CTU should be more careful with its wishes

This morning as I was walking IMG_2346.JPGmy children to school a popular teacher enthusiastically handed me a flyer about the upcoming “Day of Action.” As I read it I was interested to note the things the Union hopes to accomplish on behalf of my children on April 1.

  • Demand: Tax the rich!
  • Expect that education and social services be properly funded
  • Put TIF money back into schools

Now first, I take exception to the idiotic and inflammatory “tax the rich” mantra. Our school is located in a neighborhood where the average home price is over $1 million dollars. Is the Union or that friendly teacher really hoping to hurt the parents of his students? Last I checked, they were already paying some of the highest taxes in the country. In addition, these are the most generous donors to the school. Whenever I hear these statements, I wonder if the writer believes that those better off really need to give more or if they need to be punished just for making more. But maybe I digress.

The rest of this all seems good. More for education means books, additional programs, a school nurse, and reduced class size. TIF Funds means physical improvement to the schools, improved HVAC, water fountains that work, and a general all around reduction in our school’s dumpiness. These are things I can get behind.

Unfortunately, in today’s newspaper the exact same CTU claims that Friday’s Strike (note their changing choice of nouns) is legal because it is in protest of the CPS’s failure to pay “raises based on experience and educational attainment.” (Chicago Tribune, 3/30/2016).

So in the document to get the parents on their side, CTU says that Friday is a day-of-action in support of better educational services and nicer schools. Yet to the courts, CTU says they are striking to get raises! Which is it?

If history is a precedent, the answer is pretty clear. Last time we had a strike, there were ten things on the strike priority list, the last two were compensation and job security. I wish I still had the list, but smaller class sizes, facility improvements, and even central air conditioning listed higher. Not surprisingly, when the strike was over, the only things that were addressed were issues compensation and job security – the only thing the Union really cares about.

This (in particular) is not a criticism of the Union. It is their job. The pipe fitter’s union doesn’t care about the lives of pipes. They are paid to care about electricians. By the same token, the teacher’s union is not paid to care about children, they are paid care about teachers. Now, do teachers care about students? Absolutely! But there is occasionally a conflict between what is best for a student and what is best for a teacher. The Union’s job is to take the teachers’ side, play the hardball, and protect the teachers from the associated ugliness.

Unfortunately, in this case, the Union is playing a game that they can win only if the city loses. Property taxes (for those paying them) have skyrocketed this year. City service fees have similarly jumped, while the actual services offered have been reduced. The only way to give the Union what it wants is to further increase taxes or further slash services. This environment of rising taxes and falling services is exactly what precipitated the exodus of the middle-class from Detroit.

People argue that this won’t happen here. People in Chicago are loyal and they love it here in spite of the machine politics, union corruption, and high taxes. Yet only days ago the Tribune ran this headline…

Chicago area sees greatest population loss of any major U.S. city [or] region in 2015

Be careful what you “demand,” CTU.

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Chicago’s Game of Bags benefits no one

Much of the difference between common sense conservatives and common sense liberals is how much faith each group has in the government’s ability to solve problems. Liberals tend to think that a group of thoughtful politicians can influence people’s behavior through properly crafted legislation. Conservatives tend to believe that even well-meaning legislation is likely to be botched by unintended consequences. It is tough to imagine a law that makes the conservative point more soundly than Chicago’s ban on disposable shopping bags.

The problem, as it was described by the City Council and advocates is that too many disposable plastic shopping bags are produced, used and discarded. These flimsy menaces create litter, increase our carbon footprint, fill our landfills, and are largely unrecyclable.

The solution was to require retailers to offer only bags with handles that could be reused at least 125 times. The thinking is that stronger bags are less likely to be discarded and could be reused many times. Stores are given the choice between selling them and giving them away. Most give them away and those that don’t charge such a negligible amount for them – say 5-10 cents – that no one notices.

But this foolish law which regulates only bags and retailers seems to be predicated on the assumption that bags reuse themselves and fails to acknowledge the actual decision maker in the problem – the consumer. Some consumers have long chosen to reuse bags and others throw them out.target bags

The law does not provide any incentive for those who chose to discard their bags to change their behavior. As a result, those who reused bags before the law continue to reuse them and those who discarded them before the law continue to discard them. Many pet owners depend on shopping bags to discard pet waste and have little option but to continue the practice. Even well-intentioned shoppers often forget their bags and after accumulating more than they need are forced to discard bags. The difference is that now they are throwing away thicker, bigger bags, with larger carbon footprints, and which take up more space in the landfill.

As a result, this well-meaning piece of legislation has likely accomplished the opposite of what it intended – due to unintended consequences or just lack of intelligent conception.

Let’s be clear, I support a law that accomplishes the goal of reducing disposable bags. It’s easy to design and it looks like this:

  • All bags must be made out of cloth or pressed cloth-like material.
  • All bags must be a standard size so customers don’t have to store multiple sizes.
  • All bags must be sold at a price which incents consumers to hold onto them – say two dollars each.
  • Cheaper or free plastic or paper bags cannot be sold or offered as an alternative at checkout.

