The coronavirus recession and the election

As Bill Clinton famously said while campaigning for the White House for the first time: “It’s the economy, stupid.”

That was in 1992—but what about 2020?

The US economy is in bad shape as it reopens after a 2.5-month shutdown. This is an election year. The pundits are therefore speculating: Which party will win—and lose—at the polls in November?

Will the “coronavirus recession” harm Trump? Will it benefit Biden? Continue reading “The coronavirus recession and the election”

Gyms, dithering DeWine, and the long Ohio shutdown

Governor Mike DeWine, the governor of my state, doesn’t strike me as much of gym rat.

So far, the dithering DeWine has set reopening dates for restaurants, bars, hair salons, and general retail.

But no date for gyms and fitness centers so far!

I was wondering when the media was going to notice. They finally have: Continue reading “Gyms, dithering DeWine, and the long Ohio shutdown”

Why the universal basic income (UBI) won’t work

It’s not about the Protestant work ethic; it’s about economics.

Three left-leaning senators have introduced a bill to grant a regular, taxpayer-funded income to all Americans in order to combat the negative economic effects of the COVID-19 shutdown.

This Senate trio is comprised of two names you’ve heard of—Kamala Harris of California, and Bernie Sanders of Vermont—as well as one who might have escaped your notice, Ed Markey of Massachusetts.

Harris and Markey are both Democrats. Bernie Sanders is an independent democratic socialist who identifies as a liberal Democrat when it’s convenient (like when he wants to run for president).

Their plan would provide two thousand dollars per person, to all Americans. So a family of four would get $8,000 per month, directly from the government, just like a paycheck. Continue reading “Why the universal basic income (UBI) won’t work”

‘Blue Ocean Strategy’ (what I’m reading)

Every market seems to be overcrowded nowadays. It doesn’t matter if you’re a science fiction author or a plumber.

But what if you could find ways to create and tap new markets, and thereby make the competition irrelevant?

This is the premise behind the book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant. The authors, Renée Mauborgne and W.Chan Kim, developed the ideas in this book while researching and writing a handful of articles over the years. If you compete in a crowded marketplace (and who doesn’t?), Blue Ocean Strategy is very much worth reading. Continue reading “‘Blue Ocean Strategy’ (what I’m reading)”

Amazon slashes affiliate commissions

And Amazon Associates learn to love Amazon a little less

This bombshell hit online publishers this week, both large and small:

Amazon Cuts Commission Rates for Advertising Affiliates

….Commission rates for several affiliate product categories are getting reduced significantly. For example rates for furniture and home improvement products have been cut to 3% from 8% while grocery product commission rates fell to 1% from 5%. The commission on ads for headphones, beauty products, musical instruments, and business and industrial supplies got reduced to 3% from 6%.

The commission reductions are a significant blow to some Amazon affiliates who rely on commissions as a main portion of their income. Websites like BuzzFeed publish buy lists that drive readers to Amazon products in return for a cut of those sales.

Amazon is one of the oldest affiliate programs on the Internet. I don’t know exactly when it launched, but Amazon Associates certainly dates back to the turn of this century. Continue reading “Amazon slashes affiliate commissions”

End the shutdown

The shutdown is unsustainable. We need to set a date to end it.

The coronavirus pandemic caught everyone in the United States off-guard in late February and early March. In January, we barely heard about COVID-19. Then in mid-March, a national lockdown/shutdown was imposed. Owing to the American system of federalism, the lockdown was mostly implemented at the state and local levels; but it was national in scope.

Four weeks later, over half of the US economy has simply shut down. Unemployment claims are surging. Washington has already authorized a $2 trillion stimulus bill, which will only be added to our record national debt of $23 trillion. Continue reading “End the shutdown”

Should Trump have acted sooner against COVID-19?

Over the past week, a new narrative has emerged in the mainstream media: President Trump has finally, belatedly gotten serious about combatting the coronavirus, or COVID-19. A few brave correspondents at CNN.com—heretofore the mainstream media headquarters of the Resistance—have penned editorials of cautious praise.

Journalists aren’t the only ones. Minnesota Representative Ilhan Omar, one of Trump’s most implacable archenemies in Congress, openly praised the president’s ‘incredible’ response to the pandemic. New York Governor Andrew Cuomo has had nice things to say about President Trump in recent days. In the face of this unprecedented national crisis, the lion and the lamb are lying down together—albeit at a safe social distance of six feet.

