Telling It Like It Is

THE ENTERPRISE--SIGNS OF THE TIMES

THE ENTERPRISE--SIGNS OF THE TIMES

THOUGHTS ON WHAT'S REALLY IMPORTANT IN BUSINESS

Business today is tough.  Sales are slower because consumer spending is down, housing is down, there is a credit crisis, and inflation is coming on fast.  Steel has doubled in price in the past year. Gas prices have shot up to unprecedented levels, driven partly by record oil prices.  Lots of other things are tied to oil prices.  Natural gas, for one, is both a big fuel and the source of most plastics feedstocks.  Chemicals prices are climbing with oil and its byproducts.  Big customers are still resisting price increases that they know are, in the end, almost inevitable.  Some industries, like housing have so much overhang of inventory and productive capacity that the prices are depressed and competition is brutal.  Unfortunately, there are no new shortcuts in this kind of an environment.

The same principles apply to large or small, new or old companies.  Cash is king.  Hoard it, protect it, track how you are generating it and spending it.  Without cash, everything stops.  Innovation wins over mindless proliferation and me-too products.  Top quality and superb customer service are advantages in any kind of market, IF you can persuade the customer that paying a little more for proven performance is better than taking the low bid.  Getting close to customers and listening, asking, probing and then delivering on what you heard can make all the difference. 

There are few things that are truly proprietary sources of competitive advantage:  intellectual property (patents, brands, etc.) based on genuine innovation; trusting partnerships with trustworthy partners; finding and keeping the best people engaged in the business, and sharing in the vision, the pain, the progress and the rewards. 

Build partnerships, and then lean on each other.  The worm will turn, and each partner, over time, will need the other's help.  Above all, hang onto the best people and make sure they know they are appreciated.  There is no such thing as too much communicating about conditions, goals, objectives, and appreciation for good work.  Hook your wagon to the best: Customers, Associates, Suppliers, and Truth-tellers, and let that CAST lead you to success.  There will be bumps on the road, but rest assured--it works, over and over.

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JOHN MAULDIN'S THOUGHTS

John Mauldin is usually a "bearish" guy on investments.  I accuse him at times of always seeing a glass that is half empty.  He is also a very bright guy and a successful investment manager.  Posted below are excerpts from his column last week.  I think he makes many wonderful points.

Excerpts from From John Mauldin's Thoughts from the Frontline Newsletter, July 18, 2008

Take a Deep Breath

It is easy to find bad news these days, and the torrent that seems to keep coming can ruin a person's summer (or winter, for my southern hemisphere readers). The credit crisis, as noted last week, is nowhere near an end. Housing, as we will see, is actually getting worse. Foreclosures, auctions, government bailouts, higher taxes, inflation, the price of energy and food - the list goes on and on.

I thought, since so many think of me as a rather bearish person, I would show you my more optimistic side. Yes, I am bearish in the short term, for reasons I have documented at length in this letter. But long-term I am a wild-eyed optimist.  With all the negative news thrown at us today, why is the United States not in the midst of a deep recession? How, many of you ask, can I be so sanguine as to suggest a milder recession and a Muddle Through Economy?

First, things are somewhat different now than in the '70s and early '80s. Back then, a great deal of the US and developed world economies and their resulting employment were linked to manufacturing, which was largely geared to domestic sales. Exports were a much smaller part of the economy for most businesses. When the economy and consumption slowed down, manufacturers laid employees off rather rapidly. Unemployment would soar and a V-shaped recession would occur.

Now, the number of people employed in manufacturing is less in percentage terms than it was back then, and more of what is produced in the developed world is bought by a growing developing world. Exports from the US are booming. The number of TEUs (the large containers on ships: Twenty-foot Equivalent Units) moving through the ports of Los Angeles and Long Beach is up 23% in May year over year and up 26% since the beginning of the year. Because of the weak dollar, imports are down by 7% year to date. It is export growth that is keeping the US from sliding into the usual deep recession.  So, not only is manufacturing not down as in usual cycles, it is up quite handsomely for many products, except of course for automobiles, which are not just in a recession but facing a depression. But that growth in exports is keeping unemployment from going to 9%.

But let's take a longer-term outlook. My view has been, and is, that we are in for a period of very tepid growth that will last through at least 2009. We have to work our way through the after effects of the twin bubbles of housing and the credit crisis bursting. There is no magic Fed wand. That simply takes time. No (rational) government or Fed policy is going to change the facts on the ground (although they can make things worse). But, in the fullness of time, we will in fact get through this.

If you look back over the decades, things are getting better. Goldman Sachs estimates about 70 million people a year worldwide are entering the "middle class" and that by 2030 two billion people will be in a far better condition than the poverty they experience today. That will also keep demand steady for all sorts of products and services produced in the developed world, even as our population (except for the US) declines.

The old joke is that a recession is when your neighbor loses his job and a depression is when you lose yours. And a rise in unemployment and lower corporate profits are no laughing matter. But the simple trend is that we will adjust and free markets in America and the world will grow, as they have always done. ...

Last year a record 4.3 million babies were born in the US. Each of them will need all sorts of "stuff" - food, education, and places to live - in (hopefully) 20-25 years.

Yes, consumers are cutting back, but they are still buying the basics. (See more below.) Manufacturing in the US is starting to make a comeback, with the lower dollar and management driven to compete globally. In free-market economies, every economic slowdown is followed by a period of solid growth driven by innovation. The point is that life goes on. Births, weddings, eating, living and enjoying friends and family. It is all part of the cycle.

The next 20 years are going to see the most powerful wave of technologically driven growth the world has ever seen. The accelerating pace of technological change did not slow down last century through multiple world wars, scores of "minor" wars, a depression, all sorts of natural disasters, and an unbelievable amount of government folly. Why should that trend stop now?

