Charles Munger’s monocausal explanation for why Costco is great seems right — it charges a membership fee.
People who shoplift or create messes or otherwise act disorderly are not going to take the time and spend the money to get a membership card, so your selection of customers is much better.
Whether it’s schools or public transit or warehouse-style grocery stores, removing the bottom quintile solves all kinds of problems.
Not only that, the membership fee covers most of Costco’s fixed costs, allowing them to price so aggressively while ALSO paying their workers generously. Contrast to Wal-mart, which has no membership fee so they have to squeeze everything really hard (including their workers) in order to keep prices low.
And from a consumer standpoint, a lump sum fixed cost plus low per-unit variable costs benefits those who spend (and thus presumably earn) more, so that’s going to naturally make your product more appealing to affluent families. (It’s the same logic that applies to expensive credit cards, which despite high annual fees are positive-value for high spenders).
The associate (or whatever term of art they use for the employees, I'm never sure) kept trying to upsell me on the benefits of the Executive Membership(tm), and seemed frustrated that I wasn't interested. It's like, ma'am, I live in a converted garage with no pantry and don't have a car, how often do you think I'm gonna be using travel insurance? Tire rotation? Updating my kitchen appliances and entertainment centre? Also, I work at competing grocery store with a nice employee discount and prices often lower than yours. There is just no way I'm gonna be spending the extra $750 annually or whatever it is to break even, nevermind profit off the rewards. Might have worked out differently with the old Amex deal, that was a solid card, especially if you could share it with someone who did buy their gas. Alas.
Still a worthwhile investment anyway for the bulk goods like toilet paper though - it really is a large mental savings to not constantly be second-guessing "how many rolls of Shitty Value Brand do I have left, do I need to pick up a pack on the way home" and similar.
It doesn't make sense for everyone but the executive membership i think is more like $130 for the year and for a family of 4 we're easily able to break even on it. We've also replaced appliances, bought furniture, etc. from Costco and ended up well in the green.
the aggressive pricing is downstream of vendor negotiations more than membership income. They only sell 3k SKUs vs a sams club/walmart 100k and thus each LOB in costco will have 1-3 products vs 10+ elsewhere. This drives volume and the volume drives discount pricing from vendors, shelf space in costco is competitive and high volume.
That's the thing that irritates me most about "soft on crime" stances Visa Visa shoplifting: they don't even spend much, if anything, so it's no rind off my melon if they're, ah, deterred from the premises. Whereas the overloaded cart with $500 of groceries? I mean, I'll still make a good-faith effort to ring them up accurately, but if they peel the organic sticker off an avocado I don't really care, nor am I gonna nickel-and-dime them on bag fees. That's the sort of returning profit-generator I want coming back on the regular, so they get a bit of leeway. Whereas the chud who tries to return months-old expired food from brands we don't even sell, paid for using foodstamps, and wants it back as cash so they can buy alcohol? Yeah, they can fuck right off, at that point I'd rather they just actually steal it rather than waste our time and condescendingly lie to our faces too. It's people like that that make me reconsider the wisdom of government-owned grocery stores: it'd be Good, Acktually to have a grocer of last resort we could fob off the tuberculars and reprobates onto. Go rob the food desert oasis instead of an honest and beloved capitalist business!
(I'm happy to work at a place that doesn't lock up any merchandise, but the erosion of faith and goodwill that comes from having to powerlessly tolerate such shameless scumbaggery surely inflicts a steep nonmonetary cost that I'd rather make disappear with $65/yr or whatever. The fact that such a cheap fee mostly solves such issues is a damning indictment of Pikerism. Microlooting loser mindset makes no sense to me.)
I love how all the top comments are just people gushing over Costco.
As an exec card holder, id go even further. We deserve our own store. Having to watch people wait in line, blocking the exit for the 10am entry is disgusting. I'd never shop past 930. Get the riff raff out of my clean, spacious ailes.
Sam's Club does that. Pay a higher membership fee, and you can get in at 8:00 AM. Pre-pandemic it was 7:00 AM. I can also scan my items with my phone as I shop and then sail straight out the door, no waiting in line at the checkout counter. Honestly, Sam's has the better shopping experience. I have both Sam's and Costco memberships, and Costco has better items in some categories, but the shopping experience sucks.
I think this is part of it but it’s rather insufficient and just really overlooks how different their store is from Walmart. Aldi actually uses a similar model and while it’s not as nice as Costco by any means they pay their employees far better than most grocery stores by doing things like putting their products out in pallets and having your clerks be more productive and having less skus to stock. And you can serve poor people with by far the lowest prices this way and their checkouts are fast because they’re paid to be good at both front and back of the store operation.
Walmart has a business that really requires low prices because they want to be a near everything store and have low prices. That’s a successful model but it fundamentally means it can’t ask as much of its employees because it needs to stock a gazillion things and can’t be pleasant to work at.
I was going to make this comment. It's both exclusivity but also directly funding the thing you like. The reason that we can't have more Costcos is that people generally have a pretty high aversion to recurring fees for access, so the more interesting question is how they're able to pull that off.
Its a part of it for sure, and in addition to that, costco has 3k SKUs per store vs walmarts 100k. This gives them efficiencies both in store management (simpler logistics) and vendor negotiations (getting costco to sell your stuff is very valuable to vendors so they get a lower price).
Every time I go to a grocery store in DC something stupid is happening (with the exception of Ward 3). Every fucking time. It’s a hassle 100% of the time. Same with CVS. They all look like they’ve been ransacked as well (whether or not much theft is actually occurring, they just keep really low stock levels).
There’s either a panhandler outside the door, someone trying to steal something, a mess in the aisles, someone with their animals, a fight, kids going nuts… people running the store have no ability to control the environment in the store short of moving the store to where people who do degenerate nonsense cannot go, or cannot enter.
