attention & value.

One of the reasons I love writing is that it makes me form coherent thoughts. This process sometimes ends up changing how I view a topic. My previous post on what we value has ended up being one of those times.

We live in a world of insane inattention. For me it started with AIM back in ’96. You signed-on and messaged people whenever you wanted. Eventually you just never shut it off. Next, email became indispensable. Then I not only IM’ed friends, but checked their away messages every little bit to see what was going on (the *original* status message!) Blogging. Facebook. Twitter. Brightkite. Google Lattitude. Nowadays it’s more the ridiculously awesome content freely available & constantly updated: drudge, nyt, espn, huffington, politico, message boards, list, goes, on, and, on. All of these things compete, relentlessly, for my attention.

My original post was really about the meta and questioned how we viewed life. This eventual impacted me in 15 minute increments. Tim’s written well on this topic and is what his book is all about. 43 folders has always been about this whole philosophy. Here’s my take and thoughts:

1) I’m using BubbleTimer. It sounds kind of anal. OK, I guess it *is* kind of anal. The premise is that you define a set of things that you want to and actually spend time on. You then bubble in where you actually just spent that last 15 minutes.

One, it holds you accountable. When focused, fifteen minutes is a ton of time. It’s harder to get sidetracked when you realize that you’re documenting your weaknesses. It actually reminds me of one of the few things I still remember from 4th grade. Our teacher taught us this cool hack where when things got too crazy busy and we felt overwhelmed, we should stop what we were doing and just stare at a clock for 60 seconds. Doing nothing else, helped you realize how much time we actually have.

Two, you get great data visualizations back which like using Quicken, Mint, or Smallspend for your money will help you make some choices to improve things. I’ll see where I spent too much time, too little time, etc.

Three, it helps with goal setting & tracking. We each set high-order goals around New Years. Go to the gym. Talk to Mom more, etc. Well, you can set time max and min’s here. If you don’t bubble in the necessary time here, then you’ll see that you failed. Pretty good for that accountability thing.

2) I’ve given up on email. Sort of. I turn off my Gmail notifier and don’t constantly check my work email anymore. If you’re like me, you feel an urgency to respond to everything asap. I hate to leave someone hanging, so I end up spending way too much time responding to emails. Aside from the raw time of email, it also interrupts my workflow. It might start with checking and responding to an email. But I eventually end up on espn.com or on the couch watching House M.D. (how awesome is that show, btw?) So I’m doing email at set times and trying to ignore at all others. Many of the really sharp, productive people I know do this. I’ve finally gotten on the bandwagon. For now. I’ve tried and fallen off a number of times on this over the years. I’m also paring back substantially on twitter, facebook, linkedin, IM, and my other social indulgences.

3) Everything is a draft. This is probably the most singularly meaningful change I’ve made. It came from this post: Accept that everything is a draft. It helps to get it done.

It’s only been a few days, but this has been a ridiculously liberating line. I’ve always had some amount of trouble pushing things out there. Why? Probably because I was used to get reprimanded as a kid for stuff that wasn’t done right. I guess this produced a fear of failure. I’ve thought a ton about fear of failure and it’s impact on my life from a macro level, but not in the micro. Since I was nervous about not creating perfection, I dreaded starting and  sharing my work. Now, what I try to do is get something done as quick as possible and reassure myself that it’s just the roughest possible draft. I try and judge it like that. It’s freed me up to just do it, and then figure out the rest later. If you’ve ever felt this pang, repeat the mantra of “everything is a draft.” So great.

4) Do it or kill it. From the same list: Banish procrastination. If you wait more than a week to get an idea done, abandon it. Married together with #3 above, this is a recipe for just getting stuff done. I’ve always had a million ideas bouncing around in my head. But since I want the perfect way to do them, it often takes me too long (if ever) to get them out there. When my alternative is to do something within a week or never, it spurs action.

