I had the chance to spend time with a senior strategist from the Boston Consulting Group. Among the things he told me was that he believes we are entering a period of significant inflation that could last 10 - 15 years. The inflation will be driven by demand for basic commodities thanks to the growth of China, India, and other emerging economies as well as our own lust for consumption.
We've already begun to see it with rising prices for gasoline and many food products. What was interesting was his forecast that it could last for more than a dozen years. We haven't had an inflationary spell like that since the 1970's. I'm old enough to remember those days (and was getting my undergraduate degree in Economics at the time) but many business leaders have never been through these conditions. It's going to be a rough ride.
This got me thinking about the upcoming election and Barack Obama's options for vice president. I'd like to suggest that he consider Robert Rubin. In case you've forgotten, Rubin was a senior advisor and then Secretary of the Treasury in the Clinton administration. He's about the smartest people I've seen on economic matters, has a passion for building economic literacy, and has great credibility on Wall Street.
The next President is going to inherit an economic mess and, according to my BCG colleague, it isn't going to get better for quite awhile. S/he'll need solid financial advice from a trustworthy source. Rubin would also add a bit of gray hair that an Obama ticket could use.
Obama/Rubin '08. It has a ring to it.
Thursday, May 15, 2008
Wednesday, May 14, 2008
Happy, happy, happy
I spent the most wonderful day yesterday leading a discussion about happiness and its implications for business. It may seem a bit esoteric to the unitiated but there is a fair amount of hard science in the study of happiness and its benefits for us.
The meeting was convened at Harvard with the support of Coca-Cola. Among those participating were Annie McKee, Robert Provine, Ellen Langer, Nancy Etcoff, Marc Mattieu, and Robert Biswas-Diener.
Beyond the hard science was the general belief that a positive approach to life yields greater benefits than a focus on weaknesses and faults. Businesses that want to engage customers and employees would do well to gain a deeper understanding of happiness.
I'll be posting more on the discussion in the days ahead. For now, I'm just basking in the glow of a great meeting with wonderful people.
The meeting was convened at Harvard with the support of Coca-Cola. Among those participating were Annie McKee, Robert Provine, Ellen Langer, Nancy Etcoff, Marc Mattieu, and Robert Biswas-Diener.
Beyond the hard science was the general belief that a positive approach to life yields greater benefits than a focus on weaknesses and faults. Businesses that want to engage customers and employees would do well to gain a deeper understanding of happiness.
I'll be posting more on the discussion in the days ahead. For now, I'm just basking in the glow of a great meeting with wonderful people.
Sunday, May 11, 2008
Health Care Idiocy
Why are we still on first base with our national discussion of healthcare reform when the rest of the industrialized world has figured it out? Almost all of them pay less and get better results. A recent Frontline laid it out pretty clearly.
Why aren't we discussing how we can adapt what others have learned to work here?
Enough worrying about rejiggering competition or becoming more patient-centered. Just look around, see what everyone else is doing that works, and appropriate it for ourselves. Yes, it will take toughness to stand up to those who do well under the current system but that's called l-e-a-d-e-r-s-h-i-p.
Short, obvious post for a short, obvious solution to the healthcare problem.
Why aren't we discussing how we can adapt what others have learned to work here?
Enough worrying about rejiggering competition or becoming more patient-centered. Just look around, see what everyone else is doing that works, and appropriate it for ourselves. Yes, it will take toughness to stand up to those who do well under the current system but that's called l-e-a-d-e-r-s-h-i-p.
Short, obvious post for a short, obvious solution to the healthcare problem.
Thursday, May 8, 2008
The High Cost of Media Efficiency
Mr. Gimbel (or was it Mr. Macy) famously said that he knew that half of his advertising was wasted but he didn’t know which half. That inefficiency funded a wide array of magazines, television and radio stations, and newspapers. It made it possible to field teams of investigative reporters to keep an eye on government and corporate malfeasance. It funded the publishing of essays and fiction and poetry; new voices, quirky voices, defiant voices. It allowed us to see and better understand the world around us.
The richness of those days is soon behind us. Yes, the Web has brought us even more content and greater choices. But the hyper-efficiency of measuring activity on the Internet means that the successors to Mr. Gimbel and Mr. Macy know exactly what they are buying with each dollar of advertising. They know which half of their advertising is wasted and they do something about it.
Publishers are trading analog dollars for digital pennies as the economics of off-line media collapse. The actions of the advertisers are perfectly rational and the consequences for publishers easily predictable. This is an example of classic market behavior where the actions of buyers and sellers drive out inefficiency.
What we are missing, however, is a way to calculate the cost of the lost benefit of the original inefficiency to the society as a whole. We benefited – as consumers, as citizens, and simply as human beings – from the abundance of the inefficient mass media. It as if a farmer planted a wide range of crops in all of his fields because he didn’t know which would provide get him the highest price that season and, as a result, the people around him could feast on everything from asparagus to yams. Then, through better forecasting tools, the farmer learned how to plant just the crops that would be in highest demand and in quantities that would maximize his return. Does the farmer benefit? Certainly. Are the people around him poorer for it? Absolutely.
