Showing posts with label Crisis. Show all posts
Showing posts with label Crisis. Show all posts

January 6, 2019

From Tulips to Cryptocurrency

There always seem to be another mania. 

From the Tulips Mania in 1637, when a tulip went for more than 10x what a skilled workman earned in an entire year!

To Cryptocurrency in 2018, which is down about 80% from its $20,000 peak losing $700,000,000,000. 

In between, we had the gold rush, the great depression, the tech/dot-com bubble, and the housing/mortgage crisis, and many more I am sure. 

There seems to always be something for people to get excited about in an "irrational exuberance" type of way, as former Federal Reserve Chair, Alan Greenspan put it.

Is it boredom, big dreams, unadulterated greed, the desire to "get rich quick" and easy, the belief that you've discovered the Holy Grail or is it just people being stupid. 

Either way, we have a way of getting ourselves in trouble, some "losing their shirts."

Not sure who said it, but there isn't an easy fix to your life. 

There are small and big problems, and then there is you trying to fix them (with G-d's help). 

As to bitcoins and tulips, they ain't worth what you think they are. ;-)

(Source Graphic: Andy Blumenthal with photos from Pixabay). 
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March 20, 2017

Budget Cuts Conundrum

So I'm hearing two opposing themes about the proposed federal budget cuts:

1) It's horrible because we are cutting into the bone and this is going to really hurt a lot of important government programs.

2) It's great because we have been spending money that we don't really have, and we need to finally reign it in. 

Let's face it, we'll never get such drastic cuts across the civilian government unless this country goes into severe crisis mode--which never happens until it's too late and something terrible has happened. 

If we even got half the cuts being proposed--which most people don't seem to believe will even happen--that would be significant and painful itself. 

The truth of the matter is that we are facing enormous danger on both the national security and financial fronts!

- Militarily--Russia, China, Iran, North Korea pose huge threats including those involving weapons of mass destruction. 

- Financially--We have a serious national debt to the tune of $20 trillion, an annual trade deficit of half a trillion dollars, and social security and medicare trust funds that are going bankrupt. 

If we let these threats run their course, we will eventually have a crisis that will be truly nationally catastrophic. 

So what's it gonna be--guns or butter--or national bankruptcy. ;-)

(Source Photo: Andy Blumenthal)
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December 27, 2016

Planning For The End Of The World

I have never heard so much about the coming of the end of the world, Armageddon, the Apocalypse, and World War III as I am hearing these days...

The world seems to truly be going mad. 

And that MAD is as in CRAZY and as in Mutually Assured Destruction. 

- 25 years after the end of the Cold War, we are back in a nuclear arms race with Russia!

- Despite being our largest trading and economic partner, we are now going head-to-head confronting China over trade, Taiwan, and the South China Sea! 

- While setting some near-term constraints, we have in effect solidified Iran's getting the nuclear bomb!

- As North Korea continues developing and testing nukes and ballistic missiles, we have no answers for how to deal with them!

Not only have we failed to contain the many threats we face, but also in many or most cases, we have made them worse.

- The Middle East has gone from the promise of an Arab Spring to instead raging in flames and becoming the modern-day killing fields

Even as ISIS becomes more dangerous despite having less territory, they are likely eclipsed by Iran's global terror expansion as a threat to the world order

- The refugee crisis has meant that ISIS terrorists have infiltrated our borders and are now living among us ready to strike at will. 

- There is a real documented threat of a terrorist attack using radiological, chemical, biological, or nuclear weapons of mass destruction

- The European Union is falling apart and it's future is unknown. 

Increasing border attacks and escalating tensions are creating a risk of a dangerous Indian-Pakistani War

Obama has alienated our allies, reduced our stature among the nations, and destabilized the world

- While people are arguing over the state of hopelessness since the election or from before it, either way, there is huge divisiveness in America. 

Gun ownership is soaring and people are stockpiling ammo

Videos have emerged from people in near-death experiences claiming to have vividly seen the coming World War III and the prelude to the coming of the messiah. 

