Let’s speak plainly

After watching a few newscasts with politicians using words that sound nice, but lack substance, I am in the need of some plain spoken comments. Here are a few to start the conversation. Please let me hear some of yours.

The US President and Congress are speaking of Tax Reform, but what I am hearing are tax cuts. We have a debt of $20 Trillion and an annual budget deficit. There is no way in hell to reduce either with lower tax revenue. We need spending cuts and tax increases, but no politician has the stomach to do what is needed.

Steve Bannon is the latest White House departure to say the President likes for his direct reports to compete for his attention and favor. People say this is how he likes to run his businesses. Two comments. First, I have witnessed this model as an employee, manager and consultant and it is a highly unproductive model. Second, biographers and financial reporters have all said Trump’s business record is spotty. He is a great salesman, but the word great is rarely used to describe his management style. It shows in the level of chaos and incompetence in the White House. General Kelly has helped, but it is a tall hill to climb.

While I understand the reasons for Brexit, I have been very concerned by the consideration and vote to exit the EU. From the outset, financial experts forewarned of the British leaving the EU. They spoke of EU headquarter movement, less investment, and less collaboration. This is already occurring in plans of the exit. I understand Former PM Tony Blair has an idea to govern immigration better without leaving – my strong suggestion is to hear him out.

Along these lines, those who want to retrench from global markets need to know a truism – it is very hard to shrink to greatness. I understand middle income workers in flourishing economies feel the brunt of globalization, but a large part of that is due to and will continue to result from technology gains. Retraining is a must. Shoring up wages is a must. But, we need to be careful about retrenching from global markets, that also add jobs here.

What are your thoughts? Do you agree with these comments? If you do not, let me know why?

 

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Erecting barriers does not make the world safer

Our new President has been in office less than two months and the world is a less safe place than it was before his tenure. So, is the United States, which is the opposite result of his stated goal.

Erecting barriers, both physically and verbally, perpetuates a we/ they culture. Demonizing groups of people and specific individuals causes disenfranchisement. Banning folks creates segregation and less integration of thoughts, cultures and ideas. Tolerating and fueling bigotry promotes narrow-minded thinking and less collaboration. And, a jingoistic national bent derails international commerce and security.

But, this is not just a US phenomenon. Like-minded folks in other countries are demonizing people who look and worship differently than they do. I recognize fully there are concerns and conflicts with influx of refugees. Yet, demonizing folks does not help resolve the issues. The resulting nationalistic thinking makes collaboration and trade more difficult, as well as finding ways to resolve problems.

Breaking down barriers makes us safer. The more commerce we do across borders, the more indebted we are to each other’s success. The more commerce and common goals makes us more secure. The greatest threat to terrorists is multi-cultural success and freedoms.

And, as I wrote recently, coexisting leads to more profits. So, we should reduce barriers not erect them. We should challenge bigotry and exclusion. We should ask the same of our leaders.

Not voting diminishes your right to protest

In the days following the Brexit vote, many young adults took to the streets in protest. They said if we had known this might occur, we would have voted. On his comedy news show “Last Week Tonight,” John Oliver chastised his former countrymen. This is how it works. You don’t get a do over.

Fast forward to the US Presidential election. Young adults have taken to the streets in protest over Donald Trump’s victory. Following Oliver’s cue, this is why we have votes.

So, if any protestors did not vote, go home. Your abstinence from the voting process was a vote for the negative outcome you are now protesting.

If you made a protest vote for a third party candidate or wrote in a name, your vote may make you feel better, but likely got Trump elected. Everyone who voted for Jill Stein, I want you to tell me how you feel when Trump makes due on a promise and tears up the Paris Climate Change Accord and guts the EPA.

Most of Stein’s votes likely came from frustrated Democrats and Independents who wanted Bernie. I understand, but allowing Trump to get elected is an insult to Bernie who seeks the truth. Bernie heavily influenced the Democrat platform,

I am disappointed in this outcome and worry about our country and planet. I will support our new President and pray he has success. But, I will be doing my part to civilly and rationally push back when he is taking us down a wrong path. That is how it works. We vote and we advocate.

