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Archive for the ‘economics’ Category

Guest Writer Ron Williams again… Attorney, Businessman and Citizen

It is clear to even the most casual observer that the sole political agenda of the Republican Party is to prevent the reelection of Pres. Barack Obama. It is equally clear that it is the absolute, single-minded focus of the Far Right of the Republican Party to prevent the reelection of a Black Man, any black, as President of the United States.

Thus, for nearly two years, as the President negotiated health-care with the Republican Party, those negotiations were futile, because no matter what would have been offered by this President the answer from this Republican Party would have been “no”. It is clear that no matter what initiative this President put forward, the Republican Party answer would always have been “no.”

And today, we see the Republican Party, and in particular the Far Right portion of that party, deciding to attach items on their political agenda to the debt ceiling bill as a means to further weaken the president and as a means to move their political agenda forward. As a political strategy, the move is almost brilliant. They were able to attack Medicare, Medicaid and Social Security (three programs that the Republican Party has been attempting to repeal sent each of them were first adopted) while at the same time further demonstrating the weakness of this President.

The mistake President Obama continues to make is to attempt to negotiate substantive programs with a group of people whose agenda is not to negotiate on those programs, but to attack the man himself. They will never negotiate to yes until they have used the so-called negotiations to attack the President (demonstrating his weakness) and until they have also gotten what concessions they otherwise wanted.

I predicted when this whole debt limit “crisis” began that the Republican Party would string this out until the end of July, after they had extracted significant concessions from the President and the Democratic Party, that is they had gotten as much as they could based on the time limit left. I am being somewhat facetious when I suggest that if these negotiations continued much longer, President Obama would eventually have negotiated away the entire Social Security, Medicare and Medicaid programs.

It is telling that the Republican Party started these negotiations stating that there could be no revenue increasing tax changes that would affect the wealthy. And that exactly where they ended. How can you have negotiations when one side gives up nothing in the other side makes all the concessions? That because their whole purpose of the Republican Party was to use the debt ceiling issue as a means of moving their political agenda forward with demonstrating their basic weakness of President Obama. And the Democratic Party and this President let them.

What Barack Obama should have said to the first overture from the Far Right that they would not agree to raise the debt ceiling unless there were major cuts to the various social programs, was “no.” He should have simply stated that he would veto any legislation that came across his desk that did anything other than simply raise the debt ceiling. And then stopped negotiating. Whenever they said “well let’s talk about this,” his response should have been “there is nothing to talk about.”

The President should have said, “I’ve told you my position. Congress, you do what you feel you need to do. If you want to pass legislation that has provisions other than raising the national debt attached to it, do so. I will veto it. And if you choose to then put the full faith and credit of the United States government at risk because you want to attach non-relevant politically motivated subject matter on what should be otherwise routine legislation, do so, but I will not be a party to this game-playing”.

If he had said that from day one, and then stuck to his guns,, this so-called crisis would’ve gone way. Then should he want to discuss modification of Medicare, Medicaid and/or Social Security that could have been done in conversation along with tax code changes.

The president has got to learn to stand up. If he doesn’t he will be a one term president. As it is, he is losing his base and maybe a one term president in any event. It may already be too late.

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from Ron Williams…

In the October 29, 2010, edition of the Wall Street Journal (The Potential Pitfalls of the Winning Big) reporter Gerald F. Seib wrote, “In an interview with National Journal out this week, Senate Republican leader Mitch McConnell was asked what his party’s main political job will be after next week’s election. He gave a surprisingly stark answer: “The single most important thing we want to achieve is for President Obama to be a one-term president.”

At a time when the country is fighting a major war, facing a severe economic recession that rivals the Great Depression, and having the largest federal deficits in the country’s history, it is telling to see that the focus of the Republican Party is not to address any of the great problems facing this country.  Rather, their focus is on politics as usual.

And the fact that the American public is about to give them the same Party and laid the groundwork for most of these problems seems to me say that we are a country of amnesiacs.  When President Bill Clinton left office we had budget surpluses, we were not at war with anyone, and the economy had not collapsed.

Then we had eight years of Republican governance.

