Ignoring the Whole Foods Boycott

John Mackey, CEO of Whole Foods, wrote an Op-Ed piece in the Wall Street Journal about health care reform. Many liberals were upset about some of his ideas, and are proposing to boycott Whole Foods.

I actually agree with this right wing commentator, that a boycott of Whole Foods is ridiculous. Full disclosure: I worked at Whole Foods for several months. I was only there on probation, I was never fully hired. But I liked it, I still admire the company, and I still shop there. I realize that the prices aren't the most consumer-friendly, but I love the atmosphere, and their mac and cheese is to die for.

I object to the boycott of Whole Foods for one reason: I object to the idea of boycotting a company over the expression of ideas of one of its employees, even if it is the CEO. I make a clear distinction between the expression of ideas of one of a company's employees, and the company's practices. I have no problem boycotting a company over the practices of the corporation as a whole. For example, if I ever have an opportunity to boycott Blackwater, I'll probably do it in a heartbeat. But, then again, I seriously doubt I will ever have the opportunity to even consider spending money with Blackwater, so that's mostly besides the point.

For me, this is a test of tolerance. John Mackey is perfectly free to express his ideas. I don't agree with all of them, but some I find somewhat intriguing, like this one:

- Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.

That makes sense to me. One of the biggest problems with healthcare right now is the consolidation of the healthcare insurance industry. I'm all in favor of more competition here. He also endorses Medicare reform, which I might agree with if he had provided any kind of detail. His ideas mostly run to the conservative side of the argument, which is not surprising for an Op-Ed in the WSJ, but is somewhat surprising for someone many of whose customers are dyed-in-the-wool liberals. This article may be reasonable from a political perspective, or at least not extremist, but maybe not such a great idea from a marketing angle. But just on the basis of content, I don't see much worth boycotting here.

Beyond the content, boycotting Whole Foods because the CEO wrote an Op-Ed you disagree with is just childish. A boycott is the LBO (large blunt object) of a debate - it's a baseball bat as opposed to a scalpel. If you're claiming to have a superior argument, the best way to prove that is to present a better argument, which would presumably be a more nuanced one, as well. There's not much subtlety in a call for a boycott.

A boycott is also a terrible idea tactically, because it deprives you of the opportunity to engage the other in a meaningful debate. You are therefore depriving yourself of an opportunity to prove the other person wrong. A boycott should be a weapon of absolutely last resort, when all other reasonable means of persuasion have failed. It should not be the first thing that comes to mind. It is, unfortunately, a great example of a knee-jerk reaction.

I think Mackey's great mistake here is that the article just isn't very well-written. He starts out with a quote from Margaret Thatcher. Again, not surprising for the WSJ, but also again, a great way to piss off the kind of people who shop at Whole Foods. Doesn't this company employ PR people? I can see giving the man points for principle, if he's willing to alienate customers to air his true beliefs, but I also think that's a fairly stupid management practice.

He touts Whole Foods' approach to health care. All well and good, and expected from a CEO. Pat yourself on the back for treating your employees well - that's what CEOs are supposed to do: promote the company. I didn't stick around long enough to partake of the health insurance, but that's just me. I do remember that the employee stock ownership plans were quite popular.

But then he crosses the line in two places. First, he claims that there is no "right" to health care. That's a philosophical issue, not just a policy debate. Here he's opening himself up to the charge that, as someone who never has to worry about whether or not he can afford health care, he is denying to others what is available to him just as a function of his individual wealth. That makes him look heartless and cold. He writes:

A careful reading of both the Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter. That's because there isn't any. This "right" has never existed in America

Apparently he missed the parts about the right to "life, liberty, and the pursuit of happiness," and the line about about how we the people came together in order to form a more perfect union to, among other things, "promote the general welfare." I'm not sure how he missed that last part if he claims that he read the Constitution closely - it is, after all, in the Preamble. Personally, I think helping our fellow citizens take care of their health, particularly when they themselves are unable to do so, is a key part of "promoting the general welfare" through a "more perfect union." Maybe I'm just a bleeding heart liberal.

