From Proudest Moment to Saddest, the Saga of Toys "R" Us Founder Charles Lazarus

With the liquidation bankruptcy filing of Toys “R” Us, the era of the category killer store may be said to be over. Toys “R” Us was the original category killer chain that overwhelmed small specialty and large general merchandise stores by offering a supermarket-style presentation of wide and deep assortments of sharply priced category specific merchandise. 

To be sure, a few category killers remain—Best Buy, Dick’s Sporting Goods, Bed Bath & Beyond, and even the struggling Barnes & Noble, to name several. But the graveyard list of category killers is much larger. An incomplete list would include Child World, Lionel Leisure, KB Toys, Circuit City, Crazy Eddie, Sports Authority, Oshman’s Sporting Goods, Linens ’n Things.

When Toys “R” Us began in 1948, if you wanted toys, or an appliance or housewares item—virtually anything—you would go downtown to a department store. There were no suburban department stores back then. There were no suburban shopping centers. 

Charles Lazarus used $4,000 to transform his father’s Washington, DC, bicycle shop into a juvenile furniture store. After customers kept asking for toys, Lazarus quickly evolved his merchandise mix to focus on toys. 

He believed staunchly in regimental uniformity. All business decisions–which products to carry, merchandising and store layout–emanated from headquarters. “I should be able to close my eyes and walk 130 feet and put my hand down and touch the very same stack of items in each store. If not, there’s something wrong,” he used to say. 

Lazarus was an early believer in the power of point of sale data. He partnered with suppliers, accepting early inventory deliveries and sharing sales data in return for discounts and assurances that Toys “R” Us would be kept in stock on the most wanted toys. The chain’s wide and deep inventory position became a strategic advantage when desperate parents and grandparents scavenged for the most wanted present during the holiday season. In stock leadership, not price, cemented the company’s position as the go-to retailer for toys. 

This advantage started to dissipate in the late 1980s as Walmart and Target refined their POS data systems. They concentrated on the hottest toys, selling them at discounted prices. They had more stores than Toys “R” Us. Shoppers visited them more often. They siphoned off sales in buckets, not drips and drabs. 

If you needed a specific toy, the place to go no longer was Toys “R” Us. In the age of the Internet, you searched on line, Amazon most likely.

With the advent of electronic games, computers and hand-held devices, traditional toys began losing their cache among children. Toys “R” Us added video games to its assortment, but one didn’t need to visit a store to upload apps to a hand-held device.

The real dagger to the heart of Toys “R” Us and other retailers, however, has been the greedy tentacles of private equity fund managers. They swooped in to ostensibly rescue retailers, offering cash secured against a retailer’s real estate. Some merchants had lagged because they could not compete against more streamlined, better financed competitors. Some were unable to cope with changing market conditions. Some just had inadequate management. It mattered not to the equity funds. They reaped their profits upfront from the leveraged buyout transaction, from interest payments on the debt it provided and, hopefully, from taking a retailer public if its profitability improved. 

Ever since Charles Lazarus retired from his creation in 1994, Toys “R” Us has lacked an energetic, bold merchant at the helm. Profits lagged. The equity funds offered money. But at a highly leveraged  price. Executives with no proprietary interest in a company, other than to maximize their personal returns, usually succumb to the siren song of a deep-pocketed equity fund. Bain Capital and Kohlberg Kravis Roberts, along with Vornado Realty Trust, loaded Toys “R” Us with $5 billion in debt in a 2005 leveraged buyout. 

The downward sales spiral kept Toys “R” Us from paying off the debt and, ominously, from upgrading its stores and systems. All that’s left now is to sell off its real estate. 

Charles Lazarus is now 94. The last time I saw him was about 15 years ago as I was leaving work. He was window shopping a store located on the ground floor level of the Park Avenue office building housing Chain Store Age. We exchanged pleasantries but even then, a decade removed from active Toys “R” Us management, he resisted talking about the company he founded. 

He always was a reluctant interview (see http://nosocksneededanymore.blogspot.com/2017/09/toys-r-us-bankruptcy-brings-back.html). I cannot imagine what must now be gripping his emotions. 

His proudest moment, he used to say, was paying off the creditor debt Toys “R” Us assumed when its then-parent company, Interstate Stores, dragged it into Chapter 11 bankruptcy reorganization in 1974. Other Chapter 11 filings have occurred, none under his watch. 

