Friday, 8 June 2012

Thursday, 16 December 2010

Lifeline

Scott Grannis’ Calafia Beach Pundit has become daily reading for me [1] – primarily because I’m a sucker for the charts he shares.

Take a minute to look at this one. (no worries, I’ll still be here when you get back).

Good stuff. It’s rare to see a single chart summarize our own confidence over time, let alone over my lifetime.

Yes, it was the Gay Nineties.
Yes, we did fall off a cliff in 2007 – wasn’t the first time, just the biggest.

Some of you may know you were when John Lennon was shot. Or JFK. Or when we landed on the moon.

From new babies to client projects to wondering just what the hell is happening I know where I was along each bump down that cliff. Spooky.

You?


1. Other daily reading includes:

There’s a pragmatic optimism across these 4 sites that I find both challenging and refreshing. Plus – they’re not afraid to go deep.

Thursday, 23 September 2010

Unanimous Support for Unlicensed White Spaces

“The Federal Communications Commission voted 5-0 today to adopt rules for using the airwaves, known as white spaces.”

Some ridiculous NPR story yesterday complained that the crowded nature of metropolitan airwaves prevent this from being useful to the vast majority of Americans.

The point isn’t urban America – the benefit is to rural America.

My earlier posts on the topic of opening up white spaces:

Bringing Me-dia to Rural America

In Bigger News: FCC Opens White Space & Frees iPhone

Out of context, the specific significance of this post’s title is entertainingly vague.

Thursday, 8 April 2010

How do I make a contribution to the U.S. government?

“Citizens who wish to make a general donation to the U.S. government may send contributions to a specific account called ‘Gifts to the United States.’ This account was established in 1843 to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs. These contributions are considered an unconditional gift to the government. Financial gifts can be made by check or money order payable to the United States Treasury and mailed to the address below.”

Thanks to Mark Perry for the pointer.

Wednesday, 18 November 2009

My Proposal for Wal-Mart to Replace the US Postal Service

“With this program, we’re able to provide consumers in every rural town or big city across America with … a convenient, free mail delivery system.” – John Agwunobi, Wal-Mart division president

In continuing my mental exercise on replacing the USPS I was stuck with solving the problem of delivery and drop-off for rural America.

Especially deep rural America – where the roads are still gravel.

A I commented on earlier – Wal-Mart’s based its success on serving rural America remarkably well.1

With more than 4000 stores nationally, 3000 stores worldwide, and a highly efficient network of distribution centers – there are few organizations with the presence, passionate customer base, and logistics experience capable of competing with the USPS.

Even half a mile down a dirt road in rural Wisconsin – a Wal-Mart is still a quick 15 minute drive away. And has been for 15 years.

Let’s say Wal-Mart returned to the days of small town packaged good store.

As part of your weekly drive into town for clothes and groceries, you drop your outgoing mail – bills, personal correspondence, everything – off at the customer service desk.

For the personal correspondence – you provide an email address or phone number of the recipient and you go about your shopping.

Wal-Mart – in their characteristic price cutting manner – charges nothing for this service2.

The outgoing mail is picked up by the existing incoming delivery trucks and their first stop is the nearest Wal-Mart distribution center. Where the mail is sorted for delivery to next closest Wal-Mart distribution center to the final destination2. And so on, and so on, until it’s delivered to the Wal-Mart closest to the intended recipient.

Once at this last Wal-Mart – a email (or voicemail) is sent to the intended recipient notifying them that an item is ready for pick-up during regular business hours.

What else would that quote at the top of the post be about?

Oh, how Wal-Mart is transforming the prescription drugs market.


1. Yes, I’m aware my original question was about a competitive non-profit. I do think that’s an more interesting idea – but I landed on Wal-Mart. So let’s explore this for a moment.

2. Just like email.

Mental Excercise: Replace the US Postal Service

Yesterday, NPR discussed the challenges of the US Postal Service after reporting a $3.8 billion revenue loss for the fiscal year ending September 30, 2009.

The revenue loss corresponded to a reported 13% decline in mail volume.

I’ve noticed a significant decrease on my end since Dec 2007 as well. For the 2008 and 2009 – the number of credit card offers and direct mail catalogs arriving daily was 0. This number is only now picking back up – maybe one per week. Nowhere near the multiple items per day we received in 2006 and 2007.

We’re even transporting Netflix DVDs less.

I have a hard-time imaging the USPS returning to profitability with first class stamps less than 50 cents a piece. Then again, none of the bulk mailings I mentioned above had first class stamps on them. So, either first class stamps are the USPS’s only profit – or they’re a loss leader.

My bet is the latter.

This puts the Postal Service in a tough spot. FedEx and UPS are taking the high end of their business. Email, Facebook, and 37Signals are taking the low end.

There are a few things we send via the USPS – things that aren’t easily digitized and not urgent enough to send via a private carrier:

  1. ‘Thank you’ notes from the kids.
  2. Holiday cards.

Leads me to some interesting questions:

Who else could handle that exchange?

What would a non-profit competitor to the USPS look like?
Even one that didn’t sell first class stamps or provide service to every address.

Or, restating the questions –

What would US Postal Service look like if it started today – with FedEx and the internet already well-established ?

Three ideas that immediately come to mind:

  1. More sub-stations within other existing businesses.
  2. Email/IM/voice mail notification of letter/package arrival.
  3. Scheduled home pick-up.
  4. Co-op business structure.

How would you change the USPS?

Thursday, 5 November 2009

2010: The Great Restart

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I could stare at this image all day. Continually riding its roller coaster in my head – watching geo-political events, holidays, elections, and family gatherings, all unfold.

