• Schemes to make the most of the GOP tax plan

    Fareed Zakaria on the new tax bill

    Whether or not one agrees with the wisdom of the GOP tax bill, if it becomes law (as it looks like it will, as of December 17th, 2017), then each taxpayer probably wants to make the best of it on a personal basis. Some of the strategies include: 

    • Giving to charities in 2017, assuming one won't be itemizing in 2018. One strategy is a "Giving Account" which is available at some investment firms. Make your donation now to the account--then parcel it out to charities in the future. Your deduction can be taken in the year the account is set up. 
    • Have a child...OK--this is risky business and rife with Unforeseen Consequences, but maybe your employer will take advantage of the family leave provisions that they can only deduct in 2018 and 2019.
    • Regarding inheritance tax (if you are among the 2/10 of 1% of folks who stand to inherit an estate worth $5.49 million or more--since those are the only estates that are taxed): have your benefactors die later rather than sooner...but make sure they die before 2026! For this interim time, the first $11 million will not be taxed--but it goes back to  "only" $5.49 million in eight years. 
    • Move to Alaska, New Hampshire, Texas, Florida, Nevada--or some other state that doesn't have a state income tax or high property taxes, since state income and local property taxes will not be deductible over $10,000 under the new plan. 
    • Make non-real estate asset swaps (1031 exchanges) this year, as the non-real-estate transactions will not be allowed under the new law. A 1031 exchange allows an entity to sell an asset and replace it with another without incurring a tax liability on any gain. 
    • Set up and use a 529 account--not just for your kids' college education--but also to send them to private elementary and high school. 
    • Turn yourself as an employee into a pass-through corporation in order to take advantage of a 21% income deduction in the GOP bill.
    • Of course : See an accountant to make sure that whatever strategy you think applies will actually will work to your benefit.

    I, personally, am in a state where the income tax rate is high and the property taxes are a significant portion of housing expenses.  On my joint tax return, I have itemized deductions for most of my middle-to-upper-middle-class adult life--so I will have to do some "what-if" calculations to see how I should proceed in the future. I feel a bit aggrieved that the new tax law creates corporate tax rates that are lower than individual rates--especially because corporate tax-payers benefit in an extraordinary way from tax-supported infrastructure (roads, bridges, railroads, ports, police protection, fire protection, military protection). I am also concerned that the lack of support for home ownership in the current tax bill will de-stabilize the middle class and make it harder for the young to move up in economic status. Worst case, it will widen the divide between the extremely wealthy and The Rest Of Us. And create more debt. Alas. 

    Nevertheless, I may personally benefit from the GOP tax plan--but just a little: enough to take the family out to a very fancy dinner, maybe. Or to pay an accountant to crank the numbers for a few different tax scenarios, in case I don't trust myself to do it right. 

    I do encourage everyone to make the best of their own situation in light of the current reality, but also to work for other tax reform bills if this one doesn't seem to be the best the U.S. can do. 

    Source: "Hacking the Tax Plan: Ways to Make Money Off the Republican Tax Bill," by Quoctrung Bui and Margot Sanger-Katz, New York Times, December 12, 2017. 

    Follow up

    • How will the tax bill affect you, assuming that it passes? Will any of the hacks mentioned in the article help? Be specific in terms of the amount it will cost you or help you. If it will help you, what will you do with the extra money?
    • Discuss the pros and cons of "voting your self-interest" vs. "voting your conscience." If you were voting your self interest, would you vote for this tax bill, based on your short-term and long-term realities and aspirations?
    • If you were in charge of the U.S. as a whole, what would be the essential points in your ideal tax structure? Whom would it particularly benefit and why? Is balancing the budget a factor in your plan? 


  • Molly's Game: entrepreneurship, poker and business ethics

    trailer for Molly's Game

    Opening this holiday season is the film Molly's Game, which is a biopic about an Olympic-hopeful who became an extremely successful poker-game-hosting entrepreneur. Molly Bloom, portrayed by Jessica Chastain, thinks on her feet, embodies an ideal of self-discipline, and takes advantage of opportunities to make money and control her own life--while assuming an increasing amount of risk. At one point, she crosses the line into what is technically illegal activity, which leads to the dramatic climax of the movie arc.  

    Thematically, the movie addresses motivation in a major way--as well as decision-making, risk, and what a clear ethical stand might mean for one's personal life. In addition, it is fun (and easy, with a little internet research) to guess what real-life characters are being portrayed by the film. 

    Source: "Molly's Game," written and directed by Aaron Sorkin, produced by STX Entertainment, et. al., in theaters beginning December 25, 2017.

    Follow up

    • What 2 events shaped Molly Bloom's Olympic career in a dramatic way? How may those experiences have shaped her business career?
    • When did Molly Bloom first commit a technically illegal act? What laws did she violate? What does the judge ultimately have to say about the severity of her crimes? What other crimes were being committed by those with whom Molly was doing business? 
  • A disruptive solution to the problem of sustainable energy storage

    a primer on Electrochaea's storage process my NTD.TV

    Think about the sources of carbon-based energy--coal, petroleum, propane, natural gas. One thing they have in common is that they are tangible, transportable products that are not consumed in transport. This also means that they are finite--as well as being a part of several causing environmental problems. Solar and wind power are different, in that they capture energy from constantly-renewing sources. But unless that energy can be used when it is produced, it needs to be stored in some separate medium so that it can be transported and/or used later.

    So far that medium has been batteries. Battery technology is becoming more efficient, but it does not represent a cost effective, long term solution in a world where a larger and larger percentage of energy is produced from renewable sources. Lead-acid battery technology has evolved into newer lithium ion batteries. And salt, silicon and graphite are also being studied as more efficient and economical battery materials. But batteries add to the expense of renewable energy...and may not be the best solution at all. One company is doing something totally different, with demonstrated effectiveness. 

