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Posts Tagged ‘economics’

Brilliant and succinct analysis of the erosion of expertise in the media from Todd Gitlin, in an article he wrote for the Chronicle of Higher Education. Check it out:

But when news media go looking for experts, they don’t examine their records. Baseball announcers would be fired for not knowing the RBI records of designated hitters. But editors don’t think it’s their business to vet their experts. They’re not enamored of expertise, they’re enamored of the aura of expertise. They embrace their experts all the way over the cliff.

With a news cycle running at full steam 24 hours a day and a push on the web to create and distribute content rather than substance, the walls come down. Or rather, the foundations crumble. We need viewers, we need visitors, we need clicks and likes have replaced we need to be the best in the business, the most knowledgeable, the most trustworthy.  That’s what content and content farms are there to do: The objective isn’t to answer questions, educate or even drive purchasing behaviors. It is simply to attract eyeballs. As many as possible, as often as possible. More eyeballs = more advertising revenue, and more advertising revenue is the end-game. If one channel isn’t enough, create a new one. Each new channel is like an empty bucket that needs to filled with… content. When SEO-friendly filler won’t do, sensational headlines and constant “news alerts” will pull eyeballs.

Opinions are now simply a product, which means that opinions have become mere content: Here is opinion A. Here is opinion B. Let’s throw a few soundbites back and forth at each other and move on to the next thing. Sell someone as an expert (or accept their claim regardless of whether or not they actually are) in order to fill a segment, and you have instant expert content. Now you have your 3 minute interview, your 3-paragraph blog post, your bite-sized YouTube video. More content means more views. More views means more advertising revenue, more chances to push more content and thus yet more advertising, more opportunities to sell webinars and white papers and $250 monthly subscriptions to the newsletter. Not enough experts to fill up 24/7/365 worth of news and content across 300+ channels? No worries: Just make some up. Anyone with an opinion that can be conveniently packaged as option A or option B will qualify as an expert for the purposes of a segment, of a presentation, of a consulting gig. And it isn’t like you will run out of people begging for their 15 minutes of fame anytime soon. The “personal brands.” The gurus. The overnight experts. They’re lining up around the block. You know why? Because they’re in demand and they know it.

Here is Mr. Gitlin again:

Some years ago, I wrote about the example of Edward Yardeni, formerly the chief economist of Deutsche Bank, who anticipated a world depression as the likely outcome of Y2K, yet remains on many a go-to list for economic commentary.  That he was badly mistaken did not impair his place on the media quotemeister list. Just this month, for example, he shows up not only in the FT but also Bloomberg, USA Today, and a San Francisco Chronicle blog—though one is thankful that he appears mainly to state the obvious.

Any of the following statements sound familiar?

Quora is going to redefine the social web.

Google Buzz is a game-changer.

Google Wave is here to stay.

Google+ will kill Facebook.

We’re one of the world’s first full service social media agency.

We’ll handle all of your social media feeds.

The value of a Facebook fan is $1.93

Social Media ROI = (brand equity x engagement) ÷ online mentions.

Content is king.

Blog post after blog post, presentation after presentation, prediction after prediction, are you really seeing valid expertise and insight, or simply an endless stream of content?

If you think that make-believe “experts” will eventually go away all on their own, keep dreaming. Why would they? We have created a market for them, built demand for their BS, given them an ever-growing platform, and held them accountable for absolutely nothing. How many social media-themed conferences are there now, each with dozens of tracks and breakout sessions? Among them, how many have really turned out to be either thinly disguised sales pitches or vague rehashes of basic concepts you already knew 3 years ago?

How many “experts” are still publishing books, selling bogus ROI calculators and make-believe “case studies,” how many are being increasingly quoted by self-professed “news” sites – where they guest-blog for free without much of an editorial review process? Is that really the business ecosystem you want to be building and supporting? Smoke and mirrors and BS by the pound, when real ideas and legitimate expertise are so sorely needed all around us? Really? In the crux of a recession, when companies need real help, when people need real solutions, when entire economies are in serious need of real direction, we want to gravitate towards the lowest common denominator? This is what we want to reward?

The dog that gets the strongest is the one you feed. One will protect and strengthen you. The other one will lead you astray and eat you in your sleep. Make sure you’re feeding the right one.

