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March 31, 2006
Quote of the Day for Friday, March 31, 2006
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March 30, 2006
Twenty-Five Years
Today is my 25th anniversary in the investment business. I probably wouldn’t remember the date otherwise, but March 30, 1981 is the day President Reagan was shot. That event has always made the date stick in my mind.
One lasts twenty-five years in any business because you survive. Survival depends on other people. They sustain and nurture you in the beginning, or when you hit hard times. Others are the reason for whatever success you ultimately have.
In my experience, those people fall into two different categories. One group is the very talented people I’ve been lucky enough to work with over the years.
By far, however, my best fortune is found in the group of people I work with at my firm today. I have the privilege of being associated with a dedicated group of people who truly care about the well-being of each other well beyond the dollars and cents. Not everyone can say that, so I feel very humbled and thankful when I consider my lot.
Most important, though, are the clients I’ve had over the years. You can’t have a business without clients. I’ve been lucky enough to have some long-lived relationships with my clients. Moreover, I continue to be fortunate in the caliber of partners I’m lucky enough to attract.
Without them, there are no anniversaries. There’s nothing.
Posted by John at 11:51 PM | Comments (2) | TrackBackQuote of the Day for Thursday, March 30, 2006
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March 29, 2006
Entitlement in France, Growth in California
Bloomberg’s Amity Shlaes has written a column on the contrast between France and California that’s so good I wish I had written it. And no, it's not about wines.
Read it in its entirety here; an excerpt follows:
Posted by John at 8:32 AM | Comments (0) | TrackBackAdam Smith, the philosopher, wrote that in a growing economy, "the great body of the people seem to be the happiest and the most comfortable." Life was, Smith noted, by contrast, "hard in the stationary, and miserable in the declining state." Baron de Montesquieu, one of Smith's French counterparts, wrote of a related phenomenon: "Everywhere there is commerce, there are gentle mores."
. . . several centuries after he put it down, Montesquieu's thesis is proving itself anew in his homeland. After World War II, France seemed to grow just fine. Real per capita income rose. In 1973, unemployment was less than 3 percent in France, well below the 5 percent in the U.S.
All that growth and employment put France, and Germany for that matter, in a sharing mood. People born in the 1960s and 1970s had the impression that France would grow forever. Back in 1985, France hosted one of the friendlier and most pro-immigrant events in the history of the world, a concert for hundreds of thousands whose theme was opposing racism. The motto that year was "Touche Pas a Mon Pote" --"Don't touch my buddy," the immigrant. Gentler mores would have been hard to find.
But then France became "stationary," to use Smith's term. As the government grew, and competition from developing nations increased, growth slowed. Unemployment began to range consistently higher than that in the U.S. Youth unemployment moved into the 20 percent range. By 2000, almost half of all unemployed Frenchmen had been out of work for more than a year.
In a statement more terrifying than any made by students, the Archbishop of Paris last week told demonstrators that "Honestly, I do not believe that anybody can guarantee you this security, no more than guarantee that you will have a standard of living comparable to your parents." Small wonder the French students are not in a sharing mood. The archbishop is telling them that growth isn't their birthright, after all.
The California experience is the opposite: citizens of the Golden State, including Hispanics, are increasingly confident that growth is indeed their birthright. California unemployment came within a hair of 10 percent in the early 1990s, a period when anti-immigrant nastiness increased as well. Since the mid-1990s, despite whatever spending lawmakers in Sacramento did, unemployment has gone down; in February it was 5 percent.
The state Department of Finance shows California's per capita income rising every year since 1988 -- and always exceeding the U.S. average. For as long as teenagers can remember, there has been growth and there have been jobs. They don't merely feel entitled to entitlements. They also feel entitled to growth, which is different.
. . . the crowds in France keep taking to the street. And their demonstrations remind us that growth has effects in other areas of our lives, including politics. U.S. Republicans, for example, have found numerous times that anti-immigrant nativism backfires; people are doing too well to see the appeal.
In an enlightening new book, "The Moral Consequences of Economic Growth," Benjamin Friedman, a Harvard University economist, posits that morality and growth are related: "Economic growth not only relies upon moral impetus, it also has positive moral consequences."
It's all worth considering as smoke from burning cars wafts around the Eiffel Tower. In the end the French troubles reveal not the selfishness of the students, but that of their parents and Mother France. They are the ones, after all, who hurt their own children rather than harm the large French state.
"That's China"
After a seven year joint venture in magazine publishing in China, Mark Kitto had his enterprise taken over by the state and he was thrown out.
"That’s China" is the title of the article; you can read this cautionary tale of doing business in China, particularly in media, by following this link.
