Starbucks cannot be all things to all people

SEATTLE, Washington - Starbucks Gossip is reporting on the announcement of the Q1 numbers for Charbucks. For one thing, it featured CEO Howard Schultz spouting platitudes that could have been spoken at the quarterly announcement of any public company in the country - "focus on building a long-term model to realize our transformation agenda", "laser focused on delivering what our customers want and expect", "optimize our resources", etc.

In addition, Schultz is again making noises about the Starbucks Experience, meaning the aroma, the music, he comfy feel, and so on. He thinks the store is losing its focus on coffee, and one of the first steps in restoring that focus is the announcement that Charbucks will stop selling warmed breakfast sandwiches.

When Schultz began talking up the Experience a year ago, he got thrashed by Bill Saporito of Time magazine. Manhattanite Saporito does not want an Experience, he wants faster delivery of the drinks:

It's not the atmosphere, Howard. It's your incompetence. Or at least that of the executives who work for you at your way too laid-back HQ. You're talking atmosphere when you should be talking about front-end operations. Instead, in my Starbucks we have the morning chaos, the lines stretching all the way to the ludicrously heavy doors, a drill duplicated at the coffee hour of 4 p.m., where they've mastered the art of have exactly one less person on hand than needed.
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You don't need more ambiance, you need more throughput. More machines, more sales terminals. You want us to smell the coffee, just grind some. In the meantime, we're waiting.

This is a problem for Charbucks. You can shoot for having a neighborhood vibe, or you can shoot for ruthless in-store operations; it is a challenge for a massive corporation with over 10,000 locations to try to be both, or to be one thing in some locations and another thing in other locations.

Sign that the stock market is in trouble

SEATTLE, Washington - I've had the same investment manager since 1992. He's been a curmudgeon the whole time, through good times and better times. Now, suddenly, he's the optimist. In a recent letter, he said good times are ahead:

15000 DOW
I believe the news media and doom and gloom experts will be completely fooled by year end as the political experts and news media where fooled in New Hampshire

Misuse of the word "where" in the original.

CRDA head frets about "grind joints" in Atlantic City

SEATTLE, Washington - The Casino Reinvestment Development Authority (or CRDA, pronounced "creedah") is a New Jersey state agency entrusted with skimming some money from Atlantic City casinos (in addition to various other gaming-only taxes and fees) and investing in various infrastructure and development projects in New Jersey. They are currently in a bit of a dust-up with Atlantic City officials over the sale of Bader Field, a former airport (in fact, the first place in the United States to be called an "airport") that is considered a primo casino development location.

Penn National Gaming has offered Atlantic City $800 million (including fat $50 million payments in each of the first two years) so that they could buy the land and divide it so that up to four casinos could open there. Atlantic City is having its first tax reappraisal on residents in 20 years and wants to use some of that money to soften the blow.

CRDA head Thomas Carver blasted this plan with language a bit spicier than you usually hear from a bureaucrat. He said that the Penn National offer was a "scam", that the two large upfront payments were "tantamount to a bribe", and that Atlantic City would end up with shitty casinos instead of the lavish "megacasinos" he envisions:

"It will take the city back years. It will almost preclude us from reaching the next level in terms of our evolution into an international resort destination. You will end up possibly, at best, with four grind joints out there, based on how they want to divide the land up."

Carver believes that it is the job of CRDA, not the city, to oversee a bidding process for the land, and at least partly blames the dispute on "long-held suspicions by city officials that the CRDA is trying to usurp the city's authority." Well, yes, that exactly what the CRDA is doing, usurping the city's authority. People don't trust Atlantic City to handle its own affairs for good reasons, including Michael Matthews, a childhood friend of my father who became mayor in 1982 and within three years was serving a 15 year jail term for extortion.

And for those not versed in gaming lingo, a "grind joint" is a casino that operates by catering to a large volume of small-stakes players, instead of high-rollers. Perhaps Mr Carver hasn't noticed the 800+ junket and charter buses that arrive daily in Atlantic City, ferrying people directly to the casinos from poor neighborhoods in New York, Philadelphia, and Baltimore. Sounds like grinding to me.

Jo-Wilfried Tsonga and Clint Holmes - separated at birth?

SEATTLE, Washington - The Australian Open tennis tournament has just ended, and the AP story describing the men's final refers to runner-up Jo-Wilfried Tsonga as a "Muhammad Ali lookalike" and notes that "a portrait of Ali, a racket sketched in one hand, was taped to the stadium wall."