- There is even widespread recognition by our space experts that we are woefully unprepared for an errant asteroid or comet hitting the Earth

Clergy is warning and encouraging us to repent and do good deeds to merit G-d saving us from the coming cataclysm, whatever it ends up being.

I am certainly not a forecaster of doom and gloom, but always try to remain hopeful and encourage everyone to do their best to improve the world.

But I also must reflect on the voices of anger, frustration, and exasperation around the world that are growing ever louder and scarier daily...the latest with Obama's betrayal of Israel at the United Nations Security Council.  

What comes next politically may very well determine whether the end is near or the future gets bright again. ;-)

(Source Photo: Andy Blumenthal)
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December 20, 2016

Just Cut It Out

What a way to handle global leadership...all you have to say is,  just "Cut it out!" and your job is done. 

- Cyber attacking the U.S. democratic election, invasion of Crimea, and encroaching on NATO with nuclear capable missiles...just cut it out! 

- Vast destruction of Aleppo including hospitals, schools, and markets, killings, refugees, and humanitarian crisis, and the dangerous use of chemical weapons on civilians...just cut it out!

- China stealing our drone and militarizing the South China Sea...just cut it out!

- North Korea testing advanced nukes and ballistic missiles capable of reaching Europe and America and threatening to use them...just cut it out!

- Iran taking our sailors captive, humiliating them, buzzing our warships, and violating the nuclear arms deal...just cut it out!

- Abandoning our friends and allies and befriending our enemies sworn to kill us and not even being able to say the words, "Radical Islamist"...just cut it out!

- Spiraling divisiveness, rioting in our inner cities, and cycles of racial and police violence...just cut it out!

- An unsustainable Obamacare with double digit rising rates and decreasing insurance choices (many localities with only 1)...just cut it out!

- Doubling of the U.S. national debt by another $10 trillion and enacting regulations that are strangling business...just cut it out!

- Endless ISIS and other terrorist attacks (yesterday on Berlin, Zurich, Turkey and more) and calls it "workplace violence" or a traffic accident...just cut it out!

Anyone who says that now "We're feeling what not having hope feels like," truly must be referring to where we come from and not where we are going.

(Source Photo: Andy Blumenthal)
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October 31, 2016

Politicized Justice

DC is in partisanship chaos once again, but this time it's our very justice system at the heart of it. 

There is widely publicized internal fighting at the FBI and Department of Justice over whether and how far to investigate, let alone ever prosecute, emails and foundation issues from a presidential candidate. 

As the FBI can only investigate, they have no jurisdiction over whether prosecutors are willing to then take the case forward. 

Downtown today, there were signs that said:

"I Need Some Good News.com"

This was referencing the new soundtrack of "Good News" by Ocean Park Standoff, but it could easily summarize the standoff between the FBI and Justice Department and the political parties lining up behind them. 

So there is certainly the need for some good news, as a dour mood settles over the capital and the people around the nation watching this play out so awfully, where politics have gotten in between us and our candidates and doing what's right. 

From the song:

"I need some good news baby 'cause the world's gone crazy."

When even our law enforcement authorities can no longer function without impediment, and when there is no core impunity from political infringement and recriminations, we know even our most basic system of justice has gone awry with political dysfunction. 

Yes, it's crazy and it's definitely not good news for the progress and righteousness of this great nation. ;-)

(Source Photo: Andy Blumenthal)
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October 11, 2016

On the Lookout To Managing Risk

So risk management is one of the most important skills for leadership. 

Risk is a function of threats, vulnerabilities, probabilities, and countermeasures. 

If we don't manage risk by mitigating it, avoiding it, accepting it, or transferring it, we "risk" being overcome by the potentially catastrophic losses from it.

My father used to teach me when it comes to managing the risks in this world that "You can't have enough eyes!"

And that, "If you don't open your eyes, you open your wallet."

This is a truly good sound advice when it comes to risk management and I still follow it today. 

