Commonsense and Compromise

Well it’s Friday and my new goal this year is to blog on matters of a more personal nature on Friday. Furthermore, there are three subjects we know to stay away from when blogging … sex, religion, and politics. And today I venture somewhat into one of these areas, but not too deeply, I hope. Here goes …

I noticed a story the other day about Harry Truman when he was President. On leaving the White House after the 1952 election of Dwight Eisenhower, Truman made a prediction about the former military general and his presidency. Paraphrasing, Truman said Eisenhower would pick up the phone to say do this and do that, pull this lever, push that lever, and he will be shocked when nothing happens.

The point being that Ike was a 5-star general who was used to giving orders and the orders were executed. But Truman was noting that a government is made up of non-executing departments/cabinets that have to be leaned on every day, through and by talent earned by experience. Military generals can issue orders but federal agencies have to be gently guided, encouraged, threatened, pushed, and even clubbed on occasion … every day. It’s a process that sometimes includes the press … sometimes the press is in the way … and other times the press is nonexistent.

People who run big businesses learn these experiences of executive leadership early on in their careers through training and experience. So do leaders of small businesses and nonprofit organizations.

And here’s my point, most of the Obama administration people don’t have a background in executing. They have a strong background in communicating … not in doing. That’s where their talent is … that’s where their boss’s talent is … and it’s a good talent, but not one that will in itself force a government to work well. And, therefore, the real reason why our country is in a stalemate as far as the economy and outlook is concerned. A properly functioning government involves that old-fashioned thing called working it out. You don’t tell people you disagree with that they would be better off somewhere else … you don’t pit one side against the other … you execute by being a leader at commonsense and compromise for the good of the country.  And you don’t reduce your opponents to stereotypes; you address them as fully formed people worthy of respect. You try to persuade them. And, yes, this applies to both sides of the proverbial aisle.

The best government will provide us protection, safety, liberty, equal rights, and opportunity.

Disclaimer: Sometimes WordPress includes ads with my blog … I do not choose these and I do not receive any compensation from such ads.

© Phil Hoffman 2013. All rights reserved

How the Economy Works

Last Thursday I saw a Charlie Rose interview on the CBS Morning Show with one of the top economist in the world, Ray Dalio. Therefore, I wanted to take this venue to share with you a video by Ray Dalio with Bridgewater who manages over $150-billion in global investments. In his brief interview with Charlie Rose, Mr. Dalio noted that he had recently turned 64 and he decided he wanted to share what he has learned in his illustrious investment career with everyone. He admits the economy is complex even for an economist so he put together, at no charge to anyone, a 30-minute video to describe how the economy works in what he believes is the simplest terms possible.

If something like this has your interest I think you will like it. I would not be surprised if some of you find this video to be confusing or overwhelming, and that is okay and you shouldn’t let it bother you. Our economy is complex … and some of you will close this video down in the first five minutes and never give it a second thought. But if you want to understand the economy, this is a good short course on a complex issue in a fairly simple format.

I, personally, think this is a good arrow to have in our quiver today of business tactics for trying to understand what the world is going through … and especially the United States of America. We are living this every day and will be for several years.

Here’s the link: http://ow.ly/tatAv

I sincerely hope you are doing well and are off to a great 2014!

Disclaimer: Sometimes WordPress includes ads with my blog … I do not choose these and I do not receive any compensation from such ads.

© Phil Hoffman 2013. All rights reserved

Today’s Jobs and Economy – Part 6 – Creative’s

In the previous blogs in this series, I have touched on Blue Collar Workers, White Collar Workers, Sales People, Private Business Ownership, and Personal Investors. Which covers a wide range of the worker market? In this blog, I add a twist with a fairly new category that I first learned about in August 2012 … the Black Collar Worker.

