Category Archives: Economy

Starbucks Betrayed My Wife

By Lloyd Graff

Call it the frap flap but Starbucks is pulling the New Coke.

Evidently the Buck is feeling the pain from McDonald’s competitive and cheaper McCafé, in tampering with one of its most successful products, the beloved Frappuccino. My wife Risa was addicted to the mocha, light, double blended Grande Frappuccino with easy whip. Along with the shortbread cookie it was the break in her rigorous workday that usually goes to 8 p.m. (The shortbread replaced her former staple, the Rice Krispy Treat, after Starbucks ruined that by taking out the Trans Fats a few years back). The baristas at our local Starbucks all knew her order and started making it when they saw her approaching the store. If I came in they asked me if I was there for the Missus.

And now they’ve ruined it. According to Risa the new process using pumps is so inconsistent they’ve lost her recipe and cannot seem to recover it. From store to store the variance is enormous. I would compare this to McDonald’s using different hamburger grinds and ketchup at each store.

Fast food depends on consistency. White Castle makes the slider the same way everywhere, and Wendy’s chili is always reliable. A Frappuccino is not a Domino’s Pizza, which was so uniformly awful everywhere that it begged for a redo.

Risa is appalled. She’s furious. It is a topic of conversation daily. She feels like she’s been robbed of something dear to her without warning. She says she beat the New Coke debacle by buying cases of old Coke ahead of time. But there is no old Frappuccino to be had.

Starbucks you were stupid. Let’s see how long it takes before you realize it.

Question: If you were Starbucks CEO Howard Schultz what would you do to compete with McDonald’s?

From Blog Will Starbucks Die soon?

From Blog Will Starbucks Die soon?

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Is Efficiency Sometimes Unhealthy?

By Noah Graff

For the May issue of Today’s Machining World, I interviewed Carl Hoffman, author of the new book, the Lunatic Express. The book chronicles Hoffman’s travels throughout Asia, Africa, South America and the U.S., during which he attempted to use the modes of transportation commonly used by natives, notorious for discomfort, tardiness and poor safety.

One thing Hoffman described to me is how the concept of time in Third World countries differs from that in the First World. In countries like India, the Congo and Columbia, people generally have a different expectation of what it means for things to start “on time.” People never know whether a train or bus is coming in one hour or three. Waiting for things for long periods of time, and arriving to destinations late is just an accepted way of life.

It’s mind boggling to me how anything gets done at all in places with such a low priority on punctuality. How can businesses operate if it’s unknown if workers will show up?

One would think the people of these countries would be happier if things functioned the way they do in the U.S.? It’s always so frustrating to me, knowing that precious time has slipped away that could have been used for things I care about. After all, time is a limited commodity. Once you lose it, it’s gone forever.

Yet many people I know from these places where things move so sloooooowly say they often feel more relaxed and centered when they return home to Slowville. And more and more it seems like us First Worlders in our civilized, efficient habitat are stressed out and paying top dollar for shrinks to help us chill out. We pay money to go to yoga classes and lie on the couch watching reality shows to slow ourselves down.

Is total efficiency sometimes unhealthy?

Jeepney Stop in Manila, Philippines

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Is an advanced degree still a key to prosperity?

By Emily Halgrimson

Not long ago completion of an advanced degree was assumed to lead to a higher wage, but this isn’t always the case today.

With jobs hard to come by in today’s economy, lately there’s been an influx of people headed back to school for the piece of paper they feel will eventually lead to that coveted high-paying job.

Unfortunately for them, some companies are bypassing the well qualified but expensive employee for less expensive, less educated workers who they can train on the job. Companies are also realizing the benefits of hiring people with real world job training over academic excellence.

In her story “Valuing Another Degree” on, Jonnelle Marte uses the example of entry-level teachers with master’s degrees, often having a harder time finding a job than those with bachelor’s degrees because of the higher wages expected by teachers with master’s degrees.

For some advanced degree candidates, the cost of school doesn’t seem worth the benefits now. With the average advanced degree costing more than $50,000 to acquire, many out of work people are not interested in piling on more debt, especially with no promise of a job on the other side. In some cases a master’s degree may make sense, but not if you’re just out to delay the inevitable and difficult task we all face at some point in our lives, the job search.

Question: How important is a job candidate’s education in your decision whether or not to hire them?

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To Your Good Health – Insurance

By Lloyd Graff

First of all, I consider myself an Independent fiscally conservative Republican. I voted for Reagan, Dole and George Bush (both of them). But I am disgusted with the negativity of the Republicans on health care reform. The decision to demonize the Democrats for political gain saddens me. As I read the key features of the final law, it is a lot more centrist than the “sky is falling” GOP partisans have labeled it. There is no public option, it gives help to small businesses and aids less affluent uncovered people. It eliminates the insurance blackball for a pre-existing condition, which has imprisoned so many people in jobs they do not want. This new law could unleash an entrepreneurial rush, because a lot of people will feel empowered to start a practice or a business if they know they can still obtain health insurance.

