Bill's Focus

It’s not what you think

Happy Mothers’ Day all you moms, grand moms and great grand moms. We would be nowhere without you. Literally. And may the appreciation last longer than a day.

Today while reading “Letters from an American” by Heather Cox Richardson, I learned that Mothers’ Day actually had a beginning that had little to do with an appreciation of motherhood the way we think of it today. The first declaration was by Julia Ward Howe an anti-war activist who worked to establish a “Mothers’ Peace Day”.

Read this piece in “Plough” for the history I was never taught. And after I read Heather’s letter today, I needed to make a comment on her substack page. I think we need to do more than appreciate women once a year. Here is my comment:

”If there was ever a time when “men” have demonstrated their inadequacy as leaders, it is now. If there was ever a time when “men” made clear their ignorance and moral hypocrisy, it is now. If there was ever a time when “men” should throw in the towel and let women take charge (no, not you, Amy) it is certainly now.

For eons we “men” have embarrassed ourselves with wars and oppression of every imaginable type. It has not gone well and it is getting worse. Patriarchs have dominated and failed for much too long. It is time for capitulation. It is time for Mothers of many colors to rule.
signed,
Old White Guy”

https://www.plough.com/en/topics/culture/holidays/mothers-day/the-original-mother-s-day-proclamation

https://www.womenshistory.org/education-resources/biographies/julia-ward-howe

Dedicated to the Supremes

My fellow Substacker “TCinLA” just sent this to his clan. I can’t resist sending it to mine. Thanks TC for this classic Carlin take on the current controversy. The only thing that has changed in the debate is that George isn’t here to explain it all in person.

BTW, Check out TCs letters. They are found at “That’s Another Fine Mess”

extraordinary articulation

Please watch this video. If only Mallory McMorrow were a US Senator! Or maybe POTUS? This powerful video should be shared widely.

I found the video on Robert Hubbell’s “Today’s Edition. Which I highly recommend for daily reading – facts and analysis with a realistic and optimistic tone. I have pasted below Robert’s “Concluding Thoughts”.

          “A couple dozen readers sent me a link to a speech by Michigan State Senator Mallory McMorrow. A Republican in the Michigan Senate sent a fundraising letter accusing McMorrow of being a pedophile, alleging she was “grooming” kindergartners for sex. Why did McMorrow’s opponent make that accusation? Because McMorrow walked out of the Senate during a “prayer” led by the Republican legislator that attacked LGBTQ students.

          McMorrow took to the Senate floor and delivered a fiery rebuttal that has gone viral. I urge you to watch the entire speech (ten minutes) if you can. See YouTube, Sen. Mallory McMorrow shows everyone how to deal with Republican hate in powerful speech, McMorrow’s key point is this:

          I know that hate can win only if people like me stand by and let it happen.  

          Some Republicans do hateful things because they believe there will be no consequences for the actions. McMorrow’s opponent no doubt regrets that she aimed her hate at Mallory McMorrow—a courageous woman who refused to “stand by and let it happen.” If each of us had a little more of Mallory McMorrow’s passion and fighting spirit, there would be less hateful speech and the world would be a better, safer place.”

Solutions and more

Breaking News – New York Times Tuesday, April 12, 2022 8:42 AM EST 
“Consumer prices increased 8.5% in the year through March, pushed to the fastest inflation rate since 1981 by gas costs and higher rents.  

But gas is not the entire story. Stripping out volatile fuel and food, so-called core prices climbed 6.5 percent in the year through March, up from 6.4 percent in the year through February, also a brisk pace.” 
 

In part one of Inflation Nation, we discussed the huge increase in the price of lumber. This added tens of thousands to the cost of new homes and made home renovation challenging. What to do? 
 
Build homes with other materials! Build more multi-family buildings! Allow more density of housing using shared walls. Many towns have antiquated zoning restrictions that ask that new homes be built on one or two acres.

While this reflects the “white picket fence” American Dream, it is unsustainable in country where housing is in such short supply. And the lack of housing affordability has excluded too many from ownership.
 
Certainly, zoning could be adjusted in portions of towns to allow for denser living. Isn’t it embarrassing that the people that serve us in many of our towns can’t live in them? Teachers, police, firefighters, workers at city hall and highway and parks, nurses – even some young doctors who are saddled with school debt, liability insurance and… the cost of child care… can’t afford to live where they work. This is an arrangement that adds more carbon to the world as they must drive longer distances for their commute. It’s just nuts. It is feudal. It is our classist society getting more bifurcated. Think “upstairs, downstairs”.  
 

There are homes now being built by 3d printers – cheaper, faster and more efficiently (less errors!). Read how Habitat for Humanity is doing it now! Using specially formulated cement and just a little wood, a 3d printed house can be completed in the fraction of the time of a stick-built home. It is an industry in its infancy. To grow it up, we need to address zoning and building codes.  
 
This new approach to housing would provide homes for the many who need it at a lower cost and let millions of trees stand that would continue to capture carbon. Fight inflation and the climate crisis simultaneously.  Win, win! 
 
