Measuring Up

The Foxes who live in this hen house

I really get nauseous every time I see another article and caption describing how Senator Chris Dodd and  Congressman Barney Frank are overhauling our financial system.

Weren't these two jokers part of the gang to blame for getting us into the housing mess in the first place? If memory serves, both men (who sat on banking/finance committees way back in the Clinton Administration days) pushed hard on opening up first home buying opportunities for those who never could afford to own before. They were quite successful because they forced Fannie Mae to significantly lessen its mortgage standards for who would be deemed credit worthy to buy a home. Their laws created opportunities for banks everywhere to drop any and all ethics they had left. The result was something called subprime mortgages. You can read about the rest in any good history book.

What's my point (you might be asking)?

I'll tell you. Our political system stinks. And, one big reason why is because guys like Dodd and Frank have become professional career politicians. Because of this, they can (and have) entrench themselves into committees that have absolute power. Incredibly, this allows them to remain in charge after they facilitated creating the biggest economic disaster in 80 years.

How are these jokers still in leadership roles charged with changing banking regulations now? It's just amazing. They continue to feast on power because our system allows it. And, that's just wrong.

I have a solution. And, I’ve said it (and written it) before. We, the people, should create a new law that prohibits any American from serving more than two terms in office. That would pertain to any public office.

Wasn't this the true concept that our founding fathers had over 200 years ago? Back then, Americans served their fellow man by taking public office for a brief period in their life. This ‘sacrifice’ away from their careers and/or livelihoods was deemed very important because it helped preserve (our ever so delicate) Constitution and these public servants created new laws that were needed to establish rule and order.

I know we live in a different world now. But, think about it. If politicians could only serve two terms, then they probably wouldn't need to spend all their time shoring up power and votes (i.e. always worrying about the next election). And just maybe, our system could simply focus on passing laws that a new breed of politicians actually think will do well for their fellow citizens versus what will keep them in office.

I think this new political system could also bring more ‘fresh blood’ and innovative thinking into our stale, corrupt pockets of government, as well.

Sure, I’ve thought about the negatives with my concept. We'd clearly lose lots of institutional knowledge on important issues within key committees (Military and Armed forces are two highly specialized ones that come to mind). Still, I'd  rather end this current system (and live with that sacrifice) when it allows two hatchet men like Dodd and Frank to remain in complete power, bumbling around the same issues that that they helped screw up more than a decade ago.

The pot calling the kettle black

Ever notice how many famous (or highly regarded) public figures who go through scandals (or are disgraced) rehabilitate their image only to jump right back into the spotlight a few years later? I’ve always been intrigued with the ease that most gain acceptance. And, although their lapses aren’t forgotten… typically they are forgiven.

Don’t get me wrong. In many cases, these former politicians, dignitaries or celebrities come back even stronger and have every right to do so because their new found visibility has little to do with past crimes or indiscretions. One case in point is Martha Stewart. Martha went to jail for insider trading (actually the official crime was lying to the government.) With her jail term served, those who cherished Martha’s wise home living advice and tips before, accepted her quite affectionately again by enthusiastically watching her shows, reading her magazines and books and maintaining their overall fan status.

Take a look at Eliot Spitzer and we see a completely different scenario, albeit an interesting storyline. It wasn’t so long ago that the former Governor of New York went through this state’s largest political scandal in recent history when the news broke that he was caught red handed frolicking with an expensive call girl. The governor quickly resigned from office and then created his own Richard Nixon-like, self exile scenario. We thought that would be the last of Mr. Spitzer, until 18 months later when he appeared on many talk shows to offer his very relevant commentary on the plummeting financial markets and Wall Street’s blame in the economic disaster that had resulted. Yes, people were shocked to see the disgraced governor in the spotlight again. Some were even outraged. Yet, in the end, this was most likely the smartest move Mr. Spitzer could have made to rehabilitate his image because the only positive and credible piece of his reputation that still existed was forged over a 12 year period as having an Elliot Ness approach to fighting Wall Street corruption and greed by standing up for all those ‘little people’ who needed to be protected.    

Then, there exists a few hypocrisies that I simply don’t understand. These include real life examples of larger than life successful people who fell from grace because of some misdeed, or simply because their success was built on a lie. Yet, somehow, they managed to come back in the most credible and public way to provide counsel or advice on the very same issues or manners that caused the controversy in the first place. One such example I’m thinking of is the former dot.com super star analyst Henry Blodget.