Essentially, it is always critical to have a backup or backout plan for contingencies.

Plan A, B, and C keeps us from being left in the proverbial dark when faced with challenge and crisis. 

In enterprise architecture, I often teach of how if you fail to plan, you might as well plan to fail. 

This is truth--so keep your eyes wide open and manage risks and not just hide your head in the sand of endless and foolhardy optimism for dummies. ;-)

(Source Photo: Andy Blumenthal)
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September 16, 2016

State Of U.S. Relationships

(Click To Enlarge Graphic)

Here is the current state of a sampling of U.S. relationships with other countries around the world.


As the "superpower" and as a people who strongly value freedom, democracy, and human rights, as well as a people mainly of faith, we have the obligation to do good in this world. 

Also, we recognize our imperative to maintain strength and promote peace, prosperity, and betterment for all mankind.

We have some enormous challenges ahead, and we had better be up to it. 

There is a lot riding on this! ;-)

(All opinions my own)

(Source Graphic: Andy Blumenthal)
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July 26, 2016

Poverty Is An Illness

Poverty is not just a phenomenon of poor, homeless and hungry people. 

It is a social and economic epidemic, and here are some sobering statistics:

- "Nearly 1/2 of the world's population--more than 3 billion people--live on less than $2.50 a day."

- More than 1.3 billion people live in extreme poverty--less than $1.25 a day."

- "1 Billion children worldwide are living in poverty...and 165 million children under the age of 5 were stunted...due to malnutrition."

- "1/4 of all humans live without electricity."

- "80% of the world population lives on less than $10 a day."

Those empty stomachs, battered roofs, and tattered clothes are leaving indelible marks on so many impoverished people, yet many at the other end of the spectrum are living so high and mighty...it's a crazy contrast that fails to make any sense. 

Passing by the stronghold buildings of the World Bank in Washington, D.C., I found these striking "End Poverty" t-shirts that they had in their storefront--although I couldn't help think how far removed this place was from this sorry state of global poverty and chaotic and violent world affairs. 

We are living in an incredible bubble, and while I often hear how grateful people are to be here and have "all this," somehow I just don't think we fully get it what's going on out there! ;-)

(Source Photo: Andy Blumenthal)

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July 18, 2016

When It Comes To Education, We're Just Playing Around

So I overhead a conversation of 2 young women in Starbucks talking about their college education. 

One of them while acknowledging that she enjoys her classes, says, "But I still don't feel that I am learning anything practical!"

He friends responds saying, "Yeah, all we learn is X+Y, but what does that do for us in real life?"

The first young women says, "They need to emphasize the practical things and teach us personal finances, fitness, healthy cooking, and so on."

The second young women starts repeating, "X+Y, X+Y, that's all they teach us!"
I couldn't help but chuckle at this point, even though it was sort of sad. 

The education system is known to be so bad in this country, especially until you get to college. 

We've gone from No Child Left Behind to Every Student Succeeds, but no matter what you call it--it's still a big C-R-I-S-I-S. 

According to Ranking America, the US ranks 14 out of 40 countries in education--behind Netherlands and Poland.

Moreover, we rank 2nd in ignorance about social statistics like teen pregnancy, unemployment rates, and voting patterns. 

Moreover, we are falling behind in our competitiveness ranking in science, technology, engineering, and math (STEM), and are now 27th in math and 20th in science out of 34 countries.

We can't innovate, improve productivity, and effectively compete if we are just playing around with our education system. 

If we don't change, X+Y may soon equal the bottom of the education barrel. ;-)

(Source Photo: Andy Blumenthal)

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June 21, 2016

It's Getting Mighty Hot

This is a advertisement around Washington DC alerting people to the dangers of global warming.

"I'm Too Hot"

And 

"9 of the 10 hottest years have occurred since 2000."

Wait a second, for some (or many) a little extra heat may be considered a good thing especially if you live up north with generally freezing cold and miserably snowy winters.

