Meal Emotions

Burger King wants you to know that it respects your emotions and that you should feel however you want to feel.

burger-king-real-meal-hero-1To celebrate Mental Health Awareness month, Burger King has rolled out a new promotion in certain cities in which it is offering “real meals” in different colored boxes that are supposed to promote the “overall mental health of all Americans.”  Pointedly, there is no “happy meal.”  Instead, you can get one of five boxes with mood-matching colors — red for “pissed,” blue for “sad,” teal for “salty,” purple for “YAAAS,” and black for “DGAF.”  (If, like me, you don’t know what the last two moods are, “YAAAS” reflects extreme excitement and the first three words of DGAF are “don’t give a” and you can figure out the rest.)

Burger King explained:  “With the pervasive nature of social media, there is so much pressure to appear happy and perfect.  With Real Meals, the Burger King brand celebrates being yourself and feeling however you want to feel.”  A commercial running in one of the markets where the promotion is being offered — Columbus isn’t one of them — ends with the statement:  “No one is happy all the time, and that’s OK.”

I’m all for promoting overall mental health, but I wish companies like Burger King would just stick to making the best food they can at the best prices, and not act like they care about their customers as unique individuals with their own emotional lives — because they don’t.  And that’s really all right, because Burger King’s job is just to sell food, and any time they veer into other territory, like focusing on customer mood, they’re just being distracted from being the best at what they’re supposed to be doing.

At bottom, getting a different colored box at a fast food joint to celebrate your “mood” seems like a pretty weird and superficial way of promoting mental health.  If you feel sad when you’re ordering your burger, do you really want to confess it to the kid wearing the paper hat behind the counter so your order can be put into a blue box rather than a purple one? And the superficial nature of the whole concept is confirmed by the fact that everyone who orders a “real meal” gets a Whopper, french fries, and a drink, whether they’re feeling “pissed” or “YAAAS.”

So if you’re at one end of the mood spectrum or another, it all boils down to a different colored flimsy cardboard box that will get pitched into the trash and whether you get a diet soda or not.  That doesn’t seem like much of a way to “celebrate being yourself and feeling however you want to feel,” does it?

Advertisements

The Ever-Present Direct Government Payment Solution

Yesterday I saw an article that I think capsulizes what has gone wrong with the direction of our country.  The article reported that Senator Elizabeth Warren, that darling of the progressives, wants to send every senior citizen in the country a check for $580.

Why?  These days, I’m not sure that there actually needs to be a reason for a politician to propose a direct government payment to some constituency or another, but the stated reason is that Senator Warren believes the payment is needed because the cost of living for Social Security recipients increased last year.  Social Security benefit payments already are indexed to inflation, of course, but this year the formula that calculates the cost of living indicated there should be no increase.  So why do we need to make a $580 payment?

Well, Senator Warren contends that “Congress’s formula is volatile and does a poor job of reflecting what older Americans actually spend.”  She apparently has more perfect insight into the true spending habits of seniors.  She notes that part of the reason why the index didn’t increase this year is that gas prices fell and argues that seniors don’t drive as much as other Americans.  If there’s an empirical basis for that conclusion, I haven’t seen it, and working stiffs who walk to work, or take public transportation, might properly be skeptical of that claim.  But in any case it makes no sense as a policy matter:  in past years, when gas prices have surged, the existing formula has yielded increases to Social Security payments.  So if seniors, in fact, drive less than other Americans, then in prior years they got a windfall when their benefit payments increased to reflect higher gas costs that they weren’t paying.  In short, even if the cost of living formula is improperly weighted as to gas prices given senior spending habits, the advantages and disadvantages even out.

How did Senator Warren come up with the proposal to send Social Security recipients a check for $580, or about 3.9 percent of their current benefits?  According to the article linked above, it’s not by using the alternative inflation calculation Democrats propose for seniors, which would produce a 0.6 percent increase in benefits.  No, according to Senator Warren 3.9 percent represents the average increase of compensation for CEOs last year.  It’s not clear how that 3.9 percent number was calculated and which CEOs were included in any analysis that was done — was it limited to CEOs of America’s largest public companies, for example, or did it include the CEOs or proprietors of every business in the country? — but in any case there is no correlation between “CEO compensation” and Social Security benefit levels.  You might as well determine Social Security payment increases by looking to changes in the salaries of NBA players, or law school professors, or federal bureaucrats, or the presidents of unions.

So why choose CEOs?  Because people like Senator Warren consider them to be the evil greedheads in our society.  They make lots of money and run impersonal corporations — so they must be evil by definition.  Of course, the CEOs of public companies have enormous management responsibilities, their salaries are set by boards of directors whose members can be removed by shareholder vote and paid by the corporations themselves, and they often get sacked if their company is struggling.  But those realities don’t matter.  Senator Warren’s proposal will allow some people to argue that Congress favors CEOs over senior citizens.  And, of course, there are a lot more senior citizens than CEOs.

This is what we’ve come down to:  politicians like Senator Elizabeth Warren will do just about anything to rationalize the government cutting checks to directly pay off a chunk of the population and build her resume as a populist icon.  She’s not alone, of course, which is why we have a federal government that runs jaw-dropping annual deficits of hundreds of billions of dollars despite taking in record levels of tax revenue.

I’m afraid that the system is broken.

When The King Goes To Canada

Burger King has announced that it is buying Tim Horton’s, a Canadian doughnut and coffee chain, and moving its headquarters to Canada as part of the move.  From the frenzied reaction to the decision, you’d think the head guys at Burger King had set fire to the American flag and then used the remains to mop the floor by the deep frying machine.