Posted by John at 7:55 AM | Comments (0) | TrackBackQuote of the Day for Wednesday, March 29, 2006
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March 28, 2006
Economic Growth and Coronary Disease March Arm in Arm
We’ve pointed to anecdotal evidence about rising affluence and heart disease—-here, for example. An economics professor at the University of North Carolina Greensboro actually proves the connection:
Panel data econometric methods are used to investigate how the risk of death from acute myocardial infarction (AMI) varies with macroeconomic conditions after controlling for demographic factors, fixed state characteristics, general time effects and state-specific time trends. The sample includes residents of the 20 largest states over the 1979 to 1998 period. A one percentage point reduction in unemployment is predicted to raise AMI mortality by 1.3 percent, with a larger increase in relative risk for 20-44 year olds than older adults, particularly if the economic upturn is sustained. Nevertheless, the much higher absolute AMI fatality rate of senior citizens implies that they account for most of the additional deaths. This suggests the importance of factors like air pollution and traffic congestion that increase with economic activity, are linked to coronary heart disease and may have particularly strong effects on vulnerable segments of the population, such as the frail elderly. AMI mortality risk quickly rises when the economy strengthens and increases further if the favorable economic conditions persist. This is consistent with strong effects of other short-term factors on heart attack risk and with health being a durable capital stock that is affected by flows of lifestyle behaviors and environmental conditions whose effects accumulate over time. [Emphasis mine]
This study (which you can obtain here) is confined to the United States, but we’d be willing to bet the same results would come from a study across countries.
Thanks to Marginal Revolution for the pointer.
Posted by John at 11:08 PM | Comments (0) | TrackBack"Flat World" Fact of the Day: Long Distance Education in Developing Countries
Seven of the world's largest distance education universities—-where students and faculty alike all use some form of computer-assisted learning—-are located in developing countries. [Emphasis mine] For these communities, educational resources available via the Internet can offer cutting-edge applications of cyberspace. Yet, roadblocks—-from inadequate national communications infrastructures to teachers reluctant to adapt to e-learning—-exist for the full success of online education for higher education. Meanwhile, the use of online delivery in corporate training is predicted to overtake higher education usage in developing countries, becoming an estimated $150 billion industry by 2025.
Thanks to the Poverty & Growth Blog for the pointer.
Posted by John at 10:16 PM | Comments (0) | TrackBackYou Can't Tell the Capitalists without a Scorecard
Posted by John at 9:57 PM | Comments (0) | TrackBackAn opinion poll, published by Le Figaro newspaper on Saturday, showed that 50 per cent of French people did not have faith in the market economy - compared with 20 per cent in communist China.
Inside Information: Illegal Except for Members of Congress
If you think I’m being too hard on Congress with posts like this or this, consider this Wall Street Journal story today:
Amid broad congressional concern about ethics scandals, some lawmakers are poised to expand the battle for reform: They want to enact legislation that would prohibit members of Congress and their aides from trading stocks based on nonpublic information gathered on Capitol Hill.
Two Democrat lawmakers plan to introduce today a bill that would block trading on such inside information. Current securities law and congressional ethics rules don't prohibit lawmakers or their staff members from buying and selling securities based on information learned in the halls of Congress. . . .
In addition to banning trading on inside information, the proposal would require that lawmakers and their top aides disclose within 30 days any stock trades. Congressional rules now require lawmakers to disclose their trades once a year. . . .
To some extent, the legislation would expand the commonly used definition of insider trading. According to the Securities and Exchange Commission, insider trading is the buying or selling of securities on the basis of material, nonpublic information in violation of a duty. But the information in question normally comes from inside a company: For example, an executive of a publicly traded company can't tell friends to sell company stock if he or she knows that the company is about to fall short of its quarterly earnings forecast.
Lawmakers and staff members never have faced similar obligations on the information they acquire. "If a congressman learns that his committee is about to do something that would affect a company, he can go trade on that because he is not obligated to keep that information confidential," said Thomas Newkirk, a partner with law firm Jenner & Block LLP and a former official with the SEC's enforcement division. "He is not breaching a duty of confidentiality to anybody and therefore he would not be liable for insider trading."
Am I alone in wondering why some rules of business the rest of us take for granted don’t apply to Congress?
Posted by John at 6:58 AM | Comments (0) | TrackBackQuote of the Day for Tuesday, March 28, 2006
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March 27, 2006
Dispelling Myths on Sleep "Deprivation"
Speaking of getting a good night’s sleep, Live Science reports on the views of several researchers that the "sleep deprived American" is a myth fostered by pharmaceutical companies.
A lot of money is at stake. Over the next few years, the global hypnotics (sleeping pills) market is expected to reach $5 billion.
A six year study of more than one million adults by UC San Diego psychiatry professor Daniel Kripke revealed that people who get only 6 to 7 hours of sleep a night have a lower death rate than those who get 8 hours of sleep.