I am not sure we can ever produce Teddy Bears at an affordable price in America. But we can certainly produce more computer chips here. We must. There is no other choice. Most of our devices – computers, phones and vehicles are powered by a tiny item that is being produced primarily in Taiwan. This article explains why we can’t buy the vehicle of our choice without a very long wait time. Used car prices are 35% higher than a year ago because folks can’t buy a new car – no trade ins.

 
But Taiwan has an uncertain future. Possible war with mainland China. Regardless of how it will happen, Beijing has established that Taiwan will be absorbed. And our economy will be held hostage by our economic adversary/trading partner. If you think you see inflation now, consider what it will mean when China controls the cost of almost every tech-oriented product we use.  
 

There is some good news about chips. TSMC of Taiwan controls 54% of the global chip market. And they are building a new plant in Phoenix, Arizona. It should be delivering advanced chips by a year from now. While this is encouraging, it is not enough.  
 
Dwight Eisenhower launched the national highway program. John Kennedy announced a space program. Joseph Biden should announce a government sponsored “chip independence plan”. Computer chips which are at the center of our consumer technology were developed in the US.  
 

The “chip” was born in the USA. Here’s a great recap of the beginning. It happened in “Silicon Valley”. Yet we let other nations like Taiwan, South Korea and China dominate the production of the most essential item in our entire “supply chain”. And now we wake up to enormous inflation. Why? 
 
Because we let companies drive our lives. Because we let oligarchs who control industries determine where items like chips are manufactured – despite the vulnerability it creates for us on a consumer and national security level. We let unregulated capitalism – the drive for lower costs and hence profits – outweigh the public good. Profits over people.
 
Want to control the availability and cost of phones and vehicles? Bring the manufacturing of chips home now. Set a goal of chip independence of five years. TSMC can bring a plant from first shovel to production in less than two years. Make it so. Create high paying jobs. Control pricing. Win, win! 
 

But lumber and computer chips are just two examples of inflation that make the news. Another is fossil fuels. Americans are whining about the price of gasoline. Major airlines are cancelling flights due to the enormous price of jet fuel. For those who commute longer distances and those that use a vehicle for work, it’s painful at the pump. The answer that is coming down the pike is, of course, electric vehicles.

There are some terrific electric cars and now America’s favorite pick-up truck, the Ford F-150 is available in an electric version. Read the review. But sadly, these vehicles are still priced well out of the category of “affordable” for most of us. And charging stations are still not a common roadside attraction.  
 

So, isn’t this the most opportune time to launch a “space program scale” effort to embrace renewable energy? Wind and solar are now THE cheaper ways to generate electricity. Cheaper than fossil fuels! Geo-thermal energy is still under development – but it holds tremendous promise. And it employs some of the same techniques and workers that currently search for and pump oil.  
 
President Biden’s BBB plan embraced these issues. There was a provision to help build vehicle charging stations all across the country. And a boat load of tax incentives to lead us to a greener energy future. The House passed it. The Senate failed to pass it. You know why.  
 
But here is the thing. All of the above are just the tip of the inflation iceberg. The part you see on every commute. The big sign showing the price of gas. The empty car lots. The less visible and larger aspects of inflation have been with us a lot longer than these fleeting, recent headline worthy items.  
 
We’ll look at what is really wreaking havoc on Americans when it comes to prices in Inflation Nation part three.  

This man can’t fix the root causes of inflation. But he can certainly create a recession with his much too late sledge hammer approach to “taming the economy”.

Notes:
 
 https://singularityhub.com/2022/01/24/habitat-for-humanity-is-using-3d-printing-to-build-affordable-houses/

https://www.visualcapitalist.com/top-10-semiconductor-companies-by-market-share/
 
https://www.consumerreports.org/hybrids-evs/2022-ford-f-150-lightning-review-a4084273266/

https://www.techtimes.com/articles/266748/20211016/tsmc-building-new-chipmaking-plant-phoenix-arizona-help-ongoing-chip.htm

https://www.novoco.com/notes-from-novogradac/house-passed-17-trillion-build-back-better-reconciliation-legislation-includes-325-billion-green 

What if the Central Bank has it all wrong?

On March 16th, the Federal Reserve Bank announced an interest rate hike of ¼ percent and recently indicated that it may lift rates even more aggressively – as many as six more times this year. And the chair, Jerome Powell added that they “will follow the data and the forecasts and do whatever is necessary to bring inflation under control”.  
 
Finally and way overdue! But, Mr. Powell, this is a terrible time to do it.  
 
Almost zero interest rates have punished savers, pushing them into a volatile stock market. Virtually free loans have enriched the banking oligarchs. Cheap money has kept “zombie” companies afloat. And super low mortgage rates encouraged a surge in home buying by a generation that had been living in their parent’s basements for too long. Ultra-low interest rates have created a stock market bubble and a housing bubble.

Mr. Powell and his team have created a nightmare we will have trouble awakening from. They are following a dangerously outdated playbook that ignores today’s realities. That playbook suggests that the Fed can actually achieve control over inflation with its interest rate yo-yo. It is true that there is a relationship between rates and economic growth – and ultimately inflation. But what we have now is a runaway horse and it can’t be controlled with a length of twine.  
 
