A good thing about news online or in hard copy is that you can pick the stories you want to read, and ignore the rest. You can't do that with the TV (where I also watch the news.) Even switching channels often doesn't work because they're fixating on the same inane thing. It can be a balloon boy hoax one time or a flipped out flight attendant another.
Captivity to such TV coverage apart, this hoopla about Steven Slater cussing out a passenger and deploying the emergency chute to walk off his Jet Blue job gets to me in other ways. The Huffington Post online poll shows almost half the readers regard him as a folk hero. This may not be a representative sample of Americans as this readership is very liberal. But Slater also has 100,000+ fans on Facebook, tee shirts sold in his name, and has a media fixture for the past four days.
The deeds are nowhere comparable but I'm reminded somewhat of the hundreds of women who write love letters or send marriage proposals to serial murderers or rapists in prison. In a free country everyone gets to have apologists, even amongst strangers. If only these women could be advanced to the head of the victim line instead of the other poor hapless souls targeted by such predators. In the same way if only Slater fans on their flights could be privileged to have only crew members like him in attendance.
Joseph Lopez who was a flight attendant himself cites his difficulties and challenges as a rationale for Slater's behavior in an August 14 piece in the Washington Post. But I'd agree a lot more with Rich Lowry in his August 14 opinion in the Salt Lake Tribune. He lauds the quiet heroism of Capt. Chesley "Sully" Sullenberger in landing his US Air plane in the Hudson River, and contrasts that with Slater's self-indulgent excess that "is not in the least bit admirable."
On my own air trips I'd hate to have someone like Slater aboard. To add to my July 13 post on airline experiences I've witnessed my share of surly, brusque or stone-faced flight attendants, especially on American Airlines. One snapped "what do you want?" to a diffident old lady sitting across the aisle from me when she pressed the attendant light button to request for some water to take her medication after we had boarded. The same attendant wore a scowl for the most part of the flight - a passenger on my other side wondered if this was because their flight attendant union had just agreed to wage concessions in bankruptcy talks. On another trip a flight attendant glowered at a young mother who had requested water for her restless infant after boarding, and took 20 minutes to bring it.
In both cases I toyed with the idea of quietly noting the errant attendants' names and sending feedback to the airline after getting home. But their name tags that they are required to wear on their uniform were missing - this was probably not accidental. I also observed their far more cordial and gracious colleagues on the same flight and wished there was a way to track and reward good and conscientious staff while penalizing bad conduct.
But in the aftermath of the chute exit drama it seems these workers just needed to behave more shockingly and egregiously to win accolades and fans among a sizable chunk of regular Americans. I'd instead much prefer airlines to "Sully" their image after wiping their Slate(rs) clean. And I'd like TV broadcasts to focus more on real news.
Saturday, August 14, 2010
Monday, August 2, 2010
Landmark Half-Measures
This is just the latest of the Obama (and Congress) half-measures that have been widely labeled as "historic", "unprecedented" and "landmark". I'm referring to the Financial Reforms Bill signed into law on July 21st.
It started with the $800B economic stimulus package of Feb. '09 that Paul Krugman warned even at the negotiation stage as being very inadequate,and reiterating these concerns after Congressional agreement. His fears of a stalled recovery have been realized. Next we had the Afghanistan surge of troops, but with delays and declaration of a withdrawal starting in July 2011 - signaling intentions to embolden the enemy though leaving some leeway. Then of course there's the health care overhaul of Mar. '10 but without even the public option, leave alone the far more appealing and cost effective "Medicare for all" (aka "single payer") push.
Which brings me back to the financial reforms law. It is huge and complex, yet leaves almost all the important safeguards against a meltdown to be put in place through subsequent regulations by government agencies. That's great for bankers and their lobbyists who can get all the loop holes and escape clauses inserted while working with regulators. If they can win over hundreds of lawmakers, why not a few dozen regulators behind closed doors? Krugman points to further timidity by the Obama team - they are even dithering over nominating an obviously great fit like Elizabeth Warren to head the new consumer financial protection agency.
But that's not all. Regulations can be changed by successive administrations, without further legislative oversight. That means that even if the present crop of regulators do their job well and insert the right checks and balances, all this can be undone by a future Bush clone who assumes the Presidency. Knowing this, even the Republicans beholden to bankers and supporting them may not be quite so upset with the new law. And as seen in the current crisis, it can take many years for the negative consequences of lax oversight to surface, while banks can start to profit almost immediately.
