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Perishable Pundit
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Three Reasons Why Wal-Mart’s Visits Are Down

When the Pundit was just a boy, we remember the Pundit Poppa investing in the high-yield securities — in other words junk bonds — of many retailers. Hallowed names like W.T. Grant and McCrory’s are gone now but were the subject of avid attention at the Prevor dinner table.

So we’ve been studying the way retailers announce their sales and earnings for a long time and, although different retailers do different things at different times, for the most part we find retail explanations highly self-serving.

It seems that if people don’t shop at stores, it is often bad weather that gets the blame, and that seems to make sense as, after all, who wants to go out through the sleet and snow to get to a store? Of course, if sales are down and the weather is good, retailers sometimes blame good weather for poor results and that, also, makes sense — after all, who wants to go shopping when they can be at the beach?

After enough years of listening to this stuff, you realize that with a few exceptions, these reports are often ex post facto attempts to explain things in any possible way except to blame management.

One got that feeling in the recent Wal-Mart conference call covering first quarter earnings of 2010.

Once again, Wal-Mart’s United States same store sales were down while profits were up. Last time, we wrote about this phenomenon in a piece titled Wal-Mart Reports Strong Earnings — Is It Creating A Pricing Umbrella For Aldi?

The explanations didn’t really make much sense.

Eduardo Castro-Wright, President and CEO of Wal-Mart Stores, Inc. USA, said the proximate cause was that customer traffic was down since basket size was up. Fair enough.

He pointed to two problems: The first was unemployment and fear of unemployment, although, one would think that even if existing Wal-Mart shoppers have lost buying power or fear losing buying power, and so are buying conservatively, other consumers would compensate for this dynamic by “trading down” to Wal-Mart. It is curious this isn’t happening and no explanation was given.

Eduardo Castro-Wright’s second claim was that visits were down because of high gas prices as Wal-Mart shoppers consolidated their trips to Wal-Mart in order to save on gas.

We are sure some consumers did this but visits to Wal-Mart Supercenters historically go UP with rising fuel costs, as a Supercenter concept provides one-stop shopping, thus eliminating trips to multiple stores. This historically saves both time and money.

For every Wal-Mart consumer who might reduce his or her visit frequency to Wal-Mart because of high gas prices, there should be ten who decide to increase their Wal-Mart visits and decrease visits to other venues because they can save on gas by getting everything they need at Wal-Mart.

Since economic distress and high gas prices are actually dynamics that should favor Wal-Mart and did not, an honest search for explanation has to go deeper.

We found three hints in the financials, press release and conference call:

1) Wal-Mart has been on a binge of reducing SKUs. This has never made sense to us. Yes, offering a limited assortment is a key way ALDI can keep costs low — but Aldi does not have 200,000-square-foot stores to fill. The whole point of a supercenter is that one can get everything one wants there. Cutting low volume SKUs seems like a no-brainer — eliminate slow selling items and reduce costs — but very often those slow selling items are the exact reason people select that store for their shopping. They love that brand, that size, that flavor profile — and can’t get it elsewhere. If you drop the SKU, you lose the customer or at least the frequency of visit. Which is a better explanation for why visits are down than gas prices or unemployment.

One suspects Wal-Mart knows this as they mentioned in the call that they were restoring 300 items to grocery that they had just taken out — in other words they had to restore items because they were losing customers or, at least, frequency. Which shows Wal-Mart doesn’t have a good system for knowing what customers really value — which is not the same as simply what they buy. They may buy 90% Coke and Diet Coke but choose the store because it is the one that sells Dr. Brown’s Cel-Ray Tonic.

2) A related insight as to what is depressing visits is in the explanation of where sales were strong and where they were weak. Areas such as produce, seafood and deli were up, but grocery was down. Note that rising sales of fresh products makes no sense in the context of a decline of shopping frequency caused by high gas prices. It also makes no sense if the decline of shopping frequency is due to high unemployment and fear of unemployment, since such concerns lead to the purchase of items that won’t go bad and potentially be wasted.

What would explain this is that in addition to reducing SKU count, Wal-Mart has been pushing a private label initiative. This reduces further the likelihood that a consumer will find the brand and size they want on Wal-Mart’s shelves.

But the private label roll-out has not been uniform across the store; it is far more advanced in grocery than in perishables.

