While watching the speech, I tweeted that "Obama sounds remarkably similar to the CEOs I used to listen to on earnings calls: the ones with mediocre EPS and a failing business model." This wasn't a crack at Obama, or Democrats; it was a reaction to the content. And after watching the responses, the impression lingers--indeed, maybe it's strengthened.
The nation is facing some really difficult problems, particularly on the fiscal front. There's no longer any way to put it off; pretty soon, the government is going to have to start making some very hard choices about taxes and spending. No matter what it chooses, that probably means lower economic growth, angry voters, and some real loss on the part of whoever's ox is gored.
Listening to earnings calls means listening to quite a few CEOs in analogous situations. Often, the situations they are in are largely not of their making, or indeed anyone's fault at all. But they are expected to fix it. And too often, they can't, at least not yet. Think of Rick Wagoner, and the other managers at GM who knew they were on the road to disaster, but couldn't exit without the consent of stakeholders who weren't quite ready to believe it was necessary.
Faced with that situation, what does the CEO say? He puts the best face on things. I once listened to the head of a biotech company which was burning cash every quarter, had no good research prospects in the pipeline, and had already capitalized (i.e. sold) the income streams from their existing intellectual property. Despite the fact that this was obviously patently insane, he spent quite a lot of time detailing his plans for the future of the company. What was he supposed to say? "Sell my stock now, guys!"
Everyone on the call knew that the future of the company lay in bankruptcy court or a fire-sale liquidation, but bizarrely, they sort of went along with it. Of course, for obvious reasons, there weren't really a lot of dedicated analysts dialing in.
The government's situation is not quite that bad. But it's pretty bad. The underlying economy is, I think, ultimately fine, but the structural problems with the government's finances are driving it rapidly towards an unpleasant denouement. Like a CEO with a stuck company, however, he can't just say that. Stating the obvious would make things worse, as customers and creditors decide that the end really is nigh, and it's time to get out while they still can.
So what do those CEOs do? They spend a lot of time talking about their company's proud history, even if that history only stretches back a few years. They lavish extravagant praise on their awesome, dedicated workforce. And they deftly avoid talking about the big problems, for which they have no solutions, by talking about strategic areas for potential growth ("green jobs"), and going over a laundry list of new initiatives that do nothing to solve any of the core problems. When they are forced to talk about the core problems--and if the company is big enough to attract analyst coverage, they will rudely draw his attention to the problematic areas on the financial statements during the Q&A--he responds in vague generalities that restate the problem as if doing so constituted a solution:
To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market.
The absolute favorite tactic, however, is the management reorganization. You may be in a saturated market where your second-rate franchisees are slowly destroying your brand, making it impossible to attract higher-quality franchisees . . . but that's nothing that can't be fixed by creating a new Chief Strategy Officer under the CEO, and giving that officer oversight of marketing, research, and HR. Perhaps a much larger competitor whose cost structure allows them to undercut your prices by 32% has entered your niche, but can they really withstand the fearsome might of your ISO 9000 certification and your new cross-functional product teams? The government regulators who just outlawed your three top-selling products and made two-thirds of your capital plant obsolete may be powerful--but not as powerful as your revolutionary sales force compensation scheme!
You can't blame the dodges, but they are a warning sign. Not that the CEO is a bad CEO, but that the CEO is in a bad situation he can't fix.
It's not that Obama doesn't know how to fix the problems; I think that like most people in Washington, he understands the broad parameters within which the fixes will be carried out. But he can't make Congress do it before there's an actual crisis. And saying all of this is all too likely to trigger the crisis--a crisis he'd much rather would happen during someone else's presidency. So he tells us what we want to hear: that we need to find a way to fix Social Security without, y'know, changing it in any way. And will you look at those green jobs! I think we're going to have a bumper crop!
The reason he does this, of course, is that like the analysts on all of those calls, we let him. Indeed, we actively, even eagerly, participate in the denial. After all, if we knew how to fix the company, we'd be CEOs, not sitting on the couch kvetching about their nonsense.