In this world of realtime sharing, our attention is more precious and in demand than ever. I could spend half my day reading my Google Reader feeds, responding to emails, seeing what my friends are up to, reading magazines, etc, or I can control my attention and try to marry that up to what I value.

So I’m seeing two stages:
Stage 1: On the day-to-day, what matters? What do I consider high value and things that I’m satisfied I did at the end of the day? What’s not?
Stage 2: At the 1000 foot level, and specific to how I want to go forward, what matters to me? What would I be disappointed I never did in my life if I only had a few years to live?

Stage 2 informs stage 1, but gaining more control of your minute-to-minute will embolden and free you for the higher order thinking. Hopefully this ramble wasn’t too theoretical. It’s past 1 at night and I’ve been sort of distracted talking to arjun on IM 🙂 Oh, and forgive poor grammar, this is a published draft.

it’s always the same.

Months ago I looked around me at what was going on in the economy and stock market and it literally gave me tightness in my chest. It was hard for me to concentrate on work, or much of anything. Things that I had read about and worried about were coming to life and the pace of news was nauseating. It’s not that way anymore. Which is actually kind of scary in its own way. The Dow broke 7000 today in what was widely considered a critical support level. Where do we go from here? Likely no where good. But I barely batted an eye. Why? I’ve either gotten used to it, or I’ve made peace with it. This is our new reality. We should move forward. Always forward.

It’s always the same. The people who I watch in life, who I’ve read about, and who I admire, are always the same. Watch how they handle setbacks and misfortune. Sure they might hiccup. But only for a minute. They focus intently on what’s right in front of them. They see what they can repair. What they can improve. Where they can go. They keep moving forward. There are certain people who when you look back at their story, every one of their setbacks ended up being a launching pad for something better. Are they blessed? A coincidence? It’s their attitude. Dr. Liza Siegel, the psychologist from The Apprentice, (Yes, we had an on-site psychologist and let me assure you that we all made full use.) drove this home for me. She stressed how across all the people she came across in her life– whether it was the people who made it through the insane casting process to make it on The Apprentice or whatever, it was this resiliency that was just indefatigable.

So, now, as we look at the insanity around us, remember that it’s always the same. Be that person. If you’ve lost your job (or a friend of yours has, remind them) be that person. The one who takes a second to take accounts, and then wakes up earlier the next morning to move forward. Who creates their next opportunity. Whatever it is, savings vanishing, job losses, home price depreciation, etc — these are all detours. It’s always the same. Those who believe in themselves and their ability– those who believe in hard work and earning every inch of what they get– nothing has changed. There are still opportunities. We just have to get back to work. Oh, and as negative as I’ve been on all of this, I do, truly, believe that when we all get back to work, we’ll be on our way to getting out of this hellish hole. Until then we can each only do our part.

the reporting business.

Time magazine writes an article this week on “How to Save Your Newspaper.” Their conclusion? Micropayments. Basically, allow people to pay a small fee, like 5-25 cents for every article they read. The dominant platform for this doesn’t really exist since Paypal charges fees too large to make this viable. I used to think that this was a perfect business for Google to be in: you Google something, see the price (if any) for the content, and click the credit button on your Google toolbar to pay for the article/result. But, regardless, even with a good platform for micropayments I don’t think it’ll work. Why? Because I don’t think I’d pay to read an article ala carte that I’m not sure I’ll like. I imagine the abandon rate on articles is very high. Though, I suppose this might be because it’s free, but I don’t think so.

So what would work for the reporting business?

