Thursday, March 30, 2017

Seth Godin, on Hillary Clinton's Chances in 2005

"Hillary Clinton, more than others, has a worldview problem because the vast majority of the electorate has already told itself a story about her... I believe there isn't enough money in circulation to persuade those voters that have already made up their minds to change them." -- from Seth Godin's All Marketers are Liars (2005), pp. 81, hardcover.

Bonus: "Trust is the scarcest resource we've got left. No one trusts anyone." -- pp. 9.

What's my take? Marketers have reached a point where their stories diverge so far from reality, people have stopped listening.  The real gamechangers will be the truth-tellers--if the marketers allow them media space.

Bonus"Hillary Clinton received the most money from Goldman [Sachs] employees and affiliated PACs... during the 2016 election cycle." -- The Atlantic, April 2017, pp. 23. #hillaryclinton 

Monday, March 27, 2017

Western Civilization and its Exiles

By Rebecca Goldstein, National Geographic (2017)
In 399 BC, the Greeks tried and killed Socrates--"the best, wisest and most upright man"--because they grew tired of his anti-democratic views.  His death caused Plato to self-exile.

The Greek Empire lasted from 776 BC to 323 BC (until the death of Alexander the Great), or about 350 years.   Yet, the moment Greece killed Socrates, it was over for the Greeks, who are today the weakest link in the European Union.

The Roman Empire lasted about 500 years.

If any place cannot keep its best people, it will eventually fail or become irrelevant.  History is simply a reiteration of places that managed to keep their best people safe while attracting--and keeping--the best people from all over the world.

Propaganda and favorable media coverage play major roles in where people go, because if you never hear of certain places due to dishonest communication or inadequate media access, they won't be able to attract the best people in a systemic or broad manner.  The problem is when propaganda deviates significantly from reality, leading to dissatisfaction among both natives and newcomers. Americans are discovering that splintering media and allowing varying levels of honesty is posing major challenges in maintaining societal cohesion.

Bonus: Wisdom is often found in the unlikeliest of places.  Guess who?

“His view of American and world politics was so on point and profound and now, eerily prophetic. Even to the last days of his life, even if his mind wasn’t always there, he was devouring the news, reading every newspaper and being an oracle who foresaw what was coming.” 

Saturday, March 25, 2017

Book Recommendation: Hilarious Satire of Academia


March 25, 2017
Worldwide Intelligentsia
Wherever, Everywhere

Dear Readers:

I haven't laughed this hard since Me Talk Pretty One Day and David Lodge's similar novel, Changing Places. Jay is a beleaguered English professor who appears to spend most of his time writing letters of recommendation. His writing style is equal parts maudlin, passive-aggressive, and earnest. I needn't say more, I suspect.

An aside: I asked my law professor for a LOR over a month ago, and it took a month, two in-person visits, and about 10 emails to get it. Trying to make it easier for her, and with her agreement, I did it myself and drafted two noncontroversial paragraphs. It still took a month to get the letter. She actually expected an online form (would it cut off her sentences, like in the book?) and looked at me like I was crazy for questioning why it was taking more than 10 minutes to do a copy-and-paste job. Apparently, professors don't mail letters anymore--they have staff and a queue for this sort of thing. When people wonder why Americans voted for Trump, I tell them this story.

"With candor, regret, and a whiff of vengeance,"
Mateo

Update: the author is apparently both witty AND wise. How come female authors "do" male characters so well, but we men can't seem to reciprocate?


Friday, March 24, 2017

Retail Therapy: What's Wrong with Brick-and-Mortar Retail?

Payless Shoes appears headed towards bankruptcy. Sears looks like it's on life support.  Does anyone shop at JC Penney anymore?  

It's tempting to say retail is dead and appoint Amazon as its pallbearer, but one look at McDonald's, Costco, H&M, Chick-fil-A, In 'N Out, and Dunkin' Donuts tells you brick-and-mortar can work just fine.  

