Kevin Drum

Help Us Solve the Rotisserie Chicken Mystery

| Thu Jul. 24, 2014 2:18 PM EDT

Megan McArdle alerts me today to a story from a local TV station that answers a question I've vaguely wondered about for a while: Why is it cheaper to buy a cooked and seasoned rotisserie chicken than a raw chicken? Cat Vesko provides the straight dope:

Right now, an uncooked chicken at Ralphs runs you $9.87, but a rotisserie chicken is $6.99; at Gelson's, you'll pay $8.99 for a cooked chicken or $12.67 for the raw version; and at that beloved emporium of insanity Whole Foods, a rotisserie chicken is $8.99, while a whole chicken from the butcher counter is $12.79 ... per pound.

....In most cases, preparing meals from scratch is significantly cheaper than buying them pre-made. What makes rotisserie chickens the exception? The answer lies in the curious economics of the full-service supermarket....Much like hunters who strive to use every part of the animal, grocery stores attempt to sell every modicum of fresh food they stock. Produce past its prime is chopped up for the salad bar; meat that's overdue for sale is cooked up and sold hot. Some mega-grocers like Costco have dedicated rotisserie chicken programs, but employees report that standard supermarkets routinely pop unsold chickens from the butcher into the ol' rotisserie oven.

This is a curiously roundabout explanation, but it boils down to this: whole chickens that are about to reach their sell-by date—and be thrown out—are instead taken to the deli to be cooked up. The grocery store doesn't make as much money as it would selling the chicken fresh, but it makes more money than it would by throwing it out.

I guess this makes sense. Except for one thing: the number of rotisserie chickens in your average supermarket is huge. As near as I can tell, the number being roasted in any single hour is greater than the total number of raw whole chickens in the entire poultry section. In other words, there's just no way that supermarkets toss out (or come close to tossing out) enough whole raw chickens to account for the vast pile of rotisserie chickens on offer. An awful lot of these chickens must have been purchased explicitly for the rotisserie. At least, that's what my informal eyeball estimate tells me.

What's more, the availability of all those cheap rotisserie chickens is a conspicuous incentive to stop buying whole raw chickens in the first place, and supermarkets obviously know this. This is one of the reasons most supermarkets stock so few whole chickens these days.1 So selling rotisserie chickens cheaply is just cutting their own throats. Why would they do that and lose money on the chicken?

So there must be something else going on. I'm not sure what, but I suspect there's more to the story than just using up chickens that are approaching their sell-by date. Do I have any readers who work in supermarkets and can enlighten us?

1Not the only reason, or even the main reason, of course. The main reason is that most of us just don't want to bother cooking a whole chicken these days.

UPDATE: The most popular guess in comments is that rotisserie chickens are a loss leader. Sure, you lose a dollar or two on each one, but you make up for it with the cole slaw and 2-liter sodas and so forth that everyone buys to go with them.

This is the most obvious explanation, and I'm totally willing to buy it. I just want to know if it's true. Not a guess, but a confirmation from someone who actually knows if this is what's going on. Anyone?

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A Question About Botched Executions

| Thu Jul. 24, 2014 12:45 PM EDT

I'm reluctant to ask a question that may strike some people as too cavalier for a subject that deserves only serious treatment. But after yesterday's botched execution in Arizona—the latest of several—I continue to wonder: why is it so damn hard to execute people?

For starters, there are plenty of time-tested approaches: guillotines, firing squads, hanging, electrocution, gas chambers, etc. Did those really fall out of favor because people found them too grisly? Personally, I find the sterile, Mengele-like method of lethal injection considerably more disturbing than any of the others. And anyway, if you're bound and determined to kill people, maybe you ought to face up to a little bit of grisly.

Beyond that, is it really so hard to find a lethal injection that works? Obviously I'm not a doctor, but I do know that there are plenty of meds that will very reliably knock you unconscious. And once you've done that, surely there are plenty of poisons to choose from? Or even asphyxiation: place a helium mask over the unconscious prisoner and he'll be painlessly dead in about ten minutes or less.

Can anyone point me to a readable but fairly comprehensive history of executions over the past few decades? When and why did lethal injection become the method of choice? Why does there seem to be only one particular cocktail that works effectively? Lots of people have asked the same questions I'm asking, but nothing I've ever read really seems to explain it adequately.

