Saturday, July 29, 2006

My new favorite website

I think I've got a new favorite website. Its called The Disembodied Head of Dick DeVos, and its pretty much the funniest thing I've seen all week. It refers to Michlib as the "Michigan Branch of the Communist Party of America" and features images like this:

The blogger sarcastically plays the "character" of former Amway head Dick DeVos. It is clear that a lot of thought, detail, and creativity went into making this. From hovering the mouse pointer over the blogroll, their comments on some of my favorite MI blogs: - Communist from Shiawassee County, Michigan
Devos is a Dick - Devos HAS a dick, girly man
Michigan Liberal - I think I just threw up in my mouth
Pohlitics - Sticking your name in the blog title?? LAMER!!
Voice of Mordor - You know who got a raw deal? Saruman, that's who
Who Got The Gravy? - No idea - I ordered the lobster!
Wizard Kitten - L is for LIBERAL!!

The website also put me on to an amusing video on Youtube mocking Dick DeVos' ties to Amway. Reminds me of those Flash movies that kids make on Newgrounds, except a lot scarier.

Also, I got a chance to meet matt, lpackard, and LiberalLucy from Michlib a few days ago. They were pretty cool.

Friday, July 28, 2006

Not-So-Safe Republican

By David: The New York Times generally has little good to say about the people of Michigan. Sitting high a top their "East-Coast" bias tower they view us flyover staters and interesting every four years when we decide who becomes President. The Times has a fascinating Election Guide 2006 on their website, but they obviously do not delve greatly into the races here in Michigan. For example my congressional district, the "Fighting 9th" is listed as "Safe Republican". Finally, this year it seems this is not the case. Despite the fact that the 9th voted for Bush twice, despite the fact that Republican tax cuts favor a district with a median income of $65,358 our district is changing. The issue of abortion is altering our viewpoints of Congressman Knollenberg and it is about time.

What may have once seemed safe is now under assault. Congressman Knollenberg doesn't have to just contend with Nancy Skinner in the November 7th election, but also with a primary opponent who is gaining steam, Pan Godcheaux. The Detroit News highlights the differences between Knollenberg and Godcheaux as such:

She's for abortion rights, opposes the war in Iraq, is a strong environmentalist and, as a former teacher, education is her staple issue. Knollenberg opposes abortion, supports the war, takes pride in his many votes to cut taxes and scores high on the national pro-business agenda.

Godcheaux likely won't win, but her presence really does bring up the issue. Is Knollenberg more conservative than the district? I think the answer is a clear yes. But more so than that, Knollenberg has stopped representing Michigan's 9th and only represents the Republican Party. In the same Detroit News article this following question was posed (and following is Knollenberg's response):

Detroit News: What do you think the federal government ought to do to help the struggling domestic auto industry?

Knollenberg : The federal government needs to improve the overall regulatory environment for manufacturers, reduce the cost of health care by cracking down on frivolous lawsuits, and promote alternative fuel technology like E85. We also need to ensure that the Japanese automakers are not gaining a competitive advantage by manipulating their currency rates. Finally, we need to get serious about enforcing intellectual property rights and cracking down on counterfeit manufactured goods. Counterfeiting is rampant in China and it's a problem that costs the auto industry hundreds of billions of dollars. I recently authored a new law that strengthens our domestic laws against counterfeiting. We now need to demand that China do the same.

Whether or not the government actually does have a responsibility to assist the domestic auto industry is a matter of one's own opinion, but Congressman Knollenberg represents suburban Detroit. If the government wanted to throw money at the automakers he should support it regardless. As Godcheaux answered the same question:

Godchaux: The federal government could at least put the resources into the auto industry that go to subsidize the oil industry, as we pay them to drill wells and lease public right-of-ways at giveaway prices. We should support the U.S. auto industry with capital to expand research on alternative fuels and more fuel efficient cars and invest in public transportation, at a time when U.S. auto companies have little capital to take chances.