1) Content wants to be free on the web. Or, rather, we want everything to be free on the web, but we also want it to be valuable. That’s why I believe the sustainable future for deep reporting (magazines + newspapers) will lie in the device. This might mean the Kindle and the evolving world of smart subscriptions. Might I pay, say $2 a month, for the NY Times on my Kindle? I say definitely. In fact, I’d probably pay higher. But at the $2 pricepoint, and with an variable distribution cost of near zero, I’d bet that we’re talking many millions of people who would pay that amount. The economics of print– delivery, printing presses, etc are zero’ed out and we’re left with a far more efficient cost structure. This should translate into a more economical cost, which, I would think, will increase the number of people who will opt to pay. Would I pay to read this on my Mac over the Interwebs? That feels tough to me. Would I pay to have the NY Times “delivered” to my Kindle every morning and auto-updated as the day goes on? Oh yes. Now it might not be the kindle. Maybe it’s the iPhone or whatever other device comes next. Which reminds me that I’m baffled why the NY Times iPhone app is free. It is positively insane. Charge a couple of dollars up front or a small recurring charge. The app is pretty damn amazing (it downloads the content locally so you can read from the plane, subway, etc!).

2) OK, so micropayments might actually work. But not the way everyone talks about them (as basically small debit card payments). I think it could work if we give people credit for doing things on the web. Say I take a survey or watch a commercial. This should give me some credit points that I can use on articles or whatever else. This seems pretty damn obvious to me. Why can’t the NY Times offer a choice of 15 second “commercials” on their site, and I have to watch one of them in order to have access to the site for a session? Or credits to use on articles. This is kind of a no brainer to me. In fact, I should go start a company that does this across the web. Why the hell am I updating my blog when I should be working on this idea?…

the rebirth of the long.

Up on the Tom Peters site there’s a good note on the “Generation Gap.” The idea is that his generation was handed a functioning business world with solid fundamentals, and that they took it created a world of stilts, which the current generation has now been bequeathed. Today those stilts are being knocked down and we’re trying to figure it out what the hell to do now.

The obvious answer is that we need to start rebuilding. I’m more convinced than ever that the problems of the last twenty years will have to be fixed by building companies that are driven by the new technologies that are transforming everything. Though, as TP’s post points out, the business world’s current guiding ethos also need to change.

We need long term thinking. The TP post talks about too many MBA’s in charge, too much greed, and confusing profit with value. To me, these are all different ways of saying, as a business community, we’ve failed the long term. We measured things in fiscal years and quarter-to-quarter and found the long term something that was hard to fathom.

We’re already seeing some of this (apparently) change. Google when they went public stressed acting for the long term instead of sacrificing to attain the short. (I’ve got a longish rant on public companies and whether or not Google lives up to this saved in drafts that I need to finish). Facebook throughout their history has emphasized the long term vision of “transforming communications” (or something like that) over the noise of the next 10 minutes. Clearly this has done extremely well for them. And throughout startup land, smart investors and founders have been stressing building transformative products that create killer value as the only priority and short-term profits as an afterthought. This is often laughed at by pundits as signs of the last dot.com bubble. But there’s a difference between doing something stupid like raising a $100 million dollar to sell hundred pounds bags of dogfood through the mail and looking at an idea that will disrupt a market that people are getting value from today by leveraging technology to make it better, more efficient, or just cheaper.

Millions of people looked at Obama as the guy who was going to lead us out of the doldrums. But, really, we need to look at each other. And my generation specifically needs to figure out how to create the next generation of business that will get the economy growing again. Things are incredibly nasty out there. And, personally, I don’t see things getting better for a while. There are no quick fixes when you dig as deep a whole as we’ve done. So what’s left is for us to look around at the tumult, change, and turmoil around us and ask how can we help? In some cases this might just be volunteering, in others there are business opportunities to help create value, and in the process create jobs and help be a part of the solution.

I know what I’ll be spending part of my weekend doing.

there will be consistency.

I look around every day and what I see often depresses me. It’s what I fear is still to come. Consistency.

In the past consistency meant things getting better, people making more money, things thriving. What I fear, and what I see around me are models failing every where around me.

What am I talking about?

