We Can’t Ban Cigarettes

I’ve recently written about the need for businesses to be cognizant of social issues and how they should try their best to improve areas of social concern when possible, but shouldn’t feel required to hurt their business to make progress in these areas.

In the comments the issue of cigarette companies was brought up and the “ethicality” of their businesses as a whole. The question was posed as to whether I am OK  with cigarette companies choosing to be unethical and ignoring the consequences of their product to the general public. Then, loyal Crastinate reader (Crastinator) Avi sent me an exchange between Rush Limbaugh and a caller on Limbaugh’s radio show. Limbaugh was making the case that if cigarettes were so bad for you, and they really kill people, why doesn’t Congress ban cigarettes. His argument was that the government needs the tax revenue from cigarettes and cares more about their revenue than they do about the health of their constituents.

Let me be clear on my position. I believe that if cigarettes were a brand new product in the market, and we have all the scientific information we have now on the addictivesness and correlation with cancer that we have now about cigarettes, they would be illegal. But that is not the situation. And we can’t just ban something that millions of people are addicted to in our country. I think the government’s approach towards these companies is a good one. You can’t change the current market that much but you can affect the future. Make cigarettes very expensive for potential new users. Create public awareness about the health dangers of smoking. And hopefully have an effect on the future consumption of cigarettes and slowly ween the American consumer off this addictive substance.

Limbaugh implied that cigarettes are not as dangerous as the studies have shown because if they were, then they would be banned. Comments from my previous post implied that if I feel that businesses shouldn’t have to hurt their bottom line to act ethically, than I’m OK with cigarette companies. Both of these statements are wrong. Cigarettes should be banned but can’t be because they have been sewn into the fabric of American culture (and tax revenue stream) for too long. So we’re trying to ease America off cigarettes slowly. I am not OK with cigarette companies and I wish I could shut them down but, because of already stated reasons, we can’t ban their product.

We ARE making progress with cigarettes and have recognized as a society that cigarettes are very bad for you. The tough ethical decision here is a bit easier because the line is so clearly drawn. How do you tell a business that they HAVE to be more socially responsible at a higher cost unless you make it law? I don’t think you can.

More Beggars Wasting Money

I’ve spoken previously about beggars wasting money. Loyal Crastinate reader Joseph brought this story to my attention. Apparently, Citigroup, the same Citigroup that the government is giving a $20 billion bailout package to, is keeping their sponsorship of the new New York Mets stadium. This sponsorship is a $400 million deal over 20 years which comes out to $20 million a year. That means that, to some degree, the tax payers are paying for the new Mets stadium. What else should we, the taxpayer, pay for? How about a new theme park? I know I could use some fun after this ridiculousness.

Businesses Shouldn’t Have to be Socially Responsible

Some consider the term ‘business ethics’ as an oxymoron. Every MBA program (including the on I’m in now) has a required business ethics course. The goal of this course, from what I can gather up to this point, is for the students, future managers and leaders in business, to understand that business objectives and positive social change are not always in conflict. And that through business practices, one can have a hugely positive impact on social benefits. I agree with that. I think almost everyone in my program agreed with that before we even took the course.

I think that this overall agreeable consensus leads me to the problem I’m having with this business ethics course I’m taking now. The professor is trying to make the point that we not only can we create social change via our future business practices but have an OBLIGATION to create positive social change. I disagree with this. I think that consumer transparency is important and you have an obligation to be honest with your consumers. On the other hand, if I make a food product that is really bad for people’s health (<cough> Mcdonalds <cough>) and the consumer is aware of how bad it is and still eats it, that’s their problem. I believe in consumer transparency but I don’t believe in a requirement to create positive social change (in this case, it would be to stop selling food that is bad for people). If future trends show that people want to eat healthier, then maybe profits and social change can work in tandem. But it shouldn’t be a requirement.

While this difference might seem trivial to some, I think it highlights the major divide regarding corporate social responsibility in today’s business world. Some people feel that corporations are required to act as forerunners in positive social change. Business people wouldn’t mind being the leaders for social change, but they have to see the financial benefits before they do so. Dove was given much praise and had a large sales increase because of their famous ads that used real women with realistic waist sizes rather than models who are size 0. This pushed for positive social change and helped increase profits. It can work. And companies who can make it work, should try. But it’s not an obligation and shouldn’t be presented that way.