This means that a future regime that loosens regulations that unfairly helps banks can benefit from their patronage. Yet such an administration can quite possibly escape (or at least get the benefit of the doubt for) the blame for planting the time bomb that causes a financial disaster on a successor's watch.
Other instances of the Obama and the Congressional Democrats collectively lacking courage are in enacting effective energy legislation, and perhaps immigration reform. In energy we couldn't even have the weak cap and trade system passed, leave alone a stiff gasoline tax that can fund alternative fuel development as espoused by Thomas Friedman for years.
My take even on Obama "victories" is generally of his doing a lot when cornered into having to act, yet without doing enough. It's almost like trying to save half the patient. And it's not a question of being a centrist, but being ineffective. I believe his taking the lead and acting more vigorously and decisively on contentious issues would help rather than hurt the Democrats in the 2010 mid-term elections. It would not only rally his disheartened Democratic base, but also win the respect of more independents.
But some initiatives did work well. The response to the H1N1 "swine" flu epidemic was good overall, and overestimating the demand for the swine flu shots and the resultant oversupply was much better than if they'd underestimated it. On the gulf oil spill the Obama team could have acted faster and forced more skimmers to be mobilized, including those from other oil companies. But it did force BP to pay into a $20 billion fund despite Republican condemnation and appointed Kenneth Feinberg to administer compensation (with luck speedily and impartially) from it.
Hopefully they can build more upon these types of successes in the time to come.
It started with the $800B economic stimulus package of Feb. '09 that Paul Krugman warned even at the negotiation stage as being very inadequate,and reiterating these concerns after Congressional agreement. His fears of a stalled recovery have been realized. Next we had the Afghanistan surge of troops, but with delays and declaration of a withdrawal starting in July 2011 - signaling intentions to embolden the enemy though leaving some leeway. Then of course there's the health care overhaul of Mar. '10 but without even the public option, leave alone the far more appealing and cost effective "Medicare for all" (aka "single payer") push.
Which brings me back to the financial reforms law. It is huge and complex, yet leaves almost all the important safeguards against a meltdown to be put in place through subsequent regulations by government agencies. That's great for bankers and their lobbyists who can get all the loop holes and escape clauses inserted while working with regulators. If they can win over hundreds of lawmakers, why not a few dozen regulators behind closed doors? Krugman points to further timidity by the Obama team - they are even dithering over nominating an obviously great fit like Elizabeth Warren to head the new consumer financial protection agency.
But that's not all. Regulations can be changed by successive administrations, without further legislative oversight. That means that even if the present crop of regulators do their job well and insert the right checks and balances, all this can be undone by a future Bush clone who assumes the Presidency. Knowing this, even the Republicans beholden to bankers and supporting them may not be quite so upset with the new law. And as seen in the current crisis, it can take many years for the negative consequences of lax oversight to surface, while banks can start to profit almost immediately.
This means that a future regime that loosens regulations that unfairly helps banks can benefit from their patronage. Yet such an administration can quite possibly escape (or at least get the benefit of the doubt for) the blame for planting the time bomb that causes a financial disaster on a successor's watch.
Other instances of the Obama and the Congressional Democrats collectively lacking courage are in enacting effective energy legislation, and perhaps immigration reform. In energy we couldn't even have the weak cap and trade system passed, leave alone a stiff gasoline tax that can fund alternative fuel development as espoused by Thomas Friedman for years.
My take even on Obama "victories" is generally of his doing a lot when cornered into having to act, yet without doing enough. It's almost like trying to save half the patient. And it's not a question of being a centrist, but being ineffective. I believe his taking the lead and acting more vigorously and decisively on contentious issues would help rather than hurt the Democrats in the 2010 mid-term elections. It would not only rally his disheartened Democratic base, but also win the respect of more independents.
But some initiatives did work well. The response to the H1N1 "swine" flu epidemic was good overall, and overestimating the demand for the swine flu shots and the resultant oversupply was much better than if they'd underestimated it. On the gulf oil spill the Obama team could have acted faster and forced more skimmers to be mobilized, including those from other oil companies. But it did force BP to pay into a $20 billion fund despite Republican condemnation and appointed Kenneth Feinberg to administer compensation (with luck speedily and impartially) from it.