Target (TGT), which I own, is the odd duck, so I will focus on it.  It used to be Target was retail's darling.  Fans would refer to it as "Tar-jay" (with a French accent) to denote some particularly welcoming stores and its exclusive clothing lines.  At one point, a famous designer, Isaac Mizrahi, created an exclusive fashion line for Target for five years.  The fact that a "discount" retailer was able to carve out a high-end niche, at least in the consumer's mind, is worth further study.  

Recently, however, Target has lost its ability to maintain its brand.  A series of unfortunate events occurred.  In 2013, hackers took advantage of Target's credit card information, a debacle that continued to make headlines through 2015.  It exited Canada, admitting defeat in the country.  Its exclusive fashion collaborations didn't garner as much appeal as in the past.  And it angered fundamentalist conservatives by taking a political stance on unisex bathrooms.  

What is happening to Target, whose stock is at a five-year low?  

1.  As living costs in America have increased, wages haven't kept pace.  It's hard to motivate employees when they see employment with you as a temporary gig.  At least waiters and bartenders have tips to motivate them, so they can't completely slack off.  

2.  Today, the main way to differentiate retail is through outstanding customer service.  Chick-fil-A has great food, but most people will remember its consistent service long after the taste of spicy chicken has been forgotten.  With its relatively low wages, how does Target create consistently excellent customer service?  

Note that Costco pays higher wages than the industry norm, which it considers to be part of its competitive advantage because higher wages can reduce employee turnover.  American retailers in trouble have failed to adapt to higher living costs while complying with Wall Street's general antipathy to higher wages for unskilled labor.  

Canada's Tim Horton's has adapted by hiring foreign-born Filipinas--who have a reputation for excellent customer service--to staff its stores.  Obviously it needs its government to be on the same page when it comes to immigration to do this, but Canada, as usual, succeeds where others have failed because of its greater tolerance and dedication to doing what works. 

Dunkin' Donuts has adapted by reducing the size of its stores, lowering its overhead and need for additional staff.  I'll never forget ordering a sandwich in a Chicago public transportation hub and trying to figure out how Dunkin' fit an entire kitchen in what appeared to be the size of a rich housewife's shoe closet.  (Maybe the new retail paradigm is this: can your store fit into an airport or public transportation hub and still succeed?  Hopefully not, though I notice bookstores seem to be doing well in airports and nowhere else.) 

3.  Does anyone think the majority of employees at Payless are experts on the perfect shoe fit or style? Of course not.  That's why it's cheap to shop there.  In contrast, Asics in Tokyo has a machine to measure your foot and print out data--yours to keep--that helps the Asics employee identify your best shoe choice.  After the helpful employee spends all that time with you, you really do want to buy whatever shoe s/he recommends.  After all, who am I to doubt science? 

As far as I know, Target has no individually-tailored services outside its photo department. 

4.  Partnerships are an excellent way to keep your brand in the spotlight but difficult to find and even harder to maintain.  I knew Olympic Gold medalist Jordan Burroughs would be a superstar long before he became a household name in some circles and abroad, even in Iran.  (As proof I'm no bandwagon fan, I donated to his gold medal fund *before* he won the gold. Besides, how could anyone not like his family? http://ftw.usatoday.com/2013/10/olympic-wrestler-gets-married-bride-wears-his-signature-shoes-down-the-aisle

Corporate partnerships are hard.  Jordan Burroughs made some comments against excessive police force that could have made him unpopular, but most people appreciated his measured criticism.  Meanwhile, Nike dropped the great Manny Pacquiao, and Colin Kaepernick is unemployed.  

In Target's case, it's just not getting enough mileage out of its "exclusive" partnerships because consumers figured out if they miss one offering, another will soon appear.  The lesson is simple: companies that mislead consumers, even if indirectly, will suffer, because consumers have become smarter about seeing through advertising gimmicks.  Target appears to suffer from a case of "MBA-itis"--short-term profits over long-term credibility.  

In Asics' case, it not only managed to scoop up the brightest star in a growing sport, it also cultivated a mutually-beneficial relationship with the sport's most respected coach for decades.  Is that why they were able to identify and sign Jordan Burroughs before other apparel companies?  Maybe not, but it couldn't hurt. 