The social network learns more about its users than they might realize.
Facebook, you may have noticed, turned into a rainbow-drenched spectacle following the Supreme Court’s decision Friday that same-sex marriage is a Constitutional right.
By overlaying their profile photos with a rainbow filter, Facebook users began celebrating in a way we haven't seen since March 2013, when 3 million peoplechanged their profile images to a red equals sign—the logo of the Human Rights Campaign—as a way to support marriage equality. This time, Facebook provided a simple way to turn profile photos rainbow-colored. More than 1 million people changed their profile in the first few hours, according to the Facebook spokesperson William Nevius, and the number continues to grow.
“This is probably a Facebook experiment!” joked the MIT network scientist Cesar Hidalgo on Facebook yesterday. “This is one Facebook study I want to be included in!” wrote Stacy Blasiola, a communications Ph.D. candidate at the University of Illinois, when she changed her profile.
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
For centuries, experts have predicted that machines would make workers obsolete. That moment may finally be arriving. Could that be a good thing?
1. Youngstown, U.S.A.
The end of work is still just a futuristic concept for most of the United States, but it is something like a moment in history for Youngstown, Ohio, one its residents can cite with precision: September 19, 1977.
For much of the 20th century, Youngstown’s steel mills delivered such great prosperity that the city was a model of the American dream, boasting a median income and a homeownership rate that were among the nation’s highest. But as manufacturing shifted abroad after World War II, Youngstown steel suffered, and on that gray September afternoon in 1977, Youngstown Sheet and Tube announced the shuttering of its Campbell Works mill. Within five years, the city lost 50,000 jobs and $1.3 billion in manufacturing wages. The effect was so severe that a term was coined to describe the fallout: regional depression.
The second episode of the new season was a slow burner with a dramatic twist.
Let’s start at the beginning, with Frank in bed with his wife, Jordan, discussing water stains on the ceiling and childhood entombments. I don’t know about you guys, but I found this whole bit slack and familiar. Maybe there was a two-minute scene in there, but five? Maybe a more charismatic actor could have pulled off that lengthy monologue. But Vince Vaughn is no Robert Shaw, and his childhood basement is no U.S.S. Indianapolis.
The historian and Knesset member Michael Oren accuses the president of distancing the U.S. from Israel, and calls out left-wing Jews and Israel’s Jewish critics in the American press.
In a recent post, I suggested that the intervention of two men, the former U.S. national security advisor Tom Donilon and the former Israeli ambassador to the United States, Michael Oren, might help improve the dysfunctional relationship between the Obama administration and the government of Israeli Prime Minister Benjamin Netanyahu.
At the time I wrote this, both men had reputations as people who were concerned about preserving the extraordinarily complicated, and extraordinarily close, U.S.-Israel relationship, and both had spent a good deal of time calming the waters between Obama and Netanyahu. Today, Donilon maintains that reputation. As for Oren …
Put it this way: If Goldblog readers would allow me to withdraw the suggestion, I’d be much obliged. Oren has created a new role for himself: acid critic of the Obama administration and of left-leaning American Jews (especially in the press and in the White House) who, he believes, are trading on their Jewishness when they criticize Israel. Oren’s critique, at its heart, is simple: Obama, in part because he wanted to reconcile the U.S. with the “Muslim world” (a very large, ill-defined, and politically complicated concept, in Oren’s mind), decided to distance the United States from Israel; to surprise Israel by altering U.S. Middle East policy without prior notice; and to negotiate with Israel’s most potent enemy without alerting Israeli leaders.
Over the last two weeks, Republican presidential candidates have repeatedly missed opportunities to demonstrate that they care about communities outside of their traditional base.
After Mitt Romney’s defeat in 2012, the Republican National Committee published an “autopsy.” “When it comes to social issues,” the autopsy declared, “the Party must in fact and deed be inclusive and welcoming. If we are not, we will limit our ability to attract young people.” The autopsy also added that, “we need to go to communities where Republicans do not normally go to listen and make our case. We need to campaign among Hispanic, black, Asian, and gay Americans and demonstrate we care about them, too.”