But the problem with a properly-crafted disposable shopping bag ban is that it is effectively a regressive consumption tax. Because the value of the goods put into bags by poor people tends to be lower, they pay a higher tax rate than their wealthier neighbors which isn’t cool with our City Council.

So now we see that the problem as it was described was only half the problem. The other requirement was that it could not place a larger burden on the poorer south and west sides – areas that couldn’t care less about disposable plastic bags – than it does on the North side – where the wealthier residents and image-conscious mayor were seeking a solution. Creating a Chicago-wide law that accomplishes both of these objectives is simply not possible. They are in conflict. As a result, we end up with a stupid law that penalizes all citizens equally but offers benefits to no one.

This point goes to the common sense conservatives.

Trump University: Far from his most amoral venture

About 3 years ago a friend asked me to look into a multi-million-dollar, international, multi-level marketing company that she was considering. She had been recruited by a woman who promised her great things in return for selling bundled utilities at reduced prices. Maybe she trusted my analytical ability or maybe she just knew I had free time, but she wanted me to give her my opinion of it.

I went undercover on this project and was able to meet with a real rep who was trained in the company rhetoric. Assuming I was interested in joining too, she dazzled me with stories of reps who were making millions of dollars a year and had customized license plates on their Bentleys. But when I asked her to explain the formula for revenue she couldn’t do it. When I asked her how much I would make off my sales, my recruits, or the reps that they recruit, she told me that there were way to many variables for me to calculate on my own. She was quick to point out however that she knows another rep who makes so much money that she paints her poodles nails in real gold (OK, I may have made that one up).

Now I’ve created spreadsheets with hundreds of variables. There is no possible formula I can’t model-up in Excel – unless you refuse to tell me what it is! Furthermore, one of the things everyone learns in business school – or in life in general – is that a complicated revenue model is a doomed revenue model. Yet this clown just kept stonewalling on the important questions while playing to my fantasies. It was only when I found a question she would answer that the veneer started to crack. “How many reps fail before making any money?” I asked. “99%,” she responded, but then added quickly – “that just underscores how important it is to be the best and keep recruiting. Because the best…”. That’s around the time I stopped listening.

What she was telling me was that almost all the reps that join, pay the 500 dollar fee, sign up their 10-20 friends, and then drop out never making a dime. Meanwhile the Company keeps all the customers, the revenue, and maintains a steady stream of new recruits who are willing to chase the dream until they realize they can’t catch it, at which point they sulk away quietly, hoping no one notices.

This also suggests that following the introductory period, the Company is likely to raise prices. Without a rep to assist, converting back would be complicated and likely costly, creating a captive audience environment. I called my friend who by this point had signed up many of her family and friends and warned her to check the numbers on her earliest conversions. Sure enough, the promises she had been making to her closest circle were untrue. Prices were not lower, or about the same, but significantly higher.

She hadn’t yet made any money, and now she was faced with the task of calling all her customers, apologizing profusely for the losses they had suffered, and manually switching them all back – one customer at a time, one utility at a time. Drag, man.

The Company is basically honest to its reps – her friends and family were her easiest customers, they may or may not save money but they will switch as a favor to her, and if she can extend her network to additional customers and reps she would make money. What they didn’t tell her was, it is more likely that her peeps will not save money, she is unlikely to extend her market, that the Company makes money either way, and it is very unlikely that she will ever make her initiation fee back.

The Company is publicly aware of its reputation and train their reps to combat it. They have been accused of fraud and operating a pyramid scheme. At least two states have brought cases against them. The Company’s General Counsel states that “[The Company] is aware of the bad press that’s out there on the internet, and we pretty much ignore it.” So how does a company like this continue to exist and even thrive?

The answer – it turns out – is Donald Trump! The businessman who touted playing into people’s fantasies in his book “The Art of the Deal” has extolled the virtues of this Company for years. He has praised the innovation of their business model in YouTube videos and twice featured the Company on his show the Apprentice. According to the Wall Street Journal, this relationship has netted “the Donald” millions of dollars.

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“I know nothing about that Company”  Trump has recently said of ACN

When I researched the Company several years ago, Trump’s picture and quotes were all over the Company’s marketing material. Today however, with his Presidential campaign steamrolling across the country, all reference of him has been removed from the Company’s website and he claims – in typical fashion – “I do not know the company. I know nothing about the company.” Still, YouTube is peppered with videos that demonstrate what a lie this is.

Trump’s attraction to this company isn’t the business model that sells a great product that people want. It is much more likely that he appreciates using the seduction of fantasy to encourage naïve reps to sell a lucrative but worthless product at absolutely no cost to the Company.

Donald Trump may have looked slightly presidential after his win on Tuesday, but his involvement with this sham suggests that he has no moral compass when it comes to business. Companies that do not add value, or prey on their constituents, do not have a place in society even if they can scam some money out of a few people for a few years. People who endorse and profit from such companies are nothing short of greedy hucksters.

