Monthly Archives: March 2018

The T-Myth Revisited

Economics, Politics

 

Michael E. GerberThe title of today’s blog is a take-off on Michael Gerber’s classic book The E-Myth: Why Most Small Businesses Don’t Work and What To Do About It (Harper Collins, 1995).  During my days at the Ewing Kauffman Foundation in Kansas City, I had the pleasure of being the host of a one-on-one conversation with Michael in the style of Inside the Actor’s Studio.  Each time Donald Trump fires a cabinet secretary or senior member of the White House staff, my thoughts often turn to the lessons from Gerber’s book and the insights he shared during our interview.

Now, no one is going to argue the United States government is a small business, but I would contend every new presidential administration can be viewed as a start-up and faces the same challenges and risks associated with any entrepreneurial venture.  Especially if you’re going to claim you are going to “break the mold” as the current occupant of the Oval Office promised.  Therefore, the dysfunction in the current White House can best be explained by demonstrating how Trump has violated several of the pillars which are the cornerstones of Gerber’s analysis and prescription for success.   Thus, Gerber’s “E-Myth” becomes Trump’s “T-Myth.”

Let’s start with Gerber’s basic premise.  Being proficient in a technical profession and running a business based on that technical competence requires two entirely different skill sets.  In his book, Gerber using the example of a woman who is urged by her friends to start a bakery because her pies, cakes and cookies surpass any available at retail outlets in her town.  She quickly learns running a bakery has little to do with baking.  Thus the “E-Myth,” proficiency in a technical skill makes you immediately qualified to run an entrepreneurial venture marketing that product or service.

Obviously, Donald Trump has not read Gerber’s book.  Otherwise, he would not have nominated his personal physician Dr. Ronny Jackson to be secretary of the Department of Veterans Affairs.  But Trump always does thing bigger and better than anyone else.  Which brings us to the T-Myth.  In Trump’s book, you don’t even have to be technically competent.  Ben Carson has no identifiable skill related to either housing or urban affairs.  [COMIC INTERLUDE:  Stephen Colbert explained Carson’s nomination this way.  “Carson is ‘urban,’ he lives in a house and Trump has affairs.”]  Rick Perry did not even know what the Department of Energy does.  Scott Pruitt does not understand the science of ecology.  Betsy DeVos has no experience in the field of education unless you equate political fundraising with PTA bake sales.

Trump also fits this mold.  He too lacks competence in almost every one of the technical skills required of a chief executive of the federal government.  A president needs to be a consensus builder.  NOT!  A president needs to clearly articulate consistent policy.  NOT!  A president needs to be a team builder. NOT!  A president needs to know how to differentiate fact from fiction.  DEFINITELY NOT!  A president needs to be a student of history.  NOT!  A president needs to appreciate the power of his office to influence people and events.  NOT!

To fully understand the difference between the “E-Myth” and the “T-Myth,” one also has to compare other major tenets of Gerber’s formula for success with Trump’s modus operandi.  One example.  “Build a system of systems, so your business does not rely on people.”  In other words, the key to running an organization is not to do all the work yourself, but to create systems that run smoothly in your absence.  In Gerber’s own words:

If your business depends on you, you don’t own a business–you have a job.  And it’s the worst job in the world because you’re working for a lunatic!

In Trump’s case, quo erat demonstrandum.

Another major tenet of the “E-Myth” is, “Think ahead.”  Never put yourself in a situation where you are forced to make a snap decision which may put you in a situation you cannot get out of.  Stuff happens.  A new hire does not work out.  There are going to be dissatisfied customers.  Your major supplier in Puerto Rico is five feet under water (literally).  Do not wing it.  Know what you’re going to do before you do it.  Need I remind you how the “T-Myth” advocates just the opposite and the resulting number of personal, financial and political headaches Trump faces for his impulsive behavior.

If I were conducting my interview with Michael Gerber today, this is the question I would close with. “Michael, the Trump presidency, including the transition, seems to affirm your theories and principles about why businesses fail, but how do you explain the success of the Trump Organization?”  This is how I believe Michael would respond.  He would argue there is a major difference between success and the illusion of success.  A business with multiple bankruptcies, does not pay its bills, is constantly in litigation and could have more liabilities than assets is hardly a success.   For all we know, the only thing Trump is good at is spending other people’s money to maintain a lifestyle and reputation he has not earned.

