The Equal Employment Opportunity Commission, responsible for ensuring that the nation’s workers are treated fairly, has itself willfully violated the Fair Labor Standards Act on a nationwide basis with its own employees, an arbitrator has ruled. . . . The EEOC has a much worse record of labor and civil-rights violations than most corporations and agencies with a similar-size workforce.
As Reynolds notes - "Fair employment practices, like taxes, are for the little people." On one hand, it's sort of frightening that Americans have a leadership that believes in imposing greater amounts of regulation and taxes but don't believe those same regulations and taxes apply to themselves. Arnold Kling sees an additional quite troubling pattern (also via Instapundit):
For quite a while, but especially over the last nine months, the best way to predict developments in politics and finance has been to ask: what will do the most to increase the concentration of power? Every headline, from the Geithner regulatory plan to the proposed cap on the charitable deduction, to the resignation of the General Motors CEO, should be viewed in that light.
Perhaps this is a case the Bono's organization doth protest too much and the reason they resist calls for accountability is that they can't live up to the scrutiny.
A redefined top-end. Fewer big-spending Westerners, tighter MNC expense budgets and a general de-rating of Western standards will change the way China defines luxury and status. High End Asian has existed for a while, but it’s always been in the shadow of European standards. As that shifts, international managers are going to have to make sure that their offering stays competitive.
A more middle-class middle-class China I recently had lunch with Bill Dodson, publisher of This Is China - and he made the distinction between ‘middle-class Chinese’ and ‘entrepreneurial Chinese’. The folks that westerners call ‘middle-class’, most Chinese call ‘rich’. The real Chinese middle-class is huge, value-oriented and very local. The entrepreneurs and returnees, whom we have all been CALLING the middle class, were very international, status-conscious and tended to have jobs that linked them to China’s ‘external economy’. The real middle is on the rise.
More opaque B2B transactions. As western capitalism gets de-rated in China, so will the annoying trappings of western commerce — like open bidding for contracts, RFPs and transparent procurement. Look for a re-guanxified buying process – even in MNCs.
Larger, more assertive SOE & State actors The stimulus package shows the direction of China. Private commerce is going to finally and definitively be given a back seat to the SOE/State actors in China business. As some of us have always suspected – market-oriented commerce was just a phase in China. Now that there are plenty of well trained, commercially sophisticated managers in the system, we’ll see China rapidly back away from ‘market socialism’ and towards ‘Statist capitalism’.
Laxer QC, compliance and regulation. China will be throwing the baby out with the bathwater, and many hard-won gains in the areas of quality control, consumer protection and anti-graft policies are going to fall by the wayside.
I'm not alone in thinking that China's domestic economy will bear the brunt of the global downturn - but I'm also not sure ChinaSolved's prediction isn't wrong that the US will not have emerged by the end of 2010. If the lessons China learns are the above, this will ultimately handicap their future growth as it will reduce the efficiency of their economy. It will also suggest China's apparatchiks have been successful at reclaiming some of the power they have lost.
The US government says no (CNN). While the media hasn't exactly been reporting the multitude of protests from unlikely places - ie people who actually contribute in some meaningful way to society (IBD via Instapundit), much of the electorate is clearly unhappy with the bailout packages (not to mention the treat of higher taxes and bigger government well into the future). So why won't the government take the money back? So much for the silly people who say that capitalists deceive to seize power during crises (Reason). They must have had "capitalists" confused with "government".
Services like this make the traditional gatekeepers of information increasingly irrelevant. What matters now more than ever are the ideas/content rather than distribution - from Wil Wheaton (via Instapundit):
As creators, the barriers between us and our audience are falling faster and more easily than ever before, the time between creation and release is shrinking, and thanks to the Internet we can reach more people with less effort than we could as recently as a decade ago.
This is excellent news and it furthers the irony that capitalism may soon no longer require capital. It also does not bode well for the mainstream media who have been suffering through a depression for quite some time (ReadWriteWeb). It's going to get worse.
World Bank President Robert Zoellick has recently taken to calling on rich countries to pony up 0.7% of their respective stimulus packages, including $6 billion from the United States, for a bank "vulnerability fund" for the world's poorer countries. It's all part of what he calls, echoing President Obama, "the Age of Responsibility."
Apparently "responsibility" doesn't apply to the World Bank:
The bank has publicly stated that the debarments mean only that these companies will be prevented "from bidding on future World Bank-financed contracts." Does that mean that the companies continue to get money from the bank for the contracts that were signed before the debarments? Interesting question. Our sources say they do, and the bank's sanctions procedures are ambiguous on the point. We contacted the debarred companies that still have contracts with the bank, but they either hung up on us or never returned our calls.
As for the bank, it has declined to respond to our multiple queries. A February 4 bank press release promised to make a redacted report of its Philippines investigation available on its Web site "in the coming weeks," but so far we haven't seen it.
