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    On the Internet

    Posted by Carl from Chicago on 18th April 2014 (All posts by )

    Recently a few loose threads have come together on the Internet and some “old school” high tech companies.

    Yahoo! – Yahoo! (I guess I need the exclamation mark) has a value that is less than the sum of its component parts. The market capitalization of Yahoo! comes in the fact that it owns a significant portion of two Asian internet companies. Per this pithily titled article “How Is Yahoo So Worthless“:

    Yahoo is huge. It is the fourth-biggest Internet domain in the United States. It is the fourth-biggest seller of online ads in the country. It is the most popular destination for fantasy sports, controls one the most-trafficked home pages in news, and owns the eighth-most popular email client. In the last three months, it collected more than $1 billion in revenue. It’s very rich.

    It’s also totally worthless.

    Technically, it’s worse than worthless. Worthless means without worth. Worthless means $0.00. But Yahoo’s core business—mostly search and display advertising—is worth more like negative-$10 billion, according to Bloomberg View’s Matthew C. Klein.

    The math: Yahoo’s total market cap is $37 billion. Its 24 percent stake in Alibaba, the eBay of China, is worth an estimated $37 billion (Alibaba hasn’t IPO’d yet, so this figure will vary), and its 35 percent stake in Yahoo Japan is worth about $10 billion. That means its core business is valued around negative-$10 billion.

    This isn’t just a random business article; there is some actual financial science behind this analysis. At my trust fund site Yahoo! is one of the stocks I selected since I believe that their new CEO Marissa Meyer is a badass but according to the math she is still losing the battle.

    At one point in my career I worked for a public company that had $300M in cash on hand and a market value of $200M. Your business plan could be to fire everyone and drink in a bar all day and you’d be much closer to $300M than $200M (after all, how much can you drink). The market is anticipating that bad things are going to happen or that Yahoo! won’t be able to successfully sell and repatriate the cash for these investments. It is like that famous postcard my relatives in Montana had that said “If I won a million dollars I’d just keep ranching until it was all gone.” That is what the market today thinks of Yahoo! – even if they successfully extracted the cash from these investments, they’d invest it into something of less value (by $10B or so, apparently).
    Read the rest of this entry »

    Posted in Business, Economics & Finance, Tech | 12 Comments »

    Harbingers

    Posted by Sgt. Mom on 15th April 2014 (All posts by )

    I’ve been surfing my usual internet hangouts over the last week or so – in between working on various editing, formatting and sales projects for the Tiny Publishing Bidness – so although I did surf, and read and observe reports on a number of different and rather disturbing events – I didn’t have time to write anything about them until after I had finished the biggest of the current projects on my plate.

    The biggest of them was the new-old range war of the Bundy ranch. I suppose that technically speaking, the Fed Gov had some small shreds of technical justification in demanding grazing fees … but the longer one looked at the whole of L’affaire Bundy, the worse it looked … which is doubtless why the Fed Gov backed down. A tactical retreat, of course; The optics of a shoot-out between the minions of the Fed Gov and the various Bundy supporters would not have been good, for Harry Reid and his clan and friends most of all, although they may eventually act – seeing that they have a position which will be at risk by tolerating defiance.
    Read the rest of this entry »

    Posted in Americas, Blogging, Business, Civil Liberties, Deep Thoughts, Just Unbelievable, Media, North America, Politics, Real Estate | 19 Comments »

    Book Review: Father, Son, & Co., by Thomas Watson Jr and Peter Petre (rerun)

    Posted by David Foster on 8th April 2014 (All posts by )

    (Yesterday marked the 50th anniversary of the announcement of the IBM System/360 series (original press release here)…seems like a good time to rerun this book review, which I originally posted in 2011)

    Buy the book: Father, Son & Co.

    —-

    When Tom Watson Jr was 10 years old, his father came home and proudly announced that he had changed the name of his company. The business that had been known as the Computing-Tabulating-Recording Company would now be known by the grand name International Business Machines.

    That little outfit?” thought young Tom to himself, picturing the company’s rather random-seeming collection of products, which included time clocks, coffee grinders, and scales, and the “cigar-chomping guys” who sold them. This was in 1924.

    This is the best business autobiography I’ve read. It’s about Watson Jr, his difficult relationship with his father, the company they built, and the emergence of the computing industry. It is an emotional, reflective, and self-critical book, without the kind of “here’s how brilliant I was” tone that afflicts too many executive autobiographies. With today being IBM’s 100th anniversary (counting from the incorporation of CTR), I thought it would be a good time to finally get this review finished and posted.

