Wednesday, November 25, 2009

A Toast to Failure

Here's to failure, one of our greatest teachers.


Barack Obama:

Making your mark on the world is hard. If it were easy, everybody would do it. But it's not. It takes patience, it takes commitment, and it comes with plenty of failure along the way. The real test is not whether you avoid this failure, because you won't. It's whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.

George Bernard Shaw:

A life spent making mistakes is not only more honorable but more useful than a life spent in doing nothing.

Havelock Ellis:

It is on our failures that we base a new and different and better success.

Herbert B. Swope:

I cannot give you the formula for success, but I can give you the formula for failure: which is: Try to please everybody.

It's a Wonderful Life:

Remember, no man is a failure who has friends.

John Dewey:

Failure is instructive. The person who really thinks learns quite as much from his failures as from his successes.

Mary Pickford:

If you have made mistakes, there is always another chance for you. You may have a fresh start any moment you choose, for this thing we call "failure" is not the falling down, but the staying down.


Michael Jordan:

I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life and that is why I succeed.

Oscar Wilde:

Experience is simply the name we give our mistakes.

Ralph Ellison:

Life is to be lived, not controlled, and humanity is won by continuing to play in face of certain defeat.

Robert F. Kennedy:

Only those who dare to fail greatly can ever achieve greatly.

Samuel Smiles:

It is a mistake to suppose that men succeed through success; they much oftener succeed through failures. Precept, study, advice, and example could never have taught them so well as failure has done.

Thomas Alva Edison:

I have not failed. I've just found 10,000 ways that won't work.

William Saroyan:

Good people are good because they've come to wisdom through failure. We get very little wisdom from success, you know.

Winston Churchill:

Success consists of going from failure to failure without loss of enthusiasm.

And finally, from a Chinese fortune cookie I received last week:

You may fail many times, but you are not a failure until you give up.

Wednesday, September 23, 2009

You Should Look a Gift Horse in the Mouth

The old adage is Don't Look a Gift Horse in the Mouth. In my mother's view, it meant that if someone gives you a present, you should accept it graciously, even if it is something that is not exactly what you want. My view is that the economy fell apart because greedy people failed to examine that steed. Too many people jumped at the chance to get homes, cars, and other luxuries they couldn't afford with loans and cheap credit they knew they couldn't repay (at least not in this lifetime, based on minimum payments). I'm old-fashioned enough to be suspicious whenever someone offers me something that sounds to good to be true. Read that fine print and you'll find that it almost always is. The size of our economy is a function of how much credit is being used. The quality of our economy is a function of how much we save, how much we keep spending within our means, and how frequently we buy products that are manufactured here rather than abroad. Don't always look to cheat the system, or you may find that there won't be a viable system at all in the future.

Wednesday, September 9, 2009

Why Would Anyone Want to Be President?

Anyone wanting to be President of the United States defies logic. First, the job pays a lot less than it costs to get elected. Second, you have to endure large groups of people doing everything they can to destroy your reputation and ability to achieve your goals (Whether your name is George W. Bush or Barack Obama, your position on the issues will anger a large portion of the electorate.). Third, you are speaking fervently to people who don't want to hear what you have to say and who are speaking more loudly than you are. Fourth, you are trying to address the needs of the country as you see them, and many people are only saying, "Don't make any changes that intrude on my comfort zone."

President Lyndon Johnson wanted to keep track of poll results on how people thought he was doing. If you worry about what others think of you all the time, you will never get anything done, and you will have trouble sticking to your principles. This applies even to those of us who will not ever try to be elected for anything. If you are comfortable with the decision you make, stick with it, at least until someone comes up with a logical modification of that decision that makes even more sense to you. Our outlook has been influenced too much by the media. Ratings really don't matter. If you follow your principles and feel comfortable with your decision, then go ahead with it. As Commander David Farragut once said, "Full speed ahead! Damn the torpedoes!"

Thursday, July 30, 2009

Heroes Are People Too

I just returned from the big EAA Airventure Airshow and Convention in Oshkosh, WI. This is an annual trip for me, and I am always impressed by both the technology and the people. One of the best parts is that you get to have personal conversations with people who have been through ordeals you will probably (hopefully) never have to face. Last year I spoke briefly with Dick Cole, co-pilot with Jimmy Doolittle in the April 18, 1942 payback raid on Tokyo by sixteen B-25 bombers. This year I met Jeff Skiles, First Officer of US Airways Flight 1549 that made a safe emergency landing in New York's Hudson River. The common thread in my conversations with both of these heroes is that while talking with them, you feel as though you are talking with an old friend from down the street. They feel as though they were just doing their jobs, although doing them very well under very trying circumstances. There were a lot of other just plain folks there, too: the airmen and soldiers of World War II and all the subsequent wars. It is always a privilege to meet them and talk with them. They are heroes, although you'll probably never learn of their individual exploits. The nice thing about the Oshkosh Airshow is that you also meet a lot of young people who are growing up to appreciate aviation and the heroes that came before them and walk among them.