    The German company Electrochaea GmbH, in its own words, "has developed a commercially viable and disruptive solution for utility scale energy storage, grid balancing and carbon reuse." In other words, Electrochaea has a completely new approach to solving sustainable energy storage: converting it into methane. Methane gas is the primary component of the natural gas that powers many hot water heaters, furnaces, stoves and clothes dryers, so we already know how useful it is. Moreover, the infrastructure for delivering methane to the final consumer already exists. 

    The process has many steps, but the most interesting step involves the use of "methanogenic archaea"--a biological catalyst. The process is described in detail in the linked article, but is summarized on an Electrochaea webpage graphic:

    A "commercial scale demonstration facility" has been built by a Danish Electrochaea subsidiary, and their initial goal is to decarbonize the Danish grid. A major revenue stream will be the sale of natural gas.  

    Source: "Batteries can't solve the world's biggest energy storage problem. One start-up has a solution." by Akshat Rathi, Quartz, December 11, 2017.

    Follow up

    • Describe the process used by Electrochaea. Do you see any places where there may be bottlenecks or problems? Do you notice any surprising benefits?
    • How is Electrochaea organized as a business? Who has invested in Electrochaea? (see their About and Partners pages) Would you invest? Why or why not?
    • What do other companies and energy industry observers have to say about Electrochaea's technology?


  • Cute rescue puppies: Supply, demand and logistics

     Tracy's Dogs, a different, non-profit, organization with the same mission

    Depending upon where you live, the puppies you see at your local adoption center may not be local strays...but rather may be imports from elsewhere in the country. There are a few factors that set up the business model that make this a reality:

    • Several states in the South have no leash laws, and no spay or neuter laws (or big fees for licensing a fertile dog).
    • Consequence: a lot of "surprise" pups. Therefore, there is an over-supply.
    • Several states in the Northeast, northern Midwest and West have spay and neuter laws as well as leash laws.
    • In regulated states, fewer puppies are being born...and therefore there is less of a selection at adoption events. Therefore an under-supply or over-demand exists.
    • Non-profit fund raising by animal lovers can help make the business model work for transporting the animals to even out the supply and demand situation.

    Entrepreneur drivers like Joy Harklerode make a difference in states where the economic hardship of paying for the spaying an animal outweigh any "greater good for the greatest number" concerns. She, and others like Rusty's Legacy and Brother Wolf Animal Rescue make the economics of animal rescue work by acting as intermediaries in the transporting of unwanted pups to states where there is an undersupply of adoptable dogs. 

    This is one example of making a business that aligns with personal values. Wanna see more puppy pictures? Visit Topic.com.

    Source: "What Rescue Puppies Teach Us About Supply and Demand," by Peter Balanon-Rosen and Lizzy O'Leary, Marketplace: American Public Media, December 7, 2017.

    Follow up:

    • Research and discuss another product that is transported across country for reasons of supply and demand: Used cars.
    • Discuss the economic constraints for those who transport rescue dogs long distance. What factors make this business work? What factors can make the thin-margin business model fail?
    • What business would YOU like to start that aligns with your personal values?


  • Why would a business go to space?

     PBS: Why do we go to space?

    Planet Money, the podcast series on business from NPR, has obtained space on a satellite (owned by Planet) orbiting the Earth and taking pictures. (But they still need a rocket.) This may sound exciting, but then they asked themselves: Why are they doing it?

    One of the reasons is "Space Fever." And if there is "fever", it may mean there is a business "bubble" rather than a long-going investment opportunity. They rationalize their pictures as being a time machine, even though their first impulse is to find their personal homes using the satellite data. Still, that is not all that is happening with space data.

    In developing their rationale, the Planet Money people talk to spies at Genscape. Genscape professionals obtain and gather data for clients--measuring whether power plants are running for example. Genscape actually can spy on how much oil is in a tanker in a Chinese port as well. This is useful, salable data. 

    So, (again referencing a personal interest) a possible mission for Planet Money pod 1: avocado pricing prediction, based on the timing of supply. They can look at heat patterns for ripening and track avocado trucks or ships or avocados on pallets. "Tracking complementary commodities" might also be utilized in this mission. 

    All of these measurements can be accomplished from space. And Planet Money is planning on zeroing in on one of the many reasons that can be summed up as "industrial espionage."

    Source: "Space 2: Wait, Why are we going to space?" by Stacey Vanek Smith and Robert Smith, NPR: Planet Money, December 1, 2017.

    Follow up:

    • Why might any business want to do space exploration? Consider Elon Musk's SpaceX and Avatar (fictional) in your answer. Give examples and support your research. 
    • Describe what the company Planet does. What is their source of revenue? It is described in the middle of the podcast. 
    • Listen to the first episode in the series. How did Planet Money get involved in this project?
    • Do you think the backstory about how pictures were "captured" by the Corona satellites was relevant to the story? Explain your answer, in terms of marketing communication. 


