Showing posts from 2008

Our Nation: So where do we go from here? Part 3

In my humble opinion, the two most distinctive elements of the United States of America's economy are freedom and entrepreneurialism. The First Amendment of the U.S. Constitution states, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." What is so striking about this, and quite frankly all of the U.S. Bill of Rights is the negative language. "Congress shall make no law;" or "shall not be infringed" (2nd); or "No Soldier shall" (3rd); all are written to limit or forbid the Federal Government from entering into the lives of its citizenry. This is one of the most profound statements of freedom in the history of politics, society and I will argue, economy. The Declaration of Independence is more positive in its tone, calling

Our Nation: So where do we go from here? Part 2

U.S. Interest rates Over the next two years, rates will be low by historical standards. This will be bad news for fixed income investors, and good news for borrowing costs. In the 5-10 year time frame, there will be pressure for U.S. interest rates to rise due to the size of the U.S. government budget deficit. In addition, as the economy rebounds (and trust me, it will rebound), then the Federal Reserve will raise interest rates to hold inflation in check. So when the government spends more than it collects in taxes, who pays the difference? Today, the shortfall caused by taxes collected being less than government expenditures, has been funded by foreign government purchase of Treasury bonds of various durations. Indeed, of all of the "savings" in the world, the U.S. consumes 85% of it to finance its borrowing. Mind you, the shortfall could be funded by US citizens buying government bonds, and if investors become more risk averse over the next two decades, this may occur. But

Our Nation: So where do we go from here? Part 1

I wanted to write optimistically about our nation's democracy and capitalism. But before I address what I see in the next 3-5 years, I should start with my underlying assumption, and why I believe it to be true:. The United States of America is an incredibly unique social, economic and political construction, and it is the best the world has ever known. Not perfect, but perpetually driven towards auto-improvement. Natural Resources : which other country has the vast amounts of natural resources, in quantity and diversity, as the United States? None. The USA has 30% of the world's natural gas, 22% of its coal, 8% of its oil, copper 15%, Gold 15%, Silver 13%, Aluminium 17%, Magnesium 29%... Go to to see the entire data set. Human Resources : which country has the size, scale and scope of the US education system? None. The USA has 4,140 colleges and universities with 17,500,000 undergraduate and graduate students? No o

US Autos: whichever way we go, let's get this right

A sound plan from Tom Epley's Bold Exec Blog. I agree with this 10 point plan. Worth reading...

The search for happiness Part 1

Perhaps it is a consequence of middle age, but more and more of my friends are pondering the meaning of life. To be fair, the terrible economy is also a causal factor, as far too many of my friends have lost jobs or fear losing them shortly. I have friends who are atheists. I have friends who are agnostic. I have friends who are both committed and causal Christians , Jews , Hindus and Muslims . I find, however, that the questions are very much the same. What is the purpose to my life? Am I loved? Do I love others? Does my life matter? Can I be happy? Today, I was reminded of words of wisdom from Mother Teresa. As we approach the second most important Christian holiday, Christmas, we find that one of the key lessons from Advent is the discovery and pursuit of JOY. First and foremost, I should clarify that joy is not pleasure. Pleasure is sensory-based. Joy is spiritual. Due to the fact that I graduated from Kenyon, and majored in the history of ideas or philosophy, most of my friend

Big 3 Part 3 -- Closing in on the finish line

As we get closer to an agreement for supporting General Motors, Chrysler and Ford, I continue to press for structural reforms. What concerns me is the lack of discussion around several issues: 1. Rationalization of brands and dealer networks: whoever becomes the Car Czar will rue the error of not being granted sweeping powers to supersede state franchise laws. GM had to pay millions to dealers when they retired Oldsmobile. This cannot be the case going forward. Furthermore, continued consolidation of GM, Chrysler and Ford dealer networks is required -- and speed and low cost is the key. 2. We need to incentivize consumers to "Buy American." I am perplexed by the failure to address this requirement. It should be a hallmark of the Obama- Biden stimulus program. I favor tax credits, like those for hybrid vehicles. 3. There are two meta-goals above this issue. President-elect Obama should use the U.S. auto industry crisis as a "laboratory" for fixing Medicaid/Medicar

So why not Chapter 11?