Mackey's biggest mistake, however, was in the final part of the piece, when he mixes two things he so far hasn't, and really shouldn't: marketing his own company, and articulating his own personal political philosophy. He tells us that a key part of health care reform is eating healthy and taking care of ourselves. All well and good - except that he writes it in a way that - surprise! strongly suggests we would do well to shop at Whole Foods. So we should all be free to make our own choices, but we should also be responsible, and we should make our own choices about how to be responsible in a way that directly benefits Mr. John Mackey.

Someone call Ron Paul - he now has competition for Best Libertarian. Oddly enough, however, Mr. Mackey's libertarianism has a puritanical streak - everyone should do what they want, but they should listen to my advice about how they should live their lives. It seems like Mackey really can't decide whether or not he is a free-market conservative or a do-gooder liberal. Finessing that contradiction, of course, makes perfect sense for the CEO of Whole Foods - he believes in giving people the power to do the right thing for themselves, and he believes in his right to make a profit by doing so. It works perfectly fine as the guiding principle of a corporation. It does not work as the guiding principle of government, because government exists in large part so that we may do things collectively that we cannot do as individuals, and that we cannot do collectively at a profit.

I still have a great deal of respect for John Mackey as the CEO of a company. Well, maybe a little less, now that I have reason to question his politics/marketing savvy. But this is just one episode, and Whole Foods is still a great place to shop for certain things. But if I were Mr. Mackey, I would spend some good money on a better PR firm and a political consultant who has a good grasp of how to explain libertarian concepts, particularly to liberals, without sounding like a pompous, arrogant, self-serving jerk.

Quote of the day

From a comment on a Wall Street Journal opinion piece critical of McCain's response to the current crisis:

"To say that John McCain is a loose cannon is to denigrate unchained artillery."

And that's from a McCain supporter. This is the next (and only other) line from the comment:

"Casting my vote for that man come November will be one of the toughest things I have ever done."

I think it's fair to say that this person has not made a donation to the McCain campaign.

Post-mortems

One interesting aspect of this very long primary race is that there is now a great deal of material to be analyzed, thot over, regretted, learned from.

The WaPo has a good analysis. The title explains quite a bit:

'She Could Accept Losing. She Could Not Accept Quitting.'

I think this may be because of something that has gone largely unremarked in this campaign: Hillary had never lost a campaign before this. She ran against two Republicans (in her Senate races) that no one (including me) remembers. Obama, on the other hand, ran for Congress in 2000 and lost. There's that old saying that failure can be the best teacher. At this point in her life, Hillary must be having a hard time adjusting to having to deal with the need to quit.

The Wall Street Journal has an analysis that puts it succinctly:

The bottom line is this: She called the biggest plays, and she got them wrong.

There's also this, which I hadn't heard before:

The Clintons were unfamiliar with caucuses: Mr. Clinton had left Iowa to native son Sen. Tom Harkin in the 1992 Democratic race and was unopposed there for his 1996 re-election.

So the Clintons didn't know their own blind spots. That is probably true in other respects, as well.

Ten Days That Changed Capitalism

That's not my own hyperbole in the title of this post - that's the headline of a Page One article in the Wall Street Journal. The world is different now.

"The past ten days will be remembered as the time the U.S. government discarded a half-century of rules to save American financial capitalism from collapse."

It is different in ways that many people don't appreciate. "[the changes from the government] are shrouded in technicalities and buried in a pile of new acronyms."

The political implications are, to use an overused word, profound.

"A Republican Administration, not eager to be seen as the second coming of the Hoover administration, showed it no longer believes the market can sort out the mess."