So don't just tell us about it getting hotter, but tell us how hot is it actually going to get and what will happen when it does--melting glaciers, rising oceans and catastrophic flooding of cities, weather abnormalities and violent natural disasters, and so on.

We need to move on to the substance of this. 

Just like with the national debt, we keep talking about it going up (and up). 

Well what's so bad about that if we can just print some more greenbacks and pay for more stuff, maybe it's a good--or great--investment in our country and future?

Here again, the message that isn't getting out clearly is what is going to happen when the debt becomes unsustainable and printing or devaluing dollars will not solve the problem and may actually exasperate it by creating run-away inflation, a downgraded or junk credit rating, and higher debt payments possibly tanking our economy and people's savings.

Yeah, we don't want to cause a panic. 

But shielding people from vital information on the dangerous paths we are on will only lead to going further down into the abyss of non-action and potential for cascading calamity. 

Let's face it--it's unpopular to talk anything doom or gloom--financial crises or natural disasters or especially anything with WMD--but if we aren't the adults in the political room, who will be? 

For once, I'd love a leader who tells it straight, who helps us face our own worst nightmares, and actually gets us back on track again, rather than keeps the wool pulled over our eyes for another term or two.

Leadership is lost in rosy glasses, vote counting, pundits called upon to obscure the truth from the people, keeping a false calm, and creating wildly inflated legacies.

These motives for now are stronger than the determination to deal with the threats we face, but not forever, and then the pendulum will most abruptly swing in the other direction, precariously late for the ensuing global effects. ;-)

(Source Photo: Andy Blumenthal)

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January 14, 2016

Refugees or Terrorists--How Do You Really Know?


The news about the refugee crisis is truly heartwrenching.  

My own parents and grandparents were refugees from the Holocaust who came to this beautiful country to start fresh and live in freedom and peace.  

So one one hand, I like so many others want to do the right thing from a humanitarian perspective and help people in need.  

But on the other hand, with this new wave of refugees something seems vastly different...

- 18 of 31 people identified so far in mass New Year's Eve attacks (sexual molesting, raping, and robbing) of over 500 women in German...were refugees that had already applied for asylum.

- At least one of the Paris terrorists who killed more than 130 people in November is alleged to have been a Syrian refugee. 

- At least 3 refugees resettled in the U.S. since 9/11 (from Iraq and Uzbek) have been arrested on terrorism charges and there have been dozens of other counter-terrorism investigations for those resettled here. 

- The ISIS suicide bomber that killed 10 German tourists in Istanbul this week was registered as a Syrian refugee "without setting off security alerts."

- And again this week, a group of refugees with rocks, bats, knives, attack a Frenchman

- ISIS is already asserting that they will use the refugee crisis to get attackers into the West and are bragging that already thousands have successfully infiltrated

Surely, no refugee vetting process is going to be ironclad--processing mistakes, system errors, and errors of judgement are bound to happen.

Some have also suggested that politics is playing a larger role here in wanting to get as many refugees and immigrants as possible into the country for the purpose of simply getting their cold hard votes...so this is a possible darker side of DC. 

In the end, we need to put politics aside, and figure out how do we help those that really need help and are good people seeking to live peacefully and productively among us, and how do we prevent the next wave of terror from some really bad apples? 

Until we can answer this question substantively, and not by an emotional response of it "is just not who we are," we need to take this one step at a time and not act rashly and recklessly. ;-)

(Source Photo: here with attribution to Luis C. Araujo)
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January 7, 2016

Clash Of Civilizations

Things are looking a little less rosy today in the world...

Clash of Civilizations - Tensions continuing to heat up in Middle East as Saudia Arabia is accused of bombing Iran's embassy in Yemen after the Saudi embassy in Iran was ransacked. 

Weapons of Mass Destruction - North Korea conducts H-Bomb test threating major escalation of WMD in Asia, and Iran unveils nuke capable carrying ballistic missiles at 2nd site, and claims surface that ISIS (similar to Syria) is now using chemical weapons

Wold Economy - Yesterday, China had to again halt trading (after only 30 minutes) when their stock market dropped another 10%, and the World Bank cuts global growth forecast to just 2.9% for 2016 (down another .4%). 