I agree with my good and respected friend, Don, who kindly left a comment. We need to accelerate the pace of de-consolidation or break-up of the parts of the Big 3 Automakers. How fast we can move is limited by socio-political structures. The key here is the UAW. Either they exist in a radically modified sense or they may not exist at all. Clearly the import manufacturers in the USA are not unionized, and they are much better off. I believe politics (especially for the Democrats) will necessitate that the UAW must exist, but with concessions and modifications. Hence, I think we evolve to Don's vision of a new approach to auto manufacturing through either Chapter 11, or a government guaranteed loan program with concessions. Why do I favor a 1979-type of approach? The answer is two-fold: Chapter 11 will kill consumer demand. I was riding in a cab in San Franciso, and the driver, an African immigrant, said, "Hey, I'll ride in a plane of a company in bandruptcy, but

Big Three Rescue Part 2 -- Let's learn from Chrysler 1979

I am hopeful that my proposal for government-guaranteed loans and credit lines for the Big Three, in exchange for the meaningful structural changes, will soon become reality. Without knowing it, I was in some ways recounting what happened under President Jimmy Carter in 1979 with Chrysler. Check out this wonderful article from Time Magazine’s archives:,9171,947356-1,00.html To summarize, The government guaranteed loans to Chrysler totaling up to $1.5 billion Chrysler had to secure another $1.43 billion in private financing at reduced rates from banks Chrysler had to gain concessions from suppliers on cost and financing Chrysler committed to $462.5 million in concessions from the company’s union employees, plus another $125 million from salaried workers. Chrysler shed unattractive assets (wholly owned parts and components factories), cut the workforce. The US government also extended the deadline by two years for Chrysler to meet C.A.F.E. req

Everybody wants to know what I think about the Big 3!

Well, because I spent 17 years in the auto industry, I am getting a great number of inquiries about "what should we do with the Big 3?" What I share here are my own opinions. I do not suffer from naivete about how hard this will be. But I do wish for a sustainable resolution, and not just another short-term fix, which inevitably leads to more pain and hardship in the near future. Here are my thoughts for beginning to truly address the Big 3 issues. I believe that there should be no "free lunch." I do not support a "no strings attached" plan for the Big 3. They need support and encouragement to make the changes they have discussed for decades. If our government supports the domestic-owned industry with loans or grants, then in exchange, it must seek to create a viable business for employees, and a return for investors. The only way to guarantee employment is to create an ongoing and viable business model that can compete and win. To survive, and in the futu

Another Trend -- Nostaglia

What do Glen Campbell, Seal and James Taylor have in common? They have all put out cover albums in the past month. Is it co-incidence? Maybe, but mark my words, as the economy continues to suffer, people are going to be going for nostalgia . We will see it in music, in movies and TV shows. We will see it in fashion. People will want to reflect and reminisce about the past as they struggle in the present.

My thoughts for Our President, Barack Obama

While I have posted on what I think the country must do to succeed (see below..."8 points"), I would like to continue with a humble open letter to our President, who is facing a very difficult environment. But he is the leader who can indeed make the right things happen for all of us. So what should President Obama do? Perhaps two recent articles provide a little guidance. The first was in Businessweek by Michael Porter: In it, he outlines what has made America successful. The second piece appeared in the Wall Street Journal. It is an editorial by Henry Olsen published yesterday called "What would Reagan do?" In it, the key theme was "focus on freedom." http Both Porter and Olsen have as a foundational element this theme of freedom. Let's reflect and explore upon where our great nation must go to continue to be great. What ma

Why I love the Lex Column

For the past 20 years, I have told anyone who will indulge me, that if they could only read one thing each day, that one thing should be the Lex Column in the Financial Times of London. Why do I love the Lex? It uses case studies to teach It is not afraid to use an advanced technical and financial lexicon. It makes me feel smart It has a sense of humor Let's look at each in turn. First it goes without saying that case studies, when done well, are very effective tools of instruction. Granted, Lex keeps the words to a minimum, but everything that is written is tied to a company, industry or goverment. The Lex column rarely invokes theory without a specific example. While it is true that the majority of comments are negative, I would argue that Lex uses the concept of criticism in its true Latin intent; "kritikos" means "able to make judgments." Yes, the English use tends to have an overtone of "faultfinder," but Lex always discusses what SHOULD be done.

Evidence that Social Publishing is Next

Check out a very enlightening article on Financial Times online: http:// The quick summary is that young people -- 11 to 29 -- are using technology, both at work and at school, in very unique ways versus their older brothers and sisters, let alone parents. Employers are finding, according to an Accenture Survey, that younger workers are not using email systems. They are relying upon social networks, instant messaging and blogs. What is next? Check out my entries below on Social Publishing. I predict that universities and businesses will increasingly use WIKI platforms for communication and collaboration. Here we go!

