Empirical Rationalism and Other Oxymora
Politics
A Hireless Recovery?
Jul 31st
Michael Schrage on HBR.org (commenting on an NYTimes article) argues “U”, “L”, “V”… it dosen’t matter the shape of the recession — this is not a “jobless” recovery, it is a “hireless” recovery. Instead of asking “where all the jobs have gone”, a better question might be “where did all the employers go?”
Executives and entrepreneurs aren’t asking “Who should we hire?” They’re asking, “Why should we hire?” World-class firms are still looking for world-class people. But when world-class people aren’t what’s needed, world-class firms will consider world-class alternatives. Most people looking for a job today aren’t competing against each other. They’re competing against alternative ways to getting that job done.
He rightly suggests that this is a structural, not a cyclical shift. Necessity is the mother of invention — as the recession lingers, companies are becoming more efficient at finding alternate methods of value creation and, as a result, these jobs are not likely to come back anytime soon..
For most organizations, people are a means and medium to an end. They’re not hiring employees, they’re hiring value creation. If they can get that value — or most of it — from contingency workers, outsourcing, automation, innovative processes or capital investment, why wouldn’t they? If tweaking a process or program empowers three people to do the work of five, then tweakonomics is the way to go.
Along these lines, Robert Reich on Business Insider talks about “The Great Decoupling of Corporate Profits from Jobs”.
Second-quarter earnings reports are coming in, and they’re making Wall Street smile. Corporate profits are up. And big American companies are sitting on a gigantic pile of money. The 500 largest non-financial firms held almost a trillion dollars in the second quarter, and that money pile is growing larger this quarter. Profits that plummeted in the recession have bounced back. Big businesses have recovered almost 90 percent of what they lost.
He suggests that hiring is not happening for three reasons: 1) profits are coming from overseas operations (so that is where investments are going) 2) companies are investing in labor saving technologies and 3) companies are using their money to pay dividends and buy back stock. According to Reich, this leaves us with huge paradox:
Big American companies may never rehire large numbers of workers. And they won’t even begin to think about hiring until they know American consumers will buy their products. The problem is, American consumers won’t start buying against until they know they have reliable paychecks.
So where does this leave the American worker, particularly the unemployed? What opportunities are out there for progressive companies?
Lohan who? 20-somethings worth reading about.
Jul 30th
My sister-in-law posted this on FB earlier this week… I thought it was worth reflecting upon and sharing:
I can’t believe the news coverage being given to a spoiled 20-something yr old. Here are a few 20 year-olds worth knowing about: Justin Allen 23, Brett Linley 29, Matt Weikert 29, Justus Bartett 27, Dave Santos 21, Chase Stanley 21, Jesse Reed 26, Matthew King 23, Christopher Goeke 23, & Sheldon Tate 27. These 20-somethings gave their lives for you this week.
Then I read this morning that “July is deadliest month of Afghanistan war for US”. Where is the moral outrage?
Lingering Consequences of Bad Choices
Aug 5th
There is fascinating article in yesterday’s Washington Post by Paul Schwartzman that chronicles the choices one family has to make as they face economic hardship. The article evokes a range of emotions from sympathy (doting father, bad luck, articulate family) to outrage (spending unemployment money on gambling, beer and cigarettes). I found that the most interesting thing about this situation was the compounding nature of (bad) choices made long ago. One choice or decision led to another with compounding consequences; once you head off a path, it is increasingly difficult to correct course.
Stephen Dubner posted some interesting commentary on the article — the comments are telling insight into the polarization of American views on the economic crisis.
A little too much perspective?…
Jan 19th
I was a having a conversation today with a co-worker today about politics, the economy, the state of the world, etc… In 2002, the infant mortality rate in the US was 7 per 1000 live births; in 1933, it was 58.1. In 1915, the maternal mortality rate rate was above 600 for every 100,000 births — now it is in the single digits. In 1970, about 36% of the world population couldn’t read; in 2015, the illiteracy rate is projected to to be ~15%.
Is the drop in your bank statement or the prospect of losing your job even close to the reality losing a child (or multiple children)? Or losing your wife in childbirth? Or not being able to read? In the span of human history, the last 100 years (much less the last four months) have been an insect bite — truly inconsequential. Yet, as individuals, we tend to dwell on the here and now. We forget that collectively we’ve made huge strides in a short time.
Yes, the economy is bad. Yes, these are some of the toughest business conditions that many of us have seen. However, we need a little perspective here. We all need to remember what really matters and put that in perspective.
Just a few thoughts as we wrap up MLK day.
The Long Tail of Globalization
Mar 9th
The current issue of Foreign Policy has an article that attempts to dispel the notion that The World is Flat. According to author Pankaj Ghemawat, less than 10% of patents, phone call revenues, management research, direct investment and “management cases” cross borders. In his opinion, if globalization truly lived up to its hype, he would expect these measures to register at much higher levels (e.g. “90% for foreign investment”). The author contends:
These and other data on cross-border integration suggest a semiglobalized world, in which neither the bridges nor the barriers between countries can be ignored. From this perspective, the most astonishing aspect of various writings on globalization is the extent of exaggeration involved. In short, the levels of internationalization in the world today are roughly an order of magnitude lower than those implied by globalization proponents.
The author feels that globalization has been over-hyped and that “The World is Flat” thinking is both dangerous and not reflective of reality. In his view, a better model is a “Clash of Civilizations” posited by Samuel Huntington…
The champions of globalization are describing a world that doesn’t exist. It’s a fine strategy to sell books and even describe a potential environment that may someday exist. Because such episodes of mass delusion tend to be relatively short-lived even when they do achieve broad currency, one might simply be tempted to wait this one out as well.
The world has not seen this level of global integration since pre- World War I. Granted, Globalization 1.0 turned out pretty poorly for most of the participating countries; and, yes, there may be some truth to his hype claims. However, it is undeniable that there are powerful social and technological trends that underpin this new wave of globalization – namely, unprecedented access to the global communications infrastructure and the ability to participate in the read/write web. In short, globalization is not simply an economic occurrence – for better or worse, it must also be viewed through the lens of its lasting social and cultural impact. As such, I’d urge Mr. Ghemawat not to limit his analysis solely to economic indicators.
Shout-out to my homies in the Islamic Republic of Iran…
To illustrate my point, I had a look at the Google Analytics data for this blog. Yes, I recognize that this is completely unscientific and utterly navel-gazing. Nevertheless, it turns out that that roughly 60% of visitors over the last 90 days were from the US; followed by the UK (9.73%), India (4.89%), Canada (3.93%), Germany (2.36%), Australia (1.33%), Thailand (1.09%), Singapore (.91%), Italy (.91%) and Netherlands (.85%). The top-ten list is not particularly surprising – four of the top ten visitor countries are native English speaking countries (and two others, Singapore and India, have very strong English-based educational systems). However, what I found particularly interesting was The Long Tail of my reach. In the past 90 days, readers from 76 countries including The Islamic Republic of Iran, Zimbabwe and Nigeria have visited the strategyst.
As more than a casual reader of The Economist, I would have thought that these visitors would have more pressing concerns than the random musings of a customer and technology evangelist half a world away. The fact that they do not leads me to believe that there is more to this globalization thing than mere economics.
