Odds and ends number 39

As always, these are my short takes on a number of subjects.

Let’s begin with something the nanny state of Maryland has already addressed, banning hand-held cel phones or texting while driving. Now the National Transportation Safety Board wants to take this ban nationwide, never mind there are already laws in every state against inattentive driving.

I do quite a bit of driving as part of my job and I have to tell you that there are a lot of drivers out there who are on their cel phone – some may be hands-free and others are holding on to theirs. But aside from the fact they may have one or both hands on the steering wheel, I don’t think they’re any more distracted than someone who’s eating their lunch on the run, adjusting their heater or the radio, or yelling at the kids. Should we ban all those activities as well? Trust me, if I were an undercover cop I could rack up a lot of fines for the state by picking up folks who I saw talking on the phone, and could probably find a few scofflaws texting as well.

We don’t need a national texting ban – just a little more common sense.

Speaking of common sense, I think there’s another area where we’re lacking. The internet is great because of its freedom, but there are those who want to enact Chinese-style internet censorship because they’re worried about copyright infringement. This site pokes fun at the idea.

But this could be a serious problem for a blogger like me, because I have my occasional Friday Night Videos series and some of these artists cover songs by other artists. Obviously that’s not a significant portion of my content and I don’t think I’m going to cost any of these original artists any money. But in theory I could run afoul of the law, and that’s completely ridiculous. It’s amazing the excuses people can come up with to dampen the internet, because copyright infringement is only the beginning – next will be restricting what one can say. Constitution? We don’t need no stinkin’ Constitution.

Finally, speaking of the internet, this was an interesting e-mail.

I just received a spam message from a candidate you did an article on.  It is a nice Christmas message, and below is says I am on their “Supporters list. ”

I, however, am not on the list.  I actually don’t even know who this guy is.  Furthermore, I have never been to Maryland.  I have never voted in a US election.  I am actually Canadian.

And I hate spam like cats hate water.  And I find it reprehensible that someone running for senate would be spamming – which here is against the law.  I believe it is down there too.

Should I be invited though, I would be happy to make a trip down there and give you guys an honest opinion of the candidates you have running for senate.  Please forward this appropriately if need be.

Well I appreciate the readership from north of the border, but it brings up a great point about e-mail address harvesting.

I have no idea just how many e-mail lists I’m on, and there’s a reason I tried to avoid placing any of my work e-mails on e-mail lists – to avoid situations like this person’s.

Still, I’d be curious to know how the e-mail got on the list – probably a typo, judging by the fact it’s a fairly common Gmail address – and what this person really thinks about our Senate candidates.

The best irony, though, is that Eric Wargotz isn’t even running this year but he’s now known in a far-flung place like Regina, Saskatchewan. And now so am I.

Update: There was one more item I meant to throw in. People like to rag on Walmart and those who frequent it, but this writer – presumably one who won’t be part of the 99% since she’s working her way through college – brings up a great point about the need for welfare reform, to wit:

I spent hours upon hours toiling away at a register, scanning, bagging, and dealing with questionable clientele. These were all expected parts of the job, and I was okay with it. What I didn’t expect to be part of my job at Wal-Mart was to witness massive amounts of welfare fraud and abuse.

Read the rest. It’s going to be interesting to see what Maine does with their system since the Republicans were swept into power last year – of course, having said that, one has to consider that what passes for Republican in Maine are RINOs like Olympia Snowe and Susan Collins.

Odds and ends number 35

Gee, and I just did one of these last week. But I keep picking up more interesting items, so here we go.

On Saturday it’s quite likely your bank started charging you a monthly fee for using a debit card, whether once or multiple times a day. The most infamous example is the $5 monthly fee Bank of America enacted, but many other banks got into the act as well.

But as John Berlau of the Competitive Enterprise Institute wrote in the American Spectator, we have someone else to blame as well:

The irony of these developments is that if the media and politicians wanted to blame a greedy big business for these new consumer costs, there is one industry that would accurately fit the bill. This would be the giant big-box retailers that lobbied for these price controls to fatten their bottom line.