Wednesday, July 15, 2009

Unintended Consequences

Whenever you make a decision that will affect your future, you should remember that unintended consequences may result. Here are a few societal and personal examples that come to mind:
Desire: Use computers more to eliminate files of papers. Result: More paperwork as people back up their computers with paper versions because of mistrust of computer reliability or rapid computer obsolescence.
Desire: Pass more laws to control crime and regulate society. Result: More lawyers.
Desire: Visits to fast food restaurants to save time in busy schedules. Result: Obesity and poor nutrition balance.
Desire: Get the best cable or satellite TV package. Result: Lack of exercise and obesity; no time for other tasks.
Desire: Hire landscapers to have a more appealing lawn and grounds. Result: Lack of exercise.

I'm sure you can think of other similar cases.

Saturday, July 4, 2009

You Matter More than Your Job.

Most Americans, when asked about themselves in the course of meeting new people, will describe themselves by what they do for a living. In other parts of the world a self-description includes more basic, general, and personal information. When you describe yourself in terms of your job, you open yourself up to two negative consequences. First, you present a very limited image of yourself. There is much more to you than the job you happen to be performing. The second problem is that when you have a self-image that is based on your job, you are setting yourself up to be traumatized if you lose that job. There are many things that you could be doing for a living. It may have been a complete accident that led you to the position you now occupy. Spend some time thinking about what really matters to you and what you would really like to do or achieve in life. Start talking to people about those important things instead of talking about your job all the time, and you might find doors opening toward actually doing some of those other things.

Friday, June 26, 2009

This Speech Has Been Long Overdue.

Jeffrey Immelt of General Electric Company has made a speech that is worth reading in its entirety. He says things that our leaders should have said long ago. Click on the title of this post to read it.

Wednesday, June 24, 2009

Saving Money Made Easy

Americans are known for saving very little of their income. Many think they just can't do it; others think that saving just a little bit would be insignificant. The truth is that the best thing about saving is that it gets you into the habit. Try this approach: Open up two accounts at the bank. One should be a savings or money market account. The other should be a checking account. Every time you get paid, deposit the whole amount into the savings or money market account. This account becomes your capital formation resource. Every time you receive any payment, deposit all of it into your capital account, and transfer only what you need for immediate expenses and current bill payments into your checking account. Some weeks you may even have to transfer out more than you put in that week, but the important thing is that you get into the habit of following the deposit-and-transfer procedure. After a while you will start to see the residue amounts that you left in your capital formation account increase significantly. Save just a little, but do it over a long period of time, and it pays off. Even if your bank account for capital accumulation doesn't pay much interest, it will soon let you start to pay some bills from cash instead of charge cards, and that will save you plenty of interest. You may even find that you will be able to reduce or eliminate your past balances on those cards.

Wednesday, June 17, 2009

Ready, Set, Upset!

Whenever things are getting to be too boring or routine for you, it's time to shake things up. If your business is lagging, do something differently. If your employees aren't enthusiastic about their working conditions, do something radically different. If you don't receive as much non-spam e-mail as you would like, start writing to contacts. Almost any innovation has its greatest impact during the period immediately following its implementation. As time passes, its effectiveness falls off, usually exponentially (which is a pretty drastic falloff). The way to keep interested in what you are doing and to make it the most effective, is to periodically introduce something new. Each new thing, process, or innovation will cause a spike of interest and/or business which will be followed by the usual drop-off. You create excitement when you keep those innovation spikes coming. Brainstorm with yourself or a few friends, and you'll come up with changes that are easy and a lot more fun that doing things the same way forever.