The Republicans had control of the Executive Branch and both houses of Congress.  What did that get us?  The answer is two foreign wars, the budget deficits, and the beginnings of the great recession.  All were precipitated on the policies of the Bush administration and a Republican Congress.  The Republican governance approach was underfunded budget cuts for the very wealthy and deregulation of just about every industry. Now, it seems that both they, and apparently a significant portion of the American populace, have forgotten what a disaster Republican governance games this country and are prepared to allow the return of those same disastrous policies.

I fear for this country. Example, the governor of New Jersey has just canceled the Tunnel Project, and has ended a project needed for the future transportation needs of the Northeast region.  During the Great Depression it was just the sort of New Deal Projects that helped jumpstart this country out of the Great Depression.  Republican politicians these days cancel these projects.  We see Republican and Tea Party candidates stand their time sending racist and sexist e-mails around the country with others focus on anti-masturbation campaigns and witchcraft issues.

We see a Republican Party which has as one of its favorites ex-governor Sarah Palin, a politician who has yet to complete the term for any office she has been elected.  I’m amazed to think that anyone would support a politician who resigns from office midterm to pursue other financial interests and then expect you to support their election to the next higher office.  It is one thing to leave an office to run for a higher office, it is something else to quit an office to be a commentator on Fox News.  And Tea Party members want this woman to be our next president?

I despair for this country.  Democrats have had control of the Executive Branch and both houses of Congress for the last two years.  President Obama was elected on a campaign promise of putting forward major social and economic changes.  Instead of using that control in both houses and the Executive Branch to make good on these promises, President Obama and the leaders in the House and the Senate spent two years dickering with Republican Senate and House members (who was declared goal was to block every single legislative program with the express purpose of capturing more seats in the midterm elections.) And that is exactly what has happened.  Democrats have not had the guts to push their own agenda.  I believe they deserve to lose.  If you don’t have the courage of your convictions, then perhaps you use should not lead.

I believe the 2008 and 2010 election cycles are based on the electorate crying out for leadership. I think most of us feel the country has been headed in the wrong direction for the last ten years and wanted a change. They asked for that with the election of President Obama.  He has failed to deliver.  For example, the health care bill did not go far enough.  He did not cause runaway health-care costs to be reduced for the average Of American.  He spent too much time dickering with the healthcare industry (the folks who are causing the cost run-up in the first place) and with Republicans (again those people whose only goal in life is to recapture the presidency).

It is the same thing with re-regulation and control of the financial industries. The regulations being put in place today are being written by the same group of Ivy League financiers that gave us the problem in the first place. The regulations do not go far enough in controlling this industry. The American public knows it and is angry.

Last year, there was an uproar when the same bankers who caused the financial meltdown were being awarded large bonuses. In answer to this outcry, the Ivy League financiers trotted out the argument that the bonuses had to be paid because of “contractual obligations”. The problem is that we all knew that the Ivy League financiers knew about these large contractual bonuses when they were negotiating the bailout of these major banks.

During this bailout, detailed contracts were being renegotiated and new terms set in place. These individual contracts, with their large salaries and their scheduled large bonuses, could have and should have been renegotiated at that time. If an individual refused to accept these renegotiated terms, then their employment could have and should have been terminated. With economy as tough as it was unsure that they would have accepted those terms.

Further, with all of the layoffs in the financial industry, it goes without saying that finding well-qualified individuals to fill the spots of those who quit would not be hard to come by. This is what happens to the steelworker, on a file clerk or even the PhD executive. In this economy, there’s always someone willing to take the job in a lower, more reasonable, salary and to forgo bonuses. If this wasn’t, so it seemed like politics as usual. And this is going to cost the Democrats in the election.

It is activity like this that is fueling the anger on the Right, and that the lack of enthusiasm on the Left.

I would not despair if the Republican Party had more to offer than tax cuts for the wealthy and the slashing of any program that supports the elderly, poor or the disabled and a return to the deregulation of any and all industry. These programs have proven to be disastrous and there’s no reason to believe that going back to them would do anything other than bring on more of the same.

