Capitalism

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Last week, my family went on a New England road trip and I brought along my laptop and iPhone to stay connected with the office and clients. It is the norm for many businesspersons these days (and not much different from typical weekends). The downside of technology is that you are always connected. Fortunately for me last week was quiet and the digital side was a huge help in managing projects in progress.

I mention all this because my family’s trip was a wonderful educational trip mostly along the coast of New England. It underscored for me how much life, especially working life, in America has changed over our relatively short history. It was humbling on many levels.

The Morgan docked in Mystic, CT is under major restoration but still tourable.

The Morgan docked in Mystic, CT is under major restoration but still tourable.

In Mystic, we had a chance to tour the Morgan, the only remaining wooden whaling boat left and currently under major restoration. On a hot AC-less day, its cramped quarters underscored that a long time at sea was a very long time. Especially at a time deodorant wasn’t invented yet.

The Breakers, the Vanderbilt mansion in Newport, RI, is a glimpse back to the Gilded Age.

The Breakers, the Vanderbilt mansion in Newport, RI, is a glimpse back to the Gilded Age.

With class warfare in full political mode, a visit to Newport, RI and the summer homes of the Vanderbilts and others underscored that at times the gulf between the haves and have-nots was much greater. The American middle-class didn’t exist yet. It is a testament to capitalism and free-enterprise that a middle ground evolved and thrived in the last century. Even if it feels like we are at another tipping point.

The whaling museum in New Bedford, MA tells the amazing story of whales and the men who hunted them.

The whaling museum in New Bedford, MA tells the amazing story of whales and the men who hunted them.

The whaling museum in New Bedford, MA is a treasure chest of knowledge and exhibits about what was New England’s principal livelihood for many years. I learned why every whale hunted was such a vital collection of valuable resources, principally oil used as a fuel for lights, which extended American’s day on average by an extra hour after sunset. However, the hard work and danger to successfully hunt, kill, and bring back a whale was beyond daunting. It must have taken a certain kind of bravado or crazy to sign on for this duty. Ironically, it was the discovery of oil in the ground in Titusville, PA that signaled the beginning of the end for whale-hunting as an industry in New England.

Up close and personal with a humpback whale from the deck of the Seven Seas tour boat.

Up close and personal with a humpback whale from the deck of the Seven Seas tour boat.

Happily, the whaling industry is thriving in a new way now — tourism. Whale sightseeing boats out of Gloucester are doing an amazing job of introducing landlubbers like me to these amazing creatures. On the Seven Seas, we saw a dozen humpbacks during an afternoon voyage off Cape Ann. And as these awesome natural wonders put on a show on the surface of the Atlantic, they are unaware they are helping to support all the shops, restaurants, and motels in the area that depend on summer vacationers. There were close to 150 on our ship, times twice daily, times many other similar tour boats. Talk about an unlikely ecosystem.

A Lowell textile mill reimagined dollhouse size.

A Lowell textile mill reimagined dollhouse size.

On the way home, we headed inland to Lowell, MA for a different take on the New England economy of yesteryear. The once thriving textile mills there are now a working museum run by the National Park Service. They have done a terrific job of presenting the relevant-today story of cheap labor in service of manufactured goods. The Lowell mills were populated by a steady stream of ever-cheaper-to-compete labor pools. Ironically, most were women. First, farm girls from New England. Then, immigrants were brought in, from one nationality or country at a time, always in search of remaining competitive. Lowell went from being one of America’s brightest stories during the Industrial Revolution to finding itself fighting for its economic life, first against other cities in New England, then in the southern US, and finally, in countries around the world. The work in the mill was hard, loud, monotonous, long, and often dangerous. In those early days, there was no OSHA and there were no unions, although both would come later.

The Lowell lesson is an instructive one — if America wants to compete in today’s global markets, we face tremendous challenges in terms of costs, regulations, worker/union expectations, technology, and governmental cooperation with the private sector. With Lowell’s mills closed in the early 90s, the city is now retooling in another direction — tourism. I encourage you to avail yourself of this instructive link to our past (and hopefully, future).

