Archive for 2014

ED MORRISSEY: How Obama Marginalized The Democratic Party. “Their agenda has focused on wedge issues that have little to do with the middle class, but everything to do with demagoguing for narrow activist interests.”

IS BEST BUY BACK? Maybe yes, maybe no.

Companies in trouble can often, though not always, deliver improved profit margins via rounds of cost cutting. The problem comes when the costs that were cut turn out to be things that helped the company appeal to customers. For example, a retail operation may cut floor staff. Over the short term, this delivers a profit boost, because people take a while to adjust their opinion of your brand. Over the long term, however, messy-looking sales floors and empty shelves encourage customers to go elsewhere, leaving you back where you were, except that you’ve spent down some of your valuable brand equity.

Here’s a Best Buy-specific example of how this might work: A couple of weeks ago, I found myself in Indianapolis for four days without my laptop power cord. I had a couple of hours to get a new one, and I raced to the nearest Best Buy — which, as it turned out, carried every MacBook power cord except mine. It didn’t even stock it. So I had to go back to the car and head to the Apple Store, having wasted half an hour. That’s probably going to impact my decision to turn to Best Buy in similar future emergencies — and because this sort of purchase is one of its key competitive advantages over Amazon, that matters.

Now, I don’t know that this was a result of cost cutting or some other sort of problem. The point is that customers who have that kind of experience tend not to come back. And stocking fewer SKUs, along with cutting floor personnel, is one of the major ways that retailers can save money.

I remember when Circuit City got rid of its commission-paid salespeople — some of whom made into the six figures — and replaced them with just-above-minimum-wage types. Bad move, as it turned out. . . .

THE HILL: Dark Days Ahead For ObamaCare.

The Obama administration is facing a slew of healthcare challenges as the winter holidays approach.

While this fall has been a far cry from last year, when HealthCare.gov was melting down, 2014 has brought wholly unexpected problems to the fore for federal health officials and the White House.

Take the conflict surrounding Jonathan Gruber, the ObamaCare consultant whose suggestion that a “lack of transparency” and voters’ “stupidity” helped the law pass, went viral.

Though Democrats have sought to distance themselves from Gruber, his remarks have become a new flashpoint in debate over healthcare reform, invigorating GOP critics as the party prepares to take control of the Senate.

Gruber has agreed to testify before the House Oversight Committee on Dec. 9, in a final hearing for outgoing chairman and relentless administration antagonist Rep. Darrell Issa (R-Calif.).

The gathering, also set to include Centers for Medicare and Medicaid Services (CMS) Administrator Marilyn Tavenner, is sure to prove a distraction for the White House as officials try once again to keep a lid on opposition to the law.

Here are four additional challenges that the administration faces on healthcare this winter.

Read the whole thing.

DOUBLING DOWN ON DISASTER: U.S. Education Department widens campus sex probe. “The U.S. Department of Education’s investigation into sexual violence and harassment on college campuses has expanded to include two-year schools, as evidenced by a recent settlement involving State University of New York Broome Community College.”

Don’t expect relief in 2017. I suspect that President Cruz will actually double down on this whole thing as a way of crushing the Democrat-dominated higher education sector.

THE BELMONT CLUB: It could be worse. “Micromanagement is sometimes a symptom of having no overarching idea, manifested as ‘making it up as you go along;’ in following the last whispered advice. Such a foreign policy would not be implausible in an administration which prioritized domestic power-seeking over all else.”

WHAT HATH FRACKING WROUGHT? The New Oil Order: OPEC feels the squeeze from the U.S. shale boom.

Meanwhile, lower oil prices are an unmitigated boon to American consumers. The average gasoline price per gallon in the U.S. fell to $2.79 on Friday, down 50 cents from a year ago. That’s a big difference to the average family filling up the SUV each week, especially wage earners who haven’t had an increase in their standard of living during this entire economic expansion. Consumers who feel less pinched might open their checkbooks for non-energy purchases.

Lower prices will also add to the economic pressure on some of the world’s worst dictators, notably Vladimir Putin . Russia doesn’t belong to OPEC but it has benefited to the extent that the cartel’s production controls have kept prices high. Already under pressure from EU and U.S. sanctions, Mr. Putin’s ability to buy domestic political support will decline along with oil prices.

All of these benefits are flowing from a U.S. oil boom that government didn’t predict and had almost nothing to do with. The political class has force-fed subsidies to renewable energy with little economic benefit. The new oil order is a reminder that markets and American ingenuity are better economic pillars than all the schemes of government planners.

Yes, but on the other hand they offer insufficient opportunities for graft.