Social Media's Future: Sell! Sell! Sell!

Imagine your best Jerry Seinfeld impersonation and repeat after me “What’s the deal with Facebook? It isn’t a book, and it’s not for your face!”

Sorry, that joke might have been funnier back when Facebook was still sort of new.

Actually I love Facebook. It really is a hodgepodge digital network for news of all types whether friends or national interest. Plus there is something addicting about the scroll function; it’s like an endless morass of sweet stories and cat videos followed by vile ranting and virtue signaling from college freshman (Yes Tom… we all think Tibet should be free). Trying to scroll to the end is like trying to run through a park fountain without getting wet. You know it’s impossible but the thrill is too much to resist. So you scroll. Until the time gets away from you and re-evaluate how pathetic your life is that you just spent hours reading other nonsense and believing most of it (is it just me?).

The point is we all spend time and money on things we enjoy and believe in. Or at least, we support financially organizations, communities and projects we understand and have some relationship to. For instance, I give money to the church I attend because I love the cause. Christian churches are community centers that help the poor and bring people closer to Christ and (hopefully) into a relationship with the heavenly Father. I understand how they are funded and what those funds purchase. Most people support what they can see and understand. I can see a useful value in social media but not an investment opportunity, partly because most tech companies don’t have machines and factories. So if the business goes bankrupt what is left to sell off? maybe some intellectual property in software which, by the way, got shared through open sourcing.

Even the worthwhile bits aren’t really worthwhile.

This is where my tech knowledge gets me into trouble. I don’t usually write about tech companies because…well, most of it goes over my head. I can turn on my computer (Yay!!!) and upload some photos to a sweet desktop icon that says “photos” (although very slowly). I get the business side of Silicon Valley, whiz kids and their fiefdoms. I can’t figure out how Facebook, twitter, and other social media sites are worth billions and can round up enough investors for an IPO. Advertising is supposed to be enough revenue? Sorry I don’t see how to squeeze real value out of these companies that isn’t at least partially a promise on advertising dollars. Nothing wrong with it of course, it just doesn’t equal value in the traditional sense of the word. They don’t crank out widgets which can be priced or have machinery with fixed costs.

Look I get it OK, I am the kid with the crayons and coloring book trying to stay inside the lines while everyone else is painting on canvas and listening to Mozart. I still say San Francisco and the whole tech world is sitting on a bubble that grows every time a new app gets talked about. Also, if the software your company invented is so great why are you sharing it? Sell it man! I am less of a naysayer on the tech world and more of a skeptic. I’ll admit to missing out on what are some great buys because I frankly don’t get most of it.

So there is your advice kids; firstprinciples doesn’t understand it; it must be voodoo. 

Most of it is just my personality. When it comes to technology and newer different ways of doing things I am a little tepid.  I’ve always believed though, invest in what you know and stay away from what you don’t. There are exceptions of course; learning about new companies and products is part of making money. If after a full day of studying and reading about the latest R&D in an industry, you still feel like the kid with the crayons? Stay away. I am not the type to come home after a hard day of work and utter the phrase “I just got a great tip on a can’t lose investment honey!” The good part of that though is that I’ll never come home and utter the phrase “I just got a great tip on a can’t lose investment honey!”

So be yourself and buy what you know. In the meantime if a social media company bombs and loses money for shareholders, don’t say you weren’t warned. We saw this in the late nineties with the overvalued dot coms selling pixie dust and dreams to investors who didn’t understand what they were buying (especially pixiedustanddreams.com, they really cleaned up). It was the new, hot thing and they were ‘all in’ like a Texas hold ‘em rookie. I realize many of these companies do fine and in most cases the financials are sound and here to stay. I just need to catch up.

Until then I’ll keep my pessimism and approach life like Jerry Seinfeld “What’s the deal with…?”

The Program: Armstrong's Hubris

I watched a great movie the other night about the Lance Armstrong fiasco. Called The Program it summarized the professional life of Armstrong and the US Postal cycling team and their incredible run of victories. Lance was the star and the crew rode for him to make sure he won in the end. It was a sobering look at competition and the lengths that athletes will go to win. Winning is everything to certain people and when cheating is the price of victory far too many engage in it. Survey after survey proves this to be true and especially in sports where the margin of victory is so slim.

There are two parts to the Lance Armstrong saga crucial to understanding how he got away with doping and being a ‘squeaky clean’ spokesman for cancer research.  Journalist David Walsh, of the Sunday Times, who covered cycling and wrote about Armstrong before he became famous, was persona non-grata once he accused the American of being 'on' something. Second, the irresistible story of a man beating testicular cancer to win the Tour de France became a sponsors dream. By dream of course I mean a huge payday for a lot of companies, not to mention top billing and top money for a somewhat obscure race. American Greg LeMond had won the Tour in the early nineties but the tour had never been a big deal in the US and only a slightly bigger deal in Europe.