5.  Consistency matters.  McDonald's might not always provide good customer service, but its coffee will taste the same everywhere in the world.  Its only adaptations are specific to local tastes, like adding guacamole to its Mexican burgers or using the term "liberty" in its advertising in Guantanamo Bay (the irony isn't lost on me).  When you consider the TSA can't even manage to be consistent in its own country, you'll see achieving consistency isn't easy but key to maintaining your brand's reputation.  

In Australia, I eagerly visited a Target store near Chinatown to see how my Target investment was doing.  I almost sold my shares the next day.  With Australia's affluent customers, you'd think Target would make the country a priority. Yet, the store was not clean and not even organized well.  I didn't want to buy a single thing.  Even the lighting made me sad. 

Perhaps Australia's relatively high currency and higher labor costs make it harder to invest there, but why open a store that will damage your brand's reputation?  How hard can it be for the Board's and executive team's spouses and children to travel a few times a year--on their own dime--to international locations and give objective feedback to their family?  One visit was all I needed to realize Target lacks the expertise or ability to expand overseas. 

[Correction and Update from Wikipedia: "Despite the similar logo, name and type of outlets, Target Australia [founded as Lindsays] carries no corporate connection or relation to the US discount retailer, Minneapolis, MN-based Target Corporation."] 

Conclusion: Target has many problems that justify its current low stock price and will need to think long-term to stay relevant.  Its issues expanding internationally need to be addressed immediately. 

© Matthew Mehdi Rafat (2017)

Disclosure: I own Target shares and other retailer company shares as part of mutual funds and/or ETFs, but my positions may change at any time.  You are responsible for your due diligence.  Nothing herein is intended to be investment advice. 

Thursday, March 23, 2017

Random Act of Kindness


I got an unexpected package in the mail today. I saw an Amazon Prime sticker, and I don't have Amazon Prime. I opened it and my favorite things in the world were in it: books
First thought: "Finders, keepers." 
Second thought: "Dammit, that's a lot of books. Someone will be inconvenienced. Let me check the label."
Third thought: "That's my name on the label. What's going on?"
Fourth thought: "Well, it's morally wrong to keep all these books, so I have to return them to Amazon. Dammit, I hope this won't take a lot of time." 
Fifth thought: (rummaging through papers, see the one marked "gift," but presume it's the standard gift receipt that comes with every package) "The receipt lists the books correctly. I wonder how Amazon screwed this up." (Starts looking through books, thinking maybe I'll read one before sending back.)
Sixth thought: "That's a gift receipt.  Let's look at it more closely... It's from a law school friend?! All I did was a very small thing for him, and he's a great guy... Wait, he sent me a gift? I got a surprise gift?!" 
Seventh thought: "Who's chopping onions in a goddamn post office?!" 

Wednesday, March 22, 2017

Remnants of Western Civilization

When they study the remains of American culture, I hope they see this Facebook debate. I'm not sure if these people are paid to post online as part of a strategy to discredit both major parties in the U.S., but I don't think these comments could be made by anyone in a foreign country--the language used is clearly U.S.-based.

Mateo: [posts blog link]

KM (older white American male, appears to have some connection to the University of Kansas): "Sounds like mateo is one of those compassionate conservatives that believes in throwing the baby out with the bathwater. Punish all the children because you are too lazy to go after the few corrupt adults...

when was the last time right wringers like you ever built anything that did not benefit you or your buddies rather than the community. So tried of hearing you selfish a-holes trying to tear down any and everything that made this a great country. Tell you what, if everything in this country -- public schools, unions, EPA, minimum wage laws are so bad -- why don't you leave and move down some third world country that has no regulations or laws.

meanwhile the real Americans will stay here, pay our taxes and support our troops and work to make this a better country for everyone."

Mateo: Keith, let's try this again.

Step 1: read post: https://willworkforjustice.blogspot.com/2017/03/why-wont-someone-think-of-children.html 

Step 2: make specific points relating to the content in the blog post.

Step 3: support your comments with links to supporting evidence, preferably from nonpartisan sources.

