flwyd: (Vigelandsparken heels over head)
Part of me wants to stop listening, turn away, and get America's unpopularly elected president out of my head. But he's got an uncanny narcissistic knack for getting people to pay attention to him. So here's some commentary on pieces of Trump's inauguration speech.

In a speech whose overall tone was jingoistic nationalism, this stood out to me:
We will seek friendship and goodwill with the nations of the world – but we do so with the understanding that it is the right of all nations to put their own interests first.
It sounds like Trump misunderstands friendship. When a good friend is in need, we put aside our own interests to help them out. We lend our friends money at no interest when they're in a jam. We put our own reputation on the line to vouch for a friend's character. We sit our friends down for an uncomfortable conversation when they need an intervention.

Friendship is a long-term relationship that often involves personal sacrifice to help the other. We do this because at some point, at a time unknown and with no guarantee, the friend might be in a position to return the favor. Trump's line does not describe friendship. Perhaps the term he was looking for was "business partner."

Trump launched his campaign by impugning Mexican immigrants as rapists and drug dealers and made anti-immigrant bluster a cornerstone of his rallies, so it's no surprise it was a key point in his inauguration speech.
Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.
There's actually a really elegant solution to this. If you make it easy for immigrants to become citizens, more Americans will be employed and more American families will contribute to society.

Trump continued on one of his favorite topics, borders. (Although the U.S. only has two, and Trump only seems to care about one of them, so perhaps he should make it singular.)
We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs… We will bring back our jobs. We will bring back our borders. We will bring back our wealth. And we will bring back our dreams.
"We will bring back our borders" is an odd choice of wording. Make America 48 Again? Maybe he wants to renegotiate the Louisiana Purchase as a public-private partnership.

The first sentence is somewhat surreal too, and not just because "ravages" seems out of place. Despite corporations counting as "persons" under U.S. law, a foreign intelligence agency can't kidnap or steal a company. And I'm not aware of major American companies disincorporating and moving to another country, perhaps because Delaware is such an effective tax shelter. (There have been some notable international purchases of American companies, perhaps none more ironic than Budweiser being produced by a Belgian firm.) Additionally, the United States is still the top manufacturer in the world, we just mostly make stuff with really fancy machines and not a lot of people (high capital, low labor). Finally, a lot of wealth has stayed in American accounts: since the companies are still American, their stocks are traded on American exchanges, and the corporate executives haven't been outsourced, wealth gains from globalization haven't fled the country: they flowed to the American 1%.

Finally, Trump is personally an odd champion for trade protectionism and a call to bring jobs back to the U.S. He makes a lot of money from hotels and resorts around the world, employing thousands of non-Americans. It would also be nonsensical to fill those jobs with U.S. citizens: you can't outsource cleaning a hotel room in Manilla to someone in Toledo. These properties also put Trump in a compromising position in his quest to put America's interest before its friends: will he put the U.S. first if, say, Trump Towers Istanbul becomes a pawn in negotiations with Turkey? Would he stick to his protectionist stance if his family was offered the chance to build Trump Tower Guangzhou?
flwyd: (1895 USA map)
I am a lifelong Colorado resident. My grandfather represented the San Luis Valley in the legislature in the 1950s and my great grandfather gave the first sermon on Pike’s Peak. I have voted in every election since I turned 18.

I am writing you on the occasion of Martin Luther King Jr. Day to express support for immigrants and disenfranchised citizens and because I am concerned about the political tone in the United States. Dr. King expressed a dream, based in the ideals set forth in the founding documents of our nation, that everyone in America would be judged not by the color of their skin but by the content of their character. And while major strides were made in the second half of the 20th Century, this dream often seems a long way off. The president elect and many other prominent voices have proposed a vision for America which seeks to deny the American dream based on demographics, denying people the chance to prove their inherent worth.

America has been built by half a millennium of immigrants, creating wealth and innovation like the world has never seen. The first of my ancestors to arrive came from England in the 1600s; the last arrived from Norway and Wales near the end of the 19th Century to farm and mine in America, working hard to support their families and, in the process, helping America grow. Today’s generation of immigrants contributes immeasurably to American society and the United States economy, from migrant farm workers to the CEO of Google.

Mr. Trump and many other prominent voices have tried to foment xenophobia and anti-immigrant sentiment for political gain. Mr. Trump has proposed signaling out members of specific religious groups for enhanced government surveillance, building a fence to rival the Great Wall of China at a cost around 40 billion dollars, and deporting children (future American entrepreneurs and laborers) for whom the United States is the only home they’ve ever known. This plan not only goes against the American values that Martin Luther King elucidated, it also works against our economic interest. For the U.S. economy to thrive in the coming generations, the country must grow. The native-born American population is aging and shrinking. Immigrants tend to be young and work hard, filling important roles, spending money in the American economy, and fueling job growth. The United States risks an economic and budgetary crisis as our population ages if we do not welcome the innovation and determination of immigrants seeking the American dream, fleeing war and economic despair abroad, just as immigrants have done for the last four centuries.