But such newfound respect for the president is by no means unalloyed. The other side of the narrative is that Trump should have known better; he should have acted sooner.

There is evidence, after all, that the intelligence community warned the president about the true dangers of coronavirus back in February—even January. And while President Trump did place early restrictions on travel to and from China, the full mobilization of the American  homeland didn’t really get underway until around the Ides of March, give or take a few days.

This brings up an obvious question, the one posed by the title of this piece: Should the president have acted sooner?

Let’s not beat around the bush about the answer: Of course the president should have acted sooner. Most of the rest of us should have acted sooner, too. Speaking of the Ides of March: On Sunday, March 15, I exercised at my fitness center in suburban Cincinnati. I was still half-convinced that I was going to be able to continue working out in a public gym, just like I always have.

But I was wrong. The very next day, Ohio Governor Mike DeWine shut down all bars, restaurants, movie theaters…and health clubs.

I failed to take COVID-19 seriously at first for the same reason that President Trump probably failed to take it seriously. We’ve seen this movie multiple times before, and it has always ended fine for Americans.

No, I’m not talking about the 2011 pandemic film, Contagion. I’m referring to events in the real world. How many times since the beginning of this century have we seen a new flu arise out of  some distant corner of the world, only to dissipate before it reaches American shores?

There have been global outbreaks of H1N1, the avian flu, SARS. None of them seriously impacted daily life in America.

We all make future predictions based on past events. Why should it have been any different this time?

The experts warned President Trump about COVID-19 in January and February of this year. That seems almost indisputable now. But those same warnings, if more generalized, were out there during the presidencies of Barack Obama and George W. Bush. They did nothing, either…so long as they didn’t absolutely have to.

Yes, Bush and Obama were both warned. Over the past fifteen years, I have heard and read multiple warnings from epidemiologists. They repeatedly said that the emergence of a truly global, society-altering pandemic was a question of when, not if.

If I knew that, as a private citizen, then Presidents Bush and Obama also knew. We should have been stockpiling protective masks, ventilators, and hand sanitizer, in the same way that we stockpile petroleum. Imagine how much more prepared we’d be now, if we’d started such actions in 2012, or 2006?

The coronavirus wasn’t the only existential threat that we might have seen coming. What about sentient human threats, like stateless Islamic terrorism?

At the beginning of this century, the cataclysmic black swan event was 9/11. As most readers will know, Osama bin Laden and al-Qaeda were behind that.

The dangers of Osama bin Laden were known to President Bill Clinton. President Clinton had at least one clear chance to take him out with a missile strike. Clinton didn’t act decisively, though, for fear of the political consequences.

And what of Clinton’s successor, George W. Bush? Bush believed that he was going to be a domestic policy president. Shortly after taking office, Bush deprioritized the work of the CIA’s “sisterhood”—a group of mostly female analysts who were then closing in on the Saudi terrorist.

Less than a year into Bush’s first term, 9/11 occurred. How’s that for lack of foresight?

President Reagan, the hero of my Republican youth, played a pivotal role in bankrupting the Soviet Union with an expensive arms race that a Marxist economy simply couldn’t win. During the 1980s, American aid to the Afghan mujahideen helped turn the Soviet invasion of Afghanistan into the USSR’s Vietnam. That effort not only drove the Soviets out of Afghanistan, it also contributed to the collapse of the USSR itself.

What Reagan didn’t foresee, however, was that a decade later, Afghanistan would become the home base of the Taliban. And one of the Arab mujahideen—that same Osama bin Laden—would eventually stop killing commies and start killing everyone else, most of all Americans.

Oh, and President Reagan also didn’t foresee that after the fall of the USSR, Russia was going to turn into something that is arguably worse. Vladimir Putin’s Russia is preferable to Stalin’s USSR; but Mikhail Gorbachev’s USSR might have been preferable to this new incarnation of czarist Russia.

Reagan’s predecessor, Jimmy Carter, also failed to act when he really needed to. Carter should have recognized by 1977 that the Pahlavi regime in Iran was tottering. When the Shah of Iran visited the White House in November of that year, tear gas marred the state visit, as Iranian students studying in the US clashed with riot police. CIA analysts and State Department officials based in Iran (which was then a US ally) warned Carter that something bad was coming over there.