Quote of the Day: John Boehner Invites Obama to Ignore Congress on Immigration

| Thu Jul. 24, 2014 11:49 AM EDT

From House Speaker John Boehner, who is currently beavering away on a plan to sue President Obama for dealing with too many problems on his own:

We’ve got a humanitarian crisis on the border, and that has to be dealt with. But the president clearly isn’t going to deal with it on his own, even though he has the authority to deal with it on his own.

Man, this begs for a follow-up, doesn't it? What exactly does Obama have the authority to do on his own, Mr. Speaker? What unilateral actions would you like him to take without congressional authorization? Which particular law would you like him to reinterpret? Inquiring minds want to know.

A Quick First Look at Paul Ryan's Anti-Poverty Plan

| Thu Jul. 24, 2014 10:34 AM EDT

Paul Ryan is out today with his anti-poverty proposal, and my first reaction after a quick skim is that I'm surprised at how limited it is. Maybe that's fine. There's no law that says every white paper has to offer a comprehensive solution to every federal program ever invented. In any case, Ryan is offering ideas primarily in three areas:

Experimentation. In a few select states, he wants to consolidate a number of federal poverty programs and then allow states to use the money to test different approaches to fighting poverty. It would be revenue neutral ("this is not a budget-cutting proposal—this is a reform proposal") and states would have to agree to a rigorous program of testing and research to evaluate how well their plans work.

EITC. Ryan wants to expand the Earned Income Tax Credit. This would be paid for by unspecified cuts in other anti-poverty programs.

Education. This is a bit of a hodgepodge and requires some reading between the lines. Mostly, he seems to want to block grant spending on early childhood programs; increase federal support for K-12 vouchers; "modernize and reform" tuition assistance for colleges; and block grant job training programs.

Ryan also has some ideas about prison reform and loosening occupational licensing standards. I'll try to have more on this later after I've read his paper more thoroughly. Overall, my initial reaction is that I like the idea of more rigorously testing different anti-poverty approaches, but I'm pretty skeptical of Ryan's obvious preference for eventually eliminating most federal anti-poverty programs and simply sending the money to the states as block grants. This is a longtime conservative hobbyhorse, and not because states are models of efficiency. They like it because it restricts spending, especially during recessions when federal entitlement programs automatically increase but block grants don't. That may please the tea party set, but it's bad for poor people and it's bad for the economy, which benefits from countercyclical spending during economic downturns.

This is just a quickie reaction. More later.

For Lower Back Pain, You Can Skip the Tylenol

| Wed Jul. 23, 2014 8:24 PM EDT

Here's the latest from the frontiers of medical research:

About two-thirds of adults have lower back pain at some point in their lives, and most are told to take acetaminophen, sold under brand names like Tylenol, Anacin and Panadol. Medical guidelines around the world recommend acetaminophen as a first-line treatment.

But there has never been much research to support the recommendation, and now a large, rigorous trial has found that acetaminophen works no better than a placebo.

The good folks at Johnson & Johnson will no doubt disagree with extreme prejudice, but I'm not surprised. I suppose different people respond differently, but I've basically never responded other than minimally to Tylenol. It might dull a bit of headache pain slightly, but that's about it. However, there's more:

Dr. Williams said that acetaminophen had been shown to be effective for headache, toothache and pain after surgery, but the mechanism of back pain is different and poorly understood. Doctors should not initially recommend acetaminophen to patients with acute low back pain, he said.

Hey! That's right. I had some mild toothache recently thanks to a filling that involved a fair amount of work beneath the gum line. It acted up whenever I chewed food on that side of my mouth, and I found that Tylenol made it go away within 20 minutes. I was pretty amazed, since Tylenol had never really worked for anything else. But it was great for toothache.

Anyway, everyone is different, and Tylenol might work for you better than it does for me. It might even work for back pain. It doesn't on average, but that doesn't mean it's ineffective for everybody. In the meantime, maybe the medical research profession could hurry up a bit on that business of understanding what lower back pain is all about, OK? It so happens that I could use some answers on that score.

The Great Third-Pound Burger Ripoff

| Wed Jul. 23, 2014 5:19 PM EDT

This is from a New York Times Magazine piece about America's innumeracy problem:

One of the most vivid arithmetic failings displayed by Americans occurred in the early 1980s, when the A&W restaurant chain released a new hamburger to rival the McDonald’s Quarter Pounder. With a third-pound of beef, the A&W burger had more meat than the Quarter Pounder; in taste tests, customers preferred A&W’s burger. And it was less expensive. A lavish A&W television and radio marketing campaign cited these benefits. Yet instead of leaping at the great value, customers snubbed it.

