Telling It Like It Is

THE ENTERPRISE--Time for Action

THE ENTERPRISE

—The Economy--Still Going and going and ....
The US economy is like the Ever-ready Bunny.  It keeps going and going and going...for now.  That's good, because when the batteries finally start to run down, they lose power fast and the bunny stops and drops over "dead" (batteries, that is).  Until then, enjoy the ride, but keep your powder dry, because the end is just over the horizon unless or until someone(s) in DC really shuts off the spending tap and start acting like responsible adults.

There are several management principles embodied in the paragraphs that follow. These apply in business as well as in government.
1)  When you're hot...do smart things and be a little humble... or you'll soon find out you're not!
2)  Einstein said "We can't solve problems by using the same kind of thinking we used when we created them."  Perhaps the Bush White House should re-read this one.  So should companies that think the management that got them in trouble is going to get them out of trouble.  Won't work.
3)  Stop problems at the source--"nip them in bud"--and establish metrics that reinforce the correct behavior--not vice versa.  The remember that tough problems take tough solutions, and "the behavior rewarded is the behavior that will be repeated!"

1—The waste of "political capital" (And 2006 election projections--see below)
George W. Bush spoke of the "political capital" he had after defeating John Kerry.  He has spent the last 2-1/2 years frittering it way.  With the lowest approval levels of a President in recent US history, Bush has done plenty wrong, but even the things his administration did (or tried to do) right (and despite his detractors, there were a number of "good things")...they DID THEM WRONG...OR AT LEAST HANDLED THEM POORLY.  I could make a list, but you know them.  Not all of them are the startling, significant issues the mainstream media made of them, but most of them could have been handled sooo much better by Bush's team of "we're right, you're wrong" insiders.  Even though they are right a lot, neither the opposition nor most of the American public likes that kind of treatment, and the consequences will be large.

2—White House Re-staffing--too little, too late (for 2006 elections that is) but worth continuing
Changing the chief of staff and press secretary are both fine moves.  But they don't really make policy directly.  Changing Rumsfeld now is the wrong thing to do, given the deplorable "break of ranks" by retired generals.  What happened to the military ethic of loyalty to the chain of command?  Whether they are right or wrong is irrelevant.  They were out of line.  Period.  Anyone who thinks they weren't, go to the back corner of the classroom for detention.  There are lots of places where speaking out against authority figures is perfectly OK.   In fact, we've made it into a nearly destructive mania in the US.  But NOT IN THE MILITARY, and not people of this rank.  Shame on them.  We have enough trouble without this kind of thing PUBLICLY undermining the confidence of our fighting men.  (They can use terms like FUBAR privately all they want, but you don't go public with it.)  That said, there are plenty of spots Bush could re-staff that would both bring in fresh insights and send a clear message to the American people--"we admit we screwed up and are going to make some changes."  C'mon W...keep on with replacements--but make them meaningful, not token.

3—Somebody woke up in DC!  Now can they get it done?
Finally, the Bush administration and Senate Leader Frist have a good idea that WILL make a difference in the US.  Raise the CAFE (Corporate Average Fuel Economy) standards and raise them a bunch.  Quit pussy-footing around and do it NOW!  The technologies exist to make more fuel efficient autos right now and  if the known methods are combined into new vehicles, I'm betting we can save a huge amount of energy that we are paying OPEC for--money that largely funds our adversaries in the Middle East.  Want to bet the House tries to water down the proposed bill?  It's an election year and they are all up for re-election.  I wonder if they will figure out that average Americans know this is a good idea.  C'mon Congress--get it done.

3—Tax Gas Guzzlers, both the Gas and The Guzzlers
The US gas prices are about 1/2 that of rest of the developed world.  Why?  We don't have nearly as high a tax on gas.  If we are serious about ever balancing the budget AND energy independence a good way to start is to stick a healthy (but not ridiculous) added tax on gas, and the higher the octane, the higher the tax.  (Keep regular fuel taxes lower for the less well-off to buy.)    Then slam a tax on any vehicle that gets lousy mileage, as part of the CAFE increase bill. If you want to drive a Hummer H2, fine, do it.  This is America, and you can. You'll just pay an extra ANNUAL fuel consumption tax in addition to buying $4/gallon fuel to fill that big gas tank.  Take part of the proceeds and use it to bring down the debt run up by the Iraq War, and take the other part and use it to drive a "Man on the Moon" level project to make the US independent of foreign oil and its tyrants like Iran (and OPEC in general) and Venezuela's Chavez, et. al.

