Longform’s Best Business Stories of 2011

Longform.org's guide to the greatest long articles ever written.
Dec. 29 2011 6:35 AM

Longform’s Guide to the Best Business Stories of 2011

Postal service woes, strip mall casinos, and more great writing about money.

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This week, we’ll be sharing our favorite articles of the year on Slate. For our full list—including the top 10 stories about sports, politics, tech, and more—check out Longform’s Best of 2011. —The Editors

James Meek • London Review of Books

The brave new world of privatized postal services:

“Somewhere in the Netherlands a postwoman is in trouble. Bad health, snow and ice and a degree of chaos in her personal life have left her months behind on her deliveries. She rents a privatised ex-council flat with her partner and so many crates of mail have built up in the hallway that it’s getting hard to move around. Twice a week one of the private mail companies she works for, Selektmail, drops off three or four crates of letters, magazines and catalogues. She sorts and delivers the fresh crates but the winter backlog is tough to clear. She thinks her employers are getting suspicious. I counted 62 full mail crates stacked up in the hall when I visited recently. There was a narrow passageway between the wall of crates and her personal pile of stuff: banana boxes, a disused bead curtain, a mop bucket. One of the crates has crept into the study, where the postwoman’s computer rears up out of her own archival heaps of newspapers and magazines. Should these two streams of paper merge they would not be easily separated. The postwoman hasn’t given up. She had a similar problem with the other private mail company she works for, Sandd, a few years back. ‘When I began at Sandd in 2006 I delivered about 14 boxes of mail every time,’ she said. ‘I couldn’t cope and at Christmas 2006 I had about 90 of these boxes in the house. By New Year’s Day we had 97. There were even boxes in the toilet.’ The postwoman is paid a pittance to deliver corporate mail. She hasn’t done her job well, yet so few people have complained about missed deliveries that she hasn’t been found out."

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Staff • Der Spiegel

How the utopian dream of a common currency turned tragic:

"The promises of the euro were recorded in the Maastricht Treaty. It was to be a currency that would make Europe strong in a competitive globalized world; that would bring the European economies closer together; that would oblige countries to limit their debts and deficits; that would guarantee that no country would be liable for the debts of another; and that would promote political unity.

“And the details? Well, they would be ironed out later.”

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Clare Baldwin, Melanie Burton, Pratima Desai, and Susan Thomas • Reuters

Why Goldman Sachs is hoarding aluminum in Detroit:

"A string of warehouses in Detroit, most of them operated by Goldman, has stockpiled more than a million tonnes of the industrial metal aluminum, about a quarter of global reported inventories.

“Simply storing all that metal generates tens of millions of dollars in rental revenues for Goldman every year.

“There's just one problem: much less aluminum is leaving the depots than arriving, creating a supply pinch for manufacturers of everything from soft drink cans to aircraft."

George Packer • The New Yorker

The prosecution of former hedge-fund star Raj Rajaratnam:

"Rajaratnam’s view of human nature was not so different from that of Willie Stark, in 'All the King’s Men': 'Man is conceived in sin and born in corruption and he passeth from the stink of the didie to the stench of the shroud.’ If there are examples of people whom Rajaratnam unsuccessfully tried to corrupt, they have not surfaced in the voluminous public record on Galleon. Once, his brash younger brother, Rengan, put out a feeler for inside information to a friend from Stanford’s business school who had become Kumar’s protégé at McKinsey. Rengan gleefully relayed to his brother that the young associate was ‘a little dirty.’ When Rajaratnam shared this assessment with Kumar, Kumar asked him to lay off the associate, not wanting his protégé to be sucked into Galleon’s corruption. Later, Rajaratnam laughed with his brother over the episode. 'I just wanted to show how your friend is—‘

“ 'Scumbag!' Rengan said. 'Everybody is a scumbag!' "

Michael Lewis • Vanity Fair

How a nation went bankrupt:

"Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places—trophy companies in Britain, chunks of Scandinavia—the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.”

Jack Hitt • New York Times Magazine

How the lowest end of American retail does business:

"We are awakening to a dollar-store economy. For years the dollar store has not only made a market out of the detritus of a hyperproductive global manufacturing system, but it has also made it appealing — by making it amazingly cheap. Before the market meltdown of 2008 and the stagnant, jobless recovery that followed, the conventional wisdom about dollar stores — whether one of the three big corporate chains (Dollar General, Family Dollar and Dollar Tree) or any of the smaller chains (like '99 Cents Only Stores') or the world of independents — was that they appeal to only poor people. And while it’s true that low-wage earners still make up the core of dollar-store customers (42 percent earn $30,000 or less), what has turned this sector into a nearly recession-proof corner of the economy is a new customer base. “What’s driving the growth,” says James Russo, a vice president with the Nielsen Company, a consumer survey firm, 'is affluent households.'"

Felix Gillette • Businessweek

How slot machines snuck into the mall:

“It's a Wednesday morning in mid-March, and the Bakers are sitting inside Jacks, a new type of neighborhood business that is flourishing in shopping malls throughout Florida—and across America. Jacks bills itself as a 'Business Center and Internet Cafe,' but it looks more like a pop-up casino.

“Jacks is about the size of a neighborhood deli. There is a bar next door and a convenience store around the corner. Inside, jumbo playing cards decorate the walls. The room is filled with about 30 desktop computers. Here and there, men and women sit in office chairs and tap at the computers. They are playing "sweepstakes" games that mimic the look and feel of traditional slot machines. Rows of symbols—cherries, lucky sevens, four-leaf clovers—tumble with every click of the mouse.

“John Pate, a 50-year-old wearing a Harley-Davidson T-shirt, says he is wagering the equivalent of 60 cents a spin. 'This place is pretty laid-back,' says Pate. 'You can come here and get your mind off everything. You're not going to win the mortgage. You're not going to lose the mortgage. It's pretty harmless.' "

Jeanne Marie Laskas • GQ

The lives of illegal-immigrant fruit pickers:

"Wash the apple before you bite into it, because that's the way you were raised. Germs, pesticides, dirt, gunk, it doesn't matter—just wash it. The fingerprints, too, go down the drain with the rest. It's easy to forget that there are people who harvest our food. Sometimes, maybe, we are reminded of the seasons and the sun and the way of the apple tree, and if we multiply that by millions of apple trees, times millions of tomato plants, times all the other fruits and vegetables, we realize, holy potato chips, that's a lot of picking. Without 1 million people on the ground, on ladders, in bushes—armies of pickers swooping in like bees—all the tilling, planting, and fertilizing of America's $144 billion horticultural production is for naught. The fruit falls to the ground and rots."

Matt Taibbi • Rolling Stone

The case for criminal charges:

"Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn't a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it's an advanced-stage, 1,100-pound medical emergency who hasn't left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law."

Malcolm Harris • n+1

On the emerging student-loan bubble:

“Since 1978, the price of tuition at US colleges has increased over 900 percent, 650 points above inflation. To put that number in perspective, housing prices, the bubble that nearly burst the US economy,  then the global one, increased only fifty points above the Consumer Price Index during those years. But while college applicants’ faith in the value of higher education has only increased, employers’ has declined. According to Richard Rothstein at The Economic Policy Institute, wages for college-educated workers outside of the inflated finance industry have stagnated or diminished. Unemployment has hit recent graduates especially hard, nearly doubling in the post-2007 recession. The result is that the most indebted generation in history is without the dependable jobs it needs to escape debt."