As we add two billion people to the middle class, we are also going to bring the internet to even billions more. The explosion in information and creativity that we have seen in the last 20 years will double and double again. A small percentage of those people are going to invent amazing new technologies, new drugs, and create companies that will make life better for all of us.

That is one reason that technological growth will continue to accelerate. We will simply be throwing more people at an ever wider array of problems, and they will be able to share their discoveries at the speed of light.  We are on the verge of a revolution in biotechnology that is going to truly revolutionize medicine. No one in 20 years will look back on today as the good old days. And it will probably create yet another stock market bubble, but that is a story for another letter.

US diplomats are talking to Iran. Iraq may actually work out. In most places of the world, most people are better off today than they were 20 years ago. There is still a lot of progress to be made, but the point is that we are making it. There is a ton of opportunity for those prepared to look for it. It may not be in the usual places, it may not be where we would like it to be, but it is there. World GDP will have roughly doubled (or more) by the end of the next decade.

Yes, I know there are a lot of problems. Really big scary ones. I write about a lot of them all the time. But go back to any year ending in 8 for the last 100 years. When were there not problems? And in most times and places, the problems were bigger. And in the next ten years? There will be lots of problems. Some will be the same old problems and some will be new. I am not certain why mankind seems to have a need to find new ways to create mischief and lose money when the old ways work so well. But those too will pass.

So, when you read about current problems - and I will point some out in the next few pages - just remember that things will work out. Markets will adjust, and the world will be a better place. Things will work out better for you as an individual if you anticipate the problems and make the proper adjustments, as much as possible, in advance.  The next 20 years are going to be the most exciting time that the human race has experienced. Yes, there will be issues, but we will adjust. That is what we do. ...

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FINALLY--LET'S THINK POSITIVE--STARTING WITH ME: WE LIVE IN A GREAT COUNTRY....
The air is relatively clean (ever been to Mexico City, Bangkok or Beijing?  The water is safe to drink virtually everywhere.  There are restrooms, free ones, almost everywhere.  The choices of everything from products to services to entertainment to recreation are incredible (too many).  We can travel freely from coast to coast (if you can afford the gas or plane fare).  We can meet openly to discuss almost anything, and write about nearly anything, anytime, anywhere.  Our news media--although biased politicall,y is the envy of the world.  Our elections are free an open, albeit not without their flaws (hanging chads, gerrymandered districts and distorted campaign spending to name a few.)  Most important of all--we are free!--thanks to the decades of sacrifices of American men and women from Japan to Germany, from the beaches of Normandy to the sands of Iraq and the mountains of Afghanistan ... and lots more places than that. They have served, suffered, and died to keep America strong and free.

....EVEN IF WE LET SOME GET FAR TOO CRITICAL OF THEIR OWN AMERICA
America's fringe of "dissidents" and special interests have almost too many rights and freedoms. They can demonstrate (in an orderly way) almost anywhere and employ their zeal to promote their causes.  Too bad the apathetic majority (that's us!!!) doesn't feel as strongly and stand up for its rights--which, while "protected by law," are being steadily siphoned off by political correctness and special interests.  And yet, that very freedom, as vexing as it can be, is another part of what makes America great.  We need to do improve our schools, but our colleges and universities are envied the world over.

We should encourage those masses of very bright immigrant students to stay here (instead of sending them "home") after they come her to attend our great colleges. If they would stay in the USA--and we would encourage them to do so, it would make our great country even stronger.  As we struggle to control illegal immigration, one cannot help but consider why so many people want to come to the USA--to enjoy the American dream--a better life.  As Tony Blair, the former British Prime Minister said, "You can judge the greatness of a country by how many people want to get in compared to how many want to get out."  Perhaps the great task along with "securing our borders" is to find a clear, fair and certain path to citizenship for all those here illegally (not blanket amnesty, but widespread earned status) and with the special ID cards to prove their achievement.

BUILD ON STRENGTHS--THE KEY TO GREATNESS
Finally, we need to give a great deal of thought to what solutions build on America's strengths.  In every field of endeavor, building on strengths is a surer route to success than obsessing over weaknesses.  America has many strengths upon which to build.  Let's encourage our elected leaders to quit playing partisan politics and build on America's greatness, for that is the key to our future.

SOME GOOD RULES FOR BETTER LIVING.
You boomers-and-beyond of the relocating kind, New York real estate expert, Barbara Corcoran, has written a great guide to places on the map that connect with places in your soul. It's called Nextville, and below are some tips we couldn't have said any better.
Barb's 10 rules to living happily ever after

1. Forget Florida. I'm not just talking Florida here. I'm talking about conventional retirement, in the usual ways and the usual places.
2. Remember that the only worthy goal is to find what suits you, not your parents or your kids.
3. Think outside the hammock. You can rest when you're dead. Your second act should be about doing, not just relaxing.
4. Choose people over palm trees. When it comes to your next place, the people who surround you will make or break the experience.
5. Think passions, not pastimes. A pastime is something you do to fill your time. A passion is something you do to fill your soul.
6. Turn back the clock. Head for a place that allows you to be young again.
7. Release your inner good guy. Find a way to help others in your new community. It's the single best way to help yourself.
8. No place is too far away. Be wiling to stray. You have the courage and the know-how to go anywhere and make a home there if you like.
9. Be willing to stay. If your current home is your idea of paradise, then put away the suitcases. But decide to make it new again and truly make it (and your life) better.
10. Take a test drive. Live in a new place temporarily or plan lots of visits. Don't trust what anyone, including me, tells you.

Life is short. There's no time for regrets. Be adventurous. Be happy. Live your dream

I'll save all the political commentary for next week!  Enjoy the summer, spend time with those you love, and rejoice in being free and an American.