Typical for any business or project is a financial model that justified it. For a local coffee shop, they’d project out the cost of rent, labor, supplies/product, average number of customers, and average amount spent by customers. Profit margins are usually thin, say 10-15%, so a change to any variable can make a business unprofitable and destroy it. What scares me today, is that I fear that almost every single model is wrong now. If you were a credit card company a key input for your financial models would be the unemployment rate to determine the delinquency rate. No ones model had the unemployment rate going to 10% and showing no signs of stopping. People are losing their jobs in a scarily fast fashion. These same people, who have on avererage borrowed a ridiculously high amount of money, now also can’t borrow since no one wants to extend them credit. So they have bills they can’t afford, no job, and no credit to get them there. Then you have most people who are seeing this happen across the country and it freaks them out. They worry for the future. So they spend less. They save more. Other people, the wealthier ones with a lot of savings? Even if nothing else has changed in their lives, they’ve probably lost anywhere from a third to half of their net worth in the bloodbath in the stock markets. So they don’t feel as wealthy as they once were and so they spend less.

All at once, everyone is freaking out, and spending less. No model is built for this massive combination of job losses, deleveraging, and increases in the savings rate to replenish losses. Whether you’re a coffee shop, a media company, a packaged goods company, or the local barber shop your model just got torn to shreds. We crave consistency. Except the bad kind.

I haven’t posted in a while, and on my entire drive home (and for the past months) this thought has been eating at me. So I just wanted to post this and I hope I can let it rest.

detroit, empathy, and stories.

Detroit. Mitch Albom is a terrific writer. Think Tuesdays with Morrie and The Five People You’ll Meet in Heaven. Albom has a great way to make characters real, settings come to life, and emotions feel at home within you. He’s a storyteller in the truest sense. Today, I read his latest in Sports Illustrated called “The Courage of Detroit.” It’s damn fine writing.

I don’t think I need to point out why Detroit is in the news. I mean, it’s literally everywhere. And, Albom, who has lived in Detroit for decades has heard just about enough. There are really some choice bits in here:

“…what all Detroit sees — is a nation that appears ready to flick us away like lint. We see senators voting our death sentence. We see bankers clucking their tongues at our business model (as if we invented the credit default swap!). We see Californians knock our cars for ruining the environment (as if their endless driving has nothing to do with it)…”

“We hear Congress tongue-lash our auto executives for not matching the cheaper wages of foreign car companies. We hear South Carolina senator Jim DeMint tell NPR that “the barnacles of unionism” must be destroyed at GM, Ford and Chrysler. Barnacles? Barnacles are parasites without a conscience. Sounds more like politicians to us.”

“This is why our recent beatdown in Congress was so painfully felt. To watch our Big Three execs humiliated as if they never did a right thing in their lives, to watch U.S. senators from Southern states — where billions in tax breaks were handed out to foreign car companies — tear apart the U.S. auto industry as undeserving of aid, well, that was the last straw.”

“Enough. We’re not gum on the bottom of America’s shoe. We’re not grime to be wiped off with a towel. Detroit and Michigan are part of the backbone of this country, the manufacturing spine, the heart of the middle class — heck, we invented the middle class, we invented the idea that a factory worker can put in 40 hours a week and actually buy a house and send a kid to college. What? You have a problem with that? You think only lawyers and hedge-fund kings deserve to live decently?

“To watch these lawmakers hand out, with barely a whisper, hundreds of billions to the financial firms that helped cause this current disaster, then make the Big Three beg like dogs and slap them with nothing? Honestly. There are times out here we feel like orphans.”

“Do you think if your main industry sails away to foreign countries, if the tax base of your city dries up, you won’t have crumbling houses and men sleeping on church floors too? Do you think if we become a country that makes nothing, that builds nothing, that only services and outsources, that we will hold our place on the economic totem pole? Detroit may be suffering the worst from this semi-Depression, but we sure didn’t invent it. And we can’t stop it from spreading. We can only do what we do. Survive.”

If you managed to read through the quotes, hopefully you’ll be inspired to read the whole article. It paints an amazing picture of a city, it’s people, and what the passing of time can do.