So we are now coming to see a reasonable explanation on what has been happening. Consumers who come to Wal-Mart can’t find the products they want because SKU count is reduced and branded product is replaced by private label, so the consumers come less frequently because Wal-Mart is forcing them to go to other stores to find the products they want.

3) Finally, one other hint of a problem was the incessant attention to Wal-Mart’s “rollback” program on prices, which is, in fact, just a gimmick. The important numbers are that Wal-Mart’s profits have been rising faster than its sales.

Yes, we know all about the greater efficiencies Wal-Mart is claiming to realize. What it should do is pass on those savings to consumers. This is what encourages a virtuous circle of lower costs, leading to uniformly lower prices, which leads to high volume, which leads to lower costs.

The rollback strategy — which is the same thing as telling consumers “we used to overcharge you… now we won’t” — is actually damaging Wal-Mart’s reputation for always having the right price. This is a precious asset because it means consumers won’t feel the need to price-compare. What Wal-Mart is teaching its customers now is that they better price-check other stores because although Wal-Mart has rolled back certain prices, it is not promoting on other items — but, perhaps, some competitor is.

With gas prices high, and consumer budgets stressed, Wal-Mart management is creating a promotional — as opposed to EDLP — environment that encourages consumers to check around. That is likely why Wal-Mart visits are down. Don’t hold your breath waiting for that analysis on a conference call.

Marion Nestle, The Perishable Pundit And A Lawyer Named Stearns; We Need Civil Discourse To Advance Effective Public Policy

Marion Nestle isn’t necessarily the food industry’s favorite writer. A professor, author and blogger, she has been proclaimed by some activists to be “one of the country’s most hysterical anti-food-industry fanatics”. Well, as Daniel Patrick Moynihan once wrote, “Everyone is entitled to their own opinions, but not their own facts.”

We have read Marion’s work and think that the activists’ polemics both aren’t true and, further, don’t contribute to the creation of good public policy. We don’t agree with every word she has written, but she is smart, knowledgeable and certainly interested in making a better world. So we have proudly published letters from her and discussed her opinions in pieces such as these:

Pundit’s Mailbag — Plenty of FDA Incompetence to Go Around But The Problem Is A Matter Of Politics, Says Marion Nestle, Esteemed Food Policy Professor

Will Our World Be Dominated By Junk Science And Sloppy Thinking?

So Much For Regulation: SEC Misses A Big One… Why Think FDA Will Do Better?

Importer Of Recalled Basil Sheds More Light On FDA Handling

We’ve also been pleased to play a small role in helping to educate her own readership and have been honored that she has occasionally had cause to quote something we wrote or link to the Perishable Pundit.

The other day, we were tickled pink that Marion Nestle decided to include a mention of the piece we recently wrote about food safety for a Washington, DC-based scholarly journal, The New Atlantis, and which we had mentioned here at the Pundit in a piece titled,, Food Safety Solutions: Look At Legal System, Industry Incentives And Effective Government.

Marion Nestle wrote a piece that she ran both on her blog, known as Food Politics, and at The Atlantic’s web site. The post was titled, simply, Thinking About Food Safety. After presenting one point of view from Denis Stearns, a founding partner and a principal at Marler Clark, a Seattle-based law firm that focuses on representing plaintiffs in foodborne illness cases, Marion Nestle elected to reference our work:

In contrast, Jim Prevor, who writes as the Perishable Pundit, writes in the online New Atlantis: A Journal of Science and Technology that fixing the FDA will do little to address food safety problems. Instead, he recommends:

• Fix the liability system so retailers as well as producers are liable and make it legal negligence, not strict liability.

• Root out bribery and corruption in food safety certification.

• Invest in state testing laboratories.

• Invest in food safety research.

• Revitalize the Agricultural Extension Service.

• Educate consumers.

I’m not sure about the legal liability issues, but most of the rest are really good ideas and would help a lot.

The blog allows for comments and one came from a Harry Hamil. The comment doesn’t mention it, but Harry Hamil owns the Black Mountain Farmers Market in Black Mountain, NC, and often speaks out on behalf of small growers. Here is what he wrote as a comment on Marion Nestle’s blog:

Shame on you, Dr. Nestle, for your totally unsubstantiated statement: “It’s a national scandal that the Senate is still sitting on that bill.” As you and the Make Our Food Safe coalition well know, a committee made up of staff from Senators Durbin, Burr, Harkin, Enzi, Dodd and Gregg continues to work hard gathering additional information and considering it in an effort to improve S 510..