  • A career path of luck, flexibility, hard work, dedication and success

     short interview bites from Seraina Maag; For more, see speech after honor

    Seraina Maag (Macia), age 49, has had a remarkable international career in insurance and finance. So far, it has included these highlights:

    • An idyllic childhood in the Swiss mountains, doing acrobatic horse riding in international competition
    • A gap year in London, employed as an au pair
    • Work as an export credit specialist in Zurich for Brown Brothers Harriman--while going to night school in management
    • Work as an account underwriter for Swiss Re, an international reinsurance company. Although she did not meet the minimum job requirements, as luck would have it, her resume had been on a stack left outside on a balcony, and drew attention because it had been hit with bird droppings. She got the job and worked her way up to rating agency coordinator in the decade she was there.
    • Education at night: While at Swiss Re, she worked in both Switzerland and Australia, and continued night school. She received her MBA and became a Chartered Financial Analyst while working in Australia.
    • Entrepreneurial work as a bank founder: With twelve men, founded NZB NeueZuercher Bank in Switzerland, and served as Partner and Financial Analyst
    • Work as a global financial manager at Zurich Financial Services in Switzerland, running the Investor Relations & Rating Agencies and serving as Chief Financial Officer and President of Zurich North America Commercial Specialties.
    • An opportunity to grow and turn around a division of XL Group, whose CEO, Mike McGavick, gave her the freedom she needed to take action.
    • An appointment to the Young Global Leaders group of the World Economic Forum, which led to additional world service commitments.
    • Leadership as CEO of Hamilton, USA, between her two stints with AIG, Inc. 
    • Leadership at AIG: Worked at AIG; left in 2015 as part of a reorganization; rejoined AIG July 13, 2017 as Executive Vice President and Chief Executive Officer of Planned Technology-Focused, an AIG, Inc. subsidiary. Here she heads up a special project called Attune, which develops data analytics.
    • Service on a corporate board: Has been an Independent Director at Credit Suisse (USA), Inc. since 2015.
    • Service work in the Congo and other places as Chairwoman at BanQu, Inc.

    Inspiring, isn't it?


    Follow up

    • What do you think are the outstanding aspects of Seraina Maag's career history? In what ways would you like to emulate her? What aspects wouldn't work for you?
    • Have you ever applied for a job for which you did not meet the minimum qualifications?  If you were hired, how did that work out? Do you know of any others who have been in that situation? Describe.


  • Business Books for the New Year

    Andrew Ross Sorkin has been a major force in business entertainment this year--as a consultant for the TV series Billions, and the creator of a DealBook digest of business news. He also has some reading suggestions for business aficionados, which include:

    Happy reading! I've got the Ray Dalio book on my bookshelf...

    Source: "In a Year of Nonstop News, a Batch of Business Books Worth Reading," by Andrew Ross Sorkin, New York Times, December 25, 2017.

    Follow up: Have you read any of these books? Which ones interest you? Why?

  • No more letters of recommendation!

    from Grammarly.com

    It is a little ironic for me, as an instructor, to read an article in which the REQUESTOR of the letter of recommendation is making an argument for changing the process. Often it is the professor or former boss that is inundated by requests for letters and imagines a better process. However, it may be that the process could be improved on both sides. 

    The author of this article has requested TWENTY-FOUR recommendation letters in the current year so far--and expects to ask for more. Why? Because they are required by grants, potential employers, internships, fellowships, residencies and others. Rosen, the author, suggests that the process could be streamlined by using one or more of the following:

    Until there is a pervasive standard, however, there will be striving, duplication of efforts, occasional duplicity, and other problems. 

    Source: "Please don't ask me for another letter of recommendation," by Kenneth R. Rosen, New York Times: Preoccupations, December 1, 2017.

    Follow up:

    • Have you asked for letters of recommendation? What was your process? (include advance time, links provided, number of recommendations requested, and whether or not you thanked your recommenders) How did things turn out? What might you do differently next time, based on experience, or on having read this article?
    • Have you ever written a letter of recommendation? Describe the process and your feelings about it. 
    • Comment on the point of view expressed by the author of the linked article. Start by describing the hypothetical iRecommend, and how it might work.
    • Try this exercise: a subordinate with whom you have had several issues asks you for a letter of recommendation. On one hand, you can't think of what you might say that would be positive. On the other hand, you would REALLY LIKE him to get a new job. Write two or more drafts of recommendation letters aimed at meeting multiple objectives (including Doing the right thing; Meeting your own needs; Giving the subordinate the benefit of the doubt; and Skirting your responsibilities). 

  • Taking the "Bro" out of CEO at MBA schools

    image by Chris Philpot for NYT

    In many MBA schools traditionally, a "bro" mentality has been fostered. Faculty offices, fraternities, exclusive meetings with alumni and appointments with recruiters have all been arenas where exclusion has been taught by example. Today, however, the atmosphere is changing. At Vanderbilt University, Professor Tim Vogus teaches about the "bro" culture at Uber. Stanford and Harvard are covering sexual harassment, free speech and human resource ethical issues. Topics such as gender privilege, empathy, and the sociology of decision-making are also being addressed. 

    From the article linked below: "An M.B.A. education is no longer just about finance, marketing, accounting and economics. As topics like sexual harassment dominate the national conversation and chief executives weigh in on the ethical and social issues of the day, business schools around the country are hastily reshaping their curriculums with case studies ripped straight from the headlines."

    A program called Manbassadors was started by two men in the Berkeley Haas MBA program, and has been gaining traction. Might this become a resume must-have?

    Source: "Business Schools Now Teaching #MeToo, N.F.L. Protests, and Trump," by David Gelles and Claire Cain Miller, New York Times, December 25, 2017.

    Follow up

    • Where and in what way(s) have you experienced the (perhaps unconscious) teaching of a men's-club-mentality for a business environment? Give specific examples.
    • Describe the Manbassador program. What are the plusses and minuses?
  • Global competition and the tax reform tax rates

     one view of tax reform from the right-of-center Young Turks

    Proposed GOP tax reform promises increased global competitiveness of American companies. One of the supporting arguments of this is that the "U.S. has the highest corporate tax rate among developed countries." This is misleading, as the taxes paid for social services are not included, AND few corporations pay the full rate, according to Jonathan Traub of the Tax Policy Group at Deloitte Tax LLP in the article linked below. Also, there is no "quid pro quo" in the tax reform bill: corporations are not required to give any benefits to workers when they take advantage of reduced tax rates. 

