Learning from Dogs

As expected … and as cautioned here:

The Commerce Department has revised downward its estimate of the U.S. growth rate from the third quarter of 2009, see this report.

Citing weaker consumer spending than originally estimated (discussed in an earlier post here) the annualized growth rate is now 2.8%, down from 3.5%, far too weak to make any progress on the employment front.

By Sherry Jarrell

An example of how we really do own our lives.

We were invited to our friend’s 25th Wedding Anniversary on Saturday, 21st November.

English pub

It was in a local pub and they had invited many friends, some of whom we had not seen for many years.

One friend had started his own architect business, built it up over the last 10 years and, although he had lost a large amount of work because of the recession, things seemed to be picking up.

I mentioned that my work had dropped off dramatically since the summer. He said:

Well, Jon. You can make your own mind up what you do. You can either decide you’re going to go bankrupt or you can decide that you’re going to succeed –  in spite of everything.

For some reason, that short conversation had a huge impact on me and I realised that it really is mind over matter and once we make our mind up about something, good or bad, it tends to happen.

By Jon Lavin

“Get me a rope before Mandelson wipes us all out”

Whether you live in the UK or not is an issue, because it might well affect somewhat your reaction to a recent diatribe which is characteristic of a journalist who is well known in the UK, but probably not outside. (That sentence was too long; I was trying to emulate his style!)

Jeremy Clarkson

That journalist is Jeremy Clarkson, who is known as an arrogant, irresponsible motoring journalist.

Over the years, he has done only a moderately good job of using that persona to hide his intelligence, his common sense, his sentimentality and, even, his wit!

Fortunately, for the rest of us, his failures to hide them completely have been known to result in some valuable contributions; whether this is one of them, you will have to judge for yourself.

If you are live in the UK, or are from the UK and living elsewhere, you will probably “get” his recently written article in the Times Online.  Here’s a flavour of the article:

He [Peter Mandelson] announced last week that middle-class children will simply not be allowed into the country’s top universities even if they have 4,000 A-levels, because all the places will be taken by Albanians and guillemots and whatever other stupid bandwagon the conniving idiot has leapt onto in the meantime.

I hate Peter Mandelson. I hate his fondness for extremely pale blue jeans and I hate that preposterous moustache he used to sport in the days when he didn’t bother trying to cover up his left-wing fanaticism. I hate the way he quite literally lords it over us even though he’s resigned in disgrace twice, and now holds an important decision-making job for which he was not elected. Mostly, though, I hate him because his one-man war on the bright and the witty and the successful means that half my friends now seem to be taking leave of their senses.

My guess is that you will either sympathise with it, or not; there is unlikely to be any middle position!

If you have no UK connections, then the whole thing might appear to be complete nonsense. In that case, you might be interested, at least, to know that more and more people in the UK feel like this!

My hand is up, “include me in”, as they say! … and my guess is that Chris Snuggs, of this blog, has both hands up!

Read it here!

By John Lewis

[P.S. more of Clarkson's superb writing here.  P.P.S. Mandelson background for non Brits. Ed.]

Another political masterpiece!

British Health Minister Andy Burnham is urging us to give up meat; this will apparently help to save the planet.

Andy Burnham! (Seriously)

Now, it is very noble of the Minister to try to help save the planet. However, his efforts do raise some questions.

• The thing is, if it is essential to stop eating meat then shouldn’t the government put its money where its mouth is and DO something about it? Such as tax it? (usually the first instinct!) Or do they only do things that are electorally favourable? (this is a rhetorical question, by the way – feel free not to answer it …)
• Or is this perhaps a long process of “educating the electorate”? Well, there are plenty who leave school hardly literate already, so he’s being a bit optimistic, isn’t he? And why start with poor, little Britain? There are tens if not hundreds of millions of our American buddies to convince ….

And at the same time as we are being sermonised about our meat-eating the the USA is edging towards the opening-up to oil-exploration of previously off-limit areas.

In our quaint British lingo this is known as “not singing from the same song-sheet”.  And as for oil, I wish they would make up their minds once and for all; either we have to reduce its use or we don’t.

At the moment, all they seem to be doing is organising conferences (at vast carbon footprint) where they promise to reduce emissions. This is schizophrenia, isn’t it?

Re the British sermon, one wonders whether the noble minister is himself a vegetarian, and of course whether he is among the vast government contingent attending the international climate conference. And does he drive the car 50 metres to the baker’s on Sunday mornings?

Personally, I’d be prepared to give up meat if: A) I were convinced it would do any good and B) I thought that the great and good (and rich) would make a similar sacrifice.

These are two VERY big “ifs” ………

Must go – got some burgers in the pan …..

By Chris Snuggs

Pay and the Free Market

It came up again in conversation today:  someone was offended and upset over the level of compensation of some senior executives in the U.S. economy.   I have to admit I just do not understand the anger. And I have a fundamental lack of respect for the arguments that have been served up thus far in support of the position.

I have tried to resist drawing the conclusion that the anger is born of envy, but I am very close to throwing in the towel on that one.  Why should we begrudge anyone who earns a healthy salary, especially in an economy that provides each of us the opportunity to aspire to the same?

Even if there were reasonable ways around the practical issues and costs associated with legislative caps on salaries — how to set them, who sets them, using what measures, what value judgements — it simply makes no sense.  It is the antithesis of a competitive market economy where individuals have the incentive to learn, grow, work hard, and succeed.  It ignores the role played by capitalism in creating a strong and vibrant private economy that provides endless opportunities for all who want to put in the hours and the effort to succeed.