Am I worried about the unintended consequences of health care reform? Sure. Will the lefties regard this as the nose of the camel under the tent and attempt to expand it into a Canadian system? Of course. But the present system stinks. It begs for reform. The Republicans were cynical Rovians to turn their backs on the process. I fear it will backfire on them—badly.

Question: Do you think the new law will help you or hurt you, personally?

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Obama’s Subsidies will Benefit Foreign Manufacturing more than Us

By Lloyd Graff

"Broc Obama" from

The cross currents of job growth, environmental protection, energy and raw material security for the United States make for a public policy jumble.

The Obama administration is showering incentives to build alternative energy facilities using wind and solar under the “green jobs” theme and some Republicans have joined in the chorus. The sad fact is that the subsidies usually benefit foreign manufacturing more than domestic. Bloomberg recently ran an informative piece talking about a $2.1 million subsidy for Suntech Manufacturing to build a poly-silicon solar panel plant in Goodyear, Arizona. It will employ 70 workers to assemble 30 megawatts of power. In China, Suntech plans to boost production 40 percent to 1,400 megawatts.

In Wuxi, China, where the Suntech plant is located, minimum wage is $141 per month, about 15 percent of the U.S. minimum wage.

The stimulus package contained $2.3 billion in tax credits for renewable energy manufacturers. Obama wants to expand it to $5 billion next year.

The unfortunate fact is that the big solar producers are making their stuff in China and Malaysia. It will be installed here by “green workers,” but the incentives will benefit big multinationals more than American manufacturing companies.

Question: Do big subsidies for alternative energy make sense?

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Feeling Groovy

Productivity in manufacturing rose an unprecedented 13. 5 percent in the third quarter. It means business is rising but the number of employees isn’t. The inflation vigilantes do not accept these numbers. But I’m feeling groovy about productivity gains which will give a big chill to the dollar killers and gold hoarders. Sell your bullion unless you’re going to make soup.


After discussing murder in the workplace, Tuesday, how about some good news?
Chrysler is breaking even now despite its third grade styling. Costs have been pared to the femur. Fiat’sMarchionne is a serious guy and he has brought in a young, aggressive team to turn the joint upside down. With money in the bank (taxpayer’s) and minimal cash burn, Chrysler has a fighting chance to make it when its Chef Boyardee Italian-American line hits the market in two or three years.


Ford made a billion dollars last quarter and gained market share. They have 23 billion in cash. GM gained market share in the quarter. Toyota made money in the quarter after predicting a loss. Automotiveland is producing at the rate of 10.5 million units per year and making some money. At 12 million they will feel good. The emasculated supply base will need to rebuild capacity.


Ninety yen to the dollar, and a 1.45 Euro will make American suppliers tasty dollops for acquirers. The Canadian dollar has risen .80 to .93 to the U.S. dollar. We are seeing Canadians in Ontario stepping up for CNC lathes here because they look like bargains with the almost 20 percent swing in the relative value of the respective currencies and because of the upswing in automotive.

Question: Are you feeling happy today?


Jerry Seinfeld’s 1967 (Summer of Love) Fiat 500 that he crashed in 2008

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The Inflation is Coming! Really?

The Inflation is coming! The inflation is coming! The inflation is coming! It’s all over the news and the bond speculators are fanning the inflation hype like Billy Mays wannabees.

I have to ask the dumb question: What planet are they living on?

In my world, Wal-Mart and Amazon are in a price war on books with best sellers going for $10 per copy. Home prices continue to fall as properties fester on the market. U.S. unemployment figures stick around 10 percent, but smart guys like Dan DiMicco, head of Nucor, says if you include discouraged workers who don’t show up on the charts it is over 16 percent.

Commodities like oil have rebounded because Wall Streeters are playing games again, but the real demand for petroleum and natural gas is far weaker than supply. There is no more on-land capacity to store oil so 125 million barrels are now floating in slow moving tankers headed nowhere.

In the machine tool world, auction prices are still trending soft, supply is huge and distributors are discounting like crazy. I recently heard of a Nakamura CNC lathe listing at $360,000 being sold for $217,000. Prices are inconsistent but we hear that 20 percent discounts off quoted prices are common.

The classic definition of inflation is “too much money chasing too few goods or services.” Excuse me, but whether it’s golf clubs or Renoirs, prices continue to fall.

Ten year U.S. Treasuries are around 3.5 percent, which hardly portends inflation. I was astonished to see my real estate taxes on my home are going down and my dentist is dealing on cavities.

