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Today is election day in America.  I am not aware of any results, as I am writing this at 6:00AM, the day of. But what I am aware of, is that the election process in our country, which was designed to evaluate and select the best candidate for the job, is no longer the case.  Instead, most of us don’t take the time to even consider candidates based on their merits or campaign promises, and just vote along straight party lines.

Why do we do this?  We behave in this manner because we are simply following the examples set by our elected officials.  Both political parties give lip service to the need for bi-partisan action in congress and reaching across the aisle. But that’s just it – lip service and no action. The leadership in both parties is so powerful that anyone straying from the official narrative runs the risk of being ostracized by that leadership and cast into a virtual Siberia should they commit the sin of independent thought.

So why bother with analyzing candidates and issues and voting based on the person or the issue?  Once elected, the candidates will just step in line and vote according to the mandates set down by the party bosses anyway.

The 2022 midterm elections are on a pace to spend in excess of $17 Billion to infiltrate our consciousness with their carefully crafted propaganda and lies. The only thing propagated by the vicious and expensive attacks in campaign ads is to further divide an already divided country. The two party system is supposed to foster healthy debate within a democracy. It’s not working.

 “This merger advances our commitment to build a more equitable and sustainable food system by expanding our footprint into new geographies to serve more of America with fresh and affordable food and accelerates our position as a more compelling alternative to larger and non-union competitors. As a combined entity, we will be better positioned to advance Kroger’s successful go-to-market strategy by providing an incredible seamless shopping experience, expanding Our Brands portfolio, and delivering personalized value and savings.”

So says Kroger CEO, Rodney McMullen promoting this mega merger.  As a 45+ year food industry veteran marketing to our nation’s retailers, I have witnessed this story play out exactly the opposite too many times. In a carefully worded combined statement by the two chains, they say the “merged companies would pass along as much as $500 Million in savings to their customers.” Does anyone really believe this? The more likely result will be store closures, employee layoffs, and higher prices for consumers.

Big box food retailers have used the Covid-19 pandemic and headline inflation figures as a free pass to raise prices to consumers, well in excess of their cost inputs. Despite the tight labor market, both companies have enjoyed double digit increases in operating profits during the past year.  In the quarter ending August 13, Kroger’s operating profit grew by 13.7 percent from a year earlier. Both companies argue that this merger is needed to compete against stores like Aldi, Walmart, Costco and Amazon. Amazon? Really?

When I entered the Southern California food industry in 1973 as a lowly banana salesman, there were six food chains dominating that market – Alpha Beta, Safeway, Lucky, Ralphs, Vons, and little bitty Albertsons, complimented by a handful of small regional chains and independents, none of which had more than a 10 percent market share. Since then, Alpha Beta was acquired by American Stores and eventually dissolved and rebranded to Ralphs and Lucky Stores. Ralphs was acquired by Kroger. Albertsons, through some masterful financial engineering, eventually gobbled up American Stores (Lucky Stores), Safeway, and Vons. And when the dust settled, there were two – Kroger and Albertsons.

According to Stacy Mitchell, co-executive director of the Institute for Local Self-Reliance, and advocacy group that challenges concentrated corporate power in the grocery industry, “if this merger is allowed to go through, the combined Albertsons-Kroger and Walmart would control 70 percent or more of the market in 167 cities in the United States.” This is hardly a recipe for increased competition and lower food prices in America.

Well, here it is, January 1, 2022.  A brand new year with the same old worries plus a few more that have recently cropped up. Where to start is the big question. First there is the China Syndrome and the Covide-19 pandemic that they launched upon the world. Then there is their test launch of hypersonic missiles that circled the globe as a show of strength that they could easily annihilate any major U.S. city at will. Now they are rattling their sabers about invading Taiwan. But I am not going to talk about that.

The Russia problem never seems to go away. So what is wrong with them massing 100,000 troops along the Ukrainian border as a threat to keep the Ukraine from joining NATO? But I am not going to talk about that.

The current administration single handedly in one short year stripped us of our hard earned energy independence and is now begging OPEC to produce more oil as a solution to mitigate record fuel price increases. The solution offered was to release 55,000 gallons of oil from our strategic reserve – a whopping 3 day supply considering our daily use is around 20,000 barrels a day.  But I am not going to talk about that.