Mind you, I go to the suburbs in Maryland and Virginia (which in some cases are not “safer” than DC) and they simply don’t have this problem. I think urban grocery stores and drug stores might have challenges maintaining them above and beyond the surrounding populace.
The key issue with Platner is that a lot of Democratic activists learned the wrong lesson from Donald Trump. All they see is the aggressive anger and fighting and attribute all his success to that. They either don’t know, or minimize the way he forced the Republican Party to moderate - on entitlements as well as being able to acknowledge the failures of the wars in Afghanistan and Iraq. So the idea is- we too can have Donald Trump success, we just need to find fighters like him! But they don’t want to do any kind of issue moderation so it’s not really clear it’s going to work. I really fear that Abdul El-Sayad is going to run an aggressive “fighting” campaign, he’ll win (because Trump has been so disastrous- the war with Iran is back now- Yay?) and people will take that as evidence to run a “fighter” with no moderation for president in 2028 - and, well hello President Vance.
Yes, agree. The other thing Trump moderated on is the culture war issues - this gets missed frequently, but "Republican President has gay cabinet members" is not something you'd expect in 2014.
And the "stop invading the world, Iraq and Afghanistan were bad ideas" is why Iran has been such a huge blow - a lot of people really want to get away from "invade the world, invite the world, in hock to the world".
A couple other things I’d note about a Costco is that they really aggressively optimize towards low base costs that allow them to pay good wages. They have an incredibly low SKU count compared to your standard supermarket. They also have an advantage that they can negotiate really aggressively with vendors both because they have so much scale and can credibly threaten to substitute them with a Kirkland brand if they don’t hit a particular price level.
Neither can easily be replicated across the economy.
I believe WinCo has a similar (is it a B Corporation?) business model. Since it is more convenient for us we go to Sam's Club in SW New Mexico, which seems indistinguishable from Costco now though I don't know that the employees are so well taken care of. What I like about the Costco business model is it solves a lot of structural problems without having to enact more federal regulation (minimum wage, ACA, Medicaid, etc.). I think it's also telling, if what I read was true, that the CEO of Costco makes $950,000 a year, a figure far more in line with a reasonable world.
The Summary Compensation Table from last year's Proxy says the CEO was paid $14M, incluing $1.2M in base salary.
I would argue this is a pretty low number. However, since the stock has done well (in part due to management), the actual value he receives once the stock vests should be much higher than the $14M that shows in the proxy.
Thank you for that it was interesting! We do do almost all our grocery shopping at Costco, but often stop at Aldi’s for certain produce Costco doesn’t stock (zucchini, herbs, local apples, frozen peas etc) and then occasionally go to Giant for specialized baking supplies or better ice cream flavors and things.
Giant is ridiculously expensive, but I’d hate to be limited to just what Costco sells as much as I like Costco!
We have a membership but we’re a two-person, apartment-dwelling household so don’t go very often (I get overwhelmed so almost never go, but my husband enjoys it more). Even though I don’t enjoy shopping there, it’s impressive in a way. The one I’ve been to in Michigan, not far from a large community of middle eastern immigrants, stocks whole lambs in the freezer case.
On the failure (or not) of Abundance, I see it a bit differently.
The YIMBY movement is a scrappy, small-time activist movement that preceded Abundance. They go around trying to win little fights in state legislatures and have had some success with that.
The Abundance idea was to combine YIMBY with some other elements as a factional intellectual movement within the Democratic party, with the hope that eventually, Abundance would become part of the party's brand. This has been an abject failure.
The main issue is that the movement's leaders and adherents are just unbelievably cheap dates. Mamdani says "Abundance!" in a speech once, and then they embrace the guy who wants to freeze rents and expropriate landlords as the Abundance candidate. "Strong unions, price controls, and ex-post expropriation are all compatible with Abundance, can you please just at least start a sub-committee to explore the possibility of building a taskforce that will study zoning reform?"
The best way I've seen it put was by one of the guys on his transition team:
"Matt [Stoller] wasn’t appointed to Mamdani’s transition team like I was, so we have to forgive him for his ignorance here. Populism in the front, abundance in the back is exactly how most people on the transition and even inside the administration describe his housing policy."
I don’t really understand the Mamdani hate, he was certainly courting abundance voters much more than Cuomo was and the union groups were largely behind Cuomo, so the choice to abundance voters wasn’t that difficult.
It’s still early days but so far Mamdani seems like he’s doing pretty well (but not perfectly of course) on abundance issues.
I think this is the fundamental misunderstanding that Abundance bros have. They misunderstand where growth comes from.
Mamdani's idea is that you can generate growth through zoning reform plus aggressive price controls and ex-post expropriation. (In my opinion, this combination is *negative* on net for investment).
The authors of Abundance basically agree with this -- their entire story is about how deregulation is the main driver of growth, whereas prices and incentives play a much smaller role. They think markets and state-driven investment are roughly equivalent ways of generating prosperity.
Of course, even if you accelerate permitting and do zoning reform, no private investor will want to build anything if they understand that they'll be immediately expropriated after investing.
No one is being expropriated. The value of rents and housing in places like New York vastly exceeds the cost of construction. There is plenty of room to make a profit if land prices come down even with pretty aggressive price controls and redistribution since most of the profit in places like NYC is just rent-seeking off limited land anyway.
Yes there was one really bad option and one bad option at least pretending to be open to your ideas. It wasn't a tough call. Also Mamdani cares about urbanist issues and Cuomo definitely doesn't. While YIMBY doesn't have to be paired with street safety, etc, most YIMBYs do care about that stuff
“And the thing is, he really might have beaten Collins absent the scandal”
He might have beaten her with it, if this gutless party hadn’t waved the white flag before even asking for proof beyond POLITICO printing “there’s totally proof.”