I would not despair if the Democratic Party could find its way clear to have the courage of its beliefs and fight for their policies as hard as the Republicans fight for theirs.   But it seems as if the Democrats won’t, so I despair.

[Ron Williams is a frequent quest writer on this site.  He is a former attorney and a current Texan living in a free country with changing contingencies.]

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[By Ron Williams, former attorney, Texas native, patriot and a frequent contributor to free press expression and open forum debates of note.]

Tea Party candidate for Connecticut Senate, Christine O’Donnell, recently stated in her debate with fellow candidate Chris Coons that the Constitution, as written, provides that the government shall not interfere with the establishment or operation of the church, but that there is no prohibition against the church being involved in the operation of the state.  This is a most interesting interpretation of the Constitution.

This is an interpretation you hear many right wing conservatives espouse when they attempt to get government to somehow sponsor a church event or have the government provide money to support some church organized activity.  The most common of these activities is probably getting the government to pay for private church operated schools.

Some conservatives espouse in the opinion that the government should be operated on strict principles of Christianity.  After all, they argue that this government was formed on the principles of Christianity, so why should its daily operation not be based on those Christian principles?

There is a name for democratic governments, where religious principles dominate.  They are called theocracies.  One example of a religious-based “theocracy” is Iran.  So if taken who its logical conclusion, as in Iran, the President of the United States, Congress and the Courts would all look to the pronouncements of a religious leader in interpreting the Constitution and in the implementation of any law.

If you are okay with that proposition, we then come to the next question.  Christian beliefs will dominate government actions.  Now, which version of Christianity will that be?  Will it be the Mormons, so we can look to Utah for government principles?  What about the Catholic Church.  Catholics certainly are certainly Christians.  That means we would look to the Pope for the operation of the American government is interesting that even in Italy, with all of its Catholics, the Pope still does not run the Italian government,  But it seems that this would be okay with our conservative right wing brethren.  If not Catholics, which branch of Gentile Christianity gets to call the shots?

Of course, I believe that when the right wing conservatives talk about applying Christian principles to the American government, what they really mean on their Christian principles.  They believe that they get to decide what the rules are, what the laws are and how the government should operate.

One example of this might be the issue of abortion.  One of the great tenets of the right wing movement is to be use the size and influence of government.  They want to get government out of their lives.  Whether or not to have an abortion is one of the most intimate and difficult decisions a woman can make.  Then they would turn around and take the most intimate decision away from women.  Right wing conservative would use the government to interfere in the intimate private lives of women.  Explain to me how that is getting the government out of American citizen’s lives?

So what we come to, I believe, is that the people who call for the integration of church and state don’t really believe in democracy at all.  They believe in a government run on their principles regardless of the feelings, beliefs, attitudes and opinions of other citizens.

And that is what is scary.  A group of people who call themselves patriots who in fact are doing everything they can to destroy our current democracy.  I believe we have to be careful of groups like this.  What happened in Mussolini’s Italy and 1930’s Germany.  You get some group who come into power via a democratic election, only to run the government based on their narrow political agenda.  Real democracy is kicked to the curb.  All the citizens then are required to follow the dictates of this new moral majority that control the government.

As a side note, notice how right wing Christians seem to cluster themselves around our military academies.  Also, we should take note of the investigation surrounding the command structure at the Air Force Academy which has been investigated for proselytizing the Academy’s cadets

You say it could not happen here.  And why not?  If you believe I am being extreme to accuse these Christian right wing so-called “patriots” of being actually anti-American?  Well go ask them how they feel about a government operated on Christian principles, and watch him say YES.  Then ask them how they feel about those Christian principles being dictated by the Catholic Church.

I believe right wing Christian conservative are a danger to our democracy and should be recognized as such.  A true patriot accepts the fact other patriots will have a slightly different view of democracy and allow those principles to be acknowledged in the operation of the democracy.  The beliefs of these right wing zealots show that they do not believe in that sort of free democracy.

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You may have seen it on news shows…

Athletic Clubs with cardio programs where members jump up and down as if using a jump rope but don’t really have a rope to jump.  Why?  The club doesn’t want people to feel bad if they can’t jump rope like others in the class… …or feel bad if they mess up in front of people not messing up.