But Carter ignored the warnings. Or at least he didn’t act decisively on them. Fifty-two American hostages spent more than a year of captivity in Iran. And for forty years now, Iran has been not a US ally, but our most persistent and troublesome foe.

I grew up Catholic during the 1970s. In those days, the administration of John F. Kennedy, America’s sainted Roman Catholic commander in chief, was still very much a part of recent memory. Portraits of the fallen president hung in at least one of my primary school homerooms. We memorized passages of Kennedy’s 1961 inaugural address like we memorized passages of Catholic Church catechism. (I can still recite entire paragraphs of it from memory.)

Nevertheless, I can also see where Kennedy failed to heed warnings from his advisors, from history, and from common sense. Kennedy’s Bay of Pigs invasion (1961) was a disaster from the planning stage. Castro’s forces outnumbered the American-backed anti-communist guerrillas by at least 10-to-1.

Kennedy should have known that the Bay of Pigs wasn’t going to be a success. Members of the “deep state”, moreover, advised him not to proceed. But Kennedy went with his gut, and greenlighted the debacle.

The following year, Kennedy narrowly pulled us out of the Cuban Missile Crisis. But every historian will acknowledge that we could have just as easily been incinerated.

Why didn’t Kennedy foresee that the Soviets would put nuclear missiles in Cuba? After all, we had already put nuclear missiles on their doorstep, in Turkey. What the Soviets did was a logical escalation.

What was JFK thinking?

When presidents fail to heed the warnings of advisors and circumstances, the result is often a raft of conspiracy theories. There are Americans who believe that FDR deliberately sacrificed over 2,400 American lives on December 7, 1941, so that the isolationist American public would finally consent to join the war against the Axis powers.

By 1941, after all, FDR had ample evidence that a Japanese attack on Pearl Harbor was imminent. Relations between the United States and the Empire of Japan were already near the breaking point. For years, a final exam question at the Imperial Japanese Naval Academy was, “How would you carry out an attack on Pearl Harbor?”

The Japanese had also tipped their hand with their prior actions. Thirty-seven years before Pearl Harbor, Japan carried out a similar surprise attack on a different enemy. The Russo-Japanese War began in February 1904, when Japanese forces suddenly and without provocation bombarded the Russian naval base at Port Arthur, on the Chinese mainland.

Japan made an official declaration of war three hours later.

Did President Roosevelt knowingly immolate 2,403 Americans on the altar of geopolitics on December 7, 1941? If you believe that, then you essentially believe that FDR was a homicidal sociopath. I don’t believe that.

It’s possible, sure. But the far more likely explanation is that FDR, like so many US presidents before and after him, lacked a perfect insight regarding which dangers required an immediate response, and which could simply be monitored. For no president can respond with urgency to every potential danger.

Hindsight, moreover, is always 20-20. This is as true in our private lives as it is in the fates of nations. ICU units throughout the country are filled with terminal patients whose lifestyle diseases were entirely—or almost entirely—avoidable.

They were informed, ad nauseam, about the dangers of smoking. Their physician warned them to lose weight, to get more exercise. Watch that blood sugar, they were told. Your blood pressure is too high.

They had years to turn their situations around, to avoid disaster. And yet they still wound up in those ICU beds.

Why? They probably weren’t suicidal. But something else was always more urgent—more pressing. Who has time to worry about a heart attack that might strike you ten years in the future, when there is so much that demands your attention right now?

And so it goes with presidents. When you’re President of the United States, you’re constantly bombarded with warnings about short-term and long-term dangers to America. The Chinese are expanding their blue-water navy, with the aim of threatening the American heartland with nukes. Iranian and North Korean hackers are trying to take down our electrical grid. There’s also a new disease in Wuhan, China; you really ought to take a look at that.

On occasion, presidents overreact to a threat. (President Bush’s 2003 invasion of Iraq was a recent, textbook example of such an overreaction.) But most of the time, their mistake is to not recognize a potential threat until it becomes an actual, existential threat.

We can certainly make the case that President Trump fell into that trap in January and February of this year. He should have acted sooner and more decisively in a critical moment. He didn’t. But the same can be said of FDR, Clinton, Carter, Bush, and others.

