29 January 2010

My Analysis of Obama's State of the Union

Talking about the struggles that Americans face in this recession, Obama said, " I hear about them in the letters that I read each night. The toughest to read are those written by children ..."

And I thought, well, yeah. Their handwriting and spelling can make it nearly impossible sometimes.

26 January 2010

Multinational Corporation vs. National Government - Multi Wins!

The Supreme Court realizes that the government is no longer the big dog and has rather blatantly rolled over for the corporation. I should be outraged by the various implications of this, but instead just find it inevitable.

This from Jonathan Alter's most recent column about the Supreme Court decision to let corporations put unlimited money into any election.
In oral arguments, Ruth Bader Ginsburg, another dissenter, asked if foreign companies should have the same free-speech rights as domestic ones, since foreign individuals are allowed to make a speech here. The majority had no answer, and opened the door to a Chinese bank or Russian oligarch buying Congress.

Right now, the American political landscape has two camps regarding government and the corporation. One is wrong and the other is irrelevant. Sadly, it’ll probably take about a decade or two for communities to catch up.

One camp applauds the Supreme Court’s decision to let corporations spend unlimited amounts in elections. They rightfully see corporations as the engine for our economy, the creators of wealth and jobs. They wrongfully think that this means that corporations’ interest will dovetail with local communities and thus don’t need regulation.

Another camp is outraged at the Supreme Court’s decision. They rightfully see corporations as more interested in profits than American jobs and more interested in avoiding costs than accepting regulations that lessen the damage to communities through pollution and other egregious acts. They wrongly think that in a global economy the government has much influence over an institution that is so dispersed (we talk about “the corporation” but there are, in fact, thousands and thousands), pervasive, malleable, and quick.

Sadly, while political parties engage in the equivalent of Beta vs. VHS debate, the corporation continues to gain power in ways that don’t necessarily benefit communities here in the US.

The church could not reform the nation-state. Once the state had eclipsed the church in dominance, citizens had to transform the nation-state through revolution. Today, a similar thing has to occur within the corporation. Stockholders and employees – owners of the financial and intellectual capital of corporations – have to transform the corporation from within.

I’m optimistic that this can happen. I’m not optimistic that many people will even try to play this game for another decade or two.

24 January 2010

Flag on the Play - Excessive Celebration

Today I heard such a sad story. A friend went to a monster truck show yesterday and reported that what he saw, "was big and loud."
"You're talking about people or things," I asked.
"As a matter of fact," he said, "there was this one really loud, big guy with his shirt off who got handcuffed."
"What did he do?"
"Nothing, really, that I saw. I think that he was just overly excited about monster trucks."

It wasn't like the poor guy was at Von's or in church. He was at a monster truck rally. And was cuffed for excessive celebration. Where else is he going to be able to freely express his passion for monster trucks?

I love baseball, but find it inane that when a guy hits the rare home run he has to act as if he's jogging out to take his position, showing minimal emotion. It used to be that football players at least knew how to celebrate scoring, but apparently the officials thought it bad form for a guy to get excited and they now throw a flag at a player who acts too happy.

I missed the official memo requesting more apathy. Maybe the pharmaceutical companies are behind this, knowing that in order for us to continually swallow our emotions we'll eventually need some sort of chemical handcuffs. Or maybe the real plot is to get us all to stop emoting so that when they begin replacing us with robots we'll be less likely to notice.

23 January 2010

Obama Finally Gets His Experience Just as His Support Dries Up

Leadership does not just begin with vision. It begins with getting people to confront the brutal facts and to act on the implications.
- Jim Collins, Good to Great

Again, I feel like a Martian. I’m not sure whether to feel comforted by that or not.
When Bush invaded Iraq, I was aghast twice. Once that he’d do it in response to 9-11 and then that so many people – from media to everyday citizens – would so blithely cheer him on.

A year ago, when Obama was sworn in, I was, like so many Americans, so relieved that Bush was gone and happy to have a new president who seemed so intelligent, thoughtful, and carefully optimistic. The one big concern I expressed at the time was that Obama had no real experience. A year ago, I felt like a part of the majority. It was a little heady.

