Competition Bombshell from Apple Proves Markets Work

The vast majority of high–end cellphone users are blissfully unaware the $200 they pay to upgrade their phone is a heavily subsidized price. Most of us think the $200 is bad enough, but if customers were paying full retail for their newer phone the price would be in excess of $650 for a model from Apple.

That’s a lot of money to pay in one big chunk for a device your teenager is likely to drop in the toilet.

Cell service providers cushion the blow by folding the rest of the cost into the contract. That’s why early cancelation fees are high. The company is recovering the cost of the phone.

This system worked fine as long as competition in other areas of the business was at a manageable level, but that’s changed. AT&T, Verizon, Sprint, T–Mobile and other providers are cutting prices and beefing up bundles on minutes, data and contract length. Consequently, financing phone purchases is less attractive.

This is where competition works to your advantage. Apple knows if customers have to pay the entire cost upfront, sales decline as customers wait longer between upgrades.

So Apple will now finance iPhone purchases for $32 per month AND allow customers yearly upgrades. In addition, Apple includes its premier AppleCare service ($99/yr.) as part of the package.

Finally, Apple will give customers the option of switching cell carriers every year, marking the end of the two–year contract and repaying cell provider’s decision to stop financing phones.

What’s more, this instance of competitive creativity would solve many of the lingering, intractable problems of Obamacare. How? Click the link below to find out in my Newsmax column:

http://www.newsmax.com/MichaelShannon/Obamacare-Apple-Free-Market-Competition/2015/10/01/id/694256/

 

Why Mr. Ed Gives Better Lifestyle Advice than the Media

Mr Ed Gives AdviceParaphrasing William F. Buckley, I’d rather take lifestyle direction from 200 randomly selected people in the phone book than follow the advice found in the 200 most prominent media outlets. Reporters are fad–conscious professionals at the expense of common sense. If they can identify a trend first, they become media experts and their journalistic prestige — if there is such a thing today — increases among their peers.

Since the media has the attention span of Joe Biden, it doesn’t matter if the trend makes sense or even exists outside a few malcontent exhibitionists. What matters is novelty. Putting the story in context could only take the luster off a scoop, so it’s rarely done.

I fell prey to this as a freelance writer in the 70’s. Some eastern media outlet, where I desperately wanted to work, ran a story on a decline in coffee drinkers. The tyranny of the young was making itself known by switching from coffee to carbonated drinks. (What an innocent age. Now the young drink powdered alcohol.)

Consequently coffee beans rotted in the warehouse, cocaine production was looking better and better and Mrs. Olsen was considering switching from Folgers to Metamucil.

Eagerly trend–surfing I contacted a coffee distributor, interviewed the owner of a well–known diner and talked to random customers sitting behind a coffee mug.

I would soon be Oklahoma’s caffeine–conversion expert. Only I didn’t know Starbucks had opened about three years earlier and was gaining fast on the Bunn complex. Soon a cuppa Joe would be an “Espresso Macchiato,” and the trend cycle would resume with carbonated beverages replacing coffee as the liquid on the decline.

A trendy Wall Street Journal story concerning high–end steakhouses is another cycle entry.

You may recall steakhouses, and meat for that matter, were dead just a few years ago as the Kale Revolution swept America. Food that had heretofore only been fit for rabbits was now appearing in the White House as youth (those wretches) traded flavor for regular bowel movements. Since it was a trend other businesses, with superficial easily stampeded management, had to hop aboard or be thought uncool.

Ronald McDonald was so eager to attract skinny herbivores it instituted a new “healthy” menu featuring the McCompost. In spite of McDonald’s subsequent sales decline, Subway felt the social pressure and hired a child molester to promote produce in a bun.

Steakhouses weren’t eager to serve malnutrition on a cracker, but it didn’t matter because a vile cabal of granola–heads and the USDA was busy ruining beef with another fad. Instead of corn–fed beef that produced tender, marbled steaks, anti–fat crusaders gulled beef producers into going back to “natural” grass–fed beef.

Now two generations of Americans have no idea how steak should taste. They try to masticate Florshiem–like steaks from cows that look like the herd in Lonesome Dove and think it’s a luxury.

