Monday, June 30, 2008

Spain's Officially the Greatest

In Simpson's lore, these national soccer matches are a battle to see which nation is the greatest. Tongue in cheek, we now know it is Spain, who beat Germany 1-0 in the UEFA Euro2008 final in Vienna on Sunday.

I have watched most of the UEFA Euro 2008 soccer tournament that took place in Switzerland and Austria. There were some amazing matches. One cannot help with be impressed with the efforts shown by the Russians, Croats and Turks.

I thought the Dutch were the team to beat. The Germans are always tough. The French and Italian teams are too old. The Czechs and Portuguese were disappointing. Although favored, the Spaniards always seem choke on the international stage. But not this year.

This team has a large number of young players, players that have not been indoctrinated as chokers. Although they knew their nation's football history, they ignored it, opting to make their own.

As a Liverpool FC fan, there's a strong Spanish influence on the national team. The winning goal scorer, Fernando Torres, has already become a Mersyside legend. Now he's a Spanish one.

Let's Go International...Maybe But Probably Not China

There is a feeling, especially in some smaller to mid-sized businesses, that in order to grow a business, you need to expand internationally. A firm's growth goals might include a global strategy, but it does not have to be.

There are plenty of successful business that stay local, regional or within the country. In most cases, a firm's growth plans depends on the business and the market for the products or services.

But if international business is one of your expansion goals, then don't start with China.

International expansion is expensive. It requires significant external and internal marketing and product research. Just because product or service work in California does not mean it will work in Asia or Europe. Just because it works in Korea, does not mean it will work in Singapore. What works in England might not work in France.

Case in point: the Oreo cookie we know in America looks nothing like the Oreo cookie in China. It took Nabisco some trial and error to get the product right.

A firm can go abroad to sell its product into a new market. It can go abroad for manufacturing, support, engineering, etc. However, as the price of energy increases, transportation expenses will play a bigger role in the financial justification. The cost to transport raw and finished goods increases; the cost of executive or worker travel go up; the cost of marketing programs are more expensive.

In today's WSJ, there is an interesting article entitled China's Export Machine Threatened by Rising Costs. In China, the Yuan has appreciated significantly; inflation is high; it is harder for Chinese firms to retain their employees; wages are up sharply. All the good reasons to by Chinese products and services are diminishing.

The article examined the Chinese sweater industry. Honghe, China was the sweater manufacturer of the world. These days, they are really struggling to keep plants operational. Walmart is able to find cheaper sources of sweaters.

Markets are dynamic. Nothing is guaranteed (except taxes and death, yea I know). International expansion may be appear sexy, but it is not always what it is cut out to be. It is hard, expensive work. I have been the beneficiary of a global company on multiple occasions. My current firm has not interests in a global presence for the foreseeable future.

If you must go international, start with Canada or Mexico, not China.

Thursday, June 26, 2008

District of Columbia v. Heller

District of Columbia v. Heller is a landmark ruling. For the first time in U.S. history, the Supreme Court ruled that individual Americans have the right to own guns for personal use. The ruling struck down a strict gun control law in Washington, D.C. -- not a city rather a federal enclave.

The overturned 32 year old D.C. law banned private possession of handguns and required that any rifles or shotguns kept at home be unloaded and dissembled or bound by a trigger lock.

The 5-4 ruling marked the first time the high court has addressed whether the Second Amendment of the U.S. Constitution protects an individual right to keep and bear arms, rather than a right tied to service in a state militia.

Writing for the majority, Justice Antonin Scalia was joined by Chief Justice John Roberts and Justices Samuel Alito, Anthony Kennedy and Clarence Thomas. Joining Justice John Paul Stevens on the decent were Justices Stephen Breyer, Ruth Bader Ginsburg and David Souter.

Justice Antonin Scalia said that an individual right to bear arms is supported by "the historical narrative" both before and after the Second Amendment was adopted. The Constitution does not permit "the absolute prohibition of handguns held and used for self-defense in the home." The handgun is Americans' preferred weapon of self-defense in part because "it can be pointed at a burglar with one hand while the other hand dials the police."