We suppose the bank might say that it owed these companies "due process" before cutting them off. But that doesn't mean the bank had to do more than a half-billion dollars of business with companies it suspected of corruption. If this is the "responsibility" that the bank proposes to exercise over the new taxpayer billions Mr. Zoellick is requesting, his donors should look for worthier recipients.
Just as one threat was being shot down as being bogus... Sometimes there really are monsters under the bed. First - if you were ever worried about the Bird Flu or SARS (I still am somewhat and I bought two boxes of N95 masks (Google) for my family), Bird Flu could be nothing compared to some of the other viruses lurking out there (think HIV). Fortunately at least we have people hunting for these things. From TED (via BoingBoing):
The second is the potential of a solar space storm - here's how the New Scientist - which isn't exactly a fringe magazine, paints the worst case scenario:
IT IS midnight on 22 September 2012 and the skies above Manhattan are filled with a flickering curtain of colourful light. Few New Yorkers have seen the aurora this far south but their fascination is short-lived. Within a few seconds, electric bulbs dim and flicker, then become unusually bright for a fleeting moment. Then all the lights in the state go out. Within 90 seconds, the entire eastern half of the US is without power.
A year later and millions of Americans are dead and the nation's infrastructure lies in tatters. The World Bank declares America a developing nation. Europe, Scandinavia, China and Japan are also struggling to recover from the same fateful event - a violent storm, 150 million kilometres away on the surface of the sun.
It's not like this kind of thing hasn't happened before - it has! Just not in major population zones:
The incursion of the plasma into our atmosphere causes rapid changes in the configuration of Earth's magnetic field which, in turn, induce currents in the long wires of the power grids. The grids were not built to handle this sort of direct current electricity. The greatest danger is at the step-up and step-down transformers used to convert power from its transport voltage to domestically useful voltage. The increased DC current creates strong magnetic fields that saturate a transformer's magnetic core. The result is runaway current in the transformer's copper wiring, which rapidly heats up and melts. This is exactly what happened in the Canadian province of Quebec in March 1989, and six million people spent 9 hours without electricity. But things could get much, much worse than that.
The big issue is how reliant we are on an outdated electrical grid and an excellent case for decentralizing the grid. I figure though if we can get through the next 10 years without a disaster, some of the amazing technical innovations in energy will provide us with sufficient alternatives but until then... I'm not sure that relying on government is ever ideal.
Something to think about tonight when I'm sure some of you will turn off your lights in observance of "Earth Hour". Me? I think I'll keep the lights on to celebrate human civilization and hope those lights continue burning brightly.
Update: And as if we didn't already have enough things to worry about (RTE News): "A highly radioactive lead ball has gone missing in China, prompting authorities to launch an urgent search."
Not according to Phillip Greenspun who makes the argument that our systems of governance and regulations encouraged excess risk at the expense of shareholders:
Given our country’s rules regarding public company governance and the fact that Wall Street is dominated by public companies, is there a realistic hope for stability? What would any of us do if we had the chance to make $100 million per year by taking a 10 percent risk that our employer and its shareholders would be wiped out?
A free market in which participants risked their own money might work quite well, but that’s not what we tried. We had a market in which participants risked other peoples’ money and pocketed much of the upside but suffered no downside risk, all made possible by the government’s regulating away public company shareholder power.
Along with the pols out in force to decry the "greed" of Wall Street (nevermind their central role in the crisis), all sorts of people are coming out of the woodwork to capitalize on the resentment people have over the financial crisis making claims that capitalism has to be made "moral". Of course most of these people never understood capitalism (or economics for that matter) to begin with.
The blog at ASI differentiates between "greed" and "self interest": "even without their kind intervention, capitalism is very much more moral than most of the snotrags in Parliament, who seem to spend most of the time working out how to fiddle their expenses [...] People say that capitalism is based on greed, which must be restrained. No it isn't. It's built on self-interest – which is perfectly natural to us all, and beneficial to our community. Markets are about free people, voluntarily exchanging cash for goods or services."
A rejoinder by William Easterly makes the "moral" case for personal freedoms: "Individual liberty is a precise concept and a powerful ideal. It has an enormous moral appeal – “all men are created equal, and are endowed by their creator with certain inalienable rights, that among these are life, liberty, and the pursuit of happiness.” Jefferson wrote these words even though there was only liberty for propertied white males at the time in the US, but these words would serve as a beacon through American history, which Lincoln would invoke to motivate the Emancipation Proclamation, and which Martin Luther King would invoke to end Jim Crow and get de-facto voting rights for blacks."
The markets reflect who we are as individuals and as a society. So when we're told that capitalism needs to be more "moral", just remember it's none-too-subtle code that someone wants to impose their morality on us.
