Tuesday, October 14, 2008

Indirect Social Mobility in this Nonsense Economy

I read an interesting article in the Wall Street Journal yesterday about legal disputes concerning Starbucks leases. Since Starbucks expanded so rapidly and exponentially, the sudden drop in demand for frappuccinos has caused them to default on some of their leases, inciting a few lawsuits.

This is really classic supply-demand stuff that freaks people out and causes the stock market to have hyperbolic effects on our daily lives when it really should just make us shrug. For some reason, the last ten years has seen a great demand for $4 coffee beverages. This is not really "demand," however, but perceived demand. People see a product everywhere the way a child sees a new toy and think they absolutely must have it. But, nobody actually needs a frappuccino. That's why, when we discuss supply and demand, we're not really discussing supply and need. That's where the problem really comes in. When the supply of oil goes down and the need we have in Western society for the stuff remains constant, we're in some deep water. However, if the supply of mocha powder suddenly diminished, we'd see a few 14-year-olds say "aw shucks" or they could text "superlame" or whatever to their friends, but I think they'd get along just fine.

This takes me to my "How to Save Starbucks" argument. There are three kinds of need, the way I see it.
1) Actual Need - These are things that human beings actually, totally, 100% need to survive. Water, basic food sources, and in our bustling cities, oil.
2) Fake Need - These are the things like frappuccinos that I was discussing earlier. Every day when I get to work I decide that I need coffee to function. I don't actually need it, I just really like having coffee every morning because it makes me feel better, helps me concentrate and do good work (I almost certainly would not be writing right now without it), and gives me something to do with my hands besides type. I'm very fidgity, I must bring some warm liquid to my lips every 35 seconds or so.
3) Physically non-essential but mentally necessary needs (Snazzy name pending) - These are things not terribly unlike coffee that people don't actually need to survive, but for which there will always always be demand no matter how poor we are or how bad the economy gets. These are things for which business actually gets better when our lives suck. I have boiled this down to a simple rule, namely, the rule of BHDP: Booze, Hookers, Drugs and Pornography.

I cannot think of any society, no matter how destitute, unfortunate or downtrodden, not to absolutely require these four things in varying degrees of importance. Now, I know what you're thinking. "Jonathan," (you're thinking this) "how dare you argue that human life is so base to only require the most degenerative aspects of our society!" Or, you may be thinking, "Jonathan, your list is too long. Since alcohol is a drug and pornography is just another form of prostitution, you could have theoretically shortened your list to DW, or Drugs and Whores. I don't completely disagree, but I think it's important to make the distinction among the wildly varying requirements of society. I include drugs after booze as alcohol is undoubtedly the most prominent drug in Western society and is a solid, legal industry independent of the drug trade. I realize that alcohol was illegal for a decade in the early part of this century, and I think it's ironic that we learned the lesson of that mistake but didn't learn the lesson from this 30-year-deep drug war. We just replaced Al Capone with Avon Barksdale.

Anyway, here's what I do if I'm Starbucks. Include two shots of bourbon in every frappuccino (you're already charging four dollars for the damn thing!) and pay your employees an extra two dollars an hour to work topless. It doesn't matter if they look like models or not, this is 2008, and people in this economy will take what they can get. Also, the guys have to do it, too, so there's no claiming that it's a sexist move. The pay will get so good, you'll have those jerks who work at Abercrombie & Fitch coming over for a job. I guarantee a double in sales by, oh, next week?

I'm not saying I've come up with some sort of brilliant Keynesian strategy here, I'm just using common sense. People are depressed, they can't buy an Xbox or go to the movies on Friday night anymore, but hell if they're going to be deprived of their booze and boobs! (That's a much better name, the B&B School of Economics, patent pending).

Okay, where's my Nobel?

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