Year: 2009

Save the planet – eat a carrot!

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

Why the Anger over U.S. Executive Compensation?

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

Remarkable people: Tim Smit

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

Resignation, anger or possibilities

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

Working hard for others

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

The Power of Words

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

Remarkable people: Warren Buffett

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:

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

By John Lewis

Consequences and probabilities

How Peter L Bernstein’s work helps us make the safest decision with regard to global warming.

Probably like me you hadn’t heard of Peter Bernstein. He was instrumental in understanding risk and that alone makes him worth knowing about.  Here’s the entry from Wikipedia:

Peter Lewyn Bernstein (January 22, 1919 – June 5, 2009) was a financial historian, economist and educator whose development and refinement of the efficient market theory made him one of the country’s [USA] best known authorities in popularizing and presenting investment economics to the general public.

Watch the YouTube video before reading on:

You could not have missed a fundamental message in the interview – if the consequence of something is critically harmful then don’t take ANY risks. Bernstein’s book on risk is Against the Gods.

Continue reading “Consequences and probabilities” →

It’s all about timing!

An adjustment to when Posts are published on Learning from Dogs.

The editor of this Blog lives in the American Mountain Time (MT) zone.  That is 7 hours behind GMT.  Posts have been scheduled to be published at 09:00 MT, which is 16:00 GMT.

It has now struck us that this is daft because for our American readers East of MT and our European readers the daily Posts appear either mid-morning or in the afternoon, even later during the Summer.

Thus with effect from Wednesday, 25th November Posts will be published at 22:00 MT the previous evening.

This will ensure that your daily Learning from Dogs Post will be waiting in your in-box, and available on the Blog website, at the start of your day. (Apologies to our readers down under!)

For those that haven’t done this, you can easily set up an email subscription (and just as easily cancel it) to the Posts thus ensuring that they are always available to read via your email account.  To do that, click here.

Government Spending and jobs! Uh? What jobs?

Government spending isn’t what it is made out to be.

The headlines are full of claims about the number of jobs created or saved by the stimulus package, the impact of the Cash for Clunkers program on U.S. output and, the latest, the reduction in the deficit from the proposed U.S. health care reform legislation.

What total rubbish!

Government spending is just that — SPENDING.  It does not, can not, never has, and never will CREATE any output, economic wealth, or job.  The only way — and I mean the ONLY way — that profits or wealth or a new job is created is through a business.  Businesses are the only entity that can hire labor and capital and combine them in such a way as to create a product or a service that society may decide is worth more than it costs.

And that spread between the cost of production and what society is willing to pay is economic value; it is the generation of profits that then enables the taxes that the government collects to spend on the goods and services it thinks America ought to consume.

Private industry is the job creator.  Not the government.   And this is not wishful thinking, or a political point of view, or a theoretical model.  It is an unmitigated, irrefutable fact.

By Sherry Jarrell