Let The Markets Decide

I listened this morning  to GM’s CEO “customers, cars, & culture” priority…

Did anyone read Anna Schwawrtz’s brief interview in Time? http://www.time.com/time/business/article/0,8599,1909115,00.html

She lived through crash of 1929,and is considered a financial matriarch. She co-authored with Nobel laureate Milton Friedman the highly acclaimed financial bible A Monetary History of the United States (Princeton University Press, 1963), and she’s worked as an economist with the National Bureau of Economic Research since 1941.  She now serves as an adjunct professor at the Graduate Center of the City University of New York.

Bottom line: Companies that fail should be allowed to fail. Let the market decide. Rescue plans provide no motivation for companies to “get it”.

After listening to “the new” General Motors this morning, I heartily agree.

Global Warming

Are we all on the same page?  Does everyone know that Al Gore stands to benefit from the cap-and-trade regulations?  He is a partner in a capital firm called Kleiner Perkins, which has invested about $1 B in 40 companies that stand to gain from the cap-and-trade regs. (IBD, 6/18/09)

Remember this the next time you hear Al Gore ignoring reports that contradict his assertion that global warming is accelerating.  That reminds me – it snowed in Yonkers New York earlier this week.  In July!  How’s that for global warming?

Politics

In the June 16th publication of Investor’s Business Daily, they talk about Biden’s then recent stint on NBC’s Meet the Press, where Biden said “Everyone guessed wrong.”

But this is simply not true.  Back in February the IBD offered its readers the prediction that the stimulus bill would “in fact not stimulate much of anything.”  They went on to offer that the $787 B package would be filled with “pork and outright waste.”

They remind us that 330 well-recognized ecomomists signed a statement protesting Obama’s claim that “there is no disagreement that we need action by our government, a recovery plan that will help jump-start the economy.”

More on this from Trends Research Institute: “VP Biden’s recent admission that the Obama Administration’s economic recovery plan was predicated on egregiously inaccurate forecasts consigns the entire effort to failure, predicts Gerald Celente.”How often does the government have to be wrong, and how wrong do they have to be before people and the media stop taking them seriously?” wondered Celente.  “The first spending package didn’t deliver as promised, and now Obama’s advisors want another stimulus, as if doubling up on failure will achieve success.”

So what is going on in our country?   As a nation, I fear we have sent a well-intentioned child in to do an man’s job.  This isn’t Hollywood where happy-endings can be written to placate fears.  Actually, given Michael Jackson’s recent untimely passing, perhaps the era of happy-endings is long gone, bombarded out of existence in 2001 by the shell shocking events of 9/11.

General Musings

Just a quick note. Two quotes to think about:

“If you think education is difficult, try being stupid”  

A friend offered this:
The government’s view on our economic state:
“If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it.”
Ronald Reagan

Find ways to hang on to your money, because the government is going to be coming after it in the form of taxes, mandates and regulations.  Someone has to pay down the debt…..

Speaking of national debt, I read a good observation:  If the airlines could keep flying in the aftermath of 9/11 with their bankruptcy issues, why couldn’t the car manufacturers weather their crisis?  The observation offered was that the manufacturers filing for bankruptcy protection, thus able to exit (or restructure) their legacy debt (unions), probably would have been better off than the path the government  took.

Tipping

While I can’t complain in general, today something irked me enough to bump itself to the top of my list.  I paid $185 for a massage treatment today, and when paying, the cashier informed me that an 18% gratuity is the norm.  Huh?

As an ex-waitress, I appreciate tipping.  And while my massage was very good, I have to ask: when did we start tipping skilled labor 18%?  Tipping, in my humble opinion, is reserved for unskilled labor, to “make up” for the fact that they earn minimum wages.  (Yes, I know most people think it is “to insure priority” treatment, but that has long gone by the wayside.   See Wikipedia for more on that.)

I don’t mind tipping SOMETHING to say “gosh it’s been great and thanks a lot”….but I am not about to pay an extra $33 for that privilege.  Is the establishment really paying an experienced, licensed masseuse minimum wages?  If so, then something is wrong with that establishment’s pay structure.

Even my hairdresser, God bless his soul, only gets a paltry percentage tip (for crying out loud, he charges me $300 a sitting, which I am willing to shell out, but not an extra 10-20% on top of that).  It’s not customary to tip nurses, yet their extra TLC is vital. No one tips bus drivers, but the care they take is vital.  So since when did tipping waiters 10-20% move into tipping a skilled labor force an equal amount?  Frankly, I think the Spa employer should shell out a professional salary, and not count on its customers to subsidize its wages.  The employer, in this case, is shifting the burden of its wages to me, the customer.  Heck, if an employer can’t pay decent wages, they need to raise prices and simpy decline tips. What a relief to you the customer, to actually know you are paying a fair fee and not have to wrestle with your conscience whether you have tipped “enough”.

What’s that?  If they raise prices they can’t be competitive?  Well, as we have learned, if they are a price-taker, they will have to manage costs better or find another business.  If they are a price-setter, they will be just fine.

On another note, the other item I wanted to mention today was along the lines of the economy. Barron’s pointed out that while the unemployment rate leaped from 8.9% to 9.4%, “if we look at the category we feel gives a more accurate picture – the so-called U-6 tally…” which includes the rate of people who have stopped looking (given up) and the rate of people accepting part-time work because they can’t find full-time work, we see that it has grown, which means that unemployment has shot up to 16.4%.  Be careful about the numbers being tossed around….

Leadership

Coming off from a week of Leadership reflections, (otherwise known as closing residential), I find myself reading Resonant Leadership.  I decided to jump into this book out of a basic fear that I would otherwise put it on the shelf and never look at it again.  After the first 15 pages, I think that anyone who is in a leadership position and has found themselves “blindsided” by any kind of feedback – that this book would make for a good read.

As one who is disciplined in exercise, and I can now see (or articulate) how my exercise regime has contributed to my overall sense of wholeness.  And in reading this book, in turn, I see how this has helped me as a leader.