Best, John

THE ENTERPRISE--A Summertime Assortment

THE ENTERPRISE--A Summertime Assortment

Since summertime is time for fun and families, this weekend brings our two grandsons to town (with their Mom).  We'll be spending time together, and THE ENTERPRISE will be an assortment of bits and pieces I've assembled that hopefully will be interesting and useful.  Enjoy the summer--it's half over already!

A FRIGHTENING THOUGHT ON CURRENT POLITICAL  ISSUES
Electing Democrats to fix the economy and balance the budget is like handing out cans of gasoline to fight a fire.  The Do-Nothing Congress, Led by the Pelosi and Reid are threatening to set a new record for ineptness in government.  TheIR 14% approval rating is even lower than their nemesis--George W. Bush!

WHO TO BLAME FOR $4/GAL. GAS--NOT WHO YOU THINK
Dems' Dereliction
By INVESTOR'S BUSINESS DAILY | Posted Wednesday, July 16, 2008 4:20 PM PT
Energy Policy: Imagine an energy plan that does it all — from allowing more oil drilling to spending billions on alternative energy sources such as wind, solar and nuclear. Well, guess what? Been there, done that.

'Energy has enormous implications for our economy, our environment and our national security," President Bush said in proposing the plan. "We cannot let another year go by without addressing these issues together in a comprehensive and balanced package."
That was in June 2001 — more than seven years ago. 

His words came just after he first proposed a comprehensive energy bill that included 105 separate steps the U.S. could take to boost its energy supplies. It was something he promised repeatedly while campaigning for the presidency in 2000. He kept his promise. His first plan included, among many other things:
• New drilling for more oil and gas and new refineries.
• Building of nuclear power plants.
• Revamping the U.S. electricity grid.
• $10 billion in tax breaks to help push energy efficiency and alternative energy.
The fact is, these are remarkably similar to the plans that economists, oil experts and energy wonks say need to be put in place today in order to end our oil crisis.

Yet, those proposals went nowhere — not approved in 2001, not in 2002, not in 2003, not ever. Bush tried repeatedly to get something through Congress. He pleaded. He tried to cut deals with Democrats. It didn't work.
A New York Times headline from August 20, 2003, sums it up: "Ambitious Bush Plan Is Undone by Energy Politics."
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NOW YOU CAN DO SOMETHING ABOUT IT
I assume you know about the latest outrageous (in)action by Nancy Pelosi and the Democrat leadership in Congress.   When Americans are canceling vacations because gasoline is over $4.00 per gallon, Democrats plan to adjourn work for a month-long vacation the first of August WITHOUT holding a vote to drill for American oil.

This is inexcusable.  I hope you’ll agree with me that there should be no recess without voting on legislation that can help lower gas prices.  No wonder the new Gallup Poll today that shows Congress’s approval rating has slipped to an all-time low of 14%. It’s not hard to figure out why.  The Democrat Majority in Congress is putting their extremist ideology ahead of common-sense solutions to bring down the price of gas and reduce our dependence on foreign energy sources in unstable regimes.
If you are as outraged as I am, I need you to do 2 things:

Send a strong message to Pelosi and the Democrat majority to vote now. Sign our online petition demanding Congress take immediate action to lower gas prices before taking their vacation. You can sign the petition by clicking on the following link --
http://www.nrcc.org/actioncenter/default.asp?ID=288   PLEASE DO IT NOW--DON'T WAIT!

Help us spread the word by forwarding this message and link to everyone on your email list!
I hope you will join the efforts to force the Democrat leadership to act on this immense problem--which goes way beyond gasoline prices, to our national security being at risk of being held hostage for energy by hostile nations.  This is not only possible, but a clear and imminent danger.  (But then of course the Democratic controlled Congress would go on vacation again before initiating diplomatic actions to talk about the problem with our enemies.)
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BY NOW, THIS ONE SHOULD MAKE YOU GRIMACE, NOT GRIN--BUT TAKE A LOOK ANYWAY
It's all about how Congress works--or rather--how it doesn't work.
http://www.unclejayexplains.com/2007/09/03/uncle-jay-explains-the-news-september-3-2007/
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THOMAS SOWELL SAYS IT ONLY TOO WELL--READ ON
Change Means Never Having To Face Facts
By THOMAS SOWELL | Posted Tuesday, July 15, 2008 4:30 PM PT

In an election campaign in which not only young liberals, but also some people who are neither young nor liberals, seem absolutely mesmerized by the skilled rhetoric of Barack Obama, facts have receded even further into the background than usual. As the hypnotic mantra of "change" is repeated endlessly, few people even raise the question of whether what few specifics we hear represent any real change, much less a change for the better.

Raising taxes, increasing government spending and demonizing business? That is straight out of the New Deal of the 1930s.  The New Deal was new then but it is not new now. Moreover, increasing numbers of economists and historians have concluded that New Deal policies are what prolonged the Great Depression.

Putting new restrictions on international trade, in order to save American jobs? That was done by Herbert Hoover, who signed the Hawley-Smoot tariff when the unemployment rate was 9%. The next year the unemployment rate was 16% and, before the Great Depression was over, unemployment hit 25%.

One of the most naive notions is that politicians are trying to solve the country's problems, just because they say so — or say so loudly or inspiringly. Politicians' top priority is to solve their own problem, which is how to get elected and then re-elected. Barack Obama is a politician through and through, even though pretending that he is not is his special strategy to get elected.

Some of his more trusting followers are belatedly discovering that, as he "refines" his position on various issues, now that he has gotten their votes in the Democratic primaries and needs the votes of others in the coming general election.

Perhaps a defining moment in showing Sen. Obama's priorities was his declaring, in answer to a question from Charles Gibson, that he was for raising the capital gains tax rate. When Gibson reminded him of the well-documented fact that lower tax rates on capital gains had produced more actual revenue collected from that tax than the higher tax rates had, Obama was unmoved.