Whoever put up that sign has probably never been to Las Vegas, because then they'd know that Mr Tsonga bears a much stronger resemblance to Vegas entertainment legend Clint Holmes.

Mr Tsonga is a 22-year-old Frenchman, so... did Holmes tour in France 23 years ago?

Trophy Cupcakes drops the ball

SEATTLE, Washington - My favorite cupcake at Trophy Cupcakes in Wallingford has been the Peanut Butter & Jelly flavor. They used to only sell it on Saturday and Sunday. They then started selling it four days a week, and I warned them that that would make this cupcake less special. They said it was "still special."

Now, it's gone, they don't make it at all. Perhaps temporarily, perhaps permanently. It seems to have been replaced by a Chocolate Peanut Butter flavor, but this is just not going to cut it.

UPDATE! See comments - someone allegedly from Trophy Cupcakes has responded, saying that the PB&J will be re-instituted on Good Friday this year. For the Jews out there - that's March 21 this year in the United States. Mark Your Calendars.

Sounds like Wesley Snipes joined the Moorish Republic

SEATTLE, Washington - Just a few days after I discussed the crackpot theories and cryptic court statements of the adherents of Redemption Theory, I may have stumbled upon Redemption's first celebrity devotee - actor Wesley Snipes.

Snipes's trial for defrauding the government recently kicked off in Florida. He was indicted in 2006, so we've known for some time that he had some interesting ideas on taxation; today in court portions of a letter he wrote to the IRS after the indictment sound like plays from the Moor/Redemption playbook.

In the 600-page declaration signed by Snipes and sent Dec. 4, 2006, Snipes said he had "no ill intent or malice" and didn't want to evade any lawful requirement to pay taxes. But he went on to say the government had "no lawful authority to impose any kind of criminal sanctions."
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Snipes declared he had no taxable U.S. income, making the IRS Form 1040 "absolutely the wrong form for me to file." He also claimed taxes withheld were "stolen funds."
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The document also warned the government's "illegal collection action" would result in "significant personal liability" for those involved.

He did everything but "fire" the IRS and try to reclaim the funds of his "straw man." He also made this threat, which his lawyer claimed was not a threat:

"Warning - pursuit of such a high profile target will open the door for your increased collateral risk," Snipes wrote. "I certainly don't believe this is in your best interest and can be avoided."

Snipes's accountants apparently tried to use the "861 Argument" on his tax returns, which is an attempt to exploit an alleged statutory loophole to avoid tax. If you're having trouble sleeping you can read the Wikipedia page that discusses various tax protester arguments.

Found via Drudge Report

UPDATE Snipes was acquitted of fraud but found guilt on some more minor charges of failing to file tax returns.

Homework assignments on Mary Carter Paint

SEATTLE, Washington - In the footnote of one of my posts on the Tropicana gaming license denial in Atlantic City, I noted the rather suspicious fact that Resorts International, the company that opened the first Atlantic City casino in 1978, was the Mary Carter Paint Company only a decade earlier. Paint companies typically don't open casinos. The orthodox explanation is that the company (which was based in Florida in the 1960s) expanded into real estate, which led to acquiring property in the Bahamas, which became casinos, thus they were pros at this thing by the time gambling was legalized in New Jersey.

Various authors that I have read have put a more insidious spin on this. Charles Higham, in Howard Hughes: The Secret Life, says the following:

He [Hughes] made a deal with the CIA, which owned Mary Carter Paints, an improbably named "front" company, to let him buy the operating rights to Mary Carter Paints's Paradise Island Casino, Hotel and Ocean Club. The founders, in 1958, of Mary Carter Paints were Thomas Dewey and Allen Dulles, at a time when Dulles was head of the CIA and shortly before Dulles obtained Maheu's assistance in attempting to kill Fidel Castro, with Hughes's tacit approval... In 1963, the CIA linked up with mob connections through Mary Carter to support fascist governments in South America. By 1964, Robert Kennedy... was aggressively exploring the Hughes-Moe Dalitz-Sam Giancana-CIA-Mary Carter Paints-Nassau connections.

In his source notes Higham says that this came from "files of the Watergate hearings."

