Beware the Dangers of Grocery Shopping

This AP story comes from Cleveland.  “A woman injured when she was struck by a motorized shopping cart in a suburban Cleveland grocery store has been awarded $1.2 million by a jury.”  Another customer lost control of a motorized cart and struck the 71-year-old woman.  The lawsuit says she was “tossed” 4 feet and sustained head and neck injuries.

Her lawyer agued that the store “failed to show customers how to properly use the store's motorized carts.”  The caring, but misinformed jury probably found in her favor for a couple of poor reasons.  First, they did not think it was unreasonable for the grocery store to hold a short driver-education class for every time someone used their motorized carts.  Second, they figured the store has lots of money and no one is really hurt by handing over $1.2 million to her and her lawyer. 

This reflects the failure in economic understanding and responsibility prevalent in our society.

Another factor is that by law in the US a person or organization found with any small fraction of fault can be assessed full damages, which turns the focus toward persons or organizations with the ability to pay rather than determining the size of their contribution to the problem.  The system in the US is also structured so that anyone can sue anyone else without spending a penny.  Lawyers take on the risk of losing the case in return for a large percentage of any winnings.  What it may cost other parties to defend themselves against possibly spurious accusations is usually of no concern.  Many of these cases are settled without going to trial merely because the cost of the settlement is less than the cost of the long legal battle.

The outcome of this case may be that all grocery stores are less inclined to provide motorized carts.  Another option might be to post a sign at the doorway warning everyone that they enter at their own risk – requiring every shopper to sign a hold-harmless agreement before shopping would be a stretch, but the way things are heading, not completely crazy.

How else does this behavior of juries and these societal assumptions, impact the public in general?  Look at almost any other transaction you enter into.

My heath savings account website agreement has a section on Limitation of Liability. “We are not liable to you for any act or failure to act that is reasonable under the circumstances or that is consistent with any applicable laws, rules, or regulations, or with general commercial practices of banks. “

My credit card has a “Disclaimer of Warranty and Limitation of Liability.”  It begins:  “The information, products and services on this Web site are provided on an "AS IS," and "AS AVAILABLE" basis. [The company] does not warrant the information or services provided herein or your use of this Web site generally, either expressly or impliedly, for any particular purpose and expressly disclaims any implied warranties, including but not limited to” – and it goes on for another 714 words, some in bold and some in ALL CAPS.

Every phone app or new download onto the computer comes with a similar agreement, pages and pages of legal sentences about use and liability.  When you join a gym or sign up for yoga, you sign a hold-harmless agreement.  Even when your child goes on a field trip for school a typical permission slip may read:  “I agree to instruct my child to obey all rules, regulations and instructions given by the teacher and/or authorized school personnel.  I further agree that no teacher or authorized personnel shall be held responsible or liable for injuries or other mishaps caused by my child’s deliberate disobedience of rules, regulations or instructions.”

These are so easy to ignore and just sign the form or check the box.  But remember, each of these paragraphs is there to protect us from each other.   Whether we are a teacher, a homeowner with an icy sidewalk, a manager of a restaurant, a youth sports coach or whatever; even when we are doing the best job possible and being as careful as we can, we are exposed to legal problems.  This is the direction America is going.

Notice that they did not hold the driver of the motorized cart responsible; it was the store’s fault – deep pockets.  Imagine if the shopper who was struck was instead a college football player or the same lady was hit by a privately owned motorized wheelchair in the parking lot.  Would the jury have been so sympathetic – similar circumstances or different players would likely have yielded a different outcome.

None of the Above (2)

It has finally come down to it.  Election day is tomorrow.  Our choices from the major parties boil down to two of the most disliked and distrusted candidates ever to run for the office of president.  Most of their campaigning, and much of the campaigning for other offices as well, over the last 3 months has consisted of each candidate accusing the other of being a bigger liar and a bigger crook.   It was like watching children on the playground where the best defense was to throw more mud.

For those locked into voting for a major party candidate, it is truly a choice between the lesser of two evils.  It’s like being passengers on an ocean liner in the North Atlantic being asked to vote on which iceberg to hit.  Many voting decisions are being driven by fear, fear that one is so bad we must vote for the other to avoid a complete disaster.  (If we could find one other person to vote for instead of one of these two to vote against, that one person would surely win.  But the fear of “throwing away” one’s vote seems to be greater than the fear of either choice.)  Remember, the lesser of two evils is still evil.

How did we get here?  If you have been paying close attention to these entries over the last five and a half years, you will be right in saying, the candidates we have are exactly the ones we deserve.  They are the consequences of our behavior.