As newspapers, then magazines, radio, movies, and television came on the scene, they expanded and enriched the dialogue in the public square. Despite predictions that each would kill its predecessors, they complemented each other because they were relatively equally inefficient in terms of measurability by the advertisers that supported them. The Internet, however, is the game-changing killer app that can obliterate it predecessors simply by allowing capitalists to do what they do best: make rational microeconomic decisions.
The macroeconomic costs will be paid and it may be too late to do anything about it by the time that the check arrives on the table. Who would have uncovered the disgraceful conditions at Walter Read Army Hospital besides journalists given time and resources to pursue a story over time? Which on-line news organization has reporters in Darfur, Iraq, and other global hot spots? How many bloggers are covering the Supreme Court effectively? How many Web sites have fact-checking departments? The heavily lifting to get us all the information we need – information we can trust and on which we can base decisions -- is still being done by the AP, the New York Times, the BBC, NPR, CNN, and the rest of the much maligned “mainstream media.” The Internet has democratized publishing and shrunk the costs of distribution to near zero. That’s wonderful. It has not produced any viable model to allow the workhorses of content generation to thrive or new peers to emerge.
The technology has been abetted by regulators who encourage media consolidation. As corporate ownership of media has grown – more capitalists making rational microeconomic decisions – so too has the need to produce profits. Gone are the iconoclast publishers and broadcasters who valued voice over shareholder value. Dying are the journalists able to tell truth to power from a position of strength. Dwindling are the muckrakers willing to take on industry or government with only determination and a broadsheet.
There is a high cost to media efficiency that we’ll all have to pay. Unfortunately, no one is watching the tab.
The richness of those days is soon behind us. Yes, the Web has brought us even more content and greater choices. But the hyper-efficiency of measuring activity on the Internet means that the successors to Mr. Gimbel and Mr. Macy know exactly what they are buying with each dollar of advertising. They know which half of their advertising is wasted and they do something about it.
Publishers are trading analog dollars for digital pennies as the economics of off-line media collapse. The actions of the advertisers are perfectly rational and the consequences for publishers easily predictable. This is an example of classic market behavior where the actions of buyers and sellers drive out inefficiency.
What we are missing, however, is a way to calculate the cost of the lost benefit of the original inefficiency to the society as a whole. We benefited – as consumers, as citizens, and simply as human beings – from the abundance of the inefficient mass media. It as if a farmer planted a wide range of crops in all of his fields because he didn’t know which would provide get him the highest price that season and, as a result, the people around him could feast on everything from asparagus to yams. Then, through better forecasting tools, the farmer learned how to plant just the crops that would be in highest demand and in quantities that would maximize his return. Does the farmer benefit? Certainly. Are the people around him poorer for it? Absolutely.
As newspapers, then magazines, radio, movies, and television came on the scene, they expanded and enriched the dialogue in the public square. Despite predictions that each would kill its predecessors, they complemented each other because they were relatively equally inefficient in terms of measurability by the advertisers that supported them. The Internet, however, is the game-changing killer app that can obliterate it predecessors simply by allowing capitalists to do what they do best: make rational microeconomic decisions.
The macroeconomic costs will be paid and it may be too late to do anything about it by the time that the check arrives on the table. Who would have uncovered the disgraceful conditions at Walter Read Army Hospital besides journalists given time and resources to pursue a story over time? Which on-line news organization has reporters in Darfur, Iraq, and other global hot spots? How many bloggers are covering the Supreme Court effectively? How many Web sites have fact-checking departments? The heavily lifting to get us all the information we need – information we can trust and on which we can base decisions -- is still being done by the AP, the New York Times, the BBC, NPR, CNN, and the rest of the much maligned “mainstream media.” The Internet has democratized publishing and shrunk the costs of distribution to near zero. That’s wonderful. It has not produced any viable model to allow the workhorses of content generation to thrive or new peers to emerge.
The technology has been abetted by regulators who encourage media consolidation. As corporate ownership of media has grown – more capitalists making rational microeconomic decisions – so too has the need to produce profits. Gone are the iconoclast publishers and broadcasters who valued voice over shareholder value. Dying are the journalists able to tell truth to power from a position of strength. Dwindling are the muckrakers willing to take on industry or government with only determination and a broadsheet.
There is a high cost to media efficiency that we’ll all have to pay. Unfortunately, no one is watching the tab.
Monday, April 28, 2008
The Big Squeeze
Tom Ashbrook had the NY Times' Steven Greenhouse on OnPoint today to discuss Greenhouse's new book, The Big Squeeze: Tough Times for American Workers. It was an interesting discussion that is worth a listen.
It isn't hard to see that American capitalism is broken. We're extracting more at the top (a significantly greater percentage of income goes to the top one percent of earners than did 20 years ago) while retirement and health care coverage have become less secure. Income disparities are growing while social mobility is decreasing.