The last two weeks, more than any since Romney’s defeat, illustrate how miserably the GOP has failed.
Start with June 17, when Dylann Roof, a young white man enamored of the Confederate flag, murdered nine African Americans in church. Within three days, Romney had called for the Confederate flag’s removal from South Carolina’s capitol. Four days later, the state’s Republican governor and senators called for its removal too. But during that entire week—even as it became obvious that the politics of the flag were shifting—not a single GOP presidential candidate forthrightly called for it to be taken down. Instead, they mostly called it a state decision, a transparent dodge politicians deploy when they don’t want to make a difficult call.
The president delivers his single most accomplished rhetorical performance, and it’s one you should watch rather than read.
I think Barack Obama’s eulogy yesterday for parishioners of the Emanuel African Methodist Episcopal Church in Charleston was his most fully successful performance as an orator. It was also one that could have come only at this point in his public career—and not, for instance, when he was an intriguing figure first coming to national notice, as he was during his celebrated debut speech at the Democratic National Convention in Boston 11 years ago; or when he was a candidate fighting for political survival, as he was when he gave his “Race in America” speech in Philadelphia early in 2008.
I’ll explain why I say so, but first a word about the odd circumstances in which I’ve heard and learned about the speech.
In any case, people have probably heard the phrase in reference to something gone awry at work or in life. In either setting, when the shit does hit the fan, people will tend to look to the most competent person in the room to take over.
And too bad for that person. A new paper by a team of researchers from Duke University, University of Georgia, and University of Colorado looks at not only how extremely competent people are treated by their co-workers and peers, but how those people feel when, at crucial moments, everyone turns to them. They find that responsible employees are not terribly pleased about this dynamic either.
In 1784, the doctor Benjamin Rush described alcohol as a threat to morality—and a danger to the nascent republic.
Go ahead, have a small beer; it will bring “Serenity of Mind, Reputation, Long Life, & Happiness.” Even a strong beer would be fine, for that brings “Cheerfulness, Strength, and Nourishment,” as long as it’s only sipped at meals. So declared Benjamin Rush, one of the signers of the Declaration of Independence and the early republic’s most prominent physician. In his loquaciously named pamphlet, An Inquiry Into the Effects of Ardent Spirits on the Human Mind and Body, first published in 1784, Rush describes the “usual” downward spiral of drink. What starts as water and wine quickly turns into punches and toddies and cordials, ending with a hopeless vortex of gin, brandy, and rum, “day and night.”* In the pits of intemperance, one can expect such vices as “Idleness, Gaming, peevishness, quarrelling, Fighting, Horse-Racing, Lying and Swearing, Stealing and Swindling, Perjury, Burglary, [and] Murder,” with punishments including “Black eyes and Bags,” “State prison for Life,” or, worst of all, “Gallows.”**
The meaning of the Confederate flag is best discerned in the words of those who bore it.
This afternoon, in announcing her support for removing the Confederate flag from the capitol grounds, South Carolina Governor Nikki Haley asserted that killer Dylann Roof had “a sick and twisted view of the flag” which did not reflect “the people in our state who respect and in many ways revere it.” If the governor meant that very few of the flag’s supporters believe in mass murder, she is surely right. But on the question of whose view of the Confederate Flag is more twisted, she is almost certainly wrong.
Roof’s belief that black life had no purpose beyond subjugation is “sick and twisted” in the exact same manner as the beliefs of those who created the Confederate flag were “sick and twisted.” The Confederate flag is directly tied to the Confederate cause, and the Confederate cause was white supremacy. This claim is not the result of revisionism. It does not require reading between the lines. It is the plain meaning of the words of those who bore the Confederate flag across history. These words must never be forgotten. Over the next few months the word “heritage” will be repeatedly invoked. It would be derelict to not examine the exact contents of that heritage.