The Daily Parker

Politics, Weather, Photography, and the Dog

Past performance is no guarantee of future results, craft beer edition

Ballast Point, a former craft brewery that sold out to Constellation Brands for $1 billion in 2015, hasn't given the buyers everything they had hoped for:

Ballast Point has plummeted back to earth after its meteoric rise, though, a sales decline that reflects early missteps after the merger and the slowing growth of craft beer in general, according to industry experts and Constellation executives. The San Diego-based brewer of Sculpin IPA faces numerous challenges in its quest to grow as national craft brand, but perhaps none more significant than this: There are almost 6,500 breweries in the U.S. today — at least 2,000 more than when Constellation bought Ballast Point.

“We have a great high-end Mexican portfolio and wanted to get into craft. We entered in a big way with Ballast Point. … This is really an example of where we’re headed right here in terms of executing our strategy,” said Marty Birkel, Ballast Point president, in an interview at the new Chicago brewpub.

Michigan-based Founders Brewing Co., best known for its lower-priced, lower-alcohol All Day IPA, was roughly the same size as Ballast Point in 2015, but could end up shipping twice as much beer to wholesalers this year. Founders CEO Mike Stevens called the Ballast Point decline a “perfect storm” of high price point — a six-pack of Sculpin regularly sold for $15 — and what he believes to be a fading trend in fruit-flavored IPAs.

“They were obviously just screaming to the top of the peak, riding that price point, riding their fruit IPAs. … Right when that (deal) went down, we kind of all knew that they were going to have to fix the price points because the consumers were going to lose interest,” Stevens said.

Given that "small" and "craft" are two of the things people who drink beers from small, craft breweries want, and that these things go away when a conglomerate buys them, none of this should surprise anyone. And yet, the culture at large companies almost compels this kind of behavior.

At least Constellation isn't trying to kill its acquisitions, as InBev and MillerCoors have been accused. And craft breweries continue to flourish, both here and abroad. So all is not lost...just Ballast Point.

The new American aristocracy?

Writing in this month's Atlantic (a magazine by and for the very people he writes about), Matthew Stewart says the 9.9%, not the 0.1%, are the real story in American inequality:

Let’s talk first about money—even if money is only one part of what makes the new aristocrats special. There is a familiar story about rising inequality in the United States, and its stock characters are well known. The villains are the fossil-fueled plutocrat, the Wall Street fat cat, the callow tech bro, and the rest of the so-called top 1 percent. The good guys are the 99 percent, otherwise known as “the people” or “the middle class.” The arc of the narrative is simple: Once we were equal, but now we are divided. The story has a grain of truth to it. But it gets the characters and the plot wrong in basic ways.

It is in fact the top 0.1 percent who have been the big winners in the growing concentration of wealth over the past half century. According to the UC Berkeley economists Emmanuel Saez and Gabriel Zucman, the 160,000 or so households in that group held 22 percent of America’s wealth in 2012, up from 10 percent in 1963. If you’re looking for the kind of money that can buy elections, you’ll find it inside the top 0.1 percent alone.

In between the top 0.1 percent and the bottom 90 percent is a group that has been doing just fine. It has held on to its share of a growing pie decade after decade. And as a group, it owns substantially more wealth than do the other two combined. In the tale of three classes (see Figure 1), it is represented by the gold line floating high and steady while the other two duke it out. You’ll find the new aristocracy there. We are the 9.9 percent.

I recommend reading the whole article. But his conclusions jibe with things I've worried about for most of my adult life:

The toxic wave of wealth concentration that arose in the Gilded Age and crested in the 1920s finally crashed on the shoals of depression and war. Today we like to think that the social-welfare programs that were planted by the New Deal and that blossomed in the postwar era were the principal drivers of a new equality. But the truth is that those efforts belong more to the category of effects than causes. Death and destruction were the real agents of change. The financial collapse knocked the wealthy back several steps, and war empowered labor—above all working women.