When I was chasing the extinction of Juan Valdez diners could get a fork–tender steak at a mid–priced restaurant. No longer, today you must visit a den of one–percenters and contrary to past predictions, high–end steakhouses are prospering. The WSJ reported: “Eight of the top 15 highest-grossing restaurants among business diners in New York City are steakhouses.”

A popular dish — bulk food for bulky people — is the 40–ounce cowboy ribeye that sells for $59.95. This posse–sized meal of meat alone might be good enough for the late Cecil the Lion, but most diners want a side dish or two. Unfortunately all your $60 bucks gets is meat and utensils, everything else is a la carte.

It’s like buying a new car and discovering you have to pay extra for “options” the rational would consider basic. (Oh, you want tires with that?) Iceberg lettuce that Whole Foods hides in the Mitt Romney section at the back of the store sells for $9.00 a wedge.

These restaurants aren’t obsessed with attracting female customers, running contrary to other trends. Smith & Wollensky founder Alan Stillman explains in a quote that may indicate grammar ignorance is hereditary, ‘“I know a tremendous amount (sic) of women that love to go to our restaurants…but they’re the outliers.” By contrast, at Quality Meats (sic), developed by his son, around 45% of the customers are women, Mr. Stillman said.’

The moral is take any media lifestyle advice with a large grain of salt, if you’re still allowed to do that. As a wave of steakhouse trend stories begins to break over the nation, keep in mind fad stories are a blurry snapshot in time with about the predictive power and relevance of a political survey taken last year.

Turning the Tables on Verizon & Other Cable Buccaneers

Cable guyCharles Murray’s new book — BY THE PEOPLE: Rebuilding Liberty Without Permission —urges conservatives to embrace civil disobedience, but with a difference: We won’t loot CVS stores.

In the face of all–pervasive government demanding we obey picayune regulations, Murray urges us to: “…withhold that compliance through systematic civil disobedience. Not for all regulations, but for the pointless, stupid and tyrannical ones.”

The worst offenders include the “Occupational Safety and Health Administration, Environmental Protection Agency and Equal Employment Opportunity Commission.” One example of over–reach is the DC Good Samaritan who rescued a duckling. Being unable to place the baby with nearby woodland creatures, he took it home so it wouldn’t die a swift death.

The Washington Post reports two months later “Nibbles” was following his owner around like a dog and starring in videos. That’s when animal control functionaries got wind of the Kidnapping of the Century and made the Samaritan release a thoroughly domesticated duck into the wild.

Murray’s solution is to stop following stupid rules and exploit Big Government’s weakness: “…its enforcement capabilities are far inferior to its expansive mandate.” If Refusnik Americans force Big Regulation to take them to court — Murray proposes a national legal defense fund — the time, money and effort expended in putting down thousands of tiny rebellions will force bureaucracy to retreat.

It’s a fine idea and I hope the Koch Brothers take his call, but it’s too useful to limit to government. Beleaguered citizens can use a similar technique to take on impervious and imperious companies perpetrating abuses in the private sector.

I’m talking about you Verizon.

The last time I renewed my indenture with the cable company I called both bands of cutthroats: Verizon and Comcast. Still smarting from Verizon’s removal of college football from our package, I didn’t want a repeat.

My specifications included college football, NFL Network, Rugby and cycling be included in the deal. Verizon packages are based on the number and quality of channels. First is Entropy that only contains PBS and CSPAN. This is followed in order of increasing expense by: Extreme, Ultimate and Excruciating (where you have every channel known to man and can watch real–time drone video of Hellfire missile strikes).

I re–upped for two years after securing my preferred channels.

Last week in the middle of the first round of the Rugby World Cup Championship the sport disappeared. I called Verizon and had the following conversation:

Me: I’m no longer getting what I paid for, what kind of refund can I expect?

Verizon: You won’t be getting a refund.

Me: Verizon can remove channels and make my package less valuable without reducing the price?

Verizon: Yes.

Me: So my two–year agreement only works one way?

Verizon: It doesn’t lock Verizon in, the channel lineup can change but your payment stays the same.

All the flexibility is on Verizon’s side and all the responsibility is on our side. These cable agreements are so unfair contracts specifically prohibit participation in class–action suits.