How about the no tryouts, no exercise, no activities pep clubs that provide a uniform, trophy at the end of the season and certificate saying they are, “PEP FANtastic!”   Really, this is no joke and it is not a knock-off of the ABC TV show “The Middle” where daughter Sue is the easy-to-recognize enabled student with no clue how to compete… and she is not taught how by parents or teachers or the church or synagogues, or her horoscope.

So, should schools do the about the same thing in math, history, chemistry, business, accounting and insurance as the athletic club does for its members?   How about a prize for attempting to clean up the oil spill in the gulf or attempting put a man on the moon!  “What?”, you say, “That wouldn’t make sense???!!!”  Of course it doesn’t make sense!  But that’s what is being done in education due to myopicos like Alfie Kohn.  Ya, the one and only who writes as an education ‘expert’ for The Huffington Post blog….

Competition is what is.  It starts with the struggle out of the birth canal. For many it ends with seeing who can live the longest with the most toys, or experiences, or charities, or wives, or single malt Scotches. We learn to eat, to live, to work and to mate and there is a competitive component in every second of it.  Those that don’t compete never learn skills that they can use in life later on to provide for their families, communities and the world.  And then we wonder why we are with competitive academics in the world, or why there are more and more 3rd world foreign-borns in colleges and universities, engineering schools, MBA programs, Ph.D. programs, medical schools, etc.  [No, that is not bigotry; it is that they get it!] The answer is competition.  They are serious about it and we (whoever that means) aren’t serious about it.

Perhaps it is a vestige of our ‘Man-is-superior-to-all-the-rest-of-the-animals; we don’t compete like they do!’ shtick. How’s that workin these days.  Are we winning any competitive wars you’ve noticed?

In fact, we’re frequently going in the opposite direction due to the early years being filled with the ‘help’ being offered from the very beginning.  Businesses from McDonald’s to McDonald-Douglas spend billions every year teaching their employees how to compete at different levels.  University of Phoenix makes a living for a lot of investors in grades for profit involving students companies send them who can’t compete; write, read, organize, manage or lead.  If we were doing such a great job they would be out of business.

Community Colleges have many students that don’t know how to compete.  They haven’t competed up to the point of college and now competing for jobs is almost foreign to them, not because of the jobs, but because they didn’t get the subtle or the explicate competitive approaches or experiences that are learned early on.  The ‘help’ provided is to not let them come into contact with any consequences.

What is ‘entitlement’?  It is what adults do to their children and what students learn that ensures that they do not have to compete to get what they want; they do not have to attend to what works and that they can get the same credit for ‘trying’ as for succeeding.   They say it is for the children but it isn’t; its for them, the parents.

FFPS and similar organization institutionalize the entitlement.  Learning to ride a bike you can get hurt.  Get hurt??? No, we’ll cover you in Velcro pads so if your training wheels don’t protect you and you fall, you’ll not have to connect with any unpleasant consequences.  Bad nightmares; bad marriages, bad jobs, bad DUI???  Shameful; you shouldn’t have to suffer.  We’ll get you in a program where you are given the drug propranolol to eradicate the experience, or dampen the bad history or events.   The louder the communities yell about the child, student, or young adult, the more and more it becomes about everything else but those groups.

For the things valued in life, there is way too many ‘self-referential’ content today and it is working to our dis-service, from families to the halls of Congress.   That being said, for every virtue listed to reduce competitive activities, there is an equal and larger set that most of us see as a product of competition.

For the things valued in life, there is way too many ‘self-referential’ content today and it is working to our dis-service, from families to the halls of Congress.   That being said, for every ‘virtue’ listed to reduce competitive activities, there is an equal and larger set of virtues that are a product of competition.