Justice John Paul Stevens wrote that the majority "would have us believe that over 200 years ago, the Framers made a choice to limit the tools available to elected officials wishing to regulate civilian uses of weapons." He said such evidence "is nowhere to be found." [scary]

Justice Stephen Breyer said, "In my view, there simply is no untouchable constitutional right guaranteed by the Second Amendment to keep loaded handguns in the house in crime-ridden urban areas." [scary]

"This is a great moment in American history. It vindicates individual Americans all over this country who have always known that this is their freedom worth protecting," declared NRA Executive Vice President Wayne LaPierre. "Our founding fathers wrote and intended the Second Amendment to be an individual right. The Supreme Court has now acknowledged it. The Second Amendment as an individual right now becomes a real permanent part of American Constitutional law."
It is amazing to me how divided this court is. One would have thought that our 2nd amendment right was a slam dunk. With the liberalization of America and the Court moving away from making strict constitutionality rulings, the Court has become a political arbitrator.

It is like a close tennis match: it is as likely for one player wins a point, a game, the occasional set as the other. Today's ruling is one for the good guys, but the future is not bright. Just consider Speaker Pelosi's response to the ruling when she says that despite the Supreme Court decision, the District of Columbia will still be able to regulate firearms. In other words, laws are good if they support the liberal cause; if not, they are mere inconveniences.

There were four people -- Justices -- that feel that we do not have the right to bear arms, even though the Constitution says we do. The shock of the District of Columbia v. Heller ruling is that it came one vote away from going the other way.

In this case, the Constitution trumped political policy. Unfortunately, policy looks to be gaining an upper hand in the long term.

Wednesday, June 25, 2008

Court Rejects Death Penalty for Raping Children

In a 5-4 vote, the Supreme Court outlawed executions of people convicted of raping a child. They overruled on a Louisiana law that allows the death penalty to be imposed on child rape convictions. They claim that the sentence violates the Constitution's ban on cruel and unusual punishment.
"The death penalty is not a proportional punishment for the rape of a child," Justice Anthony Kennedy wrote in his majority opinion.
Not surprisingly his four liberal colleagues joined him, while the four more conservative justices dissented.

The are many things that can be considered cruel and unusual. The most obvious is the actual rape of a child. I really cannot think of any crime more heinous. Death of the child might be better. That child must live with that event or series of events forever.
Justice Alito denounced the court's "sweeping conclusion" that the death penalty is inappropriate "no matter how young the child, no matter how many times the child is raped, no matter how many children the perpetrator rapes, no matter how sadistic the crime, no matter how much physical or psychological trauma is inflicted and no matter how heinous the perpetrator's criminal record may be."
In general, I am not an ardent supporter of the death penalty, but there seems to exist certain conditions where the death penalty is warranted, not necessarily as a deterrent but as an appropriate punishment.

Monday, June 23, 2008

The U.S. Unemployment Rate

Today, the U.S. unemployment rate sits at 5.5 percent. That's not low nor is it high.

A page on the Misery Index Web site shows in bar graph format the U.S. monthly unemployment rates in the U.S. since World War II.

In the past 60 plus years, the rate has only been over 10 percent for ten months (9/1982 - 6/1983); interestingly during the Reagan years. However, when he left office just after December 1988, that rate had fallen to 5.3 percent.

Here are the presidents , their party affiliation, the unemployment rate when their term began, and the rate when they left office:

--Truman (D) - Jan. 1948: 3.4 percent; Truman - Dec. 1952: 2.7 percent
--Eisenhower (R) - Jan. 1953: 2.9 percent; Eisenhower - Dec. 1960: 6.6 percent
--Kennedy (D) - Jan. 1961: 6.6 percent; Kennedy - Oct. 1963: 5.5 percent
--Johnson (D) - Nov. 1963: 5.7 percent; Johnson - Dec. 1968: 3.4 percent
--Nixon (R) - Jan. 1969: 3.4 percent; Nixon - Jul. 1974: 5.5 percent
--Ford (R) - Aug. 1974: 5.5 percent; Ford - Dec. 1976: 7.8 percent
--Carter (D) - Jan. 1977: 7.5 percent; Carter - Dec. 1980: 7.2 percent
--Reagan (R) - Jan. 1981: 7.5 percent; Reagan - Dec. 1988: 5.3 percent
--GHW Bush (R) - Jan. 1989: 5.4 percent; GHW Bush - Dec. 1992: 7.4 percent
--Clinton (D) - Jan. 1993: 7.3 percent; Clinton - Dec. 2000: 3.9 percent
--GW Bush (R) - Jan. 2001: 4.2 percent; GW Bush - Jun. 2008 (current): 5.5 percent