I agree with Powell’s premise that inflation is caused by demand outstripping supply.  But the current imbalance was not caused by giveaway levels of interest rates. It was caused by explosive demand. It is the result of a broad-based rearrangement of demand due to a worldwide pandemic lock down. Billions that were previously spent on dining out, air travel, cruises and all manner of vacations – hotel rooms – the entire tourism industry saw it’s cash flow rerouted to “stay at home” investments and toys. Consumers wreaked havoc on businesses almost overnight. It began in March of 2020.

Our infrastructure can’t process the reassigned demand. The pandemic and the sporadic emergence from it has revealed systemic flaws in our business systems that are at the root of this current run up of inflation. If the Fed is the fire department they are aiming the hoses at the wrong building.

The first tremors of dramatic inflation were observed in the lumber markets. The price of wood went through the roof. Why? Because Americans who were locked down during the pandemic, couldn’t take vacations and instead used that money on home improvement. New home construction went on a tear to meet pent up demand – unleashed by super cheap mortgages. There wasn’t enough lumber. Key elements like front doors and garage doors were delayed. The Fed called it a temporary, isolated event. But while prices did readjust somewhat over time, the lumber story was just the beginning.  

Many of us may remember the warnings prior to Christmas that those special toys should be secured early as supplies were limited. The phrase “supply chain” was beginning to be floated. Then we realized how delicate our “just in time” inventory practices were. We expected our two-day Amazon purchases to be our standard of life. You mean little Markie’s teddy bear may not be available exactly when I want it? But I’ll pay extra! OK, here is one we can deliver in a month for 25% more! That’s inflation and has nothing to do with interest rates.  

It has everything to do with Chinese teddy bear factories closing due to the government’s Covid policies of zero tolerance. It has everything to do with ports being unable to process the heightened demand for “stay at home” products. And even if the ports could ramp up their speed of container processing, there were not enough truckers to pick up the containers and deliver them to the distribution centers– another story to be addressed later.  

We recently purchased a new vehicle. I called four regional dealerships to arrange a test drive. None of them had the popular car we sought. The wait would be “up to 13 weeks” if I pre-ordered – without even sitting in it. And, remember when one could negotiate price? Forget about it. All of the dealers were up front in explaining that they were adding $3000 to the MSRP.

But wait. It gets stranger still. I logged onto an internet based auto “gateway” that offered to purchase vehicles. I filled in the VIN number, answered a few questions about condition. Within 60 seconds, they sent me an FIRM offer to purchase. They offered us $2500 more than we paid for the same car NEW four years ago. All of this enormous inflation in vehicles was caused by the pandemic shutdown of the computer chips factories in China.
 
It wasn’t interest rates that added tens of thousands of dollars to home construction and renovation. It wasn’t interest rates that made Teddy a high-priced Christmas gift. And it wasn’t interest rates that made cars – new and used – much more expensive.
 

Many of us of a certain age remember using a savings account. Some may remember bringing a “passbook” to the bank and depositing a little money and having that recorded in our book. We had been taught about “compound interest” and we knew that if we were consistent about deposits, our funds would grow and we could buy or do that big thing. A new car. A college education. A trip. A retirement.  
 
And many will remember when that savings account paid us 3, 4 or 5 percent. Not a lot. But respectable. And with discipline and patience that compounding of interest would pay off. Today, a savings account interest is essentially negligible.

So, where to put those weekly or monthly savings? We have to plan for our futures. For Americans there are two choices if yield is the goal. A “balanced portfolio” of 60% equities and 40% fixed income vehicles is the classic arrangement. Stocks and bonds seem to be the only logical place to park the money. And look at that stock market! Whoo Hoo! 
 
On October 19, 1987, a banking fiasco caused the stock market to crumble. In one day, referred to as “Black Monday”, the Dow Jones Industrial Average dropped by 22.6%. It took two years to recover.  
 
Starting in the year 2000, the “dot com bubble” was pierced with reality causing the DJIA to drop 2 years in a row by about 6 or 7 percent each year. In 2002 it dropped 16.7 percent. It took five years to return to 2000 levels.  
 
In 2008 the housing loan financial crisis sent the DJIA tumbling by 33.8 percent. It would take three years to recover those levels.  
 

On March 16, 2020, the DJIA recorded a 2997-point drop – nearly 13%.   

 It is absolutely true that over the long haul investing in the stock market can be fruitful. Over the decades, one could expect annual averages of about 10%. But how long is your haul? Will you need the money when your portfolio is peaking or in the pits? A young family that was about to buy that first home in 2002 – could they? The couple that hoped to retire…maybe needed to retire for health reasons…in 2008, could they?  

 The Federal Reserve has held interest rates too low for too many years now. Savings accounts have paid a pittance. Too many people with low “risk capacity” have shifted their futures into a volatile stock market.  
 Frugal, disciplined, and conservative (original meaning) savers have been punished by the Federal Reserve Bank.
 

Aside from the horrors of Putin’s war, the other big nightly news report is that inflation is hitting levels not seen in 40 years. The conventional wisdom is that by slowing the economy through higher interest rates, inflation will be curbed and the value of your dollar will be preserved.

But can a central bank really control a complex multi trillion-dollar economy with little tweaks in interest rates? What if the Fed has it all wrong?  
 