Sunday reflections

I hope your Sunday is going well. I have a few reflections for your review and digestion in no particular order.

I find it telling that ISIS fighters are hiding behind human shields of the people they captured. These terrorists have bastardized a peaceful religion and have brainwashed young people to do their dirty work. I think this last line of defense speaks volumes.

The Brexit debate continues leaving a lot of leaders looking for antacid. Reasonable exit from the EU looks harder to come by and many are calling for a new vote, which will unlikely happen. Scotland continues to evaluate and position itself for a potential exit from the UK if Brexit happens. I understand the reasons for those wanting Brexit, but unfortunately the price of retrenchment might be too dear.

On the other side of the world, President Duterte of the Philippines has said God wanted him to start cursing less. He has been colorful in telling allies to go #$*% themselves and calling them sons of ^@#$, which has left his ambassadors scrambling. By this way, this is what a Donald Trump presidency would look like in some respects. But, apparently, God did not tell him to stop having drug addicts and peddlers murdered, his solution to drug crime.

In all of the talk about Donald Trump’s “Access Hollywood”  tape of his approach to sexual assault and his discussion on Howard Stern’s radio show about his walking in on undressed beauty pageant contestants because of his ownership, one story is not being discussed. While twelve women have accused him of unwelcome advances, the fact he has a pending judicial conference in December for the alleged rape of a thirteen year-old girl is not mentioned much if at all. I realize it is “alleged,” but enough validity has been given the allegations that it is moving forward to this stage.

Speaking of trials, Jill Dennison has done an excellent job of summarizing the over 4,000 lawsuits that Trump has had in his 45 year career (see link below). He has seventy-five pending lawsuits, three of which are class action lawsuits against Trump University for alleged misrepresentation. This is on top of the investigation into his Trump Foundation for self-dealing, meaning he allegedly used the funds for business and personal purposes.

While Hillary Clinton’s emails to her aide Huma Abedin are being reviewed as a result of the FBI discovering them as they investigated Abedin’s ex-husband/ ex-Congressman Anthony Weiner for his unique version of sexual assault via sexting, it reminds me that women are victims in multiple ways by powerful men. Whether it is Congressman Weiner, Trump, Roger Ailes or Bill Cosby, your wealth and power do not give you the right to sexually assault women.

Finally, I find it amusing that Trump claims the election is rigged against him when he is reading from daily email feeds from hacked emails of Clinton’s staff. His staff has an active voter suppression campaign underway to dissuade African-Americans, Latino-Americans and women voters from voting at all. Also, the man has benefitted from more publicity than all other candidates including Clinton.  Plus, his party has had five states’ voter suppression laws ruled unconstitutional this year. So, saying it is rigged against him is a huge stretch.

Call me crazy, but I would take the word of Trump’s five biographers, one of whom Trump unsuccessfully sued. All five agree on a key point – do not vote for this man.

Sue, Sue, SUE!!!

 

Two misconceptions need to be challenged

“Innovation is portable,” said David Smick, an economic advisor to Congressman Jack Kemp and Presidents Ronald Reagan and Bill Clinton, in his book “The World is Curved.” In essence, innovation will occur where it is welcome and the initial jobs will be created around it. We should not lose sight of this observation as we discuss our economic future.

Smick surprised many when he noted in his book the similarities in Bill Clinton and Ronald Reagan, who were the number one and three best job creating Presidents, in that order. They both loved global trade and hated deficits. And, they were known for their collaboration with Congress, even with an opposite majority in power. Collaboration is essential to getting buy-in and understanding of the problem and possible solutions.

With this context, we need to challenge some notions that do not tell the whole story and, as a result, could lead us down the wrong path. We need to look at holistic causes to problems, so that we can address them effectively. Our problems are not solvable by bumper sticker solutions, no matter how loudly and forcefully they are espoused.