    Watson’s relationship with his father was never an easy one. From an early age, he sensed a parental expectation that he would follow his father into IBM, despite both his parents assuring him that this was not the case and he could do whatever he wanted. This feeling that his life course was defined in advance, combined with fear that he would never be able to measure up to his increasingly-famous father, was likely a factor in the episodes of severe depression which afflicted him from 13 to 19. In college Watson was an indifferent student and something of a playboy. His most significant accomplishment during this period was learning to fly airplanes—-”I’d finally discovered something I was good at”–a skill that would have great influence on his future. His first job at IBM, as a trainee salesman, did little to boost his self-confidence or his sense of independence: he was aware that local IBM managers were handing him easy accounts, wanting to ensure success for the chief executive’s son. It was only when Watson joined the Army Air Force during WWII–he flew B-24s and was based in Russia, assisting General Follett Bradley in the organization of supply shipments to the Soviet Union–that he proved to himself that he could succeed without special treatment. As the war wound down, he set his sights on becoming an airline pilot–General Bradley expressed surprise, saying “Really? I always thought you’d go back and run the IBM company.” This expression of confidence, from a man he greatly respected, helped influence Watson to give IBM another try.

    The products that Watson had been selling, as a junior salesman, were punched card systems. Although these were not computers in the modern sense of the word, they could be used to implement some pretty comprehensive information systems. Punched card systems were an important enabler of the increasing dominance of larger organizations in both business and government: the Social Security Act of 1935 was hugely beneficial to IBM both because of the systems they sold to the government directly and those sold to businesses needing to keep up with the required record-keeping.

    Read the rest of this entry »

    Posted in Biography, Book Notes, Business, Management, Tech | 13 Comments »

    Where Sgt. Mom Spent Saturday

    Posted by Sgt. Mom on 6th April 2014 (All posts by )

    At the mighty Big Enchilada!

    Yes, at the San Antonio Book Festival. The exhibitor tables were across the street – and there were only two homeless that I spotted, from the Watercress Press table. Otherwise a mildly rewarding day, and a grateful return home to a frozen pizza and two episodes of Upstairs, Downstairs on the TV.

    Posted in Americas, Architecture, Book Notes, Business | 3 Comments »

    On Ice

    Posted by Sgt. Mom on 28th March 2014 (All posts by )

    Just this week and thanks to gaining a new book-publishing client, I was able to complete the purchase of a new refrigerator-freezer. Oh, the old one was staggering along OK, still keeping the refrigerated foods cold and the frozen food frozen … but there were so many dissatisfactions with it, including the fact that it had such deep shelves that in cleaning it out we discovered an embarrassingly large number of jars of condiments whose best-if-sold-by-date were well into the previous decade … not to mention a couple of Rubbermaid containers with leftovers in them that we had quite forgotten about. Well, out of sight, out of mind, as the saying goes. Truly, I don’t like to waste leftovers, but in this case, we had a good clean-out and as of now are resolved to do better, cross-my-heart-and-hope-to-die. The new and larger refrigerator-freezer has relatively shallow and many adjustable shelves in its various compartments; so that we dearly hope that the buried-at-the-back-of-a-deep-shelf-and-totally-forgotten-about syndrome will be banished entirely.

    Anyway – enough of my failings as a thrifty housekeeper; the thing that I was marveling on this afternoon was that the new refrigerator-freezer has an automatic ice-maker. Better than that – an automatic ice-maker and ice-water dispenser in the door, and a small light which winks on when depressing the lever which administers ice (in cubes or crushed) and ice-water and then gradually dims once released. And if all that is a small luxury compared to the previous refrigerator-freezer, it is a huge luxury compared to the electric ice-box that made my Granny Jessie’s work and food-storage capabilities somewhat lighter than those of her own mother. It’s monumental, even – and no one thinks anything of it today, unless the electricity goes off.
    Read the rest of this entry »

    Posted in Anglosphere, Business, Customer Service, India, Personal Narrative, USA | 9 Comments »

    Warren Buffett/America 3.0

    Posted by Dan from Madison on 28th March 2014 (All posts by )

    Somewhere, sometime, I read a bit of great investing advice. A guy listed ten things to do and not do over your investing life, and number one on the list of things to do was to read Warren Buffet’s shareholder letters. I finally found some time to read this years version, which recaps 2013. You can find them all here.

    The letters are always entertaining to me, and I just love the way he uses “plain” English to describe his successes, operations, and failures.

    One part really stuck out this year from page 6:

    Indeed, who has ever benefited during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.

