Archive for the ‘Business & Economics’ Category

Recession or no, climate change can’t be put on hold

Here’s a silver lining in the existing or pending US recession: Chances are consumption and production will slow, meaning less fossil fuel expended and fewer greenhouse gases emitted. Feel better? I didn’t think so. None of us wants to see the inevitable wrenching loss of jobs, income and personal security that comes during a major economic slowdown.

The attention of government and business leaders, as well as the public, is increasingly fixed on the economy. And while that’s understandable, every other public concern will likely take a back seat to the economy. Including climate change. America, the largest source of CO2 emissions in the world, will be telling the world that we can only afford to focus on climate change as long as our economy is growing (and spewing growing amounts of CO2).

The effects of a recession are painfully real. I started my career in the early 1980s when Oregon was in the midst of a miserable recession — depression, really. I was fortunate to find a job. Some of my friends, meanwhile, lost their homes. Earlier this decade, I felt the tech implosion in a very personal way. The marketing business I co-founded lost half of our revenue in just a couple months in 2001. Within a year we had laid off nearly half our staff. It doesn’t get much worse than that as an employer.

For those of us who believe global warming is real and human-caused, this recession — if that’s what we’re in — poses a vexing question: Can we or how do we keep the very real concerns of recession from overwhelming the equally real threats of climate change?

We may be entering a very nasty period of job and income loss for millions of Americans — and perhaps for many others around the globe dependent upon our economy. A recession is one of those clear and present dangers experienced at the personal level. It’s difficult to think about much else when you’re faced with the prospect of losing your livelihood or your home.

And yet, climate change is no less urgent of a matter than the health of the US economy. The UN Human Development Report 2007/2008 calls climate change “the greatest challenge humankind has ever faced.” Its authors warn:

(Climate change) is still a preventable crisis — but only just. The world has less than a decade to change course. No issue merits more urgent attention — or more immediate action.

Try telling that to someone who’s lost his or her job or home. Or to the political candidate who can’t get the words “It’s the economy, stupid” out of his or her head. To them, global warming is a faraway worry. Unfortunately, it’s not. When we get through this recession — and we will, as history shows — the issue of climate change will still be with us. Every year our political leaders back burner the issue draws us that much closer to irreversible harm. As the UN report makes clear, “The world’s poor will suffer the earliest and most damaging impacts.” They have no political voice in America. And neither do future generations.

If the world is going to avoid the worst of global warming, America and Americans must be completely engaged and leading the way. We’re about to find out whether we’re up to the challenge.


Dick & Joe vs. Mom & Pop

“Dick vs. Joe!” the headline screamed in Sunday’s paper. As if we are supposed to care about the looming showdown in Oregon between national retail giant Dick’s Sporting Goods, Inc. and the Oregon retail fixture Joe’s Sports, Outdoor & More. Dick’s just opened a store in Portland last week, the first of perhaps 10 across the state. This could spell trouble for Joe’s, we are led to believe by The Oregonian. Coincidentally, this could also spell trouble for the newspaper if Joe’s starts advertising less because of lost sales to Dick’s, and Dick’s doesn’t make up the difference.

While the newspaper attends to the battle between big box retailers, the real victims in the retail wars are the remaining locally owned, independent sporting goods stores struggling to compete. Joe’s is not one of them. Joe’s founder Norm Daniels sold majority interest in his company last year to a private equity firm in San Francisco. The Oregonian says the firm told it a year ago “that it would sell off Joe’s in a few years.” It’s possible the next ownership group could be local, but I doubt it. The article speculated that Dick’s could buy Joe’s, although that was not considered likely. So look for Joe’s ownership to remain out of state.

Dick vs. Joe is simply a battle of two non-local chain retailers for sporting goods supremacy in Oregon. Since Joe’s got its start here, we still think of them as one of us. It would be natural to pull for them over Dick’s. But Joe’s is one of us in memory only. Joe’s majority owners are elsewhere now, and they control Joe’s future. Our choice to spend money with Joe’s may be only less bad than a decision to support Dick’s, from the standpoint of local economic benefit. Better, however, to skip both chains and shop instead at a locally owned, independent sporting goods store. That keeps more of our money in our community, instead of heading to Pittsburgh, in the case of Dick’s, or San Francisco, in the case of Joe’s. With a recession looming, this argument is stronger than ever.