On Thursday, management filed for Chapter 7 liquidation. The same market forces that will silence Lazarus’ once ubiquitous airwaves jingle—“I don’t wanna grow up, I’m a Toys “R” Us kid …,”—are sure to wreak havoc among remaining category killer stores. For some, if not all, it is just a matter of time before they share a similar fate.  

Predictions Come True

I warned you the day before the election last week we were on the cusp of the inauguration of the 2016 presidential campaign. If you took my warning to heart you would not be too depressed by the insipid chatter from pundits already handicapping the race four years hence. They’ve conducted polls—Hillary and Mike Huckabee are frontrunners of their respective parties. 

Personally, I like Stephen Colbert’s idea. Let’s not spend time on 2016. Tuesday night Colbert zeroed in on the 2072 election, a contest he said would be between Robo-Cheney and a swarm of sentient nano hornets. He did not predict the winner.

Hornets. Seems Tuesday was a big hornets day for me. Earlier, in Bible class (Exodus 23:28), hornets were part of God’s arsenal in support of the Israelites’ conquest of the land of Canaan (“And I will send the hornet before thee, which shall drive out the Hivite, the Canaanite, and the Hittite, from before thee”). 

Last week’s post on the election also contained a tongue-in-cheek suggestion that the United States bifurcate itself into Blue and Red State countries. Seems I wasn’t the only one thinking along those lines. The Huffington Post reported residents of 42 states have submitted petitions to secede from the Union. Here’s the list: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming.

The list included Blue and Red States. Maybe we are making progress toward thinking alike.

While we’re on the subject of the election, I wonder if you noticed an article in the business section of The NY Times the other day. It dealt with patent law and the problems American companies have protecting their unique products. Here’s how The Times described the article: “Sears, which sold many Bionic Wrenches last holiday season, is selling a similar product (the Max Axess) this year — only now it is made in China instead of America.”  

You can read the full article by linking here (http://www.nytimes.com/2012/11/09/business/popular-wrench-fights-a-chinese-rival.html), but the real meat of the story came near the end. Here are two telling paragraphs:

“The company that makes the Max Axess wrench and other tools for Craftsman, the Apex Tool Group, is being acquired by Bain Capital, the company founded by Mitt Romney, in a $1.6 billion deal.

“Throughout the presidential campaign, Bain was criticized on the grounds that it encouraged outsourcing by companies it buys at the expense of American workers. Apex makes many of its tools overseas. A company spokesman referred all questions to Sears.”

Romney hasn’t run Bain Capital since 1999, but his management philosophy of outsourcing American jobs is enshrined in that company. 

And remember my cautionary advice last week about buying cars from the flooded areas. Well, there's been a slew of warnings from attorneys general and consumer protection officials about cars with engines flooded not just by Hurricane Sandy but also by storms and floods in other parts of the country (dealerships across state lines have been known to swap swamped autos). So be wary out there. 

What We Want, What We Need

What we need and what we want in a president sometimes doesn’t mesh. We need someone reflective, not rash, who sets a strong policy course but who is willing to adapt to changing circumstances. What we want is someone bold, righteously aggressive, presidential in demeanor, a good talker.

What we don’t want is someone perceived as weak, someone we visualize waiting for the tumblers to fall into place in their brain before they spew out the answer they think we want to hear. We want sharp, quick command of facts (even if, in reality, we are given falsities or half-facts—it’s the appearance, unfortunately, that matters most to most of us). We don’t want a lot of ums, ahs, and aaaands. 

Which is to say, during tonight’s second presidential debate, actually less of a debate than a conversation with the American public, Barack Obama must show HE is THE president, that his command of the facts and themes of this election are at his fingertips and upon his tongue, that he will vigorously defend his administration, blasting away at misrepresentations and driving home the inconsistencies and warts of his challenger, Mitt Romney, a self-declared “extreme conservative” who has been campaigning of late as a moderate. 

Romney’s given ample ammunition for exposure—Obama must ignite those charges with the same conviction and steely resolve he demonstrated in ordering the assassinations of Osama bin Laden and other al-Qaeda operatives. Al-Qaeda wants to destroy Western civilization. It is not too extreme for a progressive to say conservatives want to destroy America as it is today and return it to a time when government did not provide a safety net for its citizens, a time when the quality and quantity of health care depended on the quantity of dollars in your pocketbook, when equality of opportunity rarely extended beyond rich white menfolk. 