Moreover, the study found that the risk to one’s health of taking hypnotics thirty or more times a month is not appreciably less than the risk of smoking a pack of cigarettes a day.
Kripke’s study even showed that individuals with severe insomnia or who only get 3 1/2 hours of sleep a night live longer than those who get more than 7 1/2 hours of sleep.
Kripke has an online book on the subject, The Dark Side of Sleeping Pills, if you want to read more.
Posted by John at 10:38 PM | Comments (0) | TrackBackGet It off Your Chest and Sleep Well
Today’s Memphis Commercial Appeal has a profile and interview of University of Memphis music professor Tonya Butler, who sounds like one engaging individual. One strand of the advice she gave jumped out at me:
"Don't ever bite your tongue if it will keep you from getting a good night's sleep."
Even though I’ve never been accused of biting my tongue too much, it’s still good to be reminded to unload, move on, and rest well.
Posted by John at 9:50 PM | Comments (0) | TrackBackAmerican Firms: Suited to Compete
Acknowledging that many don’t see it same way, the Washington Post’s Sebastian Mallaby has some interesting rationale on why he sees U.S. business in the middle of a golden period:
. . . America's business culture is peculiarly well-suited to contemporary challenges. American business is not especially good at coaxing productivity out of factory workers: The era when this was all-important was the heyday of Germany and Japan. But American business excels at managing service workers and knowledge workers: at equipping these people with technology, empowering them with the right level of independence and paying for performance. So the era of decentralized "network" businesses is the American era.
Moreover, America's business culture is perfectly matched to globalization. American executive suites and MBA courses are full of talented immigrants, so American managers think nothing of working in multicultural firms. The immigrants have links to their home countries, so Americans have an advantage in establishing global supply chains. The elites of Asia and Latin America compete to attend U.S. universities; when they return to their countries, they are keener to join the local operation of a U.S. company than of a German or Japanese one.
So the shift from manufacturing to services; the gallop of globalization; and the rise of information technology that flattens corporate hierarchies: All these forces come together to create an American moment. . . .
Read the complete article; there’s more meat there.
Posted by John at 9:32 PM | Comments (0) | TrackBackQuote of the Day for Monday, March 27, 2006
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March 26, 2006
While the Heat Gets Turned Up at J.P. Morgan, It's Sleepy Time Down South
One of several airplane reads I had recently was this quite interesting profile of J.P. Morgan’s Jamie Dimon in Fortune. Dimon has turned up some long-overdue heat in this behemoth:
Branch managers are ranked based on how much they raise both profit and revenues; the top group gets bonuses as high as $65,000, and the lowest quintile zip. Salespeople in the branches can do even better, collecting "points" for selling credit cards, mortgages, and other products. Last year the biggest point-gatherer pocketed a $145,000 bonus. If you don't make your quota, you're out.
Dimon is bringing that kind of rigor to every corner of the firm. In the old J.P. Morgan, big units combined their results, so it was difficult for top management to figure out which ones were really making money. "Strong businesses were subsidizing weak ones, but the numbers didn't jump out at you," says CFO Cavanagh. "With the results mashed together, it was easy for managers to hide."
The hiding game is over. Right after the merger, Dimon split J.P. Morgan into six major profit centers--investment banking, retail, and cards are the three biggest--with dozens of units that must report like separate companies. Each month, division heads send Dimon 50-page books packed with data, from the ratio of overhead to sales on every product to BlackBerry bills per employee. Then Dimon goes over the reports in grueling sessions that last hours.
I laughed out loud when I read the line about managers hiding. I was recently with a former senior SunTrust executive who told me that his former employer was getting "big enough for people to hide."
I also understand that SunTrust, in its recent merger with National Commerce, picked its surviving branch and area managers based on portfolio sizes, not growth rate.
SunTrust badly needs its own Jamie Dimon.
Posted by John at 11:00 PM | Comments (0) | TrackBackDemographics in the Americas and Their Effect on Migration and Prosperity
Andres Oppenheimer, the sage observer of the Americas who writes for the Miami Herald, takes a look at the demographic future of Latin America, with some interesting conclusions:
Posted by John at 10:16 PM | Comments (0) | TrackBack. . . we may soon see a migration in the opposite direction: American baby boomers heading south of the border for their retirement years, seeking cheaper healthcare, more sun and more affordable living conditions.
There already are an estimated one million American retirees in Mexico, and hundreds of thousands more in Central and South America. While U.S. isolationists say undocumented migrants bloat hospital costs in the United States, their Latin American counterparts may soon say the same about U.S. retirees.
The reason for all of this is that Latin America's population is aging fast, and the region soon will have a much smaller pool of young people ready to work in the United States, Spain or other developed countries.
