THE ENTERPRISE--AROUND THE WORLD & AT HOME

THE ENTERPRISE--AROUND THE WORLD & AT HOME

NOT REALLY 'MADE IN CHINA'
Quick, where it the iPhone made?  It says "Made in China" on it, but in fact, only 3.6% of the content is actually "done in China"--mostly the final assembly--below the 6% of USA content..  34% comes from Japan, 17% from Germany, 13% from South Korea and 27% from an assortment of other places that vary.  So what's the problem?  It is that the misconception about "country of origin" drives irrational and emotional decisions about trade policy.  Modern supply chains are far from linear chains.  They are complex networks in which material and knowledge converge in various places to create value and then move on.  I called them VALUE NETWORKS  as far back as 13 years ago!  The only way to know what comes from where it to disassemble the value in products and track back to where it was created.  You will invariably be surprised.  A long time ago, when David Glass was CEO of Walmart, he told me about how he proudly promoted Washington State Apple Juice, only to discover it was reconstituted there from concentrate made in ITALY!

IRAN AND NORTH KOREA, AND A BUNCH OF NEXT-TIER ROGUES
Does anyone else think it's time to quit "negotiating" with these lunatics and draw the line somewhere.  If it were the USA, we would not take kindly to being told we can't develop whatever kind of weapons we want.  So why are we surprised that it upsets Iran.  Forget for a brief moment the consequences of ignoring them and letting them become the Nuclear weapons broker for the Middle East.  And we need to quit "bribing " North Korea to make promises it invariably breaks.  One of these days, someone from the USA has to let these rogues know where the line is drawn and then invite so called "allies" to join us in that position.  Once that is done, then we can do whatever necessary if they try to step over the line.  I don't know who launched the Stuxnet worm virus into Iran's nuclear facilities, but I applaud them.  (Best guesses: Israel or the USA)

LET'S UNSURGE IN AFGHANISTAN
The question still remains:  What are we doing in Afghanistan and is there even a definition of what "win" means?  Or should we be devoting our efforts to "get the hell out--gracefully?"  The Afghan government is corrupt and untrustworthy.  The Taliban--who is the enemy--are residents there.  They're not going anywhere. They can just attack and fall back and hide and then do it again.  The Pakistanis are helping the Taliban, allowing free border movement and protection.  What are we doing besides pumping money and lives to save a country that isn't sure it wants to be saved, and that will then be run by whom?  A corrupt government?  Or the group we "defeated," but really never did, and probably never will defeat.  It is looking more and more like this is Obama's Vietnam, and we should stop trying to fix that country, who could care less, and spend the money and effort on fixing our own--where the people want it fixed.  Let everyone know that as we withdraw, if we discover new al Qaeda or other terrorist training camps and safe havens moving back in, we will bomb them to oblivion (and innocent citizens might be wise to stay away from such places.)

"IN THEORY THERE IS VERY LITTLE DIFFERENCE BETWEEN THEORY AND PRACTICE; IN PRACTICE THERE'S A HELL OF A LOT OF DIFFERENCE."
I wrote this line about 15 years ago after spending a year at a major university on the staff of its business school dean.  I discovered that in just a few short months, I was becoming absorbed in the miasma that clouds the thinking of otherwise intelligent and decent people.  Just like our current president, theoretical situation are fine for learning in the abstract, but then the real world encroaches on things and the
idealized solutions are woefully inadequate without the context of relevant, real world experience.
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'Experts' often are short on real-world wisdom

Thursday, January 6, 2011  02:50 AM  By Victor Davis Hanson
[Excerpts from a longer  article] 
In classical Athens, public life became dominated by clever and smart-sounding sophists. These mellifluous 'really wise guys' made money and gained influence by their rhetorical boasts to 'prove' the most amazing 'thinkery' that belied common sense.  We are living in a new age of sophism - but without a modern equivalent of Socrates to remind the public just how silly our highly credentialed and privileged new rhetoricians can often sound. ...
...In 2009, brilliant economists in the Obama administration - Peter Orszag, Larry Summers and Christina Romer - assured us that record trillion-plus budget deficits were critical to prevent stalled growth and 10 percent unemployment. For nearly two years we have experienced both, but now with an additional $3 trillion in national debt. All three have quietly either returned to academia or Wall Street.