While I do not support Godcheaux's candidacy over that of Nancy Skinner, she certainly is more in line with the district than is the irresponsible Knollenberg. This issue is indicative of Knollenberg's contempt for the people who elect him, and his blind loyalty to the Bush administration who in response to General Motors' alledged possible bankruptcy said that GM could not expect the same treatement Chrysler received under President Reagan, as he said at Fort Meade, MD in January, "I have been very reluctant - I'm mindful of the past where at one point in time, a predecessor of mine was faced with that same dilemma. I would hope I wouldn't be asked to make that decision [to facilitate a bailout]...And I haven't been asked by any automobile manufacturer about a bailout...I think it's very important for the market to function," (i.e. General Motors you are out of luck, thanks Michigan for not voting for me twice). Knollenberg's signing onto a Bush platform that would have a huge impact upon his district (yes, they don't vote for you but Pontiac is in your district Congressman Knollenberg, as are some plants of that aforementioned General Motors), he is saying party loyalty trumps the needs of constituents. This is just further evidence of Knollenberg's being out of touch.

Nancy Skinner is in tune with the district, and her ideas are bright. She acknowledges situations at hand while looking at the future. Her website, describes her energy polcy as "we must move toward a sustainable energy policy using American ingenuity and innovation. Meanwhile, we must expand our gasoline refining capacity." This is correct. The future is alternative energy, but in the meantime we need to expand the resource we use. This is the sort of thinking we need in Washington, vision and pragmatism, not Knollenberg's assinine assertions that benefit Toyota and conservatives in the Mountain West.

Hey Joe, its not so safe out in the ninth district...

DeVos Campaign Gets Dirty With Wikipedia

Members of Dick DeVos' campaign team inappropriately modified a non-partisan encyclopedia article by attempting to remove factual information about DeVos that may be perceived negatively. A Wikipedian using DeVos campaign computers removed and modified information about his background. From the article discussion page:

Envix, protests to the contrary, has edited from a network range associated with the DeVos Campaign. I have banned the range for the next six months, which puts us safely past the November election. Whether he is actually on the payroll or is merely a fellow-traveler is beside the point; he's using DeVos campaign equipment to influence an encyclopedia article. This is completely unacceptable.

The specific changes by the DeVos campaign include:

The "biographical" information was added from the Asian Symposium on Direct Selling, which the editor from the DeVos campaign claims to hold the copyright to. Because of this, it seems reasonably likely that whoever was in the DeVos campaign office is also involved in the "direct selling industry in China (i.e. Amway in China)." I don't find the "China" argument to be particularly compelling in comparison to other aspects of DeVos' history, but this should be interesting to anyone who does.

The individual from the DeVos campaign complained that the Granholm page didn't contain similar information about her. This person is missing a key point -- the information listed relevant biographical information and a part of Dick DeVos' history. Granholm does not have a similar background, so demands that biographical information be removed about DeVos because Granholm doesn't have similar history are unreasonable.

It is unfortunate that the DeVos campaign feels that they must stoop to this level of partisan hackery. Oh well -- if nothing else, its good to know about what they're worried about.

Amway Exposed, Part Three coming Monday.

(cross-posted on Michigan Liberal... front paged!)

EDIT: Thanks to Christine Barry for the plug on this, and the first two parts of the Amway series.

Thursday, July 27, 2006

all in the questions

wizardkitten points to a poll that puts Granholm 3 points ahead of DeVos.

I don't trust polls unless the methodology is clearly documented and available to the public. I remember reading a poll that asked "Do you think that Michigan's economy has suffered under the stewardship of Jennifer Granholm?" That's a leading question -- people think that the MI economy sucks, and are of course going to say yes. Even though their questions are factually correct, by adding some additional pro-Granholm info and negative DeVos background, it should be expected that the poll would swing the other way. These numbers don't really mean anything.

Regardless of the polls now, its going to be an uphill battle in November -- its important to not get too caught up in this and focus on the long term (and this is coming from someone who might want to become a pollster).

This does help us take a look at what will be effective for us to talk about, and what the DeVos campaign will want to avoid. Its pretty obvious anyway, IMO.

Tuesday, July 25, 2006

Amway Exposed, Part Two: The "Tools" Scam

Continued from yesterday's post on the potential for making profit in the Amway system.

Despite the lack of opportunities for profit from Amway, someone has been making a lot of money from the Amway system. According to various accounts, including the Dateline investigation, approximately 20 "“elite"” distributors have tapped into a multi-million dollar market outside of the traditional Amway product distribution system. While most of these high-level distributors refuse to release their income statements for fear of showing where the actual money comes from, the distributors have accumulated millions of dollars through techniques that are not available to the vast majority of IBOs.