According to the United Nations Population Division, the number of Latin American and Caribbean people age 18 to 23 will drop from nearly 63 million nowadays to 59.6 million in 2050. Conversely, the number of people over 65 in the region will rise from 6.4 percent of the population nowadays to 18.4 percent in 2050.
"The United States always takes it for granted that people from all over the world want to move here. In 20 to 30 years, it may not be that easy to attract human capital to this country," says Phillip Longman, a demographer with the New American Foundation and author of The Empty Cradle: How falling birthrates threaten world prosperity.
In a telephone interview, Longman told me that countries like Spain, Germany and Japan will increasingly compete with the United States for new immigrants. "Immigrants will be a hot commodity," he said. . . .
Declining birth rates may allow most of Latin American countries -- with few exceptions, mostly in Central America -- to enjoy a few years of social peace before their populations grow old, and they have to take care of their elderly. In the short run, fewer children will mean the region will need to create relatively fewer jobs.
"In pure demographic terms, Latin America is poised to have a fairly prosperous period for about the next 30 years, which is another reason why fewer Latin Americans may need to migrate," said Longman. "You have this little sweet spot, where you have few children but not too many elders."
It's the Spending, Stupid
Just in case you need it, the Wall Street Journal dissects the facts behind the current federal government budget deficit. Tax cuts and a strong economy have actually produced record revenue, but that’s not enough for the free-wheeling Congress:
Posted by John at 9:47 PM | Comments (0) | TrackBackIn the first five months of Fiscal 2006, through February, overall revenue continued to surge, growing at an overall rate of 10.3%, or an $81 billion increase from the year ago period, to $871 billion. That builds on the astonishing 15%, or $274 billion, revenue increase for all of 2005, which various fiscal wisemen assured us would fall off dramatically. Apparently not.
This year's double-digit increase is roughly triple the rate of inflation, reflecting strong gains in business profits and individual wages and bonuses -- both signs of a vibrant underlying economy. Corporate income taxes are up 30% so far this year, while individual income tax payments have climbed by 10.3% through February.
The bad news continues to be federal spending, with overall government outlays up 7.6%, or $76 billion, to $1.09 trillion. Defense spending is up 7.5%, but Medicare is growing at a 10.4% pace, which promises only to increase as the prescription drug benefit kicks in. As ever, the elephant in the budget is entitlement spending on seniors.
Economist Michael Darda points out that overall spending has risen at a 6.6% annual pace since 2001, or more than double the 3.1% average rate of increase between 1993 and 2000. If spending in this decade had merely stayed at the 1990s's pace, the budget would already be in surplus by $143 billion, according to Mr. Darda's calculations. . . .
An Odyssey of a Child
I read this background story from the San Francisco Chronicle on Enrique’s Journey, by Sonia Nazario, and immediately ordered the book. Nazario, a projects reporter for the Los Angeles Times, is a rare journalist—-one who actually goes above and beyond to get her story:
"I determined that 48,000 children enter the United States alone, without a parent, each year from Mexico and Central America," Nazario says. "Some of those are coming for jobs, but the majority are coming to find a parent. And in three of four cases it's a mother, usually a single mother, who left them behind."
The story was overwhelming: Some of the children are as young as 7, many are robbed or raped during their journey, some fall off the train and get sucked under the wheels. Nazario knew from experience that the most powerful way to illustrate the story was through the specifics of one individual. After meeting Enrique in Nuevo Laredo, a town on the Texas-Mexico border, she retraced his steps, traveling 1,600 miles on seven freight trains.
She interviewed his mother, Lourdes, in North Carolina, and traveled to Tegucigalpa, the Honduran capital where Enrique lived until he was 15. The series took two years to report and write for the L.A. Times. And when it came time to expand the series into a book, she went back and spent three months retracing his steps a second time. . .
When I get the book and read it I’ll review it here.
Posted by John at 9:05 PM | Comments (0) | TrackBackOff Again, On Again, Never Again
I’m back after being out of blogging for the past several days, as I’ve been busy with work, traveling, and working on other writing.
I know that our Bloglet feed is not working and we’re coming with a solution (i.e. replacement) for this dinosaur very soon.
Posted by John at 8:54 PM | Comments (0) | TrackBackQuote of the Day for Sunday, March 26, 2006
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March 25, 2006
Quote of the Day for Saturday, March 25, 2006
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March 24, 2006
Quote of the Day for Friday, March 24, 2006
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March 23, 2006
Quote of the Day for Thursday, March 23, 2006
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March 22, 2006
Vietnam: Embracing Globalization without the Golden Arches
Bloomberg’s William Pesek Jr. takes an interesting look at Vietnam, which is seeking to embrace globalization and freer markets without McDonald’s or Starbucks. It's not an attitude which is anti-Western, but a desire to remain unique. A worthy read.