Crime is increasing at unprecedented rates in our major cities. The national debt has ballooned to $30 Trillion with the progressive administration trying to pile another $2 trillion on top with their social agenda. It seems that parents have no right to weigh in on what their children learn in school. But I am not going to talk about any of these things.

What I am going to talk about is something a little more personal. While I pride myself on staying up with the latest in technology, I am clearly old school in a lot of ways. So, what I am going to talk about is Old Spice. For you lesser-informed millennials, Old Spice is not a Captain Morgan spiced rum knock-off, but rather a line of personal care products reserved for and coveted by the baby boomer generation.

So, what I am going to talk about is the current rate of inflation not seen since the 1970’s during the storied presidential career of Jimmy Carter. I will spare the readers a rant and rave critique of the current administration economic policies because I am not sure that they deserve all the blame. Well – maybe most of it, but that is not the point I want to make. The point is that corporate America is using the current inflation headlines as a free pass to raise prices at will. This is worth repeating. Corporate America is raising prices faster than their cost inputs just because they can do so without impunity. Despite all the gloom and doom that they are shoveling upon the American consumer, profit margins are soaring along with their stock prices. Witness, the Dow, S&P 500 all closing 2021 in record territory.

Now back to the Old Spice story. As recently as one year ago, I paid $3.97 for Old Spice body wash at my local Aldi supermarket. Last week, the same item was priced at $5.97. I find it difficult to believe that a price increase of over 50% is justified based on raw cost inputs. Old Spice is owned by behemoth Procter and Gamble – a company well known for its ability to control prices in any way that they see fit to boost their own bottom line.

Follow up quotes from Proctor and Gamble press release on January 19,2022

“The Cincinnati-based consumer-products company said sales increased 6% in the quarter ended Dec. 31 compared with a year earlier, fueled in part by the company’s largest average price increases since the spring of 2019.

Executives on Wednesday said its price increases will continue throughout 2022, and predicted higher profitability and improved margins in coming quarters even as labor, freight and raw-materials costs continue to balloon due to the global supply-chain turmoil.“

🎵 One is the Loneliest Number…

As if we needed any more evidence that 2020 was the suckiest year in a generation. Just look at the difference in my backyard orange crop in 2019 vs 2020. The only thing that could make this picture complete is if my lonely single orange were wearing a mask. It seems all of the bees that normally pollinate this tree were confined to a stay at home order by our California governor.

It has been said, “Opinions are like @ssholes, because everybody has one. But after weeks of holding back throughout this whole pandemic crisis, I can no longer do so. Here is my checklist of observances and opinions that keep me awake at night.

1. Masks.  I am sickened and outraged about the lies our government has purported upon us regarding the use of masks in the general population as an effective defense against COVID-19.  We were told that they were not necessary and that their usage should be limited to health care workers. But now that the shortage of masks for health care workers seems to have abated somewhat, we are now told that everyone should wear facial coverings. But the messaging stops short of advising use of approved N95 or common surgical masks as that would further impact the supply for health care workers and entice general hoarding even more. If anyone questions the efficacy of masks as a tool against contagious disease, look no further than Japan, South Korea, or even Hong Kong as evidence.

2. Corona Task Force Daily Briefings. I appreciate the information presented at these briefings by the respective experts in their field. But the sideshow created daily by the stupid and politicized questions from the press from the likes of Jonathon Karl, ABC (aka The Mickey Mouse Club) and Jim Acosta, CNN (aka The Communist News Network) and Trump’s generally off -topic and incoherent responses makes me cringe.

3. States vs Federal Government. Sprinkled throughout the Briefings discussed above, Trump likes to imply that the individual states need to solve their own problems. He chastises them for not having medical stockpiles in place to fight this pandemic. He doesn’t seem to get it that the states are stepping all over each other and the federal government to procure limited medical supplies. He responds naively that the government will simply pull back its bid if they discover that they are bidding against a state. It is just absurd to think that the federal government could manage this.  Well herein lies the reality folks. States do not have a printing press with unlimited access to dollars. Further, many states have credit ratings close to Junk while burdened with hundreds of millions of dollars of unfunded pension liabilities. California alone has over $90,000 in unfunded pension debt per household. 