In fact, one report I found said Home Depot stood to save $35 million a year by cutting the interchange fees in roughly half, as the new federal regulations do. Of course, that is split out among everyone who shops at Home Depot whether they use a debit card or not. But don’t hold your breath waiting for prices to miraculously come down since each store has thousands of items that may cost a few pennies less for the retailers to sell. Bank customers will be stuck with the fees, though.

Continue reading “Odds and ends number 35”

The market basket 2011

It’s the return of a monoblogue tradition, but with a slightly new twist.

I was inspired by a recent report regarding New York Federal Reserve President William Dudley and comments he made about the rate of inflation. Inflation, he said, is measured by a number of factors but doesn’t include food and energy costs. When an observer asked about this, Dudley reminded the questioner that the price of an iPad 2 is the same as the iPad 1 when it came out – “you have to look at the prices of all things.”

Retorted the questioner, “I can’t eat an iPad.” And it seems to me that a lot of food and energy prices have surged over the last two years. Fortunately, I had done my ‘market basket’ series from 2006 to 2009 so I had a handy reference guide to see just how prices have progressed. Instead of its original purpose, which was to track Walmart’s prices in the wake of the ill-fated ‘Fair Share’ Act Maryland passed in 2005, I used these comparisons as a general consumer guide to local grocery prices.

In the wake of Dudley’s remarks I decided to see just how rampant inflation was, since I got the same perception from my frequent grocery shopping trips. But instead of comparing all four local stores I opted to just compare Walmart year-over-year. Here‘s what I found.

Overall, I was surprised that inflation among all items was just over 4 percent, particularly with that 75% surge in gasoline costs. But a lot of the key elements bringing down the rate aren’t necessarily grocery staples – the surge in chicken prices more than counteracts the drop in beef prices. Bread may be a little cheaper but milk has gone up quite a bit. Among the few declining items are non-grocery items like detergent and soda pop, which not all shoppers need every week.

And it’s gotten quite a bit more expensive to get to the grocery store with that huge spike in gasoline prices. I didn’t begin tracking them until 2008 but we’re closing in on the $3.419 that my April, 2008 survey found, with prices usually not peaking until around Memorial Day. $4 a gallon isn’t outside the realm of possibility, particularly for those who drive trucks and need diesel fuel. They’re generally the people who deliver groceries to the stores.

So it’s not your imagination, when 12 of the 20 items sampled have gone up in price. That’s 60% of the items surveyed.

And, finally, if you live in the city of Salisbury and haven’t voted yet – what are you waiting for? There’s quality candidates who need your support (and lesser ones who need to be told to hit the bricks!)

The market basket, April 2009

If you’re like me (most aren’t, which may be a good thing – but I think many of us share this particular trait), chances are you’re probably getting together your grocery list for the next few days on this Saturday. My common practice the few years I’ve lived on Delmarva is to make the list on Saturday and do my shopping on Sunday.

On two Sundays a year, though, I expand my shopping time in an effort to track how the price of food is affecting my budget. Using items commonly found on store shelves and pretty much constant year after year, a couple weeks back I completed my seventh semi-annual survey of grocery prices. What I found was a significant trend that’s accelerating and falls in with what some Wal-Mart naysayers commonly predict.

While Sam Walton’s brainchild continues to lead the grocery pack for the seventh survey in a row (dating back to the Fair Share Health Care Act days of April, 2006), their margin is considerably thinner than it once was. Consider the reduction between Wal-Mart and the second-place store in each survey:

Of the four stores, Wal-Mart has jumped the most (by far) since the market basket’s inception. It lends credence to the argument that Wal-Mart lowballs initially to wipe out any competition before slowly raising prices to ensure profitability. However, it’s worthy of noting that often the second-place store has the highest number of sale items or loss leaders among its items. (Super Fresh seems to be the king of this locally.)

It also bears study that Food Lion rebounded well from its previous last-place performance and in doing so pushed Super Fresh back to its traditional basement position. Truthfully the Super Fresh store has a niche market in that it’s the closest grocery store to the university (it’s easily walkable) and thus has a somewhat more captive clientele.