A complete non-sequiter. The few times I've caught it on, I've enjoyed Discovery Channel's Mythbusters (imdb). In what can only be described as slightly insane, in order to answer the question of whether or not it's possible to knock someone's socks off (CrunchGear), "the Mythbusters crew ignited 500 pounds of ammonium nitrate about a mile outside of Esparto that resulted in an explosion that “was a lot bigger than they expected.”" With windows shattered as far as a mile away, my guess is that the answer is yes.
Fully aware that fighting graft is a matter of life and death for the party and its rule, Chinese President Hu Jintao has repeatedly pledged to step up crackdowns. In recent years, more anti-graft bodies have been set up and more channels opened for the public to report suspected corruption cases. Fearful that the global financial crisis may spark public discontent, which could threaten social stability, at the NPC session, Premier Wen Jiabao, Cao and the country's top judge all vowed to make new efforts, including enhancing public supervision, to fight corruption.
But if someone should have the audacity to squeal on graft?
"Nine of the top 10 anti-graft fighters in the past three decades have faced retaliation," He Zengke, director of the Institute of Contemporary Marxism under the CCP's Central Compilation and Translation Bureau, told China Youth Daily. He did not give details on who the top 10 anti-graft fighters were, or what retribution had been meted out to them, but there are plenty of cases of informants being killed, jailed or attacked after tipping off the authorities.
Government officials have a serious image problem both in encouraging offenses to be reported, creating the incentives to do so but also protecting whistleblowers. Sustained development requires rule of law and property rights that protect everyone. While China has clearly come a long ways - and its vibrant and burgeoning entrepreneurial class is evidence of this, it has a long ways to go.
My way of justifying my time and yours in reading my rants, on this blog:
Paul Hebert from Incentive Intelligence makes the case that incentive programs should change with the market - that the focus should be more on recognition and less on incentives. Noteworthy quote: "Recognition is an act - not an item." This may be the "optimum time to reinforce behavior that contribute to positive attitude, helping other departments, reassuring other employees and taking care of existing customers."
Some thoughts from Inc.com on cutting prices in this environment. One cautionary note: when it comes to pricing, the best lesson I remember is the strategy of companies like Four Seasons and Abercrombie and Fitch who try to avoid discounts whereever possible - when the economy does rebound, they're the ones who benefit most from higher margins but also a clearer recognition by customers of their products/services as luxury items. Discounts can also cheapen the value customers see in a product.
My only and favorite Outlook add-in is coming out of beta (and got additional funding). Xobni helps you to rethink the way you work with email (Cnet) by mapping out the relationships of the people who pass through your inbox. I reinstalled it last night and the recent updates like the re-index feature are most useful.
Richard Gibson from the WSJ notes 6 blogs/web resources for franchisees: Franchise-Chat, The Franchise Pundit, Rush on Business, Unhappy Franchisee, and WikidFranchise. Given that building a business can be an intensely lonely endeavour, joining a community of peers who can understand what you're going through is highly recommended.
These derivatives are the root of the credit crunch. Why? Unlike all other property paper, derivatives are not required by law to be recorded, continually tracked and tied to the assets they represent. Nobody knows precisely how many there are, where they are, and who is finally accountable for them. Thus, there is widespread fear that potential borrowers and recipients of capital with too many nonperforming derivatives will be unable to repay their loans. As trust in property paper breaks down it sets off a chain reaction, paralyzing credit and investment, which shrinks transactions and leads to a catastrophic drop in employment and in the value of everyone's property.
Though I'm not entirely sold on the idea that it's the problem of derivatives themselves, the fact that there's a lack of transparency to the point that there are doubts as to whether a financial institution is solvent is clearly a problem. He makes a number of important points though:
"Every financial deal must be firmly tethered to the real performance of the asset from which it originated. By aligning debts to assets, we can create simple and understandable benchmarks for quickly detecting whether a financial transaction has been created to help production or to bet on the performance of distant "underlying assets.""
"Governments should never forget that production always takes priority over finance. As Adam Smith and Karl Marx both recognized, finance supports wealth creation, but in itself creates no value."
Time Magazine's blog says yes after they have shut down YouTube in China in a rather heavy handed way. I tend to agree. Banning voices (Christian Science Monitor on the banning of the Dalai Lama from a South African peace conference) and messages (CTV on banning Roger Galloway from Canada) just tends to make them stronger. It's a pity given that I think there is an "other side" when it comes to these issues. Those with power should have learned by now that by attempting to crush a message, you often have quite the opposite effect.
Was China serious? Apparently, the journalists at Chinastakes don't think so - at least not entirely. I figure that in the short run, China doesn't have a choice but with what the US Administration is planning, can anyone blame them? (Besides, a currency created by the IMF - a multinational organization accountable to member states (ie no one)? If they really think they'd be trading up, we may all be in serious trouble).