3—Illegal Immigrants are...ILLEGAL...what's so complicated about that?
Any time we let someone break a law and do nothing about it, we might as well repeal the law, because the message is clear--it doesn't matter if it's illegal.  I know we can't reasonably round up and deport 11-12 million illegal immigrants already here, but we can sure as hell make a serious attempt at finding and punishing those who are flagrantly ignoring the law.  The demonstrators can have a fit all they want, but until they can chant in English and write their signs in English, as far as I'm concerned, they can go back to wherever Spanish (or whatever other languages they are using) are the native tongues.

The Pareto Principle usually applies, so the vast majority of the illegals are concentrated in locales, jobs, industries, etc. So we can't deal with 11-12 million. How about nailing 1/2 of them and the employers who are "using" them?  A few "public hangings" (figuratively speaking, of course) send a loud and clear message.  But the punishment for the worst offenders cannot be a fine.  That's just money.  It has to be banning them from operating the facilities employing illegal immigrants in quantity--just like the EPA can do to polluters--shutting them down.  That WILL get their attention.

Of course Congressional phones will ring off the hook.   Frenzied lobbyists will be calling in every imaginable favor.  BUT, until someone takes significant action--and fast--these kind of problems will keep getting worse and worse.  We wring our hands over outsourcing of US jobs.  Has anyone calculated whose jobs those 11-12 million illegal immigrants are taking?  Even the ones Americans are too proud or lazy to do need to be available to American citizens first--then open up to others.  And Detroit's cries about CAFE standards killing them--don't matter--they're already almost dead now.  And GM is advertising how many cars it makes that get over 30 mpg--maybe it'll resurrect them.

Serious problems require serious, but strong action.   Now if somebody will just use a figurative cattle-prod on this Congress and this Administration, and whisper in the ear of the media to make American Energy Independence our version of the 1960's Man on the Moon, that will get things going.  If we quit buying Iran's oil, maybe they can quit claiming they need nuclear energy know how for non-military use.  And if we quit condoning the employment of illegal immigrants with a wink and a smirk and levy some serious penalties, maybe American employers will figure out the right behavior.  And maybe if we staff the White House with a few more people with the big H--Humility, instead of the other big H--Hubris, both our allies and our citizens will like our President more and our enemies less.

If you know anyone in a position of influence in Washington, DC--please forward this to them instead of the latest joke.   We might actually find one person who can start something positive happening.

Best, John

THE ENTERPRISE--Economy & China

THE ENTERPRISE

The US economic outlook is still OK in the short term (2006, mostly) but storm clouds are forming on the horizon as oil prices hit $75/bbl. and housing slows noticeably.  The oil peak is mostly due to refined products driving oil prices up, because during the recent oil surges, suppliers of refined products reduced inventories to use up and profit from older, cheaper materials, and now refineries are behind and can't catch up--which ironically gives them pricing leverage!  Gas prices edging back over $3 will hit consumer's discretionary spending again.  Interest rate hikes and slower growth and lower prices on housing will limit cash from refinancing and thus consumers will be forced to cut back, too, even as employment is fine.  Price hikes driven by commodities over the past year will slowly filter through to further erode purchasing power--although only by a little.

WARNING SIGNS ON THE HORIZON?
Leading indicators are starting to show some declines and the housing market is softening, which leads me to believe that there is a higher likelihood of a softness or a downturn in the US economy and some pull back in the stock market in 2007.  Interest rates are still climbing and the speculative housing flips are dropping dramatically, which dampens the prices of housing also also dampens the psyche of the housing market. Additionally, in economies that are prosperous and see the end of a housing boom,  construction jobs drop off and those people will not be able to find new jobs with the same high pay levels as construction.   But they'll still need to buy $3/gal. gas.