Americans have become so lax, so superficial, so easily influenced by hype and empty slogans, so clueless about the real workings of the economy that they voted in the primaries for someone best known as the star from reality TV, on one hand, and on the other, a person whose main qualification is that she might become the first woman president.  The candidates mostly appealed to our fear (of all foreigners) and our victimhood (as women and other minorities).   Meanwhile the press continued to reveal scandal after scandal about both, misstep after misstep, but apparently to paraphrase one of the candidates, either one could shoot a person in the middle of Times Square and not lose a single supporter.  Note that the alternatives in each party were no prize packages either, just the usual parade of professional (and a few amateur) politicians.

Yes, America, we are getting exactly what we deserve by virtue of our laxity in discipline, critical thinking, economic understanding, perspective and responsibility.  We have either not been paying attention, or we have let our personal and public standards slip to such an extent that this is what we end up with in our choice of a leader.   For too long we have let the political parties, the politicians, the media and each other get away with these half-hearted efforts, these half truths and slanted “facts” and now we are paying for it.

So go to the polls tomorrow, hold your nose and vote.  Or don’t go to the polls tomorrow as a protest.  Or vote for a third party as a message to the major parties to clean up their acts. 

Whatever happens tomorrow will make little difference.  Government cannot fix problems that are the accumulated consequences of individual problematic behavior and poor choices.  They cannot and they should not.  But they will try anyway, and all we will see are consequences heaped on consequences.  Americans must take personal responsibility for the situation and act in their own lives to change it or it will only get worse.

Listen to (Don't Ask) Your Doctor

One of the key behavioral dimensions is discipline:  doing what needs to be done in the proper timeframe.  The opposite of discipline may be procrastination, but discipline also includes actions like delaying gratification and impulse control.  The important thing to understand about discipline is that it is not particularly challenging mentally.  It’s usually easy to understand what needs to be done.  All the steps are laid out and reasonable.  The difficult part comes in the doing.

I call discipline the diet dimension.  What needs to be done to lose weight and keep it off is easy to understand and common knowledge, eat less and exercise more.  Actually doing it is the challenge.  People make fortunes selling books and diet programs, some with tricks and secrets, foods to eat and foods to avoid.  Many just provide help with eating and/or exercising.  When the program is over and if it worked, most people gain back what they lost because they lack the discipline to stick to it.

Dieting is not the only example.  Success with personal finances falls into the same category, as does quitting smoking or correcting any other bad habit.  Even little habits we should develop like brushing and flossing, regular medical checkups and eye exams fall into this category.  These aren’t even hard to do; they just require some attention and the ability to stick to a schedule.

Discipline is very important because it can have long-term effects on our health and happiness.  Part of what makes it difficult is that the consequences are often far in the future.  The cancer from smoking, the anxiety-filled retirement from lack of savings and all the diseases associated with obesity are far in the future.  The pain and sacrifice of sticking to a program happen today.  Key here is that by the time delayed consequences strike, it may be too late to take corrective action.

Recent advice from the American Heart Association (AHA) gives another example.  “It is estimated that three out of four Americans do not take their medication as directed.”  This seems like a no-brainer.  Instructions are usually clearly printed on the label and reinforced by the doctor or pharmacist.  Those who have questions can easily find resources to help them out.  This is a clear case of problems with discipline.  And as in the examples above, the consequences are serious and often delayed.  The AHA goes on to say, “poor medication adherence takes the lives of 125,000 Americans annually, and costs the health care system nearly $300 billion a year in additional doctor visits, emergency department visits and hospitalizations.”  Remember, costs to the system, costs to society, are costs to you and me.

This advice is not new, but it is now based on clear evidence.  A new, very thorough study looked at outcomes of more than 3,200 heart patients who underwent either bypass surgery or insertion of a stent to keep vital blood vessels open.  That’s a very large sample.  Follow-up exams 12 and 18 months out showed much better results for the patients who took their medications as prescribed.  They “were more than twice as likely to have complication-free survival than those who did not take their medications as prescribed.”  Once again, discipline pays off.

This is why wise parents try to instill a sense of discipline in their children:  eat healthy food before getting dessert, do your homework or set aside the time before enjoying more fun activities, buckle your seatbelt, don’t text while driving and prizes and rewards are earned, not bestowed.  A famous experiment many years ago showed that children with a sense of discipline even at a young age tended later in life to be more successful in academics and careers.

Unfortunately the surest way to instill this sense of discipline in children is to lead by example; and from diets to drugs (legal and illegal), so many Americans struggle with this behavioral dimension.

Hating the Rich

Maybe hating is too strong a word for it.  Maybe being angry or envious is a better description of what’s happening and what various politicians and organizations are vigorously promoting.  But since those same organizations and advocacy groups freely use the words “hate” and “haters,” it’s probably not completely unfair.  In this case the hating is not only selective, but also difficult to justify.

Here is a graphic that has been going around on social media.  It shows the total compensation of health insurance company CEOs.  The caption and comments imply that this is the reason for the sharp increase in Obamacare (ACA) premiums for 2017.  Let’s take one example and see what’s going on.