The late great Ron Rotelli (center) helping to manage a Time and Parking Controls seminar at the National Constitution Center.

The late great Ron Rotelli (center) helping to manage a Time and Parking Controls seminar at the National Constitution Center.

My vacation ended on a very sad note with an email from Kevin Elsesser, GM of Time and Parking Controls — his longtime associate Ron Rotelli passed away in his sleep during a family vacation. Ron was a man of many talents, he made friends instantly with everyone he met, and he balanced work with a love of family and a long list of personal interests, especially music. He was one of the least likely people to have his life cut short in such abrupt fashion, which just underscores the age-old Carpe Diem message for the rest of us. That he will be sorely missed by so many was brought home by the endless line of friends, family, and co-workers inside and outside the Donoghue Funeral Home Thursday evening.

 

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With each new profile of the late, truly great Steve Jobs (current cover story of Rolling Stone is especially well done), and with each new Apple announcement, we are reminded daily that at least one sector of the economy is doing just fine — the Steve Jobs sector. The man was a one man jobs-creating machine. It is isn’t just Apple (Mac PCs, iPods, iPhones, iTunes, iWantOneOfThoseToo), but all the companies whose ancillary products are made in support of Apple’s, plus the entertainment industry with music, videos, movies, shows delivered to your device du jour. He envisioned products that never existed but that the public will clamor for. Such as the iPhone 4S with a virtual personal assistant named Siri who is a fountain of answers.

One of the Jobs story angles I have found most fascinating and uplifting is his half-Syrian family tree. No one has written better about it than the insightful and eloquent Fouad Ajami (Wall Street Journal subscriber content only, I’m afraid). The news that adopted Steve Jobs’s biological father is a Syrian-American has been resonating throughout the Arab world. It should, and hopefully will, be a constant reminder that with more power and freedom in the hands of people, many more Steve Jobs can blossom and enrich humanity.

Unfortunately, even in the West, there is an inclination to control and manage and central plan the economy via government at all levels, but especially in DC. Hence, the Administration’s heavily flogged jobs bill, which promotes the creation of jobs in the public sector, and will in turn diminish the struggling private sector. We need both, but right now, the balance is badly off and the results aren’t pretty.

Employees Must Wash Hands, a Public-Private Sector Regulatory Cooperative

Employees Must Wash Hands, a Public-Private Sector Regulatory Cooperative

A trip to the Men’s Room yesterday at a Sonic fast food restaurant was a reminder that all regulations, or executions of regulations, are not making life better or clearer, except for providing unintended humor. The obligatory “Employees Must Wash Hands” sign has been upgraded with step-by-step photography, detailed instructions, and bilingual sections. Instead, I’ll take a handwashing reminder and recommendations from Siri any time.

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Advertising typically reflects the spirit of the times it occurs in.  Lately, I’ve been thinking of building a time machine to escape to the MadMen era. I’ve been seeing a trend that reflects what DC likes to refer to as “our new reality”.  It is a reality that I don’t think many Americans are eager or willing to accept, which might fall under the heading of downsized dreams.

In the past few weeks, as the nation’s investment rating was downgraded and Warren Buffett expressed the odd belief that he and other millionaires weren’t paying enough in taxes, I have begun to notice some of this sentiment creeping into ads. Some of it is subtle, but the subtext seems to be that the American dream is dead or at the very least dying.

VIST Financial borrows an unfortunate image from the Depression

VIST Financial borrows an unfortunate image from the Depression

The first time I noticed it was in print and online ads for VIST Financial. The campaign showcased employees holding up “Will Work for Your Trust” signs that unintentionally (or perhaps intentionally) mirrored the Depression era imagery of the perpetually unemployed holding signs that read “Will Work for Food”.  What next? Apple Annie? Pencil sales on the corner? Bank employees jumping out of office windows after each day’s stock market decline? Can we find another theme? Forget about earning trust; this is confidence-rattling.

