Starbucks and Lease Breaking

[sethsrott]

Betts was bringing up the issue of ethics and morality, not legality.

Morality? Ethics? are you saying that if I open up a business and it, as is the nature of business takes away those dollars away from my competitor to the point that they go out of business, I am now an immoral person? based on what standard of morality? for every dollar that you business makes that is a dollar that is NOT going into another business (basic microeconomics) and if you continue doing this you will put your competitor out of business, at what point dose that constitute immorality? if you do it once, twice, three hundred and sixty four times? please I would like to know what ethical or moral code you derived your economic principle from?

*****EDIT***** (I forgot to address this)

Next time a Wal-Mart goes up within a stone's throw of your house, you can thank the free market.

I will, and I do, it is the very free market that you apparently hold in contempt that allowed a guy from Kingfisher Oklahoma to build the would largest retail business. It is the free market that allows you to have choices and it not be limited to two as in some countries (Socialist Switzerland). Do I shop at Wal-Mart? No. Why? Because I do not agree with its current business practices, specifically the usage of the government to kill its competition, the violation of the free market principles that I stand on. Not because it is to large, or it is not local.

[traxx]

How Starbucks didn't see this coming (kinda like how Schultz didn't see that Oklahomans buying a team from him would want to move it to Oklahoma) is beyond me. Starbucks has been way oversaturated in the US market for sometime. I predict that after the 600 close that they'll close several more in the next year or so.

It makes me think of the Simpsons episode (not sure which one) where Bart walks into the mall and construction is going on for a new Starbucks and when he walks out of the mall all the stores are now Starbucks.

[AFCM]

please I would like to know what ethical or moral code you derived your economic principle from?

...the same one that has a problem with giving a super-giant like Halliburton, keys to Iraq. I suppose thats just the nature of business, though.

People have different values. Obviously you see things differently than I. Playing within the rules of law doesn't necessarily mean your exercising good morals in your business practices.

[sethsrott]

Actually, I'm just pointing out the fact that Starbucks isn't so lily white either. Everyone in Seattle is pointing the finger at Bennett, but there have probably been many personal lives ruined by Starbucks empire building, and I haven't seen any remorse (I happen to know of two people affected personally). So, between the mayor in Seattle's actions, those of the city's legal team and Mr. Schultz, I don't believe there's any moral imperative for the city of Seattle winning out over Mr. Bennett.

I fail to see when I reread your first post how you were pointing the 'non lily whiteness' of Starbucks? It sounded more like a personal vendetta to me, which you have now confirmed. Is Starbucks a company? Yes, there for it is highly likely that the company will have questionable business practices, however you have not shown me that, you have however tried to pull at my heart strings saying "I know two people affected personally" like that was a legitimate response.

Every large company will have people that don't like them, but that is not a ethical or a moral issue unless they start promoting unethical or immoral agendas (child pornography, heroin usage, slavery, ect...) what has Starbucks (the company NOT the CEO because the stores being close are store built BEFORE Howard Schultz came back to the company. (If you recall he left in 2000 and returned in 2008) So you really cannot bring his personal decision in on this conversation considering the 'evils' that you speak of were not committed under Schultz's rule.

[sethsrott]

...the same one that has a problem with giving a super-giant like Halliburton, keys to Iraq. I suppose thats just the nature of business, though.

People have different values. Obviously you see things differently than I. Playing within the rules of law doesn't necessarily mean your exercising good morals in your business practices.

Really??? You use Halliburton as an example??? REALLY???? THAT is a violation of the very free market principles that I stand here and defend! It was the government that gave the keys to Iraq over to Halliburtion (More accurately Bush and his cronies) How can you compare Halliburton to Starbucks? P

[AFCM]

Really??? You use Halliburton as an example??? REALLY???? THAT is a violation of the very free market principles that I stand here and defend! It was the government that gave the keys to Iraq over to Halliburtion (More accurately Bush and his cronies) How can you compare Halliburton to Starbucks? P

How is Halliburton a violation of the free market principles?

[alan]

I will, and I do, it is the very free market that you apparently hold in contempt that allowed a guy from Kingfisher Oklahoma to build the would largest retail business. It is the free market that allows you to have choices and it not be limited to two as in some countries (Socialist Switzerland). Do I shop at Wal-Mart? No. Why? Because I do not agree with its current business practices, specifically the usage of the government to kill its competition, the violation of the free market principles that I stand on. Not because it is to large, or it is not local.

Standing Ovation.

[sethsrott]

How is Halliburton a violation of the free market principles?

Well, Halliburton the company isn't but the example that you gave of HAL and Iraq is. Basic Smithsonian Economics, if the government is involved it is no longer a true free market. However that aside the government favored HAL over other oil companies because a close relationship between HAL and high ranking members of the current administration. (I do not think that anyone would argue that point) therefore it was not because of a free and open market system that HAL was allowed into Iraq but because the good ol' boy system.