Also, as y’all know well, the FDA continues to utilize existing authority to do things called for in S 510 and which have been within its authority for years.

If you don’t understand Jim Prevor’s suggestion about the issue of legal liability, Dr. Nestle, then you are incapable of understanding the implications of S 510. The law places a standard of behavior on us, growers, that academics, lawyers and health practitioners would never allow to be imposed on them.

Finally, I challenge you to clearly demonstrate how anything in S 510 would have changed anything of substance in any of the recent foodborne illness outbreaks.

We appreciate Harry Hamil’s kind mention. He has often sent us letters to the Pundit, though we have never published one, and he has generously held our pieces out as models in many venues, notably in a letter to The Nation in which he associated the decline of newspapers to their failure to produce the quality of journalism we do here at the Pundit:

• This poor journalism was led by the AP and tagged onto by almost every news outlet despite my efforts and those of dozens of others including state departments of agriculture, trade publications and an excellent web journalist, the Perishable Pundit.

In short, I have no question that large newspapers are in decline primarily because of crummy journalism.

Now we think Harry Hamil is being a bit tough on Marion Nestle. She is not an attorney, has never focused her work on issues of liability, and the argument on changing the legal standard on liability has many possible implications. Marion Nestle was simply bringing our piece to the attention of her readers right after it was published and in a short blog post — not an academic treatise. It seems perfectly reasonable to say that she is “not sure” about one of our six points and endorse the other five.

We have no doubt that if Marion Nestle was to write a paper or a book on the subject of liability issues related to food safety policy, she would do excellent research, think hard on the subject and come up with a very reasonable opinion. Whether she would agree with us or not, we have absolutely no idea. But we certainly would respect her work, even if we were to disagree.

Regrettably, that is a courtesy in which Denis Stearns, the Marler Clark attorney quoted in Marion Nestle’s piece, denied to us. He followed Harry Hamil’s comment with his own:

Pardon me for being blunt, Mr. Hamil, but Jim Prevor is a tool, a tool that is of the fresh produce industry who reliably acts as a mouth-piece for industry positions. What particularly surprises me about your comment though, is your seeming support for the imposition of retailer liability. The insurance industry spent the 70’s and the 80’s mostly successfully backing “tort reform,” the major result of which was to exempt retailers from strict liability. That said, I totally agree with those seeking to amend SB 510 to exempt small agriculture from most of its requirements.

We are confident our work speaks for itself and that our reputation will survive the assault on it by Denis Stearns, yet we confess that we are saddened by such an accusation from such an esteemed attorney.

The accusation makes no sense. Aside from the laughs such a comment will get in the offices of the produce trade associations who know precisely what an independent thinker this writer is, the facts provide no support for the accusation.

This article was published by The New Atlantis: A Journal of Technology and Society. This journal has editors who don’t work for the produce industry and those same editors read the Perishable Pundit and sought us out because they found the quality of our thinking and writing to be at a level that could contribute to the national discussion of such issues. Are these editors also “tools” of the fresh produce industry?

The New Atlantis is published by the Ethics and Public Policy Center in Washington, DC. This institute is, in its own words, “Washington D.C.’s premier institute dedicated to applying the Judeo-Christian moral tradition to critical issues of public policy” — does Denis Stearns think these folks are also helpless “tools” of the produce industry?

And what about Marion Nestle herself? She is a pretty competent person. She knows how to call the produce trade associations if she wants a quote. Perhaps we should take her at face value that she read the article and is uncertain about the liability issue but agrees with the rest. What does Denis Stearns think of her? Is she also a “tool” of the produce industry, or does her quoting our article with some level of approval make her just hopelessly duped by such a “tool”?

Then, of course, there is Mr. Stearns’ partner, one of the guys with his name on the building — Bill Marler. He invited the very same “Jim Prevor” to speak at a continuing legal education program, “Who’s Minding the Store?” This invitation came along with journalists from The New York Times, The Chicago Tribune and the Des Moines Register — and did not come because Bill Marler wanted to waste everyone’s time listening to “tools” of anyone. Doubtless when Bill Marler ran a guest piece on his own site, titled Guest Blogger — Jim Prevor: Who’s Guarding Our Commerce? — Bill Marler himself must have somehow become a helpless “tool” of the produce industry.