Thursday, June 11, 2009

Everything's Relative

It's hard to believe that it's late spring or meteorological summer, with a long string of temperatures of 60 degrees F or less. It feels quite chilly even though it's June. However, I have to remind myself that most people around here (Illinois) would have given almost anything to get temperatures this warm a few months ago. Our bodies and brains adjust their expectations so that we notice significant deviations from the normal temperature, even as that normal temperature varies over the course of the year. Similarly, a day is longer for a young child than it is for an older person because it is a larger percentage of the life experienced up to that point. This is why time seems to accelerate and whiz by as you grow older. A day, week, month, or year becomes a smaller and smaller percentage of your life. The allure of travelling to exotic places decreases as the number of those trips increase. A tourist and a traveling salesperson have different impressions of the same trip.
All of this is to say that there are very few absolute goals in life. You might as well be satisfied with what you have, because the value of looking for more decreases as you keep seeking additions to what you already have. Enjoy the journey. It's more interesting than accumulating destinations just for the sake of saying you've been there.

Thursday, June 4, 2009

Local News vs. World News

I have a relative who only watches and listens to local news. He isn't at all concerned with what happens on the larger world scene. I tend to closely monitor the national and international news while only briefly reviewing the local news. Who is correct? The answer is probably that we are both correct because we have different points of view. My relative is more concerned with his day-to-day costs, taxes, and laws that impact his lifestyle. I am more focused on long-term trends and national/international developments that will have impact on my personal life in the future. The fact that different people have varying viewpoints and priorities is a good thing. Because of this sort of situation, you can have negotiations and family plans where both parties are satisfied with the outcome. If we both wanted exactly the same thing, one would come out of a negotiation the winner and the other the loser. Progress is made when you can satisfy all parties without having winners and losers. To paraphrase President John F. Kennedy, people and countries all act in their own enlightened self-interest. We will have coexistence, peace, and prosperity to the extent that those self-interests are not mutually exclusive.

Tuesday, May 19, 2009

Sounding Off!

That last Blog Post in which I lambasted Google for their lack of service sure felt good! There are times when you get so frustrated with a situation that it is positively therapeutic to sound off and vent your hostilities. It may or may not do anything to solve the problem. I have no hope for better dealings with Google, but it actually made me feel better to let it out. There was a time when I was working as an engineer for Bell & Howell Company, when I had such a showdown with the Purchasing Department. They were very upset that Engineering was treading on their turf by placing direct Purchase Orders. Without getting into the details, I read them the riot act about maintaining schedules and having sufficient technical knowledge to purchase the proper components in a timely manner. I don't ordinarily sound off, and my confrontation so surprised them that they went out of their way to be courteous and apologetic from then on. It almost approached friendship. For best results, however, you should save your sounding off for a very special situation, like Google.

Monday, May 18, 2009

Google Adsense Customer Disdain

I'd like to sue Google Adsense for Non-Support. I have spent several months trying to make contact with them to find out how to test my account to see whether it is even working. When you try to contact customer support, they tell you to ask a question in their forum first. When you ask a question, you run into so many other questions from people who are having problems that you can't even find your posted question again to see if you have received any answers or suggestions. If you give up and say that you have to contact Customer Support, they tell you that you can only check off one of a few topics they will answer, and they won't let you write a word about your case. Well Google, I don't think that you really exist. If you do, tell me why I have been on both your Adsense Content and Adsense Search Programs for more than a year on two websites and two Blogs (one more recent), and there has been absolutely no change in my account statistics for many months. I don't think you ever check to see whether sites are functioning properly. It just lets you post ads without ever having to pay off. Google Analytics is even worse. I had one site on there, and then I added three more sites only to find that the system claims that all four sites get exactly the same number of hits. Does anyone else have a better ad system available? Google is too big to know what it is doing.

Saturday, May 2, 2009

Happy Birthday

The biggest thing in the news for the last couple of weeks has been the Swine Flu, more formally called H1N1. One of the more interesting points in all of the news coverage is that your first line of defense against this previously unknown virus strain is to wash your hands frequently and thoroughly. The best way to avoid getting sick and to keep this contagion from spreading is to carry on your normal activities, but keep your hands clean after touching anyone or anything that comes into contact with other people. Dr. Tim Johnson, consultant to the ABC broadcast network has suggested that when washing your hands, you should scrub them together with soap for as long as it takes to sing "Happy Birthday". This advice gives me the picture of people at side-by-side sinks in public restrooms all washing and singing "Happy Birthday to you..." The singing would probably help them cheer each other up, but the danger is that in their enthusiasm, they would give each other hand slap high fives, which would mean that they would have to wash their hands all over again.