What the 2008 Election Means to Me

I remember seeing Barack Obama speak at the 2004 Democratic National Convention. I was impressed. I also recall seeing him again in 2006, and can proudly say that on my birthday, professed a belief that he would be a bona fide candidate for the U.S. Presidency. My brother did not agree with me, and I respect his opinion as a teacher of civics, political science and history. As it turns out, I was right. For the past eight years, I have been very disappointed in George W. Bush. I thought he would be a consensus builder, maybe even a healer, after the eight years of bickering during the Clinton Administration. I must admit that I was very bothered by the scandals (Monica, Jennifer, etc.) because I believe in the honor of the Presidency and that beyond what any single administration can do, it must represent the ideals of our society. I was also bothered, however, by the viciousness of the politics during Clinton's two terms. I have to believe in hindsight that this was caused by th

Will the Semantic Web be Next? Will it be Web 3.0?

Web 3.0 – hither and yon Let’s turn our attention to what is next for the World Wide Web. It would appear that most commentators are focused upon something called “The Semantic Web.” The goal of Semantic Web is to enable automatic machine generation and processing of content. Semantic Web demands rich machine recognizable semantics in web pages so that machines can understand web content. The aim of the Semantic Web is to build a world of intelligent and inter-communicable web pages. In plain language, to achieve this objective everyone and everything on the Web needs to use the same approach to content. People understand statements because of syntax rules. For the Semantic Web to work, then there will need to be a common syntax that computers will all understand. The syntax of any language defines the rules for building the language statements. The work towards a Semantic Web is trying to describe all things in a way that computer applications can understand. This is where the controv

The Cutting edge of the Web: Social Publishing

As we know, the Internet has evolved from a crude communication tool to its current role as the backbone for global information publishing and acquisition, communication and commercial transactions. When we quickly review the changing World Wide Web, we see that we started with static web pages. They were basically brochures online. We have see from there several interesting developments in communication on the web, moving well beyond emails and instant messaging. These all fall into the category of publishing, and represent the democratization of information, and the formation of community. The first trend in publishing to consider is “Micro-blogging” (the most famous of which is Twitter). This content is highly perishable, and only relevant in fleeting moments in time. People literally share their moment by moment experiences; their reactions to events and the actions of others. It is social small talk with a wide range of subjects. This type of information and its frequent updates i

Monitorng the World Wide Web

Check out the size of these markets! What I will argue next is that the Web is quickly moving towards Social Publishing. Could it be the fulfillment of the promise of the web?...easy to create web pages, wherein all those who join can edit and contribute based upon whatever it is that interests people. comScore MediaMetrix (August 2008) Blogs: 77.7 million unique visitors in the US Facebook: 41.0 million MySpace 75.1 million Total internet audience 188.9 million eMarketer (May 2008) 94.1 million US blog readers in 2007 (50% of Internet users) 22.6 million US bloggers in 2007 (12%) Universal McCann (March 2008) 184 million WW have started a blog 26.4 US 346 million WW read blogs 60.3 US 77% of active Internet users read blogs

The Past, Present and Future of the Web

Introduction Where have we been with the web? Where are we now? And where are we going? Some people would answer that in the first phase, we were in Web 1.0, and that now we are in the second phase or Web 2.0. But what does the transition mean to Web start-ups, “brick & mortar” companies, and consumers? These are the questions this paper will try to address. By understanding the transition from Web 1.0 to Web 2.0, we may also improve our capability to see what we should be doing now in preparation of the next phase of the internet. What are we to make of Web 3.0 or Semantic Web 2.0 or Pragmatic Semantic Web? But let us begin with the promise of the internet. For many, the promise of the World Wide Web has always been to create a virtual society in which web spaces are the residents. It has promised to make the access of information, communication with others, and commerce much easier and perhaps more enjoyable. When we think about a virtual online community, we think of the “real”

Some legal history

Have you ever wondered where "Trial by Battle" or "Throwing down the Gauntlet" came from or "trial by ordeal" or "trial by jury?" My good friend David Guenter provides a source. Here is some insight from J.H. Baker, An Introduction to English Legal History... Ordeals involved an appeal to God to reveal the truth in human disputes, and they required priestly participation to achieve this rapport with the Deity. Several forms of ordeal were recognized by the early Christian Church, but in England they usually took the form of fire or water. In the former, a piece of iron was put into a fire and then in the party's hand; the hand was bound, and inspected a few days later; if the burn had festered, God was taken to have decided against the party. The ordeal of cold water required the party to be trussed and lowered into a pond; if he sank, the water was deemed to have 'received him' with God's blessing, and so he was quickly fished ou