The bizarre nature of Denis Stearns’ accusation becomes even more clear when one looks at the specifics of the piece in question. The food safety plan we developed and wrote about in The New Atlantis was not only not dictated by the produce industry, it is not the current position of the industry. The industry has endorsed FDA standard-setting and has generally supported more power for the FDA. In fact, most of our points, especially those related to liability issues, haven’t even been discussed in the industry. If the industry ever does adopt it — an unlikely prospect — it would be a case of the trade following the Pundit’s lead, not vice versa.

We spent so much space on this matter because, as much as anything, this is what is preventing progress on public policy in our country.

Denis Stearns could, of course, disagree with the article we wrote. He is a lawyer who has worked in food safety and doubtless has an informed opinion on the matter at hand. And if he wanted to contribute to advancing public policy, he could explain what he disagreed with in the article. Instead, he makes a classic ad hominen attack, and instead of wrestling with the facts or logic presented, he accuses the Pundit of being someone’s “tool.”

How can we have civil discussions if we can’t view disagreements on public policy as matters on which men of good will can differ? How would Denis Stearns like it if every time he presented a proposal to enhance food safety, instead of seriously critiquing his proposals, someone pointed out that he made his living off sick people and thus had every reason to keep those numbers of sick people increasing. It is a revolting way of speaking about other people.

In fact our piece addressed a reality that incentives are affected by where our system places liability. Traditionally, the producer seemed like the logical person to carry this liability as he was the one most able to affect the safety of the product. But if safety is really a matter of financial expenditure — if, for example, finished product testing is a good idea but we can only test every 100,000 packages or every 10,000 packages or every 1,000 packages, and so on, with each increase in frequency bringing less risk of a contamination but no level of “perfect safety” — then the producer has no criteria by which to determine how frequent that testing should be. The testing will, literally, be exactly as frequent as the trade buyer is willing to pay for.

The question we pose is whether in that situation — which we would contend is pretty much the situation we are in right now — it makes sense to say that the “producer” is the one most able to impact safety.

If its form left us saddened, the one substantive suggestion Denis Stearns makes left us flabbergasted. He writes, “I totally agree with those seeking to amend SB 510 to exempt small agriculture from most of its requirements.”

We just recently wrote about this subject when Michael Taylor, the Chief at USDA’s Food Safety and Inspection Service, gave a speech at the United Fresh convention. We called the piece, FDA’s Michael Taylor Preaches ‘Scale Appropriate’ Food Safety Standards, Code Words For Exempting Small Farmers And Organics. We know of people who want to exempt small farmers for political reasons. Certainly nobody wants “one-size-fits-all” regulation, recognizing that different crops, different environments, etc., can create different risks, but there are precious few food safety experts who would ever make the claim that blanket exemptions of small farms will somehow enhance food safety.

Richard Goldfarb Asks: Five Legal Questions About Traceability

We’ve frequently written on traceability, including these three recent pieces:

Pressing The Reset Button On PTI

What Is The ROI On PTI?

Pundit’s Mailbag — California Citrus Mutual’s Joel Nelson Weighs In On PTI

But Richard Goldfarb, an attorney with Stoel Rives, who we’ve mentioned before, looked at three other pieces we’ve done:

Freshway’s Traceability System Worked Like A Charm: FDA And Buyers Don’t Care

How Valuable Is Case-Specific Traceability To The FDA?

FDA’s Secrecy Causes Retailers To Overreact

After reviewing the articles, he wrote a piece titled, A Traceability Story: Request for Comments, which asked five important questions. Since he asked for comments, we thought we would give him some. We list his question first and our comment beneath each question:

Is the implication of Jim’s article right, that spending money on good tracing systems may be futile because consumers and regulators will never trust the system?

We wouldn’t use the word futile. In the first case, there seems to be some evidence that excellent traceability systems provide a kind of information infrastructure that can pay for itself. We dealt with some of these possibilities here. So traceability may be justified for reasons beyond food safety.

In addition, excellent traceability can certainly help limit the scope of a recall — if a problem can be identified. In other words, if product was traced back to a plant and the FDA quickly noted that there was a rat infestation and that this was causing the problem, great traceability would probably stop the recalls right at that point.

Equally during certain times of the year, excellent traceability could help by limiting the region that is possibly at fault. So if the pathogen is found in a bag made from Yuma-sourced product but by the time it is discovered the trade has shifted to Salinas, a traceability system might save the industry as the FDA, which might have otherwise done an industry-wide ban, instead sees the futility of such a declaration.