Hopefully they can build more upon these types of successes in the time to come.
Tuesday, July 13, 2010
Some Perceptions on Travel Outside the US
A friend recently emailed me asking about booking travel from the US to India, and experiences with airlines. I offered my personal (and very limited) perspectives to her two questions, and thought I'd share them here. This is about personal travel by coach with a close eye on the budget. Anything you'd like to add is welcome.
Q: I'm planning a trip to India. Do you know and use any good travel agents, or do you just book online?
Q: I'm planning a trip to India. Do you know and use any good travel agents, or do you just book online?
A: I do know of good travel agents (and supplied that information to our friend.)
However, the online options have improved a lot over recent years and I've found very good deals on http://www.kayak.com/ and http://www.orbitz.com/ in that order. The fares fluctuate and the best ones may be available for just an hour or so before they are snapped up. So if you've time it is best to check multiple times every 4 - 5 hours, and/or at odd times like early morning or late night.
The other thing is that for international travel their systems don't work well in real time. So just like Travelocity has problems even in domestic flights, these sites often display low fares that they later say are no longer available when you proceed to book your travel. You do sometimes get those lower fares when you try subsequently.
Frequent flier miles sometimes come in very handy. Daughter Sheena got a business / first class ticket for her forthcoming trip from Austin, TX, to Lima, Peru on American Airlines for relatively few (60K) AAdvantage miles. This is on dates when paid fares even in coach are very high.
Q: Which airline have you mostly been flying? Are you happy with it? Have you ever taken the Air India nonstop? (i.e., the direct flight from New York or Chicago to Delhi or Mumbai.) I'm curious about it, and also about its quality aspects.
A: Some of my recent trips to India have been on Delta non-stop from JFK (since discontinued), American-Swiss combos via Zurich, Air France via Paris, and Thai Airways. The US airlines typically have the skimpiest service, especially American, while the European (and Thai) airlines have better food and cheerier attendants. Continental is better among the US carriers, though. They took great care of us in Frankfurt when we were stranded for 3 days due to bad snowstorms in the US.
However, the online options have improved a lot over recent years and I've found very good deals on http://www.kayak.com/ and http://www.orbitz.com/ in that order. The fares fluctuate and the best ones may be available for just an hour or so before they are snapped up. So if you've time it is best to check multiple times every 4 - 5 hours, and/or at odd times like early morning or late night.
The other thing is that for international travel their systems don't work well in real time. So just like Travelocity has problems even in domestic flights, these sites often display low fares that they later say are no longer available when you proceed to book your travel. You do sometimes get those lower fares when you try subsequently.
Frequent flier miles sometimes come in very handy. Daughter Sheena got a business / first class ticket for her forthcoming trip from Austin, TX, to Lima, Peru on American Airlines for relatively few (60K) AAdvantage miles. This is on dates when paid fares even in coach are very high.
Q: Which airline have you mostly been flying? Are you happy with it? Have you ever taken the Air India nonstop? (i.e., the direct flight from New York or Chicago to Delhi or Mumbai.) I'm curious about it, and also about its quality aspects.
A: Some of my recent trips to India have been on Delta non-stop from JFK (since discontinued), American-Swiss combos via Zurich, Air France via Paris, and Thai Airways. The US airlines typically have the skimpiest service, especially American, while the European (and Thai) airlines have better food and cheerier attendants. Continental is better among the US carriers, though. They took great care of us in Frankfurt when we were stranded for 3 days due to bad snowstorms in the US.
In contrast, when we flew American Airlines and missed a connection in Zurich due to a late incoming flight, they wrongly blamed this on the weather and we stayed a day at our own expense without any help from them. They ultimately paid up months later, but that's a long story.
There are mixed reviews about Air India but my experience on all 6-7 trips on it has been very good. A couple of times passengers tended to be unruly or unsophisticated - a Sardarji swaying drunkenly after several free drinks, and some passengers getting up from their seats on landing while the plane was still taxiing on the runway. But those were sources of amusement rather than inconvenience for me / us.
There are mixed reviews about Air India but my experience on all 6-7 trips on it has been very good. A couple of times passengers tended to be unruly or unsophisticated - a Sardarji swaying drunkenly after several free drinks, and some passengers getting up from their seats on landing while the plane was still taxiing on the runway. But those were sources of amusement rather than inconvenience for me / us.