While my shopping habits have changed (I based the selection on items I bought most at the time but rarely buy such staples as pasta and sauce, peanut butter, or bread anymore) I really don’t want to deviate much from the list as it was created but may have to soon because of store buying preference. One example is salsa, where I may have to switch to Pace as the study brand because Chi-Chi’s isn’t as readily found. The same goes for Breyer’s yogurt because I don’t see it at Giant anymore. (Luckily I don’t mind their store brand yogurt but I still prefer Breyer’s.)

Regardless, the result is still that Wal-Mart remains king of the local grocery store jungle – but for how long? While I don’t foresee Food Lion ever matching Wal-Mart price for price on everyday items, there may come a time where the extra drive isn’t worthwhile anymore. The trend will be a focus of mine in future shopping visits.

The blackest of Fridays

Chalk another one up for what is quite possibly the most insane day on the calendar. Perhaps this victim spent his last day on this Earth with his family and friends celebrating a holiday that values being with the ones you love, only to be killed early the very next morning amidst a throng of shoppers whose motto seemed to be “every man for himself.”

While there’s also my sneaking hunch that the so-far unidentified man’s family will be receiving solicitations from the trial lawyers who wish to pick Wal-Mart’s deep pockets by claiming negligence, the sadder truth is that the incident on Long Island only serves to prove my contention that the holidays are rapidly spinning out of hand – all over whatever heavily discounted item these shoppers were looking for. (They took the retailing term “doorbusters” literally and the unfortunate worker was apparently trampled or crushed by the surge of customers, along with four others who were also injured.)

To put it mildly, I’m a typical guy who doesn’t like shopping*. I’ve never had the desire to drag my tryptophan-addled behind out of bed at 3 a.m. the morning after Thanksgiving just to buy a $49 DVD player or whatever loss leader was being sold “first come, first served…while supplies last” at the local Wal-Mart, Target, Best Buy, or wherever.

What’s also confusing to me is that I thought the economy was in the tank and mall traffic was down. Somehow I’m not completely surprised that retailers would have good traffic when they sell items the public wants at prices they’re willing to pay. But now people have become accustomed to the idea of buying their big-ticket items on Black Friday then waiting out retailers in a bizarre Chinese auction of sorts to see who blinks first – will the retailer slash the price before Christmas or wait until afterward?

Retailers aren’t stupid, though. By limiting the quantity of these loss leaders they’re drawing people to the stores like flies to a chicken farm but not losing a whole lot on the particular item the shoppers are seeking. If 200 people are trying to break into a store that has only 80 of whatever hot item they’re after, you’ll have 120 disappointed shoppers who will be too late to get to the next store for Plan B. If half of those unfortunate enough to not get the prime mover stay regardless and buy other, more profitably priced items while those who bought the loss leader also stock up on stuff, then the loss leader is well worth it. The Long Island shoppers certainly sensed this and wanted to jump the gun as much as they could, with tragic results.

There was another item mentioned on today’s ABC Radio news that brought back memories and may have been the pioneering “must-have” item to start this retailing trend. It was 25 years ago that Cabbage Patch dolls came on the market and hopeful parents swamped stores looking to buy one. In those pre-eBay days the aftermarket bidding was pretty fierce as well – surely some entrepreneurs who put ads in their local paper made a princely sum from parents who couldn’t bear to not have a Cabbage Patch doll under the tree for their little girl. This year there doesn’t seem to be that sort of item; instead shoppers are simply being price-conscious. Unfortunately in this morning’s instance they were far less conscious of being kind to their fellow man.

If you were one of those who was standing outside the local retailer at 4:30 in the morning, well, I hope you got what you came to get. Just spend the time you saved in getting your gifts early thinking about what this holiday season really means.

*There is one exception. I can spend hours at a used CD store, and part of my agenda whenever I return to Ohio is a stop of one of The Exchange’s stores. But I still wouldn’t wake up at 3 a.m. to get to one.

The market basket, November 2008

This is the sixth in a continuing series of comparisons between local grocery store prices. Every six months or so since the spring of 2006 I’ve used my regular Sunday shopping trip to do my very non-scientific study of local grocery prices.

