The Swiss Vote to Restrict Immigration: Direct Democracy in Action

On February 9, 2014, the Swiss voted in a non-binding referendum by a narrow margin (50.3%) in favor of immigration quotas and an end to “mass immigration.”[1] This result took the government by surprise; officials had been urging the people to vote no. So too had the Swiss bankers—only coincidentally of course. Just enough voters rebuffed the establishment of power and wealth for the referendum to pass. Johann Schneider-Ammane, the Swiss Economy Minister, suggested that a “culture of excess” in the pursuit of profit sometimes at the expense of the common good had discredited the political and business elite in the eyes of ordinary people.

From: "The Swiss Vote to Restrict Immigration"

Congressional Statements on Obamacare: A Crack in Representative Democracy

Even as democracy has many virtues, the political system is not without its own weaknesses. In times of economic crisis, such as Germany in the 1930s, stressors can “fan the flames” such that a few opportunistic people can exploit the vulnerability to the extent that the democracy itself collapses. The “rising phoenix” is often much worse than the original weakness. In this essay, I analyze how a congressional report on “Obamacare,” or the Affordable [health] Care Act, triggered a chain reaction that brought a weakness of representative democracy to the surface. Unfortunately, I do not believe many people thought it very serious (i.e., systemic implications); most Americans probably did not even notice the brief rupture on the skin of the U.S. body politic. For my “microscope slide” of the underlying “virus,” I have carefully selected a slice of the relevant “biomass” in which the pathogen can be most easily seen; it is hardly partisan in nature even though it tends to manifest as such. While you examine my “slide” below, I recommend that you ignore the partisan puss lest you miss the proverbial “fly in the ointment.” Once you have detected the rascal, you might want to ask yourself whether the lapse in representative democracy now rendered transparent is sourced in the people or their respective representatives.

On February 4, 2014, the Congressional Budget Office released a report that mentions in a “oh, by the way” fashion a novel twist in how Obamacare could be expected to impact jobs. Whether out of sheer gamesmanship or ignorance (of whom?), some of the public conclusions from Congressional leaders show more generally the gulf between what the public “is fed” by elected representatives and the actual content they claim is behind their interpretations.

Providing a succinct account of the “twist,” congressional budget analysts said that 2.3 million Americans “who would otherwise rely on a job for health insurance will quit working, reduce their hours or stop looking for employment because of new health benefits available under the Affordable Care Act.[1]

House Budget Committee Chairman Paul Ryan’s first statement on the report, however, concludes that the report proves that the health care law “will push 2.3 million people out of the workforce.”[2] At the time, many of Ryan’s Republican colleagues were making similar claims. I want to isolate the word push here, for it is logically incompatible with the report’s claim that people staying in a job only for the health-insurance benefit will no longer have to continue in the job to receive affordable health-insurance.

Notably, some influential conservatives were cautioning Republican members of Congress to be careful with their own nterpretations, lest constituents and even the public at large (domestic and even global) catch a glimpse of the proverbial “man behind the curtain.[3] Writing in POLITICO magazine on February 4th, National Review editor Rich Lowry notes that “we aren’t talking about jobs that are eliminated in the usual sense of discouraging employers from hiring, as some Republican talking points suggested.”[4] Yet this warning did not stop Rep. Lynn Westmoreland from referencing the CBO report on February 11th as Janet Yellen, the new chair of the Federal Reserve, faced a House committee. Adopting a factual tone, Westmoreland told the Fed chair that the Affordable Care Act "is estimated to cost more than 2.5 million jobs over the next decade." He then asked her whether she thought Obamacare would have an impact on "economic growth and job creation."[5] Lest I belabor the obvious, 2.3 million is less than 2.5 million, and, moreover, the report does not claim the jobs would be lost, as implied by "cost" and "job creation." 

Notice that Rep. Paul Ryan is using "props" (e.g., gray suit, button, flag, and the all-caps title) that add to the visual impression of authoritative fact rather than opinion, ideology, and interpretation. (Image Source: CNN)

Rep. Ryan had at least gone out of his way on February 5th during a hearing on the report to “clarify” his initial statement. “So just to understand this," he said, "it’s not that employers are laying people off, it’s that people aren’t working in the workforce, aren’t supplying labor to the effect of 2 and half million jobs in 2024, and as a result that lower workforce participation rate, that less labor supplied, lowers economic growth?” he asked CBO director Doug Elmendorf.[6] The easy pivot may have saved the Budget Committee chairman his credibility, yet Westmoreland's statement and question demonstrate that disinformation can have considerable staying power, even becoming the default, nonetheless.

I submit that the misinformation had been so glaring that even the general public, otherwise occupied with life, might notice the sheer distance between Ryan’s conclusion and what credible experts were saying of the report. Do we know what is really going on? If not, how can we make good judgments in voting?

In other words, the democratic premise of viable self-governance by a virtuous and educated citizenry may contain an inherent weakness in as much as the electors rely on their respective representatives for information translated for general consumption via interpretation. As the number of electors per representative increases (i.e., larger districts, especially if in an empire-scale republic of republics and citizens), the reliance increases, exponentially I suspect. For one thing, the constituents must rely increasingly on the media to transmit (and shape) their respective representative’s interpretations.