What if raising interest rates this year does little to control inflation because the causes are not an “overheated economy” but a shortage of materials and labor? The average citizen will get punished with a dramatic increase in rates. The rich will be fine. But higher interest charges for credit cards, car loans and adjustable rate mortgages (now trending again) will make life harder for most Americans.

Super low interest rates have been a significant factor in the biggest run-up in housing prices in our lifetimes. For those who were able to secure that fixed rate mortgage at 3%, kudos! I hope you love that new home. Because as rates rise, the next house may be unaffordable in terms of price and borrowing costs. The latest Zillow forecast of home prices in our town predicts a 15% gain – in one year. That’s after a 16% gain over the last year. That works out to a home costing $500,000 in 2021 (if you could find one) costing $667,000 next year. Will raising interest rates help the housing shortage or the ability of a teacher or a cop to buy a home?
 
What’s the solution to this situation? The Fed finally has the excuse it needs to raise rates. Inflation is becoming a serious issue and the public is freaking out at the gas pump. While I think the timing is silly, the Fed should adjust its plan to raise rates more slowly – incrementally and gently – until they reach that rate that would support savings. It will be painful for borrowers but FDIC insured savings accounts should once again reap at least 3% if not 4 or 5%. Maybe less borrowing and more secure saving would be a good idea? I suggest that the process should take years – not a few months. To move too quickly back to “normal” interest rates will be like using a sledge hammer on a thumb tack.

And then what? Leave rates essentially alone, making only minor adjustments. The Federal Reserve has other functions it needs to address like setting and supervising standards for banks in terms of capital reserves, health checking banks to protect us from financial mayhem as happened in 2008. And perhaps, challenging the fact that there are now just a few major banking institutions.

Why isn’t the central bank exploring inequities in lending practices? Why isn’t the central bank developing more programs of lending to the under served? Now that the Post Office is about to be allowed into the banking business, why not team up and help the little people who don’t have access to banking including small loans? Why not get serious about really helping small businesses that we know are the largest job creators? Why not be the Central Bank for all Americans – not just our oligarchs?
 
But how to address inflation? Start by rooting out the real causes! Accept the fact that inflation may be part of a financial reset that was sparked by the pandemic and exacerbated by a decades long drive to operate on a “just in time” inventory basis.

And get ready. Should we be shocked when Putin’s war on Ukraine prevents wheat fields from being planted? Ukraine’s farmers are now soldiers. Ukraine and Russia produce a huge percentage of the wheat that Europe and Africa consume. Such a shortage will lead to rising food prices across the world (and famine). Raising interest rates doesn’t help us grow more wheat.  
 
In summary, I think the Fed is misguided. And I think we consider the Fed to be more powerful in terms of efficiently controlling the economy than it really is. Overusing interest rates to control economic activity can be overkill and potentially counterproductive – even devastating – the cause of the next recession. Those of us who lived through the 1970’s remember the pain.

I will have some ideas on how to address our Inflation Nation in part two.  

In the meantime, someone much smarter than I has written extensively about this and much more. Robert Reich now publishes a newsletter on substack.

Notes:

Robert Reich

Warning: The Fed is aiming a battering ram at the American economy

Listen now (7 min) | As Putin’s war shakes up the world economy, the Fed last week raised interest rates by a quarter point and penciled in six more increases by the end of the year. Fed Chair Jerome Powell says he’s ready to do whatever it takes to bring inflation down, including following the example of his predecessor Paul Volcker, who increased interest rates to 20 perc…

Read more

4 years ago · 221 likes · 162 comments · Robert Reich

https://www.cbsnews.com/news/mortgage-rates-4-percent-adjustable-rate-mortgages/

Thoughts in advance of President Biden’s speech

This is Robert Hubbell who writes a Monday through Friday Newsletter called Today’s Edition. He brings us observations of key events – often through a legal lens. He asks us to look at the impact of these events from the perspective of the average citizen. He calls us to action. I now follow Jessica Craven as result. “Chop Wood, Carry Water” is another substack letter that gives us suggestions for acting on our political concerns.

You can subscribe to Robert’s letter for free. You will not be sorry. If after time, you wish to help him out and/or you wish to make comments, consider a subscription. And that’s what I do. I comment. Please consider reading today’s letter from Robert. The comment I made today (below) will make more sense. Read “A Daughter of Ukraine” You may be wiping away tears after reading Jill’s family story (Jill is Robert’s wife).

My comment:
The first part of Today’s Edition is an inspiration for those who worry about the press and their pathetic popularity polls. I have no idea what the presidential race will look like in 2024. Nobody does. My wild guess is that it will be a contest between two names we would never have predicted. After all, Joe Biden tried over and over again to get the job – his odds were tiny until SC. And would any of us have really believed that a con man hated by most of the residents of his city of choice would actually rise to win? Most Americans barely knew who James Garfield was, but he became president – without even asking for the job. Read this excellent book by Candice Millard.

So I will follow Robert’s advice. The polls right now are meaningless and can change in a heartbeat. Ignore them and instead, I recommend sending letters of support to our White House. Biden has indeed been “masterful”. I could be described as a rabid radical progressive social democrat, but I voted for him. For him to be a careful steward who shares the stage, who in a self deprecating way, steers the ship of state towards peace and justice. 

