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Business and Industry

All articles with the "Business and Industry" tag.

Published: Mon, 21 Aug 2017 00:00:00 -0400

Last Build Date: Mon, 21 Aug 2017 06:17:57 -0400


Trump vs. The Business Community

Sun, 20 Aug 2017 00:00:00 -0400

Most business executives fumed and groused for the eight years Barack Obama was in the White House. He was a former community organizer who had never met a payroll, and those in the corporate boardrooms thought he was no friend of free enterprise. In 2010, New York real estate and media tycoon Mortimer Zuckerman said Obama's "demonization of business" was discouraging investment, sapping job growth and generally creating an "economic Katrina." Gary Shapiro, head of the Consumer Technology Association, called Obama "the most anti-business president" in his lifetime. Former General Electric Chairman Jack Welch implored the president, "Stop it. You can't go industry by industry ... through intimidation, business by business by business." As ordeals go, though, theirs was notably mild. The stock market soared; corporate profits nearly tripled; and the unemployment rate declined from 7.8 percent to 4.8 percent. From the depths of the Great Recession, the economy began what is now the third-longest expansion on record. When it came to the economy, the Obama years looked more like Mardi Gras than Hurricane Katrina. Now, instead of a liberal lawyer in the White House, CEOs have one of their own. And they're finding it's not everything they hoped. The stock market and other economic indicators look about the same as they did before Donald Trump took office. In Obama's final six months, the economy added an average of nearly 181,000 jobs per month. In Trump's first six months, it added 179,000 per month. GDP growth has even slowed a bit. More troublesome at the moment is Trump's insistence on defending Confederate monuments and stoking white racial resentments. In recent days, so many CEOs resigned from the president's two business advisory councils that Trump closed them down. Some of the executives no doubt were genuinely upset at the president's coddling of bigots and his inability to behave with a dignity befitting his office. Some were fearful of alienating customers who find Trump toxic. Other business executives are edging away from the president as though he were an erratic panhandler, and for the same reason: Best not to be close to him if he flips out. You don't want to have to stand there in silent mortification, as White House chief of staff John Kelly had to do the other day, while the president makes a fool of himself on national TV. It would not be good for your company or your career. But even before Trump's Charlottesville debacle, he was not covering himself with capitalist glory. His January travel order put him at odds with some 100 tech firms that sued to block it, arguing, "It disrupts ongoing business operations. And it threatens companies' ability to attract talent, business, and investment to the United States." His decision to pull out of the Paris climate accord didn't go down well with many big companies, 25 of which had signed a letter urging him to stay in. Even oil giants Exxon Mobil and ConocoPhillips opposed the withdrawal. In abandoning the Trans-Pacific Partnership trade deal, Trump spurned the recommendation of the U.S. Chamber of Commerce. His insistence on renegotiating NAFTA has the Big Three automakers worried about their supply chains. A lot of executives applaud Trump's war on federal regulation. But what else has he done for them? His failures on Obamacare have generated uncertainty among insurance companies and health care providers. His sour relations with Congress make tax reform less plausible every day. Infrastructure is what he was supposed to focus on Tuesday when he appeared before reporters at Trump Tower. But he buried that issue by venting about Charlottesville. Perhaps worst of all, he has been the arrogant bully that Jack Welch and others accused Obama of being. Trump slammed Boeing over the cost of Air Force One. He blasted Ford over a planned factory in Mexico. He has repeatedly attacked CEO Jeff Bezos, who also owns The Washington Post. He went after Nordstrom for dropping his daughter's products. When Merck's Kenneth Frazier quit his manufacturing advisory grou[...]

Cindy McCain's Charities Are Plagued With Scandal and Corruption. Now Trump Wants to Make Her Human Rights Ambassador

Tue, 20 Jun 2017 10:30:00 -0400

(image) After "aggressively courting" her for the role, President Donald Trump has reportedly nabbed Cindy McCain to serve in his State Department as an ambassador-at-large for human rights. She would almost certainly concentrate on sex trafficking, which has been the main focus of her recent advocacy—and on which she has a track-record of spreading misinformation, promoting policies that make prostitution more dangerous, and partnering with people who use human trafficking as a cover for all sorts of rights-violating behavior. And this is just one of myriad red flags that the beer empress and senator's wife isn't quite as consistent or staunch a humanitarian as she's made out to be.

It turns out the "freedom, democracy, and human rights" institute launched by Cindy and Sen. John McCain is supported by large donations from entities known for persistent rights violations, including Saudi Arabia, a U.S. defense contractor selling smart bombs to the Saudis, and a Moroccan mining company occupying land in Northwest Africa.

As Elizabeth Nolan Brown explains, examining McCain's philanthropic record reveals a long history of personal abuse of nonprofit resources, shady connections, and shoddy work. For years, McCain has been playing the role of crony philanthropist, and now she is poised to bring her dubious advocacy to the highest levels of government.

Are You Ready for the "Intimacy Economy"?