That’s twice in two cycles that this party has invalidated a primary nomination, responding to demands of donors and party insiders who have proven they have no understanding of voter motivation, and then jerked itself raw about how awesome and honest and clever it was to do that.
And they’re going to lose, again, and people like Matt are tell me that I’m stupid for thinking they shouldn’t have done the thing that made them lose, again.
Idk if you can complain about party insider machinations being the cardinal sin when two random rich socialist types decided to personally entangle themselves in Maines senate race by deciding to pick what they saw as an oyster farm working "everyman" that they could LARP as a working class hero. Everything about Planter is inauthentic.
I think I’m the only person in the god damn world who dislikes both Platner’s nomination and also the way he was removed from the race. Which is weird, because I kind of think that should be the default response if you’re actually a small-l small-d liberal democrat.
It’s not fun to talk to people who respond to things you didn’t say.
I’m sorry, I just actually care about winning over showing off how both “objective” and “woman-respecting” I am by not waiting for any real evidence, or waiting to gauge actual voter response. And the party decided it was worth throwing it away. Which means they have priorities above winning. Which I don’t, so it pisses me off.
Completely unconvinced on fusion voting. At the Presidential level thats a huge game of chicken every four years with the DSA type party, maybe 50 games of chicken.
And then 33.3 mutually assured destruction stand offs every two years in the Senate plus the Governors.
It only really works if the left aligned parties are willing to pre-agree to a nominee through some sort of voter chosen process... like a primary. Drutman is just over his skis here.
Without some other sort of reform, like RCV or a top four primary it ends up as a horrible chimera.
Proportional representation is also just a much harder hill than a commission reform bill that the Dems could have passed under Biden if they hadn't loaded the bill with partisan asks.
Yes, but you can't get there without a constitutional amendment. But the House is the only piece they can do through a law, hence the chimera proposal.
>Now that the Graham Platner Era appears to be in our rearview mirror<
Is it? I see lots of Dem hand wringing about the possibility that, in the end, he won't bow out. I'd guess he'll quit the race in then end — seems irrational not to. But is he fully rational?
>Then there’s an identity-obsessed sub-faction that acknowledges this doesn’t really work but thinks that if you cast the perfect gruff white man you can make it work....<
Then there's the hardcore DSA operative class that doesn't care about winning general elections either way. Their project (and their income source) is conducting a purge of the Democratic Party.
They may learn more from him staying in and getting absolutely blown out as (likely) more and more scandals come to light. How much he would do that alone v. be dead weight around the party's neck remains to be seen
Thanks for answering my question. There does seem a common idea that hypocrisy is a worse thing that being consistently bad. I guess it is reflects the sin among the perpetrators not the suffering of the victims. Washington and Jefferson clearly felt guilty about their slave owning while Julius Caesar or Hayyedin Barbarossa seemed never to have questioned the practice.
I didn't follow this too closely but I wonder if the tweets were an underrated part of McMorrow losing. Something I observed when spending time in Michigan (10+ years ago) is that people from Michigan have an extremely high opinion of Michigan, relative to how an outsider might perceive the state. You might say everyone loves where they're from, maybe they do, but I've never gotten this vibe from spending time in Ohio or Kentucky. But it was quite striking in Michigan.
I’m from Michigan and still spend a lot of time there owing to family responsibilities. I love seeing my friends and family, but I don’t actually enjoy being there very much at all. A huge part of this is that I hate driving but having to drive while there to attend to those responsibilities. Good groceries are available thanks to agricultural abundance, but there are few good restaurants apart from niche specialties. And I hate to say it, but with all of the freeways and billboards, a lot of the state (not the Great Lakes of course, they’re spectacular), especially the southeastern portion I grew up in, is really unattractive.
All of that said, it *is* the coolest-shaped state.
Yeah, why is the heartland doomed to be so ugly in so many places? The Roman Statue reply-guys need to form a coalition and fight bill boards, littering, and install more pretty fountains and public sculptures.
"people in Michigan have an extremely high opinion of Michigan"
Also true of Minnesota, and for good reason. The recent fraud scandal has dented the argument a bit, but in general moving administration or control of an issue from the government of Minnesota to the federal government is a step down.
a) redistribution all down the consumption levels not just “the poor” because middle consumers do not want to redistribute to “the poor.” That was the Achilles heel of ACA.
b) more recognition that growth is the main way to help the poor.
#2 should be de-nationalized, pushed down to state, municipal, private levels
".because middle consumers do not want to redistribute to “the poor.” That was the Achilles heel of ACA."
I don't see how ACA redistributed from middle consumers to the poor, at least in terms of cross premium subsidies. Most of the subsidies the poor received were paid out of general tax revenues, not from higher premiums on middle consumers.
The cross subsidy, in terms of premiums, was from healthier people to less healthy people and somewhat from younger people to older people.
Okay, but, it’s really difficult to read Zootopia as a straightforward anti-racist allegory without noticing the enormous internal contradictions. The biggest issue is that we, in the real world, know that actually existing animals really do have their behavior largely determined by their species. Predator animals really do eat prey animals; your cat isn’t gonna go vegetarian. And in many cases the film leans into this: Judy is stereotyped as unable to be a serious cop as a bunny, but it really does present serious obstacles for her; Nick is stereotyped as a shifty fox, but he’s actually a con artist! The sloths at the DMV are slow, etc. The biggest subversion of this is the big reveal where Jenny Slate’s meek, “sheepish”, assistant sheep character turns out to be secretly masterminding the events of the film to overthrow her boss, in a wildly complex Xanatos Gambit. But the unbelievability of this plot point is a Straussian clue that we should pursue an esoteric reading of the film. And the only esoteric reading that tracks is a pretty straightforwardly racist, race-realist one.
It’s shocking and disgusting that they made a sequel.
Great summary. I still think “movie producers and consumers are mostly morons” is a better explanation than “racist by design”, but there is no way Zootopia is “secretly racist” - it can only be read as “overtly racist”.