To us personally the Air India crew has been very attentive, polite and gracious, emblematic of typical Indian hospitality. On one occasion after we were airborne a flight attendant noticed I had long legs and of her own re-seated me (and Anita) in a more spacious section. At other times the flight attendants have plied me with multiple alcoholic drinks when I requested for one (may be I look like a boozer.)
And those traveling non-stop from the US to on Air India have generally liked it a lot even in coach - plenty of leg room, good food, unlimited drinks, polite crew, etc. Jet Airways invariably receives rave reviews though I've not used it for international travel myself, and they don't offer non-stops to India. In general it's better, faster and less uncertain (due to delays and missed connections at intermediate airports, volcanic ash in Europe, etc.) to travel non-stop from US to India. So I'd recommend it, on Air India or whatever.
Moreover, the crews are individuals so experiences can vary - I've often seen great attendants and got service to match even on my lowest ranked airline, American Airlines.
And those traveling non-stop from the US to on Air India have generally liked it a lot even in coach - plenty of leg room, good food, unlimited drinks, polite crew, etc. Jet Airways invariably receives rave reviews though I've not used it for international travel myself, and they don't offer non-stops to India. In general it's better, faster and less uncertain (due to delays and missed connections at intermediate airports, volcanic ash in Europe, etc.) to travel non-stop from US to India. So I'd recommend it, on Air India or whatever.
Moreover, the crews are individuals so experiences can vary - I've often seen great attendants and got service to match even on my lowest ranked airline, American Airlines.
Tuesday, July 6, 2010
Guarding Your Tail
Imagine you are running a $100B company. Your personal salary is 2% of the excess earnings (over and above the safe treasury rate) of your company. You secretly bet your company's fortune so you get an extra 1% of return on investment with 98% probability, but your company can lose everything with a 2% probability.
Any bookie can see these are terrible odds for the company since the "expectation" is (0.98 X 1) - (0.02 X 100) = -$1.02B. In other words your actions will cause your firm to lose $1.02B a year on average over a long period of time.
But if you are mainly concerned about about your own earnings during your 5 year tenure at the top, then making this bet makes perfect sense. There is an over 90% chance that your company gets that 1% for all five years, netting you $20M every year. If they are unaware of the chances you've taken, then your investors will attribute your "success" to your superior managerial capability. And if that calamity does occur wiping out your investors, you personally get to walk away paying nothing. You even keep your past earnings, go yachting and getting your life back, as BP's CEO Tony Hayward would say.
That in essence is why people can have strong incentives to take on tail risks defined as very unlikely but catastrophic events. Instances of such tail risk taking include:
a) The aforementioned BP spill, where cutting corners and ignoring safety imperatives can save oil companies hundreds of millions of dollars a year. While the other oil chiefs solemnly swear to the complete safety of their practices, they know the chance of any such false claims being exposed on their watch is very low. Just as it was for Tony Hayward who was unlucky enough to have lost the reverse lottery. But the the risk of something terrible happening is very high, when aggregated over all the operating companies and the tens of thousands of wells operating under loose regulations.
b) The financial meltdown led by the collapse of the sub prime mortgage loans market. The easy money architects like Alan Greenspan thought the risk was very low. Many lenders, traders and money managers (backed by their rocket scientist quant analysts) knew that a drop in real estate prices could be catastrophic to the derivatives market. They just figured that the bubble wouldn't burst in their short term trading horizon, and someone else down the line would take the fall. Or if they were too big to fail, that they could collect on the upside while a lot of the downside would be borne by taxpayers. They were right on many counts. Even Goldman Sachs which famously dodged the bullet would have done badly if the housing price collapse had started a year earlier, before they unwound their positions.
c) Hurricane Katrina and the damage to New Orleans. Generations of politicians and lawmakers avoided raising and strengthening New Orleans' barriers. These would have guarded against the very unlikely possibility (in their watch) of a Category 5 hurricane directly hitting the city. They instead could divert such resources for popular "pandering" projects that would win them accololades and political support, with no one the wiser about the risk that did not materialize. But a city's life should be measured in centuries (think of the Netherlands' dikes) and over that horizon the risk was very high.
d) Other as yet unrealized disasters like nuclear accidents (assuming Three Mile Island wasn't bad enough and a while back) or earthquakes where safety codes are not strong or enforced enough.