Fri, 26 May 2017 10:00:00 -0400

We've all heard of the "sharing economy" and the "gig economy," app-driven services such as Uber and Airbnb that have radically altered transportation, travel, and an infinite number of other business sectors. But are you ready for the "intimacy economy"? That's economist and media-studies professor Glenn Platt's term for the ways in which the internet and connectivity are shrinking the distance between performer and audience, producer and consumer, and celebrity and fan. "When I talk about the intimacy economy, I'm talking about this growing category of successful business models that are built on one-to-one relationships and experiences that are personal, authentic, and unscripted," explains Platt, the founder and director of the Armstrong Institute for Interactive Media Studies (AIMS) at Miami University of Ohio. He points to an example involving Craig Finn, best-known as the frontman for the indie rock band The Hold Steady. As a way to raise money for his latest album and tour, Finn set up a crowd-funded pledge drive through which fans could sign up to download the album or have it shipped early. The really interesting thing, though, were the higher-level offerings for funders, says Platt. These included paying a couple of hundred dollars to go record shopping with him in New York. "Here you are, a music fan," he says, "and [Finn] is willing to go record-shopping with you. You're getting to do the equivalent of going to church with one of your rock-and-roll heroes....It's different than saying, If you pay extra, you're going to get an autographed picture." In a wide-ranging conversation about technology and disruption, Platt tells Reason's Nick Gillespie how the intimacy economy will revolutionize not only business but also political and cultural practices. In a world where mass personalization and individualization is the new normal, the intimacy economy provides a bold new way of thinking about the future of interactive media. Produced by Ian Keyser. Subscribe, rate, and review the Reason Podcast at iTunes. Listen at SoundCloud below: src="" width="100%" height="450" frameborder="0"> Don't miss a single Reason podcast! (Archive here.) Subscribe at iTunes. Follow us at SoundCloud. Subscribe at YouTube. Like us on Facebook. Follow us on Twitter. This is a rush transcript—check all quotes against the audio for accuracy. Nick Gillespie: Hi, this is Nick Gillespie and this is the Reason podcast. Please Subscribe to us at iTunes and rate and review us while you're there. Today we're talking with Glenn Platt. He's the C. Michael Armstrong professor of interactive media studies and the founding director of the Armstrong Institute for Interactive Media Studies at Miami University. Glenn thanks for joining us. Glenn Platt: Hey Nick. Nick Gillespie: Let's talk about this concept of the intimacy economy that you've talked about. I've actually used it in a couple of articles that I've written at Reason and elsewhere. What do you mean when you talk about the intimacy economy and why is it so important? Glenn Platt: Sure, when I talk about the intimacy economy what I'm talking about is this is a growing category of successful business models that are built on one to one relationships and experiences, that are personal. authentic and unscripted. And so we're starting to see more and more of the non stylized relationships and I say "brands" here because I come from a business perspective. But, really, when I say "brands" we're talking about celebrities, we're talking about if any ... I don't know, institution of the third kind that normally interacts with people in a one to many fashion. Nick Gillespie: Right, or in a bureaucratic way. So, let's put a little flesh on this definition of an intimate discussion. What's an example of an individual, or a person, or a celebrit[...]

New Book Offers Bleak Look at Paul Ryan's Hometown

Mon, 24 Apr 2017 16:00:00 -0400

Barack Obama showed up at the General Motors factory in Janesville, Wisconsin, during the 2008 presidential campaign and proclaimed, "I believe that, if our government is there to support you and give you the assistance you need to retool and make this transition, that this plant will be here for another hundred years." Instead the plant closed, leaving thousands of its workers and those at related businesses unemployed. Nor is Obama the only politician to intersect with the Janesville story. It's Paul Ryan's hometown. Ryan is Speaker of the House and was the Republican vice presidential candidate in 2012. His father lost the tip of his thumb to a piece of machinery in the plant, working summers during law school. A reporter at The Washington Post, Amy Goldstein, tells this tale in her new book, Janesville: An American Story. It's almost unbelievably grim. Auto worker wages, once $28 an hour, have declined to $14 for new hires—$10 for some workers working for "suppliers" on the same factory floor. Janesville, which you might have imagined as a wholesome, prosperous, middle class American city—something out of a Land's End catalog—turns out to have 400 homeless children, some of whom have been abandoned by their parents. A United Auto Workers local that a decade ago had 7,000 active members now has 438, with 4,900 retirees. Another large employer in the city, Parker Pen, was sold three times. The final buyer shut the factory and laid off the staff, but first paid longtime workers to fly to Mexico and train people there to do their old jobs. One former auto industry employee goes back to school to become a prison guard, then commits suicide after cheating on her husband with an inmate. Others become "GM gypsies," leaving their families behind for days at a time to commute to far-away GM jobs in other states. Some families can't qualify for health care at a free clinic because the food stamps they are receiving push their income over the limit. One family was turned away from a food pantry because their teenager, working three after-school jobs, earned too much for the family to qualify for help. The line at the food pantry starts forming outside two hours before it opens. These are the sort of disgruntled Americans, facing economic anxiety, who elected Trump, right? Goldstein points out, though, that while Trump did carry Wisconsin's electoral votes, Janesville itself went for Hillary Clinton in the 2016 election, as it went for Obama in 2012, notwithstanding Ryan's presence on the 2012 ticket. What's the remedy? Not education or job training, necessarily: Goldstein reports that laid-off workers who went back to school at the local technical college ended up worse off, financially, than those who did not. Someone who understands Washington better than I do once explained to me that if you really want to understand a politician you need to know their home district. That was the genius of Michael Barone's classic Almanac of American Politics: it didn't just tell you about the congressman and where he or she went to college, it told you about who the big employers were, and what countries the great-grandparents of the voters in the district had come from. Ryan comes off as a bit remote in Goldstein's telling, more absorbed in the long-term details of the federal budget than in the up-close trauma of Janesville families. But if you want to understand his motivations when it comes to bringing manufacturing back to the American heartland, finding more effective ways to combat poverty, and strengthening economic growth, you can do a lot worse than to start in Janesville. President Trump was talking about urban crime when he spoke of "carnage" in his inaugural address. But he could have been talking about how the layoffs ripped through Janesville families. The economic picture is different in more prosperous quarters, like, say, Silicon Valley, or the Washington, D.C. suburbs. But places like Janesville, even if their unemployment rates have re[...]