Whether we call it the Great Recession or the Great Nominal Spending Crash1 – I don’t think we’ve seen the interesting part yet. I predict a dramatic recovery & acceleration. The Restart.

A couple recent graphs I’m using as the basis for this prediction:

Dow Jones Industrial Average Nov. 2008 – Nov. 2009
DJIA Nov 2008 - 2009

10 Year Nominal-Real Treasury Spread Now at 2%
ISM Index: Strong V-Shaped Recovery Underway

My interest in economics was sparked by Black Monday, 1987. Back when the Dow shed 800 points in 2 days – falling below 1800.

The 20 years since have brought some of the most significant advances in technology, communications, and overall quality of life (yes, pat yourself on the back). I fully expect the same looking forward.

1. Thanks to Alex Tabarrok @ Marginal Revolution for the tip.

Monday, 7 September 2009

Labor Day: Celebrating Opportunity

“Isn’t it sad that we have a job where we spend two 2 weeks avoiding the stuff we have to do fifty week a year?” – Seth Godin, Tribes

Almost 15 years ago now, a fellow student at the German design school I was attending, purchased a run-down flat. When he wasn’t focused his design degree – he was renovating the flat. With school Monday through Friday – his core renovation days were the weekend.

Well, Saturday.

The neighbors would complain if he used power tools on Sunday.

At the time, I was also surprised by the number of unfamiliar public holidays
German shopkeepers observed. Their frequency caught me unprepared more than a couple of times. While closed can be a cultural benefit – having the option to be open for business is a competitive advantage.

Here in the States, 12.4% of the workforce – 16.1 million people – belong to a union.

Over the past 24 years as union membership has dropped by a 1/3, real compensation has risen by 1/3.

union membership vs real compensation

“The problem with unions is not all that dissimilar to that posed by entrenched management: Once they win comfortable contracts, they often become impediments to the kind of innovation and flexibility essential to success in today’s economy.” – Wall Street Journal, Opinion, Sept 29, 2007

This Labor Day – as an entire family – we headed to the mall to purchase some new school shoes for the kids. On the way home we grabbed a soup and some sandwiches. The stores were open and the shopkeepers were as eager to help as any other Monday. If I understand U.S. labor laws correctly – everyone working today did so – by choice. Their employer provided them the opportunity and they took advantage of it.

Maybe their politics don’t mesh with organized labor. Maybe they were still protesting the outcome of the Pullman Strike. Maybe they find it ironic. I suspect for the vast majority of them – the additional dollars were more valuable than non-work-related plans.

Yes, I did some client work while the kids were napping, and will continue after I finish this post and clean up the dinner dishes.

The ability for a single individual to make the decision to work on Labor Day is why the U.S. is still the land of opportunity.

Wednesday, 4 March 2009

March Forth

wecandoitposter

I’m proposing today as new American holiday.

A day of deliberate action.
A day of buckled-down confidence.
A day of bootstrap-up-pulling.
A day of To-Done-ed-ness.
A day of recovery.

The opposite of Labor Day – more along the lines of Independence Day.

Let’s go, there’s work to do.

March Forth.

“This country will be rescued by each of us doing what we can do in our own individual sphere of action as government works in its sphere of action. There are roughly 142 million men and women in the labor force. Their ingenuity, flexibility, energy, and confidence will make more difference than anything government does on an individual basis…In the free society, we rescue ourselves.” – Ben Stein

Thursday, 22 January 2009

“My Baby’s Only Known Recession”

Mark Zandi, author of the Financial Shock, the best book on how we got into this economic mess is now covering the proposals to get us out.

Quick context setting:

“Every dollar decline in household net worth reduces consumer spending by 5 cents over the next two years. If sustained, the wealth lost over the past year could thus cut $300 billion from consumer spending in 2009 and a like amount in 2010.” – Mark Zandi [pdf]

Ouch.

According to the NBER, I’ve lived through 4 recessions 1. 54 months (+ 13 and counting) of my life spent from peak-to-trough.

Seems like a fortunate amount of time.

Also fortunate, Zandi continues,

“Assuming gas remains below $2 per gallon through the coming year, Americans will save well more than $100 billion in 2009 compared with fuel costs in 2008.”

“Boosting food stamp payments by $1 increases GDP by $1.73…”

Huh.

Overall, Zandi is for the House stimulus plan – if only to stop the bleeding (something he argues could/should have been done years ago).

“The House stimulus plan would not forestall a sizable decline of 2.3% in real GDP in 2009, but it would ensure that real GDP returns to its previous peak by the end of 2010”

Overall if he’s in, I’m in.

The problem I have is the principle of the thing.

For individuals and businesses that have behaved fiscally responsibly over the long run, any stimulus package unnecessary. In the exact same way it’s a life saver to those that have behave irresponsibly. This is why Detroit’s auto makers want to get in on the TARP funds – why Circuit City2 didn’t lobby congress the same way, I don’t know. 😉

Additionally, what if the stimulus works?

Moral Hazard.

Doesn’t saying the overall economy requires government intervention to recover set a bad precedent?

Primarily because Congress is structured to move much, much more slowing than the economy overall. Secondarily, because – unlike healthcare – there are so few comparable economic situations.

Zandi reminds us:

“A long history of public policy mistakes has contributed to the financial and economic crisis.”

Same with the auto makers and Circuit City. Their problems were not sudden or surprising. It just looks so, because declines (like ascents) are cumulative.

May you live in interesting times.

1. My daughter’s only known recession. And based on the business cycles dates, I too was a recession baby. Also, I have a very distinct memory of PBS’s Nightly Business Report playing in my house around and following the 1987 crash.

2. Perhaps you also remember the presently liquidating Circuit City was profiled in the business management book “Good to Great”. Peter Galuszka does.