President Trump is a polarizing figure. This statement doesn’t, in itself, mean that he’s objectively good or bad. It means what you already know: You can’t say his name in a group of people without eliciting strong reactions.

Americans tend to either love him or hate him. If you’re on the left, President Trump is horrible, evil—worse than Hitler, even. Worse than anyone or anything imaginable. Orange Satan.

If you’re on the right, meanwhile, President Trump is the nearly mythical figure of his political rallies (which won’t be resuming anytime soon, thanks to coronavirus). He’s The Art of the Deal, the charismatic host of The Apprentice. He’s the man who is going to Make America Great Again.

Perhaps Trump fits neither of those partisan hyperboles. Perhaps he’s simply yet another American president whose crystal ball was imperfect at a critical moment. And now, as a result, both the president and America find themselves behind the eight ball.

Notice how you don’t hear as much about the upcoming election in November in recent days. Oh yeah, that. We’ll certainly get around to it…provided we can all make it to the polls without having to don hazmat suits.

At the moment, most of us would be happy to simply see an America that is free of coronavirus. Let’s hope that President Trump, and our more conscientious leaders in both parties, get us there soon. There will be plenty of time to play Monday morning quarterback afterward, after the present crisis ends.

The Bernie Sanders of the 1930s: Huey Long

Bernie Sanders is not the first “share the wealth” populist to come along, and he almost certainly won’t be the last.

Around the turn of the 20th century, a socialist named Eugene V. Debs ran for president multiple times (not as a Democrat, but explicitly as a socialist). In the election of 1912, Debs won 6% of the popular vote.

And then there was Huey Long, the so-called “Kingfish”.

Huey Long came from a poor part of the country (rural Louisiana), though his family was well-off relative to his neighbors. Huey Long was egotistical, power-hungry,  bombastic, and extremely divisive.

Unlike Bernie Sanders, Huey Long explicitly disavowed Marxism. What Long seemed to want (other than his own political power and self-aggrandizement) was a more robust form of the New Deal welfare state, which was in its infancy in Long’s day. (Long was killed by an assassin in 1935.)

I’m presently reading Kingfish: The Reign of Huey P. Long by Richard D. White.  This is a very readable biography; and I highly recommend it if you’re interested American history and/or economics. 

Bill De Blasio’s nationalization schemes are bad for your health

De Blasio: Coronavirus ‘Is a Case for’ ‘Nationalization of Crucial Factories and Industries’

Yes, because countries that nationalize industries have such a great track record on healthcare, right?

Mayor De Blasio is not a classical liberal; he is an angry, power-hungry leftist who is eager to exploit our worst instincts in a time of national crisis.

Our healthcare industry needs more competition, not less. And it certainly doesn’t need to be placed in the hands of government bureaucrats.

What we need right now more than anything (where the COVID-19 crisis is concerned) is a safe, cheap, and effective vaccine. What message will it send to companies that might develop such vaccines (as well as other life-saving products of the future), if we allow Mayor De Blasio to nationalize factories that make hand sanitizer and ventilators?

In addition to being a closet Trotskyite, Mayor De Blasio demonstrates an astounding ignorance of how modern economies actually work. (In this regard, he shares a lot of common ground with Bernie Sanders.)

Coronavirus and oil

You may have noticed that gasoline is cheaper than it used to be. Here in Cincinnati, prices have fallen to $1.99.

The culprit? Coronavirus. Before the coronavirus epidemic, gas prices in Cincinnati were running close to $2.40/gallon.

With less demand for all kinds of fuel, oil prices have sunk to a three-year low.

Whether or not the coronavirus panic is exaggerated or not, one thing is certain: It is already affecting consumer behavior, and not in a positive way. Companies are telling employees to forgo nonessential business travel. Individuals are canceling personal trips—especially to the Far East.

Airline stocks have been battered, of course. At least one major airline, United Airlines, has announced a temporary hiring freeze.

The end of the world? Or the end of the global economy?

No. (At least, probably not.)

This too shall pass. Epidemics change behavior; but radical changes are usually only temporary.

I was a kid in the 1970s, during the first herpes scares. I was still in primary school at the time, so I didn’t have much of a sex life. I remember hearing, though, that if you kissed anyone, you would get herpes. Plenty of adults believed that, too. A popular joke of the time went, “What’s the difference between love and herpes? Herpes is forever.”