Empathy. I forgot who said to me, once, years ago, that if I was going to count on the world to have empathy I better prepare for some pain. It might have been my friend Rayford, or it might have just been in a passing conversation. Anyway, empathy is why I associate with Detroit. Why I follow the headlines, and why, even in sports this year, I pulled for the Lions nearly every Sunday. Detroit more than any city could be arguably the most representative of what made America great. An American entrepreneur invented the automobile in Detroit. That same man then transformed the manufacturing world both in terms of process and pay, almost in one swoop, fashioning a middle class and ushering in a new era. It was symbolic of the prosperity of America. Today it doesn’t just hurt. It bleeds, aches, and hemorrhages. And by some logic that escapes me, as a nation we feel like it doesn’t reflect us. That Detroit never represented us and that it’s nothing like us. It’s in this that I think the joke is on us. Detroit was America and, I think we’ll see in coming decades, it is America. I feel for Detroit to my core.

Stories. Everyone loves stories. I’m not sure if it’s the years of watching movies, reading books, or studying marketing that’s made me realize that stories matter. They’re everything. It’s how we make decisions. Decide who to love. Who to hate. What job to take. Who we are. What we think. Who to vote for.

Given the historical inauguration about to take place, let’s talk about politics. The story of John Kerry as an aloof, patrician, out-of-touch elitist was an easy story for people to believe. His features made him look like he should be in a painting, the apparent botox didn’t help either. His overall demeanor played perfectly into a story that actually didn’t match that well with his life story. But no matter, the facts in front of us fit a frame, and so we had our story. One would think that given his background as the son of a former President, a legacy at Yale, etc, etc President George W. Bush would have made a far more natural target for the elitist story. But it came down to demeanor again, and President W had this down home, aw shucks manner. Yale, Harvard, President’s son, company CEO by birth — none of that matters when the facts in front of us, the ones that we can digest with very little work and effort, don’t fit the frame. And so no one cared to look any further. We had our story. And our decision.

And so we’re back to Detroit. The problem with Detroit is the story. Since it seems that most of America gave up on American cars years ago, it’s an easy story to understand and tell. Detroit makes crappy cars and so Detroit deserves this. “Make cars people want!” “Make cars that don’t break down!” These are the facts in front of us, and it’s a story that’s easy to understand. That’s what screwed Detroit. Our financial companies and investment bankers betrayed hundreds of millions of American. We’re still unsure how the deep the damage they wrought on the global economy and America (taxpayer, government, and future?) is. Yet, despite taking practically 100X (or more) more money from us, there’s no convenient story here for us. How the hell does one easily and quickly grasp, with zero effort, a story involving characters called tranches, credit default swaps, collateralize securities, non-government entities, and so on. Clearly you can’t. And no one did. We don’t really even try. But Detroit. That’s a story we know. And we’re all poorer for thinking we understand it.

america and her car companies.

This was a sloppy, not-as-coherent-as-should-be post, and so I’ve rewritten it.

We have a lot to be pissed off about. Literally trillions of dollars of (in theory) taxpayer money are being given to corporations to “bail them out.” This after years of lush profits, exorbitant bonuses, and executives living like it was the gilded age. I’ve been really pissed off. But about two different things:

1) What the hell is going on with our financial services companies? We have had to give them hundreds of billions of dollars to keep them solvent, their reckless risk-taking has endangered economies and financial markets around the world (do you know of any unharmed?). But what pisses me off even more is that these companies are still paying out dividends and giving out ridiculously large bonuses. This is absolutely ridiculous and one of the most shameful giveaways I’ve ever seen. We’re OK with families losing their homes AND with Bankers still pulling in $500K bonuses for starting this train wreck? Are you kidding? While it might have seemed justified for people to be getting paid millions of dollars for moving around money when it seemed like they were actually creating value–what’s the excuse now? This is shameful.

2) The auto companies are getting eaten alive by the public and showered with scorn. Some of it deserved. But, especially when compared with what they financials have done to us, I’m shocked at how deep this feeling goes. The recent cover story in Time magazine nails it.Here’s the first paragraph.