    In the title of America 3.0, it says:

    America 3.0: Rebooting American Prosperity in the 21st Century-Why America’s Greatest Days Are Yet to Come

    Yes, we will have some short term pain, but I have fully come around to thinking that indeed, we are eventually going to move forward at a rapid and profitable pace. And I won’t be betting against Warren Buffett and Charlie Munger any time soon.

    Disclosure: I own Berkshire Hathaway B shares.

    Posted in America 3.0, Business, Markets and Trading | 16 Comments »

    2014 Midwest Business & Markets Conference

    Posted by Zenpundit on 9th March 2014 (All posts by )

    cross-posted to zenpundit.com

    The Union League Club of Chicago Building

    Yesterday, I attended the 2014 Midwest Business & Markets Conference at the historic Union League Club of Chicago. While business conferences are far afield from my usual interests, the main draw for me was seeing Lexington Green speak about the book he co-authored with James C. Bennett, America 3.0

     

    Michael J. Lotus (“Lex”)                       His book

    Read the rest of this entry »

    Posted in Anglosphere, Business, Chicagoania, Civil Society, Deep Thoughts, Diversions, Economics & Finance, Education, Entrepreneurship, Illinois Politics, Internet, Political Philosophy, Politics, Society, The Press, USA | 9 Comments »

    Your English Major Kids May End Up Serving Tables In Chicago

    Posted by Carl from Chicago on 8th March 2014 (All posts by )

    I live in the River North area of Chicago, which is full of restaurants of every type and description. There is also intense competition among many of the smaller restaurant groups, since apparently some level of scale (5+ or more restaurants) is helpful and these restaurants tend to have very high levels of food quality and service, based on my experience.

    When you interact with the bar staff, hostess, and server you can usually tell if you are working with someone who is “going through the motions” or someone “who is good at their job”. There are many subtle details that are much larger than “getting your order right” – they include knowledge about the food and presentation, recommendations based upon your input, and generally anticipating needs and solving problems without having to be prompted many times.

    Recently I’ve come to the preliminary conclusion that many of the waitresses and servers in these higher end restaurant groups must have gone to college and are well educated. When you talk with them they are very sharp and quick and they seem to have the type of drive or energy that could make them successful in a variety of careers. I would never ask them directly because that’s none of my business and it could embarrass them.

    This article form Bloomberg titled “College Graduates Taking Low Wage Jobs Displace Less Educated” confirms at least my anecdotal impressions here in Chicago.

    She got a job as a hostess at Blackbird, a One Off restaurant, while pursuing a bachelor’s degree in Germanic studies and communications at the University of Illinois at Chicago in 1999. “The formality of classes, papers and grades did lend a hand in where I am today because I had a broader sense of cultures, interactions and interpersonal skills,” said Galban, who is now also a partner at the restaurant Nico Osteria, one of seven Chicago restaurants managed by One Off. Of the company’s more than 700 employees, more than 60 percent hold college degrees or higher, yet fewer than 10 positions require a degree, Galban said.

    The willingness of college educated adults to take on these jobs will likely cause at least three side effects, one of which was the “main” topic of the Bloomberg article I linked to above:

    1. These restaurants will be more competitive than typical restaurants, because the higher educated and higher skilled workers will drive customer satisfaction and drive efficiencies within the food and drink serving processes. As these workers move “up the chain” at the restaurants, they will also offer career paths for other college degree holders as well
    2. Less-skilled workers will have less opportunities because they won’t be able to compete with these individuals. It would be a simple “screen” to give preference to individuals with a degree who apply for jobs, even if it isn’t a requirement of the job. In the past the assumption was that if someone “over-qualified” would work at your restaurant or business, they would leave immediately when a new opportunity arises, but in today’s stagnant economy (especially in Illinois) there don’t seem to be a lot of opportunities for them to “jump to”.
    3. Since the cost of higher education is so high today, parents need to think of how they will feel when their liberal arts (or lackadaisical business) degree holding children are potentially serving them in a restaurant, and if this is worth the vast expense and financial impact of the degree that they are seeking

    Another side effect to consider is that these restaurants are not just randomly seeking out applicants from the pool. Their employees are not only young, they are disproportionally above-average looking. Perhaps if you aren’t college educated you can make up for it in attractiveness.

    Cross posted at LITGM

    Posted in Business, Chicagoania, Education | 17 Comments »

    Stories

    Posted by Sgt. Mom on 26th February 2014 (All posts by )

    (This afternoon I am working through my archives for materiel to post on the Watercress Press website blog, and I came across this post from … well, a while back. I thought it might be relevant, in these unsettled days and in light of various Boyz reminiscing about Tolkien and heroic days of yore. It might also serve as a departing point for a train of thought, especially when we need more inspiration than ever.)

