Living Rich

Small companies making gains on large corporations

2009-04-18T15:47:00.000-07:00

At the Harvard Business Blogs, Peter Bregman gives a couple of compelling anecdotes of small companies beating out large ones in competition for major contracts. Small businesses offer the promise of relationships and good service and responsiveness. The uncertain economy gives large companies the threat of layoffs and financial turmoil. The advantage is reliability.

Final Four

2009-04-06T15:04:00.000-07:00

The Kansas City Star writes about the Spartans' rise to the national championship. Looks like former GM chairman Rick Wagoner was instrumental in bringing the Final Four to Detroit, but he wasn't able to make it to the games this weekend. The article doesn't mention why. I'm guessing he's keeping a low profile right now. I feel bad for him.

I'm hoping Wagoner's Final Four efforts are a success and that a Spartan victory buoys not just the hope but the hard work and grit of southeast Michigan. If this state is to succeed, it must do so like Izzo's team - no whining, just hard work.

Innovative production beats marketing.

2009-03-18T15:29:00.000-07:00

More on the small-business vs. big-business front:

For decades US corporations have been abandoning the production business in favor of the supposedly more profitable business of branding and marketing. But this strategy is coming back to bite US laptop makers. Wired reports that Taiwan companies responsible for designing and building laptops for Apple, HP and Dell have taken the industry by storm with their innovative netbooks - low-power, low-cost laptops perfect for computing on the go. Or, as Wired's Clive Thompson puts it (bold mine):

In the US, we regard branding and marketing - convincing people what to buy - as core business functions. What Asustek proved is that the companies with real leverage are the ones that actually make desirable products. The Taiwanese laptop builders possess the atom-hacking smarts that once defined America but which have atrophied here along with our industrial base. As far as laptop manufacturing goes, Taiwan essentially now owns the market; the devices aren't produced in significant volumes anywhere else... "When I talk to [the Taiwanese] now," [researcher] Shih laughs, "they say, 'We outsource our branding and sales to them."

But American manufacturing is far from dead. Once again, the innovation and flexibility of small business is filling the gaps left by corporations. Clive Thompson tells us in the same March issue how small-scale DIY manufacturing is making products never seen before - and growing by leaps and bounds.

Starting a business in a recession

2009-03-05T11:58:00.000-08:00

The recession can't stop entrepreneurs from starting new businesses. With lower costs and customers looking for good deals, the troubled economy is a popular time for laid-off workers to start their own businesses. See the Reuters report.

You don't need a credit card. Really.

2009-02-26T18:48:00.000-08:00

It's true, right? You need a credit card for modern middle-class life. You can't get along without it. Even an astute friend, one who doesn't follow trends for trends' sake, was caught up in this lie. She posted a Facebook link about how to properly use a credit card. If a credit card had a single redeeming quality, it would be a great link.

But no, there's no reason to have a credit card. Many real-world financial counselors will tell you why:

Say you use your cards responsibly. You pay the whole balance every month, you have no annual fees. You get 2% back and even free tools and perfume every year if you spend enough. You're the shining example of good credit card user, the one who takes advantage of the credit card company and makes money on the bargain. No: you're still a loser according to research - or "a sucker" according to the Boston Globe. You're spending more money thanks to impulse buys. Switch to cash and you can truly come out ahead. More money left over at the end of the month to save, or maybe spend on something more carefully considered.

There are three more common objections, to which I found some answers:

Q: "But not everyone takes cash!"
A: When necessary, use a debit card. You can use them online or anywhere credit cards are accepted. Still use cash when you can, like at the restaurant, or your bill will be magically larger when you're done ordering.

Q: "I need to build my credit!"

A: "Debt is dumb" says Dave Ramsey - never borrow money. OK, just for a house you probably can't buy it any other way. But always buy a house with a large down payment and just a 15-year loan (if you can't, face the fact that you probably can't afford the house). With a good down payment your credit matters a lot less. Is it worth spending years maintaining just the right amount of debt, shining up your credit rating but losing money (see above), for a slightly lower interest rate?

Q: "But what about emergencies?"

A: Plan for them. Build an emergency fund. Save 3-6 months income in a savings or money-market account. Buy insurance (home, car, health, long-term disability, life, liability) as needed. If you're already in a financial emergency, there's other advice and encouragement, but for the rest of us: Cut up your cards, and start building your emergency fund today.

edited 2/27/09 for tone & wording.