Look, if you want to run right-wing culture warriors in right-wing states, go, win without me. It's not like left-wing support is going to help these people.
You either are (1) operating in bad faith or (2) ignorant of people like John Bel Edwards. I'm going to give the benefit of the doubt and go with (2).
Edwards expanded Medicaid to Louisiana. He also used an Executive Order to protect LGBT (yes, even T) people from discrimination at the state level. He broke from most Democratic politicians (though not from his constituents) over abortion and Israel.
He is not a "right-wing culture warrior", at least not by the definition most people use.
“When the government allows high unemployment to linger (as it did from 2002–15),”
Be precise it was _the Fed_ that allowed unemployment (and under-target inflation to “linger,” refusing to carry out its mandate from Congress. Congress should have called them up short.
So your position is that the Fed should be supervised by the elected houses of Congress? Not independent and beyond the scrutiny of our elected officials?
Maybe part of the issue is "abundance" as a term is just too vague, and too bland. Maybe the whole thing just needs to be more granular:
"Republicans don't want you to be able to afford your own house. They'd rather be your landlord!"
"You don't remember the last time you had a steak, and you've a right to be pissed off about that!"
"If Trump has his way, gas will be so high we'll all be taking the bus to work!"
"As a Democrat, I think you have a right to a big ass truck and a week at the beach."
This kinda thing can be used in primaries, too, I should add: "My opponent's views on the Middle East won't lower your grocery bill, or beat Susan Collins."
Yeah, *in theory* an abundance movement should include all those things. But the movement that exists now is mostly focused on housing. There are people working on the other things, but the movement as a whole does not have as much in the way of concrete policy proposals, candidates etc addressing those concerns.
Sure you can - in Denmark, where the "flexicurity" model was pioneered, roughly two-thirds of workers are unionised. What you can't have is a political faction that's both in favour of abundance and in favour of giving the existing, highly antagonistic US trade unions everything they want.
There is a contradiction there, but high union wages are only a small share of the costs of building abundance. Especially true in areas like energy and infrastructure.
It’s not the wages that are the problem. I mean I mention earlier in this comment how Costco is great and working there makes you upper middle class by European standards.
The problem is that unions have an incentive structure that puts them in opposition to growth and dynamism. It’s not the wages, it’s the concern for job security, that opposes automation and demands make-work.
> Costco is great and working there makes you upper middle class by European standards.
Unfortunately, class is not just a matter of income in Europe.
> It’s not the wages, it’s the concern for job security, that opposes automation and demands make-work.
This is a solvable problem! The Danes have solved it! Don't tar all unions with the brush of the USA's uniquely dysfunctional organised-labour culture!
I’m skeptical that Denmarks labor environment would allow for the same kind of dynamism that you see in the US. I could very well be wrong! But I’m guessing it’s a lot easier to fire workers in the states than it is there.
(Also it kinda feels weird to compare the US to Denmark when Denmark has fewer people than, like, Phoenix.)
In Matt’s moderate puppet show, do you really think “helping the poor” is the right positioning for principle 1, or does that actually also amplify the cultural divide? I feel like we coastal elites implicitly assume addressing affordability = post-distribution = giving some people some nominal of cost relief in the form of tax credits and social services. I worry this a) reads as unfair handouts and cuts against the culture of American grit and self-reliance and b) doesn’t meaningfully move the needle for most people anyway.
Couldn’t principle 1 be repositioned to be an aspirational economic message - e.g. a fair path to prosperity? Messages like “you shouldn’t have to work 3 jobs just to pay your rent”, “if you’re a productive member of society you should be able to afford cutting-edge medicine and cheap TVs from Walmart and free refills at buccees and other cool shit we haven’t even thought of yet, because this is America, baby”, and “if you work hard you can buy a big ass truck, and if you shoot for the stars you could get married at MSG” all feel more culturally aligned with the American dream. I feel like this is probably the crux of what people actually mean when they talk about economic concerns before it gets flattened into consultant speak of “affordability”. It’s a big tent with guardrails - medicare for all is in the tent, anti-growth anti-consumerism is not; regulating businesses to ensure fair play is in, demonizing corporate greed is not; programs to make sure all kids learn to read are in, programs that lower the bar in the name of leveling it are not.
Charles Munger’s monocausal explanation for why Costco is great seems right — it charges a membership fee.
People who shoplift or create messes or otherwise act disorderly are not going to take the time and spend the money to get a membership card, so your selection of customers is much better.
Whether it’s schools or public transit or warehouse-style grocery stores, removing the bottom quintile solves all kinds of problems.
Sam's Club and BJ's Warehouse also charge a membership fee. Costco is better than them (though they are also pretty enjoyable shopping experiences).
Keeping the riff-raff away is helpful, but not sufficient. Good management and a good industry are still very important.
Not only that, the membership fee covers most of Costco’s fixed costs, allowing them to price so aggressively while ALSO paying their workers generously. Contrast to Wal-mart, which has no membership fee so they have to squeeze everything really hard (including their workers) in order to keep prices low.
And from a consumer standpoint, a lump sum fixed cost plus low per-unit variable costs benefits those who spend (and thus presumably earn) more, so that’s going to naturally make your product more appealing to affluent families. (It’s the same logic that applies to expensive credit cards, which despite high annual fees are positive-value for high spenders).
Yup, and if you use it right the membership fee ends up mitigated or potentially even paid for and then some by the rewards.
The associate (or whatever term of art they use for the employees, I'm never sure) kept trying to upsell me on the benefits of the Executive Membership(tm), and seemed frustrated that I wasn't interested. It's like, ma'am, I live in a converted garage with no pantry and don't have a car, how often do you think I'm gonna be using travel insurance? Tire rotation? Updating my kitchen appliances and entertainment centre? Also, I work at competing grocery store with a nice employee discount and prices often lower than yours. There is just no way I'm gonna be spending the extra $750 annually or whatever it is to break even, nevermind profit off the rewards. Might have worked out differently with the old Amex deal, that was a solid card, especially if you could share it with someone who did buy their gas. Alas.