The common factor in all these instances is that the people taking the risks on average derive a huge benefit from doing so, even if this is severely detrimental to the affected populace. That's why leaving the regulation and policing to the private industry can be so harmful. These special interests can lobby fiercely, or use a portion of their expected benefits to bribe or buy support and intimidate opposition that wants tighter controls.
At "my" University of Chicago the majority academic view leaned heavily towards private enterprise and self regulating markets. It went way beyond the concept of "efficient markets" relating to stock, etc. prices that makes intuitive sense. Many of the arguments and reasoning I heard in support of this more extreme "private and unregulated is generally the best" view was not convincing to me. It generally cited historical correlations between free enterprise and economic prosperity. Many of these no longer hold as even Andy Grove pointed out on July 1 in BusinessWeek in a different context of job creation and the rise of China and other controlled economies.
Still, to its credit the University of Chicago does tolerate dissent and fosters diversity of opinion. Paul Krugman in his April 9, 2009 NYT column, pointed to Raghuram Rajan of this school presciently warning back in 2005 of the risk of a financial meltdown, absent adequate controls. Now we just need to have lawmakers and politicians step up to the plate and have the right government safeguards to watch our collective back - and tail.
Any bookie can see these are terrible odds for the company since the "expectation" is (0.98 X 1) - (0.02 X 100) = -$1.02B. In other words your actions will cause your firm to lose $1.02B a year on average over a long period of time.
But if you are mainly concerned about about your own earnings during your 5 year tenure at the top, then making this bet makes perfect sense. There is an over 90% chance that your company gets that 1% for all five years, netting you $20M every year. If they are unaware of the chances you've taken, then your investors will attribute your "success" to your superior managerial capability. And if that calamity does occur wiping out your investors, you personally get to walk away paying nothing. You even keep your past earnings, go yachting and getting your life back, as BP's CEO Tony Hayward would say.
That in essence is why people can have strong incentives to take on tail risks defined as very unlikely but catastrophic events. Instances of such tail risk taking include:
a) The aforementioned BP spill, where cutting corners and ignoring safety imperatives can save oil companies hundreds of millions of dollars a year. While the other oil chiefs solemnly swear to the complete safety of their practices, they know the chance of any such false claims being exposed on their watch is very low. Just as it was for Tony Hayward who was unlucky enough to have lost the reverse lottery. But the the risk of something terrible happening is very high, when aggregated over all the operating companies and the tens of thousands of wells operating under loose regulations.
b) The financial meltdown led by the collapse of the sub prime mortgage loans market. The easy money architects like Alan Greenspan thought the risk was very low. Many lenders, traders and money managers (backed by their rocket scientist quant analysts) knew that a drop in real estate prices could be catastrophic to the derivatives market. They just figured that the bubble wouldn't burst in their short term trading horizon, and someone else down the line would take the fall. Or if they were too big to fail, that they could collect on the upside while a lot of the downside would be borne by taxpayers. They were right on many counts. Even Goldman Sachs which famously dodged the bullet would have done badly if the housing price collapse had started a year earlier, before they unwound their positions.
c) Hurricane Katrina and the damage to New Orleans. Generations of politicians and lawmakers avoided raising and strengthening New Orleans' barriers. These would have guarded against the very unlikely possibility (in their watch) of a Category 5 hurricane directly hitting the city. They instead could divert such resources for popular "pandering" projects that would win them accololades and political support, with no one the wiser about the risk that did not materialize. But a city's life should be measured in centuries (think of the Netherlands' dikes) and over that horizon the risk was very high.
d) Other as yet unrealized disasters like nuclear accidents (assuming Three Mile Island wasn't bad enough and a while back) or earthquakes where safety codes are not strong or enforced enough.
The common factor in all these instances is that the people taking the risks on average derive a huge benefit from doing so, even if this is severely detrimental to the affected populace. That's why leaving the regulation and policing to the private industry can be so harmful. These special interests can lobby fiercely, or use a portion of their expected benefits to bribe or buy support and intimidate opposition that wants tighter controls.
At "my" University of Chicago the majority academic view leaned heavily towards private enterprise and self regulating markets. It went way beyond the concept of "efficient markets" relating to stock, etc. prices that makes intuitive sense. Many of the arguments and reasoning I heard in support of this more extreme "private and unregulated is generally the best" view was not convincing to me. It generally cited historical correlations between free enterprise and economic prosperity. Many of these no longer hold as even Andy Grove pointed out on July 1 in BusinessWeek in a different context of job creation and the rise of China and other controlled economies.