Posted by John at 8:43 AM | Comments (0) | TrackBackQuote of the Day for Wednesday, March 22, 2006
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March 21, 2006
Georgia Tops in Growth of Hispanic-Owned Businesses
The Atlanta Business Chronicle reports:
Posted by John at 9:35 PM | Comments (0) | TrackBackGeorgia tied with Rhode Island as the state with the second-fastest rate of growth for Hispanic-owned businesses between 1997 and 2002, according to U.S. Census Bureau data released March 21.
New York had the fastest rate of growth -- 57 percent -- for Hispanic-owned firms between 1997 and 2002. Rhode Island and Georgia came in second with 56 percent, while Nevada and South Carolina had 48 percent rates of growth. . . .
"Apparently Hispanic buying power is generating enough capital to generate this sort of business formation," said Jeffrey M. Humphreys, forecasting director of The University of Georgia's Selig Center for Economic Growth. "It's very consistent in that Georgia ranked third for Hispanic buying power in 2005. Georgia's Hispanics are upwardly mobile striving to climb the economic ladder, and not a static population. But this is particularly interesting given the youthful nature of our Hispanic population."
The Selig Center's most recent survey of minority buying power shows Georgia Hispanics' buying power grew from $6.3 billion in 2000 to $10.6 billion in 2005. And that buying power is projected to hit $17.3 billion in Georgia in 2010.
Humphreys noted Georgia's Hispanic population is focused around metro Atlanta, particularly Gwinnett County, and is more urban than in some states.
"I suspect that also plays a role in business formation, since Hispanics in urban areas are more likely to start new businesses than those in rural areas," he said. "Buying power is the building block for wealth."
Humphreys expects Georgia will remain a top state for growth in Hispanic population, buying power and business formation. . . .
How Mexican and U.S. Citizens View Each Other
Zogby International and CIDAC have released interesting results of a jointly conducted poll performed in the United States and in Mexico.
U.S. citizens have a different view of Mexican immigrants than what some voices, claiming to represent "groundswell opinion," would have us believe. Further, while Mexican citizens’ hold some views of the United States which are generally negative, they share some interesting opinions in common with their counterparts in the U.S.:
Posted by John at 8:55 PM | Comments (0) | TrackBack. . . Only 36 percent of Mexicans polled said they had a positive view of their northern neighbors, while 62 percent of Mexicans said they thought the United States is a wealthier nation because it exploits others.
This differed from the responses on the U.S. side, where 84 percent said they had a favorable view of Mexicans. Positive attitudes were especially high in states in the Pacific and Mountain time zones - areas which generally have larger Mexican populations.
Seventy percent in the United States, meanwhile, said the economic success of their country was due to better opportunities to work, and only 12 percent said it was the result of exploiting others.
However, a strong majority of respondents from both countries - 80 percent of Mexicans and 68 percent of Americans polled - said that Mexican migrants have a positive impact on the U.S. economy.
Regarding the U.S.-Mexico relationship, a slim majority from both sides agreed the other country is important to the future of their own nation. Sixty-two percent in the United States said they thought a strong relationship with Mexico is important for the future, while 52 percent of Mexicans said that solid relations with the United States are essential.
However, respondents in both countries have little esteem for their neighboring governments: 27 percent in the United States said they have good feelings about the Mexican government, while an equal 27 percent of Mexicans said the same about the U.S. government.
Additionally, nearly half of those polled in the United States (49 percent) said that their country sees Mexico as a distant neighbor, while 30 percent said Mexico was perceived as a friend and 12 percent said as a partner. Thirty-six percent of Mexicans, meanwhile, said the United States sees Mexico as a distant neighbor. Only 20 percent said Mexico was perceived as a partner, and 18 percent said as an enemy.
But a majority in both nations - 69 percent in the United States and 90 percent in Mexico - disagree with a recent U.S. proposal of building a border wall. A majority on both sides also said it is important for their children to learn the other nation´s language. Seventy-nine percent of those polled in the United States chose Spanish as the most important from a list of languages, while 88 percent of Mexicans chose English from the same list. . . .
Michael Slavik, National Champ
Congratulations to Michael Slavik, who closed out his collegiate swimming career by winning the NCAA Division III National Championship in the 50 yard freestyle for his Washington University Bears. His teammate Eric Triebe was the 200 yard freestyle champion.
These two young men brought Washington University its first two national championships in the history of its swimming and diving program.
Congratulations, Michael, on your achievement!
Michael is the son of our pal Dave Slavik of Mesirow Financial.