  • self-composure

  • self-reliance

  • self-control

  • self-assured

  • self-analysis

  • self-abnegation

  • self-development

  • self-evolved

  • self-enriched

  • self-judgment

  • self-mastery

  • self-reflection

  • self-restraint

  • self-trust

Here is just one option provided by the FFPS web site…

FFPS [Fun, Fair, Positive Soccer]

…to provide every youth soccer player with a positive experience. They saw the main problem as parents who put too much pressure on the kids to perform and the programs that emphasized winning as the main focus. They developed a system so the kids could play and enjoy the sport without demands from adults to win or perform. They modified the rules and designed a process of 5 aside rules, equal play with a unique equal substitution system, balanced teams, and parent training to ensure that it would be fair. The parents would behave and be positive so it would be really “Made For Kids”.

We wouldn’t want the kids to actually perform as in ‘do’ something…. Why not just take the nets and goalie away and have the kids run up and down the field….  I know that might look more like baby sitting but then again, no one would have to explain why the other team had more goals than your team did.  Don’t drink the Cool Aide…

Geeze!

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Higher order conditioning (you know, the stuff we’re really good at) involves the paradigm where previously successfully conditioned stimulus (CS) operates as the unconditioned stimulus (US) for further conditioning.  And, like classical conditioning in general, high-order classical conditioning is often linked to known biological predisposition of the organism trained.

But the implication of traditional classical conditioning are less obvious; a real hit in the head to those that insist that life should be about using ‘common sense’.

Take the instance of McDonald’s being sued (2010) to stop giving out toys with happy meals (used to entice kids and adults when paired with bad food) at least, one would claim in such a court fight.   Toys which are also reinforcers that keep the people coming back, (operant conditioning) not necessarily for the food but for the ‘free’ giveaways.   Is that really any different than places providing good service, clean restrooms, good food, social amenities, or cigarettes  being the delivery mechanism for nicotine, etc.?

Well, some obviously think so.

The food, an Unconditioned Stimulus (US), is paired with a toy, a Conditioned Stimulus (CS) and a potential reinforcer for the children (yea, a new toy to have and hold) and the children (yea, a new toy for them to have and hold and keep them satisfied or quiet, whichever is the case).  The parents buy the food (US) and get the toy (CS) at the same time and they become linked. There is also the gambler’s bet operating in this type of example.  The conditioning that takes place is rarely some part of the awareness of anyone other than the people in the delivery business, thus, proving once again, that you do not have to have awareness to be conditioned or to avoid conditioning.  The awareness is a irrelevant.

Soon the family or the child attends McDonald’s and is not hungry for the nuggets, burger or shake, etc. and wants just the toy!   Not going to happen so the spending entity — grandma, parent, older person… buys the kid’s meal to appease the kid (enablement) and someone ends up eating the extra food or the food that the kid didn’t want but was purchased to get the new (surprise) toy.   Great!  The kid isn’t going to get more rotund but the adults are because they are now stuck eating the kids meal and their meal… after all there are poor people starving somewhere in the world.   (huh?)

Anyhow, some parents and food focused groups are saying that they want McDonald’s to stop the practice which “hooks” the parents and the kids on going to McDonalds.  McDonalds’ is protesting the suit.

Basically, we are all conditioned and that example is no different than other types of conditioning.  Making is less or more obvious is not the substantive question other than for the media.  The real issue is better food with less fat for children from a distribution place that many are conditioned to eat at.  But that is not the prima fascia case being made. Any changes in delivery mechanisms will require changes in fast food services content [food] which, in some cases, neither the children or the parents (and certainly not the fast food distributors) want to consider.

The result is conditioned helplessness of the parents..  Something to consider when selecting a restaurant next Friday night… or a business where repeat customers are part of the planned strategy…

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To start, the goal is not to be an ‘elite’ athlete…

Fourth in a 5-Part Series for http://www.SocialMode.com

(1)   Sports, like businesses or social movements have goals and costs.

(2)   The best way to advance is through the “Do”.

(3)    Focus on long-term benefits as well as short-term gains

(4)   It is not ‘automaticity’ per se that leads to high proficiency.

“Automaticity” is the perception that someone is in the ‘flow”; they make what they are involved in look automatic.

Competitors train to do stuff right; winners train so they can’t do it wrong.

In business and in sport the level of skill at which automaticity is attained is constantly changing.  When the rate of that change slows too much, in sport and in business, things start to get dicey.

