JALJA

Seth Godin on fire drills:

An organization that’s run on emergencies and reaction to incoming doesn’t know what to do when there are no problems.

Instead of seeking out new ways to delight, they run around looking for new emergencies, and if they look hard enough, of course they’ll find them.

(Two reasons for this: emergencies concentrate the mind and allow things to get done, and history).

I’ve worked in my share of fire drill factories, which is why I like Seth G.’s thoughts here.

I once coined a code word for fire drills: JALJA. It stands for Jumping Around Like Jack-Asses, which is what a lot of folks do when fire drills come along.

It’s pronounced J-owl-j-uh.

It was a part the lexicon at work for awhile. Even my bosses would use it. They’d call me into their office and say:

Seth (me, not Seth G), looks like we have another JALJA coming our way. Do you have plans tonight?

Free Condoms

In high school, I was the campaign manager for a student council president candidate.

We weren’t all that serious. We made lots of posters with sexual innuendo and at one point promised the electorate that my candidate would look into getting free condom dispensers in the bathrooms, if elected. It was a public high school, after all.

The principal wasn’t thrilled with our behavior. In his office, he told us we ran the most asinine campaign he had seen in his 25 years in education. I was honored. Even then I wasn’t enamored with politics and politicians.

I never would have guessed that one of the campaign promises we joked about would be a serious issue in the campaign for the President of the United States. I wonder what my former principal thinks of that? We were way ahead of our time.

I also learned a good early lesson in politics. While the authority figure wasn’t pleased with our antics, the electorate got a kick out of it. My candidate won. Of course, even then, I was decent at seeing the big picture. My candidate didn’t need my help and I knew it.

What does grade-level mean anyway?

Talk radio discussion topic from this evening’s drive:

Some school district is setting goals to increase reading proficiency for students from X% of students reading at their grade level to Y%.

The discussion was about the different goals set for different races and how that sends the message that it’s okay to underachieve to folks from races with lower goals.

However, that’s not what I’m writing about. I was more concerned with obvious oversight.

In the old days, to move up to the next grade you had to demonstrate your mastery of various things expected at that grade, including reading at grade level.

If you couldn’t demonstrate sufficient mastery of your grade-level expectations, you were held back. That was a darn good motivator for students and their parents to try hard.

In one population cited on the radio, 38% of that group could read at grade-level.The easy way to fix that is to hold the 62% who are not reading a grade level back until they are.

El Debato

These are my limited observations from tonight’s debate, from the 10 or so minutes I saw before I nodded off for a nap.

Have you ever seen one of those letters composed from words cut from magazines? You know how the words are all different fonts and sizes and choppy? That’s how President Obama sounded to me tonight. I often couldn’t tell if the two words he just said were connected to previous sentence, the next sentence or stand alone.

I liked the first part of Romney’s response to the question about this country losing jobs overseas. He should continue to hammer this message home. The answer isn’t trickle down government, it’s to make the U.S. a more attractive place to invest.

Most economists agree, incentives matter. We — through government — chase those jobs away by making it less attractive to invest in America.

I didn’t care much for the second part of Romney’s response. If China devalues its currency to make its products cheaper, we benefit at the expense of the Chinese citizens. They should be up-in-arms about that. Not us. They will be some day.

The moderator seemed fair.

President Obama seemed surprised and a little disappointed that one of the questioners, Kerry, was not female, and judging from Kerry’s body language, not prone to be wooed Obama’s machismo.

Also, the President didn’t answer Kerry’s question, which was When did the Libyan embassy request extra security and who turned down that request? President Obama started his answer at the time of the attack.

I wasn’t clear on what Romney’s answer was on the assault weapon ban question. But, I don’t really care, either. President Obama said enough repeating the wisdom/ that guns kill people. He also demonstrated his lack of understanding of the second amendment when he said something about people having guns to hunt and (I think he said, I was nodding off) fish.

Yes. The 2nd Amendment protects our right to hunt and fish (who fishes with a gun?)./

No. It does not. It protects our right to protect ourselves from an oppressive government and other things that might encroach on our safety. It is one check-and-balance on power in a document that is full of check-and-balances.

I think the President also said something about eliminating mentally unstable people, or not eliminating them…not sure. It was one of those choppy moments. But, I think even he wished that he could ‘walk that one back.’