CHINESE LABOR SHORTAGES--TEMPORARY OR NOT?
Across the pond, the Chinese have an interesting phenomenon occurring--labor shortages.  These are not shortages from a gross standpoint--there are still plenty of Chinese workers.  These are shortages of qualified, skilled workers, and the same thing is happening there as everywhere else when this occurs.  The best workers command premium wages and jump jobs more often as competition to employ them intensifies.  According to the Institute of Contemporary Observation, a Shenzhen labor research group, there are 2.5 million unfilled jobs in Guangdong Province alone, and other major industrial provinces also have similar shortages.

Emerson Climate Technologies (Suzhou) General Manager says it's all he can do to keep his 800 employees from jumping ship to Samsung, Siemens, Nokia, etc.  Salaries in the southern city of Dongguan climbed to $160/mo. according to a recent Business Week story.  As this continues, Chinese employers face three solutions:  move further inland and train workers, move product mix to higher technical content/higher value products, or increase productivity or prices or both.  With an economy steaming along at 9-10% growth rates, annual wage increases are going up by similar amounts.  This is a replay of what happened 2 decades ago in Taiwan and Korea, albeit China has a much, much larger population base from which to draw new, cheaper labor, so it will proceed somewhat more slowly.

PLENTY OF PEOPLE DOESN'T EQUAL THE RIGHT SKILLS
The Chinese can "open the gates" and let millions of low skilled but ambitious, and motivated (and trainable) workers migrate from the countryside to the industrial cities.  This may be a temporary issue if it does, but it is still an issue for China business.   As reported (from McKinsey) in previous editions of THE ENTERPRISE, China is also graduating millions in areas such as engineering, finance, etc., but only about 10% of those graduates are qualified to work for a foreign, well developed company--but that is still a large number of ready talent.

Thus we have seen China suffer from three very real shortages in the past year, and these are shortages that will not go away easily:  1) energy, 2) commodity raw materials and now, 3) talent in the form of skilled labor.  Somehow, this seems like the normal progression of a large industrializing country--even though some thought it couldn't happen to China, and certainly couldn't start to happen this soon.  The faster rockets go up, the faster they burn through fuel and reach their apex.  Where China is on this journey remains to be seen, but signs of its "unlimited potential" are starting to show a few issues.

NO TIME TO CELEBRATE THOUGH--BUT STUDY HISTORY
Before anyone celebrates, these jobs will mostly not return to the US, where workers make $160 in a day or two, not in a 60 hour week, so the disadvantage is still 5:1 or more, and that's before counting huge US costs like benefits and socially regulated costs.  On the other hand, it is important to understand how countries like China change as they develop into world powers on the shoulders of their people.  The US did it a century ago.  Study your history books, because there is much to be learned about the future by studying the past.

ARE THE GENEVA CONVENTIONS OBSOLETE?
Finally, amidst the trial of Saddam Hussein and the continued debate about the treatment of captured terrorists, isn't it time to study the Geneva Conventions in light of how things have changed.  These were forged decades ago when countries/armies were fighting countries/armies, not an assortment of guerillas, terrorists and dissidents fighting skirmishes in which innocents are the most common victims.  Maybe we need to rethink what the humane--and practical--solutions are for this century, not the last one.  Times change and so must the rules.  And this is true in business as in war.

Best, John

THE ENTERPRISE--Easter Edition

THE ENTERPRISE

This is a special Easter weekend edition.  I have included  below three features.  The first piece appeared in THE ENTERPRISE within the past couple of years.  It is simply too good not to rerun.  The second has been circulating on the Internet for some time, but since I reached a landmark  birthday (65) this past week, it has special significance to me.  And finally, a short poem that I used to keep on the refrigerator until I remembered it so well, I didn't have to see it every day to know the truth of it.   I hope you enjoy these, and that you and yours enjoy a wonderful Easter weekend.   

May God bless you all,
John

A CARROT, AN EGG, AND A CUP OF COFFEE.
You will never look at a cup of coffee the same way again.