Moving on to automobiles, we’ve graduated from Cash for Clunkers to scenes of a Mad Max future. It started with the Eminem SuperBowl spot that showcased Detroit’s grit, but the latest Dodge Durango advertising is right out of Bruce Springsteen’s “rattlesnake speedway in the Utah desert.” The message is that naysayers shouldn’t be declaring America’s auto industry dead yet, but the visuals suggest that it is on life support. If this is a message of hope, Norman Vincent Peale is like a rotisserie chicken in his grave.

http://www.youtube.com/watch?v=EcY4Di6OgWw

Then, there is the spot that led me to write this post — a really well produced spot. It was so well produced that I thought I was watching an ad for one of the big banks. The scene takes place as a couple prepares their nursery for their new baby. The voiceovers and supers promote the idea of starting a college fund for their kids, then for their kids’ kids, then for hundreds of kids in their community. Saving early has always been a great idea. Except the ad isn’t about investing wisely and often. It is about buying Mega Millions lottery tickets. Unintended underlying message — this may be the only way the next few generations will be able to afford higher education. Yikes!

I think we are all in need of an attitude adjustment. We don’t need Pollyanna preaching, but a little positivity in advertising would go a long way toward relieving the grim mood of the moment. Americans want to be inspired, not discouraged that the sun won’t come out tomorrow. We have TV news for that messaging.

And a moment of silence (followed by the opening chords of Layla). This week, a different kind of era sadly ended with the announcement that classic rock station WYSP would fade out, soon to be replaced with an FM simulcast of AM sister station’s WIP sports talk format. WYSP, for a long time the home of Howard Stern before his move to XM, has also long been a staple of the Philadelphia region’s rock scene. It has always been a rival of WMMR, but increasingly, other stations began carrying classic rock fare, from WMGK to BEN FM. Although classic rock has enjoyed a resurgence among younger listeners, the youth music market has many other alternatives from top 40, to hip hop. Like every other medium, radio is a numbers game and with Philadelphia’s love affair with their professional sports teams, it makes sense that WIP can reach an even wider audience via the FM dial, where it can go head to head with its own rival,  97.5 — The Phanatic. Well, at least WYSP fulfilled the wish of The Who, “to die before I get old.”

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52 posts in 52 weeks makes for a minor milestone (or a good excuse for a game of 52-card pickup).  But we’re proud to report that NewtonIdeas.net has reached the one-year mark.  In honor of the occasion, here are a few varied mini-stories of interest. Some even have something to do with marketing.

Even in the Wright Brothers era, advertising was helping to build business ventures.

Even in the Wright Brothers era, advertising was helping to build business ventures.

Advertising has long been the wind beneath business’s wings.

Spending President’s Day weekend in DC was refreshing for a lot of reasons. One was seeing this Wright Brothers era display from the Smithsonian’s Air and Space Museum. A long time before Burma Shave ever hit the highways, the medium of outdoor advertising was practiced in some pretty creative ways on some remarkable canvases.

Two other reasons were the guided tour of the Capitol (the building itself gives you goosebumps, the prelude film is magnificent, first-rate audio headsets for all, and our tour guide was a polished gem eager to share information, as well as a very energetic senior who is living proof that retirement is overrated) and a cabdriver from Ghana who was this week’s embodiment of the American Dream. He has been driving a DC cab for five years to put himself through Howard University. He is currently studying five hours a day to take the CPA exam.

Back to earth courtesy of the current Congress.

This story from the Washington Post will tell you all you need to know about what happens when the second oldest profession takes on the oldest profession. Upon first seeing the headline about Harry Reid challenging prostitution, which is currently legalized in his home state of Nevada, I was perplexed. The explanations and the instant poll here are revealing of motives and politics (prostitution) as usual.

Softer side, my a@#.

Nothing agitates agencies more than having to do spec work to win business. Unless it is being told by the prospect that they will own your ideas even if you aren’t named agency of record and you won’t be compensated for them. According to Advertising Age, that is what Sears is doing in its current search and why many shops are fighting mad and turning down the opportunity. Interesting business model. I suggest shoplifters come armed with a copy of this story to discuss with Sears store security and ask why they aren’t entitled to something valuable for nothing as well.