    One logical outcome, according to Virginia Haufler (whose research at the University of Maryland, College Park, focuses on transnational corporations), could mean that  corporations might “pay out big dividends to their shareholders instead of investing in new technology and upgrading their workforce skills.


    The big question is: WHAT IS THE UNDERLYING AIM OF DECREASING CORPORATE TAXES? And Individual Tax rates? Who benefits the most? Who is hurt, or benefits the least? What is the effect on future generations of increasing the deficit?

    Source: "There's more to America's global competitiveness than the tax rate," by Kimberley Adams, Marketplace: American Public Media, December 5, 2017. 

    Follow up

    • Think about situations where you, as a teen or young adult, have gotten a reward BEFORE you achieved a goal. How did that work out? 
    • Based on your experience, or other sources, extrapolate the tax reform benefits to corporations in terms of what they get as a determinate of what they will do. What are the guaranteed results? Likely results?
    • Summarize the points made in the podcast.
    • If there were national single-payer, government subsidized health care, would you be MORE or LESS likely to  start your own business? Put all of your thoughts on the table about this. 

  • Cows, George Clooney, and South Sudan

     George Clooney discusses corruption in South Sudan

    Business has a way of sneaking into politics in every corner of the world. When celebrities get involved, they can raise awareness and money with appeals that can be understood by those in the United States--the terrible danger and atrocities described by George Clooney are an example.

    But some values are more difficult to understand. Cows as currency--and as a way of relating on a social basis--is one aspect of South Sudan that may be difficult to grasp. In South Sudan, cows function as both currency and credit cards, so cows are an integral part of a majority of business transactions.

    Cows as currency in South Sudan...and the conflict it produces

    The United States was instrumental in setting up South Sudan as a political entity...but the current administration feels that maintaining support for the entity is too expensive. But continued support is needed--primarily to contain the corruption inflicted by rustlers that steal cows and rob individuals of "their whole life." No amount of cash can compensate--though it is difficult for us in the USA to understand how that can be possible.  

    In international trade transactions, it is important to understand what is valued by cultures that are very different from one's own. Protecting and funding a farm animal might be far less costly in terms of dollar expenditures, but may produce greater value. So investing with understanding can be more cost-effective than just throwing money at a problem when cultural understanding is lacking. According to the article, 85 cows cost only $14,000--but are very valuable in terms of status, worth and security. 

    Source: "Episode 805: War and Peace and Cows," by Gregory Warner, with Noel King, NPR: Planet Money, November 15, 2017. [Transcript]

    Follow up

    • What can this story teach a businessperson regarding negotiation and pricing?
    • What parts of this story cannot be easily understood by those of us living in the United States? 


  • "When was the last time you told a lie?" and other tough interview questions

     image from YouTube video produced by Wah! Banana

    Interviewing for a job means that you have your "foot in the door." You have made the "paper cut" and the employer is interested enough in you as a future employee to take the time to meet you. But a job interview can be more stressful than a first date. A person can do their homework on the company and have excellent qualifications, but might be get flummoxed when asked one of several tricky and tough interview questions--designed to put an interviewee on the spot. Here are a few from Forbes Magazine

    • Why have you been out of work so long, and how many others were laid off?
    • If employed, how do you manage time for interviews?
    • How did you prepare for this interview?
    • Do you know anyone who works for us?
    • Where would you really like to work?
    • What bugs you about coworkers or bosses?
    • Can you describe how you solved a work or school problem?
    • Can you describe a work or school instance in which you messed up?
    • How does this position compare with others you’re applying for?
    • If you won the lottery, would you still work?

    A few of the above questions shouldn't surprise anyone who is preparing for the interview process--experience solving problems or learning from mistakes is pretty standard interview fare. But some of the other questions can test for emotional intelligence and, without asking directly, for honesty. 

    Here are a few more tough questions, these from Onward Search

    • What kind of tree is your career?
    • What is your greatest weakness?
    • What is the last book you've read? (I was asked this when applying for my full time position at SMC)
    • What is the one question you were hoping I wouldn't ask you today?
    • How do you make a peanut butter and jelly sandwich?

    And, especially if a person has been stretching the truth in the interview process, the really tough question to answer is: When was the last time you told a lie?


    Follow up

    • How would you answer the question: "When have you lied at work and gotten away with it?" What was your motivation? What might you do differently?
    • Discuss how the article suggests answering several of the questions above. Prepare your own answers to the questions. 
    • Why might an interviewer ask you to describe how to make a peanut butter and jelly sandwich?


  • Net Neutrality is over

     Ajit Pay, FCC Chairman; photo by Tom Brenner, NYT

    The Chairman of the FCC, Ajit Pai, put forth a motion to repeal the rules that ensured that the internet was open in terms of bandwidth. He vigorously defended the repeal before the vote. He said the rollback of the rules would eventually benefit consumers because broadband providers like AT&T and Comcast could offer them a wider variety of service options. His two fellow Republican commissioners also supported the change, giving them a 3-to-2 majority.

    Others note that there is nothing in the rule change that would incentivize service providers to provide more content, although it may be that additional content may be provided at additional (and uncapped) costs. 

    Sources: "Farhad and Mike's Week in Tech: Net Neutrality is Gone," by Farhad Manjoo and Mike Isaac, New York Times, December 15, 2017.