Posted by John at 9:41 AM | Comments (0) | TrackBackQuote of the Day for Tuesday, March 21, 2006
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March 20, 2006
China's Labor Supply Pendulum Continues to Swing the Other Way
BusinessWeek has discovered rising wages and labor shortages in China:
Posted by John at 10:35 PM | Comments (0) | TrackBack. . . Doesn't China have an inexhaustible supply of cheap labor? Not any longer. From the textile and toy factories of the south to the corporate headquarters and research labs in Beijing and Shanghai, the No. 1 challenge today is finding and keeping good workers. Turnover in some low-tech industries approaches 50%, according to the Institute of Contemporary Observation, a Shenzhen labor research group. Guangdong Province says it has 2.5 million jobs that remain unfilled, while Jiangsu, Zhejiang, and Shandong provinces say they, too, face shortages of qualified workers. "Before, people talked about China's unlimited labor supply," says Zhang Juwei, deputy director of the Institute of Population & Labor Economics at the Chinese Academy of Social Sciences in Beijing. "We should revise that: China is facing a limited supply of labor."
The Hispanic Contribution to Central Florida's Growth
Posted by John at 10:20 PM | Comments (0) | TrackBackThe hundreds of thousands of Hispanics who have settled in Central Florida are contributing more to the area than just raw population growth.
The Hispanic population -- growing by four people every hour for the past five years to zoom past the half-million mark in 2005 -- now pumps more than $16 billion into the region.
And Hispanics' economic contribution, by supplying labor, creating businesses and spending money in the communities where they live, is expected to jump beyond $20 billion during the next two years. . . .
Hispanics in Central Florida grew by 49 percent since 2000, adding up to 549,563 by last year. Most Hispanics reside in Orange County, but Lake and Osceola showed the highest pace of growth at more than 70 percent.
Hispanics spent $8.2 billion in Central Florida last year. As of the current year, they have also created about 20,000 businesses that employ close to 200,000 people. Their yearly spending, which multiplies in impact as those dollars filter through other sectors of the economy, is expected to top $10 billion within two years. . . .
Snap, Crackle, Pop for Washington's Lobbyists
"Lobbyists Foresee Business As Usual." The headline jumps off the page of the Washington Post. If that brazen message isn’t enough, just read the first few paragraphs of the story itself:
Some of Washington's top lobbyists say that they expect to find ways around congressional efforts to impose new restrictions on lobbyists' dealings with lawmakers in the wake of the Jack Abramoff corruption scandal, and that any limits will barely put a dent in the billions of dollars spent to influence legislation.
Though Congress may ultimately vote to eliminate a few of the more visible trappings of special pleading, such as gifts, free meals and luxurious trips, lobbyists say they have already found scores of new ways to buy the attention of lawmakers through fundraising, charitable activities and industry-sponsored seminars. An estimated $10 billion is spent annually to influence legislation and regulations, and that spending is not likely to be diminished by the proposed lobbying changes, these lobbyists contend. . .
These comments are coming out even before Congress enacts any "reform" legislation restricting lobbying activities. These folks are pretty confident, no?
Just to give a little perspective on how much $10 billion really is, the Kellogg Company, the world’s largest ceral company, had about the same amount of total sales over the year.
Posted by John at 8:57 PM | Comments (0) | TrackBackQuote of the Day for Monday, March 20, 2006
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March 19, 2006
Selling Cars to Today’s Hispanics, While Working for a Future Generation
German Vidal is the top Honda salesman in the Washington, DC area, and one of the top ten in the country, reports the Washington Post. He’s a naturalized American originally from Bolivia.
Last year Vidal sold 348 cars at Ourisman Honda in well-to-do Bethesda, Maryland, where Latin American, as the Post notes, is "presumed to be a cuisine, not a market." About half of Vidal’s customers are Hispanic:
Posted by John at 11:45 PM | Comments (0) | TrackBackThe Hispanic car salesman must also be savvy to differences. Hispanics are much more likely to take the advice of friends and relatives about what to buy and who to buy it from. They seek a guide in a land of dizzying choices and information overload.
If a car has a problem, a non-Hispanic buyer will report to the service department. Not Hispanics.
"They come and see the salesperson, even if the service person speaks Spanish," says Gus Casabe, used-car manager at Alexandria Toyota, one of a handful of Hispanic salesmen in the area as long-established as Vidal. "It's some kind of different relationship between the salesperson and the customer than American people have. . . . Once you get into a relationship with a Spanish customer, unless you do something crazy, it's almost forever."
Vidal says this customer loyalty is simply a cultural instinct of Latinos -- a triumph of the relational over the transactional. "That's what we are," is how Vidal explains it. "It's our culture back home." . . .