As my voice in Washington, I call on you to speak out, both privately and publicly, when Mr. Trump, his associates, and other members of the political establishment make judgments of people based on the skin color, national origin, gender, religious beliefs, or sexual orientation. Furthermore, I urge you to sponsor and vote for legislation which reforms the U.S. immigration system, paving a path to citizen ships and creating an egalitarian and welcoming nation. I also urge you to take action to stop discriminatory policing, reform racially biased sentencing guidelines, ensure equal pay for equal work, and end government interference in people’s selection of restrooms.

Thank you for your service to our country,
Trevor Stone
flwyd: (currency symbols)
Eric Garland has a collection of articles about Guitar Center, the company which set out to do for musical instruments what Circuit City did for consumer electronics. The first was a short post about how their business model is failing and their bonds were degraded to junk status. A few months later, he wrote a little longer article with a great title Guitar Center's real problem: their customers are broke, pivoting from the store to the disappearing middle class and the country's significant unemployment problem despite a nominal recovery from recession. His latest piece focuses on the byzantine financial structure Guitar Center's set up with private equity firms Bain Capital and Ares Capital Management and the parasitic effect these financial shenanigans have on the economy.
When I recognized how much the financial markets have become like 2006, I finally figured out why some other financier could shell out $50 or $100 or $300 million for Guitar Center junk bonds. For the customers of private equity, a few million isn't that much money. These investors actually need some higher-risk assets in their portfolio, rather than let their money sit around in a zero-interest rate environment. They might be like Warren Buffett and already have huge stakes in sensible things like Too-Big-To-Fail banks, railroads or Coca-Cola. This just rounds out their overall position. Make 6-9% with the chance that the company could finally go tits-up? Why not! If it pays out, then great, and if it doesn't – tax write off!

In the business reporting during the financial crisis of 2008, you might have heard the phrase "appetite for risk;" this is what they were talking about. When an investment is risky (which basically means the thing you're investing in is more likely to fail), you can charge higher interest rates (which basically means you get more money until it fails). So that's why a few big financial companies can spend the better part of a billion dollars on a company that's likely to have a fire sale and go bankrupt: they've got a budget spreadsheet that says "Spend $XX billion on investments at 6+%."

Imagine an alternate world where the same financiers took the same $3 million per Guitar Center retail store and invested, say, $1 million in each of 940 community music centers. A community music center could be something like a coffee shop of sound, with instruments for sale, music lessons, rehearsal space, and an "intimate" concert venue. This would help foster a local music economy and boost both supply and demand for music.

But now that it's run by equity firms, approximately nobody in the Guitar Center management or financing chain is involved because of a deep desire to increase the amount of music being played, expand musical literacy, build a community of musicians, or even necessarily because they really enjoy selling guitars. They're in it because they think they've got reasonable odds of making a significant return on investment and the pieces of paper making up Guitar Center's corporate structure and debt obligations are an available vehicle for the financial joy ride they want to take. The folks running the show would be just as interested if they'd bought a national chain of soup canneries.

Trevor's Rule for Running a Great Company

Use profit as a tool to grow the business. Don't use business growth as a tool to obtain profit.

One of the things I really love about Google is how it's run, from top to bottom, by people who care about what we're doing. We structure efforts to be profitable so that we can easily invest in improving their quality and bringing them to more people–if YouTube makes more money than it costs, we can keep making YouTube better and serve more of the world's visual stories. Yet not every effort must be profitable on its own; many projects are done because they're good for the Internet or good for the world, with the foresight that a better Internet and a more informed world will be a better world for Google to be in for the rest of this century.

By contrast, a business run by people who don't really care about what the business produces or the people it serves (which is basically the point of private equity firms) has no reason to foster the long-term ecosystem its customers live in. When profit is the product, anything that doesn't put money in investors pockets–no matter how relevant it is to the company's ostensible mission–is likely to be slashed and burned. The private equity firm doesn't care if it clear-cuts the spending power of its customer base or strip mines the market for its colonial products as long as it extracts the monetary resources it needs to fuel its endless quest of profit for profit's sake.

Melting Pot

Friday, January 20th, 2012 10:47 pm
flwyd: (darwin change over time)
New York City has a reputation as "the great melting pot." But long before the Puerto Ricans moved in next door to the Jews and the Italians, the plantations of the South did a lot of melting and cultural exchange. Myths, music, symbolism, and bits of language were passed between former tribesmen who would never have interacted in Africa. Babies were probably born to parents whose extended families were at war with each other. And this melting pot was further flavored by the WASPy culture of the slaveholder, yielding a much more fun version of going to church.

Today, some U.S. cities (particularly in the east) have an Irish neighborhood, an Italian neighborhood, a Greek neighborhood… several generations since anyone came over the Atlantic. But I've never heard of an American city with an Akan part of town and an Igbo neighborhood. Sometimes starting from scratch is more effective than standing on the shoulders of giants.
flwyd: (red succulent)
New addition to my travels in China: Daily Luxuries in America and China. Two lists of the little things you don't think about until they're missing.
flwyd: (1895 USA map)
"Hello, I'd like to make a reservation. The name's Jackson. Andrew Jackson."
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