Bottom line: Oregon doesn’t need Dick’s. Dick’s needs Oregon, so it can keep satisfying shareholder demand for growth. Dick’s arrival here is part of the chain retail trend so well documented by Stacy Mitchell in her book, “Big-Box Swindle”:

Consider that in 1996, the top ten retail chains accounted for a remarkable 15 percent of consumer spending. Less than a decade later, in 2005, the top ten captured nearly 30 percent of the more than $2.3 trillion that Americans spend in stores each year. Two or three corporations now dominate each retail sector. As the chains have gained market share, tens of thousands of independent businesses have disappeared.

Dick’s is hell-bent on dominating the sporting goods category and Joe’s will do all it can to protect its turf. But the story isn’t Dick vs. Joe; it’s Dick & Joe vs. Mom & Pop. Local owners of independent, usually small, stores are the big losers in the battle of big box opponents. And so are the communities that watch these stores disappear. I’ll let Stacy Mitchell have the final words:

The effect of mega-retailers on local economies does not end with shuttered local merchants and their laid-off employees. Most local retailers buy many goods and services locally: they bank at local banks, advertise in local newspapers, carry goods produced by local firms, and hire a range of professionals, from accountants to Web designers. Every dollar spent at a locally owned store sends a ripple of benefits through the local economy, supporting not only the store itself, but many other local businesses, which in turn provide jobs — often the sort of well-paid positions that form the backbone of a city’s middle class and the core of its tax base. When chains displace local merchants, all of these economic relationships are severed. Money that used to flow through the community — from a local office-supply store that hires a local accountant, who in turn uses a local bank that lends money to a new entrepreneur, who stocks up at the local office-supply store, and so on — ceases to do so.


Spread of fashion undermines sustainability

One of America’s foremost critics of our consuming ways is Juliet Schor, a professor of sociology at Boston College. I had the pleasure of hearing her speak this week in Portland.

Among the many observations that jumped out at me in her lecture was what she called “the aesthetization of American life.” Not sure that’s a word, but the point is fast-changing fashion, long the staple of the apparel industry, is now central to the selling of many retail products. In recent years, furniture, cellphone, home electronics and other manufacturers have joined clothing makers in emphasizing the design — or aesthetic appeal — of their products. A New York Times piece yesterday, appropriately headlined “Hoping to Make Phone Buyers Flip,” helped make Schor’s point:

Like fashion or entertainment, the cellphone industry is increasingly hit-driven, and new models that do not fly off the shelves within weeks of their debut are considered duds.

I like attractive, well-designed products as much as the next person. However, when it becomes industry’s prevailing practice to change product designs with the season and encourage us to discard perfectly good items because they are no longer “fashionable,” then we have a problem. Making more of the products we buy fashion statements only encourages us to purchase more. This may bolster the financial bottom lines of producers and retailers. But it puts the world’s environmental bottom line further in the red.

To illustrate her point, Schor projected a graph from the World Wildlife Foundation’s Living Planet Report 2006. You can access the report here. According to the WWF:

The Living Planet Report 2006 confirms that we are using the planet’s resources faster than they can be renewed — the latest data available (for 2003) indicate that humanity’s Ecological Footprint, our impact on the planet, has more than tripled since 1961. Our footprint now exceeds the world’s ability to regenerate by about 25 per cent…This global trend suggests we are degrading natural ecosystems at a rate unprecedented in human history…Effectively, the Earth’s regenerative capacity can no longer keep up with demand — people are turning resources into waste faster than nature can turn waste into resources.

WWF offers several alternatives to our unsustainable (and potentially catastrophic) “business as usual” course of human development. If you’re wondering what you can do, start by examining your consumption choices. Resist the urge to stay at fashion’s leading edge, no matter the product. Buy less stuff. When you do make purchases, reward producers and retailers who embrace sustainability.

And if it’s aesthetics you value, ask yourself this: What better designer than Mother Nature?


Consuming our way out of poverty?

An economist and writer at the Federal Reserve Bank in Dallas tell us household consumption — not income — is the best measurement of “financial well-being.” The incomes of the top 20 percent of US households may be 15 times greater than the bottom 20 percent, but the top group’s consumer spending is only four times greater than the bottom group’s. And on a per person basis, the richest household only outspends the poorest by 2.1. to 1 (because richer households are larger on average). Writing in the Sunday New York Times, the bankers explain:

To understand why consumption is a better guideline of economic prosperity than income, it helps to consider how our lives have changed. Nearly all American families now have refrigerators, stoves, color TVs, telephones and radios. Air-conditioners, cars, VCRs or DVD players, microwave ovens, washing machines, clothes dryers and cellphones have reached more than 80 percent of households.