That gilded, roaring surge of destruction was by no means the first such destabilizing wave of inequality to sweep through American history. In the first half of the 19th century, the largest single industry in the United States, measured in terms of both market capital and employment, was the enslavement (and the breeding for enslavement) of human beings. Over the course of the period, the industry became concentrated to the point where fewer than 4,000 families (roughly 0.1 percent of the households in the nation) owned about a quarter of this “human capital,” and another 390,000 (call it the 9.9 percent, give or take a few points) owned all of the rest.

The slaveholding elite were vastly more educated, healthier, and had much better table manners than the overwhelming majority of their fellow white people, never mind the people they enslaved. They dominated not only the government of the nation, but also its media, culture, and religion. Their votaries in the pulpits and the news networks were so successful in demonstrating the sanctity and beneficence of the slave system that millions of impoverished white people with no enslaved people to call their own conceived of it as an honor to lay down their life in the system’s defense.

That wave ended with 620,000 military deaths, and a lot of property damage. It did level the playing field in the American South for a time—though the process began to reverse itself all too swiftly.

I like where I am, no lie. But I recognize, as does Stewart, that we have a choice to make in how we reverse the trending inequality that has historically led to revolution. Food for thought.

Because who needs cyber security, anyway?

Lawyer Paul Rosensweig and national security analyst Megan Reiss think John Bolton getting rid of the "cyber czar" position is "a magnificent idea:"

Bolton is completely correct that there is no need for any coordinationbetween the various federal agencies on this issue. Cybersecurity is not a cross-cutting problem that affects all sorts of equities. We have no concerns that eliminating this position will result in conflicting mission imperatives. We have every confidence that the National Security Agency, for example, can work out vulnerability disclosure equities without the need for input from the Departments of Commerce, Justice or Homeland Security (much less Treasury or State).

We also are confident that the decision accurately reflects the diminished importance of cybersecurity as a national issue. Cybersecurity is no longer deserving of the prominence that so many national security experts seem to give it. We fully expect the Office of the Director of National Intelligence to eliminate the cybersecurity menace from its annual threat assessment. We are confident that the trend lines for cyber threats and intrusions are down.

Didn't we already know John Bolton was incompetent

The art of the deal

North Korea may have pwned President Trump, for some pretty predictable reasons:

Most U.S. presidents would see North Korea’s threats as a test and would therefore neither budge from the U.S. negotiating stance nor allow our foe to dictate who advises the president. Whether Trump will crumble (as he did in offering China an olive branch on ZTE) remains to be seen. This should nevertheless serve as a warning for U.S. officials, and Trump specifically, to cut the happy talk and maintain a high degree of skepticism about Pyongyang’s intentions.

Trump’s insistence that “no one” has gotten as far as he has in negotiations with North Korea is misguided in several respects. First, we’ve actually had full-blown agreements with North Korea — which North Korea did not abide by. We’ve had many rounds of negotiations with North Korea over the years and even release of imprisoned Americans. Trump on the other hand has gotten nothing concrete from North Korea on its denuclearization; he has not gotten anything of lasting value. Second, the promise of a summit is already buying Kim some international stature and credibility while raising questions as to whether our South Korean partners have been engaged in some wishful thinking regarding the prospects for denuclearization. By offering North Korea a summit, Trump is now at risk of losing something of no strategic value — a world-class photo op — if he does not accede to North Korea’s table-setting demands for the summit. And should he ever get into a room with Kim, one can only imagine what he would give up to get his own version of “peace in our time.”

New Republic's Heather Souvaine Horn agrees:

Three and a half weeks ago, after North Korea announced it would be shutting down its nuclear tests, New Republic contributor Jon Wolfsthal cautioned not to celebrate President Donald Trump’s diplomatic victory just yet. Now, that analysis is looking remarkably prescient.

The reality, Wolfsthal wrote, was that any kind of lasting agreement with North Korea would take months to negotiate and years to implement. If America, led by an impatient president, walks away in frustration, then North Korea can “paint the United States as the unreasonable party.” By raising American expectations and then engaging in periodic obstructionism, Kim could be setting the talks up to fail. If the administration takes the bait, Wolfsthal argued, that would suit Kim just fine.