Then AIDS struck in the mid- to late 1980s. By that time, I was at least wishing for a sex life. This was the era of hyper-vigilance about “safe sex”. So no orgies for me, circa 1987 or 1988.

In case you haven’t noticed, there is still no cure for either herpes or AIDS, and people are still kissing and having unprotected sex. (I don’t know for sure about the orgies.) It therefore follows that they’ll start traveling again, coronavirus or no coronavirus…but maybe not as much as usual, for quite some time.

That said, there is no real upside to the coronavirus epidemic, with one possible exception: With less air travel and fuel consumption, we may not have to endure quite as many lectures about climate change for a while. The airlines aren’t the only parties who’ve been set back by the “black swan” event of coronavirus. The epidemic has put a damper on Greta Thunberg’s business model, too.

A progressive “spending tax”?

I’ll admit, it was a provocative headline.

Mike Bloomberg’s presidential run could cost taxpayers billions

In the above-linked op-ed piece, Edward J. McCaffery, a professor of economics at the University of Southern California, declares that Michael Bloomberg’s self financed bid for the presidency could soak the taxpayers.

Oh, no, I thought. Is Bloomberg somehow tapping into the US treasury in order to purchase all those Facebook ads that he’s been running of late?

No, nothing like that. It turns out that Edward McCaffery objects to the principle of a wealthy man spending his own money. Bloomberg should, instead, save it all so he can posthumously give it to the government. (Because government, after all, always does such wonderful things with the money we’re forced to send them.)

… in a very meaningful sense, Mayor Bloomberg is playing with what in the long run would be house money. The public is effectively picking up at least 40% of the tab for Bloomberg’s massively financed run. The reason is the existence of the US estate or “death” tax. The simple fact of the matter is that….If Bloomberg were to meet his maker still holding onto his full $62 billion, the federal government would take 40% of that sum, nearly $25 billion, in the estate tax..

McCaffery then uses Bloomberg as a springboard to float a “spending tax”.

This would give the government the authority to decide when individuals are spending their own money too freely (as defined by the government, of course).

The government would counteract such waste by confiscating the bulk of a person’s money, so that the government could then waste it, instead. 

Under a spending tax with marginal rates of 90%, say, as the income tax had for decades, Mayor Bloomberg could still spend $5 billion running for President. But he would have to pay $45 billion in taxes — 90% of $50 billion, leaving $5 billion to spend — for the privilege of doing so. This is why I have argued in more formal academic work that a progressive spending tax might indeed be the last best hope for campaign finance reform. Our current tax system encourages our growing number of billionaires to spend it all, now, on any whim or fancy. That’s crazy. Maybe it’s time to get a tax system that lets billionaires be billionaires, but that charges them an appropriately hefty fee when they binge on personal spending. If we don’t, we can expect many more “self-financed” campaigns of all sorts, not just Mike’s.

And, of course, we can assume that Professor McCaffery would be eager to join an unelected board of appointed government bureaucrats, who would decide which expenditures would be taxed at a punitive rate of 90%. 

Heaven forbid that individuals who have earned money should be able to spend it “no questions asked”, as McCaffery puts it elsewhere in his opinion piece. 

I get it: If greed is the dark side of free-market capitalism, then envy is the dark side of progressivism/Bernie Sanders-style socialism. We see Michael Bloomberg with more money than the Almighty, and we say, “The government shouldn’t allow that. The government should take it and redistribute it. Starting with me.”

But Michael Bloomberg doesn’t owe you squat. Bloomberg is the grandson of an immigrant. He attended a public high school in Massachusetts. This is not a guy born with a silver spoon in his mouth. He made his own silver spoon.  

But according to Professor McCaffery, that spoon really isn’t his.

This would be a dangerous precedent. If today the government declares the right to exercise veto power over the private spending decisions of billionaires, then it will want to do the same thing to millionaires next year.

And the year after that, individuals with “fortunes” of a few hundred thousand. After all, not everyone has a few hundred grand lying around, right?

So maybe the government should take their money, too. After all, we don’t want it to be spent irresponsibly. 

Fact-checking the fact-checkers: Bernie Sanders and taxes

Did Bernie Sanders really call for a 52% tax on incomes of $29,000?

Well, of course he didn’t….as the folks at FactCheck.org have pointed out.

