Devouring the Dreams (and Cash)

Big incentives lure a big employer into town. It’s the dream many rural regions coping with high unemployment and a “brain drain” of their best and brightest long for and have often put up big subsidies to make it happen. Sadly, however, the dream doesn’t last long and many small cities which put their futures on the line saw the big employer move on. We’ve seen this happen for decades, and usually call it “corporate welfare”.

Today is no different, except for one thing – business is moving much faster and the net time from groundbreaking to heartbreaking is only a few years. That was the experience in Dubuque Iowa and Columbia Missouri who spent a total of $84M luring IBM to expand in their towns. Six years on, a struggling IBM has let go of half of their staff in those places.

How effective are these subsidies? And why does this keep happening?

Continue reading

Online Ad Bust

“Half the money I spend on advertising is wasted, the trouble is I don’t know which half.”
– John Wanamaker, Philadelphia retail giant, circa 1893

During the internet boom that defined the previous bull market, before 2000, one thing was clear. Advertising as we knew it was dead. Any maven or guru of the ‘net pointed to the ability to target audiences with pinpoint precision and collect real-time data on how effective the spending was. It was a feature that broadcast, direct mail, and print media would never be able to achieve.

Fifteen years on, we can see just how this has worked out. The short answer is that advertising is just as wasteful and untargeted as ever, even online. Worse, advertisers have not substantially moved away from broadcast ads, with teevee still the largest category of spending.

Is internet advertising a flop, or was the hype just ahead of the promise?

Continue reading

Logistics

“Amateurs talk strategy, experts talk logistics.”
– Common US Army saying

Barataria has been discussing some of the key skills and perspectives that define the next economy with an eye towards teaching them to the next generation that will need them the most. Cooperation in competition is certainly rising in importance in a higher technology world, as is the need for a flexible workforce  and a greater reliance on automation.

All of these come together with a greater need for strategic thinking, and its related leadership models, but are executed with the great challenge of a time when everything moves faster every day – the art and science of logistics.

Continue reading

Coopertition

Our team, 2491 No Mythic,  is set for the North Star Robotics tournament next week. It’s an event that teaches all the aspects of engineering and entrepreneurship – design, build, teamwork, and budgeting. This year’s competition also brings back an important concept in any business – Coopertition. The teams competing in a match can bump up all their scores at once if they work together.

It goes against the sporting aspects of the match in many ways, but it is critical. In business, companies have always worked together for mutual benefit even as they have competed. Cooperation can be a powerful force for change or a descent into stagnation. No matter what, business has never been purely a “survival of the fittest” in ways that define the boundaries of ethics and will almost certainly be more critical in a close-knit global economy increasingly defined by technology.

Continue reading

The Original Source

The internet is a wide, rolling river of information. It can be treacherous and dangerous to wade into if you’re not careful. If you’re looking for a cool drink of truth, the muddy brown of this mighty Mississippi of data often has a harsh stench of bias bubbling along with the waves. What can a reader thirsty for knowledge do?

The answer is to seek the source – the cool, clear stream that feeds into the torment at the headwaters. I call it the “Urquelle”, a German word meaning “original source” favored in the mountains and rolling hills that are the source of so many great rivers in Bavaria and Bohemia. This process of seeking out primary sources is valuable not just for writers, for whom primary sources have long been a staple of good, useful prose. As surely as reading is writing, today’s discerning reader should also seek the Urquelle.
Continue reading

Iranian Ambition, the Great Chessgame

Netanyahu’s tone was measured and direct, fitting the prestige of the chamber he was addressing. “That deal would not prevent Iran from developing nuclear weapons — it would all but guarantee that Iran gets those weapons, lots of them,” he told Congress last Tuesday. It was classic Netanyahu in many ways – bold, dire, and ultimately a load of cowpuckey.

Netanyahu can’t claim to know what is happening in the “P5+1” talks to stop Iran’s uranium enrichment program, and if he does know he can’t prove it publicly. These talks have been going on for nine years now and have always hinged on one sticking point – Iran cannot obtain nuclear weapons. Any other result would have made the talks much easier and they would have been over by now. But these are important talks for reasons even larger than weapons of mass destruction.

Continue reading

Fed Raising Rates …. When?

It’s been nearly a year since Janet Yellen, in her first testimony press conference after a Fed Open Market Committee (FOMC)  meeting, told the world just what she was looking for before raising the Fed Funds Rate (and everything that rises along with it). The openness was remarkable for a Fed Chair and a sign of a new era as a woman took control of what is arguably the most power job in the world.

Since that time, we have followed “Yellen’s Dashboard” with periodic updates to just just how we’re doin’. Nearly everyone agrees that interest rates will rise sometime this year, probably around June, as she has told us.  But how does that stack up against her very public criteria? It’s worth checking in with some math to see where we are with rates and what we can expect.

Continue reading