Maybe it is time to stop talking about the “job” of president and focus our attention on the “business” of being president.  A good place to start? Use Michael Gerber’s book as the primer.

For what it’s worth.
Dr. ESP

 

Random Thoughts 28 March 2018

Random Thoughts

 

What do Donald Trump and I have in common?  Both of us have been relatively silent for the past few days. Trump is trying to keep inconvenient legal matters from getting worse.  In my case, it is the constant challenge of finding topics which are not already adequately covered on television, newspapers or on-line outlets.  Today’s post is dedicated to a few stories and observations which have been overlooked this past week.

Don’t Look Over Your Shoulder

Remember the Tax Cut and Jobs Act of 2017 and how it was touted as a major boon for the employment prospects of middle class Americans?  Despite all the historic economic evidence to contrary, proponents claimed the “trickle down” effects would result in more jobs and higher income for “those left behind” during the recovery from the 2008-09 recession.  In contrast, opponents predicted corporate beneficiaries would use the savings for stock buy-backs to solidify control and their share of future profits.  Turns out both are probably wrong.

Several recent reports suggest the major trend in business activity for 2018 will be mergers and acquisitions.  Business Insider reports:

Goldman (Sachs) forecasts that cash M&A spending will climb by 6% to $355 billion in 2018. That will, in turn, boost the stock prices of companies with a high chance of being bought. As a result, a basket of likely M&A targets is poised to outperform in 2018 after trailing the broader S&P 500 in 2017, according to Goldman.

Let’s parse this statement.  First, it refers to “cash M&A spending.”  Where did all that new cash come from?  That’s easy, savings from reducing the maximum corporate tax rate by 15 percentage points.  Second, this activity will “boost stock prices.”  In other words, the owners will be the primary beneficiaries of these paper transactions.  Third, and most important, when was the last time a merger resulted in job growth?  A 2016 study in the Journal of Competitive Policy International reported a job loss by 6.5 percent of the 3.7 million employees affected by mergers and acquisitions between 2013 and 20116.

Linda Brown’s New Legacy

In 1953, a nine year old African-American student wondered why she could not attend a neighborhood school with the friends she grew up with.  With the help and support of her father, Linda Brown, who died this week at the age of 76, changed history.  This week she is being honored posthumously for her central role in Brown v. Board of Education of Topeka, Kansas, the Supreme Court case which stated segregation in education was a violation of the U.S. Constitution.  The world is significantly different because of this brave, young girl’s willingness to challenge “existing case law.”

For the Supreme Court to rule in Linda Brown’s favor, it had to do something it rarely does.  It invalidated a previous decision Plessy v. Ferguson (1896).  In the Plessy v Ferguson 7-1 decision, the Court rejected the plaintiff’s contention that segregated schools were de facto unequal in quality.  The lone dissenter Justice John Marshall Harlan, in closing, predicted how history would judge the Court’s action.  “In my opinion, the judgment this day rendered will, in time, prove to be quite as pernicious as the decision made by this tribunal in the Dred Scott Case.”

In 1954, by a unanimous decision, the Court voted to overturn Plessy v. Ferguson.  Speaking for the Court, Chief Justice Earl Warren did not mince words.

Segregation of white and colored children in public schools has a detrimental effect upon the colored children. The effect is greater when it has the sanction of the law, for the policy of separating the races is usually interpreted as denoting the inferiority of the negro group. A sense of inferiority affects the motivation of a child to learn. Segregation with the sanction of law, therefore, has a tendency to [retard] the educational and mental development of negro children and to deprive them of some of the benefits they would receive in a racial[ly] integrated school system

Which brings me to Citizens United v. Federal Elections Commission (2010).  In the 5-4 decision, Justice Anthony Kennedy wrote:

The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

Yet in a 2015 interview with Harvard Law Dean Martha Minow, Kennedy admitted the dependence on disclosure to protect the public interest has not worked the way he envisioned.