Armstrong, who is played by Ben Foster, develops emotionally and physically from an average racer into a seven time champion. Movies like this have a built in advantage of not telling the story so much as watching the transformation of a person into something unrecognizable, an inflated version of  the celebrity we think we know. We know the story. We know the man. We know every crooked and concocted lie, every myth about the daring Texan with superhuman will. This film doesn't engender compassion from the viewer for Armstrong. Nor does it give him a pass for being just another biker enhancing performance in a sport known for dopers. Although there are scenes that show his humanity and good will, this film is a warning against hubris.

Armstrong isn’t a politician seeking to rule a kingdom or a business owner trying to buy out his competition. We don’t take him seriously as a powerful man because he just rides a bike after all, what is the harm in that? The blueprint for how he succeeded though is textbook hubris. From the intimidation campaigns against those who accused him of being a cheat, to his manipulation of the press and the sponsors who couldn’t get enough of this story. The press doesn’t come off well as a character in this, really no one does except the Times writer, Mr. Walsh, who stood against the legal onslaught Lance directed towards him.  Floyd Landis is the tragic figure of the whole affair. If the events of the movie accurately depict history than Landis is the moral character brought low by a failing, an immoral charge for which he is swiftly punished.

I do remember Landis winning the Tour right after Armstrong retired; he tested positive for high levels of testosterone, an indication of doping. There were rumblings of US postal cycling being full of cheats from the European press and especially the Sunday Times which had the goods on Lance from the beginning. By the time Floyd Landis won the gig was up on American racers. The evidence against the Livestrong spokesman was piling up no matter how much he denied it, threatened his accusers with lawsuits, and challenged the integrity of the reporters. It ended so ignominiously with the Oprah interview which showed Lance for the self-absorbed athlete few had really seen.  

Ben Foster looks and sounds like Lance Armstrong so much that the camera often shows live footage of the tour champion spliced with film shots of the actor on his bike. His portrayal of the professional cyclist as a ‘hungry’ competitor moves the film from an uphill slog during his cancer recovery to fast downhill ride through the winning stages. One great shot in the movie’s climax is of Lance in his home standing atop the steps excoriating his enemies, cursing old friends who accuse him of cheating, and threatening to destroy anyone not loyal to him. The camera shows him high up looking down, a man in control of his kingdom. This is hubris personified. We see Lance Armstrong as an arrogant bully who is competitive to the core and has no concern for ethics or truth. The scenes where he is giving motivational speeches are equally creepy because although he looks genuine and truthful we know how the story ends. 

We all bought into the myth of Armstrong and the Livestrong motto. The lesson from the whole sordid affair is that healthy skepticism of power in all forms is a good posture for anyone. Don’t discount a report or an accusation because of fear that the truth could ruin something you hold dear. Great stories about individuals overcoming horribly tragic events are all around us, when someone is lionized for it tread softly and don’t ignore warning signs. Armstrong’s record win right after cancer treatments should have raised eyebrows in the sports writing community more than it did. The warning signs were there if one just looked. This is the thrust of the film; writers and even sponsors knew but wouldn’t say because it was good for the sport. It sold papers and magazines and generated interest in cycling. It sold bracelets and generated money for cancer research, who wants to stop that?

There is a parallel with the rise and fall of Lance Armstrong and the housing crisis of 2008, my brother pointed this out. Both situations grew up under the ‘watchful’ eyes of those who were supposed to monitor the events and make rulings on the participants. Cheaters never got reported because it was easier to look away and make money by ignoring the deception. Hopefully the doping scandal that Armstrong orchestrated leads to a cleaner sport in the future, if only slightly. I am afraid that more sophisticated methods of enhancing performance are already being used. Athletes will always seek to find an advantage in sports that includes drugs; sadly the monitors are always one step behind. 

One for the Ages!

Well I am in a good mood! Trump is the president for the next 4 years (at least) and his rise was totally remarkable, unlike anything seen in politics in my lifetime. Oh sure, other remarkable unexpected elections probably came about across the country on some level, Schwarzenegger was a California governor after all . Never has the highest office in the country been awarded to someone with no government experience, no military experience and no applicable work experience. OK the last one may not be entirely convincing since many in the business community think their boardroom acumen is perfectly suited for dealing with Congress.