“This is the thanks you get for creating the middle class, Henry (Ford). In the throes of the biggest auto swoon since 1931, the headmen of Detroit go hat in hand to Washington to try to keep their once might industry upright for a couple of months and are treated as if they had invented the four-wheel-drive subprime mortgage. AIG torpedoes the entire economy and gets a $150 billion handout; Citgroup takes risks no sane manufacturing company would even contemplate and is rewarded with a $20 billion federal bailout. And the car guys?”

So I’ll posit that a lot of this has to do with the fact that while how the financial companies wrecked our economy is kind of hard to understand (something about mortgages and credit cards), it’s pretty damned easy to understand why Detroit needs help. It’s because they’ve made poor quality cars, that looked bad, with workers who they’ve paid too much money. These guys deserve to die. Let ’em. So I guess I can see how the haterade storm on Detroit came about. I just think it’s gone way overboard. Here’s why:

A) Fundamentally, I think most Americans have never forgiven GM, Ford, or Chrysler.

Almost everyone I know in their 20’s and 30’s has an aversion to American cars. You say Chevrolet and they’ll say “crap.” GM (I’m going to use GM as a proxy)made really, really bad cars in the 70’s and 80’s. In fact, I can remember some of those cars growing up. They required constant repairs. Entire generations moved over to imports with their superior quality and damned the Big 3 to the trash heap out of their consideration set. And today, when those companies fail, many Americans see this as evidence of why they were right to abandon American cars. They’ve never been forgiven.

The truth is that the quality gap has closed. As Time points out, or any number of publications, over the past decade quality is no longer a differentiating factor. But as any marketer knows, perception is reality, and its sure hard to change. The marketing wisdom is that if the success of your product is dependent on changing a consumer’s opinion, you’re probably going to lose. And so this has been the predominant problem for GM, et al– the perception gap. And GM’s marketers have failed miserably. This isn’t new. I’ve called these guys idiots for years now– here’s a blog post from ~2 years ago, where I beg them to apologize for making crappy cars and move on. A drastic reevaluation of your brand by a consumer requires drastic messaging.

B) GM’s cost structure reflects stubbornness, a lack of cooperation, and an era long passed. The cost structure of a living wage, health care, and a pension is reflective of the era of very profitable American manufacturing base and a corporate parent willing (or forced?) to share in the profits with its labor. The social compact to share in the success with the workers dates back to Henry Ford nearly doubling the wages of his workers so they, too, could afford a Model T. Yet, as their industry spiraled into decay thanks to poor quality, globalization, and leaner competition, these contracts and labor arrangement barely budged. Also worth mentioning are the other problems — pensions and health care costs reflect a time when an employee would retire at 65 and be dead by 67. 15 years of these costs vs 2 is a big difference. These are legacy costs. Bob Lutz summed it up well in the NYT yesterday:

“You get these people who say, ‘I know what I’d do if I were C.E.O. of G.M., like close up all the union plants and set up plants down South with non-union labor,’ ” he said. “Well, any idiot can figure that one out. But how conceivably can you get that done?”

C) If GM was such a crappy company that deserves to die, how can you explain it being the #1 car manufacturer in China and having much success everywhere else in the world?

D) It does matter where a company is headquartered– GM has the majority of their engineering and design staff here in the states. It’s not just manufacturing jobs we’re talking about. These are high value jobs that will disappear. America already doesn’t design or make TV’s, DVD players, cameras, or hundreds of other technically advanced things. We shouldn’t add cars to the list.

E) I forgot where i read this, but someone made the point that one of the primary drivers of the Japanese and Koreans basing their US auto production in the US vs Mexico was they were already foreign. They (rightly) concluded that American’s would consider them the same as GM, Ford, Chrysler if some of the cars were put together here. Without a true American manufacturer, why should they maintain more expensive labor? Let’s not even talk about expensive engineers and designers– these jobs will be based in their home office (Japan, Korea, Germany, etc) or China, India, etc.