Taking Murray’s advice, cable subscribers can fight back, not by being sued, but by suing in small claims court. Small claims is the great leveler of jurisprudence. You don’t need a lawyer and judges are often very sympathetic to plaintiffs. The term to use with the judge is “unconscionability.” This is applied to contracts where one of the parties involved is at a great disadvantage, cable agreements and Chinese organ donors being prime examples.

Small claims commonly awards three times actual damages, but no pain and suffering. Hours spent watching “Call the Midwife,” with your wife, don’t count. Here’s a sample calculation: Six months remain on your contract when Verizon arbitrarily removes a favorite channel without compensation (Univision doesn’t count either). Six months of $75.00 cable bills = $450 X 3 = $1,350.00.

Your case is unlikely to go to court because Verizon’s lawyers are expensive. Instead you’ll get a call from a nice man asking what the company can do to make you happy enough to drop the suit.

The tables have turned. Either demand the return of your channels for free or demand to be released from the contract AND receive a check to cover a refund for every month where you paid for what you weren’t getting, plus the cost of filing the suit.

If enough outraged customers file the expense, even for Verizon, would be astronomical. Management may decide it’s cheaper to be honorable.

Cable companies impose draconian contracts because consumers don’t fight back. Besides small claims court you can contact your city and state consumer affairs department, your local legislator and the Better Business Bureau to complain about abusive business practices.

Consumers of the world unite. You have nothing to lose but your chains!

In Seattle Bad Ideas Cost $70,000.00

Dan-PriceTypically leftists are insulated from the consequences of their bad ideas by a nice cushion of money, but Dan Price cut it a bit too close. Price is the CEO of Gravity Payments and his company has learned what goes up may come down — hard.

Back in April, Price announced to the world that he was raising the minimum wage for his staff of 120 to $70,000 a year. Price told The New York Times he intended to get the money by cutting his $1.1 million salary and using up to 80 percent of the company’s projected $2.2 million profit.

Blowing all the profit for salaries, with almost nothing left for investment or contingencies, would qualify Price to challenge Hillary for the nomination, but it looks like his plate is full at home.

Complete details on how to raise pay, lower productivity and alienate your best employees can be found by clicking here:

http://www.newsmax.com/MichaelShannon/minimum-wage/2015/09/06/id/673813/

Kevin McCarthy, Message Wizard, Replaces Former Wizard Boehner

Obama So Sue MeIt is axiomatic in politics that you can’t beat someone with no one. It’s a lesson one would think House Republican conservatives are well aware of, but I’m beginning to think that is not the case. As an outsider who has been active in politics for decades, I assumed that the effort to oust John Boehner as speaker included a consensus conservative nominee that would attempt to replace him.

But not only is that not the case, it appears that no conservative House member with name identification exceeding that of the current head of ISIS is even interested in the job.

Forcing Boehner’s resignation now doesn’t resemble a coup so much as it resembles a suicide bombing: Blow the place up and see who wanders in to survey the wreckage.

Right now Kevin “Benghazi” McCarthy is looking over the rubble for souvenirs he can sell on EBay.

It’s ironic that in a year when we have so many Republican presidential candidates that we could loan the RINOs to the Democrats without any drop off in quality among the remainder, House Republicans may have to hire beaters to flush an opponent out of the bushes to take on Majority Leader Kevin McCarthy.

Or was that the strategy all along? Defeat Boehner so his second–in–command could take over where he left off? A member of the crack Boehner message team that was outwitted by the pajama boys in the Obama administration every time they faced off, and who is already carrying on the Boehner tradition of lame brain public relations errors?

Are rebellious House members planning to go after all the dominoes and hope they can persuade a conservative to join the queue at some time in the future?

This could be an opportunity for outside intervention. I personally would like to know who conservative firebrand Sen. Ted Cruz thinks should be the next speaker. I have a pretty good idea who he doesn’t think is doing a good job as the leader of the Senate, so why not go positive and say something supportive about House conservatives that have been ignored for so long?

Sure a Cruz endorsement will be construed as meddling in the affairs of the House, but during his first term in the Senate Cruz has ruffled more feathers than Frank Perdue, so what’s a few more? At the very least he might inspire someone to get organized in the other house.

The important point is that regardless of the source of the impetus, conservative House Republicans need to get busy or risk becoming a noisy activist group, like Code Pink, that is always ready with a complaint, but in no condition to lead.

The clock is ticking.