Friday, April 17, 2009

Change to Plan B

If you are among the many who have lost their jobs, or find yourself living with relatives because of a home foreclosure, it is probably time to change to Plan B, while Plan A is at least temporarily on hold. Plan A was what you wanted to do while you thought that you were in control of your future. Now that you know that you can't always be in control, you have two choices. You can sit around and wait for something to happen, or you can change to Plan B. Even though you aren't doing what you wanted to be doing, you can accomplish a lot with this interim time you have been given. Here are just a few examples: You can spend some quality time and rebuild relationships with those family members for whom you never could find time under Plan A. You can finally get to do some of the things on your Honey-Do list (and save contractor/maintenance cost if you are still in your home, or you can help your relatives with their house if you are a temporary tenant). You can take that course at the local college for fun or to improve your qualifications for a new job. You can volunteer to help at a hospital or food bank to aid people who are worse off than you. (Sometimes this even leads to a new career.) You can approach a realtor or bank and seek a temporary job maintaining foreclosed houses so that they are in good enough condition to be sold. You can work on that art project or invention that you had in the back of your mind.
You are in between desirable situations right now, but don't waste this very valuable time. Right now, you are free to do anything you want. Once you get resituated in a new job and/or house, you will be back on the treadmill, and you will have lost this opportunity to just be yourself. Don't find yourself looking back and wishing you had used this time more wisely. As Omar Khayyam once wrote, "Of all sad words of tongue or pen, the saddest are these: It might have been."

Wednesday, April 8, 2009

Unemployment & the Poor Housing Market: Mutual Solutions?

It's actually possible that unemployment and the poor housing market may be at least partial solutions for each other. Consider the fact that if you are unemployed, along with many others in your area, it is likely that you will have to go somewhere else to find a good job. If you go somewhere else, you will have to get a home there. When you look for that home, you will be helped by the facts that home prices are depressed and interest rates are low. In order to move, you will have to go through the ordeal of selling your existing home, but it is likely that you have more equity in your current home than the amount you will need for a downpayment on your new home. That means that you will have some remaining capital as you start your new job in your new location. Having cash resources will allow you to furnish and remodel your new home as desired. Spending that money to get your new house ready will contribute to improving the economy, which will create more jobs and make more people able to afford a new house. In every transaction, someone spends money to get something he or she wants, and the seller of that product or service gets cash to do the same thing later on. Spending circulates cash and builds up the economy. Spending only cash that you already own builds up the economy more slowly than spending other people's money through loans and credit cards, but it is a lot safer in times like these.

Monday, April 6, 2009

Go with the Flow

If you are among the many who have found themselves laid off from a long-term job, be prepared to welcome change in the future. Companies that are laying off lots of employees are not just trying to limit their economic risk. They are trying to morph themselves into a more viable configuration for the future. In most cases, they will never bring back the same employees that they once considered essential. If they do engage in substantial hiring in the future, they will probably be looking for employees with different skill sets, and employees who will start at the bottom of the compensation ladder, rather than at the top due to seniority. Even now, there are firms and industries that are hiring, and you always have the option of handling your situation by starting up a venture of your own. Your best approach is to face your future as having great but different possibilities from the past. You should network with past associates, and monitor business and national/international news to identify trends toward new kinds of companies and jobs. If you are set to interview a new potential employer or a potential customer for your new venture, take advantage of modern technical capabilities to prepare yourself. In the old days, a smart job applicant would try to get a copy of the annual report for a company at which he was interviewing. Now, you can learn all about that company or potential customer through searching their name and key activities/products on the Web. Do all you can to walk in knowing something specific about the company so that you can engage in knowledgeable conversations with the interviewer. Being able to give them specific compliments about their business is a big plus. It shows your interest, and it gives them the feeling that you will be able to join the team without as much training expense as other candidates. It is a lot easier for potential employers and customers to communicate with people who already know something about their businesses, and it makes the meeting less awkward. There is an element of fear on the part of the employer, because there are many liabilities and hidden costs in selecting improper employees. If you search company information well, there will be more comfort in your interview, and the company's sense of "Stranger - Danger!" will be allayed.

Wednesday, April 1, 2009

Why "Buy American" Means Something

As we sit in the middle of this depressed economy, the government's hands are tied when it comes to "Buy American" discussions and rules. Because of our participation in the World Trade Organization and other international trade negotiation groups, our government has to take the position that our markets are open to products from any other country, so that other countries will equally allow open sale and distribution of our products. Way back during President Reagan's administration, I attended a meeting on international trade at the Chicago Mercantile Exchange, where the top U.S. Trade Negotiator was the speaker. During that meeting he talked about our disadvantages in trade because other countries had lower costs than we did. At that time at least the U.S. market was the source of the majority of consumption in the world. When I suggested that we offset cost advantages of other countries by controlling access to our markets, he looked at me as though I was absolutely crazy.