The Only Solution to the Trumps’ Conflicts of Interest

Sun, 23 Apr 2017 00:00:00 -0400

Pundits at CNN and other news outlets are much distressed over the report that Ivanka Trump's clothing and accessories company won trademark recognition from the government of China just as that country's president was sitting down with President Trump and the First Daughter for dinner at Mar-a-Lago. "Conflict of interest!" they protest. "Conflict of interest!" They then set off on an inquiry into how such conflicts can be prevented, an effort beset by a growing sense that nothing can be done about the problem. They are justified in that sense of futility because within the range of options they would consider acceptable, nothing can be done. Ivanka Trump is a federal worker, albeit at a salary of zero. But it would make no difference if she had no job in the White House because she would still be the president's daughter and that's not going to change. Any foreign leader—or anyone else, for that matter—who wants to curry favor with President Trump can easily calculate that doing something nice for his daughter at least can't hurt. After all, she doesn't have to be a Special Adviser to the President to be a special adviser to her father, the president. And if she is talking to her father about the country, her comments could be colored—even unconsciously—by her business interests. But even if they were not, Trump himself, who is famously a sucker for flattery and, presumably, for praise for his family, might be influenced by the kindness of strangers. So how can conflicts of interest be avoided? It would be unreasonable to demand that Ivanka Trump divest herself of her company and have no business interests: she does have rights. She no longer manages her company, but she still holds a stake, even if she has put her assets into a trust. Moreover, she also has resigned as executive vice president of the Trump Organization and sold her common stock in it. CNNMoney reported that her lawyer says that "Ivanka Trump has converted her stake in her father's company into fixed payments, which means she can't benefit from the financial performance of the Trump Organization…. At the White House, Ivanka Trump's role will be to advise her father and concentrate on issues related to women in the workplace, child care, parental leave and job training, [the lawyer] said." In another story CNNMoney reported that Ivanka's lawyer "said her client would recuse herself from certain policy matters, like trade agreements, that are specific enough to affect her line of clothing and accessories." But, as I said, this makes no difference whatever. People seeking Trump's good will might still think it advantageous to direct benefits to Trump family business interests. Even with her reduced roles, Ivanka Trump surely wants to see her company and the Trump Organization prosper. So we appear to be stuck with four to eight years of potential conflicts of interest. We'll never know if decisions coming out of the executive branch were ultimately influenced by conduct calculated to please Trump. But maybe all is not so hopeless after all. Recall that I said the pundit class knows no solution that it would regard as acceptable. That leaves open the possibility of a solution that is unacceptable to them. "Unacceptable," however, does not necessarily mean unreasonable. The heart of the potential for conflicts of interests is not the Trumps' business empire. Rather it's presidential power to steer benefits to particular interests. So the surest way to eliminate the potential for conflicts is to eliminate the president's power to steer benefits to anyone. This would include not only favors granted by executive action but also those that a president can push through Congress. Here we have an analogy with campaign finance. Those who fret over that issue don't want to understand that no one would make mega-contributions to candidates if officeholders had no favors to sell. Who shops where there's nothing to buy? By the same token, no one will d[...]