    Follow up

    • If you want to get a feel for how some people feel about the loss of net neutrality, check out the compilation of memes on YouTube. What is the overall impression that can be inferred from these?
    • List the pros and cons of net neutrality for the following stakeholders:
      • individual users who stream entertainment content
      • small entrepreneurial businesses like restaurants or specialty retailers
      • internet service providers (AT&T, Comcast, Frontier)

  • Bots are buying up hot-selling toys for holiday resale

     KTNV report on toy-buying bots

    Have ever tried to buy concert tickets and have logged in again and again from the moment the ticket sales opened--but have failed to successfully complete a transaction? If so, it is totally possible that tickets were being bought up by "bots". Their efficiency at analyzing markets and split second timing can foil even the most dedicated of fans. Companies employing bots then resale tickets to diehard fans at a mark-up above ticket price. 

    The same technique is being used in the online retail market--against children, albeit indirectly. Bots are buying up coveted Christmas-requested toys, then reselling them on Amazon or eBay at inflated prices. Some toys that have been affected for Holiday season 2017 include: 

    And from previous years: 

    Chuck Schumer, the Senate Minority Leader, has taken a stand against bots: "When it comes to purchasing products online, major retailers should put forth policies that will help prevent future Grinch bots from stealing the season’s hottest toys.

    What will it take to enable consumers to get a fair deal?

    Source: "Can't Find Any Fingerlings? Bots Snap Up Popular Christmas Toys For Resale," by Christina Caron, New York Times, December 5, 2017.

    Follow up:

    • Define "bot" and list various arenas where bots are deployed.
    • Shop for each of the toys listed above online. What is the MSRP? For what cost can you buy one from at least 2 sellers?
    • Do you think that bot purchases should be regulated for all in-demand items?  Should concert tickets be treated differently than popular toys, books, or iPhones? How do bots hurt consumers, retailers, manufacturers, and marketing strategies? Who do bots help those groups?
    • What strategies can be used to combat bot purchases? A couple ways are mentioned in the video, but think of other ways as well.


  • SOLFIS: an innovative and affordable retirement investment vehicle

     Arun Muralidhar, inventor of the SOLFIE, on managing financial risk

    With the declining availability of defined benefit pensions, the risk of having enough income in retirement is falling on the individual shoulders of a larger percentage of the workforce. In order to retire, not only does a person have to be good at one's profession, he or she also has to be good at investing. The current reality, however, is that only one-half of U.S. families have more that $5,000 saved for retirement. That certainly will not be enough--and the societal burden of caring for the elderly poor may become a larger problem. Fortunately, an MIT-trained person (whose profession is investing) has invented a financial product that could help prudent individuals provide for their own retirements.   

    Marketplace interviewed Arun Muralidhar, co-founder of Mcube Investment Technologies, about his proposed investment vehicle, pronounced almost like "selfies": SOLFIS (Standard-Of-Living Forward-starting Income-only Securities). These would be government bonds that would pay the purchaser $5 per bond, each year for 20 years. This would presumably create a defined-benefit retirement income from age 65 to age 85 (at which point the retiree would need to have another source of income). To have a realistic income of $100,000 per year in retirement, a future retiree would have to buy 20,000 SOLFIS over his or her working life.

    In current market conditions, a single SOLFIS would cost a 25-year old $15, and this amount would increase if the purchase was made closer to retirement. The concept is supported by Nobel Laureate Robert Merton--but can it become a reality? 

    Source: "An invention aimed at revolutionizing retirement savings," by David Brancaccio, Marketplace Morning Report, December 8, 2017.

    Follow up

    • What is a defined benefit pension? Why have they fallen out of favor with businesses? Would this type of pension be an attractive job benefit to you? Why or why not?
    • The SOLFIE does not yet exist. What, according or Mr. Muralidhar, would be an ideal first step to possible implementation? What hurdles would exist in the process of getting this implemented?
    • What are the pros and cons of this type of investment vehicle for: a) the federal government; b) purchasers? What are the major risks and benefits?
    • Summarize what Arun Muraldihar has to say about the corporate management of risk (in the video above). Would you say that he takes a realistically conservative approach to investments? Explain. 


  • Korean Beauty Product Buzz

     One take on the Korean Beauty Product Business

    Marketing communication is a primary component of the sale of "Health And Beauty Aids." Magazines and social media abound with "solutions" for problems that may or may not even need to be remedied.  Sometimes the products retail for many times over the cost of the product as manufactured. What is the price tag on hope?

    People have been chasing the Fountain of Youth for generations. As Gen Xers deal with becoming middle-aged, and as millennials hover around age 30, there are new potential customers starting to panic about the aging process and becoming desperate for solutions. A current fad is a 12 step Korean Beauty System, which actually can vary from 10 to 17 steps. At any rate, because people don't know what really works--but want to believe that someone has The Answer--products that are "new" have a marketing edge.  

    The NYT article below is written by Euny Hong, an American writer of Korean descent, who is multi-lingual and has lived around the world. She wants to warn Americans that they "have been had" by the promises of Korean beauty systems. (She limits her use to snail slime.) Check out the products below. 

    image by Na Kim in NYT article linked below

    Source: "I Grew Up Around Korean Beauty Products. Americans, You've Been Had," by Euny Hong, New York Times, December 9, 2017.

    Follow up:

    • What is Euny Hong's take on the good and bad of Korean Beauty Products?
    • What marketing strategies are often used with beauty products? List at least five and describe why they are employed. Which are most effective?
    • Research and report on the mark-up on beauty products. How does this compare to the mark-up on retail clothing? What other products have high mark-ups? What does high cost communicate to the consumer? 


  • Two bosses at CFPB resolved by court decision

    images of Leandra English and Mick Mulvaney from Heavy.com

    When Richard Cordray resigned last week as head of the Consumer Financial Protection Bureau (CFPB), he followed the law that established the independent consumer watchdog agency: he appointed his deputy director,Leandra English, as acting director. But then President Trump double-appointed his Office of Management and Budget pick, Mick Mulvaney, to the same position, claiming that all agency positions were his to appoint. 

