Talk Newspaper: Jeff Goldent
Last week's column on Harry & David's struggles under the ownership of Wall Street buyout firm Wasserstein & Company struck a chord. Readers said it was time to look harder at this. I wrote that SEC filings "show Wasserstein pulling $82 million in 'dividends' out of Harry & David in recent years, plus an annual $1 million dollar 'management fee,' earned, as far as anyone can tell, by periodic phone calls from New York asking 'So how's it going, Bill?'" With that kind of burden, the otherwise profitable Company — and that's no small feat for an upper-end mail order business these days — is stumbling.
But at least one reader thought I seriously missed the boat. His articulate post on the Forum deserves space on the page this week.
He begins with a poke at my reworking of Ross Perot's "giant sucking sound" to describe the effect on the Valley of firms like Wasserstein and Amalgamated Sugar, which devastated the old Medco forests in the 1980s to pay off its junk bonds. "What about the giant sucking sounds coming from Medford," this reader asks, "pulling local money out of the 125 or so economies of Harry & David's other locations? How about that same sucking sound when they purchased Jackson & Perkins Roses? Every gift basket they sell sucks money out of some other local community, or out of some family's pocket. How is that any different than Wall Street?"
Mostly it's different because Harry & David actually grows, processes, manufactures and ships real stuff, no matter where it's purchased. Wasserstein does none of that. It did provide capital at a vital time, and that deserves profit. But that happened once, in 2004, and the payback will go on forever, or until they sell to another Other People's Money agent who wants to do the same thing. Capital is just one essential input; what's out of balance is the way it's come to trump all the other inputs — labor, management, raw material, intellectual and design content — put together. When you build a system on that principle, you end up with a financial establishment so powerful that it can ransack the world economy and get taxpayers riding to its rescue, turning global capitalism into a system that privatizes profits (theirs) while socializing risk and financial loss (ours).
But the reader poses a tougher challenge than that. When a Los Angeles shopper carries a giftpack out of a Harry & David Country Store at the outlet mall, s/he's not shopping locally. Net profit travels straight up I-5 to Medford. Good for us; for L.A., not so much. Is this hypocrisy, as in let's buy local, but get others to buy our exports to them? I don't think so. Buy Local isn't an absolute creed and shouldn't be. Towns have traded with one another through centuries of economic balance, enjoying goods they couldn't grow or make themselves. There's give and take. But the Age of Wal-Mart has a whole lot of communities giving and giving—dollars, tax and zoning goodies, family-wage jobs— and a small number of multinational firms and financiers taking and taking. A thriving national economy calls for productive communities everywhere, balancing imports of what they need with exports of what they can make well. We've lost that balance. More often than not, buying local would help restore it.
"While your ideals may be noble, Mr. Golden," the reader goes on, "they are no longer practical. There will always be a need for Mom & Pop stores, but like it or not, we are now forced to compete in a global economy."
Yes. But does that mean surrendering to a global economy?
"Our forced labor standards and our overbearing, sometimes even insane, environmental policies have already forced the price of American goods to skyrocket"¦. So, as our cost of living continues to rise, and as our companies slowly go out of business, we are forced to import, while other countries profit from our ignorance."
This is the sponsoring argument for the deadly race-to-the-bottom, where the winner is whoever can most deeply cut wages, working conditions and environmental safeguards. Does anyone see that leading to a world we want to hand over to our children?
But this reader points out a fierce and real dilemma: prospering economically and environmentally in a global matrix that rewards the race to the bottom. I appreciated the contribution to a debate with no simple answers until his last sentence: "So do we re-embrace capitalism; the principals that made this country so great, or do we continue down this road of Marxism, and forever hear that giant sucking sound?" Ah, the dreaded M-word (twin to the C-word), used so much more often to freeze instead of encourage thinking.
Well, if were easy to talk about this stuff we'd probably have more answers by now.
Jeff Golden is the author of Forest Blood, As If We Were Grownups, and the novel Unafraid, with excerpts available at www.unafraidthebook.com.