As far as who was in charge of the nation at the time, the Republicans fare worse than the Democrats.

Sunday, June 22, 2008

The FHA Time Bomb

The main editorial in this weekend's WSJ is entitled The FHA Time Bomb. (One of my favorite articles in the WSJ is that editorial; I agree with it much more often than I disagree.)

The Federal Housing Authority, whom Congress is trying to give huge sums of money to help get us out of the sub-prime mortgage crisis, is the same organization that just announced a $4.6 billion loss. The main culprits are poor management and the "downpayment assistance program."

When government fails -- it just about always does -- its way out is to ask for more money. More money to do more of the same things or to try some new whacked-out programs that will certainly fail.

Pending Congressional plans intend to put taxpayers on the hook for tens of billions of dollars of additional mortgages losses.

Zero or very low downpayments are one of the main reasons the country is in the housing mess it is. Borrowers have no skin in the investment. They can walk away from the house as if it were nothing more than a rental.

It may be the American dream to own a house. However, it is not Congress' or taxpayers' responsibilities to make this dream a reality.

The realization of the American dream is based on hard work and prudent decisions.

Everything about our current mortgage crisis is based on quick fixes and poor decisions. Congress is about to make another costly housing blunder.

Saturday, June 21, 2008

Energy Self-Sufficient and the Price of Gas

We have an interesting political discussion taking place between those that would like to see America exploit its own known and potential energy resources and those that are against doing anything of the kind, hoping the rest of the world will drill and refine oil in their own nations and sell it to us at cheap prices.

I am in the former category. However one question I have not heard or read about: what will producing more of our own oil do to the price of oil (or gasoline)?

Oil is a a global product. Prices are set by the global market. If we produce more oil within the USA, we will be adding to the world's supply. The world will still demand that oil, regardless of where it comes from. If oil companies A, B and C invest billions to extract that oil, they are no under any obligation to sell it to Americans for some politicians concept of a fair price -- below the world price for oil.

The world consumes X amount of oil each day; it produces Y. Speculators have little to do with the price, they merely bet on its price based on supply and demand principles. If the USA puts more oil into the market, the markets will react accordingly.

Supplying more oil to the world oil market is going to help all users of oil, not just American. So assuming we alone are going to change the price of oil and gasoline is naive thinking.

Friday, June 20, 2008

Haditha Marine Exonerated

The MSM had pretty much forgot about the John Murtha (D-PA) led attack against eight of our Marines. Michael Savage did not. A weekday rarely would pass without some mention of it (and I don't get to listen to him all that often).

Earlier this week, a U.S. military judge dropped charges against Lt Col Jeffrey Chessani who was accused of failing to investigate the 2005 killing of 24 Iraqi civilians in Haditha. Lt Col Chessani was the highest-ranking soldier to have been accused of involvement in the incident. Seven other marines have been acquitted; one still faces charges.
The case stemmed from a roadside bombing in Haditha on 19 November 2005 which killed one marine, L/Cpl Miguel Terrazas, and injured two others. Iraqi witnesses said the US troops shot dead five unarmed men in a car when they approached the scene of the bombing in a taxi. The troops were then accused of killing 19 other civilians in three houses nearby over the next few hours. There was no full US investigation into what happened until January 2006, when video footage emerged of the aftermath, shot by a local human rights activist. A subsequent investigation by Time magazine suggested that most of the dead were shot by marines after the bomb - and in March 2006 a criminal investigation was begun. Those accused of involvement in the incident have maintained they were reacting to insurgent fire.
This thing reeks of a witch hunt. Those American-hating high-ups within the military and Democrat leaders will do anything they can to discredit the military activity in Iraq. A mid-level officer who is also a home-schooling Christian family man is a perfect target.