    Ms. English filed a lawsuit on Sunday against both Donald Trump and Mick Mulvaney, seeking a restraining order to block Mulvaney's appointment.  But on Monday, Mr. Mulvaney showed up to work earlier than Ms. English with doughnuts and instructions to staff to ignore Ms. English. 

    The confusion about who should fill the vacancy rests on two laws with conflicting procedures for appointments--one of which may or may not apply to the CFPB (quotations are from the Charlie Savage article linked below):

    • The 2010 Dodd-Frank Act, which created the CFPB as an independent regulating agency said "that the deputy director, who is appointed by the director, 'shall' serve as acting director if that position becomes open." Those supporting this interpretation read the word "shall" to be definite rather than a possible suggestion.
    • The 1998 Vacancies Reform Act--not directed at a specific agency--includes a default position that overlaps Dodd-Frank (that the deputy director should assume the position of acting director). It also, however, "gives presidents the option of instead appointing as acting head any other executive branch official who has already undergone Senate confirmation, as Mr. Mulvaney has. [The Vacancies Reform Act ] procedures are the 'exclusive means' of temporarily filling a position unless another statute expressly designates an acting successor. Since Dodd-Frank does just that, the question is whether the 2010 law superseded the Vacancies Reform Act for the purpose of the Consumer Financial Protection Bureau."

    By late on Tuesday, Judge Timothy Kelly ruled that the 1998 law superseded the 2010 Dodd-Frank Act and cleared the way for Mick Mulvaney to head the CFPB.  But it appears that Mulvaney would like to deregulate himself out of the job. Slate cited his testimony to the House Subcommittee on Oversight and Investigations: "I don’t like the fact that CFPB exists, I will be perfectly honest with you.” Mulvaney also co-sponsored HR 3118, a bill to eliminate the CFPB.


    Follow up

    • Who did you want to prevail as head of the CFPB? Why?
    • What might you have done if you reported to the director (or acting director) of the CFPB and you were at work on Monday with two bosses in conflict? If you have been in a situation where you have observed or have been a person reporting to two bosses, discuss the issues that arise as a subordinate. 
    • Listen to these views of the CFPB: The Young Turks interviewing Elizabeth Warren and Ralph Nader on Fox NewsDo either of these interviews help you better understand the Consumer Financial Protection Board? Why or why not? 

  • How to Deal with a Bad Boss

    image from the The Daily Worth blog

    The recent rise in sexual harassment complaints has highlighted one aspect that may arise in dealing with a "bad boss." But bosses can be troublesome in a variety of  ways. Four general behaviors that indicate a supervisor may be problematic are:

    • Communicating only rarely. This type of boss might only communicate when he or she has something negative to say.
    • An unwillingness, repeatedly, to take personal responsibility for problems.
    • No evidence of a moral center--cannot focus on what is right and wrong for the organization, but will do anything to improve his or her own situation.
    • Failure to foster and mentor subordinates.

    Forbes magazine recently did an article on how to deal with a difficult supervisor, suggesting five constructive ways:

    • "Make yourself indispensable.
    • Try to see things through his or her eyes.
    • Don't complain to your boss's boss.
    • Stay true to yourself and your values.
    • Don't be a victim--vote with your feet."

    It is difficult to apply these rational responses and deal with the emotions that arise in the moment when being criticized or otherwise poorly treated.  Mindfulness is a technique that might help. Mindfulness is meta-awareness about what one is experiencing. In a simple example, one can experience frustration or even road-rage in bad traffic among selfish drivers. Meta-awareness would be noting that one has a strong feeling and that a choice exists as to whether to run with those feelings or just sit and notice that the feeling has arisen, not taking the situation personally.  

    With respect to the bad boss issue, meta-awareness might look like this: if one experiences a thought such as: "I am really being treated unfairly! What a jerk!"-- it is possible to have two responses (at least). One response is to feel moral indignation and ramp up one's emotional agitation regarding the unfairness. Another response is to have a meta-awareness: "Oh, I am experiencing strong emotions here. One is anger. Another is fear. I could really let this build until I want to explode. I can choose, however, to  just sit in this meta-awareness until the strong feelings of helplessness subside.Then I will think about the situation rationally and maybe discuss it with a trusted friend or colleague so I I can handle it more skillfully." 

    Source: "5 Constructive Ways To Deal With Bad Bosses," by Victor Lipman, Forbes, September 14, 2017. 

    Follow up

    • Give examples of how a person might exhibit each of the five behavioral suggestions for dealing with a difficult boss. 
    • When might each of the five suggestions be inappropriate? Give examples. Are any of these suggestions useful in sexual harassment situations? Explain your answer, and offer better alternatives if you think of any. 
    • Do you have any experience with mindfulness or meta-awareness when dealing with difficult people? Describe. You might want to read more about this concept: "Situational Awareness Matters."


  • Mobile phone oligopoly could get tighter: AT&T and T-Mobile

    logos of AT&T and T mobile

    logos for AT&T and T Mobile

    The US Justice Department sued to block the purchase of T-Mobile USA by AT&T this Wednesday, as reported by Joelle Tessler and Pete Yost of the Associated Press ["Government Sues to Block AT&T, T-Mobile Merger" via yahoo news, 8-31-11].  The Justice Department claimed that the merger of the #2 wireless company with the #4 wireless company would stifle competition in the industry even further.  The purchase would make AT&T the top wireless company in the United States, superceding Verizon.