I began this to prove a theory I had. Readers may recall that in their 2006 session the Maryland General Assembly overrode Governor Ehrlich’s 2005 veto of the Fair Share Health Care Act, which became better known as the “Wal-Mart bill.” The bill got its name because it was tailored to affect only Wal-Mart; the three other companies in Maryland who qualified based on their number of employees were exempted either for being a non-profit or spending just over the 8% of payroll threshold the state dictated companies should spend on health care benefits for their employees. My theory was that Wal-Mart would eventually lose its extremely competitive position on prices because of the state law, particularly since one of the companies exempted was Giant Foods, obviously a direct competitor for grocery dollars and, unlike Wal-Mart, a unionized grocery chain.

As it turned out, Fair Share was thrown out in court as a violation of federal ERISA statutes but I decided to continue doing this on a semi-annual basis because it’s a nice diversion from political items and also provides a service for local residents. It also serves as a gauge for grocery prices in general. In April I also added one variable, the per-gallon price at the station I drive by on the way to the grocery store. You’ll notice that the price went down 40 percent in six months, in reality it’s about half the mid-summer peak here which was close to $4 per gallon.

Having done this now for 2 1/2 years, it’s interesting to note that Wal-Mart has lost a portion of its onetime large advantage over its local competititors. They still own the lowest prices but have raised their prices somewhat faster than two of their three counterparts.

As I said at the top this is far from a scientific study, and the items I chose were those I regularly consumed at the time. Ironically I’ve stopped eating a fair number of these items because I’ve become much more weight-conscious in that timespan. (In the last three years, I’ve lost 115 pounds.) Still, it gives a snapshot of something that consumers have sensed for quite awhile – prices have gone up pretty quickly in that time. (You may also note that in some cases, the packaging has changed as well. I’m a frequent yogurt eater, so their going to 6 ounce cups really upset me!)

With that said, here are the most recent results I compiled yesterday. As a comparison, I’ll link to the results from last April, one year ago, April 2007, October 2006, and my original survey in April 2006.

The next trend to see is if the drop in gas prices will follow through into food prices next April. It’s not predicted to do so but I’ll be checking to see when the time comes.

Wal-Mart to the rescue

Considering we’re talking about a geographically challenged Democrat governor this could fall under the heading of “blind squirrel” but this story by Jim Nolan in the Richmond Times-Dispatch shows some pretty good thinking by Virginia Governor Tim Kaine.

But it wasn’t necessarily all his doing, as several other states are using Wal-Mart to conduct similar energy audits for their state buildings. The article by Nolan also points out a report from the American Council for an Energy Efficient Economy (ACEEE) that Virginia could cut its energy usage by 20 percent by 2025 if they adopted some steps outlined in the piece. Of course, coming up with the $11 billion to implement all of these recommendations is one difficult part of the equation and what Suzanne Weston of ACEEE doesn’t make clear is the first and most obvious question I would ask: what is the payback period for that $22 billion in savings she promises?

I’ll tell you why the energy audit as performed by Wal-Mart is a pretty brilliant idea: you’re using the resources of a company which is dictated by its market to make things as efficient as possible, thus getting the best possible prices for its customers while assuring themselves and their investors a healthy return on investment. If they’re going in to do an energy audit chances are they’re loaded for bear.

It’s truly unfortunate though that this Wal-Mart approach is only going to apply to energy efficiency in buildings. The issue at hand is that government by nature tends to be less than as streamlined as it could be; mainly it’s the idea of those who draw their paychecks from government not to overwork themselves out of a job. If government ever truly fixed a problem, the department, bureau, or agency set up to deal with it would no longer have a reason for existing.

But fear not, denizens of the left wing, Governor Kaine hasn’t fallen off the liberal wagon yet. As the Nolan piece also notes:

The governor’s climate change panel has set a goal of reducing greenhouse gases 30 percent by 2025. The panel’s full report is due Dec. 15.

Kaine yesterday outlined his strategy for Virginia. It includes conserving 400,000 acres of open space, some 260,000 acres of which already have been preserved.

Kaine also said Virginia has allocated $600 million to Chesapeake Bay cleanup over a two-year period and is limiting development along the oceanside waters of the Eastern Shore.

With 40 percent of the state’s greenhouse gas emissions attributable to transportation, Kaine said the administration is promoting increased use of public transit and commuter and freight transportation by rail.