I was a late (very late) supporter of the Trump campaign. At some point you look around the tent and realize no one is left to vote for but the orange guy with the floppy red hat. I was reluctant and still am that he can put a coalition together that gets manufacturing back and stops immigration from the Southern border. I am hopeful though that with the GOP House and Senate he stands a better chance than with a divided Congress.

Here is a short list of things I’d like to see happen in the first 100 days.

1.      1 Nominate Ted Cruz for the Supreme Court. If he accepts, which he probably will, he represents a solid conservative voice that shapes the thinking on decisions for the next 30 years. Putting Cruz on the SCOTUS takes him away as a presidential challenger and resident pain in the ass Senator and gives him a larger stage. Plus, Ted wants to prove to everyone how smart he is (and he REALLY is). Give ‘em a chance, we won’t regret it!

2.      2  Repeal Obamacare (ACA) and replace with ANYTHING resembling a market driven plan. The House Republicans under Paul Ryan have (I guess) been working on it for a while, but you know…Obama. How much of mess this program really is? Ever tried to untangle a box full of old clothes hangers? Like that…but more like warehouse full of hangers in boxes. Oh, and the instructions on how to begin are 2000 pages long, and in Chinese. It should have been an albatross around the president’s neck the last few years but never seemed to be. The only real ACA stuff I read was in my Heritage Foundation blog updates. Anytime the press uttered the words “Affordable Care Act” the White House staffers should’ve run out shrieking like they had seen a ghost. It wasn’t just a disaster, it was a predictable disaster.    

3.      3 Reassure our allies in Europe (NATO) that the alliance is still strong. Trump will insist on letting them all know if they want the defensive umbrella of NATO they better pay up. Rarely do all the allied nations pay their percentage. This ‘freeloading’ is what Donald Trump has explained causes the US to keep funding defense for the continent. I don’t agree completely with his assessment, but allies are crucial to world stability and free trade. Make nice with Europe. We need them, they need us.

4.      4 The regulatory state is a nightmare and although I can’t begin to determine which industry needs the most help, an overhaul should be done. Start with ‘environmental’ regulations put into effect strictly because of climate change non-sense. I don’t mean start tearing up the Clean Water Act and allow industry to dump toxic sludge into lakes and rivers. Quotas and limits on industry should be scrapped. They are as arcane as war era food rationing plans. Trump should take restrictions off the coal industry that the current president helped establish. The price of electricity should determine how much coal or natural gas we use, not onerous and expensive federal measures.  

Those are four just as quick as I could come up with them. Certainly there are aspects of a Trump presidency that worry me but with a true belief in this country and the unlimited potential of the market, I am optimistic.

 The missing element in this country (and the world by extension) has been tough leadership and moral certainty. The US navy keeps the pirates around the horn of Africa in check because it has the moral clarity to protect the sea lanes. Ditto for the South China Sea and the Dardanelles. Moral certainty means other countries interested in trade and travel accept the arrangement of peace and stability the US ensures in much of the world. This tenuous position of give and take power politics is ALWAYS in play in theaters around the world. Why is Russia a constant thorn in Eastern Europe? They represent the ‘other’ side of influence, state run economies and zero citizen freedoms. Only when US hegemony is removed, or severely curtailed, will we realize how good we all had it. I hope Trump begins to get a sense of the responsibility this country has as a default guarantor of peace. Something tells me he’ll get help where he needs it.     

Oklahoma State Questions--Summarized

Thought I’d do a quick overview of the State Questions on the ballot this year. Something to keep in mind about SQs in any year is they are written to advantage a group or groups of people and not necessarily designed to fix a problem.

SQ 776- Vote Yes

Simply, it affirms the legislature’s authority to pick a method of execution if one method has been ruled invalid. Also, it prohibits the death penalty from being ruled unconstitutional. This probably came about because of the botched execution of Lockett a few years ago followed by another execution where the wrong drug was used. It’s a good idea to ‘affirm’ the right of capital punishment because lethal injection as a tool is increasingly complicated. Drug makers refuse to sell certain 'killer' drugs and independent groups move to block executions. Who needs it. I’ve never had a problem with capital punishment; the method of execution is beside the point.

SQ 777- Vote Yes.

Basically this is a way for farmers and ranchers to use modern technological methods, mostly large scale production.  I am always leery of laws and amendments that make other potential laws unenforceable. The agriculture trade groups backing this bill hope to avoid be court cases by opponents over whatever silly ‘violations’ outside groups manage to drag up. The courts have to apply a strict “compelling state interest” in order to stop legal firms from using the law as an anti-competitive measure. If you pair it down the law is really an attempt to make it tough to sue farms for everyday legal farming techniques.  