There is also a new generation of young, sophistic bloggers who offer their wisdom from the New York-Washington corridor. They usually are graduates of America's elite colleges and navigate an upscale urban landscape. One, the Washington Post's 26-year-old Ezra Klein, recently scoffed to his readers that a bothersome U.S. Constitution was "100 years old" and had "no binding power on anything."

One constant here is equating wisdom with a certificate of graduation from a prestigious school. If, in the fashion of the sophist Protagoras, one writes that record cold proves record heat, or that record borrowing and printing money will create jobs and sustained economic growth, or that a 223-year-old Constitution is 100 years old and largely irrelevant, then credibility can be claimed only in the title or the credentials - but not the logic - of the writer.

America is huge and diverse, but the world of our credentialed experts is quite small, warped and monotonous - circumscribed largely by the prestigious university and an office in the incestuous Washington-New York corridor. There are plenty of prizes, honors and degrees among our policy setters and experts, but very little experience in running a business in Oklahoma, raising a large family in Kansas or working on an assembly line in Michigan, a military base in Texas, a boat in Alaska or a ranch in Idaho.

In classical sophistic fashion, rhetoric is never far from personal profit. Multimillionaire Al Gore convinced the governments of the Western world that they were facing a global-warming Armageddon, then hired out his services to address the hysteria that he helped create. ...

... The public might have better believed the deficit nostrums of former budget director Peter Orzag had he not retired after less than two years on the job to position himself for a multimillion-dollar billet at Citigroup - itself a recent recipient of some $25 billion in government bailout funds.  Are we to wonder why an angry, grassroots tea party spread - or why it was instantly derided by our experts and technocrats as ill-informed or worse?

Victor Davis Hanson is a senior fellow at the Hoover Institution on War, Revolution and Peace at Stanford University.

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SMALL STARTUPS DECLINE--2ND WORST IN 18 YEARS
The number of mall startup companies with at least one employee declined 2% in the year ending March 31, 2010 according to the Labor Department.  The decline was not as bad as the previous year, which dropped 3.4%, but both are the worst in 18 years.  Could it be that these small startups are scared of what an Obama administration will do to regulate and tax them?  Probably!  Oh, yes, demand was weak too, thanks to the recession, but that has seldom stopped these innovative, ingenious small businesses from starting up.  Only the "Big Brother" government can do that.

SHOPPERS SPENT MORE THAN THEY INTENDED, BUT USED CREDIT CARDS LESS AND CASH MORE
Shoppers responded to surveys that they were concerned and planned to spend less this past Christmas.  They spent more--but they bargain shopped more intensely and paid with debit cards or cash more of the time.  That bodes well for 1Q 2011 not having as much "credit card shock" as previous years.  Also it reminds us not to believe everything consumers tell us about their plans.  Sometimes they change them at the last minute!

SOMEBODY TELL ME AGAIN--WHAT ARE WE FIGHTING TO "WIN" IN AFGHANISTAN?
The Taliban are the enemy, but they live there.  The government is our ally, but it is corrupt and dislikes us.  The Afghan people largely don't understand why we are there, have little knowledge and less memory of 9/11 and don't know how they figure into it in the first place.  So tell me again:  What does "Win" mean?  And with Pakistan in a state of near chaos, what is the best outcome we might hope for over the next year or two??

CONSUMER CONFIDENCE IS RISING, EMPLOYMENT IS INCHING UP, AND THE STOCK MARKET IS UP--PEOPLE FEEL WEALTHIER, AND MAYBE GOVERNMENT SPENDING AND INTERFERENCE WILL GO DOWN--MAYBE!
This is all the stuff we have been hoping for.  Now let's watch carefully who's actually pushing for the right actions, and who is politicizing the continued reach of government--into our lives and our pocketbooks.  This is going to be a telling 1Q of 2011.  I hope the right directions continue.

Best, JOHN

 
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John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959  http://www.mariotti.net   http://mariotti.blogs.com/my_weblog/