Some might say I am being too extreme, that Republicans simply want to transfer government back down to the levels closest to the people, from federal to state to local municipalities. One need only look to the meningitis epidemic coursing through the country to see the danger inherent in placing trust in such a transfer. The compounding pharmacy that distributed the lethal doses of tainted serum was under state, not federal, supervision. Do we really want to shift environmental oversight of our air, land and waterways to the states? Immigration rights? Health care? Do we want a system where one’s protection is based on the wheel of fortune of which state one was born in? 

During last week’s vice presidential debate the candidates were asked how their Roman Catholic faith affected their public life, particularly as it pertained to the right to have an abortion. They both gave from-the-heart responses, but I was more touched by Joe Biden’s answer as it first voiced the Church’s central mission to help the less fortunate. Biden then expressed the theme enunciated by John F. Kennedy back in 1960 as he sought to be the nation’s first Catholic elected to national office, namely, that he would not impose his religious beliefs on those who did not share his faith.

I have no doubt Mitt Romney will try to project an image of moderation tonight. He’ll try to be an endearing, thoughtful, compassionate candidate whose only mission is to save America from a decline he sees as inevitable if Obama is re-elected. He’ll be smooth talking. He is, after all, versed in being a salesman, be it for his religion or for his former company, Bain Capital. Salesmen are smooth talkers. They’ll tell you what you want to hear (which isn’t always the truth). They’ll work hard to close the deal. 

We’ll see just how much Obama wants to keep his job by how well he does tonight. He doesn’t have to cop an in-your-face attitude toward Romney. He has to look engaged. He has to prime specifics about his accomplishments—saving the auto industry, getting a middle class tax cut as part of the economic stimulus bill, passing Obamacare, killing Osama bin Laden and other al-Qaeda leaders, restoring American prestige across the world, lowering unemployment, creating a positive environment for private sector jobs, protecting consumers, passing financial oversight regulations even as the stock market has doubled since he took office—while strongly contrasting Romney’s prior statements to the comforting, warm uncle positions Mitt will espouse tonight. Use Romney’s own words to, quoting Shakespeare, “hoist him with his own petard.”

With All Due Respect, David Gregory

David Gregory’s big moment comes Sunday when he interviews Mitt Romney on NBC’s Meet the Press. Gregory will be tested to determine if he truly is a worthy successor to the late Tim Russert.

Romney has been adept at deflecting questions, refraining from answering them with specifics, if at all, about his post-election plans should he win the presidency. Gregory’s challenge will be to offer respectful resistance to Romney’s obfuscations. He must pose follow-up questions to get specifics and if necessary challenge the veracity of Romney’s attacks against President Obama and claims about his own programs. Perhaps Gregory’s most important phrase throughout the interview will be, “With all due respect ...,” which is code for, “stop bullshitting me and the American public, answer the question, this is an interview not a stump speech opportunity.”

Just in case Gregory needs help formulating questions, here are some I’d like to see posed:

The time has come to give specifics, Gov. Romney—what cuts to specific programs would you make to balance the budget?

President Clinton in his speech to the convention said more manufacturing jobs were created under President Obama than in last 50 years. That doesn’t sound like failure. How would you characterize it?

If Obamacare is repealed, specifically what would be included in your replacement program, or would the American public go back to a time when insurance companies could exclude you from coverage because of a pre-existing condition? Would your plan cover non-working children through age 26? Would you cover the donut hole for prescriptions for senior citizens?

Israeli defense minister Ehud Barak has said cooperation between his county and the U.S. is the best ever, so why do you say Obama threw Israel under the bus? What more would you have done? As for Jerusalem as Israel’s capital, even George W. Bush never moved our embassy, so why should we hold President Obama to a higher standard than all previous presidents?

Do you support legislation for equal pay for equal work for women?

If Planned Parenthood closes down because you defund it, do you have an alternative where women can get screenings and other medical services they could not afford to get in traditional health care facilities?

Since cabinet secretaries must reveal several years of tax returns to get confirmed, why should the public not expect to see at least the same from someone seeking the highest office in the land?

To combat what threat do we need the budget increase you have proposed for the Pentagon when the Joint Chiefs of Staff haven't asked for it?