In the interest of keeping it simple, I am going to share the following from my fellow blogger Philip Cummings …

“There is a new wave of black-collar workers that have become part (of) today’s workforce and will be the workforce of the future. As economist Philip Auerswald wrote:

Black-collar workers are easy to find. They crowd coffee houses with their laptops. They create prototypes of their inventions on 3-D printers at San Francisco’s TechShop, raise money for their projects on Kickstarter, and share their creations at Maker Faire events around the country. They are the work force of the future, powering change in the present.

Black-collar workers are after purpose, not pensions.

They’re not seeking lifetime employment; they’re seeking lifetime learning.

They don’t have secretaries or bosses; they have teammates.

They don’t punch in at 9, and they don’t time out at 5. They connect, create, contribute, and collaborate whenever and wherever it makes sense.

They try to minimize their spending in order to maximize their flexibility.”

The purpose of this blog series is to generate thought about today’s jobs and the economy. Since the “black collar” is somewhat of a new genre for many I felt compelled to include it in this series and felt it fit best in the “Creative” category.

In addition to the BCW we might consider artists, musicians, and other areas that are becoming more prominent as the new economy continues to evolve.

What ideas or areas come to mind for you when you think of “Creatives?”

What are your thoughts or suggestions?

© Phil Hoffman 2013. All rights reserved

Part 2 – Today’s Jobs and Economy

In my last blog I started an eight part series concerning “Today’s Jobs and Economy” which was a brief outline of what I intended to accomplish with this series. I noted that I would breakdown today’s business jobs into six basic categories and give a brief explanation of each.

In this Part 2, I am covering Blue Collar Career/Jobs and White Collar Careers/Jobs in their simplest forms.

Blue Collar Career/Jobs

I started out by going to Wikipedia and seeing their definition of the blue-collar worker. Here’s what they say:

A blue-collar worker is a working class person who performs manual labor. Blue-collar work may involve skilled or unskilled, manufacturing, mining, oil field, construction, mechanical, maintenance, technical installation and many other types of physical work. Often something is physically being built or maintained.

To paraphrase in my own words … someone who labors to fix, build, clean, make, or service something.

And I might add, that anyone who has ever done blue collar work knows there is a certain pride or satisfaction in a job well done.

Note: Today there is a trend toward skilled labors that are highly trained to operate large efficient machinery that does the work of many workers. Based on the necessary training and efficiency requirements it is hard to classify these as blue-collar workers … but we tend to think that way for some reason. This is an example of the changing ways toward the new economy.

White Collar Career/Job

Next, I went to Wikipedia to see their definition of the White Collar Career/Job. Here’s what they say:

The term white-collar worker refers to a person who performs professional, managerial, or administrative work. Typically, white collar work is performed in an office or cubicle..

To paraphrase in my own words … someone who is employed by someone else to do work other than manual labor or sales.

It seems that many people choose a white collar career, as it is one of the most socially acceptable occupations available. Many consider it to be a safe and secure option, which in my opinion has changed the last several years. For years, there was an implied unwritten contract that, if you were loyal to the company, the company would be loyal to you. And this contract is gone now. In my experience, there are two types of people who do this type work … Doers/Fixers and Stealth-workers.

Doers/Fixers are the people who want to do their job at a high level. They are energetic, motivated, and ambitious. They offer up ideas or solutions with the goal of moving up the corporate ladder. But there seems to be a downside for the Doer/Fixer. Once it is known that a person is a Doer/Fixer, they become a target of others. Their boss or other higher ranking individuals see them as threatening to their jobs, so they start coming up with ways to hold them back, or begin to take pot shots at their reputation. Then their peers see them as someone who will either embarrass them or keep them from getting a promotion … so they start to do what they can to undermine their accomplishments. Therefore, in order to remain a Doer/Fixer and survive in this hostile environment, a person must become good at something that has nothing to do with their work … and that is learn corporate or office politics. They have to learn how to navigate the “politics” by outwitting their enemies and strengthening their relationship with powerful people above them within the organization. In fact, it seems that some of the most successful people in the business world are not Doers/Fixers at all … they are pure politicians. Therefore, if you decide to work in the business or corporate world and want to be a Doer/Fixer, you need to realize that you must become a good politician also.