Most people never develop beyond their hobby levels of expertise because that is the level at which they are able to do things ‘automatically’. We’ve all seen those people in business.  We’ve also seen them in different sports. Their comfort level is large and ever present.

For club golfers, swimmers or competitive tennis players, their levels of expertise for ‘doing stuff right’ in their sport are sub-par, as it were.  To truly excel, there is always some part [life, sport, relationships] that is not automatic yet that needs attention.

When you raise the bar in each component area, you’ll move from an automatic state (large comfort zone) to a non-automatic state (‘zero’ comfort zone).  Some can’t hack the loss of comfort.  Others find it’s OK to have small comfort zones because you are betting they are only temporary.

It becomes a balancing act between  that automaticity important in the “now” is the elite level to be reached you were working toward.   One elite athlete I know said to me,

“The day I take the elevator rather than walk up ten floors is the day I’ll have decided to give up being World Champion.”

So most of us settle short of an elite status (business /sport); for club performance, for less, for sub-par.   Thus, we rationalize not reaching our highest potentials in one area when we come to value our current level, or “other” events or circumstances. That too is OK because you know what you are doing. That is life.

When we settle in business, others may identify it as ‘lost opportunity costs” and that may not be OK.  But know that the number of mountains to climb – literally and figuratively – are enormous and, clearly, some are more fun to climb than others.

You get to decide.

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The case for behavioral strategy

Left unchecked, subconscious biases will undermine strategic decision making. Here’s how to counter them and improve corporate performance.

MARCH 2010 • Dan Lovallo and Olivier Sibony

Once heretical, behavioral economics is now mainstream. Money managers employ its insights about the limits of rationality in understanding investor behavior and exploiting stock-pricing anomalies. Policy makers use behavioral principles to boost participation in retirement-savings plans. Marketers now understand why some promotions entice consumers and others don’t.

Yet very few corporate strategists making important decisions consciously take into account the cognitive biases—systematic tendencies to deviate from rational calculations—revealed by behavioral economics. It’s easy to see why: unlike in fields such as finance and marketing, where executives can use psychology to make the most of the biases residing in others, in strategic decision making leaders need to recognize their own biases. So despite growing awareness of behavioral economics and numerous efforts by management writers, including ourselves, to make the case for its application, most executives have a justifiably difficult time knowing how to harness its power…

~~~~~~~~~~~

Here is the thing…

The subject of the article is the categorization of ‘biases’.

Like the other media forms, if you run out of new terms to use in business, your presentations die an agonizing death of disuse.  This paper provides a fine example of what lack of clarity and  misapplication of  the vernacular does: http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/The_case_for_behavioral_strategy_2551?gp=1

Put ‘Behavioral’ or ‘Neuro-‘in front of almost any expression, term or concept and it would appear that it is born anew.  Throw in a set of myths, superstitions or “common knowledge” as those found in the metaphysics of the ‘subconscious,’ and cognitive biases, then make up some new words, like “debias” and you have the makings of another mechanism that supports ignorance of behavior [corporate or personal] from slippery sound bites.   Lovallo and Sibony have done a story for the acclaimed McKinsey Group and packed it with metaphors, similes and analogies but missed the behavioral part of their article, that is:

  1. EMPIRICISM –
  2. OPERATIONAL DEFINITIONS  –
  3. SHUNNING OF MONOCAUSALITY –
  4. MEASUREMENT OF BEHAVIOR OF INDIVIDUALS, COMMITTEES, OR COMPANIES SUBSEQUENT TO ANTECEDENTS OR AS CONSEQUENCES

Biases are not new, empirical, behavioral or operationally defined and therefore constitute a rehash of psycho-babble that

  1. Doesn’t address how biases come to exist OR influence behavior like selection of options or decisions
  2. Doesn’t address how biases are maintained OR why they are negative, irrelevant or harmful
  3. Doesn’t address what to do to reduce their effects in business for some company benefit

McKinsey Group should move on and get some behavioral assessment partners to mull business approaches with these gentlemen.  With stuff like this being offered to the management of companies that can afford help, is it any wonder that businesses sometimes seem to be clueless on what is going on with customers, vendors, or partners?

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