Update: The American response - per Paul Volcker (WSJ's China Blog), "They hold all these dollars because they chose to buy the dollars, and they didn’t want to sell the dollars because they didn’t want to depreciate their currency." Frankly, the response sounds a bit insane considering the the US will at least in part be depending on China's continued appetite for American debt as the US debt multiplies over the next few years.
A myth, according to the Wendy Barnaby in the science journal Nature. As she notes:
The 1990s had seen cataclysmic forecasts, such as former World Bank vice-president Ismail Serageldin's often-quoted 1995 prophecy that, although "the wars of this century were fought over oil, the wars of the next century will be fought over water".
The solution? Practically every time, has been trade - imported food has nearly always made the difference and there haven't been wars fought over water. It's nice to know that there's at least one less reason to be worried about a nuclear holocaust (though I'm sure this won't be end of the generally hysterical statements over the issue).
Just trying to figure out a name for these somewhat random but business related blurbs that I think are useful enough to pass on. In any event, here they are:
Learn to survive the downturn by looking to how other firms thrive in highly volatile, developing markets (WSJ). The basic ideas: be aggressive - repackage, reprice, requestion the value you offer & reconsider how performance is measured. Above all - stay optimistic! Definitely worth the read. One observation that seemed to work tremendously courtesy of P&G in Africa, was how they sold product in much smaller quantities per package making it far more affordable.
In my ongoing quest to GTD, I came across another (web based) summary. But what I found particularly good was the one page .pdf work flow download that they have (about midway through the page). Getting my email inbox to empty will be the next gargantuan task though I came across 43 Folders' Inbox Zero which has some ideas that I hope prove useful.
I've been quietly updating my directory of webutilities for startups - which I suspect I get more use out of than anyone I've referenced to it (which I think is a good thing). Going forward, to keep it current, I'll point out some of those changes and additions. So one significant update is adding a section called "Tell the World." With some of the services out there, there's really no excuse for not having well designed printed materials for your business these days. Inkd, a marketplace for print layouts, launched today (via TechCrunch). Competitors include Branddoozie and Stocklayouts.
In the same section, I've also added microstockphotography sites - iStockphoto (owned by Getty) is one that I've used extensively. You can get amazing imagery for your marketing at great prices. Others include the more expensive SnapVillage (owned by Corbis), or the cheaper BigStockPhoto (I've also used this service), ShutterStock, Fotolia, Dreamstime, and StockXpert (owned by Jupiter Images).
Finally, one site I first came across several years ago that amazed me and my first introduction to marketplaces of content generated by a community of creatives - Template Monster. For a cost of under $100, you get a generic template (though you can buy exclusive ones). Though they may be templates, there are a number that are extraordinary. Unless you have some knowledge of web programming you'll need some help to customize it, it would still save a ton of time and money (you can use one of the outsourcing services listed there).
Just how bad? From PEHub (they're talking about players' dwindling investments in private equity): "by the time they’ve been retired from football for two years, a staggering 78 percent of NFL players are broke or nearing bankruptcy."
The start of hopefully, a useful series. My way of justifying the time I spend on my blog and your time reading it (the rants are a bonus!) - culling business ideas from 'round the web:
Arnie Street has a variable pricing model that Armando Roggio from Practical Ecommerce believes could apply to other ecommerce businesses and has been core to its success. Prices start free, and rise up to 98 cents based on popularity - prices therefore are a signal of popularity of a particular song allowing you to discover new bands. Roggio says the model has three principles that allows it to work:
There's a scalable and low-wholesale cost item
Uses a very low introductory price to entice prospective customers, and
it rewards customers for marketing for the store.
Using design as a competitive advantage is obviously not a new idea (see Apple). One trend that I think will pick up pace is the simplification and stripping of features people neither want nor use. The Industry Standard asks whether the acquisition of Flip by Cisco heralds the rise of "dumb tech"? I think it goes further than this, in that one of the drivers is building designs for "the bottom of the pyramid" (Amazon).
Making products affordable used to be about sending last year's models and rejects into the developing world, but I think there's a real recognition (in no small part motivated by competition based in the developing world), that the market potential is not only greater but now it seems things are reversing: basic concepts are being designed for the developing world to be scaled up for wealthier markets (Core77).
Finally, a trend in manufacturing. The blog at Shapeways talks a bit about the barriers to mass customization when it comes to 3D printing as an emerging technology. It makes the argument that desktop 3D printing will never become mainstream for the simple reason that it will be easier and more cost effective to manufacture in mass quantities - comparing the technology to the less than universal nature of a Singer sewing machine. I don't entirely agree with their reasoning but I think their discussion of what the key barriers are, is interesting.