Violence From Immigration Crisis - Dozens and dozens of women were sexually attacked by alleged gangs of immigrants in multiple cities in Germany after Germany opens its border to 1.1 million immigrants from Syria, Afghanistan, etc. just last year.

Terrorist Attacks -- After multiple terror attacks in Paris, San Bernardino, and on a Russian airliner flying out from Egypt last year, another attack was thwarted just yesterday in Paris on the 1-year anniversary of the Charlie Hebdo killings

We may not want to say the words "clash of civilizations," except that we are desperately trying to avoid it, but it seems to be happening and with all it's effects anyway. 

The question is what happens when the proverbial politically "acceptable losses" rise to the point of being completely unacceptable disasters? ;-)


(Source Photo: here with attribution to Guio Gloor Modjib)
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January 2, 2016

Market Watch 2016

I took this photo in the mall on New Years Day--yes, the stores were actually open on the holiday.

And Macy's was having a blowout sale with racks and racks of "80% Off Original Price[s]."

We were laughing saying what's next--99% Off and then even 100% off! 

So you think the economy is healthy with fire sales like these on the very first day of the new calendar year--when we still have another 364 days to make our year end sales quotas...

With turbulence around the globe brewing from Iran, Syria, Russia, North Korea, Yemen, Sudan, Nigeria, ISIS, and more...anyone care to say (pending) crisis.

How about commodities--my bet--that are in the toilet (and have been for years now)--do you really think no one needs iron, aluminum, nickel, lead, cooper, potash, oil, gas, coal, diamonds, and gold anymore? 

Then the Wall Street Journal warned again today about the overall investment marketplace, asking "How do you invest when everything is expensive? [at 25 times cyclically adjusted earnings--now that's a fancy term]?

We've been down this road before in the bubble bursts and recessions of 2001 and 2008.

Is now really the time for the Federal Reserve to be raising interest rates (and what a nifty ripple effect that will have in both slowing our economy down and raising our interest payments on our already ballooning $18 trillion national debt)?

Oh, technology to the rescue again and again...it's possible with everything from virtual reality to robotics and artificial intelligence on the cusp...or maybe not this time around. ;-)

(Source Photo: Andy Blumenthal)
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November 24, 2015

Top 30 Legacy Of Hope And Change

Over 7 long years, the promise of "hope and change" has given way instead to the disappointment of chaos and dysfunction.

Just some 30 examples off the top of my head...

1) Nuclear IRAN

2) Civil War SYRIA

3) Fragmented IRAQ

4) Taliban resurgent AFGHANISTAN

5) Militarization of SOUTH CHINA SEA

6) Nuclear missile NORTH KOREA

7) Terrorist State ISIS

8) Resurgent aggressive RUSSIA

9) Weaponization of SPACE

10) Streaming crisis of REFUGEES

11) Broken system for IMMIGRATION

12)
Sharply rising MURDER RATES

13) Growing and largest PRISON POPULATION

14) Rising RACISM

15) Increasing INEQUALITY

16) Worsening polarization in POLITICS

17) Poor TRANSPARENCY

18) Dysfunction in GOVERNMENT

19) Rising NATIONAL DEBT

20) Crisis in HEALTHCARE

21) Failing system of EDUCATION

22) Stalling INNOVATION

23) Growing insecurity of CYBER 

24) Infringement on PERSONAL PRIVACY

25) Falling participation in LABOR FORCE

26) Slowing ECONOMY

27) Worsening CLIMATE CHANGE

28) Shrinking affiliation with RELIGION

29) Epidemic of SUICIDE AND SUBSTANCE ABUSE

30) Declining HAPPINESS

Now, one of our main hopes has to be genuine change for the better. 

(Source Photo: Andy Blumenthal)
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September 9, 2015

Where Is Europe?

So we are reading every day about the Europe border crisis.