So there you have it. Because nearly all of the poorest households have all or most of the “conveniences we take for granted,” they really aren’t that poor. In fact, the bankers tell us, “the abstract, income-based way in which we measure the so-called poverty rate no longer applies to our society.” By their definition, the truly poor are those who don’t have the modern conveniences nearly everyone else has. In which case, that odd millionaire couple that opts out of a consumerist lifestyle would be poor. They say no to the so-called conveniences because they don’t want to add to the human and ecological toll our consumer economy extracts.

The bankers praise “a capitalist system that has for generations been lifting American living standards.” Yes, if you define standard of living by material things. We certainly do have more material things in the average rich and poor households. And I suppose that means all of us — rich and poor — are happier than generations before us? And Earth has infinite capacity to lift the world’s material living standards for generations to come? Just wondering.


Congress stokes religious flames of consumerism

In the wake of passage by Congress of a $152 billion economic stimulus plan, a guest columnist for the Seattle Post-Intelligencer asks:

Is it too much to suggest that consumerism has become a kind of alternative faith, a religion of sorts? Religions are characterized by some vision of a good life, by their rituals and by a particular language. Consumerism seems to be developing all three apace.

Writer Anthony B. Robinson will hear no objection from me. As he observes, Americans have gone from using citizen as our default designation to consumer. And we are taking on our consumer role with religious-like fervor, aided and abetted by a Congress and president that understand the very basis for our economy is consumerism.

So now, because mortgage and finance companies succeeded in gaining more consumers with loans they could neither afford nor sustain, creating the subprime crisis, we have a stimulus package, a kind of consumer Viagra, to get us up and buying again. Is something wrong with this picture?

Yes, Anthony, there is.

Saturday, February 9th, 2008
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Posted in Business & Economics, Consumerism | No Comments »

Green innovations offer hope in an e-wasted world

I maintain an ongoing love-hate relationship with consumer electronics. I hate the constant promotional bombardment by electronics manufacturers for cellphones, flat-panel TVs, mp3 players, games and countless other digital distractions. I also hate the waste stream produced by household electronics. Last month, the New York Times Magazine published an excellent piece on this, “The Afterlife of Cellphones.”

While many of us try to recycle our phones, the reality is they too often eventually end up randomly disposed of in developing countries, exposing human and other life to dangerous materials. According to the Times:

In a study published last year, 34 recent-model cellphones were put through a standard E.P.A. test, simulating conditions inside a landfill. All of them leached hazardous amounts of lead — on average, more than 17 times the federal threshold for what constitutes hazardous waste. Under a stricter state of California test, they also leached four other metals above hazardous levels.

The E.P.A. says modern American landfills are designed to keep toxics stewing inside from leaking out, so they don’t contaminate surrounding soil or drinking water. But landfills do fail, says Oladele A. Ogunseitan, an environmental-health scientist at the University of California, Irvine, and an author of last year’s study. More important, he notes, such landfills don’t exist in the developing world. In many places, garbage is tossed into informal dumps or bodies of water or burned in the open air — all dangerous ways of liberating and spreading toxics.

The article doesn’t paint a completely hopeless picture. Industries are developing to reclaim precious metals from e-waste and to refurbish used cellphones and resell them to those who can’t afford new ones. The latter, in theory, reduces the need to make new phones and the energy and materials consumed to produce them.

Which brings me to what I love (I use the term very loosely) about consumer electronics: the innovation harnessed and applied in their design. The innovation I care about most is reducing the environmental impact of electronics. CNET gives coverage today to the Green Gadgets conference in New York. Check out some of the product innovations that promise to do less harm and in some cases improve the quality of life for some of the world’s poor.

My favorite is SunNight Solar’s solar flashlight. The company is also focusing on social issues by encouraging their customers to buy and give one of the flashlights to a person in a developing country for every one they buy for personal use. According to CNET, “The goal is to reduce the use of kerosene lamps, which are unhealthy and dangerous.”

Technical and social innovations like these from SunNight Solar are what give me hope.