Whether John Murtha is sued for declaring the men cold-blooded killers is yet to be determined. I doubt it it will go forward; I think Chessani will just move on with his life and not fester and seek revenge. That's just what most conservatives would do.

Thursday, June 19, 2008

Peter Drucker's Timeless Advice

It is hard to imagine anyone that when through a formal (or informal) business education could have done so without experiencing the wisdom of Peter Drucker.

Professionally, he was a college professor (Bennington, NYU and Claremont) and business consultant. He wrote nearly 40 book and untold papers, articles and commentaries. He addressed for-profits, non-profits including governmental organizations. He had and still does have great impact in Asia, providing framework guidance for the Chinese, Japanese and Koreans.

Drucker's writing style, as described by George Anders in the 6/18/08 WSP (page B2),
mixed anecdotes and precepts in a way that lead some fans to describe him as a philosopher is out of step with the tastes at many leading business schools, where the preference is for conclusions based on large statistical studies.
There's a place for both. The pure academicians probably prefer the later whereas the average business person will probably benefit from and implement the former.

From The Essential Drucker, as referenced in Anders' WSJ article, consider some of his timeless pointers:

-- The essential activities of business are innovation and marketing; it's a mistake to fixate on profits.
-- Good management should make work productive and the worker effective.
-- Set objectives. Set separate ones for each crucial area of the business.
-- Take social responsibility seriously. An enterprise exists only as long as a society believes it does a necessary and useful job.
-- Quality is what the customer wants, not what's expensive and hard to do.
-- 'Knowledge workers' in modern organizations may manage no one, yet their decisions' impact can be comparable to what executives do.

And one of my favorites: "Management is doing things right; leadership is doing the right things."

Wednesday, June 18, 2008

Two More Years of THIS Congress

We have all read or heard the stories about the all-time lows this current Congress, voted into office (new or successive terms) in 2008. A mere 13 percent of American approve of the job Congress is doing.

However, in a recent WSJ/NBC poll, by a 52 percent to 33 percent margin, people would rather see the Congress voted in office in 2008 are Democrats. As Gerald F. Seib stated on page A2 of the 17 June 2008 WSP:
Thus, it appears that people hate what Congress is doing, and are demanding two more years of it.
He makes a few suggestions as to why:

--For the first six years of G.W. Bush's term, Congress was lead by Republicans. [They did a crappy job.]
--Voter may think the Democrats have not had enough time. [This is rubbish; they have accomplished nothing, thank goodness.]
--Voters still believe that the President calls the shots, not Congress. [Ignorance abounds -- the danger of that "every-vote-counts" concept.]

Republicans have failed because they have failed to implement conservative principles. They have tried to be all things to everyone, supporting traditional liberal policies while telling their conservative base how important they are to them.

McCain, whom I loath, is doing the right thing by distancing himself from Bush. He is banking on the independent votes and that in the end, the conservatives will pull the McCain lever on 4 November.

Republicans running for Congress will try a similar approach, but will fail. Congress will add more Democrats to their elected ranks. We will see two more years of idiotic leadership from the likes of Pelosi. (Note, I am not saying a Republican would be any better; we'd have the Gingrich and DeLay experiments.)

Tuesday, June 17, 2008

Church Growth and the Product Life Cycle

When I graduated from business school, my first job was attributed to, in part, to the fact that I had been a full-time missionary. The hiring manager's quote to me was "if you can sell God, you can sell anything." Although not LDS, he had some good experience with LDS people.

For the past two years, I have been back in the classroom, this time as an instructor. In one class, we discuss the product life cycle. Every successful product or service, from the beginning of time, follows this pattern: the product is introduced, it goes through a growth phase, reaches a maturity phase and then declines.

Good businesses and product managers are able to avoid the declining period by reformulating or repositioning their products. They reintroduce and re-grow the product line.

The Church has experienced this life cycle pattern. Introduced in 1830s, the introductory period lasted until around the 1970s when membership ramped drastically. Recently that growth has slowed. The membership rate appears to have reached the maturity phase.