F) This *current* crisis for the Big 3 *WAS* caused by the financial crisis. Yes. GM (which I’ve been using as a proxy) has had problems and made a number of mistakes. But they’ve known about this and have been working on fixing them. In fact, they had enough liquidity to take them through all of ’09. But then auto sales fell off a cliff almost dropping in half. This isn’t limited just GM, Ford or Chrysler. Honda, Toyota, etc is seeing this as well. They, however, aren’t burdened by the weight of history. Legacy costs threaten to kill the American 3. You could be stubborn on either side of this: If GM had made good cars, they wouldn’t be in this position. Or, if not for the financial crisis, GM would have survived because they were on their way to righting the ship. The truth is it’s both of these, right?

G) This is an opportunity. GM has inched its way to this point over the past few decades. There have been a number of union renegotiations, new car designs, and inventive research and development (The Volt anyone?) The problem is they never went far enough, because GM was never close enough to the edge. Now they are. As long as legacy costs can be brought in line (with an incentive given to labor to benefit in the upside of a leaner, more profitable company in exchange for their guarantees), and the necessary trimming to an infrastructure in line with their viable market share (think selling brands, closing dealerships, some plants and making the rest very flexible) GM can be a profitable and prosperous american enterprise. And then, as I said in my previous post 2 years ago, GM should use this as an opportunity to fess up for past mistakes, explain what they’re doing, talk about their quality improvements (YELL ABOUT THEM!), and ask Americans to invest at home again. (Full disclosure: I’ve owned a Pontiac and 2 Saturns and love buying American). With really great cars like the Cadillac CTS, Chevy Malibu, etc, a great communications campaign, and a competitive cost structure, we can compete.

If anything is clear from the financial crisis, it’s that this idiotic idea that America can compete just on services and doesn’t have to make anything is a recipe for disaster. (All of the financial instruments of mass destruction which triggered this meltdown were a large chunk of those magical service revenue). As a country, we’ve already let the vast majority of our manufacturing base leave. This is one of the last vestiges of an industry that we need (think national security).

In summation, I’m not apologizing for (OK, maybe a little) GM & gang, I’m asking you to look at it with a bit more nuance.

world on the edge.

The Economist (apparently Palin’s favorite magazine) has a good, short article on the credit crisis.

This is why those politicians who set the interests of Main Street against those of Wall Street are so wrong. Sooner or later the money markets affect every business. Companies face higher interest charges and the fear that they may one day lose access to bank loans altogether. So they, too, hoard cash, cancelling acquisitions and investments, in order to pay down debt. Managers delay new products, leave factories unbuilt, pull the plug on loss-making divisions, and cut costs and jobs. Carmakers and other manufacturers will no longer extend credit (see article) and loans will become elusive and expensive. Consumers will suffer. Unemployment will rise. Even if the credit markets work well, the rich economies will slow as the asset-price bubble pops. If credit is choked off, that slowdown could turn into a deep recession.

This nicely describes the anxiety I’ve been feeling about the credit markets seizing up.

lipstick on a pig?

It’s classic. We’re going through one of the worst economic crises that our nation has seen in decades, and the media is talking about lipstick on a pig comments and other total crap.

If there’s lipstick on a pig, it’s the lipstick the Fed is trying to put on the pig that is Wall Street. After years of zero regulation, and allowing the broker / dealers to leverage hundreds of billions of dollars in instruments even they didn’t understand, we potentially face the collapse of the global financial system.

While this is going on, all we can talk about is whether John McCain is being too mean to Barack Obama or if Obama was sexist with his lipstick on a pig comments. How about we ask them what the hell they’re going to do to try and salvage our economy. Their plan for the financial system? How does it differ from the current Fed “plan”? Nah. Who wants to hear about that?

Rome burns, and we change the channel. We’re too busy watching Jerry Springer, a little NFL, and some of the “highlights” of the election. Yeah, go ahead and ignore the fact that Lehman just filed for bankruptcy and Merrill got gobbled up. Nah, that won’t affect us.

This is nuts.