With hundreds of thousands streaming to its shores, and either an inability or lack of desire to absorb the migrants. 

As the Middle East and North Africa burn with the Arab Spring, Caliphate enthusiasts, civil war mongers, religious extremists, terrorists, and anarchists, innocent people caught in the crossfire are seeking immigration to Europe as refugees or for a better future.

But significant entities in Europe, perhaps better known historically for their ultranationalism, deportations, expulsions, and the Holocaust are left gropping with what to do with a seemingly endless wave of Muslim immigrants. 

As Europe tries to figure it out, thousands are dying in capsized boats, sufficated truck cargo holds, and at the mercilessness of their handlers. 

So what will be of a future Europe that either heartlessly turns away needy migrants or potentially becomes more a Muslim enclave than the predominantly westernized and Christian continent they have been?

At least for now, Europe is facing a major humanitarian and identity crisis. In the longer term, they run the risk of their culture fading or disappearing altogether as the demographics shift beneath their techtonic feet. 

(Source Photo: Andy Blumenthal)
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November 17, 2013

The Iranian Gambit

Important developments going on with Iranian Nuclear Crisis...

According to the Jerusalem Post, Israeli Prime Minister Netanyahu is asking for a deal that dismantles Iran's ability to prepare fissile material, the core of a nuclear bomb--which Iran has threatened to use to annihilate the State of Israel.  

This is in stark contrast to a mere suspension of enrichment activity or reduction of stockpiles that still leaves this dangerous nuclear capability in the hands of the radical Islamic Republic. 

After coming out of the Holocaust Museum, Yad Vashem, in Jerusalem with French President Hollande, Netanyahu said to Hollande:

"You said when you came out that the experience of the Holocaust places a very special responsibility on all of us. Francios, I want to tell you the burden it places on me. It is my duty to prevent anyone who credibly threatens to execute another Holocaust against the Jewish people. That is my obligation, but our common obligation for mankind and for our common future."

Further, Prime Minister Netanyahu stated:

"We live here. We know something about this region. We know a great deal about Iran and its plans. Its worthwhile to pay attention to what we say."

Less than 70 year after the Holocaust of six million Jews at the sadistic hands of the Nazi murders, there is no room for error with the Mullahs in Iran. 

It seems like we are coming to a conclusion on this soon, as the Jewish people have learned it is better to live by taking your best shot, than die by going like sheep to the slaughter. 

(Source Photo: here with attribution to marsmet546)
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November 9, 2013

Remembering the 52 And Hoping For A Real Peace

This week was the 34-year anniversary since the Iran Hostage Crisis (which started on November 4, 1979)

52 Americans were held hostage for a long 444 days.

Now, Iran is negotiating for a relaxation of sanctions imposed due to their hostile nuclear WMD program.

However, there are questions about whether Iran will really give up the nukes that they have pursued for decades or whether this is another stalling tactic.

The Wall Street Journal is reporting concern by Western Allies including Israel, Saudi Arabia, the UAE, and Bahrain, and that "Republican and Democratic supporters of Israel said the agreement in the works was far too easy on Iran."

On the positive side, potentially, this is only the "first stage" in the Iran nuclear disarmament process--let's hope. 

We need to ensure a substantive nuclear non-proliferation deal that safeguards America's and allies' security and interests in the region. 

We can all rest easier when the Iranian nuclear capability is fully dismantled, until then this is not a slam dunk for peace. 

(Source Photos: EVResourceSite and Pere Ubu; Mashup by Andy Blumenthal)
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September 13, 2013

Communicating 360

My daughter, Michelle, is taking a university class in public relations and as part of the class she was asked to interview 3 people about their perceptions of this field.

So she posed some questions to me and here is how the interview went:


1. In your own opinion, what is public relations?  Why do you think of public relations this way?

Public relations is simple, it's about relations with the public--communicating and connecting with people about what you do, why you do it, how you do it, for whom you do it, when you do it, and where you do it.  It is includes marketing and sales, customer relations, investor relations, government relations, relations with partners, as well as crisis communications, and maybe even recruiting talent to the organization. 