With over 13 million members, the Church will continue to grow but at a rate less than the global population. Hence, there are and will be fewer Church members as a percentage of the world's population. Is it the mandate of the church to be the largest and fastest growing religion in the world? Absolutely not.
"Ultimately, the strength of the Church is really measured by the devotion and commitment of its members," said Elder M. Russell Ballard of the Quorum of the Twelve Apostles. "The Lord has never given us a mandate to be the biggest Church — in fact, He has said our numbers will be comparatively few — but He has asked that we commit ourselves to living and sharing the gospel of Jesus Christ."
There is a goal to have the Church and the gospel spread to every nation, tongue and people. The better metric to measure success is probably the number of active, committed members, as a percentage of the entire Church's membership.

Although annual convert numbers (279k) and member birth rates / children of record (93k) are down, the Church will continue to grow. If faster growth does resume, it is unlikely to come from Europe, USA or Canada. Liberal bastions care little for traditional religion. Growth will come from areas where the Church is strong, namely Latin America.

It will aslo come from places where the church is in its infancy, namely China and India, and perhaps Africa, though not as likely. It will be interesting to follow the Church's growth patterns over the next 10-12 years, especially in those regions.

Even in business, there are some true principles. The product life cycle seems to ring true; it can be seen in the Church, which is certainly offering a product albeit one from God.

Monday, June 09, 2008

Griffey Jr. Hits #600

For Junior, it was only a matter of time until he hit number 600. Tonight was that moment.

He did it with one on, in the first inning, in Miami, against left-handed Mark Hendrickson.

Griffey is the sixth to achieve the 600 HR mark, behind Sammy Sosa (609), Willie Mays (660), Babe Ruth (714), Hank Aaron (755), and Barry Bonds (762 homers).

He hit 398 of them as a member of the Mariners (1989-99) and 202 since joining the Reds before the 2000 season. He should pass Sosa but I doubt he'll reach Mays' number.

Junior is a player's player and a fan favorite. He did it without the slightest thought of performance enhancing drugs.

Cooperstown is his next stop -- probably in the 2013-2015 time frame. Thanks Jr.

Friday, June 06, 2008

Economic Troubles on D-Day

Economies goes up and down. For those thirty and younger, they have not really known tough times. It is likely that the bad news we received to day -- $139/barrel of oil, a 400 point drop in the DOW, an increase to 5.5 percent in the unemployment rate, and foreclosures rates at all-time highs -- is probably a sign of things to come.

For the average person and business, this is coming down to the price of energy.

With more and more of our money going to energy, less and less is going to other things. We have already curtailed our discretionary spending. We eat out less. We don't go to sporting events. We don't travel far for family gatherings -- they will occur less-frequent. We buy less food at the supermarket, opting for generic rather name brand. The list goes on and on.

There is no reason to think the next month or quarter or year will not worsen. We all adjust in our own ways; but adjust we must.

Despite the issues, we are not yet uncomfortable as a society; but we are leaning in that direction. In general, things are not "that" bad. It gets bad when unemployment is 8-10 percent; gas is over $6-8 a gallon, the dollar is not gaining on the major currencies, and the DOW and NASDAQ have fallen 25-30 percent below their current levels.

We just hope government's response is not higher taxes, more spending and more regulations. Unfortunately, we all know that's what it will do.

While today's news is not the best, today is a date worth reflecting upon. D-Day, 6/6/1944, was one of the most memorable days in our nation's history. Few things choke me up, but one topic that always gets me is D-Day and our WWII sacrifices. I thank the Lord for the men and women who served with valor, against all odds, giving their all for our liberty and freedom. It is too bad the government and our citizens are doing everything to eliminate those freedoms. And I am not talking about gays' right to marry; give me a break.

Thursday, June 05, 2008

Mrs. Clinton and Her 18 Million

Mrs. Clinton concede? Hard to imagine a Clinton admitting defeat. Whether she does or does not prior to the convention, this is not about the people who voted for her. This is about her and her alone.

By definition, a politician is self-aggrandizing, caring about no one but his/her power.