    I am not one of those given to assume that just because a lot of people like something, then it must be good; after all, Debbie Boone’s warbling of You Light Up My Life was on top of American Top Forty for what seemed like most of the decade in the late 70s, although that damned song sucked with sufficient force to draw in small planets. Everyone that I knew ran gagging and heaving when it came on the radio, but obviously a lot of people somewhere liked it enough to keep it there, week after week after week. A lot of people read The DaVinci Code, deriving amusement and satisfaction thereby, and some take pleasure in Adam Sandler movies or Barbara Cartland romances – no, popularity of something does not guarantee quality, and I often have the feeling that the tastemakers of popular culture are often quite miffed – contemptuous, even – when they pronounce an unfavorable judgment upon an item of mass entertainment which turns out to be wildly, wildly popular anyway.
    Read the rest of this entry »

    Posted in Arts & Letters, Business, Deep Thoughts, History, Lit Crit, Media, War and Peace | 4 Comments »

    As of this Weekend…

    Posted by Sgt. Mom on 23rd February 2014 (All posts by )

    I am a business owner. My partner and founder of Watercress Press has always intended that I should take over the business eventually … and as of this weekend, the papers have been signed. Oh, there are a couple of more things to be sorted out, and essentially I have been the active partner for more than a year … but here I start on the next big part of my life, as a business owner and raving capitalist. Although I do promise not to starve and flog the employees while chuckling manically and swan-diving into my pool of gold coins.

    Too much. The blood spatters get everywhere after a good flogging, and the stains never come out.

    This is by way of apologizing for no History Friday post from me. There was just too much going on, I didn’t have the time to sit down and focus on the post I was thinking about – Billy the Kid, a definite contrast to the last Wild West frontier character that I posted about on History Friday. I did manage to finish a chapter in the next book, and start another adventure in my reworking of a certain popular Wild West character, so the week hasn’t all been given up to real life in this present world.

    Posted in Book Notes, Business | 24 Comments »

    Charles Sorensen and Rosie the Riveter Would Appreciate Your Assistance

    Posted by David Foster on 16th February 2014 (All posts by )

    The project to Save the Willow Run Bomber Plant is 75% of the way to its fundraising goal, but still $2 million short.

    In October 1942, Herman Goering mocked American claims about our weapons production capabilities:

    Some astronomical figures are expected from the American war industry. Now I am the last to underrate this industry. Obviously the Americans do very well in some technical fields. We know that they produce a colossal amount of  fast cars. And the development of radio is one of their special achievements, and so is the razor blade…But you must not forget, there is one word in their language that is written with a capital B and this word is Bluff.

    (Citing the above quote in his memoir, Luftwaffe general Adolph Galland observed acidly, “Propaganda may be horrible, but bombs certainly are.)

    The “astronomical figures” turned out not to be a bluff at all, of course, and the figures were turned into reality in large part because of the production techniques pioneered and perfected at places like Willow Run.

    The Willow Run plant, which covered 63 acres, was designed for the single purpose of producing B-24 bombers…and produce them it did, once it got going, at the rate of one per hour. The genesis of the plant lay in a 1940 visit to Consolidated Aircraft, where the planes were then being built, by Ford Motor Company production VP Charles Sorensen–Ford had originally been asked by the government to quote on building some components for the bomber. After watching Consolidated’s process for a while, Sorensen asserted that the whole thing  could be put together by assembly-line methods. (See the link, which is Sorensen’s own story about “a $200,000,000 proposition backed only by a penciled sketch.”)

    Unused since 2010, the plant had been scheduled for demolition, but there is now a project to turn it into a museum that will be focused on  science education and social history as well as aviation history–the Yankee Air Museum is to be relocated there–and the history of the plant itself.  Astronaut Jack Lousma and auto-industry bad boy Bob Lutz are spearheading the effort; the additional funds need to be raised by May 1.

    I hope the new museum will integrate its focus on science & technology and its focus on the war production story to also cover the past, present, and future of American manufacturing, and of manufacturing generally–manufacturing being something that is too little understood and too little appreciated  (beyond the platitude level) in America today.  For example, in this post, which is mainly about employee evaluation, the author says:

    Today’s businesses drive most of their value through service, intellectual property, innovation, and creativity. Even if you’re a manufacturer, your ability to sell, serve, and support your product (and the design itself) is more important than the ability to manufacture. So each year a higher and higher percentage of your work is dependent on the roles which have “hyper performer” distributions.