Furthermore, “official” misrepresentations by elected representatives can mask for many voters the value to the individuals who no longer have to work in a (second) job they hate, the companies for whom motivated employees are an asset, and even society itself (happier people). To be sure, a lower labor-force participation rate in a particular job category means higher wages (to attract potential workers), other things equal. Some employers may find that the increased commitment is not worth the more tangible monthly cost.

In fact, Obamacare may not even be the primary culprit behind relatively fewer people seeking employment.  According to The Washington Post, CBO’s analysis points out that “the upward pressure on [the labor participation] rate from improvements in the economy will be more than offset by downward pressure from demographic trends, especially the aging of the baby-boom generation.”[7] By implication, the downward pressure from Obamacare come in second, at best. As part of her congressional testimony on February 11th, Fed chair Yellen did not even mention the Affordable Care Act as a factor in the downward pressure; rather, she pointed to the aging population as the main contributor in the downward trend, with structurally and cyclically unemployed giving up playing a secondary role.[8]  

That the 66% participation rate held from 2004 to 2008 suggests that sustained increases in GDP can counter the huge aging factor as the unemployment rate falls. However, as shown in 2010-2012, both rates can fall concurrently, suggesting an impact from the long-term, or structurally, unemployed losing unemployment compensation and even finding further job-hunting to be futile.

Lest business managers fear a spike in wage rates, the report projects that the unemployment rate will decline only gradually, not dropping to 5.8 percent until 2017 and 5.5 percent in 2024. “Factors such as obsolescent skill-sets and the spread of automation that have fed into the persistently high long-term unemployment are expected to have diminishing effects on the unemployment rate after 2017.[9] We can expect, therefore, that the positions freed up by demographic changes and Obamacare will not go vacant for long; as pointed out above, it is not as though the positions themselves are to be sacrificed on the altar designated by the O-god.

In short, Ryan’s initial statement suggests not just that elected representatives are capable of putting out blatantly false “information” on a policy or new law (this is hardly a revelation), but also that electors may make electoral and public-policy judgments on the false assertions. Especially in a large, empire-scale republic like the U.S., the E.U., or India, the citizenry may have to rely so much on media-shaped sound-bites that the pronouncements are instantly stamped not only with legitimacy, but also as the default. In other words, an interpretation said into a microphone and then broadcast by the media enjoys the presumption of being true even if it is blatantly false. Falsity as truth coming from elected officials is not necessarily checked, since no other quarter in the public discourse has so much authoritative status. Furthermore, the media no longer speaks with one voice, so any “truth correction” may be eclipsed by rhetoric or assumed to be mere partisanship. In terms of representative democracy itself, the representatives may be able to exploit the inherent informational-difference that exists between them and their respective electors.

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1. Zachary A. Goldfarb and Amy Goldstein, “Health-care Law Will Prompt over 2 Million to Quit Jobs or Cut Hours, a CBO Report Says,” The Washington Post, February 4, 2014.

2. David Nather, “Both Parties Keep Cherry-picking CBO Report,” Politico, February 8, 2014. See also "ObamaCare Could Lead to Loss of Nearly 2.3 Million Jobs, Report Says," Fox News, February 4, 2014.

3. This reference is to the Wizard working the controls behind a curtain in the film, The Wizard of Oz.

4. Zachary A. Goldfarb and Amy Goldstein, “Health-care Law Will Prompt over 2 Million to Quit Jobs or Cut Hours, a CBO Report Says,” The Washington Post, February 4, 2014.

5. "Economy & Monetary Policy," U.S. House Financial Services Committee, February 11, 2014.

6. Zachary A. Goldfarb and Amy Goldstein, “Health-care Law Will Prompt over 2 Million to Quit Jobs or Cut Hours, a CBO Report Says,” The Washington Post, February 4, 2014.

7. Ibid.
8."Economy & Monetary Policy," U.S. House Financial Services Committee, February 11, 2014.
9..Zachary A. Goldfarb and Amy Goldstein, “Health-care Law Will Prompt over 2 Million to Quit Jobs or Cut Hours, a CBO Report Says,” The Washington Post, February 4, 2014.

The 2014 Winter Olympics in Russia: “Where There’s Smoke, There’s Fire”

In the weeks leading us to watch the Olympics, I suspect I was not alone in thinking, “I just don't like what I see here." Why was I resisting paying even scant attention to the pre-Olympics "coverage" (a.k.a. advertising) as NBC, the American broadcast network covering the games, was getting rather publicly revved up on the upcoming media event. In this essay, I briefly survey the external stimuli, leaving the self-analysis to the analyst’s couch.[1]

First, as the American press reported before NBC began promoting the games in earnest (hmm), there is the “whole gay thing” and Putin. I really think that's a non-issue with regard to the Olympics, given the uniqueness of the Olympic Village. I would not be surprised were the Russian police of the mind that “What goes on in Vegas stays in Vegas,” at least as far as vacations are concerned.

