Dad and the Plastic Champagne Cork

            In the 1967 movie The Graduate, young Benjamin Braddock (Dustin Hoffman) is cornered at a party by one of his father’s contemporaries who conspiratorially offers him a one-word piece of business advice: Plastics. For most people who saw the movie then, it was a great gag line. For me, it was personal.

            My father was one of the people who got into plastics in the early 1950s, and he did pretty well at it. He had a little shop in Pasadena where he made a lot of precision parts used at Jet Propulsion Laboratory and other high-tech places. He and the people he worked with could put together a mold to make almost anything, and he was always willing to talk with someone who had an idea.

            That, I assume, is how he met the guy with the idea for a plastic champagne cork. It was the early 1960s, when I was ten or eleven. An internet search turned up a patent for a synthetic cork granted to Julius Fessler on March 8, 1960, which would fit. Fessler lived in California, so I’m guessing it was he who somehow found my father. Drawings from the Fessler patent certainly look very much like my recollection of the prototype cork my father made.

            What I also remember was that Dad was on fire about the plastic cork. It would be cheaper than real cork, seal more precisely, and wouldn’t rot in the bottle. Better in every way. How could it lose?

            One of the things you need to know about my father at this point is that he was a great salesman. Shortly after World War II he got hired at a Chevrolet dealership in Los Angeles and sold more cars than anyone else every year he was there. Many times I’ve wished I inherited that sales gene, but it seems to have skipped a generation.

            So Dad set out to make the plastic cork the coin of the realm in the champagne industry. I have a vivid recollection of a family vacation where we went to the mountains (Sequoia National Park, I believe) for some R&R, then descended into California’s Central Valley for a week and stopped at just about every winery in California. Or so it seemed.

            It was the middle of the summer and perishing hot. Dad would go in to make the sales call while my mother, sister and I waited outside in the station wagon, which quickly became unbearable. There was usually a shade tree nearby, but it was over 100 even in the shade.  After the first few stops, my sister and I were bored out of our minds, and my mother had to increase the soft-drink ration in order to avoid a rebellion.

            And it was all for nothing. My father, great salesman that he was, got laughed out of most of the wineries and never made a sale. They said the public would never go for a plastic cork, and that it was simply out of the question. He kept after it another year or so but never made a dime from it.

            In the 1970s, I remember bringing home a bottle of champagne to have with my girlfriend (now my wife) and being stunned, when I took the foil off, to see a plastic cork. More than a decade after my father had gotten nowhere with it, the idea finally caught on. It taught me a valuable lesson. You can have a great product and a great salesman but still fail. Luck and timing matter.

Watergate and My Life

            Forty years ago this past Sunday, a momentous historical event occurred. I graduated from college. If memory serves, there was also some sort of third-rate burglary in Washington, D.C. that morning.

            News of the burglary was on the radio when we woke up that day but at the time no one thought much of it. Even the Nixon haters didn’t think he’d do something that criminal or that stupid. It was probably the only time they underestimated their man.

            It’s not uncommon for people to feel their lives are inextricably connected to some historical event. For my parents’ generation it was likely to be the Great Depression or World War II. In my generation it was likely to be the Vietnam War, the Civil Rights Movement, or, as in my case, Watergate.

            One of the things I was in a position to see first-hand was the impact Watergate had on the business of journalism. After graduating from college, I began applying for newspaper and radio reporting jobs with a resume that consisted of a bachelor’s degree in English and a few clips from my college newspaper. In six weeks I got several offers and ended up at a highly regarded daily newspaper in coastal California.

            A decade later, after All the President’s Men had been a bestselling book and top-grossing movie, a lot of smart kids wanted to be newspaper reporters. By then I was doing the hiring, and many of the resumes I was looking at featured a lot of master’s degrees in journalism from some of the best journalism schools in the country. Anyone trying to get into the business with a background like mine would likely have been job-hunting for months before landing at a weekly paper in rural Nebraska.

            In the first couple of years at the newspaper, I absorbed the business at several levels. Being new, everything I covered — even a routine water board meeting — was exciting. There were a lot of non-routine stories locally, as well, including several horrifying mass-murder cases that are remembered to this day. And in the background, Watergate was moving toward its conclusion.

            We were an afternoon paper then, with a news deadline of noon Pacific Time, or 3 p.m. Eastern. Much of the news coming out of Washington was fresh when we published it, and we had it to our readers an hour or more before the evening news came on TV. We in the newsroom were the first in town to know the latest developments in Watergate.

            Because the story completed itself so completely with President Nixon’s resignation, many people who lived through it now think of it as a whole. I don’t. What I remember about Watergate was how it came out one piece at a time — a steady drip, drip, drip of shocking revelations. Just when you thought you’d heard the worst, something else came along to top it.