U.S. corporate governance rules provide the framework for determining the compensation for senior executives, and it works remarkably well.  Each shareholder, or owner of the company, gets one vote on material issues such as reorganization. The Board of Directors is responsible for hiring and firing senior management on behalf of the shareholders.  If the shareholders do not like the decisions of the board, including those that set the level and form of compensation for senior management, they have at least two, very effective choices. They can either sell their shares in the company or they can vote to replace the board members.  The board can take several steps if, after negotiating the compensation package for senior management, the executive fails to perform. The board can withhold the bonus, renegotiate the terms of the contract, or fire the executive.  Then the long, mostly objective arm of the competitive labor market will determine the market-clearing value for the skills and experience of the recently fired executive.

One thing I’ve never quite understood is why the market doesn’t seem to exact more punishment on senior executives who run their companies into the ground.  Maybe there is an old boys network that looks out for ex-executives; maybe my observations are biased; maybe I notice only those cases where failed executives rise again.  But it’s an empirical question, in any case; we can gather data on the issue and study it objectively.

Regardless of the conclusions of such an analysis, however, decisions about executive compensation must remain in the labor market where your ability to produce economic value still reigns supreme over your ability to curry votes and political favor.

By Sherry Jarrell

The Eden Project in Cornwall, England

To lead the project which took an old clay pit in a remote corner of the UK and converted it into a world class environmental visitor attraction is a tremendous achievement.

Homo sapiens? A game show!

Tim Smit had some fun with the business community at the 2009 Annual Convention of the UK Institute of Directors. Everyone, including he, was in their best business attire, but very few people could get away with crumpled shirt and jeans!

However, he has a serious message about the environment (1:55) and he knows a thing or two about people as well!

Monty Python: is there intelligent life on earth?

For fun, and on an Australian tack, Eric Idle is not so sure.

By John Lewis

A recap on some important messages.

One of the great benefits of being a team of authors is that we, too, are learning from each other.  So on that theme I wanted to review some of the Posts that have been written by my fellow authors as a reminder of some powerful motivational ideas.

Sir Ranulph Fiennes

When asked about his approach to climbing Everest at the third attempt in May 2009 and, at age 65, the oldest Briton to do so, he captured the full spirit of separating actions from goals when he said:

Plod forever! Don’t expect to get there. Don’t think there is going to be a top to this mountain. Just plod forever!

Watch the video.

Read more about these examples

A reminder of what parental commitment can mean.

As part of my job I often spend time in the UAE.  Many different nationals coming here on the promise of work so that they can send some of the hard-earned money back to their families, often the only means of family survival.

Thus I was touched this morning by a lovely welcome from a Filipino woman who works in a Lebanese café which I often frequent. I asked after her young daughter …

Yes, she said, she is now 7 years old, and she will see her daughter again in 8 months time, because she is leaving the job when her visa expires, which will enable her to get her passport back, and then her return airfare will be paid so that she can return home.

“My daughter was 2 and a half when I last saw her.”

There are thousands of people like her in the same situation, and they still carry on with a smile knowing that others depend on them for life!

By Bob Derham

Never give up is so much more than just a cliché.

Regular readers will know that fellow LfD author, John Lewis, has been posting regularly on the subject of remarkable people.  I have found them inspiring, to the extent that I’m going to depart from my usual safe area of economics and tell a personal story.  It’s a story of family dynamics, the power of sibling bonds and why hope and trust in the future, especially for young people, is so, so important.  I have called my story the Power of Words.

—–oooOOOooo—–

I can hear it like it was yesterday, resonating in my head, crowding out the doubts and negative thoughts, filling my mind with possibilities:  yes, I CAN do it!

Then ....

I was in my junior year of college and had no idea what I was going to do with my life.  It was becoming quite a burden.

Because I had always been good in school, i.e., the “smart one,” everyone had expected so much of me when I went to school.  I really envied my older sister; she had always been the pretty one, the popular one, the one who got invited to the prom by not one, but three young men.

And, it seemed to me at the time, she was so lucky because no one expected her to go out and conquer the world after high school.   She didn’t go to college; she went to secretarial school and studied to become an airline attendant instead.

I envied her in every way possible!  But at least I had something: I was “the smart one,” or so I thought!  Years later, my sister went back to school to study psychology.  She earned a 4.0 [four straight 'A's. Ed] and was invited to continue on to earn her Ph.D.  I’ll be darned if she wasn’t the smart one, too! And she is a wonderful and thoughtful person to boot! But I digress.

Read more of my story

What does Bill Gates admire about Warren Buffet?

On this blog about integrity, and in these difficult economic times, it is particularly poignant to note that Bill Gates cites Warren Buffett’s integrity. This was during a recent event at Columbia Business School in New York City, see below.

While many of the questions from MBA students and the answers from Gates and Buffett are not new, Buffett’s brief witty and topical comments provide considerable insight into his thinking.

It is particularly interesting to get a sense of how the world is viewed by people with their perspective. When asked about the outlook for America, both Gates and Buffett answered that it is very good. Warren Buffett even offered any of the MBA students $100,000 in return for 10% of their future earnings. Later, he increased the offer to $150,000, if they received training in personal communication skills!

Watch them together on CNBC at Columbia Business School, New York City on November 12, 2009.

Maybe you are interested in further information about Warren Buffett, if so you are not alone. The BBC, among others, have taken a strong interest in him recently.

You might like to read and view some recent stories on the “Oracle of Omaha” including:

• his words of wisdom
• a recent interview
• his best investments
• the Washington Post’s debt to him
• his recent investment in railroads

Despite a setback in 2008, Warren Buffett’s long term investment success is without question.

By John Lewis