Now, the "not fit for primetime viewing" conditions of some of the hotels putting up the foreign press strikes me as more substantive because of the implicit and likely even explicit rudeness does not go down well, even at a distance. Relatedly, I suspect, the sheer amount of money "padded" into the construction projects, including hotel construction, for kick-backs undoubtedly directed to Putin's major political supporters eviscerates any possible excuse in the tardiness.

In fact, associating Putin at all with the Olympics comes off to me like associating liver with dinner; I instinctively spit out immediately any hint of liver-taste. I must admit I am glad the U.S. State Department put out a travel warning for Americans going to the games. I was also amused to read of the low numbers of non-Russians arriving from abroad in Sochi as of the first day of games.[2] Of course, the modern Olympics hinges on the broadcasts around the world, rather than attendance numbers.

 Even though NBC's studio in the Olympic Village is transparent, the network's tactics may be anything but. (Image Source: David Johnson)

Interestingly, as part of its rather obvious devices to remind/manipulate its general viewership to watch the approaching games (including inserting reporters live from Sochi into CNBC's coverage of the financial markets), NBC strategists may actually have been fomenting the security story in order to draw viewers' attention to the fact that the games would soon begin. Stirring up fear and the hope of visual voyeurism of others’ tragedies is a sure bet for news reporting as advertising.  However, overdoing it can be counterproductive if too much of the ploy is visible on the surface as a duplicitous, otherwise stealth agenda. Yearning to turn the subtropical town on the Black Sea into an international resort, Putin could not have been very happy about the coverage, though may have realized the importance of a huge broadcast viewership even for himself, not to mention covering some of the kick-backs.

   

Finally, starting particular events including skating the day before the OPENING ceremony may stand out among the various points of smoke above in being indicative of fire skipping fire lines below. Even though Chris Chase of USA Today concludes “it’s a small price to pay for the overall improvement of the Winter Games,” he admits “it still feels strange to start the Olympics before the Olympics technically start.”[3] In the film, Inglourious Basterds, Lt. Aldo Raine wryly clarifies the matter of something seeming odd (or strange).  “Yeah, we got a word for that in English. It’s called suspicious.” 

In spite of his conclusion (i.e., small price to pay), Chase provides a credible case for suspicion. “Television rules all." he states up front as if it were a natural law. "Adding another day of Olympic competition means adding another day of Olympic telecasts. Thursday is traditionally one of the biggest television nights (along with Sunday). With all the money being paid to cover the games by networks across the world, turning 17 days of Olympic coverage into 18 days is a nice bonus.”[4] Regarding the addition of a program of skating, Chase points to a five day interim within the two weeks without any skating scheduled.

In closing, I must let the philosopher in me have a few words (no philosopher ever has just a few words, so please take a bathroom break if you need to). From sheer logic, to begin something before it has begun is a blatant contradiction. As per his categorical imperative, Kant would call the practice unethical. Were everyone to adopt the maxim, “I will start activities before the start time,” it would not make sense to have a start time for anything. The maxim is thus self-contradictory if it (like reason itself) is universalized.

Hume would point out that Kant relies too much on logic and reason more generally in assessing whether a given practice is ethical. A person reading U.N.’s condemnation of the Vatican in February 2014  for having been more concerned about the reputation of the Church as a whole than children’s welfare—a priority that Rev. Joe Ratzinger, or Benedict XVI, put in a letter while archbishop of Munich—may think through the theological implications of priests covering for each other. However, the sentiment of disapprobation (think of my expression as I spit out odious liver) is likely, excepting sociopaths, to be the principal reaction. Emotive rather than of Reason.

When I read of the sports beginning a day before the opening ceremony, I felt a sentiment of disapprobation well up inside me. Because I had been feeling that something just isn’t right about the upcoming games, especially from an vague intuitive sense of NBC’s manipulative tactics as over-reaching at best, I suspected that the rather odd placement of some events before the ceremony also came from the mentality that wants incessantly to squeeze out a few more drops of lemon juice from lemon that has already shed enough.  The sight of this childish demeanor in action is enough for any non-manipulative person to resist going where the manipulations point.

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[1] I have in mind here Nietzsche’s thesis that reasoning is really a person’s instinctual urges tussling for dominance—that which overcomes the others (here as obstacles) reaches the surface of consciousness as an idea. I do think about this point regarding philosophy (and particular philosophical systems) in general and how my own psychological background fuels or is otherwise expressed in the ideas and related theories I “intuit” and “create.”

[2] Associated Press, “Sochi Olympics Still Waiting for Spectators from Abroad,” The Huffington Post, February 6, 2014.

[3] Chris Chase, “Why Do the Winter Olympics Start before the Opening Ceremony?” USA Today, February 6, 2014.

[4] Ibid.