    A young woman went to her mother and told her about her life and how things were so hard for her. She did not know how she was going to make it and wanted to give up. She was tired of fighting and struggling. It seemed as one problem was solved,a new one arose.
    Her mother took her to the kitchen. She filled three pots with water and placed each on a high fire. Soon the pots came to boil. In the first she placed carrots, in the second she placed eggs, and in the last she placed ground coffee beans. She let them sit and boil, without saying a word. In about twenty minutes she turned off the burners. She fished the carrots out and placed them in a bowl.
    She pulled the eggs out and placed them in a bowl. Then she ladled the coffee out and placed it in a bowl. Turning to her daughter, she asked, "Tell me, what do you see?"
    "Carrots, eggs, and coffee," she replied.
    Her mother brought her closer and asked her to feel the carrots. She did and noted that they were soft. The mother then asked the daughter to take an egg and break it. After pulling off the shell, she observed the hard-boiled egg. Finally, the mother asked the daughter to sip the coffee.  The daughter smiled as she tasted its rich aroma.
    The daughter then asked, "What does it mean, mother?"
    Her mother explained that each of these objects had faced the same adversity boiling water and each reacted differently. The carrot went in strong, hard, and unrelenting. However, after being subjected to the boiling water, it softened and became weak. The egg had been fragile. Its thin outer shell had protected its liquid interior, but after sitting through the boiling water, its inside became hardened. The ground coffee beans were unique, however. After they were in the boiling water, they had changed the water.
    "Which are you?" she asked her daughter. "When adversity knocks on your door, how do you respond?  Are you a carrot, an egg, or a coffee bean?" 
    Think of this: Which am I? Am I the carrot that seems strong, but with pain and adversity do I wilt and become soft and lose my strength? Am I the egg that starts with a malleable heart, but changes with the heat?  Did I have a fluid spirit, but after a death, a breakup, a financial hardship or some other trial, have I become hardened and stiff? Does my shell look the same, but on the inside am I bitter and tough with a stiff spirit and hardened heart?
    Or am I like the coffee bean? The bean actually changes the hot water, the very circumstance that brings the pain. When the water gets hot, it releases the fragrance and flavor. If you are like the bean, when things are at their worst, you get better and change the situation around you.
    When the hour is the darkest and trials are their greatest, do you elevate yourself to another level? How do you handle adversity? Are you a carrot, an egg, or a coffee bean?

LOSING ALL YOUR MARBLES

…A few weeks ago, I was shuffling toward the kitchen with a steaming cup of coffee in one hand and the morning paper in the other…I turned the volume up on my radio in order to listen to a Saturday morning talk show. I heard an older sounding chap…(who) was talking about 'a thousand marbles' to someone named Tom. I was intrigued and sat down to listen to what he had to say.

    "Well, Tom, it sure sounds like you're busy with your job. I'm sure they pay you well but it's a shame you have to be away from home and your family so much. Hard to believe a young fellow should have to work sixty or seventy hours a week to make ends meet. Too bad you missed your daughter's dance recital.' He continued, "Let me tell you something Tom, something that has helped me keep a good perspective on my own priorities." And that's when he began to explain his theory of a 'thousand marbles.'

    "You see, I sat down one day and did a little arithmetic. The average person lives about seventy-five years. I know some live more and some live less. But on average folks live about seventy-five years. Now then, I multiplied 75 times 52 and I came up with 3,900, which is the number of Saturdays that the average person has in their entire lifetime. Now stick with me, Tom, I'm getting to the important part. It took me until I was fifty-five years old to think about all this in any detail", he went on, "And by that time I had lived through over twenty-eight hundred Saturdays. I got to thinking that if I lived to be seventy-five I only had about a thousand of them left to enjoy."

    "So I went to a toy store and bought…1000 marbles. I took them home and put them inside of a large, clear plastic container…Every Saturday since then I have taken one marble out and thrown it away. I found that by watching the marbles diminish I focused more on the really important things in life. There is nothing like watching your time here on this earth run out to help get your priorities straight."

    "Now let me tell you one last thing before I sign off with you and take my lovely wife out for breakfast. This morning I took the very last marble out of the container. I figure if I make it until next Saturday then God has blessed me with a little extra time to be with my loved ones...It was nice to talk to you Tom…"

    I had planned to do some work that morning, then go to the gym. Instead I went upstairs and woke my wife up with a kiss.
"C'mon honey, I'm taking you and the kids to breakfast."
"What brought this on?" she asked with a smile.
"Oh, nothing special," I said. "It has just been a long time since we spent a Saturday together with the kids. Hey, can we stop at a toy store while we're out? I need to buy some marbles."
-------------------------
My days are swifter than a runner; they fly away without a glimpse of joy. They skim past like boats of papyrus, like eagles swooping down on their prey…Teach us to number our days aright, that we may gain a heart of wisdom…
(Job 9:25,26; Ps. 90:12) (See Job 7:6,7; 14:1,2; Ps. 39:4,5; 89:47; I Pet. 1:24)