Coupled with this news about Wal-Mart and you begin to wonder if there are any intelligent, common sense-oriented adults left in retail management. Two key takeaways from the Wal-Mart story: “Wal-Mart still is suffering a hangover from its overly aggressive effort last year to broaden its base of customers to include more affluent shoppers” AND “Wal-Mart this year has opted to return its marketing and its merchandise to a focus on its roots: low prices on everyday items.” Sam Walton must be spinning in his grave like a gyroscope.

The difference between PR and news.

A LinkedIn group I belong to has had a spirited discussion going this week on “pay for play” PR placements, and whether as a book author has suggested, it is the future model for public relations.  I don’t see it that way, but then a friend independently sent me this link, which amusingly approaches PR from the other direction — from the consumers of news side. Journalism vs. Churnalism. Are editors getting ever lazier and running press releases verbatim? Now, you can test the story you’re reading via this cheeky site. I am convinced we are all being put through a digital blender these days, for better and for worse. And for constant change and status quo challenges. It’s been an interesting first year of agency blogging. Looking forward to many more.

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Flush with success is taking on an unfortunate meaning.

Flush with success is taking on an unfortunate meaning.

Something is seriously out of whack. Why do so many average Americans (those with full-time jobs) seem to be unenthusiastic about their work? When is the last time you heard anyone talking about becoming a millionaire instead of just scraping by? The focus in the current economy seems to be on downsizing and unemployment instead of wild success or even just growth. No one speaks, let alone thinks, of rewards anymore. Who dares to dream about starting their own business these days? Where are all the entrepreneurs?
Incentives? Carrots have become sticks. Visions of sugarplums are gone, replaced by fears of inflation, foreclosures, and punitive taxes. Retirement plans are pushed back. Class warfare is far too commonplace. Even young guys like Facebook founder Marc Zuckerberg who achieve beyond their wildest dreams talk about giving away half their fortunes. More on that in a minute.
It is easy to blame a difficult global economy and a world of low cost competitors. But the answers lie a lot closer to home. America has lost its way. This is still the land of opportunity built on free enterprise and initiative. However, decades and decades of perpetual government growth adding more and more unelected bureaucracies and departments and officials and regulators, all funded by a tax system that is Byzantine and designed to punish and disincentivize the achievers and job creators.
As the Wikileaks scandal(s) and the latest TSA controversy illustrate, the U.S. government is doing a pretty lousy job of protecting itself and its citizens. So, why is anyone still buying the concept that going after the rich, French Revolution style, is a winning strategy for economic recovery. How is giving the government more funds to waste a help to anyone?
Both major political parties and all citizens of this country have their work cut out for them in re-engineering government at all levels in the coming years. Socialists need to take a basic economics class so they understand that it is not desirable for government to take on nanny-state responsibilities for an entire nation of adult-size Depends wearers. A healthy private enterprise sector is vital to American economic vitality and global economic vitality. Capitalists need to wake up to responsibilities far beyond short-term profits and start investing more in American-based operations and communities. That includes examining government largesse toward big business and specific industries through lobbying, healthy subsidies, and tax breaks — the system is currently unfairly stacked against small businesses where so many Americans are employed and so much innovation begins. Government needs to learn to spend less and spend wisely.

If more of us were this rich, we could afford to give away half our fortunes to charities. And that's a good thing.

If more of us were this rich, we could afford to give away half our fortunes to charities. And that's a good thing.

Doubling back to Marc Zuckerberg, he has announced plans to give away half his fortune to charities, part of a campaign started by Warren Buffet, who is appealing to the consciences of the uber-wealthy. That is different from the idea espoused by another high-profile millionaires group, which has come out in support of boosting the tax rates of the very rich. Nothing is stopping these extraordinarily well-off folks from contributing more of their fair share of taxes directly to the US Treasury now. Unless it is the nagging doubt that such a generous act would be akin to flushing those funds down the sewer line.
The rest of us need to start dreaming big again. It would be great to be so successful in business that we can become like Scrooge McDuck, dancing hip-high in currency in our own private vaults, knowing we will still be comfortable and well-provided for after donating half of everything to help others.