So what's the trick to making all of this money? The lucrative "tools"” business, which includes books, monthly meetings, larger seminars, and motivational tapes. These "tools" are sold at the expense of Amway distributors that have been fooled into the system.

Official Amway policy states that the motivational "tools" aren't required to be a successful distributor, and this probably helps them escape some of the criticism over the way the Amway system is structured. While the tools aren't explicitly endorsed, the Amway system creates a culture that encourages the exploitation of distributors through the purchase of these "tools." Amway distributors are told that these tools are essential to success:

"Do you want to be wealthy in Amway? Do you want to stand on the stage and claim victory over your life..and claim it that you overwhelmed whatever challenge you had?... Do you really want to do that? You'll have to come to a dream weekend. You'll never make it without a major function." Louie Carrillo Tape DBR659 - Power of a Dream (source)

"I am so thankful that we listened to them (our sponsor) from the start, because that's got us to where we are today. I see so many people struggling with why do I need tapes, why do I need books? Why do I need all these things? And it's because the people that are getting you in the business want you to be successful. They are not telling you for any other reason. It's for your own good. Everything that you hear, you should do. And you know Jim and I all along have said "if Tim and Cindy tell us to do it, we are never going to question it." Jim & Tricia Richardson Tape "Stories to make you smile" PN2161 (source)

'Nonstop' pressure to buy

Chip Minto, a former distributor from Philadelphia, said he spent as much as $800 to $1,000 a month on the motivational events and materials. He was earning, on average, $85 a month.

"It gets ridiculous," he said. "And it's nonstop. You're paying for something at least once a week. If you didn't have something to do (a business seminar) on a weekend, you were lucky." (From the Grand Rapids Press - e-mail me if you would like the full article.)

We know that most Amway products are not sold to consumers outside the system, but rather within Amway distributors themselves. You are now also aware of the "tools" business and the kinds of pressures on distributors to buy in to these "motivational" materials. The relevancy of the "tools"” business compared to that of actually selling products to consumers becomes even more clear when looking at the way that the Amway elite make their money. According to an examination by John Hoagland, Emerald and Diamond distributors get a cut from the sale of the motivational tools. In his examination of one Diamond's 1099 form, the Diamond made nine times as much money from the "tools" as profits from his Amway downline.

The Dateline investigation came across a different figure, but the difference is still staggering:

But what he did let slip when he didn't know the camera was rolling was that one of the elite distributors we saw on stage is making most of his money from the motivation business.

Fredericks: Probably three quarters of it.” [emphasis added]

Sandler: “And that's from seminars -- holding seminars?

Fredericks: Seminars, rallies, functions, motivational tools, tapes, books, speaking engagements, appearances.

Finally, Dexter Yager himself attributed 2/3 of his income to his "tools" sales.

All of this ends up hurting the little guy. The less than stellar income reports from average Amway distributors don't even include the costs that push most IBOs into negative numbers, such as the costs for travel and the aforementioned "tools."” According to a "“Time Out"” feature on Amway:

Colin and his wife would go out showing the plan four or five nights a week, often driving hundreds of miles to see potential prospects. Although their network and sales volume grew, they still found they were spending far more on petrol, telephone calls and other expenses that they were making.

Then there was the cost of the 'system' itself. "We'd get a tape each week and a book each month. Then we'd be expected to attend weekly training meetings and monthly rallies and seminars. Although it was only a few pounds at a time, it really did start to add up.

There are emotional costs associated with the tools too. From the personal experience of one former IBO at a seminar:

It really is pathetic. I remember seeing downline distributors on the front row at rallies throwing their fists into the air screaming and crying how they're going diamond someday. Every single one of them TODAY are not in Amway anymore.

This focus on the "tools" and the "“motivational" aspect of Amway rather than the products themselves emphasizes a fundamental truth about the viability of Amway as a business model. Given that the incentives for high-level Amway elites are much greater to get their distributors to buy their tools rather than to actually go out and sell products themselves, it stands to reason that the tools are emphasized and the products aren't actually sold. Hoagland arrives at a similar conclusion:

As a side note, the same people who are making money off the tools are the same people pushing their distributors to purchase more tools. The idea is that if the distributors want to be a Direct themselves, they should purchase more tapes, attend more meetings, etc. At the same time the distributors are doing this, the upline makes more money. It makes you wonder if these distributors are really in the illegal tools-moving business rather than in the legal product-moving business?