Step 4: if you skip steps 2 and 3, you concede the debate by your inaction or inability to refute any of the facts or statements.

LS (white American female, appears to have studied at UC Berkeley and UC Santa Cruz): "Hey Mateo, could you post that link again please? I'm not sure everyone has seen it yet."

Mateo: (for the record, I've never been a registered Republican, but there's nothing worse than a well-meaning but ineffective liberal) "Step 4: first failure. Which other publicly educated liberal will fail this simple test while railing against standardized testing? Stay tuned..."

LS: [watch as white American female starts making personal attacks rather than responding to any of the content in the blog] "So, you're putting rules in place now? Why don't you go be condescending somewhere else maybe? Going around in circles and posting the same thing over and over when people are trying to engage you in another way is totally counter-productive. Controlling much?"

Mateo: Step 4: Repeat failure. Slow learner.

LS: [yes, she actually said this.] Oh I think it's clear who the repeat failure is here!

Mateo: [ok, now I had to bring out "full snark"]  Alert: native born, entitled white American unaware that much of her success is due to luck and legal structures. Completely impervious to logic. Wants to be paid 10 times more than foreign workers while bringing 10 times less to the table.  Loves the Daily Show but unable to handle same tactics applied to herself.

LS: Alert: asshole. See, I can play too!

Mateo: [Um, actually, you can't.]  Alert. Step 4 failure. Again.

LS: Step 5: Mateo pretends he knows everyone and everything. Should I make up rules to follow and then repeatedly say you are failing when you refuse to play? We could do this all day! [Apparently, trying to limit discussion in productive ways is somehow not permissible.]

KM: [re-enters the fray!] Please forgive matty -- he thinks the more he attacks people the smarter he is

LS: Oh I'm sure he's the smartest. I bet he thinks bigly.




Tuesday, March 21, 2017

Why Won't Someone Think of the Children?! ;-)

The typical debate about K-12 education starts almost exactly as follows:

"Have no illusions. INSERT PROPOSED CHANGE HERE will gut public schools.  Don't we want ALL our children in America to have a good education?"

Almost all Americans fail to understand education is primarily a state and local function.  Why federal dollars are involved at all is an excellent question no one really asks.

I've volunteered at afterschool programs funded by federal dollars, sometimes called Title I schools. Most of the money goes to existing teachers, not kids. (I was an unpaid volunteer who decided to continue volunteering after teaching a financial literacy class affiliated with Junior Achievement.)  The goal seems to be to reserve as much money for existing staff as possible.  A principal in a different California district told me when she considered using general funds to expose students to organized activities by outside nonprofits, a tenured teacher complained the funds should be used first for teachers, and teachers should object or file a union complaint.

In any case, the afterschool program--funded with federal dollars intended to help schools with impoverished children bridge educational gaps--would hand out juice boxes and small snacks like wheat crackers or leave them out for children to take as needed.  In some schools, the kids play videogames. In one middle school, I ran into two unsupervised kids in a gym. When I mentioned I found two kids in the gym, the supervising administrator became angry with me for being alone with them, even though the gym should have been locked and the kids shouldn't have been in there in the first place.  When the gym was supervised, the kids played in a haphazard fashion, sometimes with deflated balls.  (By the way, I live about 10 miles from the school, and a single family home costs around 700,000 USD in the district--about three times the nationwide median price.) In short, federal dollars used for education and nutrition are sometimes babysitting programs with no educational value whatsoever.

92% of all K-12 funding comes from state and local sources, and taxpayers are no longer as tolerant when it comes to inefficient federal spending. Why should taxpayers in Kansas, Indiana, and Minnesota pay millions each year to California teachers for afterschool babysitting programs that do nothing to improve educational outcomes? And why can't states do these programs themselves instead of relying on slush funds from nationwide taxpayers? If a program is important to local voters and has mostly a local impact, shouldn't they fund it with their own tax dollars or increase taxes as necessary? (I suppose they could borrow money, which would be a great opportunity for Congress to pass a law mandating all local government programs be funded at least 95% by local or state taxes and not debt--to the extent the local government receives any federal dollars.) [Update: I just realized my proposed Congressional check on states won't work. States will just shift state spending obligations to the federal government, which has greater and almost unlimited borrowing capacity.  Instead of issuing state bonds at higher and higher interest rates--essentially stealing from future generations--states will just ask the feds for more money and then horse-trade with more fiscally-conservative states to get that money. For example, a California legislator needing x dollars for y and z program would tell Kansas, Nebraska, and Iowa that they can have the next five years' defense contracts in their states, as long as they put a provision in the defense bill giving California federal grants for x and y programs.  Without integrity and some sense of long-term consequences, no law or proposed change will fix substantive problems. Sigh.]