Drafter of U.S. Dietary Goals Was Bribed by Big Sugar to Demonize Fat

Tue, 13 Sep 2016 11:33:00 -0400

Newly released historical documents show how the sugar industry essentially bribed Harvard scientists to downplay sugar's role in heart disease—and how the U.S. government ate it up. The link between a high-sugar diet and the development of metabolic problems had begun emerging in the 1950s. In 1965, a group called the Sugar Research Foundation (SRF) funded a study assessing previous studies on this possibility. That literature review, published in the prestigious New England Journal of Medicine in 1967, concluded that fat and cholesterol were the real culprits when it came to coronary heart disease. "The SRF set the review's objective, contributed articles for inclusion, and received drafts," according to a new paper published in JAMA Internal Medicine "The SRF's funding and role was not disclosed." The New York Times wants this to be a story about junk-food bigwigs screwing with science to the detriment of American health. And it is, in part. But beyond that, the findings also indict "dietary science" that the U.S. government has been pushing for decades, and still continues to push. As we know now, high cholesterol levels in the blood may portend heart problems, but consuming high-cholesterol food—such as eggs, long demonized as a heart-health no-no—doesn't correlate to high blood-cholesterol. And saturated fats come in many forms, some bad for you and others some of the healthiest things you can consume. But for decades, conventional wisdom in America said that dietary fats and cholesterol were to be extremely rare in a nutritious diet. Meanwhile, sugar got a rep for rotting your teeth (and maybe packing on a few pounds) but was otherwise considered benign. And this demonization of fat actually helped increase U.S. sugar consumption, as health conscious Americans replaced morning eggs and sausage with carbs like bagels, or turned to low-fat and fat-free offerings where added sugar helped fill the taste void. How did Big Sugar pull this off? With a little help from Harvard scientists, for starters. SRF—now called the Sugar Association—paid three of them the equivalent of $49,000 in today's dollars to publish the misleading literature review. One of these scientists, the late D. Mark Hegsted, went on to become a major driver of U.S. dietary advice. In the early '60s, Hegsted had developed what came to be known as the "Hegsted equation," which allegedly showed how saturated fats in eggs and meat raise blood cholesterol. A few years after he was paid by the sugar industry to demonize fat and cholesterol, he was elected to the National Academy of Sciences and edited its Nutrition Reviews for a decade. Hegsted would also go on to help the U.S. Department of Agriculture (USDA) draft its first "Dietary Goals for the United States," a 1977-precursor to today's federal Dietary Guidelines for Americans, and to be hired by the agency as the head of its nutrition division, a position he held from 1978-1982. "Even though the influence-peddling revealed in the documents dates back nearly 50 years, more recent reports show that the food industry has continued to influence nutrition science," the Times notes. That's also true. What the Times doesn't say, however, is how much the food industry continues to influence federal food policy and advice even independent of any shady research. At the 2015 National Food Policy Conference, a two-day affair I attended in downtown D.C., food-industry associates gave talks alongside federal officials and their logos— Nestlé, Dannon, Cargill—were splashed everywhere. The food industry has and continues to influence nutrition "knowledge" because federal agencies encourage it. A report published last fall found that government nutrition rules have been and are still based more on money and politics than sound science. The latest update to federal dietary guidelines still cautions against saturated fat and sodium. Members of the committee that develope[...]

Can a Bot Run a Company?

Tue, 24 May 2016 08:30:00 -0400

Can a bot run a company? A hot new tech venture that wants to run entirely by code thinks so. It's called "The DAO"—short for Decentralized Autonomous Organization—and it aims to run as a for-profit corporate body that will obviate the need for human beings to make business decisions. That is, provided that the human beings behind The DAO can set it up right. While this leaderless digital profit-maximization machine may sound more like a clever science fiction plot device than a serious investment vehicle, The DAO has raised over $150 million worth of funding on the Ethereum platform since it first launched a mere month ago. For context, this blew the $116 million record for cryptocurrency-business financing raised by Silicon Valley darling 21 Inc. out of the water. An eyebrow-raising start to be sure, but The DAO faces a long and bumpy road to the world of ubiquitous, autonomous digital organizations that its founders envision. Disrupting Investing The DAO presents itself as part venture capital fund, part crowdfunding platform, and part super-cool engine of democratic capitalism for tomorrow. It seeks to raise investment into the platform by selling digital "DAO tokens" in exchange for ether (ETH), the cryptocurrency of the distributed computing platform Ethereum on which The DAO is built. The DAO, which defines itself as "the sum of those holding the DAO's representative tokens," will then invest these funds into promising projects that will hopefully yield big returns for token holders.  Where The DAO differs from traditional venture-capital firms is in its management structure. Like the similar BitShares project that preceded this effort, there are no executives or middle managers to call shots and guide activity. As its website proudly informs: "THE DAO IS CODE." Or maybe code plus consensus, but more on that in a moment. Purchasing a DAO token is a bit like entering into a new kind of business arrangement where you bind yourself to the financial outcomes of a crowd-influenced, pre-programmed directive.  Integral to this are "smart contracts." First conceived by the cryptographic legal theorist Nick Szabo two decades ago, a smart contract is a computer protocol that digitally enforces terms in way that is self-executing or self-enforcing. Relying on an established court of law to adjudicate contracts can be messy and costly. Digitization provides us an opportunity to secure agreements in a way that makes it expensive or even impossible to breach contractual terms—no taxing trips to the justice of the peace required! Smart contracts can largely enforce themselves. Vending machines are a kind of proto-smart contract. You insert the right amount of money into the machine, select your choice of snack or beverage, and the machine spits out your tasty treat. You did not need to engage with a physical human to munch on those Peanut M&M's since the parameters of each transaction are prefigured into the mechanics of the machine: It can tell how many of each kind of snack can be sold, and at what price. It's a cheap and low-risk way to do business. Smart contracts work similarly, but instead of physical currency and mechanical verification, cryptocurrency and digital consensus combine to execute conditional agreements. Parties can create a digital contract that is coded to perform certain functions in response to specific inputs. Futures contracts can self-execute when a market feed shows that a price moves in a particular way. Rental cars can unlock themselves for use upon receiving the right cryptocurrency payment. And, in the ambitious case of The DAO, investment firms can theoretically automate core business operations. The Humans Behind the Bots So, if The DAO is "run by robots," how do decisions get made? By humans, actually. Humans decide what terms to select, and the code executes. Here's how it is supposed to work.  There are thre[...]