Sanders Didn’t Call for 52% Tax on $29,000 Incomes

But that’s only part of the story.

Sanders is claiming that he’ll only tax “billionaires”. But his proposed spending plans (per CNN) would total between $60 and $97 trillion. There is no way to do that without taxing all of us, a lot. That’s where the claim about 52% taxes on $29K incomes arises. (Bernie Sanders is running against Trump and moderate Democrats, but he’s also running against basic math.)

“Tax the rich” is the siren song of every leftwing demagogue, from Lenin to Huey Long to Hugo Chavez. But wherever such programs are implemented, they always end up taxing everyone a lot, all the way down the line.

But high taxes aren’t the worst of it. While socialist, command-and-control economic policies may or may not result in gulags, they always result in chronic shortages over time. This is because socialist policies eliminate the basic incentives of supply and demand. This is why the Soviet economy failed.

The best modern example of the Bernie Sanders agenda in action can be found in Venezuela. During the 1990s, Venezuela was one of the most prosperous nations in Latin America. Then Hugo Chavez came to power with many of the same policies now proposed by Sanders. Now the Venezuelans are burying starvation victims without coffins. The people of Venezuela are truly “feeling the Bern”.

What Sanders proposes simply doesn’t work in the real world, as has been proven again and again.

Bernie Sanders in 1981

In almost 40 years, he’s learned remarkably little.

The above interview is from the Phil Donahue Show in 1981. This was the early Reagan era, and also at the height of the Cold War. The election of a self-declared socialist as the mayor of Burlington, Vermont, was therefore newsworthy.

It doesn’t take much pressing on Donahue’s part to get Bernie to label himself a socialist, and, as a corollary, “not a capitalist”. 

Bernie does relent a little at the end, when he admits that competition may have some merits at the local level. What he dislikes is “corporate capitalism”.

This statement reveals that Bernie Sanders doesn’t understand the first thing about a modern economy. Without “corporate capitalism” we don’t get iPhones, Toyotas, or toothpaste.

In the realm of pharmaceuticals, we don’t get anything but folk medicines.

We certainly don’t get an Internet. 

What Bernie is describing is an idealized (and completely unrealistic) Rousseauian economy based on locally made crafts and agriculture. It’s a pretty picture, until you really think about what that would actually entail, when carried out on a national level. Bernie is basically describing a sustenance economy.

Coronavirus and global supply chains

The coronavirus outbreak in China is already threatening the supply chains of some major corporations.

These include Apple, a company whose products I use everyday. Foxconn, a Taiwanese company with plants in China, makes many of the components and assemblies of the iPhone line. Foxconn production in China has been severely impacted by the coronavirus outbreak.

Since the 1990s, major US companies have rushed to make their supply chains as global as possible, with much of their production moving to China. In recent years, we’ve seen evidence that this headlong scramble for the far-flung, global supply chain may have been carried out in haste–especially where China is concerned.

Xi Jinping has long shown an autocratic streak. Much of the technology being transferred to China ends up as Chinese military technology, which is subsequently aimed at the United States and its allies. (China is a pure example of the “military-industrial complex”.) We have also seen trade disputes between President Trump and President Xi. And now we have the coronavirus.

The world is certainly more interconnected than it was a generation ago. But dreams of a truly borderless world remain unrealistic at present. The coronavirus gives us yet one more reason to be cautious in regard to globalization.

The future of Amazon

From Motley Fool: Why Jeff Bezos Might Want to Break Up Amazon

There’s a case to be made here. Those of us who can remember when Amazon was nothing but an Internet bookstore never dreamed that it would become what it is today.

A planned breakup might make sense functionally.

From a political perspective, the success of Amazon’s model has earned the company detractors from both sides of the left-right continuum.

Think about it: Both Alexandria Ocasio-Cortez and Donald Trump have criticized Amazon in recent years. And those two agree about almost nothing.

The Apple Store business model is broken

Here’s what’s wrong…and how Apple can fix it.

This past week I took my 73 year-old father to the Apple Store in the Cincinnati area with the intent of purchasing at least one (and probably two) items. My dad was in the market for a new iPhone and a new laptop. 

We arrived twenty minutes before the store opened. A young Apple Store associate entered our information in a tablet before the store opened. (Like the government in Logan’s Run, Apple Stores seem to eliminate every member of their band over the age of thirty. I have never been waited on there by anyone much beyond that age.) 