            The news came over the wire from United Press International (now gone), and whenever there was a big story, the wire machine bell would ring several times. Most of us would drop what we were doing to run over to the machine and read the first couple of paragraphs of the story.

            Watergate solidified my commitment to the news business as it poisoned the politics of the country. It’s unlikely that there will be any major new revelations after all this time, and kids today hardly know the tale at all. But whenever I hear the word Watergate, I think of bells ringing in the newsroom, and for a few seconds, my blood runs a bit more quickly.

           

           

           

           

Unfit to Be a Landlord

            In 1962 my father sold his business and decided he needed to invest some of the money. So he bought a 1920s-vintage stucco house a mile and a half from ours, figuring he’d rent it out for a steady stream of income. That wasn’t how it worked out.

            The place needed some work before it could be put on the rental market. Some of it — plumbing and wiring — had to be contracted out, and some of it we did ourselves. I have a vivid memory of going to that house with my mother and spending the better part of a few very hot summer days painting the interior.

            For some reason I can’t remember the name of the first tenant. It was a family, and the man was in his late thirties or early forties with curly brown hair slicked down, as was the standard at the time. He used to drive over to our house on payday and settle in cash.

            After a few months the paydays seemed to become less frequent, but when he had a good day at the track he’d come by and pay the rent — or part of it, anyway. For a couple of years he was chronically behind, but always managed to pay just enough to keep my kind-hearted father going.

            Then one day the tenants up and left without any notice, leaving the place in need of repairs and my parents in the hole for a couple of months’ rent. There was another tenant after that, I recall, and the story was similar in its general outlines. My father decided he wasn’t cut out for the landlord business and sold the house. I had overheard enough snatches of conversations between mom and dad to conclude from the experience that I, too, would never be a landlord.

            Stuff happens, though. Linda’s mother died recently after a long and full life, and we inherited her house. It’s a nice little place, but it’s in a location awash with foreclosures, which are depressing the market. Selling it now would be a bad move, so we have become what I swore I would never be. We are now landlords.

            Even with a professional property manager, the landlord situation is putting a lot of stress in our lives. The ubiquity of foreclosures referred to earlier means that many of the prospective tenants out there have gone through foreclosure, bankruptcy or both. Even with decent jobs, they are just one income shock away from falling behind on the rent. If one of the kids needs an unplanned doctor’s visit, or one of the parents gets ill and loses a couple of weeks of work — well, their problem becomes our problem in a hurry. It’s as if the ghost of my father’s tenant has come back to haunt us.

            At times like that, I try to maintain my serenity and gratitude. Our problems are not as serious as the tenants’ and at the end of the day we are fortunate enough to own that house. Eventually we will sell the place and put the problems behind us. Still, there are enough mornings where, at 2 a.m., it’s hard to focus on the big picture.

            I was right as a kid when I decided I didn’t want to be a landlord. If you’re considering it, I would strongly suggest that you not go into the business unless you have a certain minimum number of units, say 12 to 15. The tenants who are paying at any given time will generate enough cash flow to allow you to sleep like a baby. Perhaps that sounds like Mitt Romney advice, but then that’s my point.

           

           

           

Stuck With the Constitution We Have

            It’s becoming increasingly obvious that our Constitution is no longer up to the job of providing for the running of the government of a large urbanized, industrial nation. The only reason it’s lasted this long is that some of its general tenets, such as the commerce clause, have been interpreted liberally enough by the courts to allow modern issues to be dealt with. Now that the Supreme Court seems hell-bent on taking the country back to 1897, we don’t even have that.

            And here comes the bad news. The alternative would probably be worse.

            To imagine what would happen if a convention were called to draw up a new Constitution, it helps to remember how the one we have was put together. To begin with, a small number of delegates (there were 41 signers) met in secret to argue, compromise, and hammer out the final document.

            They were all men, and men of means at that. They were uncommonly well-read and learned, not only by the standards of their time, but by the standards of ours. In debate their arguments, being held behind closed doors, were directed to each other, and not to any gallery. No one who went into the process came out of it with what he wanted, yet they came together at the end and approved the Constitution unanimously.

            Even then, it was a hard sell. In many state legislatures, the vote to approve was close and hard-fought. Although it was still early in the country’s history, a significant anti-government sentiment already existed and was given full voice in the debate. The most commonly voiced argument against the Constitution was that it gave the federal government too much power and would lead to tyranny, something that hasn’t happened yet.

            Looking only at the process of creation, it’s hard to believe that a constitutional convention held today would be anything but worse than the original. To satisfy notions of diversity and fairness, the delegations would have to be so large as to be nearly unworkable and so diffuse as to hopelessly dilute the power of any first-class minds present. Proceedings would be televised live and dissected on the spot by bloggers, tweeters and TV commentators. Prolonged debate, leading to some sort of compromise would be next to impossible. Any attempt to state things in general terms, allowing for elected legislatures to work out details down the road, would be shouted down by partisans on both sides.