From Ground Zero to 1776 Feet

The glass exterior gives the Freedom Tower a look of unity, such as that which occurred on September 11, 2001. (Image Source: USA Today)

Aspiring to hope again, against the pull of the annualized calls to remember, yet again, a tragedy whose villain had met his fitting end, America could dare to inhale a fresh sense of pride instead of the stale bad air of vulnerability and death that stubbornly would not die under the cover of mourning. New Yorkers with an even longer memory could feel a sense of payback on behalf of their proud city, which had lost the World's Fair to Chicago in 1893. New York's press had dubbed the metropolis of the Midwest "the windy city" for all the bragging there for having been selected over Wall Street's locale. In 2013, New York's bewindowed Temple of Independence beat out the Sears, or "Willis," Tower in Chitown (pronounced shy-town, not shit-own, or, even worse, own-shit) as the tallest building in the Western hemisphere on account of a spire. 

Lest it be said that the sky is the limit for the perpetual Union of shimmering unity, the laws of nature do not allow a Rome or a Washington to rise forever. as if social organization were somehow not mortal. As between us and God, our cultural artifices are unfortunately on our side of the ledger. They are also in continuity with Nature, into whose embrace we mere mortals cannot evade. So what does Nature have in store for the American experiment of a general republic within whose borders semi-sovereign republics reside as though tamed members? Will the U.S. collapse from its own weight, or become increasingly susceptible to enemies foreign and even domestic? 

Our lot is not to know what lies beyond the horizon reflected in the unscratched glass of freedom's tower. We can, however, marvel at the sheer tenacity of a people whose hope, whose light, will not go quietly under the ashes at Pearl Harbor and Ground Zero. For from the extraordinary hardships of brave colonists in the wilderness, on the periphery of the known world, came bubbling to the surface the idea of self-governance, whose practicability and unity require the self-discipline of virtue and civic knowledge,  in 1776.

Target Intimidating Customers by Impersonating Police: Nietzsche on Weakness Seeking to Dominate

In the PBS series Downton Abbey, the Victorian countess, magnificently played by Maggie Smith, delivers a reverberating line as fit for my hometown in the second decade of the twenty-first century as for a village in Britain a century earlier. Referring to the local physician, who had just been raised to the position of military manager of convalescent centers during World War I, the countess remarks in frustration after a rejected request, “We give these little people power and it goes to their heads like strong drink.” This poignant quote fits like a glove in the case of the typical store manager and assistant managers, especially in my decaying hometown in the U.S. a century after World War I. In this essay, I apply Nietzsche's philosophy to a rather distinct pattern that I discovered there decades after I had left for college.

The full essay has been incorporated into (or swallowed up by) On the Arrogance of False Entitlement: A Nietzschean Critique of Business Ethics and Management, available in print and as an ebook at Amazon.

Corporate Social Responsibility at Walmart

Is it not an outright oxymoron for a company such as Walmart to pinch pennies when it comes to its non-supervisory employees even as it is oriented to the social good of society through its "corporate social responsibility" (CSR) programs? Leslie Dach, a former executive at Walmart who had been behind several such initiatives liked to make the point that striving to make a dent in societal problems can dovetail with a company’s own financial interests. The two need not conflict. I submit that this is not good enough for a company's management authentically into "giving something back." Specifically, the social-good initiatives should be integrated with company operations. Walmart can indeed be criticized from this standpoint, particular since Sam Walton's sons cut non-supervisory employee sickness and vacation days. I suspect that the illusion foisted on the general public is likely to burst one day as the bones of the stores' operations are laid bare (i.e., the curtain is pulled back to reveal for the public the proverbial man behind the curtain). Let's hope that other companies can learn from, and thus improve on Walmart's dual strategies.

The full essay is at "Walmart: Beneath the Corporate Social Responsibility."

Strategic Leadership: Disentangling Strategy and Leadership

Strategic leadership relates an organization’s differentiated core competencies to its ideologies, identity, mission and view of the macro environment system. Relates implies that strategic elements are not identical with a vision containing values. In fact, a tension can be involved, as interest applies one way to core competencies and another to the social reality that a leader promotes in line with an organizational mission (and identity). For one thing, the basis of a competitive advantage can be rather limited temporally, due to technological changes, for example, while values espoused are presumably long-lasting in their validity and thus not easily changed. 

Ethical leadership as a means of managing strategic leadership (Worden, 2003a and 2003b)   
   

 Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon. 

Sun Tzu's Art of War: A Recipe for Leadership in Business

According to Master Sun in The Art of War, “Leadership is a matter of intelligence, trustworthiness, humaneness, courage, and sternness.”[1] Although Sun Tzu is referring mainly to military (and related political) leadership, lessons can be learned for exercising business leadership.

1. Sun Tzu, The Art of War: Complete Texts and Commentaries (Boston: Shambhala, 2003), p. 44.


Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available in print and as an ebook at Amazon. 

Google Jettisons Motorola: A Jack of All Trades Is a Master of None

Managers tasked with the overall management of a company may thirst for additional lines of business, particularly those that are related to any of the company’s existing lines. Lest it be concluded that an expansive tendency flows straight out of a business calculus, the infamous “empire-building” urge, which is premised on the assumption of being capable of managing or doing anything, is often also in play. Interestingly, this instinct can operate even at the expense of profit satisficing or maximizing. In this essay, I assess Google’s sale of its Motorola (cellular phone manufacturing) unit.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

The State of the Union Address: The Presidency as Visionary or Bureaucratic Leadership?