Markets can be wonderful but they are not perfect. I'm working on an essay on the myth of free markets and the unfortunate consequences of thinking that supply-and-demand are infallable and predictable forces, that unfettered competition is always beneficial, and that efficiency is always desireable. Watch this space for more soon. In the meantime, check out Greenhouse -- he's put together some compelling work.
It isn't hard to see that American capitalism is broken. We're extracting more at the top (a significantly greater percentage of income goes to the top one percent of earners than did 20 years ago) while retirement and health care coverage have become less secure. Income disparities are growing while social mobility is decreasing.
Markets can be wonderful but they are not perfect. I'm working on an essay on the myth of free markets and the unfortunate consequences of thinking that supply-and-demand are infallable and predictable forces, that unfettered competition is always beneficial, and that efficiency is always desireable. Watch this space for more soon. In the meantime, check out Greenhouse -- he's put together some compelling work.
Wednesday, April 23, 2008
Pod Report -- A Big "Ehhh"
I spent my first night at The Pod Hotel in New York last night. I was expecting something futuristic and so was a bit disappointed to find out that it was the old Pickwick Arms Hotel (a real hot pillow joint when I stayed there when I was just out of college and pinching pennies many years ago). It was trying hard to be cool on a budget -- sort of an Ikea hotel -- with the requisite (and annoying) dimly lit hallways and lounge music pumping throughout the property.
The room was small but no smaller than rooms I've had at the Paramount or Hudson Hotels. It was just fine given that I was only there to sleep. There was plenty of room to hang clothes and the desk was serviceable. There were plenty of outlets for recharging my various appliances.
The bed, however, was only OK. It was a far (and much firmer) stretch from the luxury beds at higher priced hotels and the pillows were spongy and cheap. But with a little help from Tylenol PM, I got a decent night's sleep. That was until my neighbors came home at 3:30 a.m. and I discovered how thin the walls are.
The bathroom is a feat of space conservation. In about the space of two phone booths they get all of the necessary equipment. Those with lots of product won't be happy with the small sink but I'm a low maintenance metrosexual so I was able to manage. It is best to visit here alone as it makes a great spacial difference to keep the bathroom door open. Otherwise it can feel like you are relieving yourself in a space capsule.
My biggest complaint is with the alarm clock. They tried to be hip -- it was an iPod docking station -- but I couldn't figure out how to set it. The time was wrong and there was no clear way to make things right.
The verdict: the Pod Hotel is not bad if you need a budget hotel, are traveling alone, and are OK with no food service, no mini bar, no business center, etc.
The room was small but no smaller than rooms I've had at the Paramount or Hudson Hotels. It was just fine given that I was only there to sleep. There was plenty of room to hang clothes and the desk was serviceable. There were plenty of outlets for recharging my various appliances.
The bed, however, was only OK. It was a far (and much firmer) stretch from the luxury beds at higher priced hotels and the pillows were spongy and cheap. But with a little help from Tylenol PM, I got a decent night's sleep. That was until my neighbors came home at 3:30 a.m. and I discovered how thin the walls are.
The bathroom is a feat of space conservation. In about the space of two phone booths they get all of the necessary equipment. Those with lots of product won't be happy with the small sink but I'm a low maintenance metrosexual so I was able to manage. It is best to visit here alone as it makes a great spacial difference to keep the bathroom door open. Otherwise it can feel like you are relieving yourself in a space capsule.
My biggest complaint is with the alarm clock. They tried to be hip -- it was an iPod docking station -- but I couldn't figure out how to set it. The time was wrong and there was no clear way to make things right.
The verdict: the Pod Hotel is not bad if you need a budget hotel, are traveling alone, and are OK with no food service, no mini bar, no business center, etc.
Tuesday, April 22, 2008
Going to the (Wine) Dogs
High on the list of business ideas I wish I'd thought of first is the Wine Dogs series of books and calendars. I encountered them recently when staying in Healdsburg, CA. -- The Winery Dogs of Sonoma County was an irresistable collection of handsome pooches who get to hang out at some of my favorite places (Wine Dogs and Winery Dogs are competitive series so perhaps there is hope for late entries).
Yes, despite the obvious sentimentality and blatant commercialism I plopped down $38 for a copy. But it was a gift.
What could be more fun than visiting wineries around the world and photographing cute K9s? I'm sure there's a fair amount of sampling the wares on a visit. The dogs from the book we met were all delightful. It might help if I was a photographer, but aside from that small consideration I'm sure I could have done this myself.
Once again, a day late and a Milk Bone late.
Yes, despite the obvious sentimentality and blatant commercialism I plopped down $38 for a copy. But it was a gift.
What could be more fun than visiting wineries around the world and photographing cute K9s? I'm sure there's a fair amount of sampling the wares on a visit. The dogs from the book we met were all delightful. It might help if I was a photographer, but aside from that small consideration I'm sure I could have done this myself.
Once again, a day late and a Milk Bone late.
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