4. Universal Basic Income. Well over a year ago, I penned an article for the consideration of adopting a Universal Basic Income for all citizens and legal residents in the United States. https://wjexchange.wordpress.com/2018/07/14/the-case-for-universal-basic-income/ This initiative was the cornerstone of Andrew Yang’s bid for the Democratic nomination for President. As an unintended consequence of the COVID-19 pandemic, it looks like we now have such a measure in place. The government has pledged $1200 per month for all residents that meet the income threshold. Additionally, the federal government has agreed to top off state’s unemployment benefits by $600 per week. While I have no beef with the $600 weekly unemployment subsidy, the $1200 monthly program seems a little misguided to me. I fail to see how a married couple making a secured income up to $150,000/year should be entitled to an additional $28,800 annualized equivalent from this stimulus package ($1200 X 2 = $2400 X 12 = $28,800). Wouldn’t the national interest be better served if that money earmarked for the presumably well-off went to those at the poverty level? For the stimulus to work as intended, the grant money would be circulated back into the economy. However, it is my belief and conviction that this extra “found” money for those with secure unaffected incomes will merely be saved and not spent.

5. Then there is the public outcry over Navy Captain Brett Cozier who was relieved of command for his letter exposing positive Corona Virus testing among crew members of the aircraft carrier, USS Roosevelt. While I am sympathetic to his intentions, I have a newsflash to share. “The U.S. Military is Not a Democracy.” The core of military readiness is discipline. Without it, you have an ineffective fighting force. To maintain discipline, you must adhere to the chain of command. Members of the military are governed by the UCMJ, Uniformed Code of Military Justice. Like it or not the UCMJ trumps individual liberties granted under the constitution or elsewhere.

6. Now, a few words about the Food Supply Chain. This is an area that I know something about having served over 40 years in the business. Headlines abound about farmers dumping milk and eggs, and plowing fields of fresh produce. Half of the food supply is dedicated to foodservice, ie., restaurants, hotels, institutions etc. That business has virtually disappeared. It is very difficult to convert that foodservice output to retail. Among the obstacles is the conversion to packaging acceptable to retail and just gaining access to the system. Obtaining a vendor code alone, takes weeks and more. The concern now is will farmers reduce their spring planting because of the demand shift. This could create severe shortages in the summer months even if we defeat the virus.

7. Finally, a last word about the Politics of the Time and how we work our way back to prosperity. Narratives should not be structured to fit into a blue or red box, but unfortunately that is the reality. Just listen to the opening line on the nightly news. If the latest model shows a range of 100,000 to 240,000 anticipated deaths from the pandemic, ABC news will lead with the 240,000 number to fit their politics, and not with the lower number. If the estimate is revised downward to 60,000, they will lead with the total deaths and downplay the progress of a reduced forecast. On the red side, Fox News will quote Trump boasting that the economy will come roaring back stronger than ever. That may happen and I hope it does, but it will take months or even years for that to happen. By the time it is all said and done, we will have added another 6 Trillion dollars to our deficit. There is no other way. It had to be done. But with the world awash with newly minted dollars, what will it do to the future purchasing power of our currency? I don’t claim to be smart enough with the answer.But it seems to me that we will have to grow our way out of this mess.  This means repatriating manufacturing and production back to the USA away from the likes of China particularly with pharmaceuticals and other critical goods. Automation and Artificial Intelligence must play a key role in all of this to make it happen. The chief reason for outsourcing to China has always been lower labor costs. As automation and artificial intelligence takes hold, the cost gap should narrow.  Before this crisis, the unemployment rate was around 3%. With this reboot of repatriating manufacturing and a renewed emphasis on rebuilding our infrastructure, it is doubtful that our labor force will be sufficient to handle it. While the transformation takes place, we will still need customers to purchase our increased output, so we there may still be a need for subsidies to the under employed and unemployable in this new era economy. This goes back to some version of Universal Basic Income.