Here are two of those simplistic notions and challenges to think about:

Immigration is taking jobs away. This is far too simple a statement. Our history has been built on immigration, who have tended to be hard workers and spawned a higher relative percentage of entrepreneurs. As noted in the famous play “Hamilton,” by Lin-Manuel Miranda based on the book by Ron Chernow, immigrants tend to work hard to make it in our country, as they did not have such opportunity from whence they came. Our economy actually flourishes more with immigration. But, as we look to better govern immigration, we should look at the whole picture. And, on the subject of illegal immigration, a concerted study of the impact of curtailing such on certain industries – housing construction, landscaping, agriculture harvesting, etc. – is critical as we move forward with better governance.

Global Trade is bad for domestic jobs. Global trade is actual good for a domestic economy creating more jobs around the world and here. The downside is companies tend to chase cheaper labor and always have, but an even greater threat to jobs is technology advances. A CFO said in the book “The Rich and the Rest of Us,” an employer will hire no one if he could make it work. Yet, what creates jobs more than anything else is “customers,” per Nick Hanauer, a venture capitalist. And, more trade means more customers. When we look to better govern trade, we need to look holistically at the jobs created domestically versus the ones lost. The ill-fated Brexit decision failed to consider all of the foreign companies who have European Headquarters, distribution and manufacturing sites in the UK. These companies are now reconsidering locations should Brexit move forward.

Of course, we need to better govern immigration and global trade, but we must guard against throwing the babies out with the bath water. Let me close with three thoughts.

First, we cannot shrink to greatness. Retrenching from your global market share makes little sense.  Second, think of all of the foreign companies who employ people in the US like Michelin, BMW, Mercedes, Husqvarna, Doosan, Volvo, Nissan, etc. who do so to keep manufacturing near distribution of its goods to their customers. Third, as an example, Steve Jobs is the biological son of Syrian immigrants. Had he not been in America, would Apple exist today at all or as an American company?

We cannot govern off bumper stickers. Our issues are complex. People who tout such ideas are doing a disservice to the problem and citizens through false promises.

 

 

Fish on Friday – a few odds and ends

Although I am not Catholic, fish on Friday is not a bad thing to serve. In the South, all of the “meat and three” places serve fried fish as one of their main entrees. Of course, we like to fry every thing here, as it makes our sweet tea taste better.

Without any particular order, here are a few odds and ends to digest with your fish and chips.

John Stumpf, the CEO of Wells Fargo was forced to resign yesterday, effective immediately, after it was revealed their cross-selling culture led to employees setting up bogus bank accounts to meet extremely high sales goals. This fraud abuse was reported by more than a few employees over many years, but their complaints were ignored. These are not process improvement suggestions, these are “we are doing fraudulent things” red flags. By ignoring these complaints, Stumpf earned the right to be fired. A company takes on the personality of its leader. Apparently, his personality was to get me numbers irrespective of how.

I don’t know if Americans are paying attention to the Brexit train wreck that is occurring in the UK. The UK wants to negotiate a soft settlement, but the EU wants them to get the hell out. In an unheard of move, Japan released an open letter, asking for the Brits to move gingerly or not at all, as Japanese companies employ about 146,000 people in Great Britain and will move their EU headquarters from there to the main continent, if needed. The Brexit move was sold on false information, but one thing that was not discussed enough is all the business done in the UK because of the EU. As many smarter than me said a few months ago, if the UK leaves, it will be harming its economic growth for years and may result in Scotland and Northern Ireland electing to leave the UK and remain in the EU. It is not ironic that Ireland is seeing an uptick in Brits who are seeking citizenship and passports there, as reported by The Guardian.

Americans are making that same mistake as we talk about trade, as we have a significant number of major foreign employers who employ many Americans. Trade agreements are generally good for the global economies, but as they are evaluated, we must evaluate all aspects, including jobs created here because of them. The biggest culprit of manufacturing jobs declining is technology and it will only get worse. Training for new jobs is paramount, but job loss due to technology will become so significant, at some point, companies needs to evaluate whether it is better to have humans employed rather than robots. At the end of the day, people need money to buy things, so are you lessening your own market, if no one can afford your products?