The Beauty of Coca-Cola's New Parental Leave Policy

Wed, 13 Apr 2016 07:37:00 -0400

Coca-Cola this week announced a massive expansion of its parental-leave policy for non-union U.S. employees. The new policy covers not just female employees who give birth but dads, adoptive parents, and foster parents, all of whom will be entitled to six weeks paid leave. Biological mothers will be entitled to the six weeks parental leave plus six to eight weeks of short-term disability leave following the birth of a child. The new policy goes into effect January 1, 2017. "Fostering an inclusive workplace means valuing all parents—no matter their gender or sexual orientation," said Ceree Eberly, Coke's "chief people officer," in a statement. "We think the most successful way to structure benefits to help working families is to make them gender-neutral and encourage both moms and dads to play an active role in their family lives." Opening parental leave to all genders and sexual orientations will hopefully help combat the penalty new moms can face for taking maternity leave, the company says. "While lengthy maternity leave policies have helped some companies retain female talent, the lack of female senior executives has remained," it notes. "By removing gender from the equation and offering all new parents the same amount of paid leave, Coca-Cola hopes to combat bias and help pave the way for more women in leadership positions." So why should anyone outside Coca-Cola care about this change? Because the move comes at a time of increased pressure for cities, states, and the federal government to impose mandatory paid family leave requirements on private businesses. And this idea is predicated on the view that businesses won't adapt on their own accord. But Coca-Cola's new policy comes not from top-down regulations but movement within the organization, driven by millennial employees. "Internal surveys and external research highlighted the value [millennials] place on parental leave and revealed that the average age of first-time, college-educated parents is 30—also the median age of Coke's current and prospective Millennial employees," the company reports. "Millennials will account for more than half of the global Coca-Cola system workforce by 2020. "Paid parental leave isn't just a nice thing to do, it's the smart thing to do for our business," said 27-year-old Katherine Cherry, one of five millennial employees who worked with Coke's HR team on the new parental leave policy. Just like employers began offering health insurance last century in order to attract top talent, big companies these days are increasingly realizing the value from a business perspective of offering flexible work arrangements and parental leave benefits. Major employers to recently expand their parental leave policies include Bank of America, Credit Suisse, Facebook, Microsoft, Amazon, Etsy, Netflix, and J.P. Morgan and, according to the Society for Human Resource Management, the number of large U.S. corporations that at least offer paid maternity leave jumped from 12 percent in 2014 to 21 percent in 2015.[...]

Virtually No Gender Pay Gap at Amazon

Thu, 24 Mar 2016 11:05:00 -0400

Just a week after the Securities and Exchange Commission (SEC) ordered Amazon to let shareholders vote on "gender pay gap" disclosure, the company reports that its female employees earn 99.9 cents for every dollar that male employees in the same job do. "Our recent review of the compensation we awarded last year at Amazon–including both base and stock–resulted in women earning 99.9 cents for every dollar that men earn in the same jobs, and minorities earning 100.1 cents for every dollar that white employees earn in the same jobs," the company said in an email statement Wednesday. "There will naturally be slight fluctuations from year to year, but at Amazon we are committed to keeping compensation fair and equitable."  Amazon is not releasing more info at this time about the methods it used to come to these conclusions, but according to VentureBeat the survey "was conducted by an external labor economist" and "covered Amazon workers at various levels of the company’s organization in the United States." As of last summer, Amazon estimated that 39 percent of its global workforce was female and women held about a quarter of management positions.  Earlier this month, the SEC rejected a request from Amazon to forego shareholder voting on a pay-gap proposal submitted by two shareholders and an activist investment firm, Arjuna Capital. The proposal, submitted to Amazon and eight other tech companies, said that shareholders should get to vote on whether companies included data on "the percentage pay gap between male and female employees, policies to address that gap, and quantitative reduction targets" in their annual reports.  In a letter to the SEC, Amazon complained that the proposal "gives no indication of how earnings should be calculated for purposes of the requested report... makes no mention of whether the gender pay gap is calculated based on median earnings or mean average earnings, whether earnings are calculated based only on full-time employees or full-time/full year employees, or whether part-time employees should be included (and if so, whether their earnings should be converted to a full-time equivalent basis)... (and) gives no indication of which of the various definitions of earnings used ... is to be applied." "Different calculation methods for determining 'earnings' could show significantly different results," Amazon continued, and "failing to adequately describe the standard, and in fact misleadingly suggesting that there is a single, clearly understood [standard] is impermissibly vague and misleading." But some have accused Amazon of being misleading itself with the new pay data. "When the most senior, well-paid people at your company are almost exclusively male, is it really accurate to say your business pays men and women about the same amounts?" writes Emily Peck at the Huffington Post. And here we go again... Whether to measure gender pay differences based on people in the same (or "substantially similar") jobs or as cross-company or country averages has been and continues to be a subject of fierce debate. I tend to think the former information is more useful, but the latter is better for propaganda and goal-post shifting purposes. [...]

Starbucks Gets Sappy About the 2016 Election in Full-Page Newspaper Ads

Thu, 24 Mar 2016 09:38:00 -0400

The New York Times and Wall Street Journal readers Thursday were greeted with a full-page ad calling for "compassion, respect, shared responsibility," and other high-minded virtues from Americans as we slog though the 2016 election season. "When you read the headlines... scroll through your social media feed," or "listen to the candidates," it's easy to mistake America as being "lost," the ad laments. But today, we must "go beyond the hatred and vitriol, and see a different story of America."

A "story that is not bound by party affiliations or religious beliefs."

A story that is neither "left-leaning or right-leaning."

A story about how some corporate-social-responsibility hack convinced the Starbucks leadership that this preening, saccharine call for unity was worthwhile...

"This is not about the choice we make every four years," the new Starbucks ad concludes. "This is about the choices we make every single day." And then comes the Starbucks logo, reminding you to choose your coffee wisely today. 