So good traceability is not futile. The outbreak and the behavior of the trade and the FDA does, however, confirm the validity of some concerns expressed about the issue of traceability.

One concern is whether the focus on traceability is simply misguided. Certainly the most prescient voice in this discussion, a voice whose point has been confirmed by every subsequent outbreak, was that of Jim Gorny. He wrote a piece we ran under the title, Tomato/Salmonella Situation Cries For Improved Epidemiology. Though Jim was at the time a respected academic, holding the position of Executive Director, Postharvest Technology Research & Information Center at University of California, Davis, he had previously worked as Senior Vice President, Food Safety and Technology at United Fresh and prior to that he was a founding principal at Davis Fresh Technology. Now, of course, he holds the important position of Senior Advisor, Office of Food Safety at the FDA’s Center for Food Safety and Applied Nutrition (CFSAN).

His point that the problem is typically not traceability but epidemiology is certainly true. Indeed one suspects that all the attention being paid to traceability can be explained by two simple facts: First, it is something tangible that government can mandate. After all, the government can’t pass a law requiring epidemiologists get it right each time. Second, traceability is a private sector function. So government can pass a law or make a regulation, and it functions as an unfunded mandate on business. Epidemiology, in contrast, is typically a government function. So if the decision was made to improve epidemiology, Congress would have to appropriate money — money the government doesn’t have.

The second concern is that the nature of most produce problems is such that case-specific traceability doesn’t typically provide the government with a limiting factor — if we assume the policy is a zero tolerance for pathogens.

Traceability to a specific factory that makes soup limits the scope of recalls because the critical control point is typically the cooking in the factory. So it is assumed that chicken may have salmonella or meatballs a pathogen — but the cooking should prevent a problem. That it didn’t tells regulators that a critical control point in that particular plant was not working. The regulators would have no reason to go back down the supply chain or to ban all soup from everywhere.

Produce is just different. Although we have run pieces such as this one in which some have claimed that the expectation is that the farmer will deliver “dirty” produce and the fresh-cut plant will be responsible for making it clean, fresh-cut facilities don’t actually have the kind of tools to reliably do that 100% of the time. Even chlorine, for example, is not approved for the purpose of cleaning food; it is only approved to clean the water!

So when a pathogen shows up, the bottom line is unless there is some obvious unsanitary problem in a plant, the FDA is going to look to the fields. And once it does, there is no logical limitation on a recall or a recommendation not to consume that comes from knowing the case. Think of it this way: Imagine our traceability was so perfect that we had a video camera on each individual head of Romaine. Now when it is implicated, we play back the video from the moment it was planted and we eventually see a wild boar defecating on the plant. Now the FDA goes down, captures Wilbur, kills him and confirms he was the source of the pathogen. That is very specific traceability.

Yet, what should the FDA do? Assume that this one boar — and only this one boar — has a pathogen? Assume the boar stayed on that one farm? No, if the rule is that it is unacceptable to have pathogens on the produce — and certainly no FDA will accept the possibility of someone being sickened when the FDA knows this causation, the FDA — especially once it has mandatory recall authority — is likely to recall everything that could have come in contact with this wild boar or any other wild animal in the region.

The third concern is that buyers have two issues: A) They have the limitations of their own people and systems. They simply can’t be sure they will completely dispose of a particular lot number, so they will always err on the side of caution and throw out more than the minimum recalled. B) They have to communicate with consumers and consumer communication requires simplicity. If it is not a very powerful brand, the easiest communication is to say “We’ve eliminated anything to do with that company from our facility and are no longer buying from them.”

This is especially true in foodservice, where business depends on the consumer trusting the operator to put only healthful product in the food served.

So, yes, buyers probably will never accept anyone telling them that the contamination is limited to these 78 cases and not one more. So in this sense, case-specific traceability won’t offer the returns in reduced scope of recall that many had hoped.

What kind of public education might work to improve the acceptance of traceability?

This is an interesting question and one we haven’t seen addressed. Very possibly a great TV commercial showing the ease with which the industry knows how to trace things back would build public confidence.

But we don’t think the problem is ignorance. The problem is fundamental. If we have a problem with melons from Honduras and the FDA believes the problem is river water, then traceability to a specific melon in the field would not serve to limit the scope of concern to that one melon, or that one row, or that field.