Prison population reduction

2009-02-21T10:48:00.000-08:00

One percent of adult Americans are in jail or prison. The problem is worse in Michigan, which spends nearly two billion a year on the 11th-highest per-capita prison population. Lots of people are upset, but misconceptions of the problem will get in the way of fixing it, says John Pfaff. Read his Five Myths About Prison Growth, which concludes:

We need to stop admitting many minor offenders, even if they're serving only short sentences. We need to focus less on high-profile drug statutes and more on the ways small-fry drug convictions cause later crimes to result in longer sentences. Once we start admitting fewer people to prison, we should shift money from prisons to police. If this seems like tinkering, rather than a sweeping fix, that's because it is. See Myth No. 4: Reformers shouldn't waste their breath trying to turn us into Europe.

Governor Granholm wants to cut the prison population as a key part of balancing Michigan's budget.

The truth hurts

2009-02-21T10:34:00.000-08:00

Matthew DeBord says that GM is finally painting an honest picture of its future. Key to their restructuring is a realignment of their brands: GM knows it must leave its tiered-branding strategy ("When you outgrew your Chevy, you graduated to Pontiac. Then Olds. Then Buick. Finally, you arrived at the glistening pinnacle, Cadillac.").

[W]hen forced to tell the truth about its destiny, GM doesn't see itself any longer as the postwar colossus that delivered a car for "every purse and purpose" but, instead, a leaner outfit with, for all practical purposes, two major brands: Chevy for volume sales and trucks, and Cadillac for luxury rides. (It's worth noting that Ford, which has declined bailout funds so far, is also saddled with redundant brands and may be following GM down this road in the future.)

Savvy observers will recognize that this is how the domestic carmakers' Japanese rivals do business. Toyota is ... Toyota and Lexus. Honda is ... Honda and Acura. (Toyota also has its Scion youth brand, but the vehicles it sells actually mirror many of the cars GM badges as Chevys.) The emergence of a North American vehicle monoculture, with Detroit's output more closely resembling that of the Asian-American transplants, signals a much more practical, less emotional future for U.S. drivers.

He also says GM won't be able to pay back its debts until well after 2012, when it will be a markedly different company. It's time for everyone in Michigan to realize the old monolith isn't coming back.

2008-05-01T22:22:00.000-07:00

In Touchstone Magazine, Emily Stimpson discusses the importance of food - good food, good meals - as part of a good life.

hat tip to Anna W.

Make your own bread.

2008-03-15T20:48:00.000-07:00

My friend Stewart Lundy explains why making your own food is full of advantages and nearly free of disadvantages.

Among the advantages:

Far cheaper

Far healthier

Far better tasting

Frees you from relying on others for your food

And the chicks dig it.

Kritik Magazine: "Reclaim the Kitchen"

More spending does not help the economy

2008-01-25T23:20:00.000-08:00

The united States' president and congress are running scared of an economic recession, and are trying to redistribute wealth to encourage spending. They think that giving everyone, except the rich, artificial money will encourage spending, which will raise key "economic indicators" and help them win reelection.

Economists today discuss the economy in terms of consumer spending. Is that all we are - a machine of 300 million spenders stuck in an endless cycle of creating often things and consuming them? We heard the call for more spending after 9/11, when Bush called on Americans to go shopping as a civic duty to help the economy, as if buying something you don't need will benefit us. Those who call for more spending have a flawed view of the economy.

A healthy economy is characterized by voluntary productivity and free exchange. An economy that relies on everyone spending and buying more than they want or need is not a healthy economy. Efforts to prop it up by artificially encouraging spending just makes the economy more unbalanced. If we do buy things we don't really need, we are forced to work harder (making more useless things?) to earn more and support our spending. Advice to spend more is not making us more productive, it's just making us busier.

We need to stop obsessing with growth in corporate income, personal wages and the economy as a whole. An individual can be perfectly happy without an increase in income each year, especially if he would have to do more for that increase in income. In a free economy, growth will come with innovation and population growth, but it isn't something you can force from the top. With pressure from factors like high oil prices, economic activity may even shrink. This is normal and temporary. Let's not make it worse by calling for artificial spending.

Weekly food expenditures

2008-01-20T20:05:00.000-08:00

This page gives photo examples of weekly food expenditures for families all over the world, including the $500 German food bill and food for eleven Egyptians at under $70.

A break from the intellectual

2007-12-04T18:51:00.000-08:00

My brother Joel and I doing some Parkour moves.

Right-wingers

2007-12-04T09:21:00.001-08:00

In the last century, right-wing types had a simple way of describing patriotic congressional representatives like Ron Paul, who championed limited federal government, believed in natural rights, respected the oath they swore to uphold, and eschewed Wilsonian-style foreign policy: “conservative.”