The question of how to raise more revenue may be the economic issue, but the political issue is whether socking it to "the rich" in the name of "fairness" gains more votes. Since about half the people in the United States own stocks — either directly or because their pension funds buy stocks — socking it to people who earn capital gains is by no means socking it just to "the rich."  But, again, that is one of the many facts that don't matter politically. What matters politically is the image of coming out on the side of "the people" against "the privileged."

If you are a nurse or mechanic who will be depending on your pension to take care of you when you retire — as Social Security is unlikely to do — you may not think of yourself as one of the privileged. But unless you connect the dots between capital gains tax rates and your retirement income, you may fall under the spell of the well-honed Obama rhetoric.

Obama is for higher minimum wage rates. Does anyone care what actually happens in countries with higher minimum wage rates? Of course not. Economists may point to studies done in countries around the world, showing that higher minimum wage rates usually mean higher unemployment rates among lower-skilled and less-experienced workers. That's their problem. A politician's problem is how to look like he is for "the poor" and against those who are "exploiting" them. The facts are irrelevant to maintaining that political image.

Nowhere do facts matter less than in foreign policy issues. Nothing is more popular than the notion that you can deal with dangers from other nations by talking with their leaders. British Prime Minister Neville Chamberlain became enormously popular in the 1930s by sitting down and talking with Hitler, and announcing that their agreement had produced "peace in our time" — just one year before the most catastrophic war in history began.

Sen. Obama may gain similar popularity by advocating similar policies today — and his political popularity is what it's all about. The consequences for the country come later.

Copyright 2008 Creators Syndicate, Inc

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THE AUDACITY OF ARROGANCE--FIRST THE "FAUX" PRESIDENTIAL SEAL, NOW THIS
Speaking at the Brandenburg Gate?   For those of you who support him--aren't some of his recent moves causing just a few doubts?  He is for Change--as long as he is the one who can change--his position whenever it's uncomfortable where he was.  Typical of a rookie who's never felt the hardships and "heat of the kitchen."  I never thought I'd cite Jesse Jackson, but even he can see through Obama's phony appeals (and said so with a "hot mike").

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SOME INTERESTING RESEARCH FROM A "BIG" RESEARCH FIRM NAMED--BIG RESEARCH!
Presidential Race Tightens in More Ways than One,
According to Latest BIGresearch Survey
Obama Has Slight Lead in Popularity but Losing Promoters

COLUMBUS, OH – (MARKET WIRE) – 7/15/08 – In the race for the White House, Barack Obama and John McCain are just about even, according to BIGresearch’s (http://www.bigresearch.com) July Consumer Intentions & Actions (CIA) survey of over 8,000 people. The candidates can use all the help they can get to make the move to Pennsylvania Avenue and it appears that a greater percentage of Republicans are willing to promote McCain than Democrats are Obama.

By using the Net Promoter® Score* (NPS), respondents were asked to rate, on a scale from 0 (Not at all likely) to 10 (Extremely likely), the probability they would recommend a candidate to a friend or coworker. 10 and 9 responses indicate Promoters, 8 and 7 responses are Passives and 0 through 6 are Detractors. NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.

Even though they have a long way to go, McCain is picking up promoters and Obama is generally losing promoters. Here is a comparison of how each of the presidential candidates rank compared to the last three months according to their NPS among all consumers and by political party. 

                        Obama                                          McCain                         

                            April   May     June    July                April    May        June    July
All                     -48.8%  -51.3%  -42.9%  -44.6%      -56.0%  -58.9%  -53.0%  -47.6%
Democrats       -13.4%  -17.3%   +1.6%   +3.0            -82.2%  -86.4%  -83.0%  -82.7%
Republicans      -84.0%  -85.0%  -84.7%  -87.1%      -9.1%   -10.0%    -2.1%   +11.4%
Independents    -51.9%  -57.0%  -50.6%  -53.4%      -65.5%  -69.9%  -63.3%  -58.9%

Source: BIGresearch, April 08 CIA (N=8180), May 08 CIA (N=8347), June 08 CIA (N=8351) & July 08 CIA (N=8361)  *Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld

McCain’s score within his own party has increased thirteen and a half points to a double digit number (+11.4% v. -2.1% in June), indicating Republicans are getting the word out about their candidate. Obama’s score has increased only slightly within his party at about a point and a half (+3% v. +1.6% in June), demonstrating a need to ramp up grassroots efforts.

McCain has also gained some momentum among Independents; however, Obama’s score still remains higher.

Regarding which candidate people would vote for if the election were held today, it’s too close to call with Obama getting 37.8% v. McCain’s 36.8%. Independents appear to hold the key with almost one-third (31.8%) still undecided. 

If the Presidential Election were held today, who would you vote for?

            All Adults 18+    Republicans Democrats   Independents
McCain          36.8%             74.7%           11.7%       29.0%
Obama           37.8%             7.8%            66.1%       33.8%
Undecided   20.7%             14.3%           18.6%       31.8%
Other           4.7%                  3.2%             3.7%           5.5%

Source: BIGresearch, July 08 CIA (N=8361

ED. NOTE:  BIG Research is a Columbus, OH based consumer research firm that uses large, pre-qualified panels of consumers, who they poll regularly on spending, shopping, attitudes, etc.  Unless there is a built in bias because these people are "regular respondents," this is a large, demographically neutral sample--which is a good indicator of the population in general.

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That's all for this week.  Getting things out a day or two early, to make more fun time this weekend.  Keep your eyes and ears open.  These are important and interesting times. 

Remember, it's not doing the right thing that's hard.  It's knowing the right thing to do.  Once you know the right thing to do, it's hard not to do it.