Many of your foreign policy advisors counselled President George W. Bush. Why should that make Americans confident in your foreign affairs leadership considering the wars in Iraq and Afghanistan we entered when they advised President Bush?

Would you intervene in Syria? To what degree?

Many European countries implemented fiscal restraint programs, government cutbacks, similar to what you advocate for the United States. Given their problems and your repeated comments that we don’t want to be another Europe, why should we have confidence government cutbacks would work here to help stimulate the economy?

Your campaign has said it won't be bound by fact checkers. Specifically, fact checkers have disputed your campaign’s claims about President Obama’s welfare reform program, the timing of the closing of the General Motors plant in Janesville, Wisconsin, the $716 billion in Medicare savings proposed by President Obama and included in Congressman Ryan’s budget proposal. Are the fact checkers wrong or will you continue to say what you've said before?

Your wife portrayed your early years together as if they were a struggle, eating tuna and pasta off an ironing board serving as a table, using an old door as a desk. Were you indeed living a typical student’s life, or were you buttressed by a sizable trust fund from your parents?

After six years of running for president why don't more Americans say they know you?

You ran for governor of Massachusetts as a moderate. Is there any specific event that prompted you to shift your governing philosophy to conservative? 

In defending your record at Bain Capital you have said not all businesses succeed. So why do you criticize the administration’s failed investment in Solyndra? What is your position on solar energy?

Bain Capital relied heavily on leveraged debt to acquire companies. Since you obviously know a lot about debt, and that the interest in borrowed money is at an all-time low at present, why would it be wrong to borrow money today to invest in rebuilding our nation’s infrastructure?

The General Motors and Chrysler bailout has been successful. Why would a managed bankruptcy, as you preferred, been better for the auto workers employed by GM, Chrysler and the other companies that supply the automakers?

Scorecard: Obama gave a rousing speech last night, but it lacked specifics just as Romney’s did. And he didn't push for the election of Democratic Senate and House candidates. In other words it was just words, not a call to action. I rate his and Romney's speeches a draw as they appealed to the party faithful, not to independents. Any bounce Obama gets will come from Michelle and Bill Clinton.

What I Heard Last Night

If one of the talking points Mitt Romney has about Barack Obama is that his presidency has disappointed us, I must say the Mittster’s nomination acceptance speech last night at the Republican National Convention did not differentiate him from the incumbent. I was not blown away by his rhetoric, his message or by his delivery. And, for sure, I was not provided an inkling as to how he would achieve his five point goals. Yes, they were lofty. But without specifics, it’s like my saying I would like a body as trim and buff as Paul Ryan’s. Unless I’m specifically willing to devote time to the exercise regimen Ryan endures each morning, it’s just not happening. 

You might already have read analyses about the speech, so I’ll try  to keep my take to a minimum of what I jotted down as Romney was smiling that awkward smile of his as he soaked up the love, if not the respect, of the conventioneers, who, honestly, seemed less enthusiastic than those I’ve seen at other party gatherings. 

First, I couldn’t believe Mitt said, “If you ask Ann and I...” I’m picky about grammar. The correct phrase is, “If you ask Ann and me ...”, “me” being the object of the verb “ask.” “I” cannot be the object of a verb. I suppose Romney might want to reconsider any suggestion to downgrade or eliminate the Department of Education.

Second, Romney said Republicans “united” behind Obama when he assumed office. What distant Bizarro world has he lived in since January 20, 2009? The only union Republicans made was with themselves in their effort to, in Senate Minority Leader Mitch McConnell’s words, make Obama a one-term president.

Third, Romney soft-pedaled the troubles Obama inherited from George Bush. He barely acknowledged Bush’s legacy—two wars, a failed economy, a rising deficit.

Fourth, he suggested the best feeling Americans had for Obama “was the day you voted for him,” ignoring the euphoria we all felt when we heard Osama bin Laden had been killed, on orders from a Democratic president.

Fifth, saying that Obama’s lack of business experience made him unqualified to be president, especially compared to his business background, Romney ignored the fact that some of our greatest or most important presidents were similarly inexperienced (FDR, JFK, Nixon, Reagan, Wilson, Teddy Roosevelt) or were failures in business (Truman, Lincoln, Jefferson).  

Sixth, Romney criticized Obama’s attacks on his record at Bain Capital, saying the president didn’t understand not every business succeeds. Fair enough. I would expect then, Romney would drop any future references to Solyndra, the solar energy company that received a $500 million federal investment but wound up filing for bankruptcy a year ago tomorrow. As Romney said, not every company succeeds.

