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Advertising► Create demand Industry Products and Services
Advertising► Leastevil form –Gets the word out► More common Manipulation Dishonesty and Obfuscation► Few things worse than …
Junk Science –Create Confusion ► "RECENT REPORTS on experiments with mice have given wide publicity to a theory that cigarette smoking is in some way linked with lung cancer in human beings. Although conducted by doctors of professional standing, these experiments are not regarded as conclusive in the field of cancer research. However, we do not believe that any serious medical research, even though its results are inconclusive should be disregarded or lightly dismissed.
Junk Science ► Glad to see Fox News on top of the case against climate change. ► Unlike cigarettes –the delay to action will harm or kill millions.
Real Ecomagination at Work ► GE:We’ll make up the words –you just keep buying our crap. ► Greenwashing Clean Coal Safe Nuclear Energy
Advertising ► Hmmm –ad claims Halliburton is “The Home Team” –building Astro stadium. ► Corporate HQ? United Arab Emirates Emirates Towers, 13th Floor Sheikh Zayed Road, Dubai, UAE
Advertising ► Kaiser. Thrive. ► Because if you don’t – you could wind up waiting for a long, long time for one of our physicians to not run diagnostics on you (so they can get a nice bonus).
Advertising ► Bicycle. ► It’s good for the environment and we’ve repossessed your car (and foreclosed on your home).
Advertising Just when you thought National Lampoon or Mad Magazine were the funniest damn magazines … along comes Forbes!
Advertising ► Not much to say here –other than the rugged, individualist cowboy in the ad died of lung cancer.
Advertising ►I love bars were everyone drinks Heineken, is having a great time and will all sleep with one another shortly after last call.
More Junk Science► Andthe “No one does that voodoo that you do” award in Economics goes to …
Milton Friedman ► Economist, Nobel Laureate ► Wrote “The Social Responsibility of Business is to Increase its Profits“ -The New York Times Mag., September, 1970 ► If you are a billionaire –you LOVE Friedman. ► When I’m not moving books by Cheney or Rove into the “True Crime” Section … I move Friedman to Fiction.
Not Done With Friedman Yet► “The Social Responsibility of Business is to Increase its Profits” ie.- Maximize profits► How? Increase revenue Lower costs Avoid costs (externalize them)
The Joy of EX(ternalities)► Avoiding Costs … examples?
The Joy of EX(ternalities)► Examples –► Ford Pinto and the exploding gas tank. Major recall and repair costs $10x Pay off a few court cases for deaths $5x
The Joy of EX(ternalities)►A hypothetical oil refinery in Richmond, California can reduce its harmful emissions and pollutants with an expenditure of $20mil. Yes? –quarterly profit is only 2nd highest on record, executive bonuses reduced from $2mil. to $1.75mil. No? –Record quarterly profit, higher executive bonuses –people in and around Richmond have higher incidence of respiratory illness, medical needs and emergency care (asthma).
The Joy of EX(ternalities)► Other examples? Tax avoidance ►Offshore HQ ►Subsidies and credits Workforce ►Transition work to low-cost, low-safety areas ►More competition for jobs –work harder, longer and for less ►Tort “Reform” Less safety for public –no recourse
Industry Creation► Fast food Obesity Fitness Centers Weight loss clinics Drug Companies ►Diabetes ►Blood Pressure ►Heart Disease
Industry Creation► Study by Robert Wood Johnson Foundation –AMA 7/2010 (rwjf.org) Between 2003 and 2007, there was a 27 percent to 30 percent decrease in children’s and teens’ exposure to beverage ads. Exposure to heavily advertised sugar-sweetened fruit drinks and non-diet soft drinks showed decreases of 60 percent to 75 percent. Exposure to ads for sweets declined, down 41 percent for children ages 2-5; 29 percent for children ages 6-11; and 12 percent for adolescents ages 12-17. Daily average exposure to total food advertising fell by 13.7 percent and 3.7 percent among ages 2-5 and 6-11, respectively. For ages 12-17, however, daily average exposure to food advertisements increased by nearly 4 percent. Among the negative trends identified in fast-food advertising: Exposure to ads for fast-food restaurants increased for all age groups, up more than 20 percent for ages 12-17; more than 12 percent for ages 6-11; and nearly 5 percent for ages 2-5. By 2007, fast-food ads were the most frequently seen type of food ad among both children and teens. Among African-American youths, exposure to fast-food ads increased at more than twice the rate for their white counterparts: up almost 30 percent among ages 12-17; almost 16 percent among ages 6-12; and almost 7 percent for ages 2-11.