Happiness
By Helen Steiner Rice

Happiness is something we create in our mind.
It's not something you search for and so seldom find-
It's just waking up and beginning the day
By counting our blessings and kneeling to pray.
It's giving up thoughts that breed discontent
And accepting what comes as a gift heaven sent-
It's giving up wishing for things we have not
And making the best of whatever we got-
It's knowing that life is determined for us,
And pursuing our tasks-without fret fume or fuss-
For it's by completing what God gives us to do
That we find real contentment and happiness too

THE ENTERPRISE--FAST BREAK: Discipline & Innovation

THE ENTERPRISE

Spring is almost here so it's time for a series of related topics.  Basketball season just ended, which makes it a good time to reprise a short piece, carved from something much longer that I wrote several years ago about the similarity between basketball and business.

FAST BREAK & MANAGEMENT
Recall the example of the basketball fast break.  Teams that use this as a basic offensive weapon must integrate several other parts of their game plan (strategy) with the execution (implementation).
o  They must rebound well, which usually means having good rebounding talent (tall, good jumpers at the forward and center positions) who understand the discipline of blocking out the opponent to get the rebound.
o  The rebounder must then make a quick outlet pass to one of the primary ball handlers (guards) usually positioned near mid court, another practiced discipline.
o  From there the ball handler tries to take the ball to the center of the court, offering the best set of options for passes to other players advancing toward the basket from both the right and left sides. 
o  Spacing of the players is important, so one defender cannot check (defend) two offensive players.
o  Crisp, rapid passes, that are very timely finish the preparation for the shot.  The shooter must have practiced shooting lay-ups or shot shots from the running position, since the habit (discipline) of doing this right usually determines the success of the shot.
o  A person trailing the fast break (usually one of the rebounders) offers the opportunity for either a last pass and a shot or a rebound of a missed shot. Again, a practiced discipline--being a "trailer"--who often scores a lot of points.
All of this unfolds in 2-4 seconds.  Is integration critical?  Is discipline critical. You bet.  Is this very much like a business model?  Sure it is.  The right talent, each taking care of its role, selflessly.  Maintaining the discipline to be in the right place and the right time, doing the right things.  And practice, practice, practice, because what you do in practice, you'll do in the pressure of the game.  Then "Attack, every chance you get."  Fast breaks demoralize opponents and score points in bunches, winning games.  And equally important, if some element of the fast break isn't in place, slow down and get reorganized.  Hmmm.  That seems to fit business too, doesn't it?

DISCIPLINE
I was thinking about a friend of mine who is a turnaround consultant as I was reading the Wall Street Journal's Wed. edition this week.  When he goes into a company, one of his highest priorities is the establishment of discipline--doing the right things, the right (same) ways, etc.  There was an article about how some hospitals are getting aggressive about enforcing the need to wash hands.  it is one the simplest and most effective ways to limit and control the spread of infections--especially virulent staph infections--and to literally save lives by the thousands.  What does it take?

Discipline.   Just like the fast break takes discipline.  Just like our schools take discipline. And just like companies, that are in serious trouble--and those that aren't and don't want to get in trouble--require discipline of doing the right things, the right ways and at the right times.  Is it really that simple, you say?  Well, yes it is.  Unless there is the discipline to do the right things the right ways--all the time--what is the point of striving to figure out the right things and the right ways?

Shortly after reading the WSJ article, I read a brief about a Rand study of 7000 patients in 12 cities over a four year period form 1996 to 2000.  Only 55% of them received the treatment they needed.  There was virtually no difference among demographic groups and the insured vs. uninsured.  It was simply a lack of the discipline to do the right things, in the right ways, at the right times.  Scary, huh?

MERGER MANIA IS HERE AGAIN
Last Monday's WSJ's "What's News" column had 8 briefs about current happenings.   6 of the 8 were mergers.  There is too much money looking for places to go, so companies are back into buying each other.  History has proven that most of these actually end up destroying shareholder value instead of creating it.  It reminds me of my days back in Oklahoma, talking to a rancher about how the ranches were being bought and combined.  He told me, "Most of the time, it doesn't make any difference in how good the ranch works.  It just makes the spread bigger and harder to take care of."