Maybe the government won't talk or think about "Buy American", but individual Americans certainly should. If you buy an American product, the dollars you spend stay in this country and circulate through the hands of many businesses and individuals. If you buy a product from another country, you send most of those dollars (except for the retailer's share) outside of the U.S. financial system, and they circulate through hands in another country. This costs U.S. jobs and endorses the terrible financial bias in favor of short term profits over long term planning and profits. If we had been thinking long term, we wouldn't have our industries (especially automobiles) in the terrible situation they face now. When we consistently run a huge multi-billion-dollar-per-month trade deficit for many years, we find that our country and our stock market have to get funding from other nations to support our economy. Right now, China's government is questioning the ability of the U.S. Government to pay back the money America has borrowed from them. China is also trying to get the dollar replaced by a different currency as the standard currency for settlement in international trade. We have had great advantages in the past because of the strength of our market and our currency. As they both weaken, we have to make decisions with a constant concern for how the countries to which we owe huge amounts of money will react. These are not good trends. Maybe, as an individual, you have bought goods from other countries because of lower prices, perceived status, or even technical preference. I suggest that if we all keep up such practices, we will undermine our future standard of living and even our ability to negotiate deals and treaties from a position of strength. Americans have the opportunity to guarantee that their country remains strong if they take the American product and service options when they are purchasing in the marketplace. Back when Britain was the greatest international power, there was the common expression, "penny wise and pound foolish". Look where that approach got them. Don't take the approach that a present bargain has no connection to a strong future. If American firms are supported, they will achieve greater volumes of units sold, reduced costs, and increased technology. All of these things will benefit you in the long run.

Monday, March 30, 2009

Now Is the Time for All Good Men & Women... think about what they would most like to be doing. Some people have time to think about this because they are out of work or retired. Others have to dream in small intervals between their many daily tasks. Use the Internet as a great big Dream Machine. With zero or very little up-front cost, you can set up a blog or a web site and present yourself to the world as whatever it is that you would like to be. Then, you can search the web for the additional knowledge that you would need to be that new identity, and you can communicate to or with others in that field. For instance, if I were to pull out of the air a desire to be a chef specializing in Chinese food with a Mexican twist to it, I might set up a blog or a web site called Chinexico. Then I could study both Chinese and Mexican cooking and test out some recipes such as Sweet and Sour Tamales, or Egg Rolls with Flour Tortilla wrappers. If the recipes turned out to work well, I could publish them on my site, try writing a new Chinexican cookbook, or open a specialized restaurant that someday might turn into a chain of such places. This particular dream might not be too farfetched, because tortillas and egg roll wrappers and mu shu pancake wrappers are all quite similar. Some Chinese restaurants use very hot peppers in their cooking as do Mexican restaurants. Both ethnicities use rice (arroz)...You can try out your dream in any category you want, but you will probably need a twist on what is already available in order to make your innovation something special and something about which you can get to know more than most others. This approach gives you a fun enterprise which could turn out to have some economic or at least self-confidence value. It also might turn out to be something that is worth noting on your resume as you look for new work. If you are out of work and looking for a new position, this exercise will give you something useful to say that you have been doing since leaving your last job. It is easier to land a new job if you haven't had a long empty period since your last one.

Wednesday, March 25, 2009

Write Right Now

Why do writers write? There are many more reasons for writing than there are for publishing. Writing is an enterprise and an adventure and a chance for immortality. Some people make money from their writing, but most do it for other reasons. I admit to several motivations. I want to leave some trace of my existence and thought processes behind after I have gone on to whatever lies beyond life on earth. I find that I think differently when I write down my thoughts and have to make each new sentence have some logical relationship to the one that preceded it. I want my children to understand the part of me that I have never explicitly expressed. I want to create something that wasn't there before. I want to record and appreciate history.

If you are among the many thousands of people who have found themselves without a job during this economic downturn, consider the possibility that your period of unemployment could be a valuable opportunity to try something new and different. Rene Descartes said, "I think. Therefore, I am." All of your life you have had your own unique perspective on the world. Nobody else sees the world through your eyes. Here is your chance to do something special with your time of unemployment, rather than drifting through it just waiting and worrying. For at least one hour each day, sit down with pen and paper or laptop and write something. Your writing might take the form of letters, or poems, or remembrances to share with your children. You may choose to make it part of your job search by using it to network with others. You may even find it to be something so pleasurable that you will want it to continue after you are back in the working world. For most of our working lives we are tied to the details and objectives of our jobs. Don't look now, but you are free to think and write about anything you want. Go and create.