Higham may not exactly be a bedrock source of information, as The Secret Life details alleged homosexual activity of Hughes, including longstanding affairs with Tyrone Power and Cary Grant, and essentially alleges that Hughes died of AIDS, even though Hughes died in 1976, he essentially ceased sexual activity in the 1950s, and documented AIDS infections were extremely rare in the US before 1980.

The Money and the Power by Sally Denton and Roger Morris says:

Formerly the Mary Carter Paint Company, which was widely considered to be a CIA front that laundered payments to the Cuban exile army in the early sixties, Resorts International now owned several Bahamian casinos and was thought to be dominated by [Meyer] Lansky.

The source notes for that list Masters of Paradise by Alan Block as the source.

An old conspiracy mailing list post states that the CIA-Dulles-Mary Carter connection was documented in the May 20, 1976 issue of Rolling Stone.

The next time I'm at the library, I'll check out that copy of Rolling Stone (which also has an interview with Marlon Brando!) and look into things further. All of the sources above probably funnel to the research in the Rolling Stone article.

UPDATE I have followed up on this.

Forms to reclaim your Straw Man now available online

SEATTLE, Washington - Backwoods white survivalists and black nationalist schemers have at least one thing in common - a byzantine, conspiratorial plan to escape debts and place themselves above the law known as "Redemption Theory". And while I can visualize the mimeographed newsletters by which this theory was distributed in the past, the paperwork and instructions to help you achieve "Redemption" are now sold on the good old internet, at the Moorish Republic Nation.

I do not wish to contract with you

Redemption Theory was started by a longtime white-extremist figure named Roger Elvick in the 1980s. Without going into too much detail, Redemption holds that the United States government went bankrupt in the 1930s and started taking out international loans against a bureaucratic alter-ego of every citizen. This alter-ego is known as a "straw man" and Elvick and his soulmates claim to have discovered a complex process by which a citizen gains access to his "straw man" and to the money contained therein. In practice, the "process" consists of bad checks and various bureaucratic and commercial filings. Elvick peddled this throughout the 1980s and 1990s before being sentenced to four years in jail for various crimes in April 2005.

The analogous movement among black men is known as the al Moroccan Empire, or Moors, or Moorish Nation, or other things with Moor in the name. The only reason I know about any of this at all is that a few guys in Atlantic City were caught up in this a few years ago. In 2003 three men, including former Atlantic City Housing Authority director W. Oscar Harris, were hauled before a judge [links to Press of AC now pay-only - jeff] for attempting to liberate their "straw man." Per their ideolgy, they responded to questions from the judge with identical, cryptic responses, including "If you think you can make a legal determination for me, you're fired", "I do not wish to contract with you", and my personal favorite, "Is this your chambers, or a courtroom?"

The black wing of all of this has added an interesting twist - they claim that the 1787 treaty between the Morocco and the United States exempts "Moroccans" from U.S. law. Thus, when Moor devotee and former Pleasantville (NJ) police officer Thomas Scott was being tried for fraud, [links to Press of AC now pay-only - jeff]he simply informed the court that his name was now Oman Valord Bey and that the laws of the United States no longer applied to him.

I've read the treaty in question and I don't think I see what they're talking about.

More straight talk from Fabio

SEATTLE, Washington - Fabio has a very stylish command of the English language, especially considering that he is an immigrant. He was recently interviewed on the Details blog and provided yet more choice material.

First he shared some thoughts on his tiff with George Clooney that I wrote about in November.

"This guy, he ate more than he could chew... Right then, I could have knocked him over and beat him," he says. "I could have punched him in the face while he was on his back. That's how you really hurt someone—their face can't amortize the punch so it takes, it takes the whole impact."

"Their face can't amortize the punch!" I wish I had thought of that one.

He also claims to be developing an energy drink for which he predicts smashing success:

"I wish I could tell you, but it's a secret. I'm sitting on this gold mine for a long time. It's like you're looking all over your house for your car keys and it turns out you are sitting on them, that's what this is like."

He also shared his innermost thoughts on what he's thinking while out on a date with an actress:

"And they are always complaining about their work, or how they are not working. About this casting or this part they are hoping to get, and I have to say, 'Come on, you're a fucking waitress.' I don't say that, but I think that, you know, because I'm a gentleman."

That's exactly what I think when I'm on a date with a hot actress.

Found via Mollygood

White Castle making big hiring push

SEATTLE, Washington - White Castle, like many fast food chains, is always on the hunt for new employees, and a Manhattan location was flying the banner below.