Would it not make a little more sense to limit development along the bay that they’re paying to clean up? My guess is that the ruling class in Virginia has more money invested in development along the western side of Chesapeake Bay than they do on the Eastern Shore. (If you’re not familiar with Virginia’s Eastern Shore, there’s not a lot there to begin with – its two counties account for less than 1% of Virginia’s population and Governor Kaine is limiting its potential even more.) Certainly the Eastern Shore of Virginia isn’t looming large on the radar screen for mass transit or rail transportation either.

At least the citizens who inhabit that backwater of Virginia do have a Wal-Mart or two to shop at.

The market basket, April 2008

As part of one of my recent shopping trips, I continued what has become a semi-annual look at what I call the “market basket” – comparison shopping between the four major grocery stores here in the Salisbury area to determine pricing trends. The four contenders are Wal-Mart, Giant (a division of Ahold, based in the Netherlands), Super Fresh (part of the A&P grocery empire) and Food Lion. With the exception of Wal-Mart, these are all large regional chains.

If you look at the results from my recent trip, you’ll see that Wal-Mart continues to hold a healthy lead over its competition but the margin is slowly abating. Of the twenty grocery items I use to compare the stores, Wal-Mart tied for the worst with 11 price increases. It doesn’t seem as if they can drive down their suppliers anymore but at least many of the increases were fairly small. They do add up, however.

I’ve also added one item for comparison’s sake and will continue to check it as time progresses to see what effect is shown on food prices, that being the price of a gallon of gasoline at the station I generally use. On Sunday it was $3.419 but it’s jumped again this week. It does seem that the biggest culprit of price spikes in my October 2007 report – dairy products – have turned around a little bit but the pinch is being felt on a number of other grocery items because transportation costs affect almost every conceivable product. 

Of course, mine is an inexact science because I use a fairly small sampling of items and stores as a study group. Originally it was based on a lot of items I purchased and since I don’t eat certain items as a rule, whole sections of the store aren’t accounted. Also there are times a store runs a large sale that just happens to include a number of my sample items and the discounts skew my results. (This is why I note which items were on sale on the week I did my shopping.) 

Another trend I have noticed but I don’t account for is shrinking packaging – for example yogurt cups that used to be 8 ounces are now 6 ounces while the price remains constant. The other key change this time is in the detergent aisle, where many brands have gone to a concentrated 50 ounce size that has pretty much replaced the old 100 ounce bottle – again, the price stays fairly stable but the amount of product is reduced. This probably adds a point or two to the inflation rate but I can’t easily reflect this in my study.

Because I do a lot of my shopping at Wal-Mart, the increase in grocery prices has actually hit me harder than most. Those who frequent the other stores are still losing out in comparison but have managed to enjoy a more stable bill because of the other chains’ aggressive pricing.

On the whole, it’s no shock to see prices up across the board but having dairy products deflate slightly makes some difference. If you’d like to check out my older studies, here are April 2007, October 2006, and April 2006. Then you can see which groups of items have jumped the most in a two-year period.

Another reminder: health care is NOT a right

I’m going to turn north of the border – the border between Maryland and Delaware, that is. But the topic I’m discussing here smacks of the differences between our country and the nation to our north, Canada. (That’s just a reminder for the few geographically-challenged readers who come to monoblogue. I wonder if they still teach that in school sometimes.)

Jack Markell is such a good writer as far as conveying his stance on the issues that I had to add a category to deal with Delaware politics. In this case though it also has application to our side of the fence because one aspect of the special session we in Maryland just endured was allocating $600 million in money we supposedly didn’t have to cover another 100,000 Maryland residents with health insurance. If you use that dollar figure as a guide, knowing that Markell claims that there’s about 100,000 in Delaware without insurance, that’s a whole lot to add to the budget of a state Delaware’s size (a population roughly 1/7 of Maryland’s.) I give Markell some credit for not simply wanting to throw money at the problem but coming up with a palette of ideas he sees as solutions.

What Jack wants to do can be summed up in a few short bullet points:

  • Sign up all those who are already eligible for state programs;
  • Allow families to purchase their health insurance through a market regulated by the state;
  • Require employers to either have insurance or contribute to a state fund;
  • Require insurers to guarantee coverage for individuals and individuals to have insurance of some sort.