            Almost surely there would be great pressure for more direct democracy, allowing people to vote on laws. Living in a state, California, that has just about been reduced to a smoking ruin by the initiative process, I find the prospect of replicating it at the national level more than a little frightening. Politicians making compromises, while hardly perfect, generally arrive at more nuanced and sensible solutions.

            Finally, imagine that a Constitution that actually reflected 21^st Century realities were to emerge from such a convention. A Constitution that, say, granted Congress the explicit power to regulate commerce, corporations and labor unions in the public interest and to regulate and limit the financing of political campaigns. Big money could and would spend unlimited amounts of money to defeat it in the state legislatures.

            Nope, it doesn’t look good. Fear of the alternative will probably keep the current document going for a lot longer. So make your peace with the Electoral College; make your peace with Wyoming having as many senators as California. We’re stuck with what we’ve got precisely because it could be a lot worse.

           

           

The End of Monopoly Money

            If you’re under the age of 30 this might sound unbelievable, but there was a time, well within the memory of many living Americans, when newspapers were considered a great investment and sold for top dollar.

            After the end of World War II there was a significant consolidation in the newspaper business. Big cities that had several papers when Pearl Harbor was bombed wound up, by the early 1960s, having two or in some cases, only one.

            Meanwhile the growth of the suburbs and the Sun Belt led to the creation of hugely profitable monopoly newspapers. Many a small-town daily that had a circulation of a few thousand before World War II found itself with thirty, forty, even fifty thousand readers by the 1970s. It happened all the way from Santa Rosa, California, to Naples, Florida.

            For a quarter of a century these suburban papers could do no wrong. As the shopping malls kept opening, they were the go-to place for display advertising. The classified advertising sections were a license to print money.  As one cagey veteran of the business side of newspapers put it to me, “You could have put a chimpanzee in the publisher’s office and still made 25 percent.”

            This wasn’t lost on the larger newspaper chains, which began gobbling up these suburban and monopoly papers. The business model they followed was exemplified by Gannett, best known as the publisher of USA Today.

            Time and again, Gannett would buy a local newspaper that had a stranglehold on its market, bring in its own people to run it, and quickly begin a steady ratcheting-up of advertising and subscription rates. Within reason, Gannett didn’t care what it paid for the paper because once it had secured the monopoly, it was no problem to set up a spreadsheet for getting the money back, and then some. During the heyday, Gannett had papers that turned a 60 percent profit.

            Perhaps this is starting to sound a bit like the housing bubble we just endured, and certainly there are similarities. Key among them was the assumption by investors that the good times, growth and profits would go on forever. Of course those things never do.

            In 1985 the small, family-owned newspaper chain I worked for (seven dailies and several weeklies) was sold to the E.W. Scripps Company. Scripps was privately owned at the time but planning on going public, and it wanted the extra newspapers on board to show investors as part of its growth strategy. I heard once that they paid more than three hundred million for the lot. Even if it was a lot less, it turned out to be too much, and today they still own only three of those papers.

            Scripps bought in at the peak of the market. Direct mail, cable TV and specialty shoppers were already starting to cut into the advertising domination, and when the internet came along a few years later, it was a new ball game. Craig’s List alone devastated the newspaper industry by showing that you could take a profit center (classified advertising) and separate it from a significant expense (covering the news). Nothing has been the same since.

            Warren Buffett, who knows a thing or two about investing, has been getting into newspapers lately, and recently bought his hometown paper, the Omaha World-Herald. I’d like to believe he’s seeing something real in the prospects of newspapers. They can probably find a way of being steadily profitable, but it’s unlikely that things will ever return to the point where they’re making monopoly money.

           

Sorely in Need of Competition

            In 1889 Houghton Mifflin published Looking Backward: 2000-1887, a novel by Edward Bellamy that looked at the Gilded Age from the perspective of more than a century hence, when enlightened socialism had replaced brute capitalism, and the world had become a kinder, gentler, more egalitarian place.

            Almost no one reads the book now, but at the time it was a sensation. The publishers couldn’t print copies fast enough. Apparently, during the time so beloved by Glenn Beck, a lot of people were thirsting for a more decent and humane alternative. By 1900 Looking Backward was the second best-selling novel in American history, trailing only Uncle Tom’s Cabin.

            It’s hard to imagine now, but back then a lot of smart people assumed capitalism wouldn’t last another century. The inequality and injustice it spawned, they reasoned, were unsustainable, and either through revolution or the democratic process, some sort of socialism would take its place.

            What got me thinking about this was a throw-away line in a recent  New Yorker essay by Nicholas Lemann, reviewing several books on economic inequality. “It’s clear in retrospect,” Lemann wrote, “that the existence of the Soviet empire was a spur to social democracy, in the United States and in Europe, because it was a serious competitor whose main selling point was generous social provision. The West had no choice but to compete.”