If you go back to our interview with Michael McCartney, which we ran here, you see the key point: Traceability is only useful if it traces back to relevant distinctions. The classic example is artificially small lots off a production line. If you are just running the line, simply declaring a new “lot” every 100 boxes doesn’t limit the scope of concern. You need to do something between lots to make the distinction meaningful — say sanitize the machinery or switch raw product suppliers, etc.

As long as the problem is reality — not ignorance — education is of limited use.

As a legal matter, it’s unlikely that the buyer of the non-recalled products has any recourse against the seller; in the real world, however, is the seller likely to make good in order to assure future sales?

We are not going to parse cases with Richard Goldfarb, but we would add a caveat. Yes, legally speaking, a buyer of non-recalled product doesn’t typically have claim against a vendor — but that is in the absence of a contractual agreement saying otherwise. Yet to get a vendor number at most big buyers, one has to sign an agreement that often says the buyer can clip the bill. Put in layman’s terms, the buyers may pay less than the invoice whenever they want to for whatever reason they may have.

Of course, in most cases this isn’t necessary. The retailers will take the money and the shippers won’t sue to get it back because the lifetime of Purchase Orders is much more valuable than the one-time loss.

Ken [Odza] recently wrote about a similar insurance issue; is there any kind of insurance for something taken off the shelves because of an abundance of caution when the supplier says only to recall specific items?

The “Ken” that Richard Goldfarb is writing about is Ken Odza, a partner at Stoel Rives, who is prominent on defense work in the food safety arena. The article he references is an interesting piece on a case we would hold to have been wrongfully decided. The piece is called, Defective Cans of Fruit Deemed ‘Usable’ by Insurer…but for What?

The essence of the piece was that Del Monte Foods bought a bunch of cans with pull-tabs. The pull-tabs didn’t work, but the court ruled that since the fruit inside was still good the technical requirement of the insurance for “loss of use” wasn’t realized as the fruit was still “usable.”

The court was apparently oblivious to the fact that the fruit was not, in a commercial sense, useable as the instant you open the cans, you would have to reprocess the fruit to maintain food safety.

The lesson was two-fold: A) Get yourself a good lawyer in insurance matters, and B) Sometimes it is hard to know what insurance will actually cover.

We’ve never heard of “abundance of caution” insurance, but we will appeal to the Pundit readers to fill us in if they know who sells such a product.

In his updates, Jim suggests that the real issue is that perhaps we are providing more traceability than the market demands and others suggest that the issue is that upon discovery of an outbreak, the FDA doesn’t either adequately communicate the perceived cause of the outbreak or ever issue an “all clear” after it is over. Is either step either (a) practical when things are moving in real time, or (b) really the FDA’s responsibility or even power under current laws and regulations?

The whole point of the Produce Traceability Initiative is to move the industry to provide more traceability than the market was doing. One of the strongest motivations for PTI was to supersede government action on the matter. At the same time PTI, by providing the industry with a common “language,” may create unknown benefits above and beyond PTI.

It would be very good for FDA to communicate the “cause” of an outbreak but FDA rarely knows the cause in real time — as the Jim Gorny piece we mentioned above indicates.

“All Clears” would also be desirable, but outbreaks are really unpredictable events. And the FDA would look silly if it went around declaring “all clear” and there was another outbreak the next day.

What would be useful is for the FDA to place in perspective its legitimate concerns. During the Salmonella Santpaul Tomato cumm chili pepper crisis and the spinach crisis, we often had some fun figuring out how great the risk really was based on the number of servings of these products produced.

It was typically so small that it seemed certain the FDA would be embarrassed to actually stand out there and say, “There is a risk to the fifth decimal place that you might get ill by eating this product, so we are banning it.”

It does seem to us that if the FDA is going to act by, say, recommending that consumers not consume and retailers not sell a particular commodity, it does have a responsibility to explain the standard by which it imposes such a draconian plan and, by the same measure, the standard by which it lifts such a ban.

In many cases, it appears that there is a subjective highly risk-averse culture at FDA and there is simply no indication that the citizenry is as risk-averse as the FDA is.

We thank Richard Goldfarb and Stoel Reeves for helping us think through such important issues.

Richard ended his piece with a little joke and we will steal it:

In case you should come across some romaine tainted with E coli 0145, the answer is to heat it, not wash it. Salon.com has a recipe.