Paper or Plastic

I know it’s better for the environment to use paper bags instead of plastic (let’s forget the irony that we moved to plastic bags because we didn’t want to chop down all those trees to use paper). How can the supermarket, or anyone, expect me to use paper bags when there aren’t any handles? You’re limiting me to carrying only two bags at a time.

I know it’s a stupid little thing, but I would guess that I’m not alone. If those environmentalists want consumers to start using paper bags, make bags with handles (that won’t rip). I think that is what’s holding back the whole ‘paper bag’ initiative. Until I see handles, I’m always choosing plastic.

Damn Beggars Wasting Money

My charity goes to charity organizations. It doesn’t go to beggars on the street. Reason being is that I don’t trust the people on the street. If I give them a dollar, how do I know they’ll use it for their needs (food, shelter, ect…) and not their wants (alcohol, drugs, etc…). With charity organizations, my money (hopefully) goes to people who will use the money in the most beneficial way.

I bring this up because I came across two distinct examples of beggars wasting money today. The first comes from the auto industry who begged Congress today for some of the bailout money that is being handed out. Apparently, the company CEOs flew to Washington in their corporate jet. According to the Consumerist post, a first-class flight would have cost $800 while the private jet for GM alone costed $20,000. The gaul of these CEOs who have messed up the American auto industry to flaunt their wasteful spending is almost comical.

The other example came from my friend Joseph who pointed me to this article. I had heard that the Triborough Bridge in New York City was being renamed to the RFK Bridge after Robert Kennedy. With New York City asking the federal government for financial aid and the rumors about putting tolls on ALL the bridges to reduce the deficit, I would expect Bloomberg (New York’s mayor) to be pretty tight on what the city is spending money on. Renaming the bridge isn’t a big deal. It’s a name. Apparently, it’s more than a name. It’s a $4M cost to change all the signs. Couldn’t we wait to rename this bridge?

Why can’t we sell the name of the bridge? The Google Triborough Bridge. Sounds good, and profitable, to me.

Choose Your Seat Theater Might Be Running a Scam

I saw the new Bond movie, Quantum of Solace, this past Saturday night. I usually would not attempt to see a movie during the opening weekend fearing the huge crowds and the potential for getting a seat that would make my neck hurt for weeks to come. This Saturday night was going to be different because I bought my seats at the Cinema De Lux in White Plains, NY where I was able to select which seats I sit in, and therefore am guaranteed to have a good seat in the theater. Or so I thought.

Amazingly, the seats were double booked. I say “amazingly” because I’m so amazed that the theater could think that double booking seats would work out to their benefit. The comparison of double booking can be made to the airline industry. With the airline industry, however, you can expect some people to not show up. People miss their flights. It’s expected. And there may very well be seats available in first or business class that you can use to accommodate for the double-bookings. In a theater, when you purchase an actual seat, what are the chances that you’re going to miss a movie? Have you ever heard of someone pre-ordering tickets to a movie and then missing it? It’s not the norm. And there isn’t an upgrade you can offer me to make it all better.

After speaking with the managers there, they told us we can try to find seats together in the 10:30 PM showing that was being let in at the time and we could discuss the situation after the movie is over. We found seats that were fairly close up which were uncomfortable to watch the movie from. We did want to see the movie so we decided to stay.

After the movie was over, we spoke to the new manager (different shift) and he told us that since we saw the movie, there was nothing he could do. We argued our point and after some teeth-pulling (that’s what it felt like) he eventually agreed to give us eight free passes to a future movie (he tried four free passes for a while. Like that makes any sense.). What did he count as eight free passes? A piece of paper with his signature and the number eight. Like that was going to work. And even if it did work, what are the chances that all eight of us would go back to the movies together anytime soon (I mean, all to the same movie and time)? So, we complained and finally got the eight free passes we deserved (actually, we deserved a full refund, but I digress).And now, every person who we told about this great theater where you can reserve your seats is hearing from us again about how this theater is ripping off their customers by making them think they have seats but are actually double booking these seats. It’s a scam and practically theft.

So let’s recap. The City Center 15: Cinema De Lux in White Plains, NY is double-booking seats. And unlike other theaters that oversell theaters, this theater is double booking a specific seat. They don’t apologize when you get screwed (that’s right, no one apologized) and they try to brush you off when you complain. Customer service was just plain bad and now that impression of the theater will be spread throughout my community by me and my friends. This should be a lesson to all companies. Don’t try to screw your customers. We talk to others and will make sure that everyone we know finds out about your shady practices.