Friday, March 20, 2009

Spring Upward

This morning, we finally made it out of winter and into spring. I think that I've seen enough indicators to be cautiously optimistic that the economic trends are springing upward too. The stock market is a leading indicator, and it has started to look mildly but consistently positive. I have been to car dealers where I have seen more people at least looking. I have seen a few "Sold" signs on houses and more realtors bringing potential customers for house tours. There are even some repaired potholes on my neighborhood streets (Some, but nowhere near all of the holes are repaired.). I know a lot of people who are taking major spring break vacations with their kids, and companies are again sending people on business travel. Smaller local banks are lending, and companies are extending credit terms. The big remaining obstacles are the major banks and insurance companies getting liquid again. The stockbrokers should be doing well because they make as much from a trade in a downward market as they do from a trade during a market gain. So, let the sun shine in and warm things up gradually.

Saturday, March 14, 2009

Don't Play the Blame Game

The latest news clips as we try to get out of the economic downturn have President Obama starting to be more vocal about blaming President Bush for the economic mess he inherited, while the Republicans are criticizing President Obama for signing a budget bill that contained lots of "earmarks". It is true that President Bush kept saying that the basics underlying the economy were sound and robust when they weren't. It is true that when Barack Obama was campaigning for President, he said that he would not tolerate "earmarks" if elected. Nevertheless, the important thing is for everyone to work together to get us from where we are now to where we want to be with the economy. President Bush felt that he had to say good things about the economy, because saying bad things might have made it even worse. President Obama felt that the pragmatic thing to do was to accept the earmarks this once so that the budget would go through in a timely fashion, and then work on rules to prevent them in the future. Whenever you have a problem, don't look to blame someone for having caused it. Instead, use all of your resources, human and otherwise, to develop steps for solving the problem and getting from where you are to where you want to be.

Monday, March 9, 2009

Davidson's Doctrine Applied When You Are Uncertain

When a decision has to be made within a relatively short time span, whether it is to be made by an individual or a group, the worst thing you can do is dither or vacillate about it. Lead, follow, or get out of the way. You always have the default option of not doing anything. However, once you decide that a decision has to be made that will move you away from your present situation, some action is required. Davidson's Doctrine can be applied: Select any possibly acceptable option and assume that you have already made that decision. Determine what the first few procedures are along that path, and take a few simple steps in that direction while you are still behaving as though no change has been made. Consider all of the implications of this assumed decision. Think about cost, effects on other people and events, what people will think of you for having selected this choice, whether making this decision will lead to other required decisions. If you are comfortable with the implications of this assumed decision, go ahead and make it an actual choice. If some of the implications bother you, assume that you have made an alternate choice, and see if it is acceptable. The decision only needs to be comfortable and acceptable for you. It does not have to be the optimum choice. If no choice feels comfortable to you, take the default option, and wait a while before you again consider a change. Doing nothing is OK when doing something will not produce a comfortable and acceptable result.

Monday, February 23, 2009

Short Term Bad News, Long Term Good News - Applying Davidson's Doctrine

You've been laid off from your job or you have to give up your job to move where your spouse has taken a new position. That's bad news for you and your established career path. You can feel sorry for yourself because of it. You can try to find a new job as similar to your old one as possible (difficult in hard economic times). The third option is to take a personal inventory and possibly go off in an entirely different direction. Losing your job is traumatic to your ego, your wallet, and your family relationships. However, it can be an opportunity to take a new approach that will give you unimagined long term benefits. I know that for many years I felt that I was so busy overcoming the daily hurdles of my job that I didn't take enough time to think about what I wanted out of life. If you have lost your job, you suddenly have that time to think. Set aside your fears (not easy), and think about what you would make you satisfied more than what you had been doing. What skills from your past job or training would you like to use? Who in your business dealings network has a different job that you would like to try? What product or service did you purchase from a vendor that you could make or do better than them? Are you willing to invent a new job by going out on your own? Do you know someone else in a similar situation who would be a great partner in an independent startup effort? Do you have or are you able to get sufficient resources to sustain yourself while you try something new? Davidson's Doctrine as presented in my book, DECISION TIME! Better Decisions for a Better Life should be applied to your situation. Think of a possible new start direction, and assume that you have already decided to pursue it. Think about the necessary steps along that path, and take a few that don't require much effort or cost, such as printing business cards and letterhead. How does it feel to you? If you assume that you've decided on that direction, do you feel comfortable about it? Will you be bothered by what other people think of you for having gone that way? Do you start to see additional costs and difficulties that you hadn't realized would be involved?