Now let’s address the Stealth worker. These are the people who HATE office politics and just can’t play that game … but they need a job. They learn not to be the ambitious Doer/Fixer. They don’t stand out … they don’t speak up in meetings … they don’t submit new ideas … they are almost invisible. They keep their heads down and do as they are told … no more, no less. They do just enough so that they aren’t talked about negatively. They simply want to survive. Moreover, this has worked for many years. But in today’s New Economy, it’s becoming much more difficult to be invisible.

Next Post:  Sales

What are your thoughts on the blue collar and white collar workers?  

© Phil Hoffman 2013. All rights reserved

Today’s Jobs and Economy – Part 1 of 8

This is an introduction to a new eight part blog series on Today’s Business Jobs. Here’s what I plan to touch on in this series.

1. What are Today’s Jobs. After this introduction, I will break today’s business jobs into six basic categories and give a brief explanation of what each of the six categories consist of today. I believe this is an important topic as we experience the constant changes of the economy, the leadership or lack of leadership of our government, the tepid but strategic efforts of big businesses, the slow growth of our gross domestic product, and the constant struggle and demand for more efficiency with less labor.
2. After this introduction and reviewing the six jobs categories, I will touch on the evolving New Economy. What are some of the possible momentum areas for the middle class that will enable us to succeed in this changing economy and what might be coming of age after slugging our way through the recession.

My goal in this blog series is to provoke some personal analysis of what is going on around us that is going to affect us all over the next three … five … ten years. I hope you will follow along on this blog series and share your thoughts and comments along the way.

© Phil Hoffman 2013. All rights reserved

What do the Numbers Tell Us

This bullish stock market is exciting as heck. Since late November 2012 the DOW continues to rise … going from 12,500 to over 15,000 … and hovering at 15,500 as I write this blog. According to the official numbers, the Great Recession was officially over in the summer of 2009. However, it doesn’t seem so robust for the average American. When one looks at the statistical facts that are public information, you understand why we still feel things aren’t as robust as they seem from the stock market numbers. This month the U. S. Department of Labor reported employers added 195,000 jobs to their payrolls … which beat the estimate of 165,000. Payrolls for April and May were revised higher, to reflect an additional 70,000 jobs. While these numbers look good, the employment situation in America continues to have several perturbations. Let’s look at some key statistical areas and see if we can gain some insights from this public information. (NOTE: All statistics come from the U. S. Department of Labor Statistics)

1. Unemployment  in the general overview, the unemployment rate remained unchanged at 7.6% even with exceeding the estimated job increases in June (165,000). Granted that is below the peak rate of 10% in 2009, but the unemployment rate has now remained over 7% for 55 consecutive months.
2. Manufacturing – in the U S continues to take its hits. While manufacturing use to be the foundation for the U S economy, that is no longer the case. Over the past ten years, more than 2.6 million manufacturing jobs have been eliminated in the U S, with most going overseas. And the June statistics show that manufacturing lost 6,000 jobs, which represent the fourth consecutive month for reduction this year. It may surprise many to learn that the number of employees in manufacturing is near its lowest point since 1946. Will it continue to go down?
3. Part Time Workers – the number of people employed part time due to the economy and not being able to find full time employment increased by another 322,000 in June to 8.2 million … the most ever in this segment in history. Many of these are individuals who have had their hours cut back and were unable to find a full time job. They are also the reason for the large reduction in the unemployment rate the past several months.  And these are generally not good paying jobs.
4. Percentage of Working Age Americans with a Job – is under 59%, its lowest since 1983. (Think about that statistic) This ratio most likely will not improve for many years. The adult population grows at about 200,000 people per month, which is about the same as the jobs being created each month to date in 2013. (Remember – last month’s numbers show increase jobs of 195,000 on an estimated 165,000)
5. Quality of Jobs versus Quantity Jobs – there seems to be a realization of more analysts and economists (and we assume our government leaders) that there is a quality issue with the jobs being created. Leisure and hospitality employment increased by 75,000 jobs in June, 60,000 in May. Retail jobs added 37,000 jobs in June. These are not normally quality well paying jobs … the vast majority are basically minimum wage and part time jobs.