Regardless of the legality of this system, the bottom line is that the vast majority of IBOs go into the system thinking that they are going to make lots of money, and come out having spent more money on "tools"” and operational costs than what they brought in from their sales of actual products.

Ultimately, the profitability of Amway and its hidden tools scam is very relevant to the discussion people are having across Michigan. In his efforts to become governor of Michigan, Dick DeVos asserts that his business experience makes him the best candidate to turn Michigan's economy around. If DeVos says that his business model is the recipe for Michigan'’s success, Michiganders must know about the Amway business model. His claims and history need to be examined so that voters can make an informed decision about their choices this November.

There is nothing about the Amway business model that bodes well for the rest of us. DeVos touts his business experience and economic development abilities as the reason to vote for him, but he made his money by allowing his business' participants to be cheated through the "tools" scam. By his own logic, this is the kind of government we should expect from a DeVos administration -- one that doesn't care about ordinary people.

There's a lot more from where this came from. Stay tuned, kids.


(cross-posted on Michigan Liberal)

Update: Front paged! Also, thanks to Pohlitics for the plug and a thank you to whoever submitted me to the Cult News Network.

Edit Again: Thanks to Stone Soup Musings for the plug. Read the rest of the post too, its really good.

Monday, July 24, 2006

Amway Exposed, Part One: The Profitability of Amway

Amway is a scam. Participants put something in (usually time, money for motivational materials, travel expenses) and get nothing in exchange. While Amway is legal, there is a fine distinction between directly paying into the system (illegal) and being coerced into paying for the motivational “tools” that participants are told are required for success. Amway does not provide an opportunity for its distributors, and there is nothing ethical about their business model.

From a buddy that's in the business, here's the basic premise behind Amway: Each distributor gets a percentage cut from every Amway product that they sell, which is their profit. As they start to recruit other distributors, the original distributor gets their own bonus from selling things themselves, plus a cut of the profits from all of the distributors “under” them. As the new distributors in the original IBO's “downline” recruit their own distributors under them, the original distributor gets a cut of the profit from the products sold by everyone involved.

The actual numbers get complicated, but the basic idea advanced by Amway is that their Independent Business Owners, or IBOs, will eventually make so much money from their downlines that they won't need to work themselves. Since the means to making a lot of money with no work is by getting other people in your downline, the biggest incentive for distributors is to recruit others, not to actually sell products themselves. This dynamic has had a significant impact on the way that Amway and its top distributors have made a profit, as well as the profitability for the average Amway distributor.

Let's take a look at some of the statements about the profitability of Amway told to potential distributors, and see how they contrast with reality:

From the 2004 Dateline investigation on Amway:

Greg Fredericks: “If you're somewhat serious, all I mean by somewhat serious -- if you invest maybe, say, 10 to 15 hours a week in your business. This is your own business -- you could generate in the next 12 to 18 months, an extra quarter of a million.”

Tim Sandler [Dateline producer]: “I'm sorry. How much?”

Fredericks: “A quarter million.”

Sandler: “You're making more than $250,000 -- quarter of a million?”

Fredericks: “Umm hmm.”

In another case, Amway recruiters have told potential members in Hungary that the minimum income for participants is $9,000 a month.

If reading about it isn't enough, listen to a clip of a speaker from a motivational tape telling prospective Amway distributors that they can reach an income of $50,000 a year in one year.

Unfortunately, all of these claims are less than accurate. Doing the math, “if 'the pitch' at an Amway meeting were even moderately accurate, in something like 18 months Amway would be larger than the GNP of the entire United States (source).” In fact, the Federal Trade Commission “requires Amway to label its products with the message that 54% of Amway recruits make nothing and the rest earn on average $65 a month (source).”

Interestingly enough, Amway itself has acknowledged that distributors may not make any profit for the first few years of operation:
From 1996 SA-4400: Gross Income: The amount received from retail sales of products, minus the cost of goods sold, plus the amount of Performance Bonus retained. This does not include deductions for business expenses that, of course, will vary according to the manner in which each individual distributor operates his or her own business. There may be significant business expenses, mostly discretionary, that may be greater in relation to income in the first years of operation (source).