One of the benefits being touted is "a paycheck every week." Why would this be such a desirable benefit? Maybe, people working at other restaurants where the check comes every two weeks will think that they'll make double the money if they switch to working at White Castle.

The baby-est of baby steps for DRM-free Sony music

NEW YORK CITY, New York - When the news broke several days ago that Sony-BMG would start offering DRM-free MP3 downloads, I said "don't get too frisky, I'm sure there are some catches." I didn't write it here, but I said it. Believe me.

Now the first bits of information have trickled out on the nature of their download program. Almost every detail of the program shows that they just don't get it. Purchasing MP3s involves going to an actual retail store (and maybe online stores too, who knows) to purchasing a special card. Once you take this card home and scratch off the instant-lottery-style covering to expose your secret code, you can then use the code to purchase MP3s online. The initial download menu will consist of 37 albums, including Britney Spears, Barry Manilow, Celine Dion, and Kenny Chesney.

My first thought was that Sony is having the hallucination that getting people to go to the store will result in them buying lots of stuff at the store, in addition to the magic code card. The article mentioned that, and also revealed an even more fanciful dream on Sony's part:

With Valentine's Day approaching, Sony-BMG is counting on demand for gift cards to boost sales of the downloads, as well as the collectible nature of the cards themselves, which feature images of the artists and information about the albums.

It continues to amaze me that record companies engage in teeth-gnashing and sphincter-clenching regarding selling DRM-free MP3 downloads, because (as a zillion people before me have pointed out) every damn CD they have ever sold contains DRM-free digital music. They behave as if this is not the case - that it is some sort of dangerous innovation to let DRM-free songs into the wild.

It's getting ugly, the entire rationale for having big music companies is disappearing and they're going to thrash about for a bit before going away. Technology has obsoleted countless industries over the years; watching this whole episode is instructive because it's happening in our time and it's happening to a very visible industry that all of us have interacted with.

Found via Slashdot

UPDATE: Just a few days later, looks like Sony is loosening up even more and will be selling music on the Amazon MP3 store. Good for them.

Book Review - The Sheltering Sky

SEATTLE, Washington - Paul Bowles was an artsy Westerner hanging out in North Africa before it was cool to do so. He started visiting the area in 1931 and moved to French Algeria in 1947. At the time, he was a composer by trade; The Sheltering Sky was his first novel.

The book chronicles the post-WW2 journey of three wealthy slacker Americans (hubby and wife Port and Kit, and friend Tunner) taking an extended get-away in French North Africa. Port seems to have the crazy idea that this long trip with a guy friend tagging along will do wonders for his troubled marriage to Kit. The trio starts out in a heavily Frenchified port city and slowly works its way into the desert, partaking of the fleabag hotels, strange cuisine, and exotic scenery.

Disaffected post-war young adults wandering aimlessly, hanging out in cafés, pondering their lives, fooling around a bit - sounds like The Sun Also Rises. I would say it is similar, except the writing has a few more adjectives, it's after a different war, and none of the main characters got their crank shot off in the war.

The book may have a few more adjectives, but it's still done in a relatively spartan style. Spartan terrain, spartan writing, etc. Works well enough for me.

William S. Burroughs's reading of The Sheltering Sky was one of the influences that led him to move to Tangier in the early 1950s, so I was expecting some drug use and gay sex with teenagers. Not much of either - the only "gay" sex involved a guy getting down with a woman who was dressed like a man - is that gay?

I didn't find out until after finishing the book that Bernardo Bertolucci made The Sheltering Sky into a movie in 1990. I got my hopes up - some good desert cinematography, a sort of heterosexual Lawrence of Arabia - but Wikipedia notes that Bertolucci "turns the bleak, sinister tone of the latter part of the book into a desert love story". Shit! I'll still rent it and watch it, but I would root for a bleaker movie. If there is not some hot loving in the movie - some Last Tango in Paris, go-get-the-butter eroticism - I will have to declare it a failure.

The source of this blog's color scheme

The Tropicana gaming license denial and casino regulation

SEATTLE, Washington - The Courier-Post of Cherry Hill, NJ recently editorialized on the denial of a gaming license to Columbia Sussex, a denial that I have previously discussed. The Courier-Post thinks that the Casino Control Commission went too far in denying the license, and that much of the justification for denying the license (the nebulous "running a first-class property") was for business practices that would have doomed the casino anyway in the competitive Atlantic City market:

We're not denying the Tropicana has slipped or that new ownership would almost certainly do a better job and hire needed staff back... but we think the Casino Control Commission went too far because, in a free-enterprise system, what right does the government have to tell an owner, "You need to do a better job or we'll make you sell." The commission ruled that Columbia Sussex failed to meet state gaming license requirements by lacking business ability and lacking good character, honesty and integrity.