Is it Individual Responsibility? ► CSPI* Study: 80% of ads on Nickelodeon were for foods of poor nutritional quality This is an improvement from 2005 when approx. 90% of ads were for bad foods. *CSPI=Center for Science in the Public Interest
Certainly government regulation and enforcement can help …► HouseVotes to Ban Obesity Lawsuits Against Fast Food Industry► NOT!
Here’s where government regulation and enforcement helps … not!► House lawmakers on Wednesday passed a bill banning obesity-related lawsuits against restaurants and food manufacturers. More than 20 states already have such laws on the books. “The bill seeks to block lawsuits by people because they ate too much and got fat,” says Rep. Chris Cannon, R-Utah, one of the bill’s sponsors.► “We should not encourage lawsuits that blame others for our own choices and could bankrupt an entire industry,” notes Rep. Lamar Smith, R-Texas Read more: http://www.foxnews.com/story/0,2933,172805,00.html#ixzz1sDLpGeRm
Reacting to Externalities► Absent government regulation and enforcement: Boycotts -consumers Socially Responsible Investing (SRI) ► Domini, Calvert, Parnassus ► Major pension funds CalPERS, CalSTRS Corporate Social Responsibility* or CSR Movement* I prefer Corporate Social Behavior or CSB
Reacting to Externalities► Boycotts/Consumer Pressure 1769 –British Trade Goods in America 1960 -Delano Grape Strike –Cesar Chavez In caving into the economic threats, Coke told Secrets: "The Coca-Cola Company has elected to discontinue its membership with the American Legislative Exchange Council (ALEC).► SRI/Investor Pressure Domini, Calvert, Parnassus, CalPERS, CalSTRS
Personhood ?► 14th Amendment and SCOTUS► “Citizens” United► Move to Amend
Individual Responsibility which product? ► Eachpurchase helps perpetuate a set of behaviors that is the operating culture of a company. ►Which pair should I buy?
Leveraging Market Demand► Extendconsideration factors in a purchase transaction.► Typical factors: Cost + Quality = Value
One New Factor ► Extend to consider how a company treats its employees, the environment and other factors of social responsibility ► Provide a simple grade/rating based upon trusted data (CSBI)
Influencing the Purchase Decision► Smartphones/Mobile Devices► alonovo.com destination website► Major social sites (Google+, Facebook, Twitter, Linked In)► “alonovo anywhere” –graffiti/overlay on other shopping pages (ie.- amazon.com, bestbuy.com, etc).
Corporate Social Behavior Index (CSBI)► Labor ► Social Responsibility Workforce Stability Societal Value of Products/Services Workforce Diversity Corporate Ethics, Transparency and Executive Pay Ratio Accountability Fair Labor Practices Lobbying Supply Chain Selectivity► Environment Worker and Community Health and Toxic and other Safety wastes/emissions Class Action Litigation Natural Resource Conservation Tax Avoidance Animal Cruelty
Creation vs. Transfer of Wealth► 99% versus 1% Are all 1% created equal?► 1% of the 1% - Risk capital, innovate and create jobs ►And sometimes entire industries
Creation vs. Transfer of Wealth► Polisner plan – Tax the hell out of the 1% except … Create real incentives and tax credits for 1% of the 1% that are actually innovating and investing that are strategically vital: ► Safe, clean and renewable energy production ► Reduction of energy consumption ► Peace and conflict resolution ► Real participatory democracy ► Education ► Healthcare ► Energy consumption