Still, to its credit the University of Chicago does tolerate dissent and fosters diversity of opinion. Paul Krugman in his April 9, 2009 NYT column, pointed to Raghuram Rajan of this school presciently warning back in 2005 of the risk of a financial meltdown, absent adequate controls. Now we just need to have lawmakers and politicians step up to the plate and have the right government safeguards to watch our collective back - and tail.
Tuesday, June 8, 2010
Sheena's Latest Pastime - Take Two
Three months ago I had talked about daughter Sheena's varied interests including her latest one - aerial silk dancing, and added a YouTube link to her first performance on Feb. 14.
On April 27 she had her second performance. Her improvement is evident, as is the fact that in physical prowess her acorn fell far from the family tree, particularly on my side. I'm talking of her flexibility as well as comfort with heights.
About the first, I'm stiff enough to have caused considerable amusement all around during my few attempts at even the most basic of Yoga poses. I'm happy just to touch my toes and can barely manage to sit cross-legged on the floor for a couple of minutes in our traditional Indian gatherings. Yet Sheena's flexibility has been evident since childhood.
Her second performance is at some height off the ground, and much greater drops haven't bothered her. She showed no nervousness when we both first bungee-jumped in Vegas off a 180 foot platform. That was when I was inwardly frozen with fear. I saw her smiling broadly in a subsequent video of a bungee jump off a bridge to an apparently much deeper drop.
Back to her 2nd aerial silk dancing performance, here's a YouTube link to her video - the image is small but not bad for a night shot taken with her miniature Canon SD780 camera. She has a better close-up version on her Facebook account (for anyone who's her "friend" there.)
On April 27 she had her second performance. Her improvement is evident, as is the fact that in physical prowess her acorn fell far from the family tree, particularly on my side. I'm talking of her flexibility as well as comfort with heights.
About the first, I'm stiff enough to have caused considerable amusement all around during my few attempts at even the most basic of Yoga poses. I'm happy just to touch my toes and can barely manage to sit cross-legged on the floor for a couple of minutes in our traditional Indian gatherings. Yet Sheena's flexibility has been evident since childhood.
Her second performance is at some height off the ground, and much greater drops haven't bothered her. She showed no nervousness when we both first bungee-jumped in Vegas off a 180 foot platform. That was when I was inwardly frozen with fear. I saw her smiling broadly in a subsequent video of a bungee jump off a bridge to an apparently much deeper drop.
Back to her 2nd aerial silk dancing performance, here's a YouTube link to her video - the image is small but not bad for a night shot taken with her miniature Canon SD780 camera. She has a better close-up version on her Facebook account (for anyone who's her "friend" there.)
Monday, May 10, 2010
More J&J Shenanigans
As I suspected my Listerine experience mentioned in the last post was not just a one-off by J&J. It looks to be part of a pattern created by the top management placing quick growth and profits over ethics and long term reputation and performance.
Here are other recent instances:
Here are other recent instances:
- The Justice Department in January accused J&J of bribing nursing home drug procurer Omnicare with tens of millions of dollars to buy and promote its drugs. The kickbacks allegedly increased J&J's sales through Omnicare from $100 million annually to $280 million. The inappropriately administered drugs like Risperdal increased the risk of death for many patients with dementia.
- A subsequent March 11 BusinessWeek article (March 22-29 issue) reports an "explosion of litigation" by states against J&J over illegally marketing Risperdal for unapproved uses. The practices included getting paid doctors to plant questions from the audience so they could talk about off-label uses. J&J may end up paying billions to settle this.
- Last week J&J recalled 40 of its pain and allergy drugs for children including children's Tylenol. These drugs were contaminated or had the wrong strength of ingredients, and J&J's may be guilty of criminal (not just civil) misconduct. It's ironical that the government is advising consumers for their children's safety to switch from branded J&J products to their generic equivalents.
- BusinessWeek on April 29 reported J&J will pay over $81 million to settle criminal and civil cases over improper promotion of its drug Topamax.
J&J of course is not alone in cutting corners and acting improperly. It's just no better now than the rest, and the loss of its reputation is likely to cost it much after its current management and CEO have departed. To consumers that means being wary of it, and regret its exit from the small pool of iconic brands that we over the decades had learned to trust.