[alan]

Well, Halliburton the company isn't but the example that you gave of HAL and Iraq is. Basic Smithsonian Economics, if the government is involved it is no longer a true free market. However that aside the government favored HAL over other oil companies because a close relationship between HAL and high ranking members of the current administration. (I do not think that anyone would argue that point) therefore it was not because of a free and open market system that HAL was allowed into Iraq but because the good ol' boy system.

While I'm definitely no fan of government favoritism, I'm not aware of too many companies with the capabilities of HAL. And people are aware that the cronies of the D and the R badge have all favored HAL, right?

[BDP]

OK, this thread should be preserved as the epitome of internet forum discussions. It starts with a humorous, and mostly specious, analogy of a basketball franchise to a coffee chain and in less than a few dozen posts we're talking about Iraq, free market principles, and Halliburton. Classic.

How is Halliburton a violation of the free market principles?

I'm not sure a company can be a violation of free market principles, but Halliburton holds a lot of no-bid contracts with our government and governments around the world. I'm not really sure how one could even try and reconcile that practice with free market principles.

[sethsrott]

OK, this thread should be preserved as the epitome of internet forum discussions. It starts with a humorous, and mostly specious, analogy of a basketball franchise to a coffee chain and in less than a few dozen posts we're talking about Iraq, free market principles, and Halliburton. Classic.



I'm not sure a company can be a violation of free market principles, but Halliburton holds a lot of no-bid contracts with our government and governments around the world. I'm not really sure how one could even try and reconcile that practice with free market principles.

THANK YOU BDP, that was the point that I was trying (and apparently failed) to make! HAL gets countless government contracts with out ever having to go to bid. Those contracts are violations of the free market principles.

[AFCM]

Halliburton was used as an example to illustrate that operating with clean hands in a free market doesn't necessarily equate to using moral practices. Until Halliburton is found guilty of any wrongdoings, they're simply a very influential superpower operating in a free market. They bleed the streets of America and crippling competition; such is the way of the way of the capitalism, moral or not.

[Kerry]

I think we are way off subject here. The orginal intent of this thread strictly deals with similarities/difference between the Sonics trying buy their way out of lease in Seattle that ends in 2 years and Starbucks buying their way out of 600 leases and laying off 12,000 people.

Here is the view from the Seattle perspective.

Sonics buying out last 2 years of lease = end of world.
Schultz laying off 12,000 and buying out 600 leases = no big deal.

How many of those 12,000 will be upset if Schultz shells out for a $60 million bond to save the Sonics for Seattle?

[sethsrott]

hmm...according to the Washington Post

KBR has been at the center of scrutiny for receiving a five-year, no-bid contract to restore Iraqi oil fields shortly before the war began in 2003. Halliburton has reported being paid $10.7 billion for Iraq-related government work during 2003 and 2004. The company reported its pretax profits from that work as $163 million. Pentagon auditors have questioned tens of millions of dollars of Halliburton charges for its operations there.

KBR is a Halliburton subsidiary.

Full Washington Post Article


And here is an AP article entitled "FBI Investigates Halliburton's No-Bid Contracts"
FBI Investigates Halliburton's No-Bid Contracts - UN Security Council - Global Policy Forum

[AFCM]

Do you think I'm unaware of the "no-bid contracts"? Why do you think I brought them into the discussion? The point is, until Halliburton is found guilty of any wrongdoing, they're simply acting within the boundaries of the free market. Influence and power are the nature for huge business. Halliburton is immoral, just like a lot of the other superpower corporations that are using their weight to influence the markets to their advantage.

I guess others don't see a problem with American corporations sending thousands of jobs overseas. That's the way of the free market, so it's acceptable and moral, right? Hey we can have our way. All we have to do is boycott the superpowers and start purchasing our products from the local guys that no longer exists because of the superpowers. Even if we scout a local guy still in business, we'd still be supporting the corporations by using their products that are manufactured overseas.

Our economy is facing a real challenge because of the free market. The free market itself isn't immoral; it's the corporations that will do anything, including selling-out America, for the benefit of the company.

To get back on topic, I'll just say that I believe Starbucks operates unethically. That's what started this whole mess.

[BDP]

they're simply acting within the boundaries of the free market.

Actually, they're not. And neither are any of the rest of us. There is no way anyone can call a market in which governments award business contracts to companies without even the appearance of a competitive process a "free market". Does that fact alone mean they have done something "wrong"? Not at all. That is an ideological question based on ones moral or economic philosophies. Saying that Halliburton is awarded business outside of the guidelines subscribed by free market principles is not, in and of itself, a qualitative judgment. Clearly they, and even our government, do not think that the free market is the best way to address the jobs they feel Halliburton can do.