We say it is a joke because, obviously, if you come across a virulent pathogen that can cause serious illness or death — you throw it out and sanitize anything that came near it.

The FDA doesn’t want consumers to wash pre-washed salads — although Costco requires vendors to put a “wash before using” sign on its spinach. The FDA takes its position because the likelihood of cross-contaminating your kitchen is far greater than the likelihood of washing it off.

Mickey Kaus Might Not Win But, If We Are Lucky, He Will Get People To Think

June 8th is a primary in California, and with the produce industry being so heavy in California, the prospects for industry prosperity depend crucially on California finding a way to resolve its fiscal problems and dealing with a government that has basically stopped functioning.

One of the more interesting candidates for office is one who is highly unlikely to win, but his seemingly Quixotic campaign might wind up having an important long term impact.

Mickey Kaus is a writer who established one of the very first political blogs in the country. He is a liberal and a Democratic and is running in the Democratic primary opposing incumbent US Senator Barbara Boxer.

We’ve followed him for years and he was quite important in pushing Democrats to think seriously about welfare reform. Now his campaign is essentially based on a contention that the Democratic party is structurally weak and so has been taken over by its most organized supporters — notably unions.

Mickey Kaus believes the party has to spring free of such special interests to better serve the more general interest.

He has no money, no biography that would make him credible, and he acknowledges he won’t win — but, as Victor Hugo said, “There is no force more powerful than an idea whose time has come.” And one thing Mickey Kaus has is ideas. If he gets a fair number of votes despite the many burdens his campaign carries, it might get people thinking. Here is the commercial he shot:

Gary Coleman Dies: A Reminder That Sometimes We Run Out Of Chances

The Broadway Show Avenue Q begins with a song that introduces Gary Coleman, the former child star, as the superintendent of a building in an outer borough of New York City. The song, titled, It Sucks To Be Me, includes these lines:

Yes I am!
I’m Gary Coleman
From TV’s
Diff’rent Strokes
I made a lotta money
That got stolen
By my folks!
Now I’m broke and
I’m the butt
Of everyone’s jokes,
But I’m here -
The Superintendent!
On Avenue Q -

Try having people
stopping you to ask you
”What you talkin’ ‘bout, Willis?”
It gets old.

And so it must have been for Gary Coleman, who died on May 28, 2010, at the age of 42.

That he was quick and talented there is no doubt. And his accomplishments as a child star were exceptional in that he accomplished what he did despite being very ill, undergoing dialysis and having eventually two kidney transplants.

And, of course, 42 is a very young age to die.

Yet it seems that people are more moved by his death than is explained by his having been a child actor or by the fact that he had a troubled life subsequently. He won a lawsuit against his adoptive parents and managers for misappropriation of his earnings and, in fact, he wound up filing for bankruptcy.

It is hard to know what motivated the degree of interest in Gary Coleman, but we suspect it was his short stature, only 4 feet 8 inches. The stature always made him look younger than he actually was.

And that youth made us hope that he would yet redeem himself. He might be working as a security guard or in trouble of one sort or another. But we hoped he would yet see it through and turn it around.

His death, then, was a slap of reality. There would be no redemption, no turn-around, no one more chance.

No wonder so many were disturbed about the loss of a childhood star.

Here is Gary Coleman on Diff’rent doing the line that made him famous.

Pundit’s Mailbag — When Winners Are Declared Losers For Winning Too Much

Our piece, Pundit’s Mailbag — The Ethics Of Abandoning Short Term Profit For Long Term Gain, challenged the thesis that individuals or companies that were declining to raise prices to market levels were behaving more “ethically” than those who made such a decision. Our point of view received an endorsement:

Could not agree more with your response.

Absent contractual (personal or legal) obligations, which you correctly allow for, to simply paint those who chose to “remain steady” with the broad and generous ‘brush’ of integrity is to necessarily imply that those who did not lack the same.

Not fair and patently untrue as a result.

You know the produce business better than I, so your specific points are well taken. In addition, those who chose to remain steady did so for the same profit motive as those who did not. They simply adopted a different strategy to arrive there.

“Different” not “better” and certainly not, by definition, more moral.

— Daniel Barth
General Manager
Super King Markets
Los Angeles, California

An awful lot of the achievements of man on earth are motivated by those who want to win and to maximize winnings. So if we make winning or profiting synonymous with unethical, we will retard human progress.

