Advisor Today > > July 2000 The Cost of Doing Business: The Narrowing of Choices

The Cost of Doing Business: The Narrowing of Choices

By Penny Righthand, CLU, ChFC

Do kids still challenge their parents’ directives with "I don’t have to do that; it’s a free country?"

When I was growing up that was one of the best ways to disagree with your parents or teachers and be clever, too. After all, in the ’50s and ’60s the fact that we lived in a country with freedom of choice was valued. Our parents had fought hard for the world to recognize that freedom was better than fascism. They were proud of their soldiers for winning that battle, proud of their politicians for furthering the cause of freedom and proud that their children understood the value of freedom of choice, even if it made it harder for them to boss us around.

When I disagreed with my dad, he’d say, "That’s why there’re horse races," or, "That’s why there’s vanilla and chocolate ice cream. In Russia [where his parents were born] you don’t have any choices. You go to the government store and get what they have. If they need you to be a truck driver, that’s what you’ll be. We are very lucky. We live in a free country."

I liked the concept a lot. But when he wanted me to go to bed early, he had a little trouble explaining why the fact that "this is a free country" was irrelevant. And when the ’70s rolled around and our political views diverged, it seemed that sometimes it mattered and sometimes it didn’t matter that "this is a free country."

Still, as I grew up it seemed life offered more and more choices in these United States. Women could stay at home and bring up their children, or go to work. You could shop at Macy’s or Saks or Lord and Taylor’s, buy gas at Union 76, Mobil or Amoco, have a Motorola, Zenith or RCA TV, drive a Ford, Chevy or Oldsmobile. After a while you could even buy a Volkswagon or Toyota! A Panasonic or Sony! You could go to work for a company or start your own business. If you were sick, you could go to any doctor or hospital and get the care you needed. You could get married or not; have a family with two parents of different sexes or of the same sex or with only one parent. You could bank at Wells Fargo or Bankers Trust. You could vote Republican or Democrat because there was a difference.

You had real choices. You made those decisions yourself and for a reason. Maybe it was more convenient. Maybe one bank offered a service another didn’t. Maybe one store had a brand that another didn’t. Maybe you liked what one political party stood for better than the other. Maybe you felt more secure working for a big company that offered you a pension if you stayed with them a long time, or maybe you felt more independent working for yourself.

All these choices were free, and for the most part, people didn’t bother each other too much about them (unless it was your father!). Maybe they got into a fist fight over whether the Yankees or the Dodgers or the Giants were the better team, but they didn’t sue over it. And the Yankees didn’t buy the Dodgers (just because they could) and make them disappear, so you had no choice but to root for the Yankees. Competition was spirited, but though it always disappointed some fans, it was (however begrudgingly) assumed that the best team was the winner.

But of late I have noticed the pendulum swinging the other way. My choices seem to be becoming more and more limited. I used to bank at Security Pacific. There was a branch near where I lived. They sold me the mortgage on my first house, they knew me and they were a part of the community. I purposely didn’t bank at the Bank of America or Wells Fargo, despite the fact that there were more of them in the area and it would have been more convenient to drop in there wherever I was. I felt quite sanguine about that choice when B of A first initiated the ATM machines and started charging customers for talking to a teller. I was not going to support a bank that was systematically eliminating customer service and personnel. But one day the sign outside Security Pacific Bank was changed. It said Bank of Amer-ica! I immediately moved my accounts to another bank where I could talk to a teller. But not long afterwards that bank, too, was bought by B of A. I kept reading the articles in the papers about how many people were being laid off each time one of these "mergers" happened, and I decided to move to a credit union where I have stayed ever since. Not the most convenient choice, but a choice I made, and for now, at least, one I can feel good about.

I bought a new house, got a new mortgage through a mortgage broker and last month was informed my mortgage had been bought by Wells Fargo.

I opened my business, signed up for an independent payroll service, and within months the payroll service had been bought by Bank of America. And the last I heard, B of A was bought by Nations Bank.

I don’t get to choose who I do business with any more. Half the time I don’t even know who I’m doing business with. It might as well be "The State." I sold someone a First Colony life insurance policy and they received a letter saying they were now insured by GE. The client called me and wondered if there was some mistake and the letter referred to insurance on some GE electrical appliance they had recently purchased.

I used to buy my books at a small local bookstore. They gave writing classes there, had talks by authors, the owners told me about what the latest book was that I might be interested in. Forget about it. That store put up the good fight against Crown Books, which put up the good fight against Barnes and Noble, which with Borders is pretty much the only choice on the street and is losing ground to Amazon.com, which so far is not on the street but only on the web. It’s like the only choice I have is the state owned bookstore in the former Soviet Union. True, there are probably more book choices at Barnes and Noble than in the state-owned bookstore, but still, I pretty much have to shop there.

There was a great skit on Saturday Night Live, a TV show on one of the non-cable stations when you could watch TV without having to buy cable services from the only viable service out there. It was a restaurant bit, where the customer came in, read the menu, told the waitress he wanted a tuna sandwich and a coke. She says to him, "No tuna. Cheeseburger."

"No tuna?" he says. "Okay. How about grilled cheese?"

"No grilled cheese. Cheeseburger."

"OK, I’ll have a cheeseburger and a Coke."

"No Coke. Pepsi."

"OK! Pepsi!" And no matter what the next few customers ordered from the menu, their choice was really only "cheeseburger, Pepsi."

That’s what it feels like around here lately. In some ways it’s hard to complain. The truth is, employment is at its highest in history. Some of the bank tellers I was supporting have gone to work for dot.com companies and are now multi-millionaires, while I’m still peddling life insurance and swimming against the dot.com tide.

I’ve had a computer for years because rate books went out with the dinosaurs. I picked an Internet service provider very carefully among the many out there to help me connect up with the internet and manage my personal e-mail. But the next thing I knew the ISP I selected was bought by one I didn’t select. I guess they’ve selected me.

It seems so irrational. On the one hand, there was the breakup of the telephone company into all these local telephone companies. Long distance costs have gone down, and local costs have gone up. There were the antitrust laws designed to control the mergers in the oil industry. Oil and gas prices are soaring. There’s the government’s attempt to break up Microsoft because it’s too big and not good for competition. But where would we be without the incredible brilliance of the Microsoft people?

And on the other hand, there are the weekly mergers of insurance com-panies, banks, brokerage houses, multi-media corporations like AOL and Time Warner, drug companies like Pfizer and American Home Products creating larger and larger companies whose research is arguably influenced more by the need to make stockholders profits than by the benefits to consumers. There are the health care systems designed for cor-porate profit, that provide poorer and poorer service, more unhappy health care providers and fewer and fewer consumer choices.

I’m not one of those people who likes to sit in the passenger seat and let the driver decide where I’m going and how to get there. I don’t like to be told what to do. And I don’t eat cheeseburgers or drink Pepsi. I thought this was a free country!

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