SQ 779- Vote No

Teachers deserve more money in terms of salary and benefits but this measure won’t help. Any sales tax increase drives business away from local stores (Yes, I do work in one) and toward online sites like Amazon. It is a bit frustrating to see that not all the money even goes to elementary and secondary teachers, whatever it amounts to. ‘Higher Education’ also gets a slice of the pie. I guess that means TCC (Tulsa Community College) and a few tech schools will get almost 20%! This is the most frustrating part. Colleges should NOT get sales tax money. Sales taxes always have the biggest impact on those who can least afford the increase in food, gas and clothing. Who in our society can least afford it? Teachers.

SQ 780, 781- Vote No

There is an encroaching laissez-faire attitude toward drugs and drug use in the country. Prison overcrowding is a problem (I guess) and when one compares the lock ‘em up rate to other countries it seems we use prisons like others use public transportation. Squeeze a bunch of people in and keep the funding low. Yes our drug laws are tough. Prison overcrowding doesn’t worry me like kids who may become addicted does. The problem isn’t the law it’s the culture. Normalizing drug use will increase the availability of drugs (legal and illegal) and strain services meant to help addicts recover. And guess what? Those new addicts will need new treatment centers and additional state paid counselors. I’m not unsympathetic to low level drug offenses being reduced by judges or by adhering to a program for recovery. This exists already in most states. Good behavior and showing up for treatment means reduced sentencing for most offenders. This bill is unnecessary.

SQ 790- Vote Yes

Voting No will send you straight to Hell…I am pretty sure (kidding). This is a restore-our-heritage type of debate that overturns previous legislation that prevented public money from being used to pay for ‘religious’ organizations, events, displays…The problem is the phrasing on ‘religious’ was never applied in a consistent way. Sometimes private (Christian) schools got federal money under certain conditions and sometimes they couldn’t. Like most legal questions regarding State/Religious fights, we wait to see how the court rules and either celebrate the victory or start drafting the legal challenge. If you think the Ten Commandments isn’t religious (like me) but culturally and ideologically significant, vote Yes. So 790 erases the restriction on public money for religious monuments like the Ten Commandments engraving. I’m not even sure how much difference it will make since unfortunately the courts always decide these things. This is a tentative Yes.

On a side note I don’t think the Ten Commandments monument is a Christian symbol or representative of any religion. It’s a statement of principles, a set of values underpinning the Constitutional order and it gets codified in every amendment and addition to the legal landscape. The truths espoused are fundamental to right thinking citizens whether Christian, Muslim, or Atheist. Any great institution has a core set of values that acts like a rudder on a ship. Drifting off course…check the rudder.

SQ 791- Vote Yes

There is no good reason in the world why grocery stores shouldn’t be able to sell wine and high point beer. Really all this law does is take down existing barriers that liquor stores have to work around in order to comply with the current law. It allows them to sell cold high point (above 3.2 alcohol percent) beer in addition to selling cork screws, coolers and other non-alcohol related stuff. Under the current set up, liquor stores separate the booze from the goods and run two independent companies, kinda silly. I expect this measure pass smoothly, like um…beer through a funnel.

Hope that helps!

Victory at Last

What a game...What a team...What a season!!!

Fly the W

The Fed and Accountability

I heard an interview with Larry Kudlow recently on ‘professionals’ at the Fed. By professionals (my word not Larry’s) he means academics without experience running a bank or institution who use modeling to make decisions. Something gets lost when economists move from higher education to federal offices and eventually hold titles, director of this and coordinator of that. Stack enough decades together and patterns of behavior on finance repeat themselves over and over until the thinking defines the institution. The Fed is in such a state.  

During the seventies and eighties federal institutions drew its experts (primarily) from community bankers, farmers and small business owners. The idea being that real world experience in a field was critical to making tough decisions on a larger scale. The people responsible for the economic health of the nation have a clear understanding of market principles and the consequences of tweaking the currency. For sure, the Federal Reserve has always been responsible to clean up dumb political decisions made by administrations hoping to goose the economy. 

Private sector bankers typically have rational ideas on lending versus a government employee who hasn’t met a payroll or bothered with ledgers. Not that public sector workers can’t be trained or understand how global finance works, but according to Kudlow, they lack the economic philosophy. 

Economists from similar schools and similar philosophies will come to similar conclusions when making decisions. This shouldn’t surprise anyone. Talk to salesmen at a convention and their opinions and attitudes on money and work will be familiar to each other and the profession. Ask teachers who they like for president in any election year and the response will likely be the Democrat. Surgeons vote alike and join the same clubs; their thinking on issues is familiar across states as is their salaries. The free market allows for like-minded people and groups to employ and be employed by each other. In the public sector (especially federal) this creates problems because bureaucrats are un-elected but have an increasingly outsized role in how Americans buy and sell.  