Friday, April 30, 2010
Beware of New Listerine Claims and Products
For over 17 years I have used Listerine mouthwash continuously on the recommendation of my periodontist, after getting religion on dental care. Its current maker and distributor Johnson & Johnson (J&J) bought the brand from Pfizer in 2006.
I had thought highly of J&J after reading a business case of the way it had handled a major crisis. It had launched a massive campaign, recalled 31 million bottles and reassured its customers following the 1982 Tylenol poisoning murders. That was 28 years ago.
Now it's very different. J&J seems (like Pfizer) to be all too willing to engage in deceptive marketing and mislead customers so long as it doesn't technically violate the law. Take Listerine.
Advanced Listerine was introduced in 2005 amidst much hype as an improvement over regular Listerine, with "the same germ killing power", "plus it controls tartar for cleaner, brighter teeth." It cost almost twice as much as regular Listerine. After switching to Advanced Listerine I one day happened to compare its back label with that of (regular) Cool Mint Listerine. To my amazement they both had exactly the same four active ingredients, in exactly the same proportion.
This way Listerine managed to make customers overpay for essentially the same product (except for the flavoring) with its misleading claims. I figure consumers eventually caught on, and the Advanced Listerine has quietly retreated from store shelves, but not before making millions in this rip-off.
Now here's the latest. Two months back I saw that the regular Listerine had been replaced in our local Costco store shelves by Listerine Total Care Anticavity Mouthwash. It was a different color (purple) and cost 25% more. The package had bold claims about protecting teeth and promoting dental health in six ways and gave the impression that this new product was all of the regular mouthwash and more.
I bought this and (wary from the previous experience) compared the label with that of the regular Listerine. Imagine my surprise when I found that its only active ingredient was sodium flouride, the same stuff you found in virtually all toothpastes sold in the stores. Since the fluoride in the toothpaste is sufficient for most users, the new Listerine is essentially useless for most folks, except for its alcohol content (same as in the regular variety) that kills germs.
So I returned the new Listerine and (at the urging of the nice Costco customer service folks) sent my feedback to Costco management. Many others must have done the same, because now the regular Listerine is back on the shelves, and I'm sticking with it. That's a product that I'd recommend any day, but beware of more marketing tricks and deceptions by these companies.
I had thought highly of J&J after reading a business case of the way it had handled a major crisis. It had launched a massive campaign, recalled 31 million bottles and reassured its customers following the 1982 Tylenol poisoning murders. That was 28 years ago.
Now it's very different. J&J seems (like Pfizer) to be all too willing to engage in deceptive marketing and mislead customers so long as it doesn't technically violate the law. Take Listerine.
Advanced Listerine was introduced in 2005 amidst much hype as an improvement over regular Listerine, with "the same germ killing power", "plus it controls tartar for cleaner, brighter teeth." It cost almost twice as much as regular Listerine. After switching to Advanced Listerine I one day happened to compare its back label with that of (regular) Cool Mint Listerine. To my amazement they both had exactly the same four active ingredients, in exactly the same proportion.
This way Listerine managed to make customers overpay for essentially the same product (except for the flavoring) with its misleading claims. I figure consumers eventually caught on, and the Advanced Listerine has quietly retreated from store shelves, but not before making millions in this rip-off.
Now here's the latest. Two months back I saw that the regular Listerine had been replaced in our local Costco store shelves by Listerine Total Care Anticavity Mouthwash. It was a different color (purple) and cost 25% more. The package had bold claims about protecting teeth and promoting dental health in six ways and gave the impression that this new product was all of the regular mouthwash and more.
I bought this and (wary from the previous experience) compared the label with that of the regular Listerine. Imagine my surprise when I found that its only active ingredient was sodium flouride, the same stuff you found in virtually all toothpastes sold in the stores. Since the fluoride in the toothpaste is sufficient for most users, the new Listerine is essentially useless for most folks, except for its alcohol content (same as in the regular variety) that kills germs.
So I returned the new Listerine and (at the urging of the nice Costco customer service folks) sent my feedback to Costco management. Many others must have done the same, because now the regular Listerine is back on the shelves, and I'm sticking with it. That's a product that I'd recommend any day, but beware of more marketing tricks and deceptions by these companies.
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