Do you remember Henry? I certainly do. Think back to 1998 or 1999. This young buck was seen as a God within the investment/technology community for his outlandish Internet investment picks. At that time he worked at Merrill Lynch and instantly reached star status after predicting that Amazon would rise to become a $400 stock (which it actually did.) Every technology or Internet company wanted to get on the radar screen of young Henry after that. He was paid at the highest Wall Street levels, treated like a rock star in all public circles and seen as a new sage on Wall Street. This all worked beautifully well until the Internet bubble busted and it was later found out that Henry and others from Merrill’s research/analyst department were conducting questionable activities within the firm.  He was sharing information (and more importantly) helping Merrill’s investment banking customers prosper by writing favorable financial reports on questionable business models. The Wall Street Chinese Wall relationship between research and investment banking was torn down because Henry (and others) helped Merrill make lots of money through these investment banking relationships at the expense of individual investors. In return, top analysts like Henry also received special early investment considerations into a number of the firm’s hot IPOs.

In the end, Henry’s picks all went south and his conflicted relationship within Merrill caused then New York State Attorney General to investigate him. Though he wasn’t ever convicted of anything, Henry was later barred from the securities industry and paid a fine of $2 million.

That’s why it makes no sense to me and truly comes across as the ultimate hypocrisy when I see that Henry is a top anchor and host on “Tech Ticker,” a heavily watched Internet news segment which dissects and analyzes the latest developments on Wall Street and within the technology world. I’ve watched these videos for over a year. While they are entertaining, it’s absurd that Henry actually plays the ‘heavy,’ watchdog role at times by beating up Wall Street executives and their companies for having ethical lapses and questionable judgment.

I’m not sure how Henry could be seen as credible by any audience on this topic based on a history laced with suspect decisions himself. Talk about the worst case of the pot calling the kettle black…

A non-story after 100 days in office

The President's 100th day in office was marked by a press conference and lots of news stories rehashing the good and bad (it was mostly reported as good, in case you were tuned out) of his administration. And, once again, many outlets like CNN focused much of their spotlight on how Obama ‘apologized’ around the world for America's poor behavior over the last eight years.

The amusing slant to this story (for me at least) is how we should all be shocked that an American president would do this. The rhetoric surrounding his supposed contrition is equally as entertaining.

Let's see. A liberal, democratic president openly exclaims to the world that the former, right wing, Republican administration did everything wrong. And, these past government leaders should be ashamed of themselves. Hmm... wow, that has to be a first. What a fantastic story!

OK, OK. I know. Obama didn't exactly use those words. And, in fact, he never actually ‘apologized’ (contrary to what CNN reported, which I'll get to soon.) But, hopefully my point is starting to resonate now...

Whether you agree with their military/non-diplomatic policies or not, it's hard to argue against one fact. Eight years of war under George Bush and Dick Cheney has greatly strained US relations across the globe. Of course, any new president from the opposing party (with 180-degree different views) is going to come into office trying to massage those relationships back to health. And, the most obvious way to do this is to blame those from the ‘enemy’ party that held office right before him. As my partner likes to say, Obama's international tour to do just that was a ‘no brainer.’

No surprise, the sensationalistic way our media labeled this trip abroad (‘the Apology Tour’), is typical and represents bad form as well. Even last night when Wolf Blitzer interviewed Defense Secretary Gates, the interview was pre-promoted for an hour as Gates commented on ‘Obama apologizes to the world.’  Yet, the secretary quickly tried to correct these mistruths by saying that the President hasn't been apologizing at all. But, instead he's building relationships by discussing how this administration will work with foreign leaders in a different manner.

Is it news that Obama continues to travel from country to country repairing bonds with their leaders? Sure. The media should cover and report this to us because he is the President and it is a change of strategy. But, is the message coming from him so surprising? Absolutely not. In reviewing history, Jimmy Carter lambasted Nixon/Ford and eight years of Republican rule to the international media when he came into office. And, his predecessor Ronald Reagan, did the same and beat up on Carter's diplomatic weaknesses as well.

Ladies and gentleman of the media, it's time to move on.

“15,000 youths came into the streets!"