Over the years, the car biz has sometimes kept Vidal away from his family. He turned down chances to be promoted to manager, he says, because a salesman can control his hours, and Vidal can take time off for spontaneous family events. He is private about his earnings, but a salesman at his level can make $150,000 to $250,000 a year in commissions, more than a salaried manager.
He works so hard, he says, to keep his daughters, Alicia, 14, and Nicole, 12, in private Catholic school and give them the very best university education. That way, they may ascend into those mythic professional classes -- the realm of people who write checks for the entire cost of an Odyssey, or who brought Mercedes to his father's garage.
Whatever his girls do, he "will be very proud," he says. "That's the only thing I want." . . .
When You Decide to Use the Crop, You'd Better Hold On
This afternoon I was riding with my wife in our riding arena. My horse, Miss Glo, was hardly paying attention to me. While I wanted a canter, Miss Glo decided that all I was going to get was a trot.
My wife got me a riding crop and said, "Ask again, and when she ignores you, smack her once with this. When you do, though, hold on and be ready for anything."
The "hold on" advice was prescient; I got quite a ride. Moreover, she decided to test my balance and swerve on me, not once but several times.
From a management point of view, it’s very similar to eating the jalapeños. When you decide to get tough and use the crop, you’d better hold on and be ready for anything. Anything may be exactly what happens.
Posted by John at 10:58 PM | Comments (0) | TrackBackThe Unfinished Task of Freer Trade
My partner Dr. Dwight Clark alerted me to an editorial by Henrik Rasmussen, President of World Growth, on the unfinished task of freer trade:
Posted by John at 10:26 PM | Comments (0) | TrackBackFree trade is the most efficient wealth creator available to mankind. During the last six decades average tariffs on manufactured goods were reduced from 40 to 4 percent. In the same period, poverty fell from 50 percent of world's population in 1950 to less than 20 percent. Foreign companies account for 5.4 million jobs in the United States, and many foreign countries have drastically improved their living standards by opening their economies to world-class U.S. companies.
Yet the task is unfinished. More than a billion people still live in poverty, concentrated in countries with limited economic freedom and high trade barriers. These people depend on strong nations such as the United States to put pressure on their governments to open markets.
Take health care in the developing world. One-third of the world's population lacks access to essential medicines, according to the World Health Organization. Yet many governments, especially in the developing world, maintain tariffs on medicines, some as high as 40 percent.
The United States recently joined Switzerland and Singapore in proposing an end to all tariffs on medicines and medical devices. This proposal puts much-needed pressure on Third World governments that harass multinational pharmaceutical companies with tariffs and red tape, yet blame the companies for the governments' failure to deliver quality health care.
Quote of the Day for Sunday, March 19, 2006
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March 18, 2006
The Link Between Infant Nutrition and Chronic Disease
The United Nations draws a link between under-nourished children and rising chronic disease in the developing world. The Financial Times reports:
Posted by John at 5:56 AM | Comments (0) | TrackBackWhile under-nutrition--which affects 170m children in the developing world--remains a leading cause of death and disease, obesity and related afflictions such as heart disease, strokes, cancer and diabetes are rising rapidly even in the poorest countries. Globally, some 300m adults are clinically obese, the UN estimates.
Health experts say people who are underweight as infants are more at risk of being overweight as adults if their lifestyle later leads to a higher calorie intake and less exercise. They point to increased urbanisation as the prime cause behind the explosion of obesity in countries such as India, China and even Mozambique. . . .
While the trend to "fast food" such as burgers and pizza has been blamed for rising obesity in China and India, in most poor countries obesity reflects a diet heavily dependent on staple carbohydrates such as maize, coupled with a more sedentary lifestyle.
Quote of the Day for Saturday, March 18, 2006
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March 17, 2006
A Parting Message from Art Buchwald
Columnist Art Buchwald, probably one of the funniest, yet thoughtful individuals to ever write for a newspaper, is dying. He’s in a hospice, foregoing dialysis.
As he relates in this column—-both funny and brutally honest—-he’s peppered with questions about the afterlife and his beliefs. Those questions divert attention from the real issue:
The thing that is very important, and why I'm writing this, is that whether they like it or not, everyone is going to go.
The big question we still have to ask is not where we're going, but what were we doing here in the first place?
What are we doing here—-today, at this moment? It’s a great question to ask ourselves, and more than occasionally.
Posted by John at 10:16 PM | Comments (0) | TrackBackQuote of the Day for Friday, March 17, 2006
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March 16, 2006
Media Companies: Change or Die
In a speech in London on Monday night, Rupert Murdoch looked ahead into a future very different from the one in which he built his media empire. The Guardian reports:
"Power is moving away from the old elite in our industry - the editors, the chief executives and, let's face it, the proprietors," said Mr Murdoch, having flown into London from New York after celebrating his 75th birthday on Saturday.