After I woke from my nap after the debate and was cleaning the kitchen, I heard some post-debate poll results.

One question was which candidate will help the middle class the most. If I heard right, the results were 54% to 30-something% in favor of President Obama.

Wow. I guess this may show the distrust some folks have for a rich guy and the love they have for a guy saying he’s going to pick that guy’s pocket.

However, I’d caution the 54% that you may want to favor the guy who is talking about making our country more attractive for investment. That will do more to help the middle class than any nutshell game. That makes as much sense as a football coach saying he’s going to win games by putting the best team on the field.

In case that 54% needs a little help with that, that makes a lot of sense.

Personal Preference Bias

I’ve read and heard a fair amount from critics of JC Penney’s disastrous everyday-low-price strategy. But, much of it is too simple.

Critics speak of JC Penney’s customers as if they are all the same. I’ve read things like maybe they liked sales prices or JCP has to attract a new customer base to replace the old one.

While JCP sales were down considerably, they were still doing 75% of the volume they did the previous year. That is a huge decline for a retailer, but the sales didn’t go to zero and that says something. Three-fourths of customers didn’t mind the change.

In my experience with consumers and retailing, it is not uncommon for about 25% of sales volumes to come from promotions and coupon offers such as the sales JCP use to run. A fair part of that percentage are folks in whatever product category that are bargain hunters. Another chunk are from folks who are not typical bargain hunters — they may shop on value — but they may just come across a deal too good to pass up. I was recently perusing Kohl’s and saw a griddle for half the price I’ve seen elsewhere. I’m not a typical bargain hunter, but I popped on it.

There’s no reason JCP can’t satisfy value shoppers and bargain hunters alike. Other retailers have figured out how.

Even low-price leaders Walmart has “Rolbacks” in the aisle. Target has a dollar section near the front. Old Navy has clearance racks hidden in the back. Banana Republic has its mall based-locations, carrying higher priced, in-season fashion. But, they too have limited clearance sale space in the back. They also have separate Factory Stores where you don’t get the latest, but you get good stuff at sales prices.

Management at these companies recognize that not everybody is the same and they try to find ways to satisfy varying consumer preferences in creative ways that don’t detract from the experience of others. That’s typical retailing.

In my opinion, that’s the key insight that escapes JCP CEO Ron Johnson — everyone is different.

Johnson was in charge of retailing at Apple. Certainly, many folks rave about the Apple store experience. But most of these ravers have very similar preferences when it comes to electronics — they love Apple!

So, Johnson didn’t have very tall task in delivering a retail experience that satisfied a relatively narrow consumer segment. He made a store for Apple devotees.

Ask yourself this. Does Apple need a store? Not really. Apple products would sell with or without their stores.

Johnson is remaking JCP to satisfy a segment of consumer that is smaller and more narrow — a group that he likely sees himself in — than the group that JCP was satisfying before he arrived, which is not usually a successful strategy.

I call this personal preference bias. Successful managers usually find ways to overcome their own personal preferences and give more weight to the varying preferences of their customers.

It’s an easy mistake to make. Ron Johnson probably thinks he learned from his former boss, Steve Jobs, that designing things to meet your personal preference is good. And, there might be something to that when you are trying to innovate from ground zero.

Garrett Jones on EconTalk

I enjoyed the recent EconTalk podcast with guest Garrett Jones.

Here are some of his observations. On the changing role of government:

Jones: And after a crisis hits, it just changes the kind of government we have. We now have a government whose job it is to repay this enormous amount of debts. Of explicit and implicit liabilities. That is now what our government is for.

The challenge for government:

Jones: I would love to see the United States tackle its long-term entitlement crisis. In some way it makes it clear to people that the Fed government is not on the hook for everybody’s health care forever. These incredibly open-ended commitments really have to be–they are going to get curtailed one way or the other. I’m certainly in the camp of thinking that the U.S. government is not going to default, either explicitly or through inflation. But sooner rather than later would be really nice.

‘Open-ended commitments,’ is a great way to put it. It’s easy as politicians to promise these open-ended commitments because it costs them nothing. It’s easy for voters to vote for these open-ended commitments because they sounds really good.