After peaking in the summer, Obama’s approval ratings have steadily dropped. They are now below 50%. And this is the part that I don’t get.

Obama’s one big weakness last year was a lack of experience. He now has it. And he’s done pretty well. I’ve got criticisms of the man, but he’s largely the cautiously progressive, boldly moderate candidate we elected. He’s kept his calm. He’s put money into infrastructure and education, showing his commitment to making long-term improvements in this country. And he’s shown genuine respect for other countries and won back our standing in the world community. He’s changed tactics, strategy, and even specifics about his goal on health care but has yet to sacrifice direction (moving towards more coverage for more Americans).

I’m still hopeful about this man who writes about the audacity of hope, but now I feel a little less uneasy about him. In my book, he’s proven that he can translate his potential into results. He has experience and the experience is not that bad, in spite of the bad economy and wars he’s inherited.

Bush had a great imagination. I’ll give him that. He wanted to transform a dictatorship in the Middle East into a beacon of democracy within a couple of years. Given such a thing has never happened in the history of humanity, such a goal showed great imagination. But he showed little acceptance of the world as it is.

By contrast, Obama has yet to show much imagination but he has seemed to show a real acceptance of the world as it is. He seems very realistic.

And to me, this explains why Obama’s approval ratings have steadily slipped. He hasn’t promised that anything will be easy. He has not claimed that in reality we’re well positioned. There is nothing exciting about confronting a reality that is full of issues as difficult as climate change, two wars (well, occupations really), the worst recession in a century, and health care costs that are steadily eroding salaries and competitiveness.

Yet the potential that comes from honestly addressing reality as it is, well that’s a potential for great achievement.

For me, Obama is addressing the real issues with real solutions. There is nothing easy, exciting, or quick about this. Drucker once said something to the effect of, “even the grandest strategies eventually devolve into real work.” And yet it is work that, finally, works.

I actually feel better about Obama now than I did a year ago. I guess this puts me back into the minority. But you know, after 8 years of watching Bush, I get some comfort from that.

18 January 2010

A New Kind of Manager

I suspect that in the future, work teams will increasingly be coordinating their activities through the Internet and be less reliant on companies. And this will set the stage for a new kind of manager.

Decades ago, if you had told a new recruit that people would pay for the (admittedly kinder and gentler) experience of boot camp, would HIRE someone to push them beyond what they'd do on their own, they would have laughed at you. And yet (probably) millions of people hire personal trainers.

One of the biggest differences between the personal trainer who pushes you and the drill instructor who pushes you is whether the experience is voluntary. The person who is drafted - or even volunteers - has no choice about the experience, however "good" it may be for him. And in this I think that we potentially have a new model of management.

Imagine a future where managers are brought in by teams who realize that they need someone to coordinate their efforts, even to push them at times, in order to realize their potential. Such a model is not so very odd, really. Personal coaches are very common, but personal coaches work with individuals.

Management is a really crucial skill. More so as our world and projects become more complex. It's probably not enough to leave tasks to individual initiative, even if we have more natural (e.g., market) consequences and inducements for such tasks. Able managers will probably always make a good living.

But one of the big problems with current institutions is their reliance on extrinsic motivation - the use of carrot and stick to make things happen. Employees, like the boot camp recruit, have little or no choice about what to do or any ability to define goals or the tasks they want to try. These are assigned. This is good enough in a world where products are scarce and the definition of economic goods is generally limited to goods to have.

Philosophers talk about three kinds of goods: goods to have, goods to do, and goods to be, each higher and more meaningful than the last. Economic progress will shift soon from an emphasis on economic goods to have to economic goods to do. Work is an essential part of this. (We know that Darwin, Jonas Salk, Galileo, Michelangelo, and Andrew Carnegie were historic figures. We tend to forget that they defined themselves - and our civilization - by their work.) And as people come to work more often as a way to (in part) create goods to have and (in part) create for themselves goods to do, a management that is based on intrinsic rather than extrinsic motivation will be essential. The drill instructor you have no choice but to obey is replaced by the personal coach you hire to help you to realize your potential.