Still a worthwhile investment anyway for the bulk goods like toilet paper though - it really is a large mental savings to not constantly be second-guessing "how many rolls of Shitty Value Brand do I have left, do I need to pick up a pack on the way home" and similar.
It doesn't make sense for everyone but the executive membership i think is more like $130 for the year and for a family of 4 we're easily able to break even on it. We've also replaced appliances, bought furniture, etc. from Costco and ended up well in the green.
the aggressive pricing is downstream of vendor negotiations more than membership income. They only sell 3k SKUs vs a sams club/walmart 100k and thus each LOB in costco will have 1-3 products vs 10+ elsewhere. This drives volume and the volume drives discount pricing from vendors, shelf space in costco is competitive and high volume.
That's the thing that irritates me most about "soft on crime" stances Visa Visa shoplifting: they don't even spend much, if anything, so it's no rind off my melon if they're, ah, deterred from the premises. Whereas the overloaded cart with $500 of groceries? I mean, I'll still make a good-faith effort to ring them up accurately, but if they peel the organic sticker off an avocado I don't really care, nor am I gonna nickel-and-dime them on bag fees. That's the sort of returning profit-generator I want coming back on the regular, so they get a bit of leeway. Whereas the chud who tries to return months-old expired food from brands we don't even sell, paid for using foodstamps, and wants it back as cash so they can buy alcohol? Yeah, they can fuck right off, at that point I'd rather they just actually steal it rather than waste our time and condescendingly lie to our faces too. It's people like that that make me reconsider the wisdom of government-owned grocery stores: it'd be Good, Acktually to have a grocer of last resort we could fob off the tuberculars and reprobates onto. Go rob the food desert oasis instead of an honest and beloved capitalist business!
(I'm happy to work at a place that doesn't lock up any merchandise, but the erosion of faith and goodwill that comes from having to powerlessly tolerate such shameless scumbaggery surely inflicts a steep nonmonetary cost that I'd rather make disappear with $65/yr or whatever. The fact that such a cheap fee mostly solves such issues is a damning indictment of Pikerism. Microlooting loser mindset makes no sense to me.)
I love how all the top comments are just people gushing over Costco.
As an exec card holder, id go even further. We deserve our own store. Having to watch people wait in line, blocking the exit for the 10am entry is disgusting. I'd never shop past 930. Get the riff raff out of my clean, spacious ailes.
Sam's Club does that. Pay a higher membership fee, and you can get in at 8:00 AM. Pre-pandemic it was 7:00 AM. I can also scan my items with my phone as I shop and then sail straight out the door, no waiting in line at the checkout counter. Honestly, Sam's has the better shopping experience. I have both Sam's and Costco memberships, and Costco has better items in some categories, but the shopping experience sucks.
I think this is part of it but it’s rather insufficient and just really overlooks how different their store is from Walmart. Aldi actually uses a similar model and while it’s not as nice as Costco by any means they pay their employees far better than most grocery stores by doing things like putting their products out in pallets and having your clerks be more productive and having less skus to stock. And you can serve poor people with by far the lowest prices this way and their checkouts are fast because they’re paid to be good at both front and back of the store operation.
Walmart has a business that really requires low prices because they want to be a near everything store and have low prices. That’s a successful model but it fundamentally means it can’t ask as much of its employees because it needs to stock a gazillion things and can’t be pleasant to work at.
I was going to make this comment. It's both exclusivity but also directly funding the thing you like. The reason that we can't have more Costcos is that people generally have a pretty high aversion to recurring fees for access, so the more interesting question is how they're able to pull that off.
Its a part of it for sure, and in addition to that, costco has 3k SKUs per store vs walmarts 100k. This gives them efficiencies both in store management (simpler logistics) and vendor negotiations (getting costco to sell your stuff is very valuable to vendors so they get a lower price).
Not just a fee, you also have to fill in a form and have an address and phone number. It is a very basic literacy and stability test.
Disorder is not an issue at like 99% of grocery stores. And you rarely have interactions with other customers in them so who cares?
Every time I go to a grocery store in DC something stupid is happening (with the exception of Ward 3). Every fucking time. It’s a hassle 100% of the time. Same with CVS. They all look like they’ve been ransacked as well (whether or not much theft is actually occurring, they just keep really low stock levels).
There’s either a panhandler outside the door, someone trying to steal something, a mess in the aisles, someone with their animals, a fight, kids going nuts… people running the store have no ability to control the environment in the store short of moving the store to where people who do degenerate nonsense cannot go, or cannot enter.
Mind you, I go to the suburbs in Maryland and Virginia (which in some cases are not “safer” than DC) and they simply don’t have this problem. I think urban grocery stores and drug stores might have challenges maintaining them above and beyond the surrounding populace.
The key issue with Platner is that a lot of Democratic activists learned the wrong lesson from Donald Trump. All they see is the aggressive anger and fighting and attribute all his success to that. They either don’t know, or minimize the way he forced the Republican Party to moderate - on entitlements as well as being able to acknowledge the failures of the wars in Afghanistan and Iraq. So the idea is- we too can have Donald Trump success, we just need to find fighters like him! But they don’t want to do any kind of issue moderation so it’s not really clear it’s going to work. I really fear that Abdul El-Sayad is going to run an aggressive “fighting” campaign, he’ll win (because Trump has been so disastrous- the war with Iran is back now- Yay?) and people will take that as evidence to run a “fighter” with no moderation for president in 2028 - and, well hello President Vance.
There is also not much evidence of Trump's success, he would probably be more popular without his baggage or personality.
There is a world where Scott Walker talks more about immigration and defends entitlements where he is president and has 60 seats in the senate.
