The Customer is Always Right

Has anyone else noticed that this has pretty much disappeared from the thought processes of most businesses out there? Or at least it hasn’t passed on to those who actually interact with the customer/client.

Today, a couple of the folks I work with were talking about an upcoming meeting with the manager during which the manager had set as an agenda item to talk about general attitude and point out that the customer is always right. The conversation between these co-workers was not how true of a statement that was but more of how much the customer is wrong. Their thoughts regarding our customers was that they were a bunch of idiots who didn’t really know anything at all and we were nice enough to explain it once so why would they still have questions.

Wal-Mart is the prime example, but it seems that everywhere we go this attitude prevails. Now obviously the customer is not always right, but it is all about the attitude. For example, the other day I went to a restaurant for a business lunch and ordered what I thought was a chimichanga lunch combo. I ordered it by just stating its combo number. When the food came out they brought me an enchilada supreme. I told them that was not my order. They apologized and pulling out the order notes they asked if it was the #23 that I had wanted. I said that is what I had ordered and they explained that the #23 was the enchilada, but they would take it back and make the chimichanga combo meal if that is what I meant. I thanked them for the offer but feeling rather stupid told them I would eat the enchilada (which was good by the way) since that is what I ordered. The entire time their attitude was that of the customer is always right, even though they pointed out how stupid I was.

It’s rare that I get this kind of service however.

Personally I think this new attitude is prevailing due to the decrease in face-to-face interaction and increase of electronic “communication” (which isn’t really communication in its truest sense). This lack of interaction is changing perspectives from looking at everyone as a human being to them just being objects. There is a great book that I would recommend you read, if you have not already, that covers changing our perspective from looking at people as objects to looking at them as who they really are. The book is called “The Anatomy of Peace: Resolving the Heart of Conflict”.

I know that you are probably now wondering what on earth this has to do with politics and the economy. Well, I actually have been thinking lately about how this attitude and this move into the information age (aka., the age of everyone getting a massive amount of their contact with the outside world through the computer) is affecting the overall economic picture of our nation. How is this changing, if at all, for good or bad our nations ability to nurture and teach the next generation of rising stars? Is there a connection between this attitude and the feeling of the now majority (according to some polls) that the government should fix some to all of their problems? [I do find it interesting that this same majority, however, does not want or agree with becoming a socialist state. Talk about disconnect]

Anyway, what are your answers/thoughts to these questions?

Government Spending Example

From Brian Wesbury at First Trust.


Christina Romer, the Chairwoman of president Obama’s Council of Economic Advisers has announced her resignation. While some people say her departure is a sign of deep divisions in the Obama team, we take her comments, about getting along with Larry Summers and enjoying every minute of her tenure, at face value. You, of course, can decide for yourself.

Romer’s infamous forecast that the $800 billion Obama stimulus bill would keep the unemployment rate at or below 8% will go down in history as one of the worst by any political economist. A 131,000 drop in jobs during July and an unemployment rate holding at 9.5% are not the headlines a president needs going into mid-term elections.

If Romer is taking the fall for all this, she has herself to blame. Her forecast of the economic benefits of government stimulus was not only wrong, but flawed. Politicians love Keynesian economists – they tell them what they want to hear – “bigger government is good.” Romer apparently fell into this trap. Now others are doing the same thing. We have one thing to say. Please, no more stimulus.

Don’t take this the wrong way. Up to a point, some government spending is good. Defending the nation and the rule of law, and helping create some national efficencies are positive additions to growth. But the US is past that point. No matter how many studies pretend that there is a positive multiplier (every dollar of government spending creates more than a dollar of GDP) they are all just political cover for expanding the size and scope of the political class.

A good test case is Canada. It has been cutting spending and tax rates for the past decade or so. While Canada bowed to pressure from the G-20 last year and is currently running a budget deficit of about 4.5% of GDP, this is well below the US and its $1.4 trillion, 10% deficits. This Canadian stimulus is smaller than in past recessions (see budget here). Canada ran deficits of 5.6% of GDP in 1992-93 and 7.6% in 1982-83 – both larger than in the US.

If Keynesians are right, the US economy should be outperforming the Canadian economy now and Canada should have done better back in the 1980s and 1990s, right? Wrong. It’s the opposite. The unemployment rate in Canada is currently 8% (Romer’s target rate) and has been below the US level since October 2008, when government spending started to go crazy. And from 1982 to 2008, the Canadian unemployment rate was always higher than the US rate – by an average of 2.8 percentage points.

This is the fruit of trusting the market and reducing the size of government. In Canada, total government spending fell from 53.3% of GDP in 1992 to 39.2% in 2007. Since then, stimulus spending boosted it to 43.8%, but the trend is down, not up. At the same time, tax rates have continued to fall. Corporate tax rates were cut from 21% in 2006 to 19.5% in 2008, 19% in 2009 and then 18% this year. The GST (a national sales tax) was cut from 6% to 5% in 2008.

The lesson is clear. Less spending, less taxing and more freedom work. Let’s not stimulate anymore. The US economy just can’t take it.