Far from mourning its passing, he evangelised about a digital future that would put that power in the hands of those already launching a blog every second, sharing photos and music online and downloading television programmes on demand. "A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it," he said. . . .
"It is difficult, indeed dangerous, to underestimate the huge changes this revolution will bring or the power of developing technologies to build and destroy - not just companies but whole countries."
The owner of Fox News added: "Never has the flow of information and ideas, of hard news and reasoned comment, been more important. The force of our democratic beliefs is a key weapon in the war against religious fanaticism and the terrorism it breeds."
. . . he combined his new-found enthusiasm for the digital future with a "change or die" message for the monolithic media empires of the 20th century.
"Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall," he warned. "That applies as much to my own, the media industry, as to every other business on the planet.” . . .
He had some words of hope for his industry peers buffeted by declining circulations, free titles and the internet. "I believe traditional newspapers have many years of life but, equally, I think in the future that newsprint and ink will be just one of many channels to our readers," he said, predicting a future in which "media becomes like fast food" with consumers watching news, sport and film clips as they travel, on mobile phones or handheld wireless devices.
"Great journalism will always attract readers. The words, pictures and graphics that are the stuff of journalism have to be brilliantly packaged; they must feed the mind and move the heart," he enthused. . . .
. . . Mr Murdoch has undergone a Damascene conversion, admitting he hugely underestimated the power of the web. He said last night: "It is a creative, destructive technology that is still in its infancy, yet breaking and remaking everything in its path. We are all on a journey, not just the privileged few, and technology will take us to a destination that is defined by the limits of our creativity, our confidence and our courage."
I admire any person who, at age 75, is spending their days looking toward the future instead of resting on their accomplishments.
(Thanks to the POMO Blog for the pointer.)
Posted by John at 5:06 AM | Comments (0) | TrackBackTough Times for China's Toy Makers
China produces almost three-fourths of the world’s toys, and about three-fourths of China’s toy production comes from Guangdong Province.
That’s not a sign of strength; it’s actually a problem. Already thin margins are being threatened by rising labor costs in Guangdong Province generally. Throw in increased raw materials costs and you’ve got an industry with some difficulties.
Protection measures introduced by foreign countries and the rise of production costs are reducing the already thin profit margins for Guangdong's toy manufacturers.
"We have worries every year. We worried about the short supply of workers last year and now we are concerned about the foreign market shrinking due to trade protectionism in many western countries," Lin Ruorong, owner of a toy factory in the city of Zhongshan, told China Daily. . . .
"The US's toy imports from China have been decreasing over the past couple of years and the European Union has raised its market threshold for China's toy products," he said. "That means my business is hardly able to survive."
Many other toy manufacturers in the province have also been feeling the pinch. As well as increased protectionism in the US and the EU, where most of Guangdong's toys have been exported, Russia, Mexico, Brazil and Argentina have recently introduced anti-dumping measures against toy imports from China, citing various excuses, according to Li Zhuoming, deputy chairman of the Guangdong Toy Association. . . .
What was worse, Li said, was that the price rise of raw materials and the rise in workers' wage will further narrow profit margins this year.
For example, he said the current price of plastic is 23 per cent higher than a year ago, and wages for toy workers has risen by about 20 per cent in the same period. . . .
Low cost labor advantages, when viewed over an intermediate to longer term timeframe, are temporary. China is no exception.
We’ve covered this issue repeatedly in Tidbits, including here , here, and here.
Posted by John at 4:54 AM
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What We Need to Make Our Wives Happy
According to a study from the University of Virginia, it is emotional commitment from the husband, along with his being a good provider.
Thank goodness we have scientists who actually research these things.
Posted by John at 4:28 AM | Comments (0) | TrackBackLaying the Burn on Prostate Cancer
Higher levels of capsaicin, the element of chili peppers which causes the burn, has been found in this study to kill prostate cancer cells.
If true, I’ve got nothing to worry about.
Posted by John at 4:19 AM | Comments (0) | TrackBackQuote of the Day for Thursday, March 16, 2006
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March 15, 2006
Gains in Spanish Language Media Expenditures Remain Sizzling
From Broadcasting & Cable:
Posted by John at 10:20 PM | Comments (0) | TrackBackTotal advertising expenditures climbed 4.2% in 2005 over the previous year, with Internet, Spanish-language TV and cable leading the way. Network and spot TV, however, lagged behind.
The hottest ad category last year was online, jumping 23.3%, followed by Spanish-language TV (up 16.9%) and cable (11%), according to a new report from Nielsen Monitor-Plus . . .
Ports of Paranoia
Due to a lack of leadership in Washington, there doesn’t seem to be much interest in looking at the Dubai Ports fiasco from the moderate Arab point of view. If you’re one of those folks, just move on.
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