And one more thing, I am going to go out on a limb here but a man who in one day publicly makes two references to his penis, one including proximity to Mitt Romney’s face, does not deserve to be President.

Apple should stand its ground.

Following the San Bernadino shooting a few weeks ago, the FBI bungled the investigation of the shooter’s telephone and now wants the court to compel Apple to crack it open so that their investigation can continue. Apple is refusing as they should. This is an important over reach of the government that anyone with common sense should oppose.

First, don’t believe what the FBI is telling the press. They say it is only for this one phone and it is only five lines of code. Those two statements are contradictory. If it is only five lines of code that need to be written, then either that five lines of code can be reused or edited to work with every other phone. Even if all 5 lines had to be completely rewritten, it’s still just 5 lines! Of course it could be repeated if required and it would be required over and over.

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The new iPhone will have tactile buttons and come in new colors. Security may or may not be included.

Second, Apple has built a phone that offers security to a market that requires it. The government is asking Apple to make the phone do something contrary to this required feature. This is akin to the government subpoenaing Tesla to make straight gasoline powered cars or Boeing to make planes that don’t fly.

Third, it is a dangerous precedent. Once these 5 lines are written for this project, then there are going to be 5 for another project, 50 for the one after that, and more and larger projects to follow – at Apple’s expense. There is nothing to stop the subpoenas once the gate has been opened. Eventually Apple may need to create an entire department to do the FBI’s job for them. In fact, every tech firm may suffer the same expensive requirement.

This is not Apple’s problem and their involvement increases expenses, reduces the value of their brand, weakens important features, and increases the risk that a government – out of their control – will subpoena additional potentially crushing exercises in the future. Instead, the FBI, DOJ, and NSA need to learn how to do their own jobs. We’ve been hearing things about the awesome power of the Government’s computer black ops for years. Assuming that wasn’t a ruse, I am pretty sure they can solve this problem.

Now, you geeky guy over there with the glasses. Go back to your desk, do your job, and stop bothering Tim Cooke. He’s a busy man, and probably working on some new wearable piece of technology that no one wants. Leave him alone.

Donald Trump: a common sense what-what?

Much to the horror of my brand manager, Donald Trump has taken to calling himself, “a common sense conservative.” Well, sorry Donald, in the wild-west world of internet domain land-grabbing I am the de factalg-donald-trump-jpg-300x220o owner of that term and you are going to have to pass some pretty stiff tests before I let you run around stealing my spuriously claimed handle.

Personally, I think Donald Trump is a blowhard and a bully. He’s not the schoolyard troublemaker with the biggest fists, he’s the one with the mouth so fast, that his zingers win the fight before the first punch is thrown. I respected these guys when I was a kid but I feared them too. Like all bullies, they know their skill and use it to belittle others and artificially increase their relative stature. I would really like to see how successful his name calling or water bottle spilling is in a dust-up with Ronda Rousey. (God, will you please let this happen?)

But I suppose a common sense conservative can be a bully and a blowhard. Readers of this blog are learning a few of the things I care about (as am I). But off the top of my head, the list looks about like this.

  1. An instinctual understanding of economics – in particular that smaller governments make healthier companies, healthy companies make better jobs, and better jobs make happier people.
  2. That people are happier earning than being given to.
  3. The recognition that “collective bargaining … cannot be transplanted into the public service” (FDR, August 16, 1937)” and why.
  4. Fiscal responsibility which requires that the government cannot spend more than it takes in.
  5. That no one gets credit for forcing other people to do what they think is right (Penn Jilette) and no one gets credit for spending other people’s money.
  6. The appreciation of capitalist democracy as a free-est form of government and the US’s place in the creation of the 123 that currently exist.
  7. The intention to support civil rights continuing march forward without hindrance.
  8. A commitment to support women’s health issues.
  9. A commitment of inclusion for all people.

Trump does pretty well on this list. He may use rhetoric that we are not used to hearing (or makes our ears bleed), but he understands business, and what companies need to succeed, he understands the benefits of a balanced budget and the consequences of the contrary, he recognizes the importance of a strong and active American military, he supports civil rights – in a common sense way if not an active one, and he has supported Planned Parenthood over and over – not for its abortion component but as a valuable resource to women.

The place where Trump strays from the litmus of a common sense conservative, is this last one – the inclusion of Hispanics. Although his plan to get Mexico to pay for a wall turns out to be slightly less ridiculous than it originally sounded, it still ignores the threat of tunnels, the three other borders, and the inefficacy of physical walls in general. Furthermore, his deportation plan is inhumane and fortunately impossible to carry out. It is very likely that both of these promises will eventually be reduced to metaphors for a secure border, and better documentation of people here illegally.

Last night, following Trump’s super Tuesday victory he held a lively press conference rather than a teleprompter speech. He took a surprising, humbler tone, turned down his insults, and offered lots of praise for his competitors. Megyn Kelly (the biggest winner of this campaign so far), a woman known for telling it straight with respect to The Donald called it “presidential” and “very smart”.

As for a common sense conservative, I am not willing to concede my title, but for the first time ever, I have to admit, I think he looked pretty good.