Read the article by Isabel Lyman here.

Teenagers can work, think, fight and love.

2007-12-04T08:59:00.000-08:00

"Teenagers can work, think, fight and love. The law prohibits all of it." - R. Cort Kirkwood

Kirkwood writes an article "Adolescence: A Heresy" arguing that modern society makes our teenagers into adolescents - essentially, big children - instead of making them into responsible adults. Reviewing Roger Epstein's book The Case Against Adolescence: Rediscovering the Adult in Every Teen. Epstein, an expert psychologist, says that our society is preventing children from becoming adults.

We put our children and even young adults into strictly regimented factory schools (including Sunday schools). We keep children away from adults, don't expect adult behavior or responsibility, even prohibit it: teens can't work or drive until 16, can't marry or enter into a contract or smoke until 18, though in past societies such actions were common. All they're allowed or expected to do is go to school, consume food and entertainment, and have no-commitment sex. No wonder they rebel. Teens are capable of far more, as Kirkwood tells us:

At age 14, Andrew Jackson fought in the American War for Independence, was captured by the British. He was also orphaned. David Crockett, hero at the Alamo, struck out on his own at age 12 and returned home four years later a full-grown man. Audie Murphy, who left grade school to support his 11 brothers and sisters, won 33 combat and other service decorations during World War II before he was 20. And David Farragut, chief of the federal navy during the War of Northern Aggression, commanded his first ship at age 12.

Kirkwood is author of Real Men: Ten Courageous Americans to Know and Admire

Honey more effective than cough drugs

2007-12-04T08:13:00.000-08:00

ABC news reports that a spoonful of buckwheat honey before bed treats coughs better than over-the-counter medication.

The article notes that honey is inappropriate for children under 1 or 2 years old, but cough and cold medicines are inappropriate for children under 6.

I was out-skinflinted

2007-11-19T18:29:00.000-08:00

Skinflint: A miser, one who goes to extremes to save money.

So yesterday, I saw an old man raking leaves at a township hall across from the chapel. He put the leaves into two large plastic bags, and I went to ask him if I could have one of the bags of leaves to help feed my goat in the winter. I don't want my family to have to buy grain or hay, or rake the leaves ourselves.

The man replied that he re-used the bags - this was the third year he had used them. They were heavy plastic, and where they were torn he had repaired them with duct tape. So no leaves for me.

Link for the day:

Alice Brock, owner of "Alice's Restaurant", talks about taking what you have and making something amazing. Which is how she created Cream of Salt and Pepper Soup. Find the recipe and her insight here on NPR's show This I Believe.

Dollar losing more ground

2007-11-17T11:29:00.000-08:00

The value of the United States dollar has been declining against metals and foreign currencies for a while now, recently dropping below the Canadian dollar last month. Now it is being rejected by rappers, American expatriates and even Warren Buffet according to the UK Independent. Five years ago, the Dollar was worth about about 0.98E. Now it is worth 0.68E.

Possibly related, the Secret Service (responsible for enforcing currency crimes) and the FBI raided and seized all of the assets of Liberty Dollar, a company which produces silver, gold and copper coins and certificates for use as private currency. The federal government is alleging (pdf warning) that the currency was involved in money laundering and wire fraud.

Fred Thomson (unfairly) pilloried for abortion comments

2007-11-08T21:47:00.000-08:00

Fred Thompson may be in trouble with pro-life advocates, reports Robert Novak reported yesterday in the Washington Post.

Apparently Thompson made two missteps. First he mentioned, in a TV interview, that he didn't want to criminalize young girls and the parents of girls who got abortions: "I do not think it is a wise thing to criminalize young girls and perhaps their parents as aiders and abettors... You can't have a [federal] law" that "would take young, young girls . . . and say, basically, we're going to put them in jail."

The article identifies this as a red herring: pro-lifers generally don't want to prosecute abortion recipients. In fact, pro-life groups tend to offer sympathy and support to those who have had abortions. And Thompson should have realized this, but he never endorsed abortion. He merely was trying to distance himself from a body of extreme pro-lifers that apparently is small to non-existent.

Fred Thompson's primary political position is for states' rights, or federalism. Many Republicans and Democrats, liberals and conservatives alike agree in principle with states' rights, until they get a chance to change the entire nation from the top down, as abortion proponents got in Roe v Wade and opponents want in a constitutional amendment banning abortion.