And, the political behavior that I believe every voter should be tired of:

Jones: I think these one-year fiscal fixes are appalling. And I don’t just mean that because it’s fun to complain about it. But I think it really does hurt the government’s planning–makes that inefficient–and I think it hurts the private sector’s planning. It makes that inefficient. This is both–whether you are a Keynesian or a supply-sider, you should be appalled by this. And it’s only the politicians who need re-election, of both parties, who really don’t want to just take a hit and sign something that lasts for 5, 10, 15 years.

No joke. One of the worst things that could have happened in politics was the Budget Act and Byrd Rule modified in 1990.

As usual with government actions, the intent of these were good, but they have generated disastrous unintended consequences. This one being setting up a government that is in never-ending kicking the can down the road mode.

These rules require that a change in law and tax code that does not have a sunset provision (a time when it automatically expires and goes away with 10 years, for example), must have 60 votes in the Senate. Any law change with a sunset provision only requires a simple majority.

The intent was to make sure that any costly legislation would either need a super majority approval (meaning it’s something a lot of people want done) or an automatic expiration date that will cause a future Congress to re-evaluate the law to see if it’s something they would like to extend.

But, from my understanding, this has had two negative consequences. First, many big changes are made with a sunset provision in order to meet the simple majority requirement. Since it’s difficult for either party to get a super majority control in the Senate they settle for using sunset provisions to a law in order to pass it on a simple majority.

This is a recipe for kicking the can down the road. Since many laws in the past 15-20 years have been passed with a sunset provision, Congress now spends a good deal of time and energy determining whether to extend these things when they come up for expiration. The “Bush Tax Cuts” are a perfect example.

Politicians love these, because they can use these expiring laws as leverage to get their new changes done, which leads to endless and unproductive (for citizens) back-scratching. Want me to vote to extend the Bush Tax Cuts? Okay, vote for my  health care proposal. Or some such.

Second, this sunset provision applies to tax law changes and treats reduction in tax rates as a ‘cost’, even if the reduction helps invigorate the economy generating more government revenue in the future.

The result is we get tax law changes with sunset provisions that guarantee political drama every time they are set to expire. Instead of having Congress debating only incremental changes to an underlying stable tax code, we have debates for incremental changes on top of the ever shifting sands of the expiring provisions and folks who are even more uncertain of what their tax situation will look like a year from now.

 

My limited vp debate observations

I don’t watch much of the debates, which surprises my friends.

I watched about 10 minutes of last night’s debate. Here are some of the things I observed and some thoughts on what I have heard since.

Joe Biden reminded me of Will Farrell’s character in the late summer movie, The Campaign. Fake teeth, hair plugs and cheesy charm and all.

More folks should be bothered with the way politicians on both sides refer to ‘tax plans’. It’s unclear what the point of their ‘tax plans’ are. It seems like one key point is to raise even more tax revenue. I don’t care about raising more tax revenue. I would rather hear politicians talk about how they are going to lower spending and minimize taxes for everyone and do the job of executing the Constitution with the most minimal impact on society as possible. Since we don’t hear much of that, I know the direction of government is still a long way from where I’d like it to be.

Democrats say that it was a draw or gave a slight edge to Biden. I even heard some Democrats praise Biden for his distracting behavior.  If a Republican acted in the same fashion, I doubt the Democrats would be praising it. They would call it a loss.

I don’t often quote the Bible, but a caller to a radio show this morning shared his thought on the debate in the form of Proverbs 29:9 and I thought it was good:

If a wise man has an argument with a fool, the fool only rages and laughs, and there is no quiet.

Biden’s remarks on Iran scared me and would have been enough for me to decide not to vote for that ticket if I was undecided.

I heard Ryan give a few zingers. I thought that bringing the unemployed back into the economic picture and saying that they aren’t feeling the recovery was a good line.

However, I also think Ryan (again in my small sample of about ten minutes) got into eye-glaze territory when he was explaining his Medicare proposal.

Just scoring on body language — which is about what any of these things are good for — I would say Ryan carried himself well against a more seasoned performer.

Ryan looked more ‘vice-presidential’ and like he has some future leadership potential. He didn’t fumble, which is all he needed to do.

As I mentioned earlier, Biden looked like a caricature of a politician portrayed by Ferrell.