I think that's exactly right. We did an article in the spring on this:
https://www.slowboring.com/p/dont-copy-donald-trumps-failed-presidency
Yes, agree. The other thing Trump moderated on is the culture war issues - this gets missed frequently, but "Republican President has gay cabinet members" is not something you'd expect in 2014.
And the "stop invading the world, Iraq and Afghanistan were bad ideas" is why Iran has been such a huge blow - a lot of people really want to get away from "invade the world, invite the world, in hock to the world".
A couple other things I’d note about a Costco is that they really aggressively optimize towards low base costs that allow them to pay good wages. They have an incredibly low SKU count compared to your standard supermarket. They also have an advantage that they can negotiate really aggressively with vendors both because they have so much scale and can credibly threaten to substitute them with a Kirkland brand if they don’t hit a particular price level.
Neither can easily be replicated across the economy.
I believe WinCo has a similar (is it a B Corporation?) business model. Since it is more convenient for us we go to Sam's Club in SW New Mexico, which seems indistinguishable from Costco now though I don't know that the employees are so well taken care of. What I like about the Costco business model is it solves a lot of structural problems without having to enact more federal regulation (minimum wage, ACA, Medicaid, etc.). I think it's also telling, if what I read was true, that the CEO of Costco makes $950,000 a year, a figure far more in line with a reasonable world.
The Summary Compensation Table from last year's Proxy says the CEO was paid $14M, incluing $1.2M in base salary.
I would argue this is a pretty low number. However, since the stock has done well (in part due to management), the actual value he receives once the stock vests should be much higher than the $14M that shows in the proxy.
Thanks for the clarification! Considering the size of Costco that does still look reasonable.
WinCo! Boise born! Here's the similarities and differences:
• WinCo is just a grocery store
• WinCo does not charge a membership fee
• WinCo has a lower SKU count than a typical grocery store, but much higher than Costco and of typical grocery store size
• WinCo does not accept credit cards of any brand (it does accept debit cards)
• WinCo also saves on labor costs, but they make you bag your own groceries
• WinCo's customer base tends to be poorer than Costco's.
• WinCo is employee owned
A while back, they got named "Walmart's Worst Nightmare" by a retail expert: http://business.time.com/2013/08/07/meet-the-low-key-low-cost-grocery-chain-being-called-wal-marts-worst-nightmare/
I read this about Costco's business model a few weeks ago and learned a lot from it (as a non Costco shopper): https://justinkuiper.substack.com/p/costco
Thank you for that it was interesting! We do do almost all our grocery shopping at Costco, but often stop at Aldi’s for certain produce Costco doesn’t stock (zucchini, herbs, local apples, frozen peas etc) and then occasionally go to Giant for specialized baking supplies or better ice cream flavors and things.
Giant is ridiculously expensive, but I’d hate to be limited to just what Costco sells as much as I like Costco!
Very interesting, thanks!
We have a membership but we’re a two-person, apartment-dwelling household so don’t go very often (I get overwhelmed so almost never go, but my husband enjoys it more). Even though I don’t enjoy shopping there, it’s impressive in a way. The one I’ve been to in Michigan, not far from a large community of middle eastern immigrants, stocks whole lambs in the freezer case.
On the failure (or not) of Abundance, I see it a bit differently.
The YIMBY movement is a scrappy, small-time activist movement that preceded Abundance. They go around trying to win little fights in state legislatures and have had some success with that.
The Abundance idea was to combine YIMBY with some other elements as a factional intellectual movement within the Democratic party, with the hope that eventually, Abundance would become part of the party's brand. This has been an abject failure.
The main issue is that the movement's leaders and adherents are just unbelievably cheap dates. Mamdani says "Abundance!" in a speech once, and then they embrace the guy who wants to freeze rents and expropriate landlords as the Abundance candidate. "Strong unions, price controls, and ex-post expropriation are all compatible with Abundance, can you please just at least start a sub-committee to explore the possibility of building a taskforce that will study zoning reform?"
The best way I've seen it put was by one of the guys on his transition team:
"Matt [Stoller] wasn’t appointed to Mamdani’s transition team like I was, so we have to forgive him for his ignorance here. Populism in the front, abundance in the back is exactly how most people on the transition and even inside the administration describe his housing policy."
Abundance in the back, indeed.
I don’t really understand the Mamdani hate, he was certainly courting abundance voters much more than Cuomo was and the union groups were largely behind Cuomo, so the choice to abundance voters wasn’t that difficult.
It’s still early days but so far Mamdani seems like he’s doing pretty well (but not perfectly of course) on abundance issues.
I think this is the fundamental misunderstanding that Abundance bros have. They misunderstand where growth comes from.
Mamdani's idea is that you can generate growth through zoning reform plus aggressive price controls and ex-post expropriation. (In my opinion, this combination is *negative* on net for investment).
The authors of Abundance basically agree with this -- their entire story is about how deregulation is the main driver of growth, whereas prices and incentives play a much smaller role. They think markets and state-driven investment are roughly equivalent ways of generating prosperity.
Of course, even if you accelerate permitting and do zoning reform, no private investor will want to build anything if they understand that they'll be immediately expropriated after investing.
Actually yes for NYC zoning reform is the thing that will most generate growth. New buildings are NOT being expropriated.
No one is being expropriated. The value of rents and housing in places like New York vastly exceeds the cost of construction. There is plenty of room to make a profit if land prices come down even with pretty aggressive price controls and redistribution since most of the profit in places like NYC is just rent-seeking off limited land anyway.
Yes there was one really bad option and one bad option at least pretending to be open to your ideas. It wasn't a tough call. Also Mamdani cares about urbanist issues and Cuomo definitely doesn't. While YIMBY doesn't have to be paired with street safety, etc, most YIMBYs do care about that stuff
Shouldn't the unions be natural allies of the Abundance crowd? They're very much in favor of more building if they get to do it.
