Friday follies

I hope you have had a great week. Since there are several issues bouncing around inside my head, here is a summary review of the follies for the week.

The Brexit clock keeps ticking while the British parliament keeps placing their collective thumbs in their more southern orifices. A second Brexit vote would likely end with a different conclusion, but it would take more time than they have and would involve another decision by an uninformed public. Let me give Parliament its out, but it will take more courage than they have. They should either accept May’s terms or vote to remain. I would urge the Brits to remain, as I would hate to see Northern Ireland and Scotland leave the UK.

Here in the US, Trump’s campaign manager, Paul Manafort, was sentenced to 47 months in prison. While a much lighter sentence than many felt, he does have another sentence coming in another court. If Trump is as innocent as he proclaims, with the guilt of Manafort and other Trump associates, Trump is not very good at judging friends and associates. Yet, as I have witnessed time and again as a consultant, an organization takes on the personality of its leader. So, if subordinates are guilty of lying, cheating, and criminal behavior…

China’s slowing economy is impacting orher countries as expected. It was reported yesterday that China is buying less from abroad and using those dollars internally. The US trade deficit with China has grown not lessened the past year. And, the EU banks have softened economic projections as a result. What continues to surprise me is how little the US President understands how trade deficits and tariffs work. This may be the best metaphor of his Presidency as economics were supposed to be his strength.

Finally, populists are popping up in more countries in greater numbers. To me, a name that implies a broader appeal should not give greater license to spread hate and bigotry. In spite of all of our many faults here in the US and some leaders who need to find a conscious, we have benefitted greatly from being a melting pot. Diversity is a strength. I fully understand the need to govern the numbers of people immigrating in, yet painting all newcomers as evil, is not appropriate. What frustrates me is issues over immigration should be fact-based and reflective of the country’s mores and ideals and not sold on fear.

That is all for now. I know I have overlooked a great deal. Have a great weekend.

 

 

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Farm bankruptcies on the rise

There have been numerous stories on the rise in farm bankruptcies in 2018. Picking one from December 1, 2018 in the Lincoln Journal Star by Matt Olberdin called “As ag economy continues to struggle, farm bankruptcies rise,” through October, bankruptcies in a seven state region including and around Nebraska are up 45% compared to all of 2017.

Trade issues and low crop prices are two main issues driving down farm incomes. Coupled with rising interest rates and property taxes, and it is a tougher road for farmers. Per PBS Newshour, trade issues means tariffs getting in the way of the farmers’ markets.

These farmers use Chapter 12 bankruptcy that makes it easier to file and reorganize. This approach allows a higher debt limit as well. Per The Wall Street Journal, farm bankruptcy filings are the highest they have been in ten years.

As with the shutdown, real people are impacted by ill-conceived decisions by the President. Loyalty to a President becomes tough when you cannot feed your family and may lose your livelihood. With the tariffs blocking markets for the farmers’ products, the buyers must look elsewhere. These farmers will have to dump product or let it go to waste.

This is a key reason economist say trade wars cannot be won. More people lose than win on targeted tariffs. Yet, this does not seem to bother the man in the White House. That is troubling and sad for our country.

America’s Top 40 – 40% turnover that is

Every Sunday for many years, Casey Kasem would play America’s Top 40 pop songs. Earlier this week, NPR reported another, but ignominious top 40. The current White House has experienced an unheard of turnover rate of 40%. In other words, four out of ten staffers who were on the payroll a year ago have departed.

To add some seasoning to this, two of the most difficult jobs to keep people are customer service representatives and bank tellers, which often see turnover rates at or above 40%. So, to see similar turnover is alarming. But, how does this rank to other White Houses?

Earlier this year, an article appeared in the Brookings Institute webpages called “Why is Trump’s staff turnover higher than the five most recent Presidents?” by Kathryn Dunn Tenpans. She focused on A team turnover, but the turnover problem is pervasive. Per the article, “President Trump’s A team turnover is record setting – double the previous leader, Reagan, and more than triple his immediate predecessor, Obama.”

Why is this important? There is a huge loss of productivity in those that leave as  well as those who replace them, as they get up to speed. Plus, there is downtime for the managers as they backfill and take time to interview, hire and coach. In some of my previous work in HR for a large bank, i used average productivity ratios and turnover by group to estimate the cost of turnover at roughly 1 1/2 times the compensation expense of the departed people.