That was the quote from a Moldovan blogger who, with a handful of friends, harnessed Twitter, Facebook, blogs and text messaging to create quite a powerful protest in this little known, obscure country yesterday.  

In actuality, 10,000 young protestors showed up at a solidarity rally to voice disapproval with the national elections which voted the Communist party into office again. Their anger arose because a serious question remains as to whether these elections were rigged to eliminate the other party from having any chance of being voted in.

It’s sad to see that this protest turned violent as the youths ransacked government offices and clashed with police. But, that’s not the part of this story I want to focus on. What’s truly amazing (instead) is how (when used correctly)  the latest, greatest social media tools can serve to inform, shape perceptions and act as a rallying cry to whip thousands of human beings into a frenzy in only a few short hours. Think about it. These young Moldovans weren’t just offering their support on the Internet. No, instead they were watching, listening and communicating in mass. Once they had built a large enough community (or mob in this case) through Twitter (and other social media tools), their newly formed organization had direction and a mission to take to the streets. A young civil rights leader in the early 60s once had the same effect. But, he needed to influence and create action through many stump speeches at churches and within communities. And, even with the impact that his publicity afforded him, Dr. King’s marches often took weeks and weeks to organize and prepare for. And, hundreds of organizers were needed to plan, direct and lead each initiative.

In this case, by creating their own searchable tag on twitter, a handful of protesters were also able communicate a host of newly popular topics (such as the questionable election process) through this social media tool to people around the world. This in turn has raised the level of concern and suspicion aimed at the governing Communist Party from the European Union, the Organization for Security and Cooperation in Europe and many other powerful international interests across the world. Here we see a great example of how a tool like Twitter truly has no geographic borders or limitations.

Young people have used social media tools to organize politically before. Through cell phones and text messages, they were able to energize protests in both Ukraine (2004) and Belarus (2006). And, of course, the Internet played a key role in helping our current president build support among many different voting groups just last year.

But, this latest movement truly feels like a landmark social media success moment in the grand scheme of the Internet’s relatively short history. It will be interesting to watch and see how other savvy people (probably most of them being from our younger generation) will leverage Twitter and whatever comes next to influence even more significant outcomes than what happened yesterday in the tiny country of Moldova.  

Should America apologize to the world?

These are the newest media headlines floating around the last few days.

Give me a break. The theme is just dumb. It's a great sensationalistic story. But, dumb for a variety of reasons.

I'll start this argument with one of my favorite sensational quotes from a great movie created out of another financial crisis – "Greed is good." Gordon Gecko from Wall Street made that line famous. I don't necessarily agree with it. But, the point is that greed is a universal attribute. It doesn't begin with American capitalists and it certainly doesn't end with so many other financial executives around the world who willingly took part to create our current economic mess.

Yes, our U.S. economic and political system should be blamed as a willing leader of this debacle. But, what about all those other banks who willingly took part based in Scotland (RBS), Great Britain (HSBC and HBOS), Switzerland (UBS), Iceland (every bank) and the list goes on and on and on...

And, I haven't even mentioned that it was AIG's London arm that led the entire derivatives program which helped to push the global insurer over the edge.

Like anything that is too good to be true, human nature pushes human beings to stop asking questions and jump on the money-making bandwagon. That's what happened here. And, the United States is but one large culprit. Many others clearly deserve blame as well. As the New York Times reported yesterday, the real cause is actually skewed financial incentives around the world. These distortions have operated on multiple levels:
1)    An imbalance in world trade – China has huge surpluses, while everyone else is operating in serious deficits.
2)    Bailing out world financial systems whenever they are in trouble – This has greatly distorted the market.
3)    Having banks in many countries that were simply “too big to fail” – These banks took too many risks because they knew that bail outs would occur should the unthinkable happen (which actually did.)
4)    Lopsided incentive plans for the financiers – This created havoc in an otherwise naturally working free market system.
I really have to tip my hat to CNN, the Financial Times and all the other media that have carved out and pushed this tabloid-like storyline. With President Obama in Europe for the Summit meeting, it makes perfect sense to admonish our economic system for being too capitalistic. And, those sound bytes from other socialistic European economic leaders really nicely pit our leader who supposedly represents ‘free market’ capitalism (Obama) against everyone else.