I had to gag when she said in her speech on Tuesday: "I want the nearly 18 million people who voted for me to be respected, to be heard, to be no longer invisible."

Newsflash all-caring Mrs. Clinton: there are winners and losers in every election. The winners do not care what the losers want, think or say.

Obama does not need your blessing to release her delegates and admirers.

The sooner those Clintons fade away, the better.

Wednesday, June 04, 2008

Red Wings Win!

It was not easy but the Red Wings are the Stanly Cup Champions for 2008, beating Pittsburgh four games to two.

After games one and two, it looked as if Pittsburgh was done. But they proved their character, coming back and winning games three (at home) and five (in Detroit). Game five will go down as one of the classic finals, with the Pens tying it in the 3rd period with 30 seconds remaining and winning it in the third OT.

The Wings got great play out of all their players; with the occasional boneheaded penalty. Deservedly, Henrik Zetterberg won the Conn Smythe Trophy; Chris Osgood a solid second, preforming remarkable in goal.

Hockeytown is rocking tonight. Way to go Wings!!!

Ross McGinnis - Medal of Honor

On Monday, President Bush presented the nation's highest military award to a young soldier killed in Iraq. His parents, Tom and Romayne McGinnis, accepted the award in his honor.

Pfc Ross McGinnis, Knox, PA, was 19 years old when he threw himself on a hand grenade tossed into a Humvee where four other soldiers sat.
"The Medal of Honor is the nation's highest military distinction," the president said. "It's given for valor beyond anything that duty could require or a superior could command."
There have been many brave and valiant soldiers, some have lived to tell about it while others have paid the ultimate sacrifice. Thirty-four hundred soldiers have been awarded the Medal of Honor. Four have been given to soldiers who have served in Iraq, one in Afghanistan; all five posthumously.

When I read about Pfc McGinnis, I asked myself: what makes people do such self-less acts? Why was he put in the position to save the lives of his comrades? Did he think about what he was doing? Did he think that if I smother the grenade, I will most likely die?

I can only think that he acted on instinct. The love and loyalty he had for his colleagues put him in a position to protect them. I can only assume that each of his four colleagues he saved would have done the same if they were in his situation.

While it may be difficult to describe greatness, but we know it when we see it.

Monday, June 02, 2008

Democrats in a Lose-Lose Situation

This less-than-democratic Democrat race is "priceless." If the November campaign is half as good, we are in for interesting reading and radio.

The party rules and by-laws leaders placed themselves in a tough predicament when they came up with their superdelegates. The premise has come back to haunt them: Democrat voters are not smart enough to nominate a candidate that can win the U.S. Presidency every four years.

I have no sympathy for Florida and Michigan Democrats. They goofed. The parties can set their primary rules. Both states knew the rules and elected to break them. You can't blame Obama for not campaigning in Florida and not getting on the ballot in Michigan. To assume all of those delegates' votes belong to Clinton because she won those states' popular vote, would be an outrage. Re-voting was not a viable option. The half-delegate vote solution, as ugly as it is, seems the only reasonable option.

It seems obvious that the party hawks are tired of the Clintons. The recent Vanity Fair tell-all article shows how a once Clinton proponent has turned against him (them).

Obama is not Clinton. Sadly, this is his main trait from the party insiders' perspectives.

My wife takes the position: anyone but a Clinton. Many conservative share her opinion. In fact, she has quit listening to Rush Limbaugh because of his Operation Chaos strategy. Too close for her comfort.

Obama, like Clinton and McCain, are terrible options. Obama has a ton of shortcomings. He'll be on the defense for the next five months. Take away his scripted posture and he is mediocre at best. If elected, he will be the most liberal leaders this nation will have ever experienced. McCain is not as liberal but he will still do more harm than good for the nation. For example, the energy cap and trade bill the three candidates are on board with is possibly the worst economic program this nation has ever considered, right there with socialize healthcare. (More on this in the upcoming weeks.)

This presidential election was the Democrats to lose. They are doing everything they can to make the unlikely happen. The thought of John McCain winning the presidency seemed as unlikely as the Tampa Bay Rays being in first place on 1 June, little own the World Series.