Of course, Starbucks has a history of silly kumbaya messaging and stunts. In 2015, the company embarked on an awkward mission to have baristas "start a dialogue about race" with customers by penning slogans on their coffee cups. If there's anything to be gleaned from this other than a good eyeroll opportunity, it's the way much of it could be read as an implicit criticism of Republican presidential frontrunner Donald Trump. There are lines condemning the "hatred and vitriol" you see in the news and on social media and celebrating the virtues of "those who work to include, rather than discriminate." 

Then again, that's pretty standard stuff for Starbucks' CEO Howard Schultz, who may be a good businessman but talks about culture and society like someone you would try to avoid late-night in the college dormitory. At Starbucks annual shareholders meeting in Seattle Wednesday, Schultz praised John F. Kennedy and Martin Luther King, Jr. and asked the assembled to "fill our reservoir back up with the true promise of our country and once again embrace what it means to be Americans."  

Update: Here's page two of the Starbucks ad that ran in the Times and Journal today.


How the NSA Is Killing American Small Businesses

Tue, 15 Mar 2016 15:58:00 -0400

The Small Business Web is a trade association for companies that sell cloud software to other small- and medium-size businesses. What began in 2009 right here at South by Southwest (SXSW) has grown into an organization with over 1,000 members, including companies like Constant Contact and Hootsuite. While attending the conference this weekend I had a chance to chat with Sunir Shah, founder and president of the group (and the chief marketer at Olark, itself a cloud software company that provides a live chat tool that businesses can use to talk to customers online). He shared some thoughts about the ways the federal government, especially via National Security Agency (NSA) domestic spying, is hurting small businesses like the ones his trade association represents. (The below transcript has been edited for clarity and length.) Q: Tell me about the ways the federal government is affecting what Small Business Web’s members are trying to accomplish. A: A great example is the current U.S.-E.U. Safe Harbor data privacy treaty that just got blown up in October 2015 by the European Court of Justice directly in response to the Edward Snowden leaks from the NSA. And so now every U.S. company that is doing business with European customers will be asked to sign these things called “standard contractual clauses.” The idea is to implement the same data privacy rights as the treaty, but it has to be signed one-on-one between each E.U. customer and each U.S. company. That's a lot of time and effort to negotiate with our customers’ lawyers. And it’s a very unstable environment with plenty of doubt that this patchwork system will be upheld. These issues are so big and so annoying that it eats up a lot of time. We’re in tech, so you might think of big companies like Google and Microsoft, but most tech companies are small businesses. We have no general counsel. We barely want to call a lawyer, because as soon as you spend money on a lawyer you’re going to lose money on the sale. When selling to small businesses, we need to do things quickly and efficiently. The biggest fear is that the European Union could make it illegal to do business with American companies as long as the data is stored in America. That’s possibly too expensive for most of the companies in the trade association, making them unable to transact in Europe. Q: The concern is that the NSA might gain access to the data that’s being stored here? A: That’s right. At Olark where I work we take a position that we want to have the best, safest privacy policy. We have internal training all the time. We have a security team to make sure that we are treating our customer data with utmost respect and good faith and fidelity. That’s just us acting as an independent company. And so you can negotiate with us, and you can sign a contract with us. The problem is that the government is an external party to every contract. So if the government can snoop on the data of foreign customers, they become a party to those contracts, and we can’t control that. We’re just businesses and private individuals. We have no power over what the government does, especially on national security. But it certainly has an impact on our growth. Because you’ve seen it—after the leaks from Edward Snowden, the sales of American cloud companies have been reduced in Europe. There are real economic burdens, not only on loss of sales because people are afraid and they don’t trust their data is safe; not only in the operational costs of having to move the data centers to Europe; but also in the transactional costs of having to keep up with all the regulatory negotiations around things that are just way beyond the expertise of most of the companies in the trade association. Q: If this is cutting into the [...]