The main problem is that this is not a cut and dried issue. Yes, there are many extenuating situations such as the fact that countries like France and Germany have had stagnating economies for over a decade with some of the worst unemployment in Europe. So, while they blame the US for its laissez-faire ways, they shouldn't forget that their policies, which border on socialism, have created state governments that had problems competing on a world scale and couldn't even employ their own employable workers much before this global crisis ever hit.

Maybe it's time to turn the tables. How about if we pin the blame squarely on the shoulders of our media?  I know. They've only helped to spread the rumors and harp on these negative themes so that they would be believed by all of us. They certainly didn't create the laws, provide the loans, or make the funky markets that traded us into crisis. Still, their powers have gone too far and if we could villanize them just for a week or two, it could certainly entertain many more people than what their stories intend to do now.

“Expect the worst and you may get it"

This was the catchy headline message from Robert Shiller's, New York Times piece yesterday. His premise is quite interesting. Based on historical data, it seems that the more we (Americans) talk about an impending depression, the more likely it is going to become a reality.

Everyone thinks that the 1930s Great Depression was the largest to hit our country. Not so. According to Shiller, we had two pretty significant ones in the 1870s and 1890s, as well.

He claims that it's important to understand that each depression was partly driven by the retelling of earlier depression stories. In fact, in the 1930s, there was such incessant talk about the previous depressions before, that this partially led to a reduction in consumers' willingness to spend and businesses' want to hire and expand.

Thus, the Depression storyline could easily end up as a self-fulfilling prophecy for us now.

It's also interesting to note that in each depression, an "accident" created a way out for America. For the ones in the 1870s and 1890s, the combination of European famine and a hugely successful crop at home stimulated our economy. And, of course, we all know how World War II greatly alleviated the economic pain of the 1930s.

So, if one believes this analysis, it seems to make sense that we (as a nation) need to stop obsessing and communicating so many negative fears about this terrible economy and start focusing (and acting) more positively about what's to come. Of course, that's not an easy thing to do. This strategy clearly needs to begin with our President. It's time for him (and his administration) to start reinforcing why this stimulus plan will work. They need to provide real details that we can believe and also should stop worrying about the political blame game. Meaning– we all know that George Bush helped to get us into this mess. There is no longer a need to continue to dwell on the fact that Obama’s administration didn't cause this economic downturn, and it will "take a long time" to get out.

Next, we need to find a way to create trickle down positive thoughts. If these optimistic viewpoints could make their way to state and local politicians, business executives, our media, the blogosphere and finally the American public, well... we just might fool ourselves into thinking that this recession will dissipate sooner than we think and the D-word was just a bad dream, with no chance of becoming a reality.

But, how do we really convince ourselves that life will get better? Maybe the real trick is to start putting faith in one component of our economy or society that will save us from this ugly malaise (i.e. "the accident.") Could it be the billions of dollars that will soon fuel alternative energy technologies that will change our fortune? Maybe, when we remove our hundreds of thousands of soldiers (and billions of $$$ in cost) from Iraq, we'll see an upbeat surge in consumer behavior? Maybe, just maybe the media will actually get sick and tired of writing about all the negatives and decide that they will be the collective group that brings the wind of change by only focusing on those nuggets of happy stories/indicators that exist, but are never in plain view. This in turn will create a ground swell of positive sentiment, changing our perceptions for the better. (OK, this one is clearly a long shot.)

I don't know what will change our luck. If I did, then I probably would have already bet my farm on it and certainly wouldn't be writing this blog. But, I do know that this is one blogger who can do his share by trying to avoid past mistakes. My doom and gloom depression-discussions are history now. It's time for me to look for positive signs and figure out new ways to prosper. Hopefully, that one small step will begin to make our day to day lives a tad more gratifying.

Obama’s Blind Spot

Just two weeks into the new administration, I’ve already started to question some of Obama’s recent decisions. Of course, I’m not alone. The media, political pundits and those in the blogosphere are scrutinizing every single move he makes. It’s much too early to become overly alarmed. I, for one, truly hope Obama succeeds, because lord knows we need it to happen.

My brother (a Democrat and liberal leaning American who supported Obama,) sent me the following email this morning about some initial worries he has about our President. He’s also added some specific thoughts on what lawmakers need to do to help stimulate our economy. Thanks, Mike.