Just as a flaw in the basic premise of Plessy v. Ferguson forced the court to reconsider its decision in Brown v. Board of Education, maybe it is time for the Court to take a second look at Citizens United.  Couldn’t hurt!

Is Michael Cohen Lazy?

I have been asking every trained attorney I know, “Is it not strange the non-disclosure agreement (NDA) between Donald Trump and Stormy Daniels contained the phrase ‘and matters related to paternity’?”  But if you believe Daniels is credible, you also must believe she is telling the truth when she says her one-night stand with Trump did not result in a pregnancy.  There was no love child or abortion to further complicate the relationship.

But last night, another possibility arose.  On CNN, Daniels’ attorney Michael Avenatti told Wolff Blitzer he had now been approached by eight additional women you claimed to have had relationships with Trump.  And in two cases, the women said they too had signed an NDA.  (NOTE: Avenatti stated his legal team has not yet verified any of these claims to date.) What if the NDA Daniels signed was “legal boilerplate?”  What if Trump’s attorney Michael Cohen was just too lazy to draft NDA’s which applied only to disclosure concerns associated with each respective paramour?  It might explain why Cohen is so anxious to enforce the Daniels NDA.

Just Glad I Didn’t Spend It Already

One of the nice features of TurboTax is the ability to estimate tax liability for the next year.  This function is particularly useful if you want to understand how the 2017 Tax Cut and Jobs Act will affect you personally when you file next year.  So I ran the numbers.  My 2018 tax savings is a whopping $310.  Thanks Donald.

Just one problem.  This week when I went to fill up the gas tank in my car, the price of a gallon of fuel had jumped from $2.17 before the tax cut to $2.59.  Working from home, I am lucky that I only use about 20 gallons per month.  Over a year that adds $100.80 to my car expenses.  An incremental increase of one percent in the cost of living over the current rate, due in part to overheating the economy with an unnecessary tax cut, will cost me approximate $400 dollars.  And if I borrow money for some long needed home improvements, the higher interest rates needed to attract lenders to cover the tax-cut related deficit puts me further in the red.

Donald, if you don’t believe me, I’m more than willing to show you my tax returns.  You claim you also will lose money because of the tax legislation.  How about proving it!!

For what it’s worth.
Dr. ESP

 

Russian Trolling 101

Culture, Media

How do you know you’ve made it to the big time as a blogger?  One metric is whether you have become a the target of Russian trolls.  Understanding the process how trolls work to first gain your trust and then use their access to your site for nefarious purposes is important.  As a public service, I am sharing this latest example of an attempted troll invasion of Deprograming101 to warn others who currently write, or are considering starting, their own blogs.

For amateur bloggers, WordPress is the platform of choice primarily for its ease of use.  However, it also includes some excellent features for blocking comments which do not mesh with the blog’s purpose or goals.  For example, trusted commenters, once approved, can post additional feedback without the blog administrator reviewing each individual message.  Therefore, by gaining trusted status, a troll can then start posting disinformation, provocative comments and links to other sites.

Below is an example, which arrived this morning.  The modus operandi employed by this troll is pretty standard.  Flatter the author; so he/she will approve the submission.

It’s actually a nice and helpful piece of info.
I am satisfied that you simply shared this helpful info with us.
Please stay us informed like this. Thanks for sharing. https://steepster.com/Jimgriffin

I use this example because it raises so many “red flags.”  First, it makes no specific reference to the content of the post which precipitated the comment, in this case Wednesday’s article titled, “Tell Me Something You Don’t Know.”  Second, and most obvious, are the grammatical errors.  “Please stay us informed…”  Clearly, an incorrect translation of the troll’s native language.

Image result for steepsterHowever, the third flag is the most clever and demonstrates the effort trolls put into their work and the training they receive.  This troll associates himself/herself with a legitimate site: www. steepster.com.  The bloggers describe their site as follows.

Three dudes in New York City built this site as a way of keeping track of the teas they were drinking. Since then, it’s turned into one of the liveliest tea communities on the Web.

Why choose a tea community when evidence suggests most of the trolls and bots during the 2016 election established false identities on sites such as Twitter, Instagram or Facebook?  Because these more generic sites with significant cyber-security resources have started to develop algorithms to identify and block this kind of content.  In other words, using sites like www.steepster.com is a trend to counter efforts by the major social media players to crack down on diabolical on-line activity.