Bosses Who Donate to Republicans Are Less Likely to Promote Female Staff

Tue, 01 Mar 2016 09:45:00 -0500

Are Republican-led companies less friendly to female employees? A look at large corporate law firms in the U.S. says yes.  For the study, business professors Seth Carnahan (University of Michigan) and Brad Greenwood (Temple University) examined individual political donations from partners at America's 200 largest law firms between 2007-2012, then weighed these against outcomes for female associates at the firm. The goal was to determine how much managers' personal political ideologies correspond to levels of organizational gender parity.  "In general, women are much less likely to be promoted, and much more likely to leave their firms," said Carnahan, an assistant professor of strategy at Michigan's Ross School of Business. "We found that this gender gap gets smaller when male bosses are more liberal, but it gets larger when male bosses are more conservative."   "Researchers have long argued that a manager’s political ideology, situated on a liberal-conservative continuum and defined as a 'set of beliefs about the proper order of society and how it can be achieved,' can influence organizational outcomes such as investments in corporate social responsibility initiatives, targeting by LGBT activists, and allocation of resources among business units," the authors note in their paper. "If these preferences influence managerial decision-making, a manager’s political ideology may drive considered choices or unconscious biases that have an important influence" on treatment and promotion of female employees.  As one way to test this, Carnahan and Greenwood explored merger-and-acquisition deals which U.S. law firms were involved in from 2007 through 2012—a sample that included 5,702 deals involving 16,860 partners and 18,215 associates at US law firms. Even after controlling for things such as an associate's number of years with a firm, their law-school ranking, shared law-school ties between associates and partners, and law-firm location, they found a "negative interaction between donations to Republicans and the selection of female associates" to serve with partners on client teams. Compared to politically moderate partners, conservative male partners were 2.7 percent less likely than other partners to choose female associates for their deal teams. Liberal male partners were 0.8 percent more likely than moderates to choose a female associate for their teams. The authors also pinpointed associates at America's top 200 law firms in 2006, and followed them until they received a promotion to partner or exited the company. Women made up about 45 percent of all associates. With or without controls factored in, Republican leadership in a practice area corresponded negatively to female promotion rates in that area and positively with turnover rates.  These conservative law-firm heads "are probably not consciously discriminating against women," Carnahan said in a statement, "but their beliefs could influence their willingness to invest in female subordinates. And this could happen on both sides of the spectrum. You could have conservative managers who don't promote women enough and you can have liberal managers who promote women more than they otherwise should." "It is important to emphasize that we don't know the right level of diversity for each office, each organization," said Carnahan. "Our results should not be interpreted as 'anti-conservative' or 'pro-liberal.'"  In the paper, Carnahan and Greenwood suggest that "the most valuable opportunity for future work is to examine whether ideologically driven gender role preferences affect firm performance."  A rapidly growing body of research suggests that gender diversity in corporate ranks can be a boon for business performance. It's not necessa[...]

How Star Wars Conquered the Galaxy

Wed, 09 Dec 2015 07:00:00 -0500

At the end of 1954, the same year that the family of a youngster named George Lucas bought its first television set, Walt Disney Productions aired four one-hour films about a Tennessee congressman who lost his life at the Alamo. The company was caught completely off guard when kids went wild for their new hero, pestering parents to buy Davy Crockett-themed toy guns, sheets, watches, lunch boxes, underwear, mugs, towels, rugs, and pajamas. Most especially, they bought his signature headgear, a coonskin cap, which sold at the reported rate of 5,000 units per day in 1955 alone (the price of raccoon fur jumped from 25 cents to $8 a pound). Within one calendar year, Davy Crockett would spin off an incredible $300 million worth of merchandise, the equivalent of about $2 billion today. Most of that windfall went to independent sellers; licensing as we know it today simply didn't exist back then. But the young Lucas witnessed the results all around him in California's Central Valley and stored the example away in his memory, to be drawn on two decades later as he labored over his third feature film. In 1976, after finishing principal photography on the movie that would create the modern blockbuster, Lucas cast his mind back to the mid-1950s. "Star Wars," he mused to Charles Lippincott, marketing director of the soon-to-be-released space opera, "could be a type of Davy Crockett phenomenon." That, of course, turned out to be the understatement of the century. Even before the December release of The Force Awakens, the Star Wars franchise pulled in an estimated $42 billion total in box office, DVD sales and rentals, video games, books, and related merchandise. And that's just the amount flowing into officially sanctioned channels; the unofficial, unlicensed Star Wars economy has generated untold billions more.                                    See: Star Wars by the Numbers Some $32 billion of that staggering revenue was derived from physical stuff rather than an audio-visual experience. Like Davy Crockett, the Star Wars universe made its biggest economic impact in the realm of merchandise—clothing, accessories, food and drink, housewares (Darth Vader toaster, anyone?), and especially toys. But unlike Walt Disney, George Lucas devised a way to pocket much of that money himself. That helped buy editorial freedom, which helped this obsessive creative make the rest of his movies how he saw fit, for good and ill, until Disney bought the rights to the franchise in 2012 for $4.06 billion. Lucas and Star Wars created a category of economic activity that previously did not exist, and in so doing forever changed the face of entertainment. Action Figure Mecca To understand the scale of Star Wars' physical presence in the modern world, you need to visit a former chicken ranch in the Northern California town of Petaluma—probably one of the few chicken ranches in the world where appointments are both desired and required. The wrought-iron gate at the entrance of the property is adorned with a portrait of Alec Guinness. You park by flagpoles flying the banners of the rebellion and the Empire, and walk past a private home that says "Casa Kenobi." There used to be 20,000 chickens on this ranch; now there are fewer than six in a single coop, near the corner of Yoda Trail and Jedi Way. The others have been replaced, in a long former chicken barn, by what the Guinness World Records book has recognized as the largest Star Wars collection in the world. Welcome to Rancho Obi-Wan. In the building, up a narrow stairway, Steve Sansweet greets you next to an alcove that has a talking head of Obi-Wan. The bust looks like actor Alec Guinnes[...]