Let's not quibble over the fact that the information is three years old or that they calculate daily pay based on 341 days in a year.  If these folks have moved on, they were likely replaced by others who were equally well compensated.  Instead take the first gentleman, Joseph Swedish as representative.

He is the CEO of WellPoint, which operates Blue Cross Blue Shield plans in 14 states.  Here is some information from a CNBC report from 2014.  “The company had 37.5 million members at the end of the quarter, up 2 million members from a year earlier.”  Apparently he is doing a good job of growing the company and meeting analysts’ expectations.  But is his pay driving up premiums?

Take the $17 million shown above and divide by the number of customers, 37.5 million, and get 45 cents per customer.  Divide that by 12 to calculate the effect on monthly premiums and we find that if he were paid nothing, each customer might see a 3.8-cent reduction in monthly premiums – 3.8 cents!  (By saving this up for 10 years each customer could afford one trip to Starbucks.)

Maybe it’s the fact that the government forces us to buy health insurance that causes such a negative opinion of these CEOs.  By contrast, we never seem to get upset about the amount paid to the Disney CEO or star athletes.  We never hear people complaining that the ticket prices would be lower if their favorite quarterback made less money.  We give these people our money freely, even line up to do it, in return for a limited amount of entertainment and they also get rich.

Look at the recent Desert Trip concert in Palm Springs.  Most of the 75,000 tickets were gone in less than five hours, with the good seats going for $1599 each.  The promoter is expected to gross $160 million for the three-day event, while paying the headliners up to $7 million each (for showing up and playing for a few hours).  The LA Times reports that these rock stars from the sixties continue to do very well for themselves.  “Since 2000, the Rolling Stones have grossed more than $1.1 billion with their periodic tours, according to Pollstar, the concert-industry-tracking publication. [Paul]  McCartney has racked up $761 million, [Pink Floyd’s Roger] Waters has pulled in $592 million, followed by [Bob] Dylan ($293 million), the Who ($200 million) and [Neil] Young ($153 million).”

We love to hate those one-percenters, the people making a lot more money than we do, but the outrage is selective.  When it’s Mick Jagger, Bob Dylan, Lady Gaga, Peyton Manning, Rory McIlroy, George Clooney, Tom Cruise, or Oprah, then it’s OK.  Making almost $50,000 a day is very impressive, but it pales in comparison to $500,000 - $750,000 for a single speech.  We love the ones who perform for us and hate the ones who help us pay our doctor bills.  Objections to the rich are both very selective and difficult to justify.

Looking For Hope

Last week I wrote an essay called We Are All Doomed, about the apparent inability of Americans to recognize the discrepancies between their words and their actions or to see the connection between those actions and predictable consequences causing them to make the same mistakes over and over.  It was a pretty pessimistic piece of prose.

But that is not my usual tone.  I really do try to hold out hope.  So when I saw the partial headline:  “DUNKIN' DONUTS: People aren't buying doughnuts because…”, my first thought was very encouraging.  Great, people are laying off the donuts due to a rational concern for their health.  They are not obsessing about gluten or organics or artificial ingredients; they are concerned about something real – donuts = calories!  With so many Americans overweight, a downturn in donut sales is good news.  It shows responsibility, a willingness to take some action to correct the situation, and discipline, the ability to forego the temporary pleasures of today in return for a healthier tomorrow.  It also shows some perspective, properly classifying drive-thru donuts and coffee as a luxury.

With this in mind, I followed the link to read the full story.  The full headline on the Business Insider website was, “DUNKIN' DONUTS: People aren't buying doughnuts because they're worried about the election.”  That doesn’t make sense.  You would of think donuts as comfort food.  They should sell more if people feel under stress.

Upon further reading, I found that it was common these days for CEOs to blame the election for financial shortfalls.  In fact the news was not so bad for Dunkin’.  They reported profits and US same-store sales higher than analysts’ expectations, but total revenue was lower.  And they will not open as many new stores this year as originally planned.  More donuts were sold, but not enough donuts to make management happy.  This supports my comfort-food theory better than the election excuse, but it’s not unusual for CEOs to take credit for good news while blaming some outside force for falling short – looking good in a strong economy and pointing fingers in a poor one, for example.

In this case, the CEO blamed “changes in gas prices, changes in food stamp regulations, and…the presidential election."  Taken one at a time: 

First, this graph from the US Energy Information Administration (EIA) shows gas prices lower this year than several prior years.

Second, it is hard to believe that such a significant portion of their business came from food stamp recipients to affect their overall results.  But if new regulations discouraged people who are having trouble feeding their families from buying donuts, that’s not necessarily a bad thing.

Finally, “last year, researchers at Princeton and Chicago found that election uncertainty affects consumers' outlook, but not their immediate spending.”

That’s three strikes for the CEO, but unfortunately, not much support for my original hope that responsibility, discipline and perspective are making a comeback based on information from the quick-service donut business.