Seventh, “As president, I’ll protect the sanctity of life,” Romney said to wild cheering. But what did he mean by that? Would he continue to defend a woman’s right to an abortion in cases of rape, incest or risk to her life? Would he work to outlaw contraception, as his running mate Ryan advocates? Would he support legislation to criminalize women and their doctors for abortions? Would he support legislation to extend rights to the unborn, from the moment of conception? Would he reject embryonic stem cell research? Would he reject federal funding for Planned Parenthood?  

Eighth, Mocking Obama’s promise “to slow the rise of the oceans and to heal the planet,” Romney said, “My promise is to help you and your family.”  His promise is a good one, but in denigrating Obama’s, he projects his disdain for the realities of climate change and pollution. It is indisputable sea levels are rising, that the world’s air and water are getting dirtier. To ignore the long-term implications is evidence Romney is living in a dream world of the 1950s.

Ninth, Romney resurrected Reagan’s question as to whether we are better off today than four years ago. To someone currently unemployed or in danger of losing their home, the answer is obvious. But let’s look at the trends. Unemployment is slightly higher, 8.3% compared to 7.6% when Obama took the oath of office. But the trendline points down and would be lower if not for the massive layoffs of state and local government workers. Job creation is up. The Dow Jones Industrial Index was 8,281 the morning of January 20, 2009. NASDAQ was 1,529. The S&P 500 was 850. This morning they were, respectively, 13,000; 3,049; and 1,399. Gas prices are almost double what they were, despite the highest level of U.S. oil production. Housing prices seem to be creeping back up, but too many homes remain under water (and I’m not referring to Hurricane Isaac). 

To sum up, economic statistics and trends can support Obama or Romney, which is why so many pundits believe Romney must make himself more likable, and Obama less likable, for the GOP to retake the Oval Office. Which brings up a most interesting question NBC’s Brian Williams asked Tom Brokaw last night—why is it that after six years of running for the presidency, Mitt Romney remains an unknown to much of the electorate? Brokaw didn’t have an answer.

An example of how much of a blank slate Romney is could be observed in the weird Clint Eastwood segment of last night’s convention. Eastwood said he never thought it was a good idea for an attorney to be president, an obvious reference to Obama’s Harvard Law School degree. The crowd laughed and cheered. I guess Eastwood and his live audience didn’t read Romney’s resume—he, too, is a Harvard Law School graduate, class of 1975. 

Chinese Fortune: Jon Huntsman Jr., the former governor or Utah and ex-Ambassador to China, was asked by Stephen Colbert to say in Mandarin what he really thinks of Romney. Here’s a translation: "All right!  Let me put it this way.  I think that two months from now Governor Romney will have a lot of success."

But as Nathan pointed out on http://languagelog.ldc.upenn.edu/nll/?p=4158, “Unfortunately for Romney, the election's slightly more than two months away.”

Foreign Language: Finally, here’s another example of dumbness on the airwaves. Stephen A. Smith, an ESPN talk-radio host, said yesterday he would gladly learn Spanish if he knew he would be sent to Brazil to cover the 2016 Summer Olympics. His co-host, producer or anyone else listening in didn’t tell him Spanish would do him little good in Rio de Janeiro as Brazilians speak Portuguese. 

How Superstitious Am I?

Only a crazed sports fan would relate to what I am about to write.

How superstitious should I be today? Should I adhere to my time-honored practice of sitting in our den to watch the NY Giants on our 35-inch, 21-year old Mitsubishi console television, a TV that has served me well during the recent playoff drive and previous Super Bowl contests (let’s forget, for now, the debacle in 2001), or should I tempt fate and lay on my bed to watch the Giants take on the Green Bay Packers on our wall-mounted 52-inch LCD, High Definition Sharp Aquos television?

Normally, Gilda prefers I seclude myself in the den, but she’ll be at the gym later. I lean towards going with what’s gotten me, and the Giants, to their present possibility of upsetting the Packers, but I am tempted by Saturday’s viewing of the Saints-49’ers game on the big screen. No doubt about it, everything popped brighter, more vibrantly upstairs. It was indeed sharper on the Sharp.