Only when the company held customer focus groups did it become clear why. The Third Pounder presented the American public with a test in fractions. And we failed. Misunderstanding the value of one-third, customers believed they were being overcharged. Why, they asked the researchers, should they pay the same amount for a third of a pound of meat as they did for a quarter-pound of meat at McDonald’s. The “4” in “¼,” larger than the “3” in “⅓,” led them astray.

Are Americans really innumerate compared to other countries? Perhaps: Author Elizabeth Green says that American adults did pretty poorly in a 2012 international test of numeracy. The rest of her piece is all about how we could teach math better if we really put our minds to it, but unfortunately, after inventing all the best methods for teaching math we gave up, leaving it to the Japanese to perfect them. I don't know whether or not this is a fair summary of the current state of play in math ed.

Still, the A&W anecdote was too good to check, and too good not to pass along. If it's not true, it should be.

UPDATE: Elizabeth Green tweets that her source for this anecdote is Threshold Resistance by Alfred Taubman, who owned A&W in the 80s. Here's the relevant passage, after Taubman has called in Yankelovich, Skelly and White to figure out what was wrong with their burger:

Well, it turned out that customers preferred the taste of our fresh beef over traditional fast-food hockey pucks. Hands down, we had a better product. But there was a serious problem. More than half of the participants in the Yankelovich focus groups questioned the price of our burger. "Why," they asked, "should we pay the same amount for a third of a pound of meat as we do for a quarter-pound of meat at McDonald's? You're overcharging us." Honestly. People thought a third of a pound was less than a quarter of a pound. After all, three is less than four!

So there you go.

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Chart of the Day: Oil Is Getting Harder and Harder to Find

| Wed Jul. 23, 2014 12:46 PM EDT

Oil expert James Hamilton has an interesting summary of the current world oil market up today, and it's worth a read. His bottom line, however, is that $100-per-barrel oil is here to stay:

The run-up of oil prices over the last decade resulted from strong growth of demand from emerging economies confronting limited physical potential to increase production from conventional sources. Certainly a change in those fundamentals could shift the equation dramatically. If China were to face a financial crisis, or if peace and stability were suddenly to break out in the Middle East and North Africa, a sharp drop in oil prices would be expected. But even if such events were to occur, the emerging economies would surely subsequently resume their growth, in which case any gains in production from Libya or Iraq would only buy a few more years.

The chart on the right shows the situation dramatically. In just the past ten years, capital spending by major oil companies on exploration and extraction has tripled. And the result? Those same companies are producing less oil than they were in 2004. There's still new oil out there, but it's increasingly both expensive to get and expensive to refine.

(And all the hype to the contrary, the fracking revolution hasn't changed that. There's oil in those formations in Texas and North Dakota, but the wells only produce for a few years each and production costs are sky high compared to conventional oil.)

In a hypertechnical sense, the peak oil optimists were right: New technology has been able to keep global oil production growing longer than the pessimists thought. But, it turns out, not by much. Global oil production is growing very slowly; the cost of new oil is skyrocketing; the quality of new oil is mostly lousy; and we continue to bump up right against the edge of global demand, which means that even a small disruption in supply can send the world into an economic tailspin. So details aside, the pessimists continue to be right in practice even if they didn't predict the exact date we'd hit peak oil. It's long past time to get dead serious about finding renewable replacements on a very large scale.

Lots of Americans Think Obamacare Has Benefited Nobody

| Wed Jul. 23, 2014 12:00 PM EDT

Greg Sargent points us to an interesting new CNN poll about Obamacare. It asks the usual question about favoring or opposing the law, with the usual results. The basic question shows that Obamacare is unpopular by 40-59 percent, but when you add in the folks who "oppose" it only because they wish it were more liberal, it flips to 57-38 percent. In other words, if you confine yourself to garden variety conservative opposition to Obamacare, there's not nearly as much as most polls suggest.

But then there's another question: Has Obamacare helped you or your family personally? About 18 percent say yes. How about other families? Do you think Obamacare has helped anyone at all?

And guess what: A huge majority of Republicans and conservatives don’t think the law has helped anybody in this country.