We've been through cycles like this in the US, and now globalization has made it an international phenomenon.  I read about the challenges Pat Russo faces trying to blend the cultures of Alcatel (French) and Lucent (American), both huge companies.  She has a truly daunting task.   I wish her luck, but I wouldn't bet on how successful she'll be getting a mixture of 88,000 French, Americans and multinationals scattered around the world to agree on anything.  Sounds like an awfully "big spread to manage" to me.

INNOVATION WORKS
From Business Week's "Technology and You" section by Stephen Wildstrom.
"There are good reasons competitors such as Dell and Hewlett-Packard have a tough time keeping up with Apple.  One is Apple's rejection of rock-bottom pricing.  Desire for big orders from low-end retailers such as Wal*Mart has pushed HP and other PC makers to adopt the cheapest hardware platform, leading to $300 desktops and $700 laptops.  There's no way to hit that price point and match Apple on design."  ...  "Apple can focus its energies on what appeals to consumers, especially ease of use and products that please the eye as well as the brain and the budget.  The new mini and the MacBook are just the latest happy examples."

I'll add, the reason Apple's stock is flying high and its profits are climbing is that (so far anyway) it has resisted the urge to be anything different than what it is--It's "DIFFERENT."  The greatest danger Apple faces is success.  As it grows and its new computers can run Intel processors and use Windows software, it must remain true to its "core," (pun intended).  But as long as Steve Jobs is at the helm, it will--at least that's my bet.  He understands that innovation wins, and being different is good, not bad.  Time for all  you PC users to try out a Mac.  You can tiptoe into the water with the Mac Mini for about $500 and just plug your old monitor and keyboard into its ports, and fire it up.  Just follow the prompts.  You WILL be surprised.  "Vive' le' difference"...from a dedicated Mac user, even when it wasn't fashionable. 

THE BIG ONE
Have a great week, and enjoy the arrival of springtime.  Me, I'm becoming a ward of the state this week as I have  a big birthday and start collecting on Medicare and Social Security--ouch--getting old is hell, but it sure beats the alternative.  Besides, at heart I'm somewhere between 21 and 49 depending on when you catch me.

Best, John

THE ENTERPRISE--Insanity

THE ENTERPRISE

“LEST WE FORGET”
Amidst the political brouhaha and the finger pointing, it's amazing how even the largest unpleasant events fade from our memory.  I am going back to Colorado to visit my friends there in a few months.  These are the same friends that I was visiting on that fateful day of Sept. 11, 2001 when the terrorists brought War to the USA.  To help remember the enormity and horror of the actual events, a PowerPoint slide show is being posted to my web site http://www.mariotti.net , in the next few days where you can once again look and listen to graphic reminders of what happened.  It is posted under “News Stories” on the left side of the site and titled “LEST WE FORGET.”

The more I read in the news, the more that definition of insanity comes to mind. “Insanity:  doing the same thing over and over and expecting a different outcome.”   In this edition, I will only take on three real cases and a fictional example-where this apt definition struck me recently-The NY Times, a “Haircut,” GM/Delphi and the Bush Administration.

IS THIS A CRIME? ---Insanity:  When dissenting voices (media included) are so flagrant that they violate the laws of the US (more than once).  As it pursued its anti-Bush agenda, the scandal plagued NYTimes  recent actions are an egregious abuse of the freedom of the press assured by the Constitution.  Many believe that the NYT management should be prosecuted for violation of the Espionage Act of 1917.  The Times knowingly and willfully leaked/exposed the NSA's “eavesdropping” on suspected terrorists (War criminals?) in spite of specific and strenuous objections of the US government. On numerous occasions NYT has editorialized negatively on almost everything about the US and its “War on Terrorism,” including a prior case that resulted in a Times writer spending jail time and then, finally being fired.   

FYI--The Espionage Act of 1917 describes a crime this way: “… a crime, punishable by a $10,000 fine and 20 years in jail, for a person to convey antipathy with intent to interfere with the operation or success of the military or naval forces of the United States or to promote the success of its enemies.”  That sounds fairly clear to me.   Isn't that what the NY Times did?  This law is still on the books and was supported in a Supreme Court test.  Whether anyone has the guts to enforce it in 2006 against a big newspaper is another question. 