Just after President Obama’s 2014 State of the Union Address, CNN found that among the Americans who had watched the speech, 76 percent had a “ total positive” reaction, 44 percent of which being “very positive,” and 22 percent had a negative reaction.[1] What is left unsaid can be even more useful than what is reported. In this case, the poll does not reveal the criteria used by the respondents to assess the speech. The devil lies in the details here, in not only the actual criteria used, but also the very content of the speech. In this essay, I investigate the suitability of the criterion that can be labeled “extent of detail in the speech,” given the purpose of the speech as laid out in the U.S. Constitution and, moreover, the presidential office.

In his 2014 address, Barak Obama stayed largely away from “the vision thing.” This point is significant to the extent that “presiding over the whole” is an important feature of his office. Even realistic bipartisan legislative items, such as immigration and trade reform, received only cursory mention. This is understandable, given the gridlock that had made 2013 one of the least productive Congresses in U.S. history. Under the circumstances, the president could have done worse than lean on his constitutional obligation “to give to the Congress information of the state of the Union.” Pursuing this tract may have given the president (and the office) more reputational capital (e.g., standing above the fray; not being partisan). Sadly, he truncated that duty to sell his executive actions to a weary citizenry and Congress. In other words, like presidents before him, Barak Obama chose to make the speech fit almost exclusively within the second part of the constitutional obligation—to “recommend to [Congress’s] consideration such measures as he shall judge necessary and expedient.”[2] To be sure, he did push a few “incrementalist” legislative proposals, such as increasing the minimum wage a few dollars and extending unemployment compensation three months. Unfortunately, the public seemed to recognize the partisan nature of these “agenda items.”

Perhaps the main thrust of the address fell on announcements of, and justifications for executive actions, including tightening industrial carbon-emission limits, increasing the minimum wage that federal contractors would have to pay their workers as a condition of accepting contracts in the future, and providing a new retirement-savings device for any employees without an employer-based plan. The White House readily admitted the diminished returns afforded by executive orders relative to legislation. “I wouldn’t tell you that executive action is a substitute for major bipartisan legislation; it’s not,” Dan Pfeiffer, a senior advisor to the president, admitted.[3]

The implication that the state of the Union hinged on such “micro” measures somehow escaped the notice of viewers, the media, and the political elite. By the time the president got to his “achievement” in having secured the voluntary agreement of several CEOs not to discriminate against the long-term unemployed, he was past even the encroachments of the recommendations part. The showcasing of hand-picked people in the gallery entirely bypasses the constitutional purpose of the report and recommendations.

To be sure, Barak Obama was hardly alone among U.S. presidents in steering the address toward partisan recommendations. In fact, by the time of the 2014 address, most Americans probably expected a partisan list of proposals. His contribution may have been in moving the de facto standard for what counts as a State of the Union Address even further along in terms future expectations of presidents using the address to sell their respective agendas. In the context of legislative gridlock and perhaps even a media-fomented general sense that the stuff of visionary leadership must finally bow down to American pragmatism in the era of managerialism, the president’s addition of executive actions took the address even further from the “big picture” inherent in the condition of the Union itself—that is to say, further away from transformational and visionary leadership and closer to bureaucratic and politicized management. This is bad news for the presidency if the presiding role of the office (e.g., looking out for the good of the whole systemically) is as much a part of the job as are commanding the military and acting as chief executive.

Burns’ distinction between transactional and transformational leadership may shed some light here. Burns classifies both types under moral leadership in his definitive work, Leadership.[4] The transactional leader takes the followers’ needs as given and attends, via particular (i.e., incrementalist) transactions with the followers, to the extant lower needs already preoccupying the followers as well as the leader (e.g., raising the minimum wage). In contrast, the transformational leader raises, or transforms, the needs that the followers consider the most important to higher, distinctively moral, needs that would transform both the followers and the leader, even if merely in looking at a problem in a new light (i.e., through the lenses of a novel paradigm). It should come as no surprise that “the vision thing” and charisma have great value in transformational leadership and none at all in the transactional sort. For example, the president could have inserted his recommendation for a raise in the minimum wage within a vision of sustenance as a fundamental, and thus unconditional, human right. The transformation would involve raising the perceived need at issue from that of negotiating a new conditional set of terms for domestic food aid (“food stamps”) and a maximum in unemployment compensation to replacing that mindset among leaders and followers alike with one that is rooted and justified in basic (i.e., unconditional) human rights.

In conclusion, the gradual shift in emphasis that has gone virtually unnoticed at the societal level as Americans have critiqued State of the Union addresses is “the canary in the coal mine” already letting us know that both the presiding and related non-partisan leadership roles of the U.S. presidency are well on their way to extinction. Unfortunately, many Americans seem to have been pegging their assessment criteria to what the address itself has become—even if this means validating successive presidential lapses. Lest shirking the presiding and “big picture” leadership roles of the office in favor of getting as much of a partisan agenda put into law as possible is not sufficiently narcissistic, the presumptuousness involved in feeling free to “tweak” the office in a more convenient direction surely suffices. Yet such gradual moves effectively evade notice as if by stealth.