Best, John

THE ENTERPRISE--Little bits of a lot of things

THE ENTERPRISE--Little bits of a lot of things

INTERESTED IN A BLOG RADIO INTERVIEW?
A short while ago, I did a blog radio interview with Tom K. (short for Koulopoulos), who is a prolific author and an all-around smart guy in his own right.  We had a great time, and if you want to listen in, the link below should get you there.
http://www.blogtalkradio.com/innovation/2008/05/08/The-Complexity-Crisis

BEST NEWS I'VE HEARD
Actress Susan Sarandon "threatening" to move to either Canada or Italy if John McCain is elected President.  Go, please, and take all your witless actor and actress friends with you.  Just because these people can "play as if they are someone important" in movies, they get the mistaken impression that their intellect matches the size of their pictures on the Silver Screen.  Good riddance.  That's enough reason to vote for McCain, (In addition to him being the best qualified candidate.)

SCARY THINGS YOU WISH YOU DIDN'T KNOW--BUT DO (NOW)
--There are over 7 million people under some form of custody or supervision in the American justice system. 2 million+ in prison; 4.2 million on probation; 800,000 on parole.  Either we have too many criminals ... or too many laws?
--38% of babies born out of wedlock in the USA.  28% of white children are born to a single mother; 50% of Hispanics; 71 percent of blacks.  Does it take any other statistics to show the reason for US racial problems? 
--One in four adults in NYC are infected with genital herpes, but that's only 7 points higher than the national average.
--67% of Americans support oil exploration off the coasts, but obviously none of them are in Congress--or at least not on the Democratic side of the aisle.  So much for a "representative democratic form of government." 
--16% of Iowa's tillable acreage was under flood waters. That should drive the price of corn up further--which should also drive the price of Ethanol higher than the price of gas.  But wait, there are those subisidies...ARRRGGHHH.
--There is now an average of 7 square feet of self-storage for every American.  I don't have any, so one of you must be using 14 sq. ft.  C'mon.  Clean out that clutter and reduce your personal complexity.  Save time; save space; save gas by not going there, and then save money--to buy gas to go somewhere fun--not to your "self-storage" place. WE ALL HAVE TOO MUCH STUFF--CLUTTER = COMPLEXITY

STARBUCKS CLOSING STORES, DROPPING MUSIC, ETC.
Reducing its Complexity Factor?  I'd say so.  Now if it will just call a small a small instead of a grande'.

CUT YOUR TRAVEL BILL--VIDEOCONFERENCE MORE
Cisco claims that it has reduced its own carbon footprint by 11% this way.  But hey, they get the neat equipment to use for free, and the rest of us have to pay for it. 

WHEN WHAT'S NEW, ISN'T--EXCEPT FOR NAIVE YOUNG REPORTERS...(AND CANDIDATES?)
The vaunted Wall Street Journal carried an article by Andria Cheng entitled "Retailers Turn to Exclusive Products to Boost Sales".  It was 6 columns wide and almost 1/2 a page long.  I don't know her (assuming it is a her) at all.  If you Google her name, it is all over the place reporting for MarketWatch and now writing these "news" pieces about her startling discovery.  Except that it isn't news at all.  And it isn't new at all.  It is a classic case of a smart, aggressive and naive young (I assume) person thinking they've just discovered this big new thing.  Further, some of her conclusions about what "exclusivity" yields are dead wrong.

WHY DO I CARE ABOUT THIS ARTICLE?
I don't--at least not much.  I wasted a little time reading it thinking maybe it was something new.  It wasn't.  Then I realized that she exhibited exactly the same bright, articulate, compelling story-telling that our "wunderkind" presidential candidate Barack Obama uses.  Worse yet, his following (or hers) of bright young people are eating this up as if it is really big news.  Since America's youth have not been interested in its history for a long time, they'd never know that Obama's approach to policy, economics, foreign affairs and lots of other things, failed decades ago.  It's just that only us "old fogeys" remember--and of course John McCain is one of us "old fogeys."  Worst of all, we keep trying to remind them and explain to them, but the facts are inconvenient things it seems.  They get in the way of "CHANGE YOU CAN BELIEVE IN."

THE WORST DECISIONS ARE BASED ON FLAWED INFORMATION
I had a shock this week that reflects on how business is conducted, and the preceding few paragraphs.  I visited some retail stores at the request of a CEO, before giving him "my take" on some decisions he is considering.  Wow!  Did I get a surprise.  What I thought I knew, wasn't so in one of the stores I visited.  And it was a biggie.  You know I love the old Will Rogers line, "It ain't what you don't know that gets you; it's what you think you know that ain't so."  GIGO was the old computer acronym.  Garbage In, Garbage Out.  Flawed information leads to flawed decisions--in business and in politics.  And THAT IS THE SCARIEST FACT OF ALL.

WHERE DID THOSE WMDS GO?  MAYBE HERE'S A CLUE.
Last week, Jordan turned over nearly 2,500 artifacts that had been stolen from Iraq in the aftermath of the US invasion.  The objects were reputedly seized by Jordanian customs in 22 smuggling attempts.  By now 8,500 of the supposed 32,000 artifacts looted from museums and archaeological sites in Iraq have been returned.  Maybe one of these days someone will turn up those mysteriously missing WMDs.  After all, if they could get all this other stuff out of the country, why not a few trucks full of chemical warfare weapons?

NEWS FLASH:  "THE LONG TAIL" IS WRONG!
Or at least that's what a learned professor (from Harvard) says her research proves.  Anita Elberse, a marketing prof at Harvard did considerable research that disproved many of the key points of the long tail.  The biggest one is that people don't behave that differently when faced with huge variety of choices (the long tail).  They go back to the old favorites.  Time to "Cut off the tail," and reduce complexity, I'd say. MAYBE THOSE OLD STANDBY BRANDS ARE IMPORTANT AFTER ALL.