The consequences of corruption, which include inefficient government spending, can unfortunately include wholesale elimination of programs. This doesn't preclude administrations from instituting new programs that accomplish the goal more efficiently and without employing the formerly corrupt employees. While no one enjoys change and new responsibilities, without them, governments will stagnate.  Governments that fail to adapt to change will promote protectionism and a desire for the "good ol' days," which are never as good as anyone thinks.  What is giving rise to voters' lower tolerance for inefficient government programs? (aka "compassion fatigue") 

1.  Lessened accountability. Anyone familiar with California's government unions knows they promote systemic corruption.  Some police officers use excessive force, and even when the evidence is on camera, the worst that follows is paid vacation or reassignment.  Why?  Because police unions have passed laws defining "excessive force" in their own favor.  (What's the definition of "sex" again, Mr. Clinton?) When you can invent your own dictionary, the law can't touch you.

Police unions and their lobbyists know that protecting the worst amongst their members--it's a fraternal order, after all--causes the general public to mistrust all cops, even good ones.  Incredibly, they don't care.  They assume with enough marketing and political influence, they will always be able to protect themselves--even at everyone else's expense.  When you don't know whether the officer who just pulled you over has used excessive force and gotten away with it, you're not going to vote to increase tax dollars to the police.  You won't trust any of them.  From the perspective of political lobbyists, however, it doesn't matter.  You can complain, but dispersed voters, even if right, cannot effectively counter political and legal moves by groups, even if wrong.

It's the same concept with teachers--who only teach about 158 to 180 days a year in California.  Many of them refuse to do volunteer work for the benefit of the school, which reduces the school's role as a positive influence on the community.  In the past, if Johnny was falling behind, maybe a teacher tutored him one-on-one for an additional 15 minutes, without pay.  Today, teachers unions counsel members not to do any volunteer or additional work during contentious budget negotiations.

Such tactics aren't new--California's teachers unions campaigned against one of the best teachers in the world and drove him back to his native Bolivia ("Faculty colleagues and union officials complained that his extra hours and large class sizes set unhealthy precedents for other teachers and violated existing work agreements.")  They, too, have passed laws favoring themselves over all other taxpayers, making it almost impossible to shut down underperforming schools or to eliminate even the most egregious pension loopholes.  Meanwhile, teachers' pensions grow at guaranteed rates, regardless of actual tax revenue. Incredibly, some teachers still wonder why the public has turned against them.

2.  Reduced accountability isn't leading to better performance or results.  One potential upside in protecting government workers is some of them will be encouraged to try new programs or take more risks.  That hasn't actually happened.  California still doesn't have universal pre-school, despite guaranteeing K-14 education receive at least 40% of each year's budget (see Proposition 98).  Educational outcomes are still primarily determined by two factors: 1) parental educational levels; and 2) parental income levels. ("America: the worst caste system in the world, but with new and improved propaganda"?) 

Worse yet, most 6th to 12th grade programs don't teach in ways that promote better analytical ability or better citizenship. Americans are likely to learn WWI started when Archduke Ferdinand was assassinated, but such knowledge is worthless without some overall context, including incorporating modern information such as NATO and internal independence movements. In short, not only is critical thinking or logic absent in K-12 courses, even the material taught is useless because it usually lacks any connection with modern-day knowledge or practical skills.