I submit for your wise consideration, therefore, the following question: Is democracy unknowingly susceptible to death by increments? If so, republics may be destined by the fates, or, more likely, inherent design to unwittingly suffer a prolonged decline without any awareness that the anchors are being gradually moved down the hill. The lack of recognition that the markers have been moved means that the new positions are taken to be the old default. Accordingly, no serial decline is discerned; no “big picture” vision that is historically as well as idealistically informed breaks through the ice, as the marker on what counts as leadership has shifted too over time. It is difficult to follow the bread crumbs if they are being eaten by birds. By yet another analogy, the state of the Union might include the point that we are skiing downhill in “white-out” conditions, utterly clueless as to where we, the self-governing people (ideally), are going until it is too late.

See "The State of the Union Address: The Presidency as Presiding or Partisan?" in The Essence of Leadership, which is available at Amazon in print and as an ebook.

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1. Ariel Edwards-Levy and Mark Blumenthal, “State of the Union Poll Gives Obama Positive Marks,” The Huffington Post, January 29, 2014.

2. The U.S. Constitution, Article 2, Section 3.

3.Susan Page, “Speech-wise: What a Difference [a] Year Makes,” USA Today, January 29, 2014.

4. James M. Burns, Leadership (New York: HarperCollins, 1978). 

The State of the Union Address: The Presidency as Presiding or Partisan?

On The O’Reilly Factor on the evening of Obama’s health-care “summit” at the White House in 2009, Bill O’Reilly told Laura Ingrahams that the president had done an adequate job in moderating the discussion.  Laura replied, “He is not a moderator; he is the President of the United States.”  O'Reilly provided his own perspective, in admitting that “moderating is not enough in the long-run because the country wants leadership.” The host was only partially correct.

Material from this essay has been incorporated in The Essence of Leadership, which is available at Amazon in print and as an ebook.

The Mammoth Indoor Mall: A Dinosaur or a Reusable Shell?

One of the pitfalls in maintaining a general gaze at the long-term trend toward e-commerce at the expense of "brick-and-mortar" stores lies in missing or overlooking other changes in the business environment. The weight of such changes can fall largely within the "brick-and-mortar" world, impacting some of its neighborhoods more than others. Not all change impacting commerce in 2013 stemmed from the internet. The fate of the indoor mall is a case in point. Taking into account the obvious impact of online purchases does not explain why stand-alone stores and outlets were doing so much better than the noisy, sterile malls. 

Anticipating further detrimental impact on in-person transactions from increasing online purchases, Michael burden, a principal with Excess Space Retail Services, predicted after the Christmas season of 2013 that the retail sector would likely see an average decrease in overall retail square footage of between one-third and one-half within the next five to ten years. He cited fewer mall visits and less inventory needing to be stocked in the stores.[1] Less retail space not only includes smaller stores, but fewer as well. As regards store closings, the question of whether the indoor mall is to stand only as an artifact of an earlier society or a structure that can adapt to ever-changing societal mores begs for a definitive answer. 

One big shift in store closings underway already by 2014 stemmed from retailers shying away from indoor malls, favoring instead outlet centers, outdoor malls, and stand-alone stores. "There's no question that mall stores are closing quicker than the open air [variety],” David Birnbrey of The Shopping Center Group said.[2] Although new retail construction completions were at the time at an all-time low, the supply of new outlet centers had picked up in recent quarters according to Richard Ellis of CD.[3] Meanwhile, no new indoor malls were being constructed. Rick Caruso, founder and CEO of Caruso Affiliated, was unaware of any indoor mall being built in the U.S. since 2006. "Any time you stop building a product, that's usually the best indication that the customer doesn't want it anymore," he said.[4] Sometimes what is not done (or said) is more important than what the attention-getters are doing (or saying).

What exactly lies behind the impending demise of the shopping mall? E-commerce cannot be the whole story, for otherwise the outlets, outdoor malls, and stand-alone stores would face an equally dismal prospect. Rick Caruso declared at the 2014 National Retail Federation convention that at one point, the indoor mall “may have met the developer's needs—and even for [a while], the consumer's needs—but it has outlived its usefulness."[5] Without a major reinvention, traditional malls would soon go extinct as though a species unwilling or unable to adapt to rapidly accelerating climate change. 

Unlike the sort of experience that coffee shops off, the amusements here at Mall of America in 2005 are only indirectly linked to the products. (Image Source: Jeremy Noble)

Specifically, mall retailers must figure out how to get back in sync with people’s daily-life rhythms by creating a satisfying atmosphere for customers to experience. Many coffee shops had already achieved as much by offering wifi, good smells, particular styles of music (or none), and comfort (e.g., nice chairs, no fear of getting kicked out for hanging out too long, etc).[6] The comfort factor is subtle though significant nonetheless. Just weeks into 2014, news broke of yet another “mall shooting.” Malls and schools were already becoming associated with guns and death in the psyche of the general public. The managers of malls themselves and the particular stores therein faced the daunting task of finding and implementing novel experiences in line with a “modern-modern” society while facing a stiff headwind manifesting as an increasingly bad reputation in the broader society.

