This New York Times story, which reports that residents of Brooklyn’s Williamsburg protested a Duane Reade chain store coming into the neighborhood and threatening the mom and pops there, just isn’t coherent.
When Duane Reade opened a new store a few months ago in Brooklyn, it faced opposition from residents loyal to a local pharmacy. So it decided to include something in the store that the neighborhood did not have: a bar that specializes in beer.
It’s been a few years since I lived there, but I can report that it’s false that the neighborhood doesn’t have a “bar that specializes in beer,” which is sort of like saying Manhattan doesn’t have a “Ray’s that specializes in pizza.” Head a few blocks east to Spuyten Duyvil, for one. The New York Observer is all over that angle.
But more broadly, the story’s thesis just doesn’t make sense. What, did the Brooklyners protesting its presence suddenly see the beer and withdraw their complaints? And doesn’t the addition of beer mean Duane Reade not only threatens the local King’s Pharmacy but also the bodegas?
So the lede, instead, should be something like this:
When Duane Reade opened a new store a few months ago in Brooklyn, it faced opposition from residents loyal to a local pharmacy. But it decided to open it anyway, and include beer.
And just as an aside, it really sucks that the chains are taking over another New York neighborhood now. One of the reasons I moved to that area seven years ago was because it had mom and pop stores and chains were very few and far between. Here’s hoping Duane Reade, Starbucks, et al fall flat on their faces.
— Apple is refusing to allow European newspapers to give free access to iPad apps to their print subscribers, a move that happens to cut out Apple’s whopping 30 percent cut of all sales.
First of all, that 30 percent cut is way, way too high, especially for subscriptions that have recurring payments. It verges on obscene for a $320 billion company to gouge people like that. Apple make plenty of money off hardware and their own software sales.
But it’s yet more reason for the press to refuse to go along with the Steve Jobs control-freak show. Time’s running out, though. The media companies are losing whatever leverage they had to negotiate terms for being on the iPad. Soon they’ll need the iPad more than the iPad needs them.
— The Washington Post is good to keep an eye on “The Influence Industry,” as it calls it, which is now trying to roll back debit-card rules via the new Republican majority in the House. They’ve got the propaganda out, too, calling the regulation “price-fixing”:
The proposed cap has been hailed by consumer groups and major retailers as a necessary curb on the interchange fees, which are set by card processors such as Visa and MasterCard and paid to banks by retailers.
But the lower fees are strongly opposed by banks and credit-card firms, which argue that they will be forced to make up for the lost revenue by charging consumers in other ways. The American Bankers Association and other business groups are lobbying lawmakers and regulators to reconsider the policy.
“We oppose price fixing just in principle, and that’s what this is,” said ABA executive vice president Floyd Stoner. “Congress does address things and go back and look at things in a lot of arenas. We believe it can happen here.”
Sounds like somebody’s been talking to Frank Luntz. But it’s not price-fixing. It’s preventing price-gouging by a monopoly.

Let the market decide and stop whinning.
#1 Posted by Swiggam, CJR on Sat 15 Jan 2011 at 02:59 PM
Question: If price controls are so great, then why doesn't the FedGov enforce a price limit on, say, Fettuccine Alfredo, used cars, haircuts, or legal services?
"But it’s not price-fixing. It’s preventing price-gouging by a monopoly."
You can twist it any way you want, but price controls decrease competition, drive firms to cut corners (and raise fees) elsewhere, and eventually drive smaller and less-govt-connected businesses out of business. The current move to control swipe fees is a get-elected scheme — another political football game played at the expense of everyone but the federal monopoly and its preferred industries or firms.
BTW: The WaPo reporter failed to address Senator Durbin's disingenuous use of the term hidden fees. Fees that are in the contract are not "hidden."
It's interesting to see this story being spun, by CJR, in such a way that readers likely won't surmise that there are lobbyists on both sides of this issue.
From the WaPo article:
"But David French, who will take over in February as chief lobbyist for the National Retail Federation, said the policy should go forward. "We will fight to aggressively defend the law and resist the efforts of banks to roll it back," French said."
Oh, but he is on the same side as the innocuous and always well-intended federal equality-enforcers; so, he's the good guy!
Seriously. When sound economics, natural law, and the historical record are exhausted, that is basically what the pro-price-control argument comes down to.
#2 Posted by Dan A., CJR on Tue 18 Jan 2011 at 05:00 AM
Yes, there are lobbyists on each side of the issue but no, the sides aren't equal.
The banks have evolved from their old roots, which were to take capital from depositors (and offer interest and services in exchange for that capital) and allocate that capital towards investments (like mortgages).
That bank system was broken the minute asset values crashed through the floor and people started waling away from their mortgages leaving an unsellable asset for the banks to liquidate.
Since the banks have no revenue stream from investments (which is why the small banks are going under), they're turning to the depositors and consumer credit operations for their money. Because usury rules have been lax since the 1990's and debit cards (which are not loans at all since the money is a withdrawal from the depositor's account) are new, the banks are adding new fees and interest payments in order to supplement their other failing operations.
Therefore, these costs are not related to the cost of providing service, these costs are related to the price of the banks' other failing enterprises. I don't believe that banks have the right to gouge their consumers because they need to cover loses resulting from their mistakes and stupidity.
But, as Ryan said, we have a monopoly of broken, bad banks and, unless someone tells them not to, they will use that monopoly to abuse their depositors.
The answer? Bank at a credit union and have a lawyer go over your deposit/credit agreements. Or the Consumer Protection agency could offer a simple credit public option.
HA!
Further details here:
http://www.pbs.org/wgbh/pages/frontline/creditcards/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid
http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid
#3 Posted by Thimbles, CJR on Tue 18 Jan 2011 at 07:05 PM
28 minutes in, Elizabeth Warren gives a good introduction to the unregulated usury market.
http://www.youtube.com/watch?v=8GHg3GAeQ1Y
#4 Posted by Thimbles, CJR on Wed 19 Jan 2011 at 04:14 AM
Man, as a connoisseur of scuzbags, I have to say that JP Morgan impresses me.
http://crooksandliars.com/susie-madrak/jp-morgan-chase-supports-troops-overc
Overcharging and foreclosing on the families of troops while they are on duty. Classy.
#5 Posted by Thimbles, CJR on Wed 19 Jan 2011 at 09:27 AM
Let the corporations have their way... let them pervert and abuse our lobbying rules and government just as much as possible. Let them go fully, unquestionably and obscenely overboard. The more extreme the better.
Eventually even the dumbest Teabagger among us will finally figure it out... and be repulsed enough by the greed and rank stupidity of these corporatists and their weenie law makers to support the legislative long knives and ball-cutting that surely must follow.
#6 Posted by gobsmack, CJR on Wed 19 Jan 2011 at 01:37 PM
The translation is less than perfect, but as I read the article about Apple, they are stating that if a newspaper wants Apple to manage its subscribers through an iPad app, they cannot give away free access to their content to print subscribers through the app.
They have alternatives, including:
• Offering a free app and managing their own sales, subscriptions and billing for online-only customers; and
• Using a browser-based solution and managing their own subscribers.
The article indicates that the 30% fee is for considerably more than hosting the app - it sounds like Apple manages all aspects of online sales, subscriptions and fee collection, and the publisher collects a check. Those services aren't without value and, if the article's suggestion is correct, any publisher who thinks they can save money by doing the same thing in-house is free to do so. Large publishers may save money with an in-house system, but smaller publishers would likely have to spend a lot more than that 30%.
#7 Posted by Aaron, CJR on Thu 20 Jan 2011 at 11:59 PM