Inflation? Yes, if you are talking about balloon hoaxes in Colorado.

Question: Are you raising prices now when you bid for jobs?


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50 Jobs in 50 Weeks

By Noah Graff

For the upcoming issue, I interviewed Daniel Seddiqui, a 27-year-old native of Northern California who recently completed his quest to work 50 different jobs in 50 states in 50 weeks. Before he started his journey Seddiqui had been unsuccessful in 40 interviews for finance related jobs (his college degree was economics) and had several jobs in various states he hadn’t found fulfilling.
For his 50-50-50 quest he tried to work a stereotypical job for each state. In Maine he was lobster fisherman, Mississippi (the state with the highest obesity rate) he was a dietician. He was a surfing instructor in Hawaii, a bartender on Bourbon Street in New Orleans during Mardi Gras, a border patrolman in Arizona and worked in the machine shop of a medical device maker in Minnesota.
Seddiqui claims that in his job search he was rejected over 5,000 times, yet 95 percent of the time the people who did hire him wanted him to stay. He is now going on a lecture circuit, writing a book and producing a documentary film sharing what he learned on his quest—the power of thinking outside of the box and being willing to step out of your comfort zone, the opportunities which do exist in America.
He shared a story about when he was working in Kansas City as a boilermaker. A dentist who had been out of work for three years saw him on the news and said, “Wow, this guy is going around showing he can do anything, showing he’s an asset to these companies. I have welding skills, why don’t I go in and apply for a job there tomorrow?” The next day the dentist showed up at the company and got hired right on the spot.

Question: Do you feel a lot of unemployed Americans could find jobs if they were more open to different occupations?


Seddiqui Working at Medical Device Plant in Minnesota

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Wall Street Lemon Pickers

By Lloyd Graff

Richard De Leon is looking for more than a few good men. He took an ad costing several hundred dollars under the “Careers” category in the Saturday Wall Street Journal, searching for lemon and orange pickers to work from September 17 to Jan. 31, 2010, near Yuma Arizona.

I called Mr. De Leon at his firm, Servicios Agricolas Mex Inc to see how many refugees from Wall Street had applied for the $7.95 per hour seasonal job. He was affable and informative.

I asked him why he advertised in the Journal and he said it has a big circulation and a long reach, so he figured something good would come from it. He needs 150 workers for the upcoming season. With the difficulty in getting traditional migrant workers across the border he is looking all over.

He admits that the work is tough. A worker must haul a 40 pound tree ladder from the site drop area. The picker carries a bag for the fruit and clippers. I asked him if he gets many college students to pick. He says he gets several every season but they rarely last more than a few days. The temperature in Yuma yesterday was 110 degrees.

I told Richard that my view of the job was colored by the movie Cider House Rules. He hadn’t heard of it. A few years ago I traveled to Wenatchee, Washington, during the apple harvest. I love apples and have picked apple sauce quantities from nearby Michigan orchards. I know it was “apple picking for sissies,” but I think there is real value for young people to leave the comfortable settings they know and go to Africa or Peru, or Yuma to feel what rigorous manual work is like, and sleep in barracks and carry a picking bag of lemons along with a 40 pound ladder.

Question: What tough, dirty, physical jobs have you had that taught you something important?

This video explains how to harvest citrus fruit. At one point the old farmer says, if you want to carry a 100 pound bag of fruit for a living, “God bless you.”

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Time to Leave Business Hibernation?

Mike Jackson, head of the publicly traded dealer group, AutoNation Inc., says the automotive economy has turned the corner. He sees a 13 million car year as early as 2011 or 2012. Ford is making money. GM may have an IPO as early as next year. Inventories of cars have been halved in the last few months. The green lights are illuminating the highways. Yet business in my world, the machining world, still stinks.

What do you do if you are making decisions now that could affect your business for the next three years?

From experience I know that the big money is made in the tiny window of a market turn. We have already seen that in the stock market’s 50 percent rebound since the March bottom. If we are at the pivot point in machining, particularly in automotive work, this may be the time to go into business if that’s what you’ve always wanted to do. If you are a business person still standing after 18 months of being pummeled, this is probably the time to gamble on the upside.

When a bear hibernates his bodily instincts tell him when to exit his cave. Rational humans tend to want to stay in the cave well after the thaw begins because a spring blizzard might hit and finish them off.

I must make the decision in the next few days about whether to increase the number of Today’s Machining World issues from the survival mode of every other month, to nine or even 12 issues for 2010. After I almost died a year ago I fear being reckless in case of an economic relapse. But because I survived near death in the hospital and on the economic playing field, I am much more inclined to say to myself and the world, “If not now, when?

Question: Are you ready to leave survival mode?

Leaving a Cave

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