Trends that I see for 2008 and 2009

Personal Technology Mobile video Interactive television iPhone/Google Phone Applications GPS real-time, and location based services Tiny and cheap laptops High tech tooth brushes Virtual currency Entertainment (Television and Movies) Hottest shows are on cable, and have surrealistic themes (Vampire, Serial Killer, Drug Dealing Mom...CSI and SVU) Hottest movies also dealing with far-out content (Dark Knight, No Country for Old Men) Nostalgia comes back (Mad Men, Life on Mars) Anti-US and conspiracy films do not payback (Stop-Loss, Lions for Lambs, The Kingdom, Body of Lies) Gossip Reality wanes in favor of Competition Reality (Survivor 17 versus DWTS) Music DRM is Dead...Don't pay for anything Megastars are out, niche is in (Mexican Indie, Indian Punk, Western Mambo, Exotic and Global) iPod is cool, but so is Zune...and both should watchout for phones Everything is wireless Ringtones are over You will get more free stuff with downloads (lyrics, art, photos) Labels are losing as band

Secrets of Success for Web 2.0 Start-ups

I have been working with Web start-ups for the past year, and there are several lessons I have learned: 1. Do not be a loss leader. Too many start-ups assume the business model, "we lose a little on every deal, but we'll make it up in volume." To be successful, a business model needs to have a positive variable margin. Yes, the amortization of R&D can be excluded, but it is important for customers to pay for what you sell...from the start! 2. Whatever it is you do, do it well. Do not go too broad too fast. You can have a roadmap to be broad, but you need to make certain that each step is on solid ground. Insure you have great technology, and a true advantage in the first step, then the second, and so on. Having a suite of average products will not succeed. 3. Do not overlook B2B. One truth is that businesses must spend moeny to make money. If your ultimate ambition is B2C, that's fine. Whatever you are doing to attract consumers will also be attractive to business

Did I have an impact at Microsoft's Xbox? Let the Annual Report decide!

Hey everybody! Here is a direct excerpt of Microsoft's annual report. Thought I should capture this for posterity. Management's Discussion and Analysis of Financial Condition and Results of Operaitons " Fiscal year 2008 compared to fiscal year 2007 EDD revenue increased primarily due to increased Xbox 360 platform sales. Xbox 360 platform and PC game revenue increased $1.7 billion or 41% as a result of increased Xbox 360 console sales, video game sales led by Halo 3, Xbox Live revenue, and Xbox 360 accessory sales. We shipped 8.7 million Xbox 360 consoles during fiscal year 2008, compared with 6.6 million Xbox 360 consoles during fiscal year 2007. Fiscal year 2007 compared with fiscal year 2006 EDD revenue increased primarily due to increased Xbox 360 platform and Zune sales. We shipped 6.6 million Xbox 360 consoles during fiscal year 2007 as compared with 5.0 million consoles during fiscal year 2006. Xbox and PC game revenue increased $650 million or 19% as a result of in

Jeff's Plan for America - 8 key steps

Dear readers: This is my 7 point plan (with an eighth point added by Doug Heuck) to make the United States of America a better place for everyone. The comments after each element of the plan come from Doug Heuck and David Guenther. The opinions expressed here are entirely ours, but we remain convinced that if the nation followed our plan, we would all be "better off in four year." 1. Improve the efficiency and effectiveness of government -- I have found that this happens best in business when you cut spending....tends to focus the mind. Every element should have a measurement of "impact to the citizen intended to benefit" as a percent of total spend. This is how charities are measured and how they avoid bureaucratic bloat. Doug: An excellent point -- which has sent me into another chapter of cost oversight in the business and the family, which will no doubt find consternation reigning in both places. Dave: SPENDING HAS TO BE CUT SOMEWHERE. 2. Once we have

The future agency model

How companies successfully engage with consumers is changing. Web 2.0, experiential and social marketing are the new Buzzwords But who is using jargon, and who is not just practicing but leading the new wave? Large traditional agencies have always been a safe choice because of their experience and size, but these strengths keep them from succeeding in an consumer world driven by flexibility and speed. Today’s consumers, especially younger audiences, don’t need or want to be TOLD anything. At a minimum, they want a dialogue, and for the most part, they want control. They want to tell YOU about everything, and they’ll tell everybody else too – they chat, text, blog, share with everyone. Now consumers make the call to action, and they do it without having to use such ugly marketing words as “sale!” or “buy!” or “Offer expires 12/31/08. Offer not good in Michigan, Delaware, and Alaska. See rules for details.” The new generation of consumers is more ambitious, brand conscious, peer-oriented