    This kind of drive-by assumption about manufacturing is frequently encountered in today’s business writings: the assumption that manufacturing is a field inherently lacking in creativity, and (strongly implied in the above quote) that “hyper performers” are not important in this area in the way that they are in sales, product design, and customer service. If the museum can help Americans to understand a little more about manufacturing and its importance, then that will be a valuable thing in addition to its contributions to aviation, WWII, and social history.

    Some books that provide useful information and perspective on Willow Run:

    Freedom’s Forge: How American Business Produced Victory in World War II, by Arthur Herman. An interesting overview of the WWII armaments program.

    I Invented the Modern Age: The Rise of Henry Ford, by Richard Snow. A lot about the early history of the auto industry, with several pages on Willow Run.

    My Forty Years with Ford, by Charles Sorensen. The whole book is very worthwhile. Sorensen gives considerable credit to Edsel Ford for the Willow Run project–Edsel committed $200,000,000 of Ford’s money to the project based only on a rough sketch, with no absolute assurance that government funding would be forthcoming–and indeed for the entire WWII armaments program at the company, Henry Ford himself having adopted what one might call a passive-aggressive attitude toward the whole thing.

    It would be a shame to let the historical artifact that is Willow Run be lost–hopefully, the fundraising efforts over the next couple of months will be successful.

     

    Posted in Aviation, Book Notes, Business, History, Management, USA, War and Peace | 5 Comments »

    Worthwhile Reading & Viewing

    Posted by David Foster on 14th February 2014 (All posts by )

    A Valentine’s Day story from Sheila O’Malley

    Some thoughts on the color green from Gerard Van der Leun

    Germany’s war against homeschooling, and Obama’s complicity therein

    Early industrial capitalism: myths and realities

    Cashing in on connections in Washington

    The crisis of the administrative state

    Is Common Core encouraging a generic and simplistic approach to literature?

    Why does the question “do you like horror movies?” have predictive power when it comes to how long a relationship will last?

    Liberalism and the credentialist conceit

     

    Posted in Big Government, Business, Economics & Finance, Education, Germany, History, Human Behavior, Political Philosophy, Politics | 2 Comments »

    It Isn’t Nice to Kick Someone When He’s Down…

    Posted by David Foster on 6th February 2014 (All posts by )

    …but the woes at Sony Corporation remind me of a couple of my posts about the path this company has been taking.

    From March, 2005:

    The New York Times (3/13, registration required) quotes Sir Howard Stringer, the new chief executive of Sony, arguing for mutual benefit between his company’s electronics and entertainment divisions. At the Consumer Electronics Show last month, Sir Howard said, “A device without content is nothing but scrap metal.”

    Following the chain of logic he seems to be developing, we could also argue that a car without fuel is scrap metal…and therefore, auto companies need to own oil companies. Or that computers are useless without software…so all computer manufacturers need to possess large software operations.

    Randall Stoss, author of the NYT article, observes that Sir Howard’s remark is “a platitude beneath mention–unless, perhaps, one were a mite defensive about owning both a widget factory and an entertainment factory.” Stoss goes on to credit the success of the iPod (far greater than Sony’s competitive product) to the fact that Apple has not pursued synergies between device and content…

    A company thrives when it has all that it needs to make a compelling product and is undistracted by fractiousness among divisions that resent being told to make decisions based upon family obligations, not market considerations.

    From September 2012:

    In his Financial Times article Why Sony did not invent the iPod, John Kay notes that there have been many cases in which large corporations saw correctly that massive structural changes were about to hit their industries–attempted to position themselves for these changes by executing acquisitions or joint ventures–and failed utterly. As examples he cites Sony’s purchase of CBC Records and Columbia Pictures, the AT&T acquisition of NCR, and the dreadful AOL/Time Warner affair. He summarizes the reason why these things don’t tend to work:

    A collection of all the businesses which might be transformed by disruptive innovation might at first sight appear to be a means of assembling the capabilities needed to manage change. In practice, it is a means of gathering together everyone who has an incentive to resist change. 

    I’d also note that the kinds of vertical integration represented by the above mergers don’t exactly encourage other companies–which were not competitors prior to the merger but have become so afterwards–to participate in an ecosystem.
    Kay references the work of Clayton Christensen, whose book The Innovator’s Solution I reviewed here.  See also Mergers, Acquisitions, Princesses, and Toads.

     

    Posted in Business, Management, Tech | 19 Comments »

    The Depression may be here.