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1. Krystina Gustafson, “A ‘Tsunami’ of Store Closings Expected to Hit Retail,” CNBC.com, 22 January 2014.

2. Ibid.

3. Ibid.

4.  Ibid.

5. Krystina Gustafson, “Without Rebirth, Malls Face Extinction: Developer,” CNBC.com, 13 January 2014.

6. Interestingly, a Starbucks store manager approached me on one occasion as I was setting up my laptop just after sitting down to demand that I buy something or I’d have to leave. I pointed out that I had just arrived and was waiting for the line to shorten, and that Starbucks’ policy permits people in the stores without making a purchase, but he dismissed both points and continued to bark his order as though I were an alien insect. I left rather than made the purchase I had intended, and called Starbucks’ customer service to complain of the manager who could not be wrong. After a bit of fake sympathy and affirmation of the policy as I had understood it, the “customer service” employee impotently said, “Unfortunately I cannot call that store manager to correct him on the policy.” I mention this because I have not since felt as comfortable surfing the net while enjoying a coffee in a Starbucks store. In fact, I stopped going to Starbucks stores and not soon thereafter gave up coffee as a regular drink because of its negative effects on the body (such as hard stools, headaches, and a general sense of nervousness while on the drug). 

Online Sales: Breaking the Egg

Was the 2013 holiday season really a turning point in terms of online purchases? Can a business environment change so drastically from one Christmas to the next? If not, what can we say about a commercial system that buckles, at least at its weakest link, under the pressure of a moderate change in buying habits? Put another way, does such buckling necessarily indicate or point to the existence of a threshold point that has suddenly and unexpectedly been crossed? Alternatively, the system itself may be weak.

During the November-December holiday season of 2004, online sales revenue in the U.S. increased 25 percent from the year before.[1] CNN Money reported the increase as 29.5 percent—almost a third of total holiday sales.[2] This healthy numbers can be deceiving, however, if the base is low relative to the total. That is, if the online holiday sales figure as a percentage of total holiday sales is around 2 percent, an increase of 25 percent from the prior year’s online sales is immaterial in terms of the change in the percent of online sales to total from the prior to the current year. As shown below, fourth quarter percentages-of-total (rather than of increase) increased from roughly 1.7 in 2003 to 2 percent in 2004. This change is hardly earth-shattering.

Estimated Quarterly U.S. Retail E-commerce Sales as a Percent of Total Quarterly Retail Sales

4th Quarter 1999 to 4th Quarter 2004[3]

So let’s look at percentage-of-total figures specifically for the combined (November and December) season of Thanksgiving and Christmas, two of the major national holidays in the United States. In 2012, the season’s online sales revenue accounted for 19.3 percent of the total retail sales.[4] Keeping in mind the magnitude of the changes shown in the graph above (0.6% to 2.2% over five years), the change from roughly 20 to 25 percent in 2013—from just one Christmas to the next—seems relatively dramatic. Yet a shift from 20 to 25 does not in itself seem very significant. Even so, it was enough for journalists to label it a “sea-change,” “threshold,” “turning point, “and “major re-alignment, capable of unleashing a virtual tsunami.

One business practitioner interviewed on CNBC in mid-January, 2014 made the startling claim that the turning point had come quite unexpectedly in just one year. I contend that conclusion is overly dramatic, though I readily concede that the five-point difference was oddly too much for a part of the system. Specifically, “an unpredictably large number of packages overwhelmed UPS,” with thousands of Christmas presents left undelivered by Christmas Eve.[5] Natalie Godwin, a spokesperson at UPS, explained. “The volume of air packages in our system exceeded the capacity of our network, as demand was much greater than the forecast.”[6] The network’s capacity itself became transparent as a constraint, as a result of demand having been much greater than anticipated. The words “capacity” and “much” point to, or intimate, a systems-level problem not just for the package-delivery company, but also for the U.S. (and perhaps global) system of commerce.

Crucially, that a percentage change of just 5 percent of total sales revenue represented as increased demand can pierce the capacity of a major link in the commercial chain from manufacturers to customers suggests not a pivotal year, but, rather, a system too (i.e., artificially) inflexible or hard. Rather than being able to adapt to changes in the environment, as any fit species does through the evolutionary process of natural selection, the American system of commerce lacks the built-in ability to stretch (and contract). By implication, reaching a threshold point, such as in demand for products sold online, is in terms of the system and behaves as a wall rather than a semi-permeable membrane. It is worth pointing out that a threshold point concerning the system of commerce also no doubt exists in terms of society (i.e., changes in daily life) and even in terms of products (i.e., transformative products as mainstays as a result of ecommerce). Just as the loud kids tend to get disproportionate attention, a rigid and complacent system gets noticed (i.e., becomes transparent as a system) more than its share. Relying on such a system warrants the warning: Watch out for the “big one”—a major earthquake of sorts capable of a truly dramatic land-shift.