It would be one thing if the casinos owners had allowed cheating to thrive, weren't keeping enough money on hand to pay winning gamblers, or were rigging slot machines to never pay out. This would violate the law or destroy gamblers' trust in a fair game. But that isn't what has happened at the Tropicana.

It's simply been bad ownership trying to maximize profit by sacrificing quality. It's not a pleasant thing for customers, and it hurts, especially for those who've been laid off. But it's something that bad businesses do all the time, and it's their right to do. If they want to run themselves into the ground, they can.
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With this decision, a message has been sent to businesses inside and outside New Jersey that the state has no problem passing judgment on how your business is run.

There is a lesson in all of this about government regulation and oversight more generally. The editorial mentions that the original, overarching mandate of casino regulation in New Jersey was to prevent mob infiltration of the casinos and to ensure honest games. The regulators have been successful at this*, but regulatory bodies seem to be congenitally incapable of keeping a narrow scope to their regulation. Atlantic City casinos have been burdened by a blizzard of regulatory decrees that have nothing to do with the honesty and integrity of the business. Examples:

• Casinos started operating in Atlantic City in 1978, but poker was not offered until 1993. Why? Regulators were reluctant to approve a game where the players touched the cards. Players had been touching the cards in Nevada and Europe for decades, but so what? This was pure fear, ignorance and over-regulation.
  
• All parties in casino poker are interested in a fast game. However, for many years after the introduction of poker in 1993, all players had to buy their chips from the dealer at the table, instead of from a cashier window or a chip runner. Why? Well, casino accounting involves some metrics related to how much money is in the box on each table, and how many chips are in the tray (the "take" and the "drop", among other things) and having players buy chips at a cashier window mussed up the calculations. Again, other jurisdictions offered many ways to buy chips, but New Jersey regulators were resistant to change. It took years and years, but players can finally buy chips at a cashier window in New Jersey.
  
• The ratio of table games to slot machines at a casino is controlled by regulators. Slot machines average more profit per square foot than table games, so regulators put in requirements for a minimum percentage of table games out of a fear that some casinos would turn into pure slot-houses. This has also been relaxed over the years, but the fact that it exists at all is a classic regulatory over-reach of the type mentioned by the Courier-Post.
  
• While I'm mentioning square footage - regulators also mandated a mininum number of restaurants on a property, based on the square footage of the casino. This typically came to more restaurants than the property needed, so some casinos (especially the larger ones) had a restaurant or two sitting around, that was open the bare minimum hours per week necessary to satisfy the regulators, but was otherwise idle and unwanted.
  
• Casino managers holding a Key license (on the casino floor, this translates to Pit Boss and higher level management) are not allowed to gamble anywhere in New Jersey. This regulation seems to be based on the nonsensical belief that high-level personnel will have some special insight on how to cheat a casino. I know some good casino employees that are basically stuck on their career path because they do not want to submit to this silly regulation. This prohibition used to be broader, applying to every employee of a casino, not just the key employees - my father, may he rest in peace, worked at a casino and used to don a wig and a fake cast on his arm to go gambling.
  

This list is not the result of intensive research, it's stuff off the top of my head that anyone that has been around New Jersey casinos knows - I'm sure there's much more stuff that I don't know about.

I think this whole experience planted in me a basic wariness of burdensome regulation. Not an outright opposition to it, but a healthy skepticism - a realization that it will inevitable be over-broad in scope, and provide a lot of counterproductive sand in the gears for each bit of good it does. So when politicians start ringing the bell for more regulation of something (like John Edwards recently calling for sweeping new food regulations - is there some mass poisoning of Americans by evil food companies that I don't know about?) I look at it with all appropriate cynicism.

* I am taking the mainstream view that New Jersey casinos are largely mob-free and have been the whole time. Some authors have a different view - that the company owning the first New Jersey casino, Resorts International, was either a Meyer Lansky mob operation, or a CIA front company, or both. It is suspicious that just ten years before the casino opened, Resorts International was the humble Mary Carter Paint Company.