But if the Giants lose, will I blame myself for switching? Non-sports fans (if they’ve read this far) are no doubt shaking their heads at the absurdity of my thoughts. How infantile can I be?, they are saying. They just don’t understand sports superstitions. Never have. Never will.


From Sports to Politics: You don’t need a TV screen to follow the tussles within the Republican party presidential primary. I’ve got a passing (yes, pun intended) interest in Mitt Romney and Newt Gingrich.

For Gingrich, my link is to his money-bagged buddy, Sheldon Adelson. As I wrote back in May, Adelson was not one of my favorite business contacts. He is transfixed on what he sees as right, and uses his money and influence to advance his causes. Here’s what I wrote eight months ago: http://nosocksneededanymore.blogspot.com/2011/05/my-link-to-newt.html

Memory fails to confirm if I ever met Mitt Romney some 20 years ago when I interviewed several Bain Capital executives about their interest in retail companies, such as Staples. This much I do remember—the three men I did meet all dressed the same. They could have stepped out of a Brooks Brothers catalog with their blue suits, white buttoned down shirts, rep ties, and black oxford shoes. They were clean-shaven with short, dark hair, not one strand out of place.

No, I can’t say Romney was among them. I have met two presidents before they became our nation’s chief executive. Jimmy Carter crossed my path during his 1972 presidential campaign while I was covering an event attended by Rep. John Monaghan of Connecticut. Carter was testy that night, I recall.

Bill Clinton was a guest at an annual shareholders meeting of Wal-Mart about 30 years ago. Sam Walton always liked to have the governors of Arkansas make an appearance and talk about the business-friendly climate in the Razorback state and how Wal-Mart was good for the local economy. A few years later Walton solidified his ties to Clinton by appointing Hillary to Wal-Mart’s board of directors. She served from 1986 to 1992.

Random, and Not So Random, Acts of Kindness

They are beautiful, heartwarming gestures I do not mean to belittle. But the anonymous charity of Secret Santas randomly giving out $100 bills to those they think are in need, or paying off a stranger’s layaway charges at Kmart, is not the answer to the paralyzing and pervasive poverty enveloping our nation. They are not the solution to a capitalist system that has divided our country, indeed, large parts of the rest of the world as well, into spheres of plenty and spheres of void.

However generous they are, random acts of kindness should not lull us into believing they can relieve our fellow citizens of the trauma of unemployment, of the despair of having a loved one in need of medical care without adequate health insurance, of squelching the pangs of hunger that ache each night in the bellies of too many of our young.

My conservative friends and relatives tell me government is not the answer. They would have the hungry and the needy rely on the generosity of their fellow human to ease their pain and tribulations, all the while exhorting them to bootstrap themselves into success. Newt Gingrich would dismiss child labor laws and have children of poverty clean schools so they can learn a work ethic, as if taking away the functions of school janitors is any way to reduce unemployment or increase the take-home pay of the working class.

I seem to recall George H.W. Bush more than 20 years ago waxing euphoric over a “thousand points of light” to help transform the country. Perhaps people are more charitable these days. But the number of families living at or below the poverty level keeps growing. The gap in income between the average worker and the average chief executive keeps growing. “Shared sacrifice” is a phrase that needs to be parsed in a new way—corporate executives get more shares, while the rest sacrifice.

Temporary generosity has but a temporary impact. Even if all of those who can afford it tithed, we would still require government intervention to bolster the economy and provide a safety net. How else to explain corporate America’s reluctance to invest in the United States, to hire more workers, even as companies sit on a treasure trove of cash. Neither government regulation nor a high tax rate is strangling our economy. Rather, it is the way we compensate our executives. They manage for short term gain, their bonuses tied to an annual bottom line. Say what you will about Amazon.com’s products and services, you can’t deny founder/CEO Jeff Bezos has stuck to his guns in defending a long-term strategy that has bedeviled Wall Streeters seeking more immediate returns.

Mitt Romney wants everyone to know not all businesses succeed, so don’t blame him if some of the companies his Bain Capital acquired filed for bankruptcy or had to lay off workers. Fair enough. So then let’s not allow him to scald President Obama for investing U.S. funds in Solyndra, a solar energy company that went belly up. New technologies need government assistance, sometimes direct, sometimes indirect. An example of the latter is the sales tax exemption many online retailers have enjoyed versus brick and mortar stores.