BIG PREDICTION:  A NEW REVOLUTION IN INNOVATION
I've been preaching about reducing Complexity.  Why?  It wastes time and money that could be spent better.  On what?  Innovation.   I hope I can keep spreading the word, because we are on the cusp of one of those eras of innovation that only comes every few decades.  What will drive it?  Energy needs.  Health and aging needs.  Immigration control needs.  Anti-terrorism defense needs.  These and many more of our critical issues will start to coalesce into a huge series of programs, paid for, of course, by your tax dollars--but not only taxes--also by the best investment dollars, those of free enterprise/capitalism and good old fashioned greed.

You read it here.  From 2009 to 2019 will be a decade of life-changing innovations.  The only question is whether America will lead, follow or fall behind.  China will be right out there at the forefront.  Why not?  It used to be the innovative leader in the world in the era around the 1400's.

THE GOOD NEWS AND THE BAD NEWS
GOOD: The US economy is not a sick as it seems--just "sluggish."  Some sectors (like housing) are really sick, but others (Tech) are chugging along, and exports are still strong.  Beware of "averages" in Gov't stats, because they often distort the true picture.  There is still business out there.  It's just skewed (and SKU'd) differently than before.  Keep costs down and carefully study where the market opportunities lie--then go after them.
BAD:  Iran is acting more an more like the schoolyard bully that just dares everyone to smack him.  Don't bet against someone (US? Israel?) getting fed up with its tough talk and taking a whack at something--not a full scale war--but enough of a whack to get Iran's attention.  The only question is, who has the guts to tell the rest of the world to shut-up when they start complaining about it.  My bet is the ISRAELIS do.  If their leadership wasn't under pressure for misdeeds, they might have done it already.  Perhaps they (and we) would like to know that Syria has helped shut down Hezbollah in Lebanon, so Israel doesn't get attacked from both sides.

Oil prices will spike to the stratosphere; naval battles over the Straits of Hormuz could involve the US quickly, and Iraq's "stability" would be tested.  Short term it would be a wild time.  Long term, it may be necessary, especially if Ahmadinejad doesn't get defeated in next year's elections.  He's the loose cannon in the Iranian mix, stirring the pot constantly.

FINAL THOUGHT
Our brave soldiers are fighting, risking their lives to protect our freedoms.  One of those that is protected is freedom of speech--for now anyway.  Some of those talking heads you see on (especially) cable news shows probably should have their "free speech" limited.  But instead the Democrats are so frustrated by the success of conservative talk radio (and the failure of liberal talk radio) that they might just legislate it out of existence in this next Congress via an oddly named "Fairness" law in broadcasting--unless we get out the "right" voters to change the makeup of Congress. 

Worse yet, failed sportscasters like Keith Olbermann are out there pretending to be real journalists, and some people listen to him.  (He makes me want to throw up).  Compared to him, Chris Matthews and Wolf Blitzer are fun to watch.  Even Chris Matthews had some surprising fun a while back, as he pressed an Obama supporter ( a state representative from some midwestern state) to name just ONE of Obama's legislative accomplishments.  He couldn't.  No one can.  There aren't any.  But he'll lead America into the kind of Change You Can Believe In--(when donkeys fly).

Sorry to rant on, but everything that we do in the world of business--and in our personal lives--relies on how our government makes policy, regulates, legislates and governs.  To leave this issue alone is just not good business, or good citizenship. 

Microsoft, GE and P & G wouldn't choose charismatic, but raw, rookie-managers as their CEOs.  Why should the US voters?  What's wrong with this picture?  Barack Obama needs "seasoning," and the place to get that is not in the White House.

Best, John

THE ENTERPRISE-Special Independence Day Edition

THE ENTERPRISE--Independence Day special

Normally on a National Holiday weekend like Independence Day, I write an uplifting edition of THE ENTERPRISE.  But this is not a normal year.  As oil prices skyrocket, the dollar plummets, the stock market sinks and our national pride sinks with it, we, as Americans are faced with looking in a mirror at what we have become.  A nation of non-doers, a nation of nay-sayers, a nation of wimps and wusses, and all the other derogatory terms I can imagine--and I am ashamed.

YOU RECOGNIZE THE CHARACTER
Movies are not real life, but their stories and characters often portray real life with startling clarity. We have all seen the movies where the smooth, slippery "climber" finds a way to blame others, distance himself from awkward situations and generally "talk his way out of everything bad."  In the movies, such people eventually (usually) are exposed at the end.  I wonder what real life will be like. 
—A black father--keep him out of pictures. 
—A white grandmother who uses racial epithets, "throw her under the bus." 
—A role model and inspirational pastor whose radical behavior frightens many and astounds others--denounce him. 
—A financier who helps buy a house he can't afford, and later is tried and convicted for misdeeds--denounce him too--sadly, as not the man I knew. 
—Positions that sound so noble and lofty--like using public finance and debating face to face in town halls suddenly become undesirable in a flood of money and a "front runner" spot against a competent, knowledgeable old pro. 
I could go on.  It is truly frightening that those who are mesmerized by his rhetoric do not see the shifting, shading, and slippery candidate. 

THE ANSWER SEEMS TO BE: "CHANGE THE SUBJECT AND ATTACK THE OPPONENT"
Here is where his backers denounce his opponent.  But I say to you--WAIT A MINUTE--we aren't talking about the old war hero.  We are talking about the smooth "wunderkind." 

I don't know what prepares a man for being President of the United States.  Perhaps being shot down and persevering through an unimaginable 5+ years of torture in a POW camp doesn't.  But it does show COURAGE.  Perhaps refusing early release, to insist that he not go until his cohorts go doesn't, but it does show CHARACTER.  Perhaps being a member of Congress, a leader in his party in spite of some contrarian views, and a bi-partisan legislator able to broker deals that involve both parties doesn't either.  But it does show COMPETENCE.   Those three characteristics: Courage, Character and Competence have always been the marks of a leader to me. 

And finally, perhaps being attacked by a retired general who was valedictorian at West Point, a Rhodes scholar, and a wounded VietNam vet himself doesn' t either.   But remaining composed and reserved in the face of such an attack belies the old war hero's reputed fiery temper.  But that also doesn't necessarily qualify him either--at least not by itself.

