I find McDonald’s a kind of fascinating story, and Daniel Gross’ article on how they prospered through the recession is very interesting. The part I have something to say about, though, is the last part:

The question now for investors is whether McDonald’s can survive the recovery. When people feel more flush, will they still stop by? The growth in same-store sales in the United States has moderated a little in recent months—up only 2.6 percent in the United States in July compared with 6.1 percent in April. And there’s a rising chunk of the population that has grown accustomed to eating healthier and better; my 10-year-old won’t touch a McDonald’s burger. Going forward, McDonald’s may face larger cultural barriers in the United States than in China.

There sometimes seems to me to be a rhetoric around fast food chains that implies that they want to serve unhealthy food to people. As if McDonald’s was a holding company that sold french fries as a loss-leader and made its real profits as a pharmaceutical company selling people cholesterol medication. The reality, though, is that successful fast food companies are very flexible and adaptable and sell all kinds of things around the world according to local tastes.

I think when the day comes that consumers genuinely want healthier meals, McDonald’s will probably be doing just fine selling them, just as they’re doing fine selling shrimp burgers in Hong Kong and a paneer salsa wrap in India. What’s more, doesn’t it actually seem really unlikely that people will start, deep down, wanting to eat healthier? For the vast majority of our species’ history, people were engaged in much more physical activity and needed to consume way more daily calories than modern people do. Historical people also lived with the constant threat of future food shortfalls, under circumstances where it made sense to eat what you could when you could because you could easily be underfed next month. That legacy creates powerful forces shaping our first-order preferences.

Paul Krugman concludes a review of Justin Fox’s excellent The Myth of the Rational Market on a pessimistic note:

Indeed, I came away from reading these books wondering if their shared under­lying premise — that the current crisis will put an end to Panglossian views of financial markets — is right. Fox points out that academic belief in the perfection of financial markets survived the 1987 stock market crash and the bursting of the Internet bubble. Why should the reaction to the latest catastrophe be any different? In fact, what I hear from my finance professor friends is that there’s a lot less soul-searching under way than you might expect. And Wall Street’s appetite for complex strategies that sound clever — and can be sold to credulous investors — survived L.T.C.M.’s debacle; why can’t it survive this crisis, too?

My guess is that the myth of the rational market — a myth that is beautiful, comforting and, above all, lucrative — isn’t going away anytime soon.

That seems about right to me. Since the crisis, people who always thought strong claims about efficient financial markets were wrong have been feeling vindicated. But I don’t see much evidence of anyone having changed their minds. Nor have the big banks lost any clout on the Hill. Nothing really seems changed. To an extent, I suppose this is a consequence of the fact that Bernanke and Geithner succeeded in avoiding the total collapse of the world economy. Maybe we’re doomed to an escalating series of crashes—’87 stock crash, LTCM collapse, tech bubble, Panic of 2008—until something happens that the lenders of last resort can’t save us.

Looking at the health care debate in the United States Senate, I more and more think that all the talk about messaging and so forth is a bit overblown. What we have instead is a specific question of pressure. One could imagine a world in which instead of serving as Secretary of Agriculture, Tom Vilsack was running for the US Senate seat currently held by Chuck Grassley. Vilsack would probably lose such a race, but one reason he would probably lose such a race is that Grassley could badly undercut his campaign by reaching an agreement with Senate Finance Committee chairman Max Baucus to produce a bipartisan health care reform bill.

Similarly, if Janet Napolitano were running for senate instead of serving as Secretary of Homeland Security that might be giving John McCain some incentive to deal. Alternatively, if Senators George Voinovich, Judd Gregg, and Mel Martinez were running for re-election in 2010 they’d all be facing potentially challenging re-election battles and looking for an opportunity to play the bipartisan dealmaker role.

But none of that is the case. Really the only incumbent Republicans who I see being under any serious kind of political pressure are Susan Collins and Olympia Snowe. And neither of them are particularly vulnerable, with each having badly beaten reasonably strong challengers in recent cycles.

(cc photo by jdickert(

Ezra Klein and Tom Philpot kick around the issue of whether there’s any real evidence to suggest that eating organic food is healthier. I’m not an expert on this, but my understanding of this lines up with Ezra’s in reaching the conclusion that there isn’t really any compelling evidence here.

And I think it’s unquestionable that the strongest case you’ll find for organic is an environmental case rather than a person health one. Having less chemicals sloshing around in the water would very much be a good thing. But viewed from that perspective the dichotomy between organic and “not organic” doesn’t make a ton of sense. Achieving a 20 percent across-the-board reduction in the use of harmful chemicals would do more good than establishing a 10 percent market share for chemical-free products. This just becomes one of a million ways in which it’s exceedingly hard to make the world a better place through individuals consumer preferences. “Organic” works as a marketing tool because it’s nice and clear, albeit arbitrary. Nothing gets marketed as “slightly more organic than it was last week,” but small, cumulative changes are normally how the world becomes a better place. Ultimately to get that, you need better overall environmental regulation and not a system that depends on consumers being able to pick up on big, obvious clues.