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Sources

Image: The Emperor’s New Sales ©2011 Olivier Blanchard

Quoted: Expertise, Dogma and the Journalism of Crackpot Ideas, by Todd Gitlin [published by The Chronicle of Higher Education, July 31, 2011]

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For better of for worse, countries and cultures – like companies, products and people – have identities too, and whether many of you in the US realize it or not, the US brand just experienced a very radical shift this month with a) the financial house of cards starting to come down on Wall Street, and b) the way that Washington responded to the crisis with its spectacular $700 BILLION “bailout” proposal.

Hat tip to ISB alumn Laurent Longin for forwarding this hilarious yet astute piece from Time’s Bill Saporito: “How We Became The United States of France.

This is the state of our great republic: We’ve nationalized the financial system, taking control from Wall Street bankers we no longer trust. We’re about to quasi-nationalize the Detroit auto companies via massive loans because they’re a source of American pride, and too many jobs — and votes — are at stake. Our Social Security system is going broke as we head for a future where too many retirees will be supported by too few workers. How long before we have national healthcare? Put it all together, and the America that emerges is a cartoonish version of the country most despised by red-meat red-state patriots: France. Only with worse food.

Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by a half dozen short sellers in Greenwich, Conn. and FedExed to Washington D.C. to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We’re now no different from any of those Western European semi-socialist welfare states that we love to deride. Italy? Sure, it’s had four governments since last Thursday, but none of them would have allowed this to go on; the Italians know how to rig an economy.

You just know the Frogs have only increased their disdain for us, if that is indeed possible. And why shouldn’t they? The average American is working two and half jobs, gets two weeks off, and has all the employment security of a one-armed trapeze artist. The [Bush] Administration has preached the “ownership society” to America: own your house, own your retirement account; you don’t need the government in your way. So Americans mortgaged themselves to the hilt to buy overpriced houses they can no longer afford and signed up for 401k programs that put money where, exactly? In the stock market!

Now our laissez-faire (hey, a French word) regulation-averse Administration has made France’s only Socialist president, Francois Mitterand, look like Adam Smith by comparison. All Mitterand did was nationalize France’s big banks and insurance companies in 1982; he didn’t have to deal with bankers who didn’t want to lend money, as Paulson does. When the state runs the banks, they are merely cows to be milked in the service of la patrie. France doesn’t have the mortgage crisis that we do, either. In bailing out mortgage lenders Fannie Mae and Freddie Mac, our government has basically turned America into the largest subsidized housing project in the world. Sure, France has its banlieues, where it likes to warehouse people who aren’t French enough (meaning, immigrants or Algerians) in huge apartment blocks. But the bulk of French homeowners are curiously free of subprime mortgages foisted on them by fellow citizens, and they aren’t over their heads in personal debt.

We’ve always dismissed the French as exquisitely fed wards of their welfare state. They work, what, 27 hours in a good week, have 19 holidays a month, go on strike for two days and enjoy a glass of wine every day with lunch — except for the 25% of the population that works for the government, who have an even sweeter deal. They retire before their kids finish high school, and they don’t have to save for a $45,000-a-year college tuition because college is free. For this, they pay a tax rate of about 103%, and their labor laws are so restrictive that they haven’t had a net gain in jobs since Napoleon. There is no way that the French government can pay for this lifestyle forever, except that it somehow does.

Mitterand tried to create both job-growth and wage-growth by nationalizing huge swaths of the economy, including some big industries, including automaker Renault, for instance. You haven’t driven a Renault lately because Renault couldn’t sell them here. Imagine that. An auto company that couldn’t compete with a Dodge Colt. But the Renault takeover ultimately proved successful and Renault became a private company again in 1996, although the government retains about 15% of the shares.

Now the U.S. is faced with the same prospect in the auto industry. GM and Ford need money to develop greener cars that can compete with Toyota and Honda. And they’re looking to Uncle Sam for investment — an investment that could have been avoided had Washington imposed more stringent mileage standards years earlier. But we don’t want to interfere with market forces like the French do — until we do.

Mitterand’s nationalization program and other economic reforms failed, as the development of the European Market made a centrally planned economy obsolete. The Rothschilds got their bank back, a little worse for wear. These days, France sashays around the issue of protectionism in a supposedly unfettered EU by proclaiming some industries to be national champions worthy of extra consideration — you know, special needs kids. And we’re not talking about pastry chefs, but the likes of GDF Suez, a major utility. I never thought of the stocks and junk securities sold by Goldman Sachs and Morgan Stanley as unique, but clearly Washington does. Morgan’s John Mack calls SEC boss Chris Cox to whine about short sellers and bingo, the government obliges. The elite serve the elite. How French is that?