Our disappointments need to find their proper targets. Biden has brought diversity to his administration in way never seen before. He has guided us through a pandemic with daily concern and by embracing science. He has sent money directly into the hands of those that have suffered – not the banks as in the Great Recession. He has passed an infrastructure bill that is epic in scale. 

The failure of our government to pass the BBB act which would be a social reset – help for most citizens – and the failure to pass Voting Rights Bills – lies at the feet of the Republican obstructionists and two DINO Senators.

And a Supreme Court that is in the process of dismantling the Federal government’s ability to protect us – that lies at the feet of the same – MCConnell is the Darth Vader of this film. 

Every time there is a popularity poll published, there should be a parallel poll that shows that the vast majority of Americans want what is in the BBB act and want Voting Rights legislation, want Women’s Reproductive Freedom. Blaming Biden for not delivering such when there are American Taliban forces embedded in our legislatures that block such is just stupid and ridiculous. 

I will be applauding President Joe Biden tonight. No matter how many slips of the tongue, no matter how many times he stammers and despite the fact that I wish he were 20 or 30 years younger. And despite the fact that I voted for Warren in the primary and despite the fact that I think he made a couple of really big mistakes in his long political career (Hill/Thomas and the crime bill) – I will be standing and applauding him. He may be one of the finest humans to have ever occupied the White House. He makes me proud to be an American. 

And now, I will write to him again and lend my support. I hope some of you will do the same. Often.  

https://www.whitehouse.gov/contact/ 

Here is just a piece of today’s newsletter from Robert Hubbell:

”Whatever Biden says in his State of the Union address, he will be criticized. But few commentators will note that the successes of Biden’s first year were achieved despite challenges that rival those faced by Lincoln and FDR. A reader (Stephen B.) sent me the following note, which is worth keeping in mind as Biden rightly lists his accomplishments on Tuesday and concludes that “the state of the union is sound.”

No one has clearly articulated the obstacles and challenges  Biden has had to deal with in his first year in office. I cannot remember in my lifetime a President who in his first term faced as many challenges such as:

• An attack on the legitimacy of his election victory.

• An insurrection and attempted coup before his Inauguration.

• A massive pandemic and the previous administration’s inadequate planning and a lack of an infrastructure to support and control the pandemic.

• A consistent right-wing campaign of misinformation on social media platforms against vaccines and masks.

• The withdrawal from Afghanistan and intense criticism of the method of the evacuation and the results.

• Negative media coverage and reporting. 

• Severe supply chain issues due to the pandemic, availability of resources and poor supply chain management and planning.

• High inflation due to pent up demand and consumer over-indulgence on products rather than services, and corporate greed.

• Rising energy prices.

• Uniform Republican opposition, with an assist from Joe Manchin and Kyrsten Sinema.

• Fierce partisan disputes over voting rights, the filibuster, and the Supreme Court.

• Ukraine.

          That is quite a list. Few presidents would still be standing in the face of such headwinds. But as Biden finishes his first year, he has successfully resurrected NATO and re-established trust in U.S. leadership during the biggest crisis since WWII. That is saying something—despite whatever the pundits say tomorrow.”

A standing ovation is surely in order.

Give them money!

This is a tale of two Bernies. Both inspired me. Both had brilliant ideas. Both have been very successful. And both disappointed me. I am NOT referring to Bernie Madoff who could be described as the King of Disappointers.

The problem with Democrats and their messaging is that they talk so much about policies and gripe so much about justice that people’s eyes glaze over. For those with enough money, it is interesting to read about the growth of GDP and a shrinking unemployment number. It’s good stuff! And the wonkier ones…we love to reflect on the impact of interest rates and how the tax code is unjust. Blah, blah and blah.

If you are a family of four or five struggling to pay for childcare as you work at an underpaid job where the health insurance is substandard – you exist in a never ending danger zone of financial terror. Chances are you are yelling a lot at the kids and/or each other. There could be more drinking leading to more yelling. The stress of almost losing everything is like a big, wet, heavy blanket suffocating you from the moment you awake until you finally pass out from emotional exhaustion. Hopelessness is devastating. And there is little reason to think about national statistics. Yup, the country is doing great. The stock market is booming. And we are about to lose our home? Oh, and who should I vote for? Why bother?

On June 29, 1978 the first Home Depot opened in Marrietta, Georgia. The founders were financially assisted by a venture capital guy named Ken Langone. But the idea of a big box warehouse home improvement store came from two veteran retailers named Arthur Blank and Bernie Marcus. I don’t know which one came up with the idea. But let’s go with Bernie for now. Arthur tended to hang back a bit. Bernie was the front of the house personality. He said to us that if we worked hard, we could own a part of the company. He said we could become financially secure if we did three things:
1. Take care of the customer – no matter what it takes.
2. Train and cultivate every employee – the only limit to our growth will be people.
3. Participate in the profit sharing programs – BE an owner!

After working as a retail merchant for many years I joined HD in the 1990’s. My previous company had been my school. I had learned how to run a significant business profitably. But now I was entering retail nirvana. There were two wonderful challenges. The first was that the place had become so successful that it was difficult to keep the shelves full. We could hardly re-order fast enough. Sales were growing exponentially. The second was that we were on a never ending search for good people. And once we hired them, it was Bernie’s directive that we were to spend at least 25% of our work day training and grooming employees. We needed to get hundreds of “orange aprons” ready to open new stores – to stock those shelves and to manage big box stores that had annual sales volumes of $50 to $100 million – with P&Ls that typically cleared a 10% operating profit. We were building new stores with our own money. So you ask… what’s the point of sharing all this? It was Bernie’s “secret sauce”.