The entire plan is here, but I think I’ll tackle these issues point by point.

In the first case, there’s a lot of people who would be considered underinsured. They may have insurance through their employer but do not make enough to be past the threshold that the state uses to determine eligibility. It seems to me that what Jack is suggesting is similar to a move Wal-Mart was castigated for – encouraging people to use the state as their insurer rather than their employer. That point is reinforced when Markell talks about “presumptive eligibility”, when those who apply will be presumed to qualify and allowing schools and preschools to screen children to determine whether they qualify. (Another reason kids may be geographically challenged, since that process takes money away from what schools are supposed to do.) Further, as I’ll argue regarding subsequent points, the incentive for insurers to do business in the state will wane despite the additional pool for coverage.

The second point would add a number of hitherto uninsured people to the market; however, the market would not be a free market that just anyone can jump into. As Markell writes:

Standards for health care plans offered through the Marketplace would be set by a Delaware Diamond Board. There would be a benchmark comprehensive plan that would cover primary, preventive, acute, and hospital care, with an emphasis on preventive care and disease management. Health care plans would vary in the level of benefits offered and out-of-pocket costs. The out-of-pocket costs for the benchmark plan would be capped to ensure affordability and designed to encourage smart preventive health practices and treatment. (Emphasis mine.)

In other words, the amount that an insurer can be reimbursed by the user is limited, so the profit margin either has to come from the caregiver or the state. While most think HMO’s and health insurance companies are purely evil, they do have a right to a return on investment too. And chances are they’ll put the squeeze on hospitals and other providers.

The third point has already been tried in Maryland. Anyone remember Fair Share? I know I do, and in the early days of monoblogue it was a frequent subject. But instead of a statewide edict affecting only companies who employ over 10,000 and don’t devote a certain percentage of their employee costs to health care, Markell goes for pretty much the whole enchilada:

To level the playing field, employers with 10 or more employees will be required to pay a fair share fee for each full-time-equivalent employee who is not covered through the employer or through another insurer.

Not only is that a job-killing idea, he even uses the same term as Maryland did! While he claims that he’ll start with companies with 100 or more employees, it may behoove you if he becomes governor and you have, say, 12 employees, to lay off 3 pretty quickly. True, he may level the playing field in Delaware but all that may do is drive business someplace else.

Finally, Markell decides to channel a portion of Mitt Romney’s Massachusetts plan, requiring all to have health insurance. It’s not clear whether Markell would use the same tactic on scofflaws (an additional fee paid yearly with their income tax) but what Jack wants to do is apply the force of government to what should be an individual decision. Not only that, he also places the restriction on insurance companies who now would be forced to cover all who apply. That is sure to drive insurance companies away from the Delaware market, and eventually when no one is left to provide private insurance it will fall on the shoulders of the state government to do so. It may take a couple decades or so, but incrementalism is how the liberals have played this game for the last 70 years.

And I haven’t even gotten to how Markell plans on paying for this. You should already know that, being a liberal Democrat, he has one target in mind:

An additional 50 cent increase in the tobacco tax would raise nearly $38 million in additional revenue, result in over $85 million in long-term health care savings, and save 1200 Delaware kids from an early smoking-related death.

It’s a tobacco tax increase – for the children, of course! After all, Delaware “only” ranks 21st among the states in their cigarette tax rate, and I honestly don’t think those on the “progressive” side are satisfied with their tax rates until they hit number one. He also thinks that Delaware doesn’t hit up the feds for their rightful share either. Much as Maryland’s budget, a large chunk of the First State’s comes courtesy of taxpayers in all 50 states.

But a post of this nature isn’t complete to me unless I suggest some alternatives. Here’s some of where I think this issue should go. In that piece, I did suggest that each state should be its own laboratory for change, so Jack Markell is within his right to suggest changes occuring within Dover and not by some bureaucrat a few dozen miles west in Washington, D.C. 

What’s missing from his plan in my view are measures to bring more competition to the marketplace. Nor is there room for something I consider as more of a common-sense portion of the solution, health savings accounts. Instead, Markell chooses an incrementalist approach where eventually incentives for insurers to enter or stay in the Delaware market will dry up, leaving taxpayers and employers – those who create the jobs he vows to bring to Delaware – holding the bill.