Somewhat surprisingly, (because my political beliefs never match his) I agree with everything Mike has to say.… and have added one or two other recommendations as well. How can a liberal and a moderate republican agree on the same means to a political (and economic) end? My theory is that traditional conservative, moderate and liberal views are basically thrown right out the window at a time like this. This is all about stimulating an economy that isn’t lending, spending or doing much of anything. So, no one is (or should be) talking about why “rich” Americans make too much money (maybe because so many aren’t rich now.) And republicans aren’t condemning those without jobs or homes now as being “lazy” or “too dependent on the government” (because hundreds of thousands are now in this same lifeboat.)  Here’s what Mike has to say:

“As much as I respect the man, I believe that Obama has a giant blind spot.  He trusts and believes in people more than evidence shows he should.  This bit him during his candidacy with the Reverend Wright.  Instead of reviewing the evidence and determining that “Yep, I need to disassociate from this guy,” he continued to defend him until Wright threw Obama under a bus.  The same thing happened with Daschle.  Clearly, Tom Daschle is an ethical mess and has been for some time. Yet Obama trusted him because Daschle was a tireless campaigner for him.  So when Daschle is $128K short on his taxes (another clear ethical lapse,) the first thing Obama does is say that he stands behind him.  Instead, he should have looked at the reality of the situation, cut ties, and run quickly away from this selection.

So what does this mean (besides all the jokes about “Does anyone in the new president’s administration pay taxes?”)? It means the following:

•    Obama is giving up the moral high ground because he’s too loyal to people and is willing to change ethical stances based on loyalties.
•    Folks are losing trust in Obama.  If he says “I screwed up” on Daschle, will he say the same next year on the bailout plan?

On that note, I’ve been reviewing the various proposals.  You know I’m a Democrat, but the Republicans are making smart points on the sweeping progressive agenda that the house democrats are inserting into the package that has little to do with shoring up our mess.  So here’s my idea of the “core” of a bailout package, based on what I’ve read.

1. Shore up the states.  This includes funding for Medicare and education and keeps the situation from getting worse.
2. Eliminate the payroll tax for a few years. This puts 6.2% back into the pockets of employees and the same for employers.  A 6.2% raise is more likely to make people spend money than $500 doled out $20 a week.
3. Reduce the mortgage rate to 4% and don’t require a credit score of 10,000 to get this rate.  Make at reachable by those that have “good” credit, not just “amazing” credit. Allow refinancing and second home loans to get this rate.  Allow investment property to get this rate.  This provides an immediate jump to the housing slump.”

I’d also add a key fourth point to Mike’s list.

4) Help small businesses. Small businesses have generated 60 to 80 percent of net new jobs annually over the last decade. Boy, do they/we need some special incentives.  A good start would be to eliminate all capital gains taxes on small businesses (per Obama’s recommendation.) And, I also agree that there is just too much weight put on the small business owner shoulders because of having to pay both employee and employer side of the payroll tax. We need to stop making employers pay for the employee pay roll tax and give the employee a $500 “Making Work Pay” tax credit to support this handed off new burden.

In the words of Richard Daley, "Cuckoo"

This is clearly how the former Chicago Mayor and (undoubtedly) thousands of other Americans feel about Rod Blagojevich, the embattled Governor of Illinois.

Everyone knows the story, but just to recap current events: Blagojevich was caught red handed, on tape, telling associates over the phone that the now vacant Obama Senate seat was up for sale to the highest bidder. U.S Attorney General Patrick Fitzgerald ceremoniously announced the attempted crime weeks ago. And now, the Governor has been impeached and is days (or weeks away) from being voted out of office by the Illinois House of Representatives.

So, what does Blagojevich do? He embarks on the highest profile, New York City media tour to declare his complete innocence. Only, the tour is actually more like a three-ring circus because of the off the wall comments, messages and analogies that the Illinois Governor continues to spout off. Let's see, we've heard him compare his situation to Pearl Harbor (I think the intended meaning was that this is one giant surprise attack against him.) And, the man has actually said on camera that his persecution is very much like that Gandhi, Nelson Mandela and Martin Luther King had to endure. But, my personal favorite is Blagojevich's analogies to famous movies like being in a "21st Century Frank Capra film" where the good guy's odds are piled high against him as he fights the establishment. His reference to the famed moved Silverado, (a western in which an innocent man is about to be hung for a theft he never committed,) was pretty entertaining as well.