Indeed, despite all the problems in the world, long-term, our civilization is probably threatened as much by actions that motivate articles like this one from Canada’s National Post than from anything else:

Win a soccer game by more than five points and you lose, Ottawa league says.

In yet another nod to the protection of fledgling self-esteem, an Ottawa children’s soccer league has introduced a rule that says any team that wins a game by more than five points will lose by default.

The Gloucester Dragons Recreational Soccer league’s newly implemented edict is intended to dissuade a runaway game in favour of sportsmanship. The rule replaces its five-point mercy regulation, whereby any points scored beyond a five-point differential would not be registered.

Kevin Cappon said he first heard about the rule on May 20 — right after he had scored his team’s last allowable goal. His team then tossed the ball around for fear of losing the game.

He said if anything, the league’s new rule will coddle sore losers.

“They should be saying anything is possible. If we can get five goals really fast, well, so can the other team,” said Kevin, 17, who has played in the league for five years. “People grow in adversity, they don’t really get worse… I think you’ll see more leadership skills being used if a losing team tries to recuperate than if they never got into that situation at all.”

Kevin’s father, Bruce Cappon, called the rule ludicrous.

“I couldn’t find anywhere in the world, even in a communist country, where that rule is enforced,” he said.

Mr. Cappon said the organization is trying to “reinvent the wheel” by fostering a non-competitive environment. The league has 3,000 children enrolled ranging in age from four to 18 years old.

“Everybody wants a close game, nobody wants blowouts, but we don’t want to go by those farcical rules that they come up with,” he said. “Heaven forbid when these kids get into the real world. They won’t be prepared to deal with the competition out there.”…

Lest the Pundit be accused of not having a heart… we would like to emphasize that Kevin Cappon is not a three-year-old who might cry at a loss — he is 17 years old. There were plenty of young men his age on Omaha Beach fighting the Nazis while liberating France; the blood on the battlefield of Gettysburg was often the blood of 17-year-old boys — and these parents think they are doing their children a favor by changing the rules of the game so that the winners are declared losers.

Now you might ask how, precisely, the coaches are supposed to stop their teams from being as good as they actually are. The article goes on to explain:

According to the league’s new rules, coaches of stronger teams are encouraged to deter runaway games by rotating players out of their usual positions, ensuring players pass the ball around, asking players to kick with the weaker foot, taking players off the field and encouraging players to score from farther away.

How horrible is this. It reminds us of that short story Kurt Vonnegut of Slaughterhouse-Five fame wrote, titled Harrison Bergeron. It was about a society in which the government wanted to equalize everyone, so the strong had to wear weights, the smart had to have headsets blaring noise that distracted them, etc., all to hold down any excellence in any area of human affairs.

Yes, have all the good players play lefty indeed.

The whole argument about self-esteem has it precisely backwards. The argument that at 17-years-old some kid on the team opposite Kevin Cappon will gain self –esteem because he “wins” since Kevin’s scored “too many “ goals is bizarre.

And, truth-be-told, you don’t have to be 17.

Jr. Pundit Primo, aka William, was all of three or four years old when we told him we had to go to the soccer award ceremonies so he could get his award, and he was old enough to know that neither he nor his team had done anything to merit an award. After he watched them give a trophy to every single kid, he treated the award as the meaningless thing it was.

In contrast, when Jr. Pundit Segundo, aka Matthew, wins a “Hustle” Award in basketball, in which he is singled out for actually doing something, the kid insists on sleeping with the medal!

In fact, those who push this self-esteem business have it almost precisely backwards. One doesn’t gain self-esteem because one gets trophies; one gains self-esteem by doing things worthy of winning trophies. And you don’t have to be a very old or particularly brilliant child to recognize when you are being patronized.

The issue, though, goes beyond faulty pedagogy; it goes to a society that is losing its bearing.

It is one thing to help the weak or underperforming, to be kind and give charity to those who need it and to teach those who can learn to help themselves, but society will advance only with excellence, so we need those businesspeople to figure out the strategies that will produce profits and we need those kids to acquire the discipline that training and practicing to be your very best produces.

In a world where terrorists want nothing more than to destroy our civilization, articles like this one must give them great hope. For if we don’t teach our children to win, isn’t it likely that one day we will lose against enemies more focused on victory?

And what will be ethical about allowing that to happen?

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