3. As governments have become less accountable, businesses have become more responsive to consumer needs, giving corporate leaders more credibility than politicians. With the exception of a few outliers, most Americans will sooner read a book by Nike's CEO or a professional athlete than any politician not named Obama.  When you think of prior leaders like Eisenhower and Kennedy--people who captivated the entire world--this shift from political to corporate power is a dramatic change. How did it happen?

Globalization forced businesses to compete and provide individually-tailored solutions while governments reduced competition--and therefore accountability--through gerrymandering and other legal mechanisms. While businesses were behaving more nimbly, American voters forgot their political systems' numerous checks and balances allow only incremental change.  In other words, once a political change is enshrined in law or through vested power, it is as close to permanent as one can get.  Once vested, power removes some portion of a country's political flexibility and its ability to absorb anything radically new--an issue for anyone who believes America's economic, social, and innovative engine runs on immigration and tolerance.

To avoid reform and making hard choices, governments--as well as corporations--have been relying on debt to prop up unsustainable legal and benefit structures that make Jim Crow's "separate and equal" look tame by comparison.  (Say what you want about Southern racists, but even they didn't argue that "separate and unequal" was defensible, like government unions are doing now with their different compensatory and disciplinary rules for government workers.)

Corporations and real estate developers have relied on debt, too, but have usually done so to facilitate new products or changes (moving to the cloud, new condos, etc.).  In contrast, governments have used debt to make change more difficult and to support separate and unequal legal structures.

4. The above phenomena have led to ineffective remedial responses.  This is to be expected, because remember: America's political structure only allows incremental changes because of its numerous checks and balances, which generally operate against non-military governmental overreach but also against removing vested interests that harm the public trust.

On the federal level, governments have responded by trying to reduce expenses and costs as much as possible--without regard to quality.  One way to reduce expenses, given the lack of fiscal checks and balances within most government entities, is to hire contractors.  Yet, even this approach is no longer working, because most businesses now understand their goal is to submit a low bid then increase costs over time through negotiations and add-ons.  In other words, governments have made internal hiring too expensive because of unsustainable benefits and no real incentives for timely delivery, forcing them to rely on more efficient outside workers, who themselves have become corrupt over time. (Study private prisons if you're curious for details.)  Also, even if costs are kept in-line, the service under contract might be so clunky, it forces consumers to rely on costly experts to navigate the system. (Talk to anyone who's navigated the Covered California website for more details.)

Bottom line: governments are no substitute for culture.  If your culture is filled with hubris, inefficiency, unsustainable legal structures, and a lack of critical thinking and compassion, your government won't be able to do anything.  Anyone who can set up private or external systems will do so--if only out of a desire to get things done.  When this self-segregation inevitably occurs, people stuck in the mainstream will complain, but in America, only incremental change is possible, so individual complaints, regardless of merit or veracity, will generally go nowhere.  Society will fracture and eventually decline as the best and brightest move away or find more accountable systems that allow them to prosper.  And that, boys and girls, is why every empire eventually collapses or becomes a military dictatorship, where some force feeds off of dissatisfaction and overrules all established rules and opposition, especially minorities.  In short, it's a scary time to be an individual in America.

"Civilizations die from suicide, not by murder." -- Arnold Toynbee

© Matthew Mehdi Rafat (2017)

Bonus: I keep saying I'm going to write more about people and non-economic culture, but you can't really do that in America.  The average American in 2017 is in debt, more uptight than almost any other culture, hasn't read more than two books in the past year, and is generally unaware of his or her exposure to constant propaganda. (80% of the TV commercials I recently saw were military-related and for soda and alcohol.  The alcohol commercial, for a low calorie beer, featured semi-professional athletes engaged in vigorous exercise.)

The most interesting Americans I've met in the last 22 years are immigrants or ones who have traveled to at least 10 countries starting at a young age.  If the most interesting Americans are the ones exposed to non-Western cultures, perhaps the best places to study culture are outside the "West."

Pro tip: if you are enamored with "Western" life but desire a bit more soul, try Buenos Aires, Argentina. If money isn't a concern, visit Santiago, Chile.

Flashback from 2010https://willworkforjustice.blogspot.com/2010/09/teachers-unions-running-california.html