Of course the paradox is that as we focus more on intrinsic motivation and goods to do, we'll actually get more and better goods to have than in the old system. People who are intrinsically motivated are typically more creative, more productive, and do higher quality work. Call me an optimist, but one reason that I'm convinced that such a model will eventually emerge is because it gets better results.

Management as a service rather than form of control. Think about it.

12 January 2010

Lower Taxes? Why Not NO TAXES?

Fed quietly posts record $46.1-billion profit in 2009.

I find this promises a fascinating alternative to us actually paying taxes. The Fed has enormous influence over interests rates and even exchange rates and, of course, stock and bond markets. It seems to me that with a proper amount of cunning, the Treasury Department could regularly generate profits. I'm waiting for Sarah Palin to take the "no new taxes" pledge to the next level, campaigning with the slogan, "No taxes."

That would, of course, give us years to figure out how to make up for the fact that all this manipulation would leave our investment portfolios stunted like bonzai trees in a redwood forest. But then again, having to work until you die would sting less if you knew that your income wasn't being taxed. I would hope.

05 January 2010

A New Olympics

Games mirror life in that they require some mix of skill and luck and have uncertain outcomes. One reason we love games is that that while we may be unable to predict whether we'll win or lose, we know what game we'll be playing when we're done.

By contrast, the game of life has uncertain rules and we may find ourselves playing a game we hadn't started out in. A man eager to show how smart he is may soon find that he is, instead, playing the game of how gracious he can be. A person who thinks that life is all about making money may suddenly find herself playing a game of soul searching. Life has a funny way of changing the game on us and it is not just that we can't predict whether or not we'll win or lose but even what game we'll be playing.

So, I propose a new kind of Olympics, one that more closely mirrors life. Figure skaters will find themselves suddenly sprinting and archers will find themselves performing the high dive. It will - as with life - be a test of one's ability to adapt to something one did not sign up for. We'd call it, "The whatever life throws at ya'" Olympics. Or something like that. It might just be the best reality show yet.

04 January 2010

Ill-Timed Fiscal Responsibility

Imagine the kid least clear on the topic getting to deliver the lecture in class and you get a sense of what happens to economics in a modern democracy.

Democrats are talking fiscal responsibility now. They've heard from their districts that Americans are aghast at our level of deficit spending. And, of course, Republicans have been harping on deficits ever since spending plans have shifted from the military to health. This is terrible timing.

Geithner and Obama have both signalled that they're aware of the need to reduce deficits and that they dare not do it too soon at the risk of tilting us back into a recession.

When the economy was expanding, the Bush administration ran chronic deficits and hardly a word was said. This was ridiculous. Large deficits during good times guarantee huge deficits in bad. And deficits in good times just fuel speculation, price inflation, and new ventures that cannot be sustained. It is during good times that we ought to speak out against deficits but it is during good times that a people feel they can afford to take on such debt.

During bad times, there is a sense that we spent our way into financial trouble and this reckless spending ought to be stopped. Americans in particular have always been uneasy about credit. Few remember that commercial credit met as much opposition in the late 1800 and early 1900s as homosexuality meets today: the apostle Paul wrote more clearly and as often about avoiding debt as he did homosexuality. We get very moral about debt during bad times. This is unfortunate, like getting squeamish about blood during surgery.

Deficit spending is necessary during bad times and is - at best - an annoyance during good. Economics is, of course, continually subordinate to popular opinion in a democracy, so what makes for good policy matters little. Lots of people claim that medicine is a conspiracy but the individual who believes in modern science and medicine can still visit a doctor: if enough people see economic policy as a conspiracy rather than the best we know, all of us get banned from seeing the doctor. Talk show hosts who fell asleep during economic lectures will fume and sputter and callers will chime in with their outrage and these kinds of people will send letters, organize voters, and set policy.

Keynes was a genius but there are lots of coffee shop diners who understand economics better than he did (and, presumably, understand physics better than Einstein). For the record, Keynes recommend government surplus in good times and deficit in bad. Right wing talk show hosts recommend the opposite. You take a guess as to who can be trusted more.