That was Senator Thompson's second costly opinion: initially opposing such an amendment. He wants the abortion debate to take place in the states. On a similar point, he refused to take a position on the Terry Schiavo fiasco in Florida. The opinions led one pro-life agitator to ask: "How, then, can Thompson describe himself as pro-life?"

Because he supports the states banning abortion, that's how. He doesn't have to preach against the evils of abortion every time an interviewer asks about it. That's not the president's job. Nor is it the president's job to oversee a judge's decision on a custody/right-to-life case that is entirely based on Florida state law. If the state doesn't properly protect life, that's its own problem and the federal government doesn't have the authority to change its law or practice. Would Kincaid also criticize Justice Byron White, dissenter to Roe v Wade, when he wrote that Roe interfered with a decision that the people and states should be making themselves?

The constitutional amendment issue has some nuances. Roe v Wade, the Supreme Court decision that declared a Constitutional right to abortion, is incorrect and usurps states' rights. A constitutional amendment is the only way anyone but the Court can change this decision. Perhaps this is why Thompson later came out in favor of such an amendment - or perhaps he was just tired of losing supporters over the issue.

No one is claiming that Fred Thompson actually supports abortion, but if he tries to balance states' rights with ending abortion, we complain that he doesn't take abortion seriously. If he doesn't know the details of a local court case some have studied in depth, we say he's uninformed. Opinions like that make me sick of campaign politics. Instead of looking at the details of how a candidate believes and votes, we expect politicians to shake our hand, sweet-talk us, and not yell "yaaah!". And heaven forbid he once insulted our state's political system.

I'm just glad Thompson has principles, good principles, and doesn't gloss them over when he's courting votes.

Music and dance

2007-10-27T11:55:00.001-07:00

Daniel J. Levitin, professor of psychology and music, writes in the New York Times (login required) about the relationship between music and dance. Apparently, the way we do music today, segregating those involved into performers and a passive audience, is counterintuitive. He tells us that Children (see also the Joshua Bell experiment) naturally participate in music, and even when adults are quietly sitting and listening to music, the parts of the brain that control and coordinate the muscles are active. Classical music in particular expects its audience to be passive, and I would suggest that this is part of the reason that classical music is less popular than modern rock and rap-related styles.

I love dancing to any kind of music, and I hate concerts with seating. At a recent Nickel Creek and Fiona Apple concert, with a particularly danceable style, I couldn't stand sitting still during the first half of the show. Finally in the second half, I left the seats and danced on the side lawn under some trees. I couldn't hear the music as well, but it was worth it.

The most profound fact: "Even today, most of the world’s languages use a single word to mean both music and dance." Let's go to more concerts with dance floors and participatory activity.

How to find participatory concerts:

Style is the most important indication of how much you can participate. Folk music and rap (which, in its less commercial forms, is an urban folk style) tends to be more participatory. Blues, jazz, country, and rock and roll skew folk and attract more participation than classical music. "Indie" music, with its younger audience and its relation to folk, attracts less participation than I think it should, perhaps because it is often quiet and introspective, emphasizes the lyrics more than the sound, or attracts more intellectual/high-class, college-types. Perhaps I've just gone to the wrong indie concerts.

Smaller is better. Small music clubs generally have open seats; larger auditoriums tend to have seats. There are exceptions: Detroit's State Theater (now the Fillmore) has no chairs on its main floor, while the intimate floor of the Ark, a folk venue, had chairs out when I attended. High prices, such as classical concerts and big classic rock names, tend to draw an audience that skews older and upper class, which believe in staying still and acting dignified. More significantly, the high prices seem to indicate an experience that is valued more for its audiovisual experience than participation. Free, open-air venues, which eliminate concerns about space and seating, are the best, such as the lawn in front of a jazz band at the farmer's market. I particularly recommend large music festivals such as the Warped Tour, with a variety of independent and alternative rock acts from punk to acoustic to ska. They feature large, open-air audience spaces that invite singing along, crowd surfing, and great dances such as moshing.

link to "Dancing In The Seats" article

Loving music: children vs. adults

2007-10-15T21:14:00.001-07:00

The Washington Post wondered - what if one of the greatest musicians played some of the greatest music on one of the greatest instruments - in the middle of the DC metro? The most interesting response to Joshua Bell's amazing performance wasn't that of the adults - it was the children. And the most disappointing response wasn't those who walked away of their own accord, it was the parents who pulled the children away.