You can take these first steps without declaring your new direction as a definite decision. Are you comfortable with it? Does it give you pleasure and/or an acceptable challenge? Does it promise economic or satisfaction rewards? If so, follow up those initial steps with an actual decision to go that way. If you are not comfortable with your assumed direction choice, discard it, and assume that you have decided on an alternate choice that appears promising to you. Take the first few steps and thoughts in that direction, and repeat the process until you have found an assumed career decision that is comfortable to you. It doesn't have to be ideal, just comfortable and satisfying to you. At some time in the future, you can always re-evaluate your outlook using the same approach if your initial direction doesn't turn out to be desirable for you in the long run. The Assumed Decision Process will tend to point you in a desirable direction in a shorter period of time than vacillating among all the possible alternatives or just trying to regain your original career situation in a bad economy.

Thursday, February 19, 2009

Living Within Your Means / Meaning Within Your Lives

One of the lessons we learn during a recession is that we have to identify items in our budgets that we can minimize or do without. Some items that are luxuries are easy candidates for cutting while others that we consider essential are more difficult to cut. The way to approach this process is to assign a priority to every item in your budget and restrict your spending to those items that are higher priority or to the higher priority portion of each qualifying item. During times when there is plenty of money for everything, you may not bother with priorities because there is plenty of money for everything with some left over. If you are smart, you assign priorities in both good times and bad. You may have enough money to buy everything you want, but you should examine your options carefully before you buy more than you need. Another result of bad times is that most of us assign higher priority to those aspects of our lives that define our relationships to each other and to God. Reinhold Neibuhr, in his Interpretation of Christian Ethics, stated that it doesn't matter very much what you believe in when everything is going well, but that you had better prepare yourself to have strong beliefs and meaning in your life when things go wrong, and they will go wrong at some time. Now that we're in that kind of period, it's a good time for intense self-examination.

Tuesday, February 17, 2009

Let the Tail Wag the Dog

I found myself feeling as though I was in the Twilight Zone recently when the government announced that due to the bad economy our international trade deficit for one month was only a record low of 39 billion dollars. Don't look now, folks, but that is pathetic. If we want to get our economic house in order, we should give priority to reducing our international trade deficit and not let it turn out to be whatever happens. The G7 trade ministers are putting pressure on countries not to respond to bad economic times by turning protectionist, i.e. telling their people to buy only their domestic products. They fear that protectionism will reduce the total amount of international trade and lead the world into a downward economic spiral. I have a modified plan to suggest. Let Americans buy anything they want from any country they want, but set a gradually decreasing international trade deficit target, and by law state that the trade deficit cannot exceed the monthly or annual benchmark. Once the difference between imports and exports exceeds that deficit, the only legal way to import more would be to export more. It would help the situation if Americans bought domestic goods, and it would also put pressure on foreign firms and countries to buy U.S. goods if they wanted to be allowed to increase their exports to the U.S.A. It's not protectionism. It's common sense.

Friday, February 13, 2009

Sexual Economics on Valentines Day

On every other day of the year except for February 14th (and a few days anticipating it), women do almost all of the shopping and most of the consumer buying. It all changes in the pre-Valentines Day period when men (in a spirit of self-preservation, if not romance) shop and purchase generously. I predict that we will see an economic pulse upward this week because of men realizing that it is time to buy for the sake of their relationships with women. It is even possible that in this year's tough economic environment some men (and women) will spend more on Valentines Day to add cheer to an otherwise bleak period. I was at the local Costco this morning, and during the first half hour an amazing number of people had already done their shopping and were checking out, 95% of them with at least one bouquet of flowers. We still pursue romance, and we still have optimism. Nurture those qualities well for an economic and spiritual rebound.