Ohio’s Democratic Senator, Sherrod Brown, seems to be the one who has gone the deepest off the deep end; he’s urging a boycott of Burger King in favor of American burger outlets like Wendy’s and White Castle.  In an email he sent out yesterday, Brown calls what Burger King is doing “abandoning your country” and says it is part of a “growing trend in which companies get rich in the United States, then move to a foreign tax haven with the stroke of a pen.”  Bernie Sanders, the Independent Senator from Vermont, says the move shows “contempt” for the “average American.”  Dick Durbin, the Democratic Senator from Illinois, also has ripped Burger King for being un-American.

It’s not entirely clear that Burger King’s motive in pursuing the Tim Horton’s deal is to avoid taxes.  The company says they are making the move not to dodge taxes, but because they want to buy Tim Horton’s and think the move will be more palatable to Canadian regulators if the combined company’s headquarters is in Canada.  It seems undeniable, however, that the move to Canada will change how the new company pays taxes — companies that are headquartered in the U.S., under U.S. tax laws, pay the steep 35 percent corporate income tax on all income earned anywhere in the world (even in countries that have no corporate income tax), whereas companies headquartered in Canada (and many other countries) pay the different corporate tax rates in the countries in which the income is earned.

The overreaction to the Burger King move seems like pretty obvious, and silly, political posturing.  So Canada, our friendly neighbor to the north with whom we share a peaceful common border that is thousands of miles long, is now a despicable “tax haven” like, say, the Cayman Islands?  So corporations that see a better deal and pursue it are now unpatriotic if that deal reduces the taxes they pay in the U.S.?

As a reminder to our Senators, corporations don’t exist to funnel as much money as possible to the U.S. government.  Instead, corporations are principally answerable to their stockholders and, in most instances, have the primary goal of making money, not shelling it out unnecessarily.  Burger King isn’t breaking any laws by buying Tim Horton’s and moving its headquarters, and if doing so will help it save on unnecessary tax payments and realize better shareholder value, what’s wrong with that?  If American tax policy is out of step with that of Canada and other countries, maybe America needs to revisit its policy rather than blaming companies for making entirely rational economic decisions.

One other point on this:  there’s a Burger King near my house.  I’m not sure how many people it employs, all told — 50, perhaps? — but how do you think those people would be affected if Sherrod Brown’s call for a boycott were successful?  If Burger King moves to Canada its restaurants will continue to employ thousands of Americans, and it will continue to pay taxes on the money it earns here.  That seems fair to me.

The Existential Reality Of Tofu McNuggets

In Japan, McDonald’s is introducing Tofu McNuggets: a mixture of fish, tofu, onions, edamame, carrots, and soy beans that is deep-fried and served with a ginger sauce.

I mention this not to comment on the gastronomic merit of Tofu McNuggets. I haven’t tried them, but I don’t need to taste them to know that they sound god awful.

Instead, I note this development only to point out the absurdity of modern corporate branding, and how it has become completely unmoored from roots or reality. Long ago, McDonald’s was a local hamburger joint. Then it grew into a chain. Then it became a franchise with outlets from sea to shining sea. Then someone at McDonald’s decided that the “Mc” in the original name had branding value, and the Big Mac and McRib and other annoyingly named menu items were born. Then the “Mc” branding was applied to new menu items like chicken, in the form of Chicken McNuggets. Even though the chicken was flavorless and crappy, the Mcbrand apparently had value — and Tofu McNuggets sold in Tokyo are the inevitable result.  It won’t end there, either.

And so, a little business that once probably made and sold pretty good hamburgers to locals became a mega business that sells awful-sounding fried tofu in Japan, using the same brand that means . . . what?  Everything, and nothing. In their own appalling way, Tofu McNuggets tell us something essential about our world.

Redefining The CEO

The Marketplace radio program recently carried an interesting interview with the CEO of PepsiCo, Indra Nooyi, about redefining the role of the CEO.  She believes that a “maniacal focus on the shareholders” led to the financial crisis, and that now CEOs should focus on the “stakeholder” rather than the shareholder.  The “stakeholder” concept is a bit ill-defined; it is “multifaceted, has different interests, represents different constituencies.”  Nooyi also contends that corporations should redefine their profit and loss performance to reflect “revenue, less costs of good sold, less costs to society — and that’s your real profit.”  At one point in the interview, Nooyi said “a lot of the CEOs I interface with have real desire to do good for society, have a real desire to make change that’s positive, want to help governments address issues.”

I’m a bit skeptical of the “stakeholder” approach.  For starters, I disagree with the notion that a “maniacal focus on shareholders” caused the financial crisis.  Instead, I think the breakdown occurred, at least in part, because Boards of Directors weren’t really paying attention and approved compensation packages that gave CEOs economic incentives to favor exceptionally risky, but in the short term lucrative, transactions over long-term investment and sustainable growth.  I therefore question a model where CEOs are given some vaguely defined charter to try to do good for society.  Who knows what they might decide, and why should corporate money be used for anything other than developing and marketing better products, increasing market share, and increasing profits to the benefit of shareholders?  If American companies don’t focus on their business they are going to get their clocks cleaned by foreign competitors who are ruthlessly focused on the bottom line.  I also think that people who are upset with the Supreme Court’s recent campaign finance decision would be uncomfortable with Nooyi’s formulation.  If corporations are expected to advance social causes as part of their charter, they will have even more incentive to participate in political campaigns. Why should we encourage such behavior?

I think the better course is to adhere to the “maximizing shareholder value” model, which at least provides a measurable basis for evaluating CEO performance.  That model, however, also requires Boards of Directors to actually play a significant role in supervising the activities of the corporation, to insist that management focus on business issues, and to develop CEO compensation packages that assess value after an extended period — say three to five years — so as to discourage short-term conduct that causes long-term problems.