As for the analogy, the "specific performance" clause has a lot of relevance and is why the analogy doesn't really hold water in a legal sense. However, it does kind of show the fallacy of "specific performance" clauses and, really, the stupidity, from a monetary perspective of Seattle for trying to enforce it. What kind of idiot landlord is going to tell Starbucks they'd rather them lose money selling coffee at their property over taking the cash equivalent of the lease and gaining the opportunity to lease that property again, effectively making TWICE the revenue during the remaining term of the Starbucks lease. Now, what if Starbucks offered MORE than the value of the lease and the same idiot landlord, who still owed money on the property, not only turned that down, but SUED Starbucks to force them to continue to make coffee there???

So, the analogy may not make a great legal argument, but it surely illustrates how stupid Seattle is for bring this suit, even if they are on firm legal grounds to do so and win the case.

[Kerry]

Wow - look what the thread ended up talking about vs. the exact same starting point on the Seattle Times website. We ended up talking about the role of government in a free market economy and the Seattle Times people are taliikng about people sleeping with their dogs.

[OKCMallen]

Mods need to lock/move this thread.

[alan]

Actually, they're not. And neither are any of the rest of us. There is no way anyone can call a market in which governments award business contracts to companies without even the appearance of a competitive process a "free market". Does that fact alone mean they have done something "wrong"? Not at all. That is an ideological question based on ones moral or economic philosophies. Saying that Halliburton is awarded business outside of the guidelines subscribed by free market principles is not, in and of itself, a qualitative judgment. Clearly they, and even our government, do not think that the free market is the best way to address the jobs they feel Halliburton can do.

As for the analogy, the "specific performance" clause has a lot of relevance and is why the analogy doesn't really hold water in a legal sense. However, it does kind of show the fallacy of "specific performance" clauses and, really, the stupidity, from a monetary perspective of Seattle for trying to enforce it. What kind of idiot landlord is going to tell Starbucks they'd rather them lose money selling coffee at their property over taking the cash equivalent of the lease and gaining the opportunity to lease that property again, effectively making TWICE the revenue during the remaining term of the Starbucks lease. Now, what if Starbucks offered MORE than the value of the lease and the same idiot landlord, who still owed money on the property, not only turned that down, but SUED Starbucks to force them to continue to make coffee there???

So, the analogy may not make a great legal argument, but it surely illustrates how stupid Seattle is for bring this suit, even if they are on firm legal grounds to do so and win the case.

Is HAL immoral for operating within the rules of the current system?
Or is the system immoral along with those promoting it and those voting for it?

[OKCTalker]

HAL was the only contractor with the capability of immediately going into Iraq and rebuilding the infrastructure. That was the PLAN, and even though I'm a free marketer, I agree with it. The EXECUTION of that plan was corrupt, and people belong in jail, and money is due back to the federal government. Gonna happen? Don't hold your breath, and it has nothing to do with who is in the oval office either today, or seven months from now.

[BDP]

Is HAL immoral for operating within the rules of the current system?
Or is the system immoral along with those promoting it and those voting for it?

I wasn't speaking to the morality of their actions or the system. I was just pointing out that:

1) The current system is not a free market one by the very nature of the fact that they are awarded no-bid contracts by the government. That's about as opposite of free market principles as you get.

2) The "free market" is not inherently a moral construct. Its parameters do not dictate what would usually be considered a moral structure.That it is to say, there is not a direct positive relationship between how free a market is and how moral it is. HAL can operate within the rules and still be immoral and they could also break rules to fulfill a moral tenant.

But what would be interesting is to find out if such practices are in line with the system for which people think they are promoting and voting for? The real irony is that our government awarded them many no-bid contracts in the aftermath of a war that was a product of a policy developed, in part, by a man that used to work for that company and who is a member of the party which portrays itself as the protector of the free market. Who voted for and promoted that? Was that part of the campaign?

Interestingly, if the Sonics lease was a product of the free market (that is, that a municipality wasn't a party to the lease), you can pretty much rest assured that it never would have gone this far in court. (just trying to keep it real)

[Rover]

WOW!!!!!!
I never imagined the direction this thread would take when I firmly planted my tongue in cheek and typed my original post. This is priceless.

[thanksarthur]

Wow. Well hey someone asked a while back which stores are closing. It is for sure that Britton and Broadway, 122 and Penn, Memorial and May, and Ponca City are closing. Also the new store openings at 36th and May and 23rd and Penn are both cancelled.

[OKCMallen]

WOW!!!!!!
I never imagined the direction this thread would take when I firmly planted my tongue in cheek and typed my original post. This is priceless.

And it was a funny first psot with lots of potential, too! Got all combative and stuff...

[onthestrip]

Wow. Well hey someone asked a while back which stores are closing. It is for sure that Britton and Broadway, 122 and Penn, Memorial and May, and Ponca City are closing. Also the new store openings at 36th and May and 23rd and Penn are both cancelled.

They just added the signs at the 36th and May location and it looked like it was open last night. Maybe im mistaken though.