“And the thing is, he really might have beaten Collins absent the scandal”
He might have beaten her with it, if this gutless party hadn’t waved the white flag before even asking for proof beyond POLITICO printing “there’s totally proof.”
That’s twice in two cycles that this party has invalidated a primary nomination, responding to demands of donors and party insiders who have proven they have no understanding of voter motivation, and then jerked itself raw about how awesome and honest and clever it was to do that.
And they’re going to lose, again, and people like Matt are tell me that I’m stupid for thinking they shouldn’t have done the thing that made them lose, again.
Idk if you can complain about party insider machinations being the cardinal sin when two random rich socialist types decided to personally entangle themselves in Maines senate race by deciding to pick what they saw as an oyster farm working "everyman" that they could LARP as a working class hero. Everything about Planter is inauthentic.
The Progressive Activist Industrial Complex is never to blame.
I think I’m the only person in the god damn world who dislikes both Platner’s nomination and also the way he was removed from the race. Which is weird, because I kind of think that should be the default response if you’re actually a small-l small-d liberal democrat.
All I did was say what happened
“The party” is not responsible for a nazi tattoo socialist larper abusing women, actually
It’s not fun to talk to people who respond to things you didn’t say.
I’m sorry, I just actually care about winning over showing off how both “objective” and “woman-respecting” I am by not waiting for any real evidence, or waiting to gauge actual voter response. And the party decided it was worth throwing it away. Which means they have priorities above winning. Which I don’t, so it pisses me off.
Completely unconvinced on fusion voting. At the Presidential level thats a huge game of chicken every four years with the DSA type party, maybe 50 games of chicken.
And then 33.3 mutually assured destruction stand offs every two years in the Senate plus the Governors.
It only really works if the left aligned parties are willing to pre-agree to a nominee through some sort of voter chosen process... like a primary. Drutman is just over his skis here.
Without some other sort of reform, like RCV or a top four primary it ends up as a horrible chimera.
Proportional representation is also just a much harder hill than a commission reform bill that the Dems could have passed under Biden if they hadn't loaded the bill with partisan asks.
If there is ranked choice or even a French style runoff those problems matter less
Yes, but you can't get there without a constitutional amendment. But the House is the only piece they can do through a law, hence the chimera proposal.
>Now that the Graham Platner Era appears to be in our rearview mirror<
Is it? I see lots of Dem hand wringing about the possibility that, in the end, he won't bow out. I'd guess he'll quit the race in then end — seems irrational not to. But is he fully rational?
>Then there’s an identity-obsessed sub-faction that acknowledges this doesn’t really work but thinks that if you cast the perfect gruff white man you can make it work....<
Then there's the hardcore DSA operative class that doesn't care about winning general elections either way. Their project (and their income source) is conducting a purge of the Democratic Party.
They may learn more from him staying in and getting absolutely blown out as (likely) more and more scandals come to light. How much he would do that alone v. be dead weight around the party's neck remains to be seen
Thanks for answering my question. There does seem a common idea that hypocrisy is a worse thing that being consistently bad. I guess it is reflects the sin among the perpetrators not the suffering of the victims. Washington and Jefferson clearly felt guilty about their slave owning while Julius Caesar or Hayyedin Barbarossa seemed never to have questioned the practice.
I didn't follow this too closely but I wonder if the tweets were an underrated part of McMorrow losing. Something I observed when spending time in Michigan (10+ years ago) is that people from Michigan have an extremely high opinion of Michigan, relative to how an outsider might perceive the state. You might say everyone loves where they're from, maybe they do, but I've never gotten this vibe from spending time in Ohio or Kentucky. But it was quite striking in Michigan.
Very interesting, where in Michigan were you?!
I’m from Michigan and still spend a lot of time there owing to family responsibilities. I love seeing my friends and family, but I don’t actually enjoy being there very much at all. A huge part of this is that I hate driving but having to drive while there to attend to those responsibilities. Good groceries are available thanks to agricultural abundance, but there are few good restaurants apart from niche specialties. And I hate to say it, but with all of the freeways and billboards, a lot of the state (not the Great Lakes of course, they’re spectacular), especially the southeastern portion I grew up in, is really unattractive.
All of that said, it *is* the coolest-shaped state.
Yeah, why is the heartland doomed to be so ugly in so many places? The Roman Statue reply-guys need to form a coalition and fight bill boards, littering, and install more pretty fountains and public sculptures.
"people in Michigan have an extremely high opinion of Michigan"
Also true of Minnesota, and for good reason. The recent fraud scandal has dented the argument a bit, but in general moving administration or control of an issue from the government of Minnesota to the federal government is a step down.
"1. Helping the poor
2. A big tent on culture"
#1 should be broader
a) redistribution all down the consumption levels not just “the poor” because middle consumers do not want to redistribute to “the poor.” That was the Achilles heel of ACA.
b) more recognition that growth is the main way to help the poor.
#2 should be de-nationalized, pushed down to state, municipal, private levels
".because middle consumers do not want to redistribute to “the poor.” That was the Achilles heel of ACA."
I don't see how ACA redistributed from middle consumers to the poor, at least in terms of cross premium subsidies. Most of the subsidies the poor received were paid out of general tax revenues, not from higher premiums on middle consumers.
The cross subsidy, in terms of premiums, was from healthier people to less healthy people and somewhat from younger people to older people.
Pushing it down to the local level is how you get violence and literally nothing is done to stop it.