Paulson Switches to Stock Injection Plan

Treasury Secretary Henry Paulson announced today that there is going to be a change in the $700 billion bailout plan. In the bailout bill, it was written that the government planned on buying up the bad assets of banks as to wipe them off the books of banks and add them to the government’s books. There was an option, that Paulson is now saying they will exercise, that instead of buying up the bad debt, they will buy shares in the banks, essentially injecting the banks with lots of cash but not alleviating them of the bad debt. For further explanation on all of this, listen to this great This American Life that explains the financial crisis for those of us who aren’t in the field.

While the market is down 300 points in the first couple of hours because of this news (amongst other bad news), I think overall this is a great decision. Let’s be straight. The taxpayer is still getting screwed by the lack of regulation in certain financial markets which allowed banks the freedom to be much riskier with our money than they should have been. But at least in this proposed approach, the taxpayer is not getting the bad debt.

To paraphrase the This American Life episode I mentioned above (you really should listen to it, it’s great), the previous plan of buying up the bad debt is like having someone come in to your house and clean out all the garbage out of your basement and you have no obligation to this person. They come in, they clean, and they leave, free of charge. With this new approach of buying stock in the bank, it’s like having someone move into your basement and start paying rent. It’s your job to keep that place clean, and that tenant can put pressure on you to do what needs to get done to get the basement cleaned up. That tenant can even kick you out if you don’t clean up (analogous to shareholders voting in a new board which would fire the management team). On top of that, the government will be getting preferred stock, which means that if the bank goes under and the assets are sold, the government will get back their money before the common stockholders get any money back.

So, I think this is a good thing. But only time will tell.

Kudos to RIM

I’d like to tip my hat to the people over at RIM, the developers of the Blackberry phone. I’m sure RIM was not thrilled when Apple launched the iPhone two years ago.  RIM could have done what many other competitors had done. They could have come out with a copycat device that, while marketed as better than the iPhone, cannot compare in functionality. But they didn’t. Instead RIM worked on innovation. They worked on actually making something unique rather than a copycat device. And they did. The Blackberry Storm that is coming out has a flexible screen so that when you push it, it can give you tactile feedback that you pushed a button. This sounds amazing. While I enjoy the iPhone, it would be nice to have some tactile feedback that I pushed a letter on my keyboard. Kudos to RIM for not taking the easy route. Consumers will show their gratitude with their money.

What’s funny is that what RIM did seems obvious to most. A device comes out that is better than yours. So you innovate to come out with an even better device. Seems simple. And yet, so many companies that I’ve worked with fail to see this. All they think about is the short-term implications. They come out with a product that can be marketed to be equal to the new/better product hoping that their sale numbers won’t go down. But they’re going to go down because the product that they’re introducing is not innovative or better. It’s just a copycat.

And so, my congrats to RIM on creating a truly innvoative product that will hopefully give Apple a scare. I’m looking forward to continued innovations.

America Has Spoken

Tonight is historic. Watching the United States elect the first African-American to the highest office in the land is incredible. I’m excited for the future.

One of the television commentators mentioned how Obama’s victory makes a statement to the world that the actions over the past 8 years of the US and our president might not be reflective of what the US wants. I think it’s a valid point. Our voice is represented by our vote. The landslide victory, the low presidential approval ratings, and the Democrats capturing of the House and Senate, points us towards one conclusion. America wants change (even though that word has gotten SO annoying). And we got it. Personally, I’m excited to see what that change could be.

Our children might ask us one day where we were when Obama was elected. My answer is pretty lame. Either I was in Negotiations (course I’m taking), or I was at home on the couch. Either way, as I watch Obama give his acceptance speech, I keep on thinking that I SO want him to succeed, and yet worry tremendously about his troubles ahead. The Democrats will have the House, Senate, and the presidency. No more complaining. It’s time to do something. Let’s hope their actions can match their rhetoric.

Read This. Watch This.

Many times others say things much better than I can. In cases like this, I’ll post a “Read This. Watch This.” Here is the first of many.

A recession could be a great time for startups if done right.

Read This

Excellent Paul Graham blog post on why this is a great time to start a startup.

Watch This

Kevin Rose’s further insight into this article relating it to when he started Digg.

I’ve got plenty more to say on the subject but it’s going to get spread out over a few posts. I don’t know about you, but I’m ready to start something.