Per the Brookings article, “while some turnover is expected and possibly beneficial, excessive turnover portends a problem.” This data is relevant with more than a few stories about the low morale in the White House. Several sources have cited feuding factions and jealousies as well as a leader who perpetuates and accentuates a highly toxic environment.

When people are not productive in jobs of import, it is harmful to their efforts. It is also harmful to our country. The President has been covered extensively over the years by financial reporters and biographers. His sales skills are envied, but the same cannot be said for his management skills. Trump has said on more than one occasion that he likes to pit  people against each other and does not mind the chaos. Well, that is an absolutely horrible management approach. And, the inconsistent messaging from the White House reveals as much, as well as its turnover.

A new phone scam

One of the downsides about having a phone is getting phone scam calls. The latest scam is for the caller to leave a recorded message that does not include your name but says “You are a person of interest in a formal proceeding. We have tried to contact you several times, so please call this number to discuss this issue.”

This is a scam. I am certain someone at the number I am asked to call back would ask me to wire money to make it go away. If I was a person of interest, they would not be calling me.

This serves as a reminder of other scams. Top of mind, here are a few to watch out for:

– IRS Scam: Someone will call leaving a message that you owe back taxes and the IRS will seek legal action to collect. The IRS will send you a letter if there is an issue with your taxes.

– Grandparent scam: The caller will pretend to be a grandchild and wait for the person to give the caller a name of a grandchild. The caller then assumes that identity. Typically, the faux grandchild says they have been in an accident and need money wired.

– Microsoft scam: This scam uses a caller who says Microsoft has detected that you are having computer problems. They want access to your computer at which time they will glean important financial information and passwords.

This does not address aggressive marketing attempts where the caller appears to be your credit card company. They are not really, but just want to issue you another credit card. It also doesn’t address other unscrupulous schemes where callers pretend to be who they are not to sell another product. Nor does it address the email phishing attempts that will allow someone to commandeer your computer.

Be on the look out. People want your money. Too many will lie, cheat and steal. All it takes is one bite to get hooked on a bad deal for you. What are some of the other scams you have come across?

Keep these trends in the back of your mind

It is easy to get distracted with today’s news, where “he said what about that” gets way too much press. Here are few other trends that we should keep in the back of our minds. Some are more pressing than others:

  • Drug companies make money by inventing a recurring need and marketing a drug you need to take the rest of your life. Mind you, there are plenty of good reasons to invent new drugs to help, but there are a series of runaway trains being advertised daily. One trend I noticed is the “add-on” drug. What I mean by this is you may be taking a recurring drug for a condition that works just fine. But, the company or even another company comes up with a supplemental drug that makes that drug a little better. Or, in the case of opioids causing constipation, there is a drug to help you with that. Suggestion: Speak with your doctor and do some research.
  • Your data will never be fully protected and safe online. We should do everything in our power to limit what is out there, but hackers are way too sophisticated and diligent. I applaud the security folks greatly, as they are tasked with a hard job. And, as I mentioned in an earlier blog, some apps like Facebook make money selling access to your information. Unless they change that model, your data will be exposed. Suggestion: Know what data you have out there and decide if you want to limit any of it. Do not use wi-fi in public places to do sensitive financial transactions (banking, credit cards, etc.). A security person said using a hotel’s wi-fi is like picking up a croissant off the floor and eating it. Change your passwords every so often, but make sure you can remember them.
  • Bottled water is a threat to our environment and your wallet. There are floating islands of plastic in the ocean as big as some states. If you must buy water, then recycle. Then there is that cost thing. Much cheaper is buying a filtered water pitcher and keeping it filled in the refrigerator. Some major named water sellers simple use purified tap water with additives. So, why not cut out the middle man. Suggestion: Check out how much you spend on bottled water or even soft drinks each month. Filtered refrigerated water (either from your door or pitcher) will save you money and the environment. Plus, if you reduce the number of soft drinks by drinking water, it will do the above, plus improve your health.
  • An authoritarian type leader tends to use a lot of false bravado. It is my view that the amount of bravado is highly correlated with the amount of lying. Think Trump, al Assad, Putin, Kim, Duterte, Maduro, etc. Suggestion:  Take everything said by these people with a grain of salt. I assume their comments are untrue and work back from there. Plus, do your homework and don’t be made out to be a fool. As Mark Twain said, “It is easier to fool someone than to convince them he has been fooled.”
  • Speaking of correlation, larger family sizes are highly correlated with a propensity toward poverty (this one is not just my impression). I read again this morning the solution to poverty is smaller family sizes, yet the source also denies the need for family planning funding. Another variation is there are too many single parent families. Again, family planning helps, but also marriage counseling with 1/2 of marriages ending in divorce. Suggestion: We need to avoid stating obvious problems as if that statement will solve them. We must do something about the problems. Data reveals states that have robust family planning funding have fewer unwanted pregnancies, fewer healthcare costs, fewer STDs and less poverty.