Bernie gave us money. In the form of HD stock. If you were an hourly employee, you could participate in stock purchase plan by buying HD stock at a 15% discount. Keep in mind the value of that stock was growing faster than greased lightning. As that stock price exploded, it was splitting in order to keep the price attractive to new investors. If you were pushing carriages and loading cars for customers you were watching yourself get rich. If you were a mixing paint or working the registers, you were on your way to financial success. And if you wanted more responsibility – to actually run stores, all you had to do was work really hard and ask for a promotion.

But that was just the beginning. If one became an “executive” – for instance, someone who was an assistant manager, you were awarded stock as a bonus – the amount determined by performance. I had front end managers who were approaching millionaire status after being with HD for 10 years. Can you spell m-o-t-i-v-a-t-i-o-n?!

Robert Reich recently wrote about a similar scenario. The piece is called “Share the Profits”. It’s a story about another retailer who did just that long before Home Depot was imagined.

Currently, “profit sharing” is offered to high level executives. If income inequality is to be addressed, then a company’s profits should be enjoyed by more than the affluent who hold stock and the executives who receive obscene levels of compensation. It must be enjoyed by the employees who actually make the company what it is.

A smart executive knows that there are always three stakeholders in a company. The customer, the shareholders and the employees who produce. Reward the latter and see employee turnover shrink. See productivity rise. See employees who can afford to spend more – a virtuous economic cycle. And that is “How We Win”.

The other Bernie is Senator Sanders. For as long as he has been in politics, he has spoken of income inequality. I often wonder what would have happened if he had been our nominee in 2016. Would he have continued to pound the table for financial fairness, for a living wage? I am sure he would have made whatever effort he could. The man is relentless.

So the point of this is that We Win by giving people money. Not for nothing. But for working hard. Create powerful tax incentives that almost require major companies to offer profit sharing. The benefits for the companies are huge. We have all read about the “big quit”. People are trading up to jobs with better pay, benefits and more work location flexibility. The largest expense in almost all companies is payroll. And a huge factor in that expense is training new hires. Lowered employee turnover means more profits. Sharing them is just part of another virtuous cycle.

Finally, the disappointments. I will digress from the point of this letter. And return with concluding thoughts.

The first disappointment: Home Depot profit sharing had given my wife and I a nice nest egg. We blended that with her real estate holdings and launched a new business with the proceeds. Just as I was departing, Bernie and Arthur were themselves retiring. They hired a GE executive to be CEO. He had an international book of experience and growing beyond the US was a HD strategic goal. Bob Nardelli knew how to build jet engines. But he did not value HD culture and he gutted it, replacing full timers who were the core of the staff you dealt with on the sales floor with underpaid, untrained part timers. It was a slash and burn. Bernie…you blew it. And then you blew it again by donating millions to TFG. (I just won’t say it’s name – it gives me agita)

Disappointment number two: Bernie Sanders was slow to support Hillary once he conceded the nomination to her. His subsequent campaigning was lackluster. His followers fell away. Many didn’t vote in the general election. He must share some responsibility for the debacle that followed.

There were those who voted for Bernie in the primary but crossed over to vote for TFG. Why cross party lines? Because the average voter is really dissatisfied – angry at the status quo. Hillary was the definition of status quo. They were voting for change. But Bernie should have come out swinging for whoever the Democratic nominee was in 2016.

Conclusion: James Carville has famously been quoted with “It’s the economy, stupid!” I believe he meant our personal economies. Americans are living in a time of unprecedented prosperity – for a few people. Income inequality is the worst in our history. When that sort of thing happens, people want to “throw the bums out” no matter how much they may be voting against their better interests.

From the Washington Center for Equitable Growth:

“Wealth concentration has risen even faster. The wealthiest 10 percent of households have long controlled more than 50 percent of all wealth, but that proportion has grown steadily over the past two decades, according to new research from economists at the Federal Reserve. Just 1 in 100 Americans now own 31 percent of all wealth in the country, and the top 10 percent owns 70 percent of all wealth. Meanwhile, one half of Americans with the lowest wealth have paltry assets: just 1.2 percent of the total.”

You want people to vote for you? Give them the money they deserve. A living wage and a share of the profits. Both Bernies were right.

https://equitablegrowth.org/eight-graphs-that-tell-the-story-of-u-s-economic-inequality/

Robert Reich

Share the profits!

Listen now (6 min) | In light of the news this week that the economy has been growing at a record rate (and corporate profits are also hitting record highs, the stock market notwithstanding), several of you have asked me specifically what can be done to spread the benefits of economic growth. I have a few ideas, which I’ll share with you in coming weeks…

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4 years ago · 11 likes · 9 comments · Robert Reich

It’s not with good stats

Everyone I know wants TFG (The Former Guy) in prison so much that they can taste it. “There must be justice!” and “How can we let him get away with an attempted coup?!” or “He is a crook. When will we see him in jail?” It’s normal. It’s the human condition to want to hold someone accountable for obvious crimes – especially when that someone is so vile as to be almost subhuman. We want more than justice. We want punishment. We want vengeance as vindication. And we have waited too long!