Paris Climate Warriors in a Good Mood

Tue, 08 Dec 2015 09:38:00 -0500

Paris, France – I’ve reported from so many U.N. climate change conferences that I’ve lost count (11 or 12, I think), but I have never before experienced what is happening in the slapped-together particle board hallways of the Le Bourget exposition site: Optimism. Even a bit of giddiness on the part of the diplomats, and even among the always dour environmentalist groups. At earlier meetings the set ritual has been for activists during the second week to issue a constant stream of urgent denunciations. Sure, one still hears here that there is only 24 hours to get this or that deal done, but the upbeat tone is nevertheless widespread. For example, during a press conference John Coequyt, the Sierra Club's Director of Federal and International Climate Campaigns flatly said, “We are very optimistic; we continue to believe that a good deal is possible.” Luxembourg's Minister for the Environment, Carole Dieschbourg, speaking as the European Union’s representative stated, “The new agreement is within reach, a binding global agreement applicable to all parties.” There is another reason for a feeling of serenity at the conference: the absence of mobs of protestors. The commotion produced by of masses of demonstrators inside and outside the climate conferences contributed significantly to the fraught atmosphere that pervaded previous meetings. The French government has used the terrorist atrocities in November as a justification to ban all public protests and marches. This seems to have taken the heart out of lot of would-be climate agitators. Yes, the occasional campaigner dressed in a polar bear costume does wander by, but participants are not being hectored by throngs of doomsters constantly crying climate calamity from their various soapboxes. The result is that the conference venue is imbued with an unaccustomed sense of orderly calm. While many of the 40,000 conference participants may believe that the world is facing catastrophic climate change, they now seem confident that the negotiators will be able to conclude the first ever universal climate accord by the end of this week. As U.S. Special Representative for Climate Change Todd Stern noted during a press conference, the Paris Accord would then guide global energy decisions for essentially the rest of this century. “Paris can be a decisive turning point in history,” declared U.N. Secretary-General Ban Ki-Moon. Noting the presence of hundreds of representatives from business and industry at the meeting, Ban said, “The business community is asking for a clear signal from governments that the low emissions economy is inevitable.” In fact, a lot of participants at the meeting are proclaiming that global warming is really a huge business opportunity. Among others so saying was Union of Concerned Scientists (UCS) Director of Science and Policy, ecologist Peter Frumhoff. “Commitment to a clean energy future is a moral imperative grounded in science and one of the greatest business opportunities of all time,” asserted Frumhoff at a UCS press conference. In the same session, biologist Chris Field who heads up the Carnegie Institution’s Department of Global Ecology, mirrored Frumhoff’s assertion calling the imminently mandated transition away from fossil fuels “the biggest business opportunity of the second half of the 21st century.” For my part, I will just say that people who take investment advice from activist scientists get what they deserve. But what about investment advice from investment banks? On the eve of the Paris conference, Goldman Sachs released its report, The Low Carbon Economy, as an equity investor’s guide to a low carbon world through 2025. The company sees tightening regulati[...]

Clinton Wants to Tax U.S. Companies for Trying to Pay Less Taxes

Mon, 07 Dec 2015 16:00:00 -0500

The former secretary of state and senator from New York, Hillary Clinton, reportedly will on Wednesday announce plans to impose an "exit tax" on companies that move their headquarters out of America or merge with foreign firms to escape America’s unreasonably high corporate taxes. Back in 2012, when Sen. Chuck Schumer (D-NY) and the then-Speaker of the House, John Boehner (R-Ohio), proposed a similar tax on individuals who chose to leave America, the president of Americans for Tax Reform, Grover Norquist, noted that a similar policy "existed in Germany in the 1930s." Schumer, Norquist memorably suggested, "probably just plagiarized it and translated it from the original German." Indeed, the Reichsfluchsteuer, or Reich flight tax, was a 25 percent levy imposed originally not by the Nazis but rather, on December 8, 1931, by the pre-Hitler, centrist government of Heinrich Brüning, who had a doctoral degree in economics. Not exactly something to try to emulate.  The details of Clinton’s plan haven’t yet been disclosed. But it’s not too early to recognize it as a striking example of how, this election cycle, neither major American political party has the right idea when it comes to the free movement of people and capital across borders. The Republicans want to prevent immigrants from getting in. They usually say they are talking about illegal immigrants, but their rhetoric often indicates a hostility to legal immigrants, including Syrian refugees. The Democrats, meanwhile, want to prevent Americans from getting out. As I pointed out back in 2012, the Universal Declaration of Human Rights, a product of the United Nations, says, "Everyone has the right to leave any country, including his own" and "No one shall be arbitrarily deprived of his property."  Maybe it’s time for a third American political party that would let people and companies come and go freely. Neither the Republicans nor the Democrats as currently constituted seem to fit the bill. Yet the journey across borders is one that was once familiar history to many Americans, whether from the biblical Exodus or the waves of immigrants to the United States from Europe, East Asia, and South America. There is a "natural rights" argument for free flow of human and financial capital, which is to say that it is unjust to force people or companies to stay where they do not want to be. And there is a national history argument for it, which is to say that our own country had an imperfect but nonetheless long history of welcoming immigrants. Go visit Ellis Island or the Statue of Liberty if you doubt that. There’s also a utilitarian argument for these free flows, part of which is that the electorate and the politicians need to hear the signals they are sending. Running a country with sealed borders is like driving a car blindfolded and with sound-deadening headphones on. That is a lesson not only of interwar Germany but also of the Cold War. In 1963, at the Berlin Wall, President Kennedy said, "Freedom has many difficulties and democracy is not perfect, but we have never had to put a wall up to keep our people in, to prevent them from leaving us." Hillary Clinton’s exit tax would do exactly what Kennedy said we’ve never had to do: set up a virtual wall, in the form of a tax, to prevent companies from leaving America. A better option would be to create policies that would attract companies from overseas to flock to set up shop here in America. When we have foreign companies trying to sneak into America like Mexicans making their way across the Southern border, we’ll know something has been fixed. Until then, Hillary’s pro[...]