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Despite Facebook getting so much face time with The Social Network movie buzz this fall, that other online giant Google managed to get my attention in two big ways last week.
The first was a news story that basically underscored how wildly successful and smart Google is. During an economy when most employers are laying off, holding tight, or freezing pay, Google just announced a 10% across-the-board increase to all employees as a carrot to discourage migration elsewhere and to attract more of industry’s top talent. Jealous? It’s simply capitalism hard at work. Become the best in your category and enjoy the rewards. To stay on top, keep getting better.

Clicking the magnifying glass icon lets you preview the home page.

Clicking the magnifying glass icon lets you preview the home page.

That brings me to that other development, which is one of those ongoing Google innovations — the launch of its “Easy Preview” feature, which allows searchers to browse by calling up home page glimpses without ever leaving the search results page. Clicking on the little magnifying glass icon to the right of the search result brings up an instant screenshot of the home page. The Good, the Bad, and the Ugly. What that means is more and more businesses are going to be forced to focus on professional web design and fresh and compelling content. Sites that look like a dog’s breakfast will be passed over in favor of the visually appealing and inviting. Sites that take a long time to load will drop down the rankings. Sites that are overrun by pop-ups and intersitials will appear as the carnival sideshows they are. As a result of this preview feature, searchers will be able to react more quickly (positively and negatively) to the appearance of your site.

Visually appealing sites will compelling content will attract visitors. The opposite will get skipped.

Visually appealing sites will compelling content will attract visitors. The opposite will get skipped.

Businesses that rely on do-it-yourself designs and overly familiar templates and SEO tricks to boost search rankings are in for a jolt when their site traffic drops because discerning prospects get a sneak peek and elect to go elsewhere before they ever visit the home page. While Easy Preview will change the face of the familiar all-text Google rankings page format forever, the functionality is welcome and long overdue. Google, the 800 pound gorilla of search and so much more, just got prettier.

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Our current news cycle, which closely follows our current economic cycle, hasn’t exactly been uplifting. That is why when the live coverage of the rescue of the long-trapped Chilean miners occurred the other week, people were jubilant. It was a great moment of humanity and teamwork and technology yielding miraculous results. A continent away, it still felt great.
However, reading Daniel Henninger’s excellent commentary on capitalism in the Wall Street Journal made me aware that the incredible nature of those events are a lot closer than most of us realize. Henninger’s economic point, that innovation is what we get from private enterprise, not government regulation, is one we’ve recently made ourselves. His geography lesson is what is inspiring, because two of the companies most responsible for the resecue of the miners are from the Keystone state.

Center Rock made the drill bit that rescued the Chilean miners.

Center Rock made the drill bit that rescued the Chilean miners.

The incredibly tough drill bit that cut through all that hard rock is a product from Berlin, PA’s Center Rock. The rig, and the crews who ran it, were from Schramm of West Chester, PA

Schramm's rig and crews rescued the Chliean miners.

Schramm's rig and crews rescued the Chliean miners.

Much has been written about the smarts, the skills, and the generosity of both companies. And much more should be, because both companies are in-state gemstones in an unglamorous industry that is overshadowed daily by green and digital technology news. Solar, wind, and renewable energy are marvelous goals, but while we are getting there, we need to remember that coal, oil, gas, and nuclear are proven energy technologies that need to continue to sustain us, both in terms of power and in terms of jobs. Here’s hoping that Center Rock and Schramm receive well-deserved boosts to their bottom lines for the roles both companies played in saving the lives of those miners.
In the midst of the Chilean rescue story euphoria, I found myself unexpectedly moved by an even more personal story of technology and perseverance with a Pennsylvania link. Sitting in a doctor’s waiting room, I read a profile about Hugh Herr in the November issue of Discover magazine.

Hugh Herr is an amazing inspiration story of literal reinvention.