But I don’t think that seeing TFG in an orange jump suit will solve any problems. There is this to consider. Watching TFG do a perp walk would probably embolden his supporters. The martyrdom would be epic. A price worth paying? Probably.

TFG should be held accountable. He should face whatever charges can be proven “beyond a reasonable doubt”. The January 6th Committee is doing it’s job well. Georgia has impaneled a grand jury to consider “that phone call”. New York is lumbering along on cases of fraud. And maybe the Justice Department will actually seek justice?

But my passion for seeing this monster behind bars has been tempered. Sometimes it’s wise to reign in our emotions and ask ourselves where do we really want to go. What do we want to change?

I wrote those first two paragraphs weeks ago, and stopped. I wasn’t sure what should come next. Today, it came to me after reading Robert Reich’s piece on substack today. Democrats and Independents are indeed beating on the wrong door in terms of politics and to some degree, policy.

Heather Cox Richardson’s piece today highlights some of accomplishments of a first year for President Biden. The key stat is 5.7% growth – the largest since 1984. That is a success. And for those of us who read about such things, it’s a winner of a number. But for most Americans…it’s absolutely meaningless.

Meaningless for the Starbucks worker who makes $28,000 per year working full time. Meaningless for her partner who had to stay home every other week to care for the kids due to Covid school policies. Meaningless for the Amazon or Walmart employee who works at a grueling job but is paid so little that he qualifies for food stamps (SNAP). Meaningless for the restaurant worker who has to choose between working in a job that exposes her to a public that may or may not be vaccinated – or not going to work to protect her un-vaccinated immune compromised 3 year old from a possibly fatal illness.

Democrats are on the right path in so many ways. Just read the list of executive orders that President Biden has signed – starting on the day he was sworn in. The list of his achievements is so strong, Biden’s polling should be through the roof.

1. Signed the American Rescue Plan
– assisting millions of Americans faced with Covid challenges

2. Rejoined the Paris Climate Accord – taking the Crisis seriously

3. Rebuilt America’s international alliances – “rejoined” NATO standing against
Russian aggression

4. Promotes human rights and democracy across the Earth

5. Put into place a Cabinet of experts (not hacks) that is diverse

6. Nominated many Federal judges in his first year who are diverse

7. Will nominate to the Supreme Court a Black Woman
– (there have been 115 Supreme Court Justices – 108 have been White Males. His
three top picks are Black, Female and as at least as qualified as that 108)

8. Signed an “Infrastructure Bill” that finally addresses concerns with water,
highways, bridges and broadband – a huge job creator

9. Ended a foolish, brutal 20 year war in Afghanistan

10. Continues to push for Voting Rights legislation

And yet Biden polls low. I’ll tell you why. Because as righteous and fair and logical as these accomplishments are, that Starbucks worker still sees no hope for making enough money to even imagine the “American Dream”. The parent who has to miss work because of Covid still sees no end to the pandemic. The restaurant worker still feels unsafe and for that matter, most of us are still frightened to enter a favorite eatery.

There is a powerful path for Democratic politicians. I will lay that out in the next letter: How We Win – part two. Hint: it has nothing to do with “finding a new center” in politics. There is no center – as much as I would like to find it, it has vanished.
Hint #2: the CEO of Starbucks makes $14,000,000 per year.

Robert Reich

Psst: Want to know why Americans are gloomy about the strong economy?

Listen now (6 min) | How can it be that the U.S. economy grew at its fastest pace since 1984 last year (according to yesterday’s report from the Commerce Department) but most Americans remain gloomy about the economy, and blame Biden and the Democrats? The New York Times…

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4 years ago · 25 likes · 20 comments · Robert Reich

https://www.federalregister.gov/presidential-documents/executive-orders/joe-biden/2021

https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/06/fact-sheet-the-bipartisan-infrastructure-deal/

A Canine Christmas Story

Christmas Day nine years ago. We had planned a nice family gathering in our Maine B&B. The Inn was closed for the season. Guest rooms for everyone. A large tenderloin of beef awaited roasting.

Our daughter in law called to say that she would love to join us. But she had been fostering two dogs for a rescue organization. I always wondered how folks could do that. I have a tendency to fall in love with almost any dog I encounter. It would be so hard to get emotionally attached and then just…say good bye. On the other hand, it is a wonderful thing to do – caring for a pup that has probably been traumatized on a truck ride of a thousand miles or so. In this case, Tennessee to Massachusetts. She asked if she could bring the dogs along. Of course, we said “Please do!”

One of the features of the B&B was the “Great Room”. It was a typical December night. A few flakes of snow on the skylights. We sat surrounding the wood stove. Lot’s of conversations about past holidays. Warmed inside and out. A classic Christmas scene. And then an icy cold blast of air…

The front door had opened. They were here! A little black puppy scampered in – the frantic click of toenails on the wood floor. “Sammy” was a very young black “boxer mix”. Super friendly and confident. He enjoyed everyone. We were all charmed and highly entertained. Some family would gobble him up soon.