To recap, the process consists of the following steps.  (1) Establish a presence on a legitimate social media site.  (2) Identify a blog on which to spread disinformation and foment division.  (3) Flatter the blogger to gain trusted status.  (4) Flood the site with false stories and comments to incite chaos and dissension.

CAVEAT BLOG-GOR!  And BLOG-GEE!

POSTSCRIPT

For those of you who are more interested in first-rate journalism versus gossip, I strongly recommend Russian Roulette by David Corn (Washington bureau chief for Mother Jones) and Michael Isikoff (chief investigative correspondent for Yahoo! News) over books such as Michael Wolff’s Fire and Fury.  Corn and Isikoff document interactions between Russia and sequentially the Trump Organization, Trump campaign and the White House beginning with the first time Trump, during the 2013 Miss USA pageant in Las Vegas, meets Russian oligarch Aras Agalarov, his son Emin and British publicist Rob Goldstone.  If those names sound familiar, it is because Emin Agalarov and Goldstone were among the attendees at the June 2016 meeting in Trump Tower.

As I read the book, I felt the same way I did watching Jordan Peele’s Get Out.  It is hard to characterize the book as falling into a single genre.  It is a spy novel.  It is a love story years in the making.  It is a political thriller.  It is a Shakespearean tragedy.  But most importantly, it is a must read.

For what it’s worth.
Dr. ESP

 

Tell Me Something I Don’t Know

Media, Politics

 

Image resultThe title of today’s post comes from a regular segment on MSNBC’s Hardball with Chris Matthews.  The objective is for each panelist to share an insight that may not have made the news or is an unexpected harbinger of things to come.  Although Conor Lamb, the apparent winner of yesterday’s special election in Pennsylvania’s 18th congressional district did not appear on MSNBC during the campaign, he ran a political race based on that very principle.

Lamb knew he would be wasting his time regurgitating Donald Trump’s mountain of lies, corruption and gross incompetence.  Much as rumors of IPOs and mergers are baked into the stock market indices days or weeks before they actually occur, individual voters had already made up their mind about Trump.  It was baked into their predisposition weeks or months before the campaign officially began.  They wanted candidates to tell them something they did not already know.  And that’s exactly what Lamb did.

At each campaign stop and at each door on which he knocked, Lamb sympathized with the angst shared among his future working class constituents.  Then he told them something they may not have heard.  He talked about the share of the Republican tax cut which has already been used for corporate stock buy-backs compared to the more publicized worker bonuses which have paled in comparison.  He explained how the short-term benefits of the tax cuts might be offset by future cuts in Social Security and Medicare.  He explained the deficit increase associated with tax cuts would preclude investments in infrastructure; so badly needed in the district.  In other words, he talked about what should have been the centerpiece of the GOP argument for electing another Republican in the 18th, not the titular head of the GOP.

And it worked.  How do we know?  Early in the campaign, pro-Saccone ads touted the middle-class benefits of the tax act.  But it did not make a difference in the polling.  Therefore, the closing, last gasp Republican argument returned to the same dog-whistle, cultural issues which did not work for gubernatorial candidate Ed Gillespie in Virginia.

But Lamb didn’t stop there.  He explained how the recently imposed tariffs represented a zero sum game for voters.  Some would win but others would lose.  And the voters heard him.  Based on exit polling, only four percent of election day voters said the tariffs impacted how they cast their ballots.  While it may have made the victory more narrow, it did not change enough votes to carry the day.  And if it didn’t play in SW Pennsylvania which was tailored for the message, it’s unlikely to play as well in swing districts.

He told voters he was personally opposed to abortion but respected the fact Roe v. Wade was the law of the land.  He told voters his positions were not incompatible.  He talked about how Congress needed to reassert itself as a equal branch of government and stop worrying about what any president wants or says. He maintained that was impossible with the current House leadership of both parties.  The message, “We don’t need ideologues in the House telling us how to vote, we need leadership who helps us better represent our constituents.”