Not great odds, especially when you consider that most Amway distributors sell primarily to themselves and have other costs not counted for in these calculations. According to a 1991 Forbes report, the typical Amway distributor sold only 19% of their products to non-Amway consumers. In other words, Amway distributors as a collective only make money from one out of every five of their sales.

Quixtar, or Amway over the Internet, isn't much better. According to a 2001 Forbes article, “By joining organizations like Quixtar, you're more likely to fill your shelves with bottles of shampoo than to fill your bank account with cash (Forbes).”

This statement seems to be corroborated by the evidence available to the public. As we will see, one of the ways that participants are hooked into the Amway/Quixtar system is through stories about the lives of Quixtar “Diamonds” that gain financial independence from their downlines. However, the math from Quixtar's own statistics show that there are only 57 Diamond-level distributors out of hundreds of thousands of participants (LawBlawg).

The “two to five year” promise to becoming a Diamond level Amway distributor is completely unsubstantiated. Even after putting an incredible amount of time and effort into the Amway system, most distributors don't even come close to reaching Diamond. Furthermore, members that qualify as Diamond often don't make kind of money that is promised by Quixtar. After years of hard work, one Quixtar member qualified for the coveted Diamond classification by making little over $35,000 a year from direct Amway profits (source). There's no real money in the Amway distribution system, even for the supposed cream of the crop of distributors.

Does this sound familiar at all? It should – the Amway system preys on the weak, promising them the answer to all of their problems (money). As we will see, the only people that benefit are the people at the top of the pyramid. This is not unlike the promises from Dick DeVos in this gubernatorial race. He tells people what they want to believe (that he will bring jobs and economic growth), but there are no practical specifics behind his rhetoric. The Amway promise has proven to be false, and it is clear that people are going to be disappointed with the DeVos promise as well.


P.S. Look for part two, on the “tools” business and the real money makers of Amway tomorrow.

Examinations of the lives Amway has ruined, the favors Amway has traded with prominent Republicans such as George Bush and Mike Cox, Amway's attempts to suppress the free speech rights of its critics, the behavioral control methods used to manipulate Amway distributors, the rest of the Amway family, the potential for an MLM-styled GOTV effort, Amway's similarities to cults and the mafia, Amway's legal troubles, and other unethical Amway behavior are coming soon.

(cross-posted on Michigan Liberal)

EDIT: Front paged! Also, thanks to Pohlitics for the plug.

Friday, July 21, 2006

ziggy discovers the wonders of...

There's a lot of stuff I could be talking about, but things have been real busy lately. Got some fun stuff coming soon, though. Stay tuned...

Monday, July 17, 2006

With God, All Things Are Political

My bro David recently started a blog, With God, All Things Are Political. Go check it out.

Also, he's got a great opinion piece in the State News on DeVos. We need to get more of these things out there.

We have an election coming up, and one of the candidates has a magical object. This candidate is Dick DeVos.

He has a political Magic 8 Ball — it provides answers to all of Michigan's problems. Floating inside is a triangle. Each side reads, "We need to put people back to work." How do we fix Detroit? (Shake, shake) "We need to put people back to work." How do we help the uninsured? "We need to put people back to work." How do we lower tuition rates? "We need to put people back to work." How can the Lions win the NFC North? "We need to put people back to work."

What DeVos really needs is to put real plans to work, get real numbers and specifics to work.

He hasn't done this. Gov. Jennifer Granholm has. If you attend MSU and plan on having a job when you graduate, put your ballot to work and re-elect Granholm. Her plan isn't a Magic 8 Ball — her plan is working.

David Wishinsky
political science senior

(cross-posted on Michigan Liberal)

Thursday, July 13, 2006

07.13.2006 Letter to the Editor: DeVos, Amway, and Vouchers

My letter to the editor about Dick DeVos appeared today in the Saginaw News. Here it is:

As a lifelong Michigan resident, I have some serious reservations about Dick DeVos' legitimacy as a gubernatorial candidate.

It is true that Michigan is hurting because of recent losses in the manufacturing sector. However, it is a little disingenuous to hail DeVos as Michigan's savior and expect him to solve all of our problems, as his ads imply.