    Deutche Telekom,  T-Mobile's parent company, has already decided not to invest further in T-Mobile USA upgrades.  This strengthens AT&T's argument that T-Mobile is already, in fact, out of the business of being a viable competitor.  On the other hand, representatives from the Justice Department asserted that the merger would result in "tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services."  Because of its underdog status, T-Mobile has been a leader with innovations like wifi hotspot access, the first Android phones, Blackberry wireless email, and unlimited service plans.  T-Mobile describes itself as "the No. 1 challenger of the established big guys in the market." T-Mobile has spurred competition among all providers. 

    Others have weighed in on the merger.  In a Forbes article, "DOJ is Wrong to Try to Stop the AT&T / T-Mobile Merger" Geoffrey Manne details "the spectrum argument," which is supported by the FCC's 15th Annual Wireless Competition Report.  FCC Chairman Julius Genachowski asserts: "Demand for spectrum is rapidly outstripping supply. The networks we have today won’t be able to handle consumer and business needs...To avoid this crisis, the National Broadband Plan recommended reallocating 500 megahertz of spectrum for broadband, nearly double the amount that is currently available."

    AT&T's acquisition of T-Mobile would partially alleviate the spectrum problem by creating less overlap and more efficiency.  This efficiency, however, is what would create the anti-trust issues that caused the Justice Department to file the lawsuit in the first place.  The judge who will be hearing the case, Judge Ellen Segal Huvell, is an experienced anti-trust jurist who has decided cases on both sides during her 12 years on the United States District Court. 

    Follow up:

    1. If the deal between AT&T and T-Mobile is blocked, what will T-Mobile receive in payment from AT&T?  What will it cost AT&T to purchase T-Mobile USA if the deal is approved?

    2.  In what other industries is the market structure an oligopoly? Pick an oligopoly that has a product you consume.  What do you notice about prices in this type of market structure?  Does anything ever go "on sale"? 

    3.  How easy or difficult is it to start up a new company in an oligopoly?  What are the barriers?  What is the easiest market structure in which to start a new business?


  • After hitting bottom, Detroit's revival includes Mahindra's nearby auto plant

     A Mahindra factory in India

    The Detroit area is growing again. The Mumbai, India-based company, Mahindra, had a ribbon-cutting ceremony today signaling a new plant to be built in Auburn Hills, MI. This is the first auto plant investment in the Detroit area in over 25 years. Off-road vehicles will be manufactured there. 

    Reasons cited by Anand G.Mahindra, CEO, for the location of the plant include: 

    • Elon Musk has proven that some of the barriers to an American auto plant start-up can be overcome.
    • "We have a responsibility to contribute to the resurgence of Detroit. That means jobs, and that means investment.”
    • The Detroit area has the human resources of engineering and manufacturing experience, and is a hub for self-driving innovation and testing sites.

    Source: "Indian Automaker's Plant is Latest Sign of Detroit Comeback," by Bill Vlasik, New York Times, November 20, 2017. 

    Follow up

    • List and discuss some additional reasons for locating in southeast Michigan, other than those cited by the company in the linked article (check related internet search links)
    • According to the article, what other foreign corporations have invested in southeast Michigan, and why?
  • SNL skit addresses sexual harassment--an unfunny reality for 48% of the female workforce

     "Claire from HR" (Cecily Strong from SNL) on sexual harassment (TVMA)

    According to a recent Wall Street Journal/NBC poll, sexual harassment is a reality for 48% of women in the workforce. Individuals who do not identify as women are being harassed as well. Human resource departments (now often heavily staffed with attorneys) often use "trainings" in an attempt to mitigate corporate liability resulting from sexual harassment, which can be costly in terms of productivity and turnover, as well as dollar settlements. These trainings clearly are not doing enough to address the realities of harassment if so many are still experiencing it.

    The humorous skit from Saturday Night Live is far more direct than any HR training might be. It deals with the issue in substance, rather than side-stepping the interpersonal issues by focusing on the legalities. Marketplace's Sabri Ben-Achour addressed the effectiveness of various approaches to sexual harassment training in a previous podcast: "What makes sexual harassment training effective--and ineffective."

    Source: "SNL's Claire From HR nails sexual harassment, but she won't be part of your training," by Jana Kasperkevic, Marketplace: American Public Media, November 13, 2017.

    Follow up:

    • What part of the #MeToo movement resonates as with you? What, if anything, makes you uncomfortable about the revelations regarding sexual harassment? Have you felt any backlash?
    • Do you have any apologies to make? Do you feel any apologies are due to you? Have you witnessed behaviors that have made you uncomfortable? Describe at least once situation in which you would have behaved differently, in any of the three roles (harasser, person being harassed, and bystander).
    • In small groups in a classroom or workplace setting, role-play harassment scenarios and delineated at lease three ways to respond if you were a bystander. List possible positive and possible negative outcomes that may occur with each response. 
    • How should Human Resource departments deal with sexual harassment and sexual harassment training? Listen to the podcast linked above on effectiveness to inform your answer. 
  • Textbook "arbitrage"

     one entrepreneur's method for profit from used books

    "Arbitrage" is a Wall Street word for selling assets (or companies) at a profit at almost the same moment you are buying them at the lower price. The Planet Money episode linked below highlights two entrepreneurs who have applied the concept to used textbook buying and selling on a grand scale. Wildly divergent prices create an opportunity for profit. They call it a "guaranteed" way to double their investment. There is a built-in market for textbooks, and the market is predictable--the schedules of classes describe the market size. The textbooks are very expensive, and the price is very volatile, as the price rises at the beginning of each semester. Editions are current for about three or four years. The entrepreneurs used computer data to find out which textbooks were the most lucrative. 

    The market is changing somewhat for textbooks that have current online content. And more people are getting into the market. But the opportunity exists for those willing to do the research and can manage the logistics. 