No campaign dollars were spent on anti-Trump ads.  We saw the same phenomenon in Virginia last November and in the Alabama special election to replace Jeff Sessions.  In the majority of voters’ minds, 2018 is already a referendum on the Trump administration.  ORANGE is the new BASE!  Victory comes not from parroting the national dialogue but by offering something that matters to undecided voters.  And they are most likely to respond to reasoned policy positions which focus on issues of local importance.  To paraphrase the John Houseman character in the 1970s Smith Barney ad campaign, “We win elections the old-fashioned way, we EARN them by respecting voters and talking policy, not politics.”

POSTSCRIPT

Lamb’s narrow victory was due largely to the Democratic ground game.  The best evidence of this supposition was the absentee balloting in Washington County, PA.  Saccone received a majority of the election day votes in Washington County by a margin of 53-46 percent.  Yet, Lamb received 62 more early votes cast than his opponent. Getting out the absentee vote takes a sustained ground game.

Some analysts have attributed Saccone’s lack of organization to the fact the 18th district had been either relatively or totally uncontested for 15 years.  The takeaway?  There is more than one path to retaking the House of Representatives in November.  While the low hanging fruit appears to be Republican districts which Hillary Clinton carried in 2016, there is potential to win relatively safe districts where the Republican incumbent is not used to a fight and a good counter-puncher like Lamb with a grassroots organization may be just the ticket Democrats need to deliver a few more surprises on November 6th.

For what it’s worth.
Dr. ESP

 

“Kill the Dealers”

Economics, Politics

 

Image result for ian read

Why is this man smiling?

At a rally for the Republican candidate for Congress in Pennsylvania’s 18th District, Donald Trump performed his impersonation of Philippine president Rodrigo Duterte and Chinese president (for life) Xi Jinping.  At issue was the increasing number of U.S. deaths attributable to drug addiction and overdoses.  Trump’s target?  Drug dealers!  His solution?  The death penalty!

You kill 5,000 people with drugs because you’re smuggling them in and you are making a lot of money and people are dying. And they don’t even put you in jail.  That’s why we have a problem, folks. I don’t think we should play games.

Nice sound bite, Donald.  But, unfortunately you’ve misrepresented the target.  We’ll get to the solution later.

According to the CDC, using the most recently available figures for specific causes of medication-related fatalities (2014), the drug responsible for the most deaths in this country was alprazolam.  More commonly known as Xanax, alprazolam was first introduced in the United States in 1981, not by “smugglers,” but by Upjohn, now part of Pfizer.  So, if you’re looking for a drug dealer responsible for MORE THAN 5,000 deaths, look no further.  His name is Ian C. Read, CEO of Pfizer (pictured above).  And as Trump suggests, THIS drug dealer is “making a lot of money.”  His total compensation in 2014 was (drum roll) $23,383,084.

Donald, put away the dog whistle.  We know who you mean when you talk about “smugglers.”  And once again, you thought it was more important to rally your base than have an honest conversation about the opioid pandemic.  And what better place to infer Mexicans are the source of the opioid crisis than southwest Pennsylvania.  Just one problem.  The 18th congressional district is 95.8 percent White and 0.6 percent Hispanic.  In other words, the drugs that are killing the residents of the 18th district are not being distributed on playgrounds or street corners.  The more likely sources are pharmacies and the medicine cabinets in residential communities.

So, if you want to have executions to show the drug dealers we’re not playing games, let’s start with Ian Read.  Or the CEOs of other opioid manufacturers and distributors.   Maybe the real cartel is the unholy alliance between drug companies and the doctors who are rewarded for prescribing opioids.  According to a March 12, 2018 report on CNN.

In 2014 and 2015, opioid manufacturers paid hundreds of doctors across the country six-figure sums for speaking, consulting and other services. Thousands of other doctors were paid over $25,000 during that time.  Physicians who prescribed particularly large amounts of the drugs were the most likely to get paid.

Seems Mr. Read and executives of other pharmaceutical companies got a significant return on investment without smuggling their product into the country.  And they are probably safe from any future prosecution.  I wonder whether back alley drug dealers would receive the same protection if they had donated $1.0 million to the Trump inauguration as did Pfizer. (Source: Kaiser Health Center, April 21, 2017)

For what it’s worth.
Dr. ESP