THE TELLING QUESTIONS ARE THESE TWO:
A first term Senator from Chicago, with some typically shady Chicago ties to crooks, influence peddlers and radicals doesn't prepare anyone either.  Being a community organizer, politically astute and very intelligent might qualify someone. Being incredibly glib and articulate, and able to mesmerize huge audiences is certainly a valuable talent for a leader.  But that alone doesn't qualify him either.  The glibness and wonderful way with words is useless when tough decisions--the kind with no right answer--only less wrongs a facing him.  We wonder how he will handle those.   

THAT MAKES ME ASK: WILL HE "THROW AMERICA UNDER THE BUS" WHEN IT BECOMES TOO HOT IN THE TOUGHEST JOB IN THE LAND?  I don't know.  Do you?

AND WHICH OF THESE CANDIDATES WOULD YOU RATHER HAVE "AT YOUR BACK IN A FOXHOLE", OR IN FRONT OF YOU "FACING A HOSTILE ENEMY?"  I know.  Do you?

THESE ARE ISSUES THAT TROUBLE ME GREATLY ON THIS INDEPENDENCE DAY WEEKEND

ANOTHER ISSUE IS OUR APPARENT "KATRINA-LIKE VICTIM" BEHAVIOR IN THE FACE OF HIGH GAS PRICES
Europe has long paid far more than we are now paying for gas.  We have lived the charmed life--and now it is over.  Either we take charge of our own destiny or we look for someone to blame—Big Oil, the current President and VP, OPEC, rogue states like Iran and Venezuela.  But whoever we choose to "throw under the bus," the problem is still ours, and or leaders are either lying, paralyzed into inactivity by partisan politics or lack the common-sense that God gave them and that our forefathers put to such good use.

IF WE CAN PUT A MAN ON THE MOON, WE CAN DO THIS--AND WE MUST!
Few things are more important to America's future than its energy supply.  Nearly everything else depends on energy to operate.  Being (largely) energy independent could very well be a global competitive advantage in the next 2-3 decades, and is certainly a National Security imperative probably long before that.  Can't anyone in the seats of power in our government see this? 

Are they all so preoccupied with equivocating, slipping and sliding into reelection that they are afraid to take a stand and do something so important and so bold?

VICTOR DAVIS HANSON CALLS US OUT—WITH FRIGHTENING CLARITY
Victor Davis Hanson is a learned student of our social behavior. The next few paragraphs are the conclusion of his Op Ed I read in today's Columbs Dispatch.  He is commenting on our "do nothing Congress" and our national malaise of doing nothing because everything we consider, offends someone, some zealous special interest group or some outspoken "talking head."  What a shame--no what a disaster for the United States of America.  Consider his words carefully on this Independence Day weekend.

--taken from Victor Davis Hanson's Op Ed  "A timid nation loses ground, and it's us"

   

The causes of this paralysis are clear. Action entails risks and consequences. Mere thinking doesn't. In our litigious society, as soon as someone finally does something, someone else can become wealthy by finding some fault in it. Meanwhile, a less fussy, more confident world abroad drills, and builds nuclear plants, refineries, dams and canals to feed and fuel millions who want what we take for granted.
    In our present comfort, Americans don't seem to understand nature. We believe that our climate-controlled homes, comfortable offices and easy air and car travel are just like grass or trees; apparently they should sprout up on their own for our benefit.
    Americans also harp about the faults of prior generations. We would never make their blunders -- even as we don't seem to mind using the power plants, bridges and buildings that they handed down to us.
    Finally, high technology and the good life have turned us into utopians, fussy perfectionists who demand heaven on Earth. Anytime a sound proposal seems short of perfect, we consider it not good, rather than good enough.
    Hamlet asked, "To be, or not to be: that is the question." In our growing shortages of infrastructure, food, fuel and water, we've already answered that: "Not to be!"

REPEATING LAST WEEK'S CONCLUSION: 

THERE ARE JUST THREE ENERGY "ANSWERS:"  USE LESS; FIND MORE; FIND DIFFERENT KINDS—CONCURRENTLY
Three approaches are mandatory.  No one of them is sufficient to all the needs.  Why can't our governmental leaders see this?  Or can they, but it doesn't serve their political agendas to admit and act on it?  CONSERVATION (Near term greatest effect); EXPLORATION/DRILLING/EXPANSION (Mid-term large effect); and INNOVATION/ALTERNATIVE SOURCES (Longer term solution is a combination of parts of these three.)
* Most immediate impact items.

NOW: Conservation (largest short term effect, also helps mid, & long term)
    --*Fuel efficient vehicles, homes, offices, factories, stores and cities, (street lights on highways where not needed, flood lights on signs, etc) etc.—NOW
    --*Reduce usage on transportation, unnecessary lighting (Christmas lights), excessive cooling & heating, etc. —NOW  and Future
    --*Use more fuel efficient products and practices (high mileage cars, programmable thermostats, CFLs, etc) —NOW and Future--more of them...
    --*Timers to turn off lights in unoccupied offices, public places, and ultimately in homes (provide tax incentives to install them)
    --When stores, offices, plants, etc. close for the day, mandate that the lights be turned off within 1-2 hours. 
    (Companies can Install motion sensors to reactive lights for safety, if people are still moving about.)
    (Lights can be turned back o--and off-for cleaning crews, but they don't need to keep burning electricity for an entire evening)

SOON: Exploration/Expansion of Oil  (short & mid-long term)
    --*ANWR Drilling (mid-term, starting immediately)
    --*Offshore Drilling & Usage of Current Lease Rights elsewhere (short term--starting immediately)
    --Shale oil Development (mid-long term)
    --Refinery Construction & Expansion of Existing Capacity (short and mid-term)
    --*Standardization:  Reduce to two Octane levels--87 & 91, and one formulation nationally--no state variations.
    --Simplify processing & help relieve refinery capacity issues--without any refitting of gas station pumps, transport, storage, etc. 
    (Anyone who wants higher octane for higher performance vehicles can buy cans of octane-booster additives.)