            Bellamy, Karl Marx and other communal utopian thinkers of the time guessed wrong about the future of capitalism at the same time they shrewdly critiqued its shortcomings and contradictions. Their mistake, in a general sense, was that they couldn’t imagine it tacking with the political winds and changing in any substantive way.

            But as Lemann pointed out, capitalism — like the shopkeeper whose competitor is selling at a lower price — had to adjust or go out of business. The great majority of business leaders never got the point, were in fact singularly clueless. But they were bailed out by the democratic process and politicians, particularly Franklin D. Roosevelt. In a just world, there would be a statue of FDR in front of the New York Stock Exchange, with an inscription on the pedestal reading, “If not for him, we wouldn’t be here now.”

            Socialism and communism are in bad repute at the moment, and as a consequence, capitalism is exhibiting the classic behavior of a monopolist. We all know what happens when a local store has no competition: It can easily become arrogant and unresponsive to its customers and employees. The customers of an economic system are the members of society at large, and like the customers of a business, they, too, benefit when there’s competition.

            In a democratic society voters disgruntled with an economic system can, like customers of a non-performing business, take their custom elsewhere. Capitalism hasn’t yet honked off its customer base to that extent, but it’s certainly heading in that direction. If it isn’t diverted from the path it’s on, the consequences for all of us could be ugly.

            Every economic system has its flaws, but a free market, coupled with a robust social safety net has been the least flawed alternative to date. Growing inequality, coupled with a rending of the safety net, inexorably drives society toward one of two unpalatable alternatives: A dictatorship to forcibly maintain gross inequality or a revolution to replace it with something else, which could turn out to be nearly as bad in a different way. Capitalism dodged a bullet once by smoothing out some of its sharper edges. It needs to do it again, but where’s the competition to provide the motivation?

           

             

           

Cesar Chavez, Tragic Hero

            For more than two decades I’ve argued, whenever the subject comes up, that Cesar Chavez was the classic tragic hero — a man of greatness brought down by a fatal flaw. In his case the flaw was an utter lack of interest in actually running a labor union and an unwillingness to delegate the job to someone who could do it.

            It’s not an argument that endears you to people on either side of the political spectrum. Conservatives, who tend to view Chavez as the illegitimate spawn of Mao and Karl Marx, don’t buy into the greatness. Liberals, who want to believe in his saintliness, want to blame the collapse of the UFW on the growers and Republicans and excuse or absolve Chavez of any part in it.

            To me, the greatness is self-evident. With no legislative or legal structure to build upon, he organized a labor movement among people who worked in the fields and who had largely been forgotten by society. That movement succeeded, for a while anyway, beyond anyone’s wildest expectations. It was clearly the work of a visionary and uncommon man, accomplished, to be sure, with the help of many others.

            Over Memorial Day weekend I read Frank Bardacke’s Trampling Out the Vintage, a history of the UFW under Chavez. It’s a wonderful book: Thorough, fair-minded, highly readable. And it documents Chavez’ own contribution to the demise of his union in a way that will make it nearly impossible for future historians and biographers to engage in hagiography.

            It has long been clear that Chavez regarded the union as only one part of a much larger farm worker movement, and I had assumed he neglected the nuts and bolts of the union operation solely because of his focus on the larger vision. Bardacke shows that the story was more complicated.

            Chavez was a classic control freak, and because his leadership was unquestioned, that aspect of his personality did untold damage. It led to UFW administration of contracts being structured in ways that maximized union control over everything, to the point that the hiring halls couldn’t process workers fast enough to get them into the fields during the harvest, when time was of the essence. At the same time, Chavez was running the union like a small-town drugstore owner, trying to oversee and sign off on everything. At best that caused delays; at worst, things didn’t get done.

            It’s often said that nothing ruins a man like success. In one sense that was true for Chavez. Having won his initial grape contracts through a nationwide boycott, he became the classic case of the man with the hammer who sees every problem as a nail. Bardacke makes a well-documented and persuasive argument that by focusing on boycotts, rather than on organizing workers and building a democratic, sustainable union, Chavez helped sow the seeds of his own destruction.

            In the late 1970s the UFW moved its headquarters to La Paz, an isolated former county building in the hills above Tehachapi. Not only did the move distance the union leadership from the people it was serving, it spawned a culture of self-absorption, pettiness and paranoia. By the time the union was crumbling in the early 1980s, the toxic atmosphere at La Paz made the Nixon White House look like Mister Rogers’ neighborhood.

            A lot of people won’t want to hear any of this. They’ll continue to blame the growers, Republicans and the Establishment in general. But the hard fact of the American labor movement is that the bosses have always been against it, and the legislatures and courts have usually been against it. Many unions succeeded despite those circumstances; the UFW didn’t. Chavez has to own his part in the failure.