As the former president of Amway, DeVos made similar promises to the people of Michigan. These promises turned out to be untrue. Despite the fact that 99 percent of Amway "distributors" (victims) never made a profit, Amway tantalized prospective participants with promises of early retirement and instant wealth.

Since there is virtually no demand for Amway products outside of already existing Amway distributors, the Amway business model closely resembles an illegal pyramid scheme. The reality of Amway is that most of the money is made by only a few individuals that sell "motivational" materials to the rest of the Amway distributors. Through Amway, Dick DeVos has already scammed countless Michiganders.

In fact, DeVos' regard for Michigan residents is so low that he continues to fund organizations pushing for school vouchers despite public opposition. Michigan voters recognized that school vouchers would cripple our public schools and overwhelmingly rejected this initiative in 2000. Afterward, DeVos still donated millions of dollars to organizations that aim to undermine public education and advocated using bullying and stealth to keep pushing for vouchers in a 2002 speech.

Dick DeVos has already spent over 7.1 million dollars trying to buy a better image for himself on TV. Given his history, DeVos' attempt to buy our votes is frightening and undermines the idea of a democratic process. This is why I won't be voting for DeVos in November.

Nirmal Mankani

(cross-posted on Michigan Liberal)

EDIT: Front paged! Thanks guys.

Saul, Google, and other random thoughts

A few quick thoughts from the past few days:

  • Saul Anuzis continues to irresponsibly pin the woes of our state economy on the SBT and Governor Granholm. While the SBT is poorly structured, it is the Republicans in the legislature that have obstructed Granholm's proposals for reform. On the other hand, they want to do away with it entirely, but won't tell us where the extra money for the General Fund is going to come from until after the election. It is irresponsible to blame the woes of the economy on Granholm or the SBT alone, when really it doesn't matter who the Governor has been the past four years, we would probably be in the same position. We need to focus on restructuring our economy so that we aren't completely dependent on manufacturing, which has been the real issue for us.
  • In this light, the Google announcement is great news, and a validation of the Governor's approach to restructuring our economy. These are the kinds of jobs that we need to keep kids in state after they graduate. Its a shame that the MI GOP has been trying to trivialize this success.
  • Share why you're voting for Granholm/Cherry.
  • I had a chance to sit in on a couple of the committee meetings on the budget -- everyone seemed to be content with it for the most part. I don't anticipate much controversy in session. With stuff in the State House winding down, that should bring more of focus onto the gubernatorial race.

Wednesday, July 05, 2006

granholm webchat

Governor Granholm is responding to questions live on her blog. Go check it out!

Attacks on "leaks" and the erosion of our democracy

Republican politicians continue to attack the news media for publishing details of a secret program to track terrorist financing, despite the fact that details of the program have been discussed by the administration many times.

Dean Baquet and Bill Keller, editors of the Los Angeles Times and the New York Times, defended the recent disclosures of their papers and made a broader case for a press that holds government accountable in a recent op-ed piece.

Government officials, understandably, want it both ways. They want us to protect their secrets, and they want us to trumpet their successes. A few days ago, Treasury Secretary John Snow said he was scandalized by our decision to report on the bank-monitoring program. But in September 2003, the same Secretary Snow invited a group of reporters from our papers, the Wall Street Journal and others to travel with him and his aides on a military aircraft for a six-day tour to show off the department's efforts to track terrorist financing. The secretary's team discussed many sensitive details of their monitoring efforts, hoping they would appear in print and demonstrate the administration's relentlessness against the terrorist threat.

Personally, I find it troublesome when our government engages in torture and domestic surveillance, and maintains secret prisons without judicial review in the name of "national security." They'll tell members of Congress, but they can't tell us about it because of "national security." If a journalist leaks this information, they're slandered and pressured to reveal their sources. On the other hand, they'll selectively declassify information when its to slander a critic or for their own political advantage.

Representative James McGovern (D) characterized the attacks as a cheap way to energize the demoralized Republican base, and also emphasized the hypocrisy of fair-weather leaks:

``Let's be honest: We are here today because there hasn't been enough red meat thrown at the Republican base before the Fourth of July holiday," McGovern said. ``The administration and its allies have no problem with leaks to the press when those leaks advance their political agenda. But if a leak contradicts their agenda, suddenly they call it treason."

On a related note, Kentucky's governor Ernie Fletcher (R) restricted access to a blog critical of his administration for over 34,000 state employees.