This is a dramatic change in ideology. Conservatives argue that the market works best when it is regulated as little as possible. This mess has illustrated, very clearly, the limitations of that ideology. And it's only going to get worse. When will we know it's gotten worse? When the bill shows up. "The next step, if one proves necessary, is almost sure to require the explicit use of taxpayer money." How happy are Main Street Americans going to be about bailing out people on Wall Street? Not very. I'm not going to be thrilled about it, that's for sure.

That's the article on Page One: change is coming, get used to it. But one interesting effect of reading the Wall Street Journal is that you notice a strong divide between the reporting and the editorial pages. Sometimes it's an almost schizophrenic divide. Just a few pages behind the article articulating just exactly why and how the government intervened in the market is an Op-Ed piece challenging the need for new regulations. Allan Meltzer, a professor at Carnegie Mellon, lets us know that "Mistaken regulation contributed greatly to the current problems in financial markets." So apparently it wasn't investment bankers making bad decisions based on greed and an unclear comprehension of how much risk they were taking on. It was the government trying to regulate the markets. I was under the impression that establishing guidelines for behavior was the government's job. I was also under the impression that responsible citizens generally try to follow those guidelines. Not according to Prof. Meltzer: "The first principle of regulation is: Lawyers and and politicians write rules; and markets develop ways to circumvent these rules without violating them." So it's fine to violate the spirit of the law, as long as you're within the letter. This is sort of like Martin Luther King's doctrine of civil disobedience, but for yuppies instead of oppressed minorities - if you consider the law unjust, try to work around it. Ethics be damned, apparently.

I've worked for investment banks, and I can actually understand this point of view. Investment bankers are paid to be creative with finances, and that requires knowing where the lines are in the law. And who among us has not thot about just how fast you can drive above the speed limit without getting caught? But instead of being creative on the legal side, shouldn't the core principle of a business be figuring out how to deliver value for your client? I notice that JPMorgan was in a position to take advantage of Bear Stearns' mishaps. I'm fairly certain that's because JPMorgan understood that one purpose of the rules and regulations that structure our financial system is to protect people from themselves. Those laws exist because when people get themselves into trouble, they tend to get other people in trouble, too. That's also why we have laws against drunk driving.

What's particularly bizarre about this line of argument is what happens when you apply it to the world outside of Wall Street. Let's try this. Should we have laws against robbing banks? No, because robbers are constantly innovating, and we can't catch up with them. Maybe we shouldn't try. Or how about this: if you install a burglar alarm in your house, some thief is just going to figure out how to get around it. So don't even bother locking your doors!

Conservatives occasionally make a good argument for too much regulation having unintended consequences. But the solution is not to abandon the enterprise of regulating the financial system or to take the path of least resistance. Conservatives, I think, are getting desperate to protect their franchise before it becomes so invalidated that they lose elections. But it's not working, because reality is intruding. You can tell people are is this kind of trouble when their arguments are sloppy. Prof. Meltzer uses a couple of examples of the failure of regulation that I think fail to prove his case:

"Regulators did not see the chicanery at Enron. Nor did they prevent the dot-com bubble or the Latin American debt problems in the 1980s."

They didn't see the problems at Enron because Enron was engaged in criminal activity and hiding it from regulators. And the dot-com bubble was a normal market correction - too many people got too greedy, and did not exercise good judgment. That's unfortunate, but there was very little illegality. And I don't know enough about the Latin American debt problems in the 1980s to comment intelligently. But the point is that this is a red herring - these are not examples of failures of regulation.

Mr. Meltzer seems to think that those who took the risks should pay the price - enforcing the moral hazard. Let the government keep this system afloat, but don't save anyone's skin who doesn't deserve it. Let the idiots hang. It's a harsh perspective, but not unusual (and, for some, I'm sure, a nice revenge fantasy).

What I find bizarre is the idea that we shouldn't bother trying to learn the proper lessons from this so that we can prevent it from happening again. It will happen again, the good professor seems to be arguing, so what's the point of even trying? Because, Prof. Meltzer, trying to find the proper range of regulation to balance the disparate needs of society is the purpose of democracy.