    Posted by Michael Kennedy on 4th February 2014 (All posts by )

    I have believed for some time that we were entering another Depression. I have previously posted about it.

    The Great Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932. The 1929 crash was a single event, much like the 2008 panic. It took major errors in economic policy to make matters worse. Some were made by Hoover, who was a “progressive” but they continued under Roosevelt.

    I posted that statement earlier and it got a rather vigorous rebuttal. I still believe it, however. I think a depression is coming soon. What is more, I am not the only one. Or even only one of two.

    The second article preceded the election of 2012 but is still valid.

    When employment hit an air pocket in December, most analysts brushed off the dreadful jobs number as an anomaly, or a function of the weather. They chose to believe Ben Bernanke rather than their lying eyes. It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980:

    fredgraph

    In January, only 51% of manufacturers reported a rise in new orders, vs. 64% in December. Not only did the U.S. economy stop hiring in December, with just 74,000 workers added to payrolls; it stopped ordering new equipment. The drop in orders is something that only has occurred during recessions (denoted by the shaded blue portions of the chart). The Commerce Department earlier reported a sharp drop in December orders for durable goods. In current dollars, durable goods orders are unchanged from a year ago, which is to say they are lower after inflation.

    So, the economy stopped hiring, even at the poor pace the past five years have seen, but business also stopped buying.

    Read the rest of this entry »

    Posted in Big Government, Britain, Business, Health Care, Obama, Politics, Taxes, Tea Party, Urban Issues | 33 Comments »

    Both Interesting and Sad

    Posted by David Foster on 23rd January 2014 (All posts by )

    A commenter at a post on value stream mapping, at the Manufacturing Leadership Blog, says:

    I saw a group of women who hated each other for over 20 years come to tears when they realized what the workflow was doing to their relationships.

    Hopefully, outright hate isn’t all that common, but I do suspect that many painful relationship problems in organizations are caused by processes and incentive structures that create conflicts of a pointless, perpetual, and unresolvable nature.

    Posted in Business, Human Behavior, Management | 7 Comments »

    Could Amnesty save the Democrats this fall ?

    Posted by Michael Kennedy on 21st January 2014 (All posts by )

    The catastrophic launch of Obamacare and its continuing problems has been decried as “Stalingrad for the Democrats.” I tend to agree but there is another issue coming soon that is “a cloud no bigger than a man’s hand.” It is Amnesty for illegal aliens and it is coming to a Republican Party near you.

    Mickey Krause, one of the last blue dog Democrats thinks it will be a sellout.

    The coming weeks will see the formal start of the GOP House leadership’s attempt to sneak an immigration amnesty through the Republican caucus and into law. We don’t know the exact details of the proposals, but we know enough:

    Read the rest of this entry »

    Posted in Business, Immigration, North America, Politics, Tea Party | 9 Comments »

    Why The Post Office Is Doomed

    Posted by Carl from Chicago on 20th January 2014 (All posts by )

    The United States Postal Service (USPS) is in bad financial shape. The service is currently losing money and is unable to pay some required payments to the government for employee retirement benefits. While the USPS has retained its first class mail monopoly, it sends only a small percentage the ecommerce packages that are the backbone of the physical internet economy.

    The real failure of the postal service, however, is encapsulated in the photo above. In our River North neighborhood, where the population density is high (local residents in high rise condominiums plus innumerable tourists) and the value of real estate is high, too, there is one institution that you can count on to not shovel their sidewalk or take care of their property. The US Postal Service.

    The employees of the USPS are unionized and likely no one has the job of shoveling the sidewalk, or it isn’t in their job description. Thus it isn’t shoveled, and you need to trudge through it which becomes treacherous as the snow melts and re-freezes. Since many of the people who actually might want to use the postal service in this area are elderly, the dangerous sidewalks are even harder to defend.

    They also used to have two mailboxes in the “drive up” section where you can pull your car up to the curb in front of the River North post office. Recently when I attempted to mail Christmas cards (we don’t like to leave them with the mailman in our condominium building because we’ve heard horror stories) at the post office, I couldn’t stuff them into the mailbox, because they reduced capacity down to a single mailbox. There were a few other potential customers milling around fuming as well, since the outdoor mailbox had apparently been jammed beyond capacity for some time.
    Read the rest of this entry »

    Posted in Big Government, Business, Chicagoania, Economics & Finance | 25 Comments »

    Seeing to Business

    Posted by Sgt. Mom on 14th January 2014 (All posts by )

    Around the end of 2007 and beginning of 2008, I was working two days a week at a Tiny Bidness owned by a friend of mine, Dave the Computer Genius. I had known Dave off and on since 2002, ever since I had looked for a local computer tech to tell me what was wrong with my very first computer. I think that I found Dave through some on-line search, possibly through some local variant of Craig’s list. Anyway, he pronounced my computer well and truly dead, and sold me a rehabbed unit which even if rehabbed was still a better and more up-to-date one than the defunct unit, which I had gotten ten good years out of since buying it at the Yongsan PX. So, I referred Dave to my then-employer, the consultancy dealing in intellectual property (read – did marketing packages and a provisional patent for people who had invented a gadget), and later on he referred me to one of his clients, the ranch realtor, when I was job-hunting.