You know, I really want the U.S. to succeed in the world. Unfortunately, we have a child in the White House, looking out only for himself, and not competent even to understand where he's incompetent.

Two Londons

Citylab has an excerpt of Stephen Griffith's and Penny Woolcock's new book exploring the parallel worlds in London:

Penny: I’m halfway between Upper Street with its snooty estate agents, boutique shops and dozens of expensive bars and restaurants and the Caledonian Road—the Cally—still shabby but sprinkled with the telltale signs of gentrification. Apart from remnants of the white working class and Asian market traders on Chapel Market, it’s uniformly posh and very safe.

Or is it?

Look carefully and you might notice a uniformed security guard outside the McDonald’s on Chapel Market, a sign that there is a parallel world right here. There are teenagers for whom this tranquil area is a deadly battlefield, laced with landmines and traps and this particular McDonald’s is one of its most hotly contested territories. These same streets have doppelgangers, not elsewhere in the universe but under our noses. In London we literally don’t see the young people dying right under our noses, their bloodstains just seem to evaporate. My eyes were opened after making two films about gang life in inner-city Birmingham, leaving me no longer able to conveniently unsee this parallel world.

Steve: O J said, “Say I need to go Angel now, it’s only a short walk. Maybe I catch the 274 [the 274 bus] and maybe that’s safe. But it’s a warm evening so say I decide to walk, well I could be caught slipping and something happens.” Sadly, a year later O J was in intensive care after a stabbing. It seemed he had been caught slipping. O J was one of the lucky 1,000 London stab victims every month who survive. Over a single fortnight in May, 11 young people were stabbed to death. This is not Chicago but we’re on our way.

I've spent plenty of time in Islington, and saw only a few hints of the divide between my world and the Cally Boys'. It's kind of freaky. I will have to read this book on my next trip to London.

Four unrelated stories

A little Tuesday morning randomness for you:

Back to debugging acceptance tests.

Conservative journalism has changed a bit

Jeet Heer describes the vacuity of the current conservative media:

While Trump remains a divisive figure among conservative intellectuals, the space for debating his merits is dwindling in the right-of-center media. Both the dictates of the market and the demands of employers like Salem are pushing conservative pundits and journalists to act, as [Salem Media Group senior vice president Phil Boyce] put it, as trial lawyers who defend their client regardless of their private scruples. What happened at Salem is a microcosm for a larger shift in the conservative media.

Ben Howe, one of the RedState writers fired by Salem Media, lamented in The Daily Beast last week that “there is almost no original reporting” in the conservative media. Alex Pareene of Splinter offered a theory as to why: “A hostility to original reporting isn’t necessarily inherent to the Right—it’s just inherent to the Right we are currently stuck with. It is difficult, for example, to go out and report on the doings of the Trump administration and not come away with stories about how it is a den of incompetents and grifters, led by an unstable crook, without some very creative interpretations of whatever facts you uncover.”

Pareene’s analysis calls to mind the original injunction given to Ben Shapiro in 2016. Given who Trump is, the American right doesn’t need good reporters (who would only risk uncovering more scandals about Trump) nor do they even need effective ideological thinkers (who would only remark on Trump’s deviation from conservative orthodoxy). What the American right needs is good trial lawyers, mercenaries for hire who will defend the president no matter who they might privately think.

And given that a sizable minority of Americans gets its news from these media outlets, that is scary indeed.

 

Remember their strategy and it makes sense

EPA Administrator Scott Pruitt's "solution" to his ethical issues is causing even more ethical issues:

EPA Administrator Scott Pruitt is facing investigations into his housing arrangements with a lobbyist, his travel expenses, and his security detail. He has authorized raises for staff in spite of being told not to by the White House, and allegedly retaliated against EPA whistleblowers. This adds up to at least 11 audits and investigations from the Office of Inspector General and Government Accountability Office, with more news of his ethical lapses seeming to break every day. In order to address these problems, according to the New York Times, the former Oklahoma attorney general has decided he is going to need extra help from a private legal defense fund.