What are some trends you are seeing? Please offer a suggestion as well.

Sustainability

Sustainability is an underappreciated word. It is essential to most aspects of life, such as exercise, relationships, saving, or business or governmental decisions.

Beginning with exercise as an example, you need to start out like you can put out. Think what you are trying to accomplish and do sustainable exercises. I used to jog often, but my efforts would wane and I would need to start again.

Now, I exercise daily after I shower for about fifteen minutes altering the routines each day. They are a series of Yoga, Pilates, isometrics and light weightlifting. I balance that with 2 to 3 mile walks or hikes and yard work. My goal at age 59 is to be flexible and toned able to get around on my own for the rest of my life.

The same holds true with financial decisions. A word of advice is pay over time what your budget can support. Save with each paycheck to create a dollar averaging effect that is not hinged on stock market rises and falls. Be wary of buying on ego – buy on sustainability (master bedroom downstairs will become a must at some point and most cars and SUVs look similar no matter the price).

Our government could learn this as well. We are borrowing from our future to make a long running pretty good economy a better one. We are on an unsustainable path toward debt and we have exhausted a few measures that would let us recover from the inevitable fall.

We are reversing a trend of treating our environment better by removing some needed regulations and allowing polluters to pollute more. We are peeing in our own swimming pool. At some point, there is a financial and health reckoning with these environmental degradations.

Sustainability is the key. It may be a boring word, but it is an essential one. Start out like you can put out.

A little bit of this and that

It is a rainy Sunday, so it is a great day to drink coffee and read. Since I am struggling for a longer post subject, here is a little bit of this and that for your reflection and thoughts. In no particular order:

There are many people who will tell you what is wrong with the Middle East, but I don’t believe it is a solvable problem. There are too many passionate religious and tribal differences that cross borders. Unless like minded people had control over their situation, did not need to rely on others and could respect the rights of others, peace is simply not achievable. In my simple view, the best anyone can achieve is to place lids on simmering pots on a stove.

The global economy is expected to grow by 3.9% each of the next two years, up from slightly lower results in 2016 and 2017. Yet, Christine LaGarde, the head of the International Monetary Fund, cautioned at Davos last week over concerns of socio-economic inequity and the rising debt in the US. Not everyone is benefitting from the growth which will cause greater uncertainty and unrest.

In a very interesting and not unexpected development, Canada and other nations completed the TPP, which is the Asia-Pacific trade agreement the US exited, When the US tried to negotiate a bilateral agreement with Japan, the Japanese trade leaders suggested the US reconsider the TPP instead. The US finds itself on the outside looking in. I find it interesting that the US President said in an interview which will air tonight that he would reconsider the pullout from Paris. It is hard to have a relationship when you are not in the room with others.

On a related subject, if Brexit follows through with the commitment to leave the EU, other cities will continue to benefit from EU headquarters migration from London. Paris, Dublin and Frankfurt are each benefitting from conpanies moving EU headquarters. A softer Brexit will help reduce the migration, but it will continue.

I guess if there is a theme to all of these subjects it is working together across country borders and regions within is more productive than going it alone. Yet, one thing remains true – collaboration is hard work. It requires give and take. If one party gets everything it wants, then the others will not, so detente is harder. So, when I hear someone who likes to win say an agreement is a disaster, I don’t put as much credence in those comments. Lifting all boats makes more money for everyone. A man won a Nobel prize for this concept. So, let’s work hard together for peace and prosperity for all. It beats the hell out of the alternatives.