It’s too late for us in Maryland to change the path we’ll be on until at least 2010. But those of you in Delaware would be wise to learn from our mistakes. I often note that Maryland is the canary in the coal mine when it comes to so-called progressivism run amok, so you folks north of the border need to pay attention and take the opportunity you have to keep your state more free than the Free State.

The market basket, October 2007

This may seem quite the unusual post for a political blog. I’m not really a consumer affairs spokesperson but there is a political tie-in to this series of posts I’ve done every six months since April of 2006.

The event that made this idea for a grocery comparison come to mind was the enactment of the Fair Share Health Care Act last year. Better known as the “Wal-Mart” bill, it originally passed Maryland’s General Assembly during the 2005 session but was properly vetoed by then-Governor Ehrlich at the end of the session. However, one of the first items on the 2006 agenda for the Democrats in the General Assembly with the support of their union thug allies was to override the Fair Share veto, thus it was to become Maryland law when I began the series. Later that summer, though, a federal court stopped its enforcement due to its conflict with ERISA statutes and the apparent death blow to the bill came this summer in the Fourth Circuit Court of Appeals.

Originally the idea behind “market basket” was to track the price effect this attempt at punishing achievement had on Wal-Mart in comparison to its local competitors. April 2006 would be my basis point (since the bill was set to commence in July of 2006) and as time went on I could track the effects Fair Share would have had on Wal-Mart versus its competition, who labored under no such restrictions. All that went out the window once Fair Share was nullified; however, I still believe this is a valid study to continue because of other government policies such as the increase in the minimum wage and emphasis on solving our fuel problem with foodstuff (e.g. ethanol taking a large chunk of our corn crop.) These also affect the price one pays at the cash register.

The methods of comparison are relatively simple – I just use a base group of twenty items commonly found in our local grocery stores, noting which ones are on sale the week I do my shopping. Most of the time I use national brands because they’re easiest to compare directly, also I buy many of them for my own personal consumption. The actual list of items can be found via the links below, with the prices in effect at the time of purchase (all are .pdf files):

What I’ve found the most intriguing is the larger jump from Wal-Mart and Food Lion compared to the other two. One possible reason is that both outlets have undergone a facelift since I began the process so part of the pricing is likely makeup of the renovation costs. On the other hand, Giant closed one of its two Salisbury stores and their standalone pharmacy so their facility cost has decreased – it may be part of the reason they’ve moved up to #2 in my store price rankings. And while Wal-Mart is still by far the most wallet-friendly of the four stores, their onetime advantage of 25-35% has slipped to about 20-25% as they’ve actually raised their prices more quickly than anyone else. They’ve been suspected of that sort of dirty pool before as they cut prices so low no one can compete and as local players are driven out of the market they raise their prices. In this case though all four chains have survived in Salisbury with just the Giant store and pharmacy closing.

It’s no shock to see that the largest price increases seem to come from dairy products. Milk has shot up 26.4% in the 18 month period, cheese 11%, and eggs a whopping 82.9 percent. Instead of solely raising the price on its yogurt, Breyers joined most of its competition by reducing their 8 ounce cups to 6 ounces for the same price. (Needless to say I was pretty perturbed by that one, yogurt’s a lunch staple for me.) Bread also made a healthy jump, increasing 28.4% over the time period.

Small wonder that people think the economy’s not doing as well as the unemployment rate and the stock market may suggest. When the price of two food staples has gone up over 25% in 18 months, it puts a pinch on families by driving their total food bill upward. And there’s little sign of abatement in either price as feed continues to be expensive for dairy cows and wheat acreage decreases due to the demand for corn to be processed into ethanol. It’ll be a trend that bears watching when I do this again in April 2008.

The market basket, April 2007

Over the last year, I’ve done what I’ve made a semi-annual pilgrimage to the local grocery stores to compare prices as I do my regular shopping. Last April and last November I posted the results.