    Source: "Episode 581: Free Money" by David Kestenbaum and Jacob Goldstein, NPR: Planet Money, October 18, 2017. (podcast)

    Follow up:

    • What are more lucrative applications of arbitrage? Give several examples. 
    • How do you buy your textbooks? Do you re-sell them? Do you know anyone who has a significant income stream from this business? Either from personal experience, secondhand experience, or by listening to the podcast, describe the advantages and pitfalls of buying and selling used textbooks. 


  • Steve Jobs steps down; will Apple keep going up?



    CNN.com reported on August 25, 2011 that Apple, Inc. is in the best financial shape it has been in the last 35 years. During the second tenure of Steve Jobs as CEO--from 1997 until his resignation this week--sales went from just over $7 billion to a forecast of $100 billion for 2011.

    The product mix has shifted--newer products, such as the iPad, are outselling even classics like the Mac.  But iPods have been outselling them all--until this year: 

    iPhone sales are also an important part of the current and future product mix.  And iPod sales continue to peak dramatically in the holiday season. 

    Will Apple continue to be a good investment under new leadership? Its cash reserves and innovative product performance seem to support its continued growth.

    Follow up:  

    1.  Calculate the percentage increase in sales from 1997 until 2010.

    2.   Calculate the increase in sales from the time the iPhone was introduced until the iPad was introduced.

    3.  Read Meet the Man Who Will Replace Jobs, from www.cnn.com. How far in the future does Apple's business plan extend?  


  • Responding to the growing backlash regarding sexual harassment claims

     sexual harassment claims on YouTube

    Backlash. The word has a negative connotation, but the phenomenon is almost inevitable--no matter what the topic. But when the topic is sexual harassment, conversations can become so polarizing that "overwhelm" sets in with a vengeance. Lili Loufbourow explains the phenomenon: 

    "With every news story there comes a moment of satiety so absolute that the weight of it trumps any story's actual merits. After everyone reads one too many descriptions of the same incident — whether it's allegations about Russian electoral interference or sexual harassment or rape — a reactionary mood sets in. It's the urge everyone gets as a news cycle crests: That's all very well and good, but come on. Time for the takedown, the pushback, the cooler heads that will reason the volume of the tide away."

    Here's an example of how it happens:

    "We all know what will come next. As in 2006, when the Duke lacrosse case gripped the news; as in 2014, when Rolling Stone published its piece about an alleged rape at UVA, one of the accounts coming out during this wave will be in some way disproved. When that happens, the familiar landslide of public opinion will turn. The incident will become a muted indictment of the hundreds of real victims who have come forward to tell their stories. Much of the public will seize that one false story as an excuse to facilitate the calming of the waters, the burying of a conversation so ugly and difficult that we regress to truisms about 'human nature' and try to explain sexual predations as mere 'awkwardness' or hapless attempts at flirting."

    There are also the actualities of what the New York Times terms the "unexamined realities of the male libido." An observer needs to over-ride any knee-jerk responses to situations in order to consider all aspects and all inputs to complicated interpersonal situations. What tools can a person access in a situation where a gut-feel response might be inappropriate?

    One choice: "Mindfulness" is meta-awareness about what one is experiencing. In a simple example, one can experience frustration or even road-rage in bad traffic among selfish drivers. Meta-awareness would be noting that one has a strong feeling and that a choice exists as to whether to run with those feelings or just sit and notice that the feeling has arisen. In other words, one can swear or yell at the other driver...OR take a breath and notice how much a part of the experience of delay is shared with other humans.

    With respect to the backlash issue, meta-awareness might look like this: if one experiences a thought such as: "They are not being fair to Louis C.K." or "That's not an apology!!"-- it is possible to have two responses (at least). One response is to feel moral indignation and ramp up one's emotional agitation regarding the unfairness. Another response is to have a meta-awareness: "Oh, I am experiencing a sudden thought that might get me riled up. I can choose to let it take over, or I can just sit in this meta-awareness until it subsides." One then has the chance to ask--again and again if necessary: What really happened? 

    Source: "The sexual harassment backlash is coming. Here's how to respond," by Lili Loufbourow, The Week, November 3, 2017. 

    Follow up:

    • What backlash have you experienced in response to the sexual harassment allegations and the range of responses from those accused? 
    • What backlash have you felt in response to the sexual harassment allegations and the range of responses from those accused? 
    • How can mindfulness around difficult discussions and interactions on this topic be applied in the workplace?
  • Why millennials make great seasonal employees

      image from flexjobs

    Holiday seasonal employment creates new opportunities in the "gig economy." The number of jobs spike in delivery and other logistics arenas, as well as in both on-ground and online sales. Employers can maximize both short and long term benefits by hiring millennials, according to the linked article and information from the National Retail Federation. The reasons include: 

    • Millennials like to communicate in person and online, and are especially adept at following up via social media. 
    • Angry and impatient customers provide opportunities for millennials to prove themselves--in an environment where they are not bored or burnt out by dealing with the public year-round.
    • The season provides a fertile but lower-risk training ground, both for and employee who might hone and develop skills to other positions, and for the employer who might want to hire the now-proven temp employee full-time. 

    In addition to the reasons listed in the article, the acceptance of short-term employment as a lifestyle make the millennial generation a first-choice for seasonal hiring. I'm sure there are plenty of other reasons...

    Source: "3 Reasons Why Your Seasonal Hires Should Be Millennials," by Deborah Sweeney, Business.com, October 19, 2017.

    Follow up

    • Have you ever worked as a seasonal employee--either during the holidays in a sales or logistics business, or during the summer in a beach, camp, or tourism related business? Describe your experience. What are the pros and cons?
    • What OTHER millennial attributes make this generation a great choice for hiring?