    Dave did computer installation, training, and trouble-shooting – rather like a one-man Geek Squad – and having a nice collection of regular clients, he did pretty well at it. He talked once or twice of one of them, another Tiny Bidness – a little local publisher owned by Alice G. whom he insisted I would get on with like a house on fire. He promised that one of those days he would take me along when he went to her home/office to work on her computer system, and introduce us. He always thought that we should get together, since he thought we both had a lot in common. And so we did, eventually – although that wasn’t until six months after Dave died of a sudden heart attack.
    Read the rest of this entry »

    Posted in Arts & Letters, Business | 57 Comments »

    Book Review: Herman the German, by Gerhard Neumann

    Posted by David Foster on 27th December 2013 (All posts by )

    Herman the German by Gerhard Neumann

    —-

    This is the autobiography of a man who was born to a Jewish family in Germany, apprenticed as an auto mechanic, attended engineering school, moved to China in 1938, was interned by the British as an enemy alien in 1939, transferred to the American forces, joined Claire Chennault’s Flying Tigers, repaired the first Japanese Zero fighter to be captured in potentially-flyable condition, became a U.S. citizen by special act of Congress, and went on to run GE’s entire jet engine business, which he played a major role in creating. (The preceding may be the longest single sentence I’ve ever written in  a blog post.) The book should be of interest to those interested in aviation, technology, management, social history, the WWII era, and/or China.

    Gerhard Neumann was born in Frankfurt/Oder in 1917, where his father was owner of a factory that processed feathers and down. Gerhard’s parents were Jewish but nonpracticing–a Christmas tree was traditional in the Neumann home–and their approach to child-raising was closer to stereotypically Prussian than to stereotypically Jewish:  ”You did exactly as you were told by your parents. There was no such thing as saying no to them!…You were not to have a hand in your pocket while talking to grown-ups…Showing any emotion in Prussia was considered sissyish. There was no kissing between parents and children–only a peck on the cheek before going upstairs punctually at nine o’clock; and there was absolutely no crying.”

    On the other hand, Neumann could do pretty much what he wanted with his spare time. In 1927, at the age of 10, he rode his bike out to a grass strip where someone was giving airplane rides for 5 marks, which he paid with money from his piggy bank. His parents weren’t angry at him for taking this flight without permission; indeed, they were so entranced with his description of the way the town looked from the air that they soon took an airplane ride themselves! At the age of 13, Neumann bought a folding kayak and, with some camping gear and a 12-year-old friend, took long journeys on the Oder River, all the way to the Baltic Sea. Few parents in America today–or in Germany either, I’d bet–would now allow this level of independence to a 12- or 13-year old.

    Neumann had no interest in the family feather business; he wanted to be an engineer. A 2- or 3-year machinist or mechanic apprenticeship was mandatory for admission to any German engineering academy: Neumann’s father asked the 10 cab drivers of Frankfurt/Oder to recommend the garage where they thought the boy would learn the most, and the answers were unanimous: Albert Schroth’s. So began Gerhard Neumann’s apprenticeship, which, other than the technologies involved, could have been something out of the Middle Ages. “In winter my hands were frozen purple. Wear work gloves? ‘What’s the matter, boy, are you a girl?’ When my hands were bleeding, Herr Schroth pointed to the large bottle of iodine in the backroom and mumbled something about faules Fleisch (lazy flesh.) No Band-Aids, no pitying, no time out.”