Even in the strongest sectors in the U.S., there’s no getting away from the French influence. Nothing is more sacred to France than its farmers. They get whatever they demand, and they demand a lot. And if there are any issues about price supports, or feed costs being too high, or actual competition from other countries, French farmers simply shut down the country by marching their livestock up the Champs Elysee and piling up wheat on the highways. U.S. farmers would never resort to such behavior. They don’t have to: they’re the most coddled special interest group in U.S. history, lavished with $180 billion in subsidies by both parties, even when their products are fetching record prices. One consequence: U.S. consumers pay twice what the French pay for sugar, because of price guarantees. We’re more French than France.

So yes, while we’re still willing to work ourselves to death for the privilege of paying off our usurious credit cards, we can no longer look contemptuously at the land of 246 cheeses. Kraft Foods has replaced American International Group in the Dow Jones Industrial Average, the insurance company having been added to Paulson’s nationalized portfolio. Macaroni and cheese has supplanted credit default swaps at the fulcrum of capitalism. And one more thing: the food snob French love McDonalds, which does a fantastic business there. They know a good freedom fry when they taste one.

Whether you agree with Bill’s point of view or not, it’s certainly something to think about. 😉

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Watching it burn

Some of us who have managed projects know a little bit about budgets. Simply put, a budget is a bucket of money set up to pay for all of the line items in a project – or a series of projects.

Typically, the budget is set based on little things like what the client (internal or external) is looking to accomplish, what the client is able to spend, and ROI: (Return On Investment) Do the project’s benefits outweigh its cost, etc.

If you’re thinking “wow, that sounds like it takes a lot of planning and strategery,” you’re right. It does. The one thing you want to ensure as a project manager is that the goals, tactics and budget are aligned before a project starts: If the project is going to cost more than the budget allows, something is going to have to be cut from the project. Simple, basic stuff. If you don’t do this, you might run out of money before the project ends, which isn’t good. Your options then are a) ask the client for more money, b) close the project before having delivered it 100%, or c) eat the added cost. None of these options are good.

It’s with this simple methodology that I look at our federal budget deficit. Is it more complex than a marketing campaign? Of course it is. Infinitely so. But the principle is the same: Figure out how much funding you need to operate your series of projects (social security, national defense, infrastructure, research, wars, etc.), make the necessary adjustments, and go forward with what you can afford.

… Except… that isn’t how everyone understands the fundamentals of running a business/country. The latest Budget Deficit figures look pretty impressive. From CNN.com:

The White House on Monday predicted a record deficit of $490 billion for the 2009 budget year, a senior government official told CNN.

The deficit would amount to roughly 3.5 percent of the nation’s $14 trillion economy.

The official pointed to a faltering economy and the bipartisan $170 billion stimulus package that passed earlier this year for the record deficit.

The fiscal year begins October 1, 2008.

The federal deficit is the difference between what the government spends and what it takes in from taxes and other revenue sources. The government must borrow money to make up the difference.

President Bush inherited a budget surplus of $128 billion when he took office in 2001 but has since posted a budget deficit every year.

Wow.

Maybe I am reading this wrong, but if the FY’09 $490 BILLION deficit is indeed for the 2009 budget year, we’re talking about overspending $1,342,465,700 per day for 365 days in a row.

Wait… Let me get this straight. The US government is overspending (all up) at a rate of 1.3 BILLION dollars per day?

Tell me I’m not understanding this correctly. Please. Someone tell that figure needs to somehow be stretched out over the last 8 years or something… Pretty please? Tell me there is no way that the United States of America’s operating budget is so poorly managed that it bleeding $1.3B per day. Tell me I am wrong about this.  Tell me there is a plan to fix this. One that doesn’t involve a) just printing more money, or b) borrowing from foreign banks.

Maybe this kind of topic changes the conversation when it comes to what types of questions really need to be on people’s minds (and lips) when political candidates (from Presidential elections down to your municipal seats) run for office. Maybe the conversation should shift from soft broad-sweeping opinions about religion and security to cold hard facts and specific plans to fix what is broken. And by the way, this isn’t an indictment of either political party. Republicans and democrats together need to fix this – which is to say this isn’t just about this candidate or that one, but about us, American taxpayers and voters, who perhaps should refocus our attention when it comes to our definition of political leadership, and what our silver-haired years will be like, and the future our children will inherit.

Maybe there’s a branding lesson in there somewhere, both for world powers and the political candidates who aspire to help run them.

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