NEXT: Innovation & Action (mid-to-long term)
    --Nuclear proven alternative source, with least risks)  Federally mandated storage sites to be built NOW in 3 US states/areas: 
    West: Nevada: South: Texas: North:  Wyoming/Montana/Dakotas based on geographical and geological analysis.
    --Solar (largest source, usable in certain environments, with simpler--mirror based--plants)
    --Hydroelectric and Tidal (using gravity)
    --Geothermal (selectively usable at premium installation cost)
    --Wind (Selectively usable for certain locations)
    --Renewable (Cellulosic ethanol, re-growable raw material, etc.)
    --Clean Coal (Only when the best alternative for a location, cost, speed, etc.)
    --Assign Federal funding for mandated bike paths to be added parallel to any highway on which construction/repair work is being done, and connected to form a pedestrian, cyclist pathway to all major office and shopping centers from major residential and transportation centers.

What follows is part of an email I received from a correspondent.  I have modified it to shorten it, and changed a little wording.  I am putting it here because it so dramatically illustrates the foolishness that pervades American policy.  Read it and weep.  I did.  Then send it to your Congressman, your Senators, and anyone else you know in a position of influence.  It is all we can do.

Hoping that America's Independence is not lost in the coming decade, I remain your humble scribe,
John
---------------------------------------
Special Section on ANWR
DRILLING ANWR PER SE, ISN'T THE ISSUE--BUT IT REVEALS A LOT ABOUT THE DECEPTION GOING ON--AND IT IS SYMBOLIC OF THE RESISTANCE TO 'DOING ANYTHING!"

Drilling in ANWR won't solve America's energy dependence on OPEC and radical leaders like Chavez (Venezuela) or Ahmadinejad (Iran).  But it might very well dampen the impact of speculators, driving the price of oil up unrealistically.   Plus, the more foreign oil we buy, the more money we send them to use for their radical intentions--against the USA.  If you know all about ANWR, stop reading and delete this.  But if you don't, read the words and look at the pictures.

FIRST… do you know what ANWR is?
ANWR = Arctic National Wildlife Refuge.
 
Now, some pictorial comparisons and information about ANWR and oil drilling.
 

 

And some perspective…

 

NOTE WHERE THE PROPOSED DEVELOPMENT AREA IS…
(it's in the 'ANWR Coastal Plain')

THIS IS WHAT THE DEMOCRATS, LIBERALS AND 'GREENS' SHOW YOU WHEN THEY TALK ABOUT ANWR
…and they are right… these ARE photographs of parts of ANWR

ISN'T ANWR BEAUTIFUL?
WHY SHOULD WE DRILL HERE (AND DESTROY) THIS BEAUTIFUL PLACE
WELL… THAT'S NOT EXACTLY THE TRUTH ABOUT WHERE THE DRILLING WILL BE.

Do you remember the map?  The map showed that the proposed drilling area is in the ANWR Coastal Plain
Do those photographs look like a coastal plain to you?

WHAT'S WRONG WITH THIS PICTURE?
???????
THE ANSWER IS SIMPLE…

THAT IS NOT WHERE ANYONE WANTS TO DRILL!

THIS IS WHAT THE PROPOSED EXPLORATION AREA ACTUALLY LOOKS LIKE

IN THE WINTER

 

 IN THE SUMMER

AS YOU CAN SEE, THE AREA WHERE WE ARE TALKING ABOUT DRILLING IS VERY TINY PART OF WHAT IS A BARREN WASTELAND.

OH… AND THE CONCERN ABOUT THE EFFECT ON THE LOCAL WILDLIFE…

 HERE IS A PHOTO (SHOT DURING THE SUMMER) OF THE 'DEPLETED WILDLIFE' SITUATION CREATED BY DRILLING AROUND PRUDHOE BAY*…

DO YOU THINK THAT THE CARIBOU REALLY OBJECT TO THE DRILLING?
*NOTE: The Prudhoe bay area accounts for 17% of U.S. domestic oil production

NOW, WHY ARE THE POLITICIANS WHO ARE BLOCKING THE DRILLING, DISTORTING THE TRUTH ABOUT ANWR?

MOST LIKELY TO FURTHER THEIR OWN AGENDAS, OR TO RESPOND TO EXTREME SPECIAL INTERESTS—VOCAL ENVIRONMENTALISTS

(Maybe they'd like to go LIVE in ANWR if it's so wonderful.)

INSTEAD OF SOLVING AMERICA'S PROBLEMS, OUR OBSTRUCTIONIST LEADERS ARE MAKING THEM WORSE. 

NOW THAT YOU KNOW,
WHAT ARE YOU GOING TO DO ABOUT IT?

ASK YOUR POLITICIANS IF THEY FAVOR DRILLING IN ANWR AND LISTEN FOR ANY LIES, THE DISTORTIONS AND/OR EXCUSES?  WATCH THEM SQUIRM OUT OF PAST ENERGY POLICY POSITIONS, TOO.  

AND IF, (OR WHEN), THEY GIVE THE WRONG ANSWER, VOTE THEM OUT OF OFFICE OR DON'T VOTE THEM BACK INTO OFFICE. 

YOU CAN HELP BY SENDING THIS TO EVERYONE YOU KNOW…
SO THAT THEY WILL SEE THE TRUTH AND THE DISTORTIONS

AND TOGETHER, WE CAN MAKE INDEPENDENCE DAY STAND FOR ANOTHER KIND OF INDEPENDENCE—FROM ENEMIES OF THE USA FOR OUR ENERGY NEEDS.