Great! I thought. This is going to be fast! Whiz-bang efficiency!

But I was wrong. It wasn’t fast. 

To make a long story short, we spent 90 minutes waiting around the store. We stood. We paced. We looked at the few items that you can view without the help of a sales associate. (And there aren’t many of those.)

And then, finally, we gave up. We left without buying anything. At the time of our departure, we were told that we would be waited on in…about twenty minutes.

That was probably an optimistic assessment. I think it would have been more like an hour: There were around two dozen other customers waiting around for service, just like us. 

I saw several of them walk out in frustration, too.

Apple: great products, sucky retailing

I am a ten-year member of the Cult of Mac. 

I personally haven’t used anything but Apple products since 2010, when a final malware infection of my Dell PC, loaded with Windows XP, convinced me that enough was enough.  

So I bought an iMac. The rest, as they say, is history. Since then, I’ve owned two iMacs, two MacBooks, four iPods, and three iPhones. 

I’ve become an evangelist for Apple products. I’ve converted not only both my parents, but at least two or three of my friends. 

Apple products really are something special. But boy, those Apple Stores sure do suck.

And I’m not the only one who feels this way.

Widespread complaints

A May 2019 article in the LA Times is entitled, “How the Apple Store has fallen from grace”. Focusing on an Apple Store in Columbus, Ohio, the article could have been written about my recent visit to the Apple Store in Cincinnati: 

Web Smith’s recent experience at his local Apple store in the suburbs of Columbus, Ohio, has been an exercise in frustration.

There was the time he visited the Easton Town Center location to buy a laptop for his 11-year-old daughter and spent almost 20 minutes getting an employee to accept his credit card. In January, Smith was buying a monitor and kept asking store workers to check him out, but they couldn’t because they were Apple “Geniuses” handling tech support and not sales.

“It took me forever to get someone to sell me the product,” said Smith, who runs 2PM Inc., an e-commerce research and consulting firm. “It’s become harder to buy something, even when the place isn’t busy. Buying a product there used to be a revered thing. Now you don’t want to bother with the inconvenience.”

There are many similar stories in the media of late, as well as customer complaints on social media. 

Cult of Mac members still largely love their iMacs, MacBooks, iPhones, iPods, and Apple Watches. But they increasingly dread the next trip to the Apple Store.

So what went wrong? And what needs to be done? 

An obsolete concept of the pre-iPhone era

The first Apple Stores debuted in May 2001—going on twenty years ago. Back then, they showcased only the computers, which had a minuscule market share at the time, compared to PCs made by Dell and Gateway. 

iPods were added in October 2001, but these, too, were specialty products when they debuted. For geeks only. 

The real tipping point was the introduction of the iPhone in 2007, and the subsequent ubiquity of smartphones. 

In 2001, a relatively small percentage of the population owned an iMac or a MacBook. In 2019, 40% of us own iPhones. The iPhone is a mass-market product. But it’s still being retailed as if it were a specialty item.

And when you visit an Apple Store in 2019, you’ll find that 70% of the traffic to these upscale boutiques is iPhone-related. Many are there for routine password resets. 

This is traffic that was never imagined or accounted for in 2001, when the Apple Store concept was launched.

Zen over function

Apple Stores don’t look like ordinary electronics retails stores. Steve Jobs was a devotee of eastern Zen practices, and the Apple Store resembles a Japanese bonsai garden. There is an emphasis on minimalism, and lots of blank space. 

The downside of that is that you can’t do much to serve yourself, as you could in a Best Buy or a Walmart. 

You basically walk into the store, and an employee puts you into an electronic queue. Then you wait around. 

But you have a very clean, zen setting in which to wait. 

Uncomfortable stores

Speaking of those long waits….

Apple Stores do look nice. But they are not comfortable places to spend an hour waiting for a salesperson. Which is almost inevitable. 

There are few stools, and it’s clear that the stools were selected for their  sleekness, not their comfort. 

There aren’t any plush bean bags or sofas to sit on. Heavens no! That would detract from the zen.

Inefficient use of staff

Too many Apple Store employees are exclusively dedicated to crowd control—to herding you into virtual line. 

This is because you can’t serve yourself in an Apple Store. Go into a Best Buy, and there are clearly defined areas for looking at computers, at cell phones, at peripherals. There’s a line for service in every Best Buy. A line for returns. 