We were thrilled to get a “doggie fix”. Sammy delivered it in spades.

But there was another dog still in the car. Apparently, a very frightened pup. Our daughter in law brought in a “leggy” black puppy that was quivering with fear. Sammy tried to play with her. But “Gigi” was not interested. She just stood there and shook. Quaking, actually.

Gigi had not eaten in 3 days. A nervous girl, for sure. As I sat across from the wood stove in a big upholstered chair, someone placed this shaking puppy in my lap. I tried to console her, gently petting her. After a bit, she calmed down. Someone passed me a handful of kibble. She ate a few! And then…and then she looked up at me and licked my chin. I glanced at my wife. She simply nodded. We had no plans to adopt a dog. But was this one meant for us? Why her – instead of “happy, easy, Sammy”? Because…well, just take a look.

We had always been “dog people”. But dog ownership had not been a sensible option of late. Inn keeping is demanding. And we had become “snow birds”. We rented a Florida waterside condo for three months – no dogs allowed. How could we consider adopting this dog that seemed to be selecting us?

Son and daughter suggested “they” would watch her for the three months until we returned. (BTW, thanks “kids” for the house training). Our excuses were falling away. We decided to have an overnight test with Gigi.

We were told that Gigi was crate trained. We coaxed her into the crate in our bedroom. We settled in for the night. The scratching on the sides of the crate began just as we turned off the light. And then there was the howling. Very sad, loud and piercing howling. And clawing to escape her cage. We released her. She jumped onto our bed and spent the night between us. Were we being played? Was Gigi wooing us?

We awakened early the next day to licks. The charm offensive was picking up steam. But there was a problem. The bed was soaking wet. She must have finally relaxed. I suspect that might have been a deal breaker for many people. Not us. We were being lured into a relationship of need…and love.

We contacted the dog rescue organization. Yes, we were interested. But oh, no. A family had already agreed to take Gigi. Not meant to be. We had to return this little girl. In 24 hours she had wrapped us around her puppy paw. So sad.

The phone rang later in the day. The puppy placer said that the family had changed their mind. They had very active young kids and Gigi seemed too timid and might not be a good match. We knew about the shy part. When our doorbell rang, she bolted out of the room and hid under the bed. What had happened to this little sweetheart in her first six months? No matter. We were up to the challenge. We were needed.

We were given the number of the family in Tennessee that had originally fostered Gigi’s litter. They had a farm and provided a brief form of shelter before the rescue outfit could arrange to transport her north. They said she was always terrified of rain and especially thunder. Apparently, she had been born and lived under a house owned by an old man who just wanted to get rid of the litter. Use your imagination from there.

So this skinny, nervous and intimidated puppy was to be ours. The name Gigi was taken by a close friend. So a new name was in order. We narrowed it down to a few and then…the name just came to us. We were “Sophie’s choice”.

A few days later, we felt as if we could leave Sophie alone – we went out for dinner. We were not gone long. But this is what we returned to.

And the next week sweet little Sophie ate my prescription eyeglasses. Love was really blind after that. And that’s our little Christmas story. Sophie was the best possible gift.

Inside a Gen Z Conspiracy Theory.

Who knew?

“Peter McIndoe, the 23-year-old creator of the viral Birds Aren’t Real movement, is ready to reveal what the effort is really about.”

The headlines and the lead photo are pulled from this revealing NYTimes article by Taylor Lorenz. I write to help spread the truth about birds. I had no idea.

Did you know that all real American Birds have been killed and replaced with identical government operated Bipedal Information Reconnaissance Drones? This is a project that had it’s origins in the Eisenhower administration. The drones have been spying on us all this time!

Watch this video from 1987. Know the truth. Join the Bird Brigade.

We reached out to the Audubon Society for comment. They were speechless.

From the NYTimes article:
“Mr. McIndoe, too, marinated in conspiracies. For his first 18 years, he grew up in a deeply conservative and religious community with seven siblings outside Cincinnati, then in rural Arkansas. He was home-schooled, taught that “evolution was a massive brainwashing plan by the Democrats and Obama was the Antichrist,” he said.”
But, he said:
“I was raised by the internet, because that’s where I ended up finding a lot of my actual real-world education, through documentaries and YouTube,” Mr. McIndoe said. “My whole understanding of the world was formed by the internet.”

To sum it up, here are some more extracts from the Times article:

”In September, shortly after a restrictive new abortion law went into effect in Texas, Birds Aren’t Real members showed up at a protest held by anti-abortion activists at the University of Cincinnati. Supporters of the new law “had signs with very graphic imagery and were very aggressive in condemning people,” Mr. McIndoe said. “It led to arguments.”

But the Bird Brigade began chanting, “Birds aren’t real.” Their shouts soon overpowered the anti-abortion activists, who left.”

“It’s a way to combat troubles in the world that you don’t really have other ways of combating,” said Claire Chronis, 22, a Birds Aren’t Real organizer in Pittsburgh. “My favorite way to describe the organization is fighting lunacy with lunacy.”

To learn more, please visit Peter McIndoe’s website that explains everything you need to know about this diabolical government conspiracy. Join the movement. Be a bird truther. Buy a T-shirt. Support his work. And remember… The Bird is the Word.