The poet Billy Collins once laughingly observed that all babies are born with a knowledge of poetry, because the lub-dub of the mother's heart is in iambic meter. Then, Collins said, life slowly starts to choke the poetry out of us. It may be true with music, too.
There was no ethnic or demographic pattern to distinguish the people who stayed to watch Bell, or the ones who gave money, from that vast majority who hurried on past, unheeding. Whites, blacks and Asians, young and old, men and women, were represented in all three groups. But the behavior of one demographic remained absolutely consistent. Every single time a child walked past, he or she tried to stop and watch. And every single time, a parent scooted the kid away.

Other sad tales:

A hundred feet away, across the arcade, was the lottery line, sometimes five or six people long. They had a much better view of Bell than Tindley did, if they had just turned around. But no one did. Not in the entire 43 minutes. They just shuffled forward toward that machine spitting out numbers. Eyes on the prize.
J.T. Tillman was in that line. A computer specialist for the Department of Housing and Urban Development, he remembers every single number he played that day -- 10 of them, $2 apiece, for a total of $20. He doesn't recall what the violinist was playing, though. He says it sounded like generic classical music, the kind the ship's band was playing in "Titanic," before the iceberg.

The lottery can be fun, but ultimately it's about greed - the idolization of money and goods, one of many sins that deadens the sensation of all true pleasures. The other passersby show a singleminded focus on the schedule of meaningless tasks and material accumulation - perhaps not the commission of greed, but it seems an offense to the Creator to lose all sense of meaning in your daily life. Follow the children. Stop to listen to the music.

(thanks to Kyle for the link)

p.s. I love authors like Gene Weingarten and many of the people in Slate. They write with excellent style, and I need to absorb some of that.

Mike Huckabee

2007-10-15T19:38:00.000-07:00

I recently received an email from a good friend expressing her support for Mike Huckabee as a good leader and one who will uphold morality and vote based on Christian principles. This is my response to her:

Thanks for your email. I believe that the upcoming election is an important one and all Americans should care about the issues involved.

I'm concerned most, this election cycle, about the rise of federal power, particularly executive power, that we've seen in huge measure from Clinton and G.W. Bush. I'm concerned that Huckabee won't bring us back toward federalism. In the last (Oct 9) debate, he said that he would, if necessary, act to prevent a perceived terrorist threat even if Congress specifically denied authorization - as if Congress wasn't worthy of making that decision. That's the thinking that got us into our current situation in Iraq and Afghanistan, thinking that the White House has the only good ideas and answers. Then there's the constitutional problem of bypassing the check and balance provided by Congress.

In a brief examination, I don't see any discussion on Huckabee's website of states' rights or federalism, and his only mention of the Constitution is in reference to the second amendment.

I would suggest Ron Paul as a candidate who is committed to the the entire constitution, federalism and limited government, and is a strong Christian. I don't agree with all of his opinions, including his support for immediate withdrawal from Iraq, but I believe a return to federalism is the most important issue facing the federal government today.

God bless,

David

Ron Paul supports morality, and is a strong Christian himself. He believes that it is generally up to the states occasionally, and ultimately the individual, not the federal government, to enforce morality. Paul is strongly pro-life and opposes Roe v Wade on constitutional grounds.

After writing my email, I came to a realization: Mike Huckabee isn't that different from George W. Bush! Let's compare campaign positions:

Bush: Campaigned on and passed tax cuts
Huckabee: Campaigning on the Fair Tax

B: Ignores restrictions on executive power
when he deems it necessary
H: Willing to do the same

B: Restore moral integrity to presidency
and nation
H: Restore moral integrity to nation

B: Encouraging "compassionate conservatism"
H: encouraging individual effort

B:Pro-life
H:Vocally pro-life

B: Would appoint conservative
federal judges
H: No obvious opinion, pro-2nd amendment

B: Redefined definition of torture to exclude what he deemed necessary/useful, though that torture is given to some who are innocent, and torture can supply bad intelligence.
H: Opposes torture

There are some areas of difference. Huckabee opposes anything even close to amnesty for illegal immigrants (so does Paul). Huckabee supports letting states choose their own standards for education, which would partially rectify one of the biggest problems with Bush's No Child Left Behind act. Paul, on the other hand, would seek to abolish the Dept. of Education and its often counterproductive programs altogether. Huckabee would not use of torture on detainees, something Bush has allowed by using clever definitions of the word. I'm going to be optimistic and assume power and an insular white house wouldn't go to Huckabee's head as it did Bush's. But I can't see big changes coming from a Huckabee white house, and certainly not the big changes in federalism and size of government that Paul would bring.

To learn more about Ron Paul, visit his website.

Sources:
Wikipedia article on GWB's 2000 presidential campaign
Mike Huckabee issues page
Huckabee's opinion on torture
Transcript of October 9 Republican debate