Samsung is in deep do-do. Just before the Christmas and holiday seasons start, they released a product that catches fire when plugged in. And, when they realized their predicament, traded phones with their customers and those caught fire as well. Apparently, the smaller version of the new Samsung Galaxy 7 does not catch fire, but many will choose not to take that risk and buy an Apple I-phone or another product. It is bad enough that pilots are telling passengers to not turn on those Samsung phones when taxiing. Between the lawsuits and sales impact, this will be the gift that keeps on giving for several years.

Well, that is enough non-election news for now. Have a great weekend.

 

Retrenching into silos is the exact opposite of what is needed

With the advent of more terrorists’ activities around the globe and the significant refugee crisis, nationalistic and jingoistic behaviors have taken more solid footing. With the backlash in some European countries, the Brexit vote and the rise of Donald Trump as an unlikely candidate for US President, show that protectionism is selling these days as a concept. These folks want to build actual and proverbial walls, rather than bridges.

Yet, that is precisely the wrong behavior needed. These so-called leaders feel if we segregate and retrench into our own little worlds, this cocooning will make everything better. What these so-called leaders fail to tell you is the significant benefits with being aligned, working together and doing commerce with each other. Economic trade breaks down barriers, as countries do not want to upset the financing of their economy and will work past governing differences.

President Abraham Lincoln did not coin this phrase, but he capitalized on it – keep your friends close, but keep your enemies closer.  Lincoln added several adversaries to his cabinet when elected. His view was if he could keep tabs on his opposition and argue with them, he could keep a lid on dissent at a time when dissent was in vogue. President Teddy Roosevelt was very open with reporters, in part because of his ego, but in large part to have the reporters be his eyes and ears. He would have them go speak with his department heads to learn what was going on.

Commerce breaks down barriers. Not only will we make more money by co-existing, we will be safer in turn. That is a concern of the Brexit vote, as the UK being a part of the EU makes the world safer and aids the economy of both entities. Like the UK, there is much to be gained in the US with the global economy, especially with companies who employ people here. Just here in Carolinas, there are multiple hundreds, if not thousands, of foreign companies who have US presences here, be it a North American headquarters or a major plant. BMW, Mitsubishi, Michelin, Doosan and Husqvarna come to mind.

We should not lose sight of breaking down barriers abroad. I have been a staunch supporter of doing trade with Cuba and Iran. The countries want to do business with us and we are well positioned to leverage that travel and trade. Just with Cuba and its 11 million people, it will be like adding a 51st state to our US economy. With Iran, of course, we need to keep our eyes open, but the median age of Iranis is age 35. We have a chance to create new economic paradigm with Iran which will live beyond the older regime. Plus, being closer to Iran will allow us to keep more tabs. This is the  best example of what Lincoln did.

The candidates who have touted building walls and retrenching are not being very open with the whole picture. They are using fear and an incomplete picture of reality. Companies have always chased cheap labor and as one CFO said in the book “The Rich and the Rest of Us,” if companies could get by with hiring no employees, they would. The greater threat is technology improvements as a new plant is not going to have 3,000 employees, it will have 300. On the flip side, Nissan in Tennessee and Mercedes in Alabama employ a great many American workers, which is not talked about enough as a benefit of globalization.

If we retrench, we will be reducing markets for goods and services. A venture capitalist once said what creates jobs is not owners, but customers. The fewer the customers, the fewer the jobs. But, with that said, there are elements of truth that workers need to ask more of the employers who have suppressed wages and let people go, to hire younger and cheaper workers. Companies are quick to hire cheaper, but need to be reminded that we employees are important and customers, as well.

I am reminded that two of the top three jobs creation Presidents had two things in common. Bill Clinton, the number one job creator at 22.8 million jobs, and Ronald Reagan, the number three job creator at 16.1 million, were both collaborators and advocated global trade, as reported in “The World is Curved” by David Smick, who was an economic advisor to both. Creating markets for trade and opening up our markets to others, in my view, is one of the best things a President can do.

Globalization is extremely important, but we need to manage it better. Throwing the baby out with the bathwater is something we must guard against. So-called leaders who are advocating this very thing need to be asked more questions. As they are not telling you the whole story.