Everyone thinks that Blagojevich is either crazy or clueless. From a pure public relations stand point, it's very hard to deem that anyone can be living the latter reality. After all, this governor's literal use of these support points (what we in the business call sound bytes) to convince Americans of his innocence is simply unbelievable. Referring to your plight in even the same sentence as Gandhi or Nelson Mandela's is abhorrent and is also a sure fire way to make people sit up, listen and shake their heads in disgust.

But maybe... just maybe, the governor has actually fooled all of us. What if Blagojevich is simply auditioning on the most visible stage ever for his next career in entertainment? I know, it sounds crazy. The man will (or may) spend time in jail. If this happens, any new career plans will have to wait. We all know that his 15 minutes of fame will soon fade away once he is behind bars. Or will it?

The Illinois Governor will surely be impeached. But, the world is witnessing first hand his outlandish, bizarrely charismatic and beyond wacky personality. Undoubtedly, this will certainly have some appeal to those on the fringes of the entertainment world who are looking for a caricature of the Governor in their commercials, promotions or even movies. (Think of the short term gigs that Tanya Harding and OJ Simpson were handed after their infamous crimes.) After all, we all know that evil is a highly marketable proposition in the entertainment world. People are mesmerized watching it. And, that means $$$.

Yes, in the end, Rod Blagojevich may actually have the last laugh if he parlays his political fall into an entertainment bonanza. Albeit, one has to wonder if his fame is actually sustainable in any way.

Then again, the man might simply be cuckoo.

A minor blotch on an otherwise wonderful day

Any American who cares about freedom and equal rights regardless of race, religion, sex, etc., probably experienced some goose bumps yesterday. After all, an African American man is now our President. And, a dream has come true.

Unfortunately, I was driving to a business meeting yesterday and had to listen to the inaugural events on the radio. Everything I heard seemed so festive and exciting leading up to the swearing in of our 44th President. And then, I listened to the invocation given by the Reverend Rick Warren. His short prayer made me shake my head in great disappointment.

You see, this holy man used the global light that was shining so brightly on his bully pulpit to push out an agenda that had little to do with respecting all Americans. In fact, it ran opposite to Obama's theme of acceptance of all and finding ways to bring people together regardless of religious or political beliefs. No, instead this narrow minded pastor pushed out his two points that should never have been uttered on this magical day: A blessing for Israel and the need to pray to (his lord) Jesus Christ. And, that was just wrong.

Why? Well for one, by allowing this man to do this, it sent a message to millions of American Muslims or others who don't support Israel or have never believed in Jesus Christ, that this administration doesn't really support their views. To do this on a national stage, in front of the world, this new President actually allowed this controversial agenda to be set on his post. And, it greatly conflicted (ironically) with Obama's inaugural speech given just 30 minutes later.

There isn't a preacher in America who wouldn't have mentioned God in this invocation. And, I think that regardless of one's specific belief in religion, Americans everywhere would have been just fine if this prayer were focused on just that word because all of our mainstream religions believe in their own God through their own traditions and prayers. But, praying to Jesus (regardless of what language his name is uttered in)speaks volumes to Jews (who, by the way helped to elect Obama,) Muslims and other non Christian religions in our country. And, as much as I believe in Israel, supporting it like he did, probably more than offended the countless Arab American communities across our country. 

Clearly, by selecting Warren to preside over this time honored prayer, Obama was actually trying to heal wounds with the right wing and bring these two sides closer together (if that is at all possible.) Ironically though, it only served to loosen the binds that are already weak between those other religious groups who wonder whether they will ever get a fair shake in this country that is supposed to now become a beacon of tolerance under a President who has promised so much change.

First MeasuringUP podcast is now online

This week, Sam Ford (our Director of Customer Insights) and I posted our first podcast. The topic focused on politics and brand building and is being launched through Steve and Ted’s RepChatter podcast series. Thank you, Steve.  Future podcasts will be coming soon, and they will be housed on MeasuringUP as well as our PepperDigital blog that Sam contributes to. In the spirit of this chat, I’ve written a post here,   Sam has written on the topic, and we’ve invited other PR bloggers to join in the conversation. You can see posts from Frank X. Shaw, Todd Defren, Talya Bosch, Ted Weismann, Indra Gardiner, and our own Matt Purdue on the topic as well.