But as the head environmental regulator, Pruitt having a legal defense fund raises even more questions for government ethics experts, who have trouble envisioning how he will accept donations without creating another ethical mess.

“Legal defense funds can be expensive and difficult to maintain due to extensive screening, compliance, and reporting requirements,” [Virginia Canter, executive branch counsel for Citizens for Responsibility Ethics in Washington (CREW),] notes. “From that perspective alone, he would be better off resigning.”

Yes, but, see: the ethical issues are a feature, not a bug. The whole point of Pruitt's current role is to make as much money as possible from it. No less important to Pruitt is the opportunity to convince people that government doesn't work, which he hopes to accomplish by poisoning the EPA from within.

Once you understand how these guys work, it makes a lot more sense.

Bigger, better swamp!

Conor Friedersdorf wants people who voted for President Trump to understand how much he's sold out the government:

The GOP base is drawn to media figures who support their president and quickly turn on those who criticize him as if they are guilty of a betrayal; for that reason, many populist-right pundits are reluctant to criticize the president or to delve deeply into the behavior of the swamp creatures he has enabled. Instead, they pander to the GOP base, keep them in the dark about important corruption—and so fail to keep the president and his associates accountable. That very betrayal of their audience is what creates the illusion of their loyalty.

I opposed electing Trump, but I’m always 100 percent honest with his supporters. And when I give specific examples of how he has failed to drain the swamp, some lash out at me for telling them truths that they don’t want to face, or angrily change the subject by pointing out that various establishment politicians have been guilty of flagrant cronyism in the past.

Wake up, Trump supporters—your country needs you to hold the man you elected accountable to his promises rather than blindly defending him to own liberals. Demand better or your country suffers.

I mean, I agree with Friedersdorf, but typically people who voted for Trump don't actually listen to people who didn't. We have to keep trying, though.

Thanks for playing

Richard Florida demonstrates how Amazon's HQ2 competition was rigged:

A detailed analysis undertaken by Patrick Adler, my colleague at the University of Toronto’s Martin Prosperity Institute, and Adam Singer, a graduate student at the university’s Rotman and Munk schools, took a look at how all 238 HQ2 applicant cities and the 20 finalists lined up on Amazon’s RFP criteria. While it can be difficult to measure whether a given city adheres to each criterion, their analysis shows that many of the finalist cities do not even fit the most obvious ones. What’s more, several of the rejected cities seem to fit Amazon’s criteria for its HQ2 city better than some of the finalists.  

[I]t’s worth asking why these 20 cities were selected as finalists, even if others would appear to be better candidates according to Amazon’s own criteria. Our analysis suggests the finalists may have other things in common that are not listed on the company’s RFP.

For one, the finalists are more likely to be farther away from the company’s original home base in physical distance, reflecting the predominance of East Coast cities on the list. Last year, an Amazon executive was quoted as saying that Amazon would like to build HQ2 outside of the Pacific Northwest, to attract a more diverse set of employees.

Finalist cities are also likely to have a larger share of tech workers. And they are more likely to have non-stop flights to the company’s current home base in Seattle.

But one factor is even more interesting. Our analysis found that shortlisted cities had more U.S. senators with considerable seniority.

At the end of the day, none of this should surprise us. Like all corporate site selection, the HQ2 process is a rigged game, where the company knows the answer in advance and sets up a fictitious competition to wrest maximum incentives.

Besides the political advantages, there are many signs that Amazon’s HQ2 is heading to the greater Washington, D.C. region—the fact that its CEO has a multi-million dollar mansion there (currently undergoing a $12 million renovation, with large public rooms for social events) and already owns the Washington Post; the fact that three area jurisdictions made the shortlist; and the fact that the person running Amazon’s search previously ran an economic development agency in the region. Perhaps four other metros on the list are serious contenders—New York, Boston, Chicago, and Toronto—with Philadelphia, Denver, Atlanta, and Dallas having an outside chance.

Chicago, however, will be less likely to play the race-to-the-bottom game.