Weekend Reading – June 3, 2018

1. Beth Kowitt wrote a fascinating article on the genesis and hypothesized (as Amazon chose not to comment on the article) vision behind Amazon’s purchase of Whole Foods.

Like most of their entries into new businesses, Amazon’s ambitions for the grocery segment were massive, and for good reason: as the article recounts, just 2% of grocery shopping is currently done online, and groceries are seen as an essential category to win on the company’s growth path. However, unlike Amazon’s other market entrances, the company failed to build its own grocery business due to the massive complexities associated with ensuring the perishable groceries arriving to the end consumer remain both intact and fresh, and then ramping up to a profitable scale in an industry where the average profit margin is 1%. Enter Whole Foods.

Interestingly, the article contends that one of the major things that Amazon was buying in its lock-up of Whole Foods was credibility – the comfort that the consumer has in both the branded (365- and other Whole Foods-labeled) and unbranded (i.e., produce) groceries from Whole Foods. However, the challenges of bolting-on Whole Foods’ retail stores to the broader Amazon machine are challenging, especially as Amazon has already acclimated its consumer to free- or low-cost, timely shipping.

As with most things Amazon, the answer seems to be in the long game. There are certainly synergies to be realized that will buoy Whole Foods’ margins, as well as significant customer overlap (per the article, 81% of Whole Foods customers were already Amazon shoppers — though then again, who isn’t at this point.) Amazon seems to be experimenting and iterating its end-concept for retail, through its expanding bookstore footprint, the Amazon Go concept-store, and the deployment of Amazon lockers at most Whole Foods locations. In addition, by linking its Prime membership with Whole Foods’ customer base, the company . Lastly, its Alexa platform seems to be aimed at creating ‘frictionless’ shopping – moving from creating a grocery list on the voice platform into the groceries themselves arriving at your doorstep hours later. Truly the future.

2. Umair Haque – known for his provocative and original thinking, has written a piece decrying the United States as the first “rich poor” country.

As he explains, earning $60k (the medium family income) in America is a very different from earning the same in France or Germany, two countries seen as similarly wealthy, due to the extremely high cost of healthcare and other “necessities,” and in turn creates a “middle class” with a much lower quality of life and potentially teetering at the edge of insolvency in the event of an emergency.

As wages have stagnated and inflation has continued to rise, consumer debt has served as a financial buffer for many American families, who pay hundreds of dollars a month in housing and car payments, healthcare, and other basic needs.

Haque argues that despite the US’ status as the richest country in the world, most Americans live a state of constant uncertainty, and are less happier, work more, and are more stressed, creating a new form of poverty that defies traditional definitions, “extreme capitalism meets Social Darwinism by way of rugged self-reliance crossed with puritanical cruelty.”

3. In typical British fashion, the FT provides a humorous introduction to Jordan Peterson in this week’s Lunch with the FT, claiming that prior to his recent acclaim he was “destined to remain a well-regarded psychologist with a slot on Ontario public TV. Think Frasier without the humour.”

Peterson’s megalomania is apparent throughout the article, as he comments on his “multimedia empire,” sudden celebrity, and, as his former University of Toronto department chair commented in a recent essay, “present[s] conjecture as statement of fact:” “Hospitals may do more harm than good”, “solar power kills more people than nuclear,” and other drivel delivered straight-faced and humorlessly.

When pressed by the FT correspondent to back up his declarative statements and most popular soundbites, Peterson’s responses are surprisingly hollow. He comes off as someone convinced of his own credentials and ultimate rightness, with no qualms about his anointed prophet status or the consequences of any of his statements. Even among the alcohol-less series of Lunches, this one was especially dry.

4. A worthy appreciation of Studs Turkel in the New York Review of Books, commemorating the release of his vast library of 5,600 tapes of interviews and other stories from throughout his career. The author compares Turkel’s published books, which overwhelming focused on the everyman and his radio shows, which oftentimes interviewed prominent celebrities, thinkers, and artists.

With such a vast library of content to dig into, I’m oftentimes intimidated and unsure where to start.

5. In part 2 of The NY Times / ProPublica story on the murder of high school teacher Mickey Bryan and the conviction of her husband for the crime, the reporters focus on a the forensic discipline of bloodstain-pattern analysis, which was used as the primary evidence by the prosecution in the case.

While “experts” are often called on to testify and provide their “professional” opinion on cases involving blood splatter, these analyses are explained to be extremely subjective, and the bar for expertise to be extremely low, as little as a course and the passing of a subsequent exam.

The authors demonstrate the specious basis of bloodstain analysis, and the problematic air of “science” surrounding its use for the prosecution and acquittal of murder cases, which oftentimes pits two competing analysts against one another on the basis of the same evidence. In the case of the Bryan case, the bloodstain pattern expert called upon by the prosecution had just one 40-hour course under his belt, which, per the appeal lawyers, was “the equivalent of allowing a first-year law student to represent a defendant in a capital-murder case.”

The article is a maddening example of the inadequacies of our justice system, and the tendency for human egos to win out over what’s right. Whether or not Joseph Bryan killed his wife, it is clear that justice was not served.

6. In this week’s NYTimes Magazine, Wesley Morris convincingly argues that the militancy of critics and fans, and their ‘canonization’ of both old works and newly crowned “masterpieces,” has reached a fever pitch of conflict and derision in our current moment of divisiveness and polarization.

7. Amidst the vast corruption associated with FIFA leading up to this summer World Cup, Chinese companies are spending hundreds of millions of dollars to reach the estimated three-billion viewers who will tune in throughout the competition. Per the NY Times Magazine, the Chinese companies’ exertion of “soft power” serves to “solidify China’s growing bond with Russia and signal a global economic shift from West to East.”

The article also mentions Xi Jinping’s broader soccer ambitions for China, using “soccer diplomacy” (the construction of stadiums and broader support of soccer in the developing world) to build ties across the world, as well as his continued investment in building soccer’s popularity in China. Unfortunately, Xi’s investment and attention has yet to reflect success by the Chinese team on an international level, who remain ranked #73 in the world based on FIFA’s 2018 rankings.

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