THE HAIRCUT (not a true story-but it seems somehow familiar)
I went to my neighborhood Barber Shop.  There are 3 barber chairs there, but since two new unisex hairstyling salons opened nearby, the traffic now only keeps one barber busy.  I don't have enough left to be “styled.”  I just need it trimmed into shape now and then.  Haircuts used to be $12, but the new hair stylists cut hair, but wash and shampoo it first, then trim and style it-and all for $15.   My old barber shop posted a new sign that haircuts are now priced at $35!    When I asked why the big jump in price, I was told it had two causes:  First, the barbers who once worked the two vacant chairs were still out of work, so part of the $35 fee was going to pay them-even though they are doing nothing these days; Second, the other part of the fee was going to pay for retirement income and benefits of all the barbers/owners who ran the shop for its 40 year history.

Both were "humanitarian" causes.  Both were directly related to how business used to be done.  And the two together made the cost of a haircut totally non-competitive in today's market.  And that's a for haircut that isn't as good as the one at the new stylists.  When I told the sole remaining barber I'd have to take my business elsewhere, he said, “Fine.  I'll just have to raise my price more to cover the cost of cutting my hours back and keeping this big a shop open with less traffic to pay for it.”  I asked, "What if people won't pay that much?"  "I'll go on strike," he said, "and shut down the shop."  I left shaking my head, planning to get my hair cut somewhere else.  (This isn't a true story.  It's too ridiculous to be true.  Right?)

GM & DELPHI---Insanity:  Expecting to spend almost $70/hr. pay for hourly auto factory workers and still be competitive.  Even though the US auto makers are making progress, competitors are making progress even faster.  Today's WALL STREET JOURNAL showed the hourly costs of Delphi at $67.79, of which $25.58/hr. was wages, etc. and $26/hr. was due to legacy health care, pensions and retiree costs.  GM's costs have been publicly posted as being slightly $70+/hr. No wonder these jobs are disappearing and being replaced by import auto factories with a whole new group of workers,paid nearly as much per hour, but without these enormous legacy burdens.  Even as GM's Cadillac, Buick and Chevrolet cars get good quality reviews, Consumer Reports has chosen its 10 best for 2006: 5 Hondas, 2 Toyotas, 2 Subarus and 1 Nissan-all Japanese-owned makes.   The faster GM goes, the “behinder' it gets!  Delphi's UAW union solution--strike and shut down its own plants and GMs.   (Anybody for a haircut?) 

GEORGE W. BUSH & staff---Insanity:  Bush “staying the course” too stubbornly, and not changing out a meaningful number of important staffers-and still expecting support from either Congress or the American people.    It ain't going to happen, W-get real!  The mounting clamor for Bush to replace staffers continues to grow.  I concur with the need for new faces, new thoughts and new ideas.  Further, changes like the Andy Card replacement with Joshua Bolten are not “meaningful enough” but still need to be made.  The daunting list of problems cited in a recent issue of THE ENTERPRISE will not be solved by “more of the same.”  Even good ideas have become tainted by the “Insanity” of pursuing prior unsuccessful avenues.  The mishandling of matters like the Dubai Ports deal, the Cheney hunting accident, etc. simply reflect the insular hubris present in the (experienced, smart, but burned out?) Bush senior staff was experienced, knowledgeable and impressive when he first selected them.

Now is the time for a change and for some Draconian actions to mitigate the effects of past “Insanity.”  Until some changes are made, outcomes will not change.  Listening to President Bush speak recently, I marvel at the disconnect between how much I like what he says (and seems to sincerely believe) and how dismayed I am at what his administration ends up doing. The fight over Immigration policy typifies the national confusion about “what to do” about one of our huge problems.   There are several reasonable proposals bouncing around Congress-if only our fragmented government can find a place to agree on actions incorporating the “best” of them.

We are at a turning point in “taking control of our destiny” as a culture, as a society, and as a country.  We can only hope that enough “noise” from us “little people” will eventually be heard, and that rational behavior will start to appear.  In an election year, this may be too much to hope for…but hope is what we must cling to.  And clinging IS the right word...

Best, John