    Read the rest of this entry »

    Posted in Aviation, Business, China, Germany, History, USA, War and Peace | 7 Comments »

    Here We Go Again …

    Posted by Sgt. Mom on 20th December 2013 (All posts by )

    … or, haven’t I been to this rodeo before? Why, yes I have, and not all that long ago, either. First I called to mind was poor artless Paula Deen, celebrity cook-book author, metaphorically burned at stake in the marketplace of public opinion. But the Great Duck Dynasty Imbroglio of 2013 reminds me very much more of the Great Chick-Fil-A Ruckus of 2012, wherein some fairly mild published remarks by the CEO of the company sent the usual right-thinking suspects into a frenzy of shrieking like demented howler monkeys. Boycott, shun, divest and/or fire was the general ukase – for they are hateful hating bigots who shouldn’t be tolerated by truly tolerant people … and then the funniest thing happened. People went out and deliberately bought lunch, dinner and breakfast at their local Chick-fil-A outlet, to the utter chagrin of the usual right-thinking suspects. Chick-Fil-A nationwide had the best darned week they ever had, as far as sales went, and lines of hungry customers stretching for blocks.
    Read the rest of this entry »

    Posted in Americas, Business, Conservatism, Current Events, Human Behavior, Media, Uncategorized | 28 Comments »

    Anecdotal Chicago Observations

    Posted by Dan from Madison on 18th December 2013 (All posts by )

    Last weekend I took the family to Chicago for our annual Christmas weekend in the big city. We had a great time, as always. Some observations below the fold.
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    Posted in Business, Chicagoania, Photos | 10 Comments »

    ZIRP Embodied

    Posted by Carl from Chicago on 15th December 2013 (All posts by )

    ZIRP or “Zero Interest Rate Policy” has been in effect in the USA since late 2008. From that point forward, the effective interest received on money from CD’s, banks, and non-risk bearing debt is very low, especially when taxation is taken into consideration.

    Recently I was standing at an ATM when I saw this receipt casually left on the ground. It showed over $300,000 left in a low or non interest bearing account. To me, this embodies how ZIRP has turned the world on its head.

    When I was growing up, inflation was high and interest rates were high, too. I distinctly remember my grandfather having an argument with someone else when he said that interest rates would never go below 10% again (they were nearly 20% at the time). If you had any money, you had to put it to work to get the benefit of “compounding interest” which is basically interest earned on interest, which would make your assets grow quickly. In parallel, of course, inflation was making everything cost more, so you were probably treading water, but that is a different issue entirely.

    In the age of ZIRP, there is no point instructing anyone about the advantages of compounding interest, because the effects are too small to be believed. In the portfolios I run for my nieces and nephews, they receive ZERO CENTS most months on the cash held in their account, and the cumulative year end totals are too small to receive an interest 1099 from the IRS. The SEC fee, which amounts to a few pennies per trade, actually is a larger cost, so I am just likely to ignore both elements.
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    Posted in Big Government, Business, Economics & Finance | 16 Comments »

    Source of America’s Problems Discovered

    Posted by David Foster on 12th December 2013 (All posts by )

    …quite a few of them, anyway

    The above poster was apparently often found on the walls of high-school guidance counselors in the 1970s. So says Mike Rowe, who has proposed an improved version of the poster. Link.

    via American Digest

    Posted in Academia, Advertising, Business, Economics & Finance, Education, USA | 16 Comments »

    Backroads in the Eagle Ford Shale Country

    Posted by Sgt. Mom on 9th December 2013 (All posts by )

    Typical South Texas landscape – Taken north of Goliad


    This last Saturday was the second day of Christmas on the Square in Goliad, Texas. I had a table there, as a local author, but the cold was so pronounced that the whole event was rather a bust … but it did mean that folding up and coming home early allowed some time for taking pictures on the way back. This is a part of Texas which overlies the Eagle Ford Shale formation, and over the last five years I have noted a good many changes along the route, and in the small towns that we pass through on a semi-regular basis. Read the rest of this entry »

    Posted in Business, Current Events, Entrepreneurship, Environment, North America, Uncategorized, USA | 14 Comments »

    “Can You Hear Me Now? Another Health Market that Really Works”

    Posted by Jonathan on 22nd November 2013 (All posts by )

    John Goodman:

    It has taken a long time, but the price of hearing aids is in the process of falling dramatically. How has this happened? Technological innovation, of course, but there is more. There’s no shortage of technological innovation in U.S. health care. However, because third-party payers, that is, health insurers and governments, determine prices, there is no mechanism for customers to signal value to providers.
     
    This is not the case for hearing aids: Although some states have mandated insurance coverage for hearing aids, this is usually limited to disabled children. The big market for hearing aids is seniors, and Medicare does not cover hearing aids.
     
    This is another case of a phenomenon observed elsewhere by NCPA Senior Fellow Devon Herrick: Where patients pay directly for medical care, prices fall like they do in every other market.

    (Via Leif Smith on Twitter.)

    Posted in Business, Economics & Finance, Health Care, Medicine | Comments Off