Compassionate conservatism is another hollow term. Even when conservative dogma is based on religious belief, as with the Right to Life movement, compassion for the unborn is not extended to the newborn. Conservatives want cuts in aid to dependent children, in early education programs, in school lunch programs.

Let’s not abandon the less fortunate. Let’s continue to donate food, clothing, dollars to worthy charities and individuals. But let’s not forget that without government assistance far too many of the citizens of the richest country on earth would not have a roof over their heads, meals to be eaten, schools to attend, pre- and post-school programs to enrich their growth years, doctors to visit, jobs to go to each day. These are not random acts of kindness. They’re the very foundation of what a government is supposed to do—protect and care for its citizens.

The Bain of Our Existence

During my time editing and publishing a business magazine, I often remonstrated against the insidious effect of Wall Street on the retailing industry. The money vultures would swoop in on a merchant, demand representation on the board or some change in corporate strategy intended for short term gain. Often as not, the retailer put up a fight, though they many times paid a greenmail ransom to rid themselves of the unwanted attention.

Bain Capital was one of those companies that pursued chain retailers and restaurants, along with enterprises from other industries. Mitt Romney was a co-founder of Bain Capital. He made a ton of money investing in companies such as Staples, Domino Pizza, Sealy and Brookstone. A foundation of Romney’s presidential run is his business acumen, his experience managing companies, turning some around, creating jobs and helping the Salt Lake City Olympics be successful.

Yet all is not rainbows and hosannas in Mitt’s corporate portfolio. As is often the case, when an investment firm takes over a company with the intent of later selling it, staff is reduced and assets are sold off. Such was the case with Stage Stores, Dade Behring, Ampad and GS Industries. Though Bain sold them for a combined $578 million profit, thousands of workers lost their jobs at those companies, and, once sold, all wound up declaring bankruptcy.

Bottom line: As the campaign for the nomination gears up, expect other Republicans to target the job losses Romney’s company administered. Should he get the nomination, Obama’s attack on Mitt’s labor record will be even more strident.


Belated Wedding Gift: Today marks the 40th anniversary of the publication of the Pentagon Papers. Listening to an NPR report and interview with Daniel Ellsberg, the Pentagon analyst who defied the government by secretly providing redacted texts to the NY Times, I was struck by a couple of points.

First, The Times published the history of our involvement in Vietnam on a Monday, one day after President Richard Nixon gloried in the marriage of his daughter, Tricia, to Edward Cox, at a White House ceremony. Not exactly the belated wedding gift he was anticipating.

Second, perhaps because he was still euphoric over the nuptials, Nixon was not aware of their publication when speaking to an aide Monday morning. The taped conversation (Nixon secretly recorded Oval Office exchanges) revealed Nixon was almost blasé about the exposure of government secrets. But he quickly changed his tune as the day wore on. He said the country couldn’t abide anyone making their own decision about what should or should not be made public.

His reaction to Ellsberg, it was noted, eventually led to his resignation. First he ordered a special unit called the Plumbers to sneak into the office of Ellsberg’s psychiatrist. That was followed by the decision to infiltrate and bug the office of the Democratic National Committee at the Watergate complex. The unraveling of that botched break-in led to his impeachment and subsequent resignation in August 1974.


Short-Sighted: This week is the last time the New York State Regents examinations will be given for French, Spanish and Italian. Regents in Hebrew, German and Latin were cut last year. Eliminating the final proficiency tests will save about $700,000 a year.

In an increasingly global society, in a country where Spanish is rapidly becoming a language required for communication with today’s and tomorrow’s work force, are the savings really worth it? I think not.


55-Plus: Early baby boomers are among the hardest hit of the unemployed. They’re finding it most difficult latching onto a new job. It might not be outright age discrimination they are facing, but it sure smacks of it.

Many of those 55 and older are willing to take lower salaries than they pulled in before they were laid off. Even for those who have kept up their skills to compete with younger workers, prospects are dim.

Some 25 years ago I hired a veteran reporter. Bob was around 65 when he was let go by one of my competitors. I was cautioned against bringing him on. But Bob turned out to be a wonderful hire. He was loyal, working for at least 10 more years, much longer than younger writers generally stayed. Moreover, his experience gave him insight into retailing younger writers would barely have learned before taking wing.

Bob was an example for all within our company that a good attitude, coupled with experience and energy, is at least as important as youthful exuberance when evaluating a prospective employee.