 Kudlow wasn’t bemoaning the institution of the Fed as much as arguing for a more accountable Fed. Government offices that draw heavily from one school of thought eventually stop listening to other schools, and thoughts. When everyone thinks the same way the mechanism for pulling back on bad ideas isn’t there. A rethink is needed when accountability is lacking.

The Central Intelligence Agency drew almost exclusively from the WASPy Ivy league schools right after World War II. Part of it just seemed logical, pick college kids with parents who attended the same clubs, went to same churches. The agency got bigger and through political will was forced to change its loose way of operating and accounting. Some high profile failures like the Bay of Pigs forced Congress put a lid on some of their crazier schemes. The CIA recruits from all over the US now.

Larry Kudlow didn’t make any suggestions about how to turn the Federal Reserve around but interestingly he is on the Donald Trump team of advisers. If Trump does win I think the country will see some positive moves toward a more accountable system of lending. The president’s authority over the Fed chairman is limited and presidents don’t like to interfere too much lest they get blamed for a messy problem. Kudlow is a known supply-sider advising a borderline protectionist candidate (Trump) on economic indicators. It is an odd pairing but one that can work if Trump does get the nomination next week. 

First comes accountability then comes philosophy.

"Do You Believe in (baseball) Miracles?"

The Cubs are in the World Series!!!

I almost can’t believe I wrote that last sentence but there it is, how sweet! They need to finish the season with a win of course but just getting there is a feat that this team hasn’t seen in 71 years—of just appearing in a World Series! Since 2003 I’ve been an occasional watcher of the north side abysmals, but always a fan. Why that year?(head drops...lets out a long sigh) This was the infamous Bartman year where that poor S.O.B  reached for the foul ball and ‘interfered’ with Moises Alou’s ability to catch it. The entire city knows now that it was a foul ball, out of play, and Bartman was within his rights to reach for it. Alou overreacted (shouting at him) and so did the tipsy outraged fans at Wrigley. He was escorted out like a criminal by some security guards who protected him from beer-throwing, cursing, threatening fans—a sickening display really.

ESPN did a brilliant documentary on it called “Catching Hell” outlining everything from crowd behavior and crowd psychology to rules governing fan interference. They even selected a sermon from a minister on the connection between Steve Bartman and Hebrew scapegoat traditions.

2003 was my junior year of college. I had time to spare and the Cubs were good! That meant skipping the occasional class to catch an afternoon game and rushing home from late classes to catch the last few innings. Not a lot of work (school or other) got done that year and the biggest let down was that playoff season where we lost to the Marlins. They were just better. Bartman or not, our guys couldn’t strike out the Florida club and managed to create additional problems by overthrowing runners, missing ground balls and walking batters. They were abysmal. Our pitching led by Kerry Wood and Mark Pryor had been almost automatic until the 6^th game of the series (the Bartman game). Kerry Wood threw the last game poorly. Marlins advanced. Cubs stayed home. Wrigleyville faithful drowned their sorrow in Old Style and raised their fists toward heaven—Greek tragedy style. It was further proof their ivy walled stadium was cursed. 

Until last Saturday…they never got over it.

   

The most I could muster since that heartbreaking fall of ’03 was watching WGN (when they still played games) on a lazy Sunday afternoon. Cubs had stars in those years and reached the playoffs a few times; in 2008 they got swept and of course just last year the Mets knocked them out with AMAZING pitching. Last year made a believer out of me like it did for so many. This team was built to win. The front office made purposeful decisions to spend money on young talent and develop it. The General Manager Theo Epstein had similar results with the Red Sox in the early 2000s and he made good on his promise to Chicago to invest long term. Fans sense a dynasty is being put together in the best place in the world for baseball, Wrigley field. Nothing is guaranteed of course but the talent this team has trained, traded for and developed is unlike any team before.

I can’t imagine having the time or passion that I did in ’03 ever again. Baseball is just too slow a game for me to sit down for 3 to 4 hours a night and watch. I suspect this is true of most people, even Cubs fans. The pace and regularity of the sport makes it difficult to focus exclusively on the game. We just don’t watch TV like that anymore and even with the DVR recorders, who can catch 50 games a year let alone 162? 

 I’ll be watching every pitch of this historic World Series though. I might even record a few next season and follow the club better in 2017. So I am not the most dedicated fan anymore but like so many others who have hoped, and believed this day would come—GO CUBS!!