Hugh Herr is an amazing inspiration story of literal reinvention.

His story is so personally amazing and inspiring on so many levels that you owe it to yourself to read all about it. It should be required reading for every student in every school in the country. Herr, a PA farm boy and also an avid outdoorsman, lost both legs in a mountain climbing trip that turned into a human survival story. Handed another chance at life, he more than seized it. Formerly a high school student with mediocre grades and no interest in science, Herr mentally, physically, and literally reinvented himself through smarts, passion, and hard work. He went to college and subsequently for advanced degrees at some of the nation’s top science schools in order to teach himself how to engineer truly world-class prosthetic limbs. As if the physical challenges Herr faced weren’t enough, he overcame academic hurdles through ongoing education and a thirst for knowledge. In 2011, his company iWalk will release to the general public the fruit of his labors, the PowerWalkOne, the world’s first robotic ankle-foot prosthesis. Like the products of Center Rock and Schramm, it deserves to be an enormous success. Perhaps it is time to rename the Keystone state, the Diamonds in the Rough State. Be inspired and go out and create your own PA business success story.

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Making lemons from sour lemonade stand story

Making lemons from sour lemonade stand story

Chalk this NY Times story up as a “Things that make you go hmmm?” (Perhaps I’m dating myself, as I vaguely recall that being a song a decade or two ago). Attempting to enforce a license on a 7-year-old selling lemonade is akin to many of the other nuisance ‘laws’ certain municipalities set forth. The ‘Peddler’s License’ (when is the last time you saw a peddler?), for example. Now the media frenzy comes, after the little girl was forced off the complex for pushing her wares (sent away crying, no less), she already has the morning shows lining up to interview her. Will the full-length feature film follow? I just wonder where people’s common sense lies. It’s one thing to have rules and stricly enforce them for the good of the community. It’s quite another to know when to draw the line and ask — Is this endangering the lives of the members of the community? Perhaps you’ll think twice before plunking down 50 cents for a cup of lemonade, even though the young entrepreneur does’t have a license, those who are afraid to try usually keep asking “What if?” I’m willing to risk it.

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Image: Liz Nofsinger/FreeDigitalPhotos.net

Image: Liz Nofsinger/FreeDigitalPhotos.net

I admit it. I am a capitalist. If any of you sixties holdouts want to add the pig noun, be my guest. Not sure why this unfortunate, all-purpose, dehumanizing slur got applied to police officers and businesspersons alike, but ironically it often came out of the mouths of radicals preaching peace, love, and understanding in their next breath.
As we mark July 4th, 2010, the US economy is stagnant and unemployment is rampant. There are predictions of a slip into another recession. The political urge to do “corrective” things in the coming months will be great. Unfortunately, we have had plenty of corrections and big programs and new edicts by central planners in DC over the past year and they have only made things worse.
Here’s a modest suggestion: get back to incentivizing American business with carrots instead of whacking it with large sticks (and possibly soon, new taxes and more regulations). In particular, get back to incentivizing small business, where most innovation and jobs growth occurs. Then, get the hell out of the way and let the free market work its magic. Supply. Demand. Profits. And sometimes losses.
Too Big to Fail is a popular phrase and justification for bailing out failing companies. It could be applied equally to government. However, a more apt expression might be Too Big to Function. Whenever bureaucracies result from corpulent corporations and ill-defined, ever-expanding government entities, you wind up with something that looks, acts, and smells like Jabba the Hutt.

Too Big to Function: Jabba the Hutt

Too Big to Function: Jabba the Hutt

Big doesn’t have to mean bad. Last time I checked, Apple was large and successful. But they are supplying products that are in demand. Value is a critical part of the equation for success in business.
The single best thing our government can do right now is to stop treating business like public enemy number one. Or like colonists to be taxed and taxed again. Freedom is a beautiful thing. When businesspeople are freed from excessive government compliance, when investment capital is freed up, and when markets are free, then a lot more companies are free to hire and put people back to work. It’s a pretty simple idea and not that revolutionary.

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