So last Sunday (the 29th) I did this again and what I found were some interesting trends. Wal-Mart remains the overall leader, but its lead has shrunk by quite a bit. While their prices increased 5.6% over the one-year period, its competitors have apparently adopted a more aggressive pricing and sale pattern to close the gap. Super Fresh in particular racked up a huge difference and jumped from the most expensive store in both my previous surveys to number 2 behind Wal-Mart. Food Lion fell to third and now Giant brings up the rear – however, the total difference has dropped to a factor of about 20%.

Just looking at it from a perspective of a normal shopper, Wal-Mart has earned a reputation of coming into a market with a very low price point in order to draw business, then slowly increasing the prices over time and lessening their advantage over the competition (making a better return in the process.) And that appears to be the case here.

Another factor in the spread is the changes within the chains and stores themselves. The Fruitland Wal-Mart (which is where I generally shop) is beginning the process of remodeling the store, so that may affect their bottom line the next time and make the gap even smaller. Meanwhile, Food Lion remodeled their Route 50 store (my store) last year and Giant closed the North Pointe store, which should’ve helped their local bottom line by closing that unprofitable location. Only Super Fresh has left their local store essentially unchanged over the last year and that may have helped matters, along with a better pricing strategy from parent company A & P.

If you’d like the see the list for yourself, a .pdf file can be found here. The April 2006 list is here and the list from last November here.

Made in the U.S.A.

Tonight I was looking for some shoes, since my old ones were getting pretty worn out. Now I have two issues when I buy shoes. Number one, I have duck feet, so called because I wear a size 9 1/2 EEE shoe. So it’s tough for me to find comfy shoes. The other issue is that, as a rule, I try not to buy anything that’s made in China if I can help it.

So you know, I’m certainly not a Buchanan-style protectionist; in fact, I’m all for free and fair trade. I just have issues with buying items from a country that points missiles at us.

Because I had one other item I was planning on getting at Wal-Mart anyhow, I stopped there first and looked for shoes. I think every single shoe I looked at was made in China. Now the tea I did get there (the actual purpose of my Wal-Mart stop) may have been made in China too but I have no idea. (Actually, where do we get our tea from?)

So I left there and eventually found my way to Vernon Powell, where I’d bought the pair of shoes I was replacing. As luck would have it, they had a pair on sale that both fit my wide feet and was at least assembled here in the good old U.S.A. They’re almost the same as my last pair and are known as New Balance 575’s. So I supported American workers in some factory someplace.

But it got me to thinking about this on the drive home. It seems like almost anything you buy at a discount retailer (and many more upscale ones too) is made in China. Now I realize that by having about 20% of the world population just sheer chance would dictate that a lot of things are made there but why China and not India (close behind China with about 1/6 or so of world population)? At least India is less hostile to our interests than China is.

Of course, the even bigger preference to me is having items made right here in the U.S.A. I can’t say I strictly apply this rule (after all I bought a Japanese car) but at least I had the option of considering American cars at the time I made the purchase. This doesn’t seem to apply nearly as much in many other areas, particularly electronics. And it’s sort of a shame when how many thousands of American workers have been tossed out of a job because a company moves production overseas – I have a friend whose company did just that and let go hundreds of workers in Ohio. Now she complains regularly about having to deal with the Chinese and the crappy product they send over here. But it’s cheaper for the company!

I suppose this all goes back to the comment that’s made when advocates of illegal immigrants are questioned about why those people are hired. They always say that the illegals do the jobs Americans won’t do. Surely that’s not always the case, but it just makes me wonder how it’s possible that, even with the much lower cost of labor in China, American ingenuity can’t figure out how to make products that are price-competitive. Has America really gotten that lazy and ignorant?

Quite honestly, if China said tomorrow that, “ok, America, either we get to reinstate our rightful rule in Taiwan or we stop selling you our exports” they would have us over a barrel. (Never mind all the Treasury bonds they hold.) But what troubles me is that a huge number of Americans would say, “phfft! It’s only Taiwan, who cares?” and bitch because the news break is interrupting “American Idol.” Slowly but surely, China is building toward a time when they can put a proverbial gun to our head and it’s a little scary.

Back in the 1980’s, one of the socially-correct items for multinational businesses to do was to divest themselves from South Africa to protect their policy of apartheid. Maybe it’s time for American businesses to do a new divestiture out of China and back into more friendly countries, even our very own.