Normal retail, in other words. 

There are no clearly defined areas within the Apple Store. Customers are all milling about, most of them doing nothing but waiting to be attended on. 

Many of these customers are frustrated and growing impatient. They want to know how much longer they’ll have to wait. This means that at any given moment, at least a quarter of the Apple Store employees you see on the floor are directing this vast cattle drive. 

They aren’t selling any products, they aren’t helping any customers. They’re just managing the virtual line. 

That amounts to a big waste of the Apple Store’s manpower—and of the customers’ time.

Decline of staff quality

Apple stores were once staffed by highly knowledgeable sales personnel. That was in the days when the stores only carried computers, and hiring was very selective.

Those days are gone. Now that it’s all about selling a gazillion iPhones, Apple Store employees are no longer specialists. Despite the pretentious name “Genius Bar”, geniuses are in short supply on the sales floor nowadays. You’re going to be served by run-of-the-mill retail sales staff. And their expertise, helpfulness, and attitudes vary greatly.

Not enough stores

There are about a dozen AT&T stores within a twenty-minute drive of my house in suburban Cincinnati.

Guess how many Apple Store there are…

One. In the Cincinnati area, we are served by a single Apple Store at the Kenwood Towne Centre.

And for those readers in Los Angeles and New York, who maybe think that Cincinnati is a one-horse cow town: There are 2.1 million people in the Greater Cincinnati area. It’s the 29th largest metropolitan area in the United States. 

And we have one Apple Store.

There are only eight Apple Stores in all of Ohio, and a total population of 11 million. That means one Apple Store for every 1,375,000 Ohioans. 

But it could be worse: There are only three Apple Stores in the entire state of Wisconsin. Kentucky has only one Apple Store.

But there are only twenty-two Apple Stores in the entire State of New York. AT&T has more retail locations than that just in Cincinnati. 

No wonder the stores are packed. I made my aforementioned trip to the Kenwood Towne Center Apple Store with my dad on a Friday. Granted, Friday is typically a busier retail day than Tuesday, Wednesday, or Thursday. But this was during the middle of October—not exactly a peak shopping season. The back-to-school rush is already over. The Christmas shopping blitz won’t begin for another six weeks. 

And at 9:40 in the morning—twenty minutes before opening time—there was already a crowd outside the Apple Store.

The Apple Store needs to be refocused on function rather than branding

As an Apple employee quoted by the LA Times notes, Apple Stores are “mostly an exercise in branding and no longer do a good job serving mission shoppers”.

The “mission shopper” is the shopper who goes into the store with a specific purchase in mind (versus someone who is still torn between a Mac and a PC, or an iPhone and an Android). 

These are customers who could largely serve themselves. If only that were possible. But due to the philosophy of the Apple Store, there is minimal “clutter” at these boutique shops. In other words, these are retail shops with minimal merchandise on display. 

Apple Stores need to become more like Best Buys: There should be clearly defined areas for looking at each category of merchandise, and clearly defined areas to wait for technical support. 

As I mentioned above, most of the traffic in the Apple Store seems to involve iPhone support. The iPhone customers definitely need their own area of the store. 

This probably means abandoning the whole boutique concept. At present, Apple Stores are small but mostly empty spaces in high-rent locations. That is, again, all very zen and cool-looking. But it doesn’t happen  to be a great way to purchase a new MacBook, or to get your iPhone unlocked when you’ve forgotten the passcode.

A broken model in terminal need of repair

 The Apple Store might have been a workable retail model in the pre-iPhone era, when Mac devotees really were an exclusive tribe. The Apple geeks of 2001, with their tattoos and soul patches, may have appreciated the gleaming but empty Apple Stores. 

But the Apple customer base has changed and expanded since 2001. When you factor in iPhones, Apple is now a mass-market brand. (And Apple now owns 13% of the home computer market.)

 Having become a mass-market brand, Apple needs to adopt the more efficient practices of a mass-market brand. 

That means dropping the boutique pretentiousness that makes Apple Stores great places to photograph, but horrible places to buy stuff. The hoi polloi of 2019 are not the rarified Apple geeks of 2001. 

We don’t want or need a zen experience. We just want to get quickly in and out of the Apple Store with minimal delays, like we can at every other retail shop.