Okay, but, it’s really difficult to read Zootopia as a straightforward anti-racist allegory without noticing the enormous internal contradictions. The biggest issue is that we, in the real world, know that actually existing animals really do have their behavior largely determined by their species. Predator animals really do eat prey animals; your cat isn’t gonna go vegetarian. And in many cases the film leans into this: Judy is stereotyped as unable to be a serious cop as a bunny, but it really does present serious obstacles for her; Nick is stereotyped as a shifty fox, but he’s actually a con artist! The sloths at the DMV are slow, etc. The biggest subversion of this is the big reveal where Jenny Slate’s meek, “sheepish”, assistant sheep character turns out to be secretly masterminding the events of the film to overthrow her boss, in a wildly complex Xanatos Gambit. But the unbelievability of this plot point is a Straussian clue that we should pursue an esoteric reading of the film. And the only esoteric reading that tracks is a pretty straightforwardly racist, race-realist one.
It’s shocking and disgusting that they made a sequel.
Hey man, furries buy movie tickets too (to paraphrase a Michael Jordan quote)
Great summary. I still think “movie producers and consumers are mostly morons” is a better explanation than “racist by design”, but there is no way Zootopia is “secretly racist” - it can only be read as “overtly racist”.
Look, if you want to run right-wing culture warriors in right-wing states, go, win without me. It's not like left-wing support is going to help these people.
You either are (1) operating in bad faith or (2) ignorant of people like John Bel Edwards. I'm going to give the benefit of the doubt and go with (2).
Edwards expanded Medicaid to Louisiana. He also used an Executive Order to protect LGBT (yes, even T) people from discrimination at the state level. He broke from most Democratic politicians (though not from his constituents) over abortion and Israel.
He is not a "right-wing culture warrior", at least not by the definition most people use.
This is important. By the standard of the Grouos, John Bel Edwards was beyond the pale. But he did a lot of good in Louisiana.
“When the government allows high unemployment to linger (as it did from 2002–15),”
Be precise it was _the Fed_ that allowed unemployment (and under-target inflation to “linger,” refusing to carry out its mandate from Congress. Congress should have called them up short.
So your position is that the Fed should be supervised by the elected houses of Congress? Not independent and beyond the scrutiny of our elected officials?
I like how SCOTUS just basically said "na they're built different; no touching" and that was that
"Abundance, in practice, is mostly the YIMBY movement"
That is far to narrow.
Abundance ought to be about per capita growth: removing the obstacles to increasing
- labor force (LFPR and immigration)
- investment (reducing fiscal deficits)
- TFP (investment in scinece and technology and smarter regulation of whihc YIMBY-ism, land use regulation and building code reform, is one example)
But Matt specifically wrote “in practice.” He wasn’t describing what it *ought to be!*
Maybe part of the issue is "abundance" as a term is just too vague, and too bland. Maybe the whole thing just needs to be more granular:
"Republicans don't want you to be able to afford your own house. They'd rather be your landlord!"
"You don't remember the last time you had a steak, and you've a right to be pissed off about that!"
"If Trump has his way, gas will be so high we'll all be taking the bus to work!"
"As a Democrat, I think you have a right to a big ass truck and a week at the beach."
This kinda thing can be used in primaries, too, I should add: "My opponent's views on the Middle East won't lower your grocery bill, or beat Susan Collins."
Yeah, *in theory* an abundance movement should include all those things. But the movement that exists now is mostly focused on housing. There are people working on the other things, but the movement as a whole does not have as much in the way of concrete policy proposals, candidates etc addressing those concerns.
You can’t have a political faction that is both pro-organized labor and pro-abundance (for things beyond housing).
Sure you can - in Denmark, where the "flexicurity" model was pioneered, roughly two-thirds of workers are unionised. What you can't have is a political faction that's both in favour of abundance and in favour of giving the existing, highly antagonistic US trade unions everything they want.
There is a contradiction there, but high union wages are only a small share of the costs of building abundance. Especially true in areas like energy and infrastructure.
It’s not the wages that are the problem. I mean I mention earlier in this comment how Costco is great and working there makes you upper middle class by European standards.
The problem is that unions have an incentive structure that puts them in opposition to growth and dynamism. It’s not the wages, it’s the concern for job security, that opposes automation and demands make-work.
> Costco is great and working there makes you upper middle class by European standards.
Unfortunately, class is not just a matter of income in Europe.
> It’s not the wages, it’s the concern for job security, that opposes automation and demands make-work.
This is a solvable problem! The Danes have solved it! Don't tar all unions with the brush of the USA's uniquely dysfunctional organised-labour culture!
I’m skeptical that Denmarks labor environment would allow for the same kind of dynamism that you see in the US. I could very well be wrong! But I’m guessing it’s a lot easier to fire workers in the states than it is there.
(Also it kinda feels weird to compare the US to Denmark when Denmark has fewer people than, like, Phoenix.)
In Matt’s moderate puppet show, do you really think “helping the poor” is the right positioning for principle 1, or does that actually also amplify the cultural divide? I feel like we coastal elites implicitly assume addressing affordability = post-distribution = giving some people some nominal of cost relief in the form of tax credits and social services. I worry this a) reads as unfair handouts and cuts against the culture of American grit and self-reliance and b) doesn’t meaningfully move the needle for most people anyway.
Couldn’t principle 1 be repositioned to be an aspirational economic message - e.g. a fair path to prosperity? Messages like “you shouldn’t have to work 3 jobs just to pay your rent”, “if you’re a productive member of society you should be able to afford cutting-edge medicine and cheap TVs from Walmart and free refills at buccees and other cool shit we haven’t even thought of yet, because this is America, baby”, and “if you work hard you can buy a big ass truck, and if you shoot for the stars you could get married at MSG” all feel more culturally aligned with the American dream. I feel like this is probably the crux of what people actually mean when they talk about economic concerns before it gets flattened into consultant speak of “affordability”. It’s a big tent with guardrails - medicare for all is in the tent, anti-growth anti-consumerism is not; regulating businesses to ensure fair play is in, demonizing corporate greed is not; programs to make sure all kids learn to read are in, programs that lower the bar in the name of leveling it are not.