1. Jennifer LeClaire, “Online Holiday Shopping Soars 25 Percent to $23 Billion,” E-Commerce Times, 4 January 2014.

2. CNN Money, “Holiday Online Sales Surge,” 5 January 2004.

3. US Census Bureau, The Department of Commerce, “Quarterly Retail E-Commerce Sales 4^th Quarter 2004.”

4. The National Retail Federation.

5. Donna Leger, “UPS System Overload Delays Holiday Packages,” USA Today, 24 December 2013.

6. Ibid.

Incentives at EBay to Exploit Its Golden Goose

When is it ok not to worry about a corporate board or management exploiting an institutional conflict-of-interest? I contend in another essay that the very structure of an institutional (i.e., based on the relationships of positions and/or organizations) is inherently unethical, hence even if not actively exploited. Here, I delve into factors that may reduce the likelihood of such a conflict being exploited. I suspect that most folks assume that the presence of such mitigating factors means that a particular conflict-of-interest is not, therefore, inherently unethical. This convenient assumption may be all too easy to make, given that it removes any need ethically-speaking to reorganize positions and roles in an organization and the relationships between organizations.


The full essay is at Institutional Conflicts of Interest, available in print and as an ebook at Amazon.

The Japanese Dolphin Hunt: Fishing or Killing?

Is a dolphin like a cow? Both are mammals. Both breathe air. So did Japanese government officials have a point when they rebuffed Caroline Kennedy, the U.S. Ambassador, for tweeting the U.S. Government’s stinging response to the annual dolphin round-up and slaughter at a cove in Taiji during the third week of January in 2014? If so, can we extract a cultural difference?  In assessing this question, the roles of the two very different cultures come into play. Are we then to be left in the void of cultural relativism, barred from coming to a verdict?

Dolphins in a family group. (examiner.com)

In the hunt in question, the fishermen trapped 250 dolphins, killing about 40 for food, retaining 50 more to sell to aquariums, and letting the rest go.[1]  After confining the dolphins in a netted area for three days, the fishermen led the forty into the shallow water near the cove’s beach. As shown on CNN, the fishermen utilized a dining-type tent structure to hid the actual killing from external view. The fishermen stabbed the dolphins’ heads, which is said to cause great pain.[2]

After coordinating with other embassy officials, Kennedy tweeted that the hunt had been inhumane. Yoshihide Suga, Chief Cabinet Secretary, pointed out that dolphins are “very important water resources,” just as cows are very important land resources in North America.[3] In fact, the Japanese government explicitly labeled the American critics as hypocrites for not including the killing of cows and chickens in the West. Yet it is fair to ask whether cows and chickens come close to the dolphin in terms of social development (e.g., living in families), intelligence/language, and self-awareness. For this reason, cows and chickens are not said to be “killed” in the U.S., whereas Americans refer to the dolphins hunted in Japan as being killed.

To be sure, differences in words used can come out of cultural differences; after all, the Japanese government officials refer to cows used for food in the U.S. as being killed. The East Asian culture is doubtless very much present in the response made by Taiji Mayor Kazutaka Sangen. “We have fishermen in our community, and they are exercising their fishing rights. We feel that we need to protect our residents against the criticisms.[4] The notion that government officials have a responsibility to keep their constituents from being publicly criticized must strike Westerns as quite alien.

As difficult as it is to evaluate cultural differences by a presumed “universal standard,” the legalistic defense hinging on rights can indeed be called into question. In response to Kennedy tweeting that the Japanese should not kill dolphins, Yoshihide Suga stressed that dolphin “fishing” (i.e., not killing) is “carried out appropriately in accordance with the law. Dolphin is not covered by the International Whaling Commission control,” he explained, “and it’s controlled under the responsibility of each country.”[5] In responding to the legality of the practice, Suga unwittingly commits Hume’s naturalistic fallacy—the erroneous assumption that ought comes from is. That is, he assumes that the morality of dolphin “fishing” (dolphins are not fish) is a matter of what the law is. It is as though ethics reduces to law. Kennedy could simply have noted that Sangen and Suga were not answering her normative, or ethical. Indeed, she had not tweeted anything suggesting that the “fishing” was at the time illegal.

In conclusion, biological differences between cows and dolphins may come into play in allowing the world to come down one way or another on the Japanese cultural custom. It may not be inhumane solely from the standpoint of another culture. Furthermore, spotting logical errors can also contribute to moving beyond cultural relativism to an answer.

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[1] Kirk Spitzer, “Japan Criticizes Dolphin Tweet from Kennedy,” USA Today, January 22, 2014.

[2] Elizabeth Shogren, “Ambassador Kennedy Criticizes Japan’s Dolphin Hunt,” NPR.org, January 22, 2104.

[3] Spitzer, “Japan Criticizes.”

[4] Ibid., emphasis added to the culturally relevant sentence.

[5] Ibid.