What insights do you glean from these public statistics?

Are you happy with your outlook the next six months … two years?

Will things be better or worse by January 2014?

As a business leader what actions will you take based on these statistics?

What other statistics can you think of that might improve or offset these?

© Phil Hoffman 2013. All rights reserved

So You Think the Outlook is Good

As much as I don’t like to be a non-positive person, my pragmatic sense tells me to look at the reality of things. At this time, I think the media and our esteemed economic forecasters are determined to make stargazers and weather people look brilliant. There’s a media and political buzz of “Look at the Bull Market! Did you see home prices! Consumer confidence is UP!”

I’ll agree this is a complex matter for many but the reality is that it’s not rocket science or advanced mathematics.

Can We Trust These Forecasts

Granted things have been very tough since 2008 and that’s a long time … so any sign of improvement is encouraging. Add to this the distinguished economists who want to embellish the uptick because they contend that if everyday consumers and small to mid size businesses think the future is great, then they will buy and invest more … which will lead to their forecasts being self-fulfilling … and them being considered geniuses.

But this just doesn’t seem accurate or possible to a well-informed businessperson and they aren’t sure they can trust this hyperbole.

Some Facts

The reality is we’re still in the muck, and if one looks at the most recent data with a clear focus it gives one cause for serious concern.

The facts are that almost all the forward movement in the economy is now coming from consumers – whose spending is 70 percent of the economic activity. Wages have gone nowhere and are going nowhere for the foreseeable future, which means consumer spending will slow because consumers just don’t have the money to spend.

The end of last week the Commerce Department advised that consumer spending rose 3.4 percent in the first quarter of this year, which is a good thing. On the other hand, personal savings dropped to 2.3 percent from 5.3 percent in the fourth quarter of 2012. That’s the lowest level of savings since before the Great Recession, which is not a good thing. You don’t have to be a master financial adviser in economics to see this can’t go on very much longer.

Granted home prices are up. The problem is they’re beginning to rise above their long-run historical average. (Before the housing crash, they were significantly higher …  way above the long-run average.) So you need to be mindful and watch your money. We’ve been here before – the Fed is keeping interest rates and inflation artificially low, allowing consumers to get low home-equity loans and to borrow against the rising values of their homes. Needless to say, this trend, too, is unsustainable. And while mortgage loans are up, most have been for refi’s instead of new mortgages.

What about the stock market?

Many wrongly assume that a rising stock market leads to widespread prosperity. Over 90 percent of the value of the stock market — including 401Ks and IRAs — is held by the wealthiest  … the top 10 percent of the population

Moreover, the main reason stock prices have risen is corporate profits have soared and companies are buying their own stock in order to keep the false assumption there is demand for the supply. Some believe that profits are mainly up because corporations have slashed their payrolls (and job creation) and are keeping wages low. This brings us back full circle, back to the fundamental fact that wages are going nowhere for most people.

What About Profits? The Sequester?

Not even fat corporate profits are sustainable if American consumers don’t have enough money in their pockets. Exports can’t make up for the shortfall, given the terrible shape Europe is in and the slowdown in Asia.

So don’t expect those profits to continue. In fact, the new Commerce Department report shows that corporate profits shrank in the first quarter, reversing some of the gains in the second half of 2012.

And, keep in mind, the full effect of the cuts in government spending hasn’t even been felt yet. The sequester is going to be a huge fiscal drag starting in August, if not July.

My goal is not to be a naysayer. But if this was a weather forecast, I believe the weather person would be warning you to get an umbrella and look for that raincoat … or maybe to buy a storm shelter …  you may need them sooner than you think.

© Phil Hoffman 2013. All rights reserved