Charles Payne
Merriam Webster is out with its top ten words of 2012. Heading the list is a tie between "Socialism" and "Capitalism." Maybe not a surprise that these words would make the list, but I'm somewhat taken aback there would be a tie at the top of the list. Anyone that believes capitalism brought the nation to greatness should be alarmed at the short-term reaction of those that think capitalism brought the nation to the brink.

There is a full-fledged war afoot, and maybe those that love capitalism and how it created the road map to the American Dream, are too busy working to notice - but they better wake up before it's too late. This particular list is heavy with influence from the political season chocked full of emotions and anger which lifted Schadenfreude and bigot near the top of the list.

Merriam Webster Top Ten Words 2012

1. Socialism & Capitalism
2. Touché
3. Bigot
4. Marriage
5. Democracy
6. Professionalism
7. Globalization
8. Malarkey
9. Schadenfreude
10. Meme

The last word on the list piqued my interest. It's one of those words we see pop up from time to time. Sourced to "The Selfish Gene" written by Richard Dawkins "meme" is defined as:

An idea, behavior, style, or usage that spreads from person to person within a culture.

I haven't read Mr. Dawkin's book (I ordered it last night for weekend reading), but from what I can gather, meme serves a purpose similar to genes with respect to passing on things among the human species that help us survive and adapt. The blessing from God has been the fact we aren't wedded to embedded data in our genes, so we don't have to fly south for the winter or be born and pass away as working drone ants, living in day to day drudgery in service to the queen.

Of course, survival of the species is paramount among all living things, but you have to wonder if our free will is more harmful than good. It goes without saying people are self destructive. I spent hours as a child watching nature. Scenes like giant red ants fighting smaller black ants captured my time and fed my imagination. Yet nature always seemed to have a corrective aspect that put things in order after such scenes. All those encounters were driven by survival, not nefarious hatred or petty jealously.

Now America is embroiled in a battle that could destroy the nation because we've hit a rough patch and forgotten how to correct it and get back on track. This notion of meme suggests we can actually forget about survival of the species and instead become a dependent species looking for thought, sustenance, and beliefs to come from government. In other words, move over drone ants, so Americans can get in line.

Darden Blinks

I made a big deal over how the mass media has begun to bully companies that dare make disparaging comments about the administration's policies or other aspects of the liberal agenda. Sure, such criticism has been around all along, but it's taking on a different twist, one that sees a deliberate attempt to negatively impact the earnings of such companies. The big targets are publicly traded companies which are more sensitive to negative publicity and the emotional whims of the stock market.

On Darden's (DRI) homepage visitors are greeted with these options:

> 2012 Community Service Report
> Sustainability
> 100 best companies to work for

Heck, it's easy to forget what the company does at first blush. Darden isn't alone, but these efforts on websites and all the wonderful multi-cultural faces smiling in their annual reports aren't going to be enough to stop the media barbarians at the gate. So, Darden blinked with management now saying it will not shift full time workers to part time in 2014. A Company spokesperson went so far as to say such moves at "test" restaurants may have already backfired, citing internal surveys showing employee and customer satisfaction declined.

Darden said the negative fallout from an announcement to make current full time workers part time employees already hit its bottom line and posed a threat going forward. But the mea culpa could doom future efforts from management to help its bottom line. Lower take home pay is a disincentive whether you're on minimum wage or earning more than $250,000 a year so that Darden survey isn't surprising. The company has larger issues with respect to the food it serves.
Once an unstoppable juggernaut, Olive Garden has seen an average monthly decline of 4.5% in foot traffic since March. That has been countered with price increases, but that's not smart business (just look at the Post Office, slashing delivery and raising prices). Darden is in trouble and doing what it has to do to weather this period. There is no way management wants to pay people less, but it might be that or fewer workers. In the past, each server handled four tables now they handle three and tip sharing has been adjusted so the Company has to pay less. In FY2007, labor was 32.5% of revenue and in the most recent quarter it represented 30.8% of revenue.

Cutting wages and raising prices is a flawed business model, but when it happens to all Americans who incidentally have suffered an average $4,500 cut in real wages during the last four years as gasoline has doubled, it is overlooked by the media. This double standard is awful and dangerous as it placates a sense of desperation and need for immediate change and answers. Businesses, unlike our government, can't spend more than they make into infinity. Some can borrow to stay alive and a few get bailed out but others make adjustments.

These are hard adjustments. I think Darden's management does take pride in being on the list of 100 Best Companies to Work For and doesn't want to jip its workers. The alternative will be fewer workers bussing more tables. That means more unemployed, more food stamps and more dependency. Ironically it might also mean a higher stock price, case in point, Citigroup (C) shares soared on news that the company is laying off 11,000 people. But for those seeking to replace capitalism with another form of government, higher stock prices while people suffer makes for great ammo.

In the end, I suspect Darden, where 75% of its 185,000 workers are already part time, will quietly shift more off full time duty but as quietly as possible.

Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.
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