Among all Americans, the poll finds that 18 percent say the law has made them and their families better off....Meanwhile, 44 percent say the law hasn’t helped anybody — a lot, but still a minority.

Crucially, an astonishing 72 percent of Republicans, and 64 percent of conservatives, say the law hasn’t helped anyone. (Only one percent of Republicans say the law has helped them!) By contrast, 57 percent of moderates say the law has helped them or others. Independents are evenly divided.

Perhaps these numbers among Republicans and conservatives only capture generalized antipathy towards the law. Or perhaps they reflect the belief that Obamacare can’t be helping anyone, even its beneficiaries, since dependency on Big Gummint can only be self-destructive. Either way, the findings again underscore the degree to which Republicans and conservatives inhabit a separate intellectual universe about it.

Maybe I shouldn't be, but I'm a little more dismayed by the news that even a large number of moderates and independents don't think Obamacare has helped anyone. In a way, that's more disturbing than the dumb—but predictable—knee-jerk Republican view that automatically produces a "no" whenever the question relates to something positive about Obamacare.

I guess the lesson is that liberals still haven't done a very good job of promoting the benefits of Obamacare. Maybe that's an impossible task since, after all, it's not as if you can expect the media to run endless identical stories about local folks who finally got health insurance. Still, it's a funny thing. If you passed a law that gave cars to 10 million poor Americans, pretty much everyone would agree that some people benefited from the program. But if you pass a law that gives health insurance to 10 million poor Americans, lots of people think it's just a gigantic illusion that's helped no one. What's more, the number of people who believe this has increased since last year's rollout.

Why? Certainly not because they think health insurance is worthless. Just try taking away theirs and you'll find out exactly how non-worthless they consider it. Is it because they don't think Obamacare policies are "real" health insurance? Or that all these people had health insurance before and the whole thing is just a scam? Or what? It's a peculiar view that deserves a follow-up.

Nobody Knows What Makes a Good CEO

| Wed Jul. 23, 2014 10:51 AM EDT

Bloomberg has done a bit of charting of CEO pay vs. performance, and their results are on the right. Bottom line: there's essentially no link whatsoever between how well CEOs perform and how well they're paid:

An analysis of compensation data publicly released by Equilar shows little correlation between CEO pay and company performance. Equilar ranked the salaries of 200 highly paid CEOs. When compared to metrics such as revenue, profitability, and stock return, the scattering of data looks pretty random, as though performance doesn’t matter. The comparison makes it look as if there is zero relationship between pay and performance.

There are plenty of conclusions you can draw from this, but one of the key ones is that it demonstrates that corporate boards are almost completely unable to predict how well CEO candidates will do on the job. They insist endlessly that they're looking for only the very top candidates—with pay packages to match—and I don't doubt that they sincerely think this is what they're doing. In fact, though, they don't have a clue who will do better. They could be hiring much cheaper leaders and would probably get about the same performance.

One reason that CEO pay has skyrocketed is that boards compete with each other for candidates who seem to be the best, but don't realize that it's all a chimera. They have no idea.

Will Republicans Finally Find a Tax Cut They Hate?

| Tue Jul. 22, 2014 9:38 PM EDT

Charles Gaba makes an interesting point about today's Halbig decision: if upheld, it would amount to a tax increase. Everyone who buys insurance through a federal exchange would lose the tax credits they're currently entitled to, and losing tax credits is the same as a tax increase. This in turn means that if Democrats introduce a bill to fix the language in Obamacare to keep the tax credits in place, it will basically be a tax cut.

This leaves Republicans in a tough spot, doesn't it? Taken as a whole, Obamacare represents a tax increase, which makes it easy for Republicans to oppose it. But if the Halbig challenge is upheld, all the major Obamacare taxes are unaffected. They stay in force no matter what. The only thing that's affected is the tax credits. Thus, an amendment to reinstate the credits is a net tax cut by the rules that Grover Norquist laid out long ago. And no Republican is allowed to vote against a net tax cut.

I'm curious what Norquist has to say about this. Not because I think he'd agree that Republicans have to vote to restore the tax credits. He wouldn't. He's a smart guy, and he'd invent some kind of loophole for everyone to shimmy through. Mainly, I just want to know what loophole he'd come up with. I'm always impressed with the kind of sophistries guys like him are able to spin. It's usually very educational.