Monday, February 9, 2009

The Velocity of Money

The battle is being fought in Washington now about how huge the amount of money we should have in the Stimulus Package in order to get the economy back on the recovery track. Perhaps more important than the amount of money is the character of the projects we are going to tackle with this money. I'm not trying to nit-pick the specific projects; the politicians have already done that, and neither side is completely satisfied. What we have to study is whether we will be funding projects that get the money moving through the system rapidly. If you give me one dollar, and I put it into my savings account, the bank may lend it out in a few weeks to someone who might use the loan to make a down payment on a house a month later. In this example, the single dollar changes hands three times in a couple of months. The economy basically had three dollars pumped into circulation over two months. If, instead, you give me one dollar, and I use it to pay for groceries, and the store uses it to replace the item I bought, and the wholesaler uses it to pay his employee, and the employee uses it to pay for gasoline, and the gas station owner uses it to buy more gasoline to sell, the same dollar changes hands six times in a few days. There are effectively six dollars pumped into circulation in a few days, or potentially, more than one hundred dollars added to the circulation in the same two month period as before. If we want a rapid recovery from our economic malaise, we need to get the new money pumped into the economy in ways that make it circulate from person to person and company to company in a high-velocity fashion. The faster the money circulates, the more quickly we will recover. The problem right now is that people have stopped buying whenever possible. In a bad economy the velocity of money circulation slows to a crawl.

Saturday, January 31, 2009

What Is a Bank?

I was in my local branch bank today to expedite a computer glitch, and the banker suggested that I cancel one of my accounts and open a different type that would pay 1% interest instead of 0.5% interest. My response was that at this time banks are Piggy Banks, places for holding your money securely, and places to store cash as a liquid asset, but that they are no longer sources of significant earnings. In this economy, it is important to have cash in the bank as protection against the declining stock market. Cash in the bank means you don't have to sell securities and turn a paper loss into an actual loss. However, most bankers still talk about their interest rates with a straight face, as though they mean something. Banks are quick to cut the interest rates they pay on deposits when the Fed lowers their rates for borrowing funds, but they completely resist lowering the rates they charge for outstanding balances on credit cards. Why is this so? What is there about the people on Wall Street who single-handedly ruined the world's economy, that makes them think they deserve huge bonuses for having done so? Maybe we need a new financial system wherein loans are issued by companies that have actually earned the money in their coffers. Then they would really be loaning their own money and would be more careful with it. The banks deal in someone else's money but treat it as their own.

Thursday, January 22, 2009

Self-Fulfilling Prophecies

President Obama is starting out well with an approach that is both pragmatic and positive in outlook. We do not yet know how successful he will be as he tackles the many problems facing the United States, but the important thing is that he is giving the strong impression that he knows how to get from here to positive results. Probably the most immediate problem facing the U.S. and the world as a whole is resurrecting the economy. There are many ambitious programs planned, but perhaps the most important thing is to generate a positive outlook in the marketplace. If we think things will get better, they will. We tend to act out our expectations. If we feel things are falling apart, we delay large expenditures and curtail spending on avoidable things such as dining out and home improvements. If we can convince ourselves that we are on the way back, people invest in the stock market because they expect to make a profit, they buy cars, and they consider moves to better jobs and homes. One counterproductive trend is that corporations take advantage of down times in the economy by cutting their payrolls and costs so that they will be more efficient when the economy improves. We are also seeing the greedy investment swindlers trying to disappear with their profits before they have to face the justice system. The stock market and our attitudes are leading indicators of the health of the economy. When they both turn positive, we will be on the way back. So, have a positive outlook. This is one time in history when we have nowhere to go but up.

Saturday, January 17, 2009

Manufacturing Is Still the Key to the Economy

For many years American corporations have been chasing short-term profits by having more and more products manufactured outside of the country where unit costs are substantially lower. Taken out of context, this is a logical thing to do in order to be competitive in worldwide markets. This approach does, however, give the U.S. major problems that may not be immediately obvious to the individual corporation. First, when we start having our products made internationally, we give away our technological techniques and capabilities. Not only do we teach others how to make our products, but we later tend to let them work out the hands-on local production techniques for subsequent orders rather than controlling them ourselves. The second problem with having products made elsewhere is that we remove large numbers of jobs from our available employment pool. The product may be more cheaply made elsewhere, but if our companies aren't paying our manufacturing workers, then our taxpayers end up paying them through unemployment compensation, retraining costs, and inefficiencies when well-trained workers in one sector are forced to take jobs for which they are improperly matched in another sector. The third problem is that each manufacturing job creates several other support and service jobs. There was a time when people claimed that the economy could thrive on service jobs alone. This works out in a boom period, but in a bust period we discover that many of the service jobs are not really necessary, and the amount of unemployment is enhanced when people stop making consumption expenditures. One of the better ways to turn the economy around is to return more products to high-quality domestic production and to convince our consumers that they have a large economic stake in keeping American manufacturers healthy by buying their products. Further, increases in domestic manufacturing and technology are increases in national security in time of war. Self-sufficiency enhances control of your destiny.