2. What do you think of when you think of public relations? Why do you think of this/these?

When I think of public relations, I tend to think of many of the big, well-known brands like Nike, Coca-Cola, Allstate, and so on--they do a lot of advertising and communicating with the public. They invest in this and it has a pay-off in terms of organization, product, and brand recognition.


3. What do you think the skills are that are needed to work in public relations?

Creativity, visual thinking, messaging, branding, marketing, sales, and psychology. 


4. Would you distinguish public relations from marketing? If so, how?

Public relations, to me, is broader than marketing. Marketing has to do with getting product awareness out there and selling, but public relations involves not only connecting with customers, but also investors, suppliers, partners, even the government, and international players. 


5. Can you give examples of what you think public relations is today? 

Public relations is how an organization interfaces and communicates with all its stakeholders.  It is mainly external or outward facing and differs from internal communications which is inward facing, like talking with employees. Public relations uses advertising, media, commercials, messaging, branding, logos, newsletters, mailings, to get the word out from the organization's perspective--good news and also countering bad news.


So how did this "IT guy" do with answering questions about public relations? 

Not my field, but maybe the MBA and private-sector experience helped, a little.  ;-)

(Source Photo: Andy Blumenthal)
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August 17, 2013

Economics, Pendulum Style

To combat the recession of 2007, the Federal Reserve initiated an aggressive policy of Quantitative Easing--purchasing federal debt en masse to flood demand for Treasuries and lower interest rates to near zero to stimulate the economy. 

As of June 2013 the Feds balance sheet has swelled to over $3.4 trillion in assets of treasury debt. What happens when the Treasury has to repay those trillions? 

Who is the Treasury going to borrow that money from and at what interest rate? 

Just like raising demand for Treasuries lowered interest rates, increasing the supply of Treasury debt to pay back the Federal Reserve will make interest rates go way up the other way. 

Rising interest rates makes borrowing more expensive--e.g. buying a car with an auto loan is more expensive, buying a home with a mortgage is more expensive--and inflation can skyrocket. 

But what is worse is that despite the recent slowing of the growth of the national debt, many economists calculate the total US debt at a whopping $70 trillion when you include the host of unfunded liabilities including social entitlements such as Social Security, Medicare, Medicaid, as well as government loan guarantees (mortgage, student loan, etc,), deposit insurance (i.e. FDIC(, and the money owed to the Federal Reserve. 

What is really sad about this is that the entire wealth of American families in this country is guess what--also $70 trillion--which means that we are essentially a bankrupt nation:

Family assets of $70 trillion - Family liabilities of $70 trillion = a big fat 0 in the kitty!

To pay back the $70 trillion, it is not realistic that we will simply "grow our way out" of this fiscal mess with a GDP growth rate over the last 20 years of a mere 2.6%.  

Also, we will likely not confiscate people's assets to pay off the debt, rather we will print money--lots of it--so that we end up paying back the trillions of past debt in much devalued future money. 

Head we win, tails you lose!

The problem is that devaluing the dollar will mean that American family savings will become worth less as well--with the risk, at the extreme, of wiping out mass amounts of savings altogether. 

Despite sequestration reducing the rate of our debt growth, the aging baby boomers with the resulting liabilities for their care will soon escalate the debt problem once again. 

David Walker, a former U.S. Comptroller has warned about our national debt problem as well as many prominent economists. 

Like a pendulum swinging from one extreme to the other, the spendthrift ways of the past will by necessity lead to penny-pinching in the future, and inflation rates of near zero since 2007 will lead to hyperinflation after 2014.  

It reminds me of the story of Joseph in the Bible, with the 7 lean years follow the 7 fat years (in Egypt that time)--this is not just providence, but common sense economics. 

Good times will come again when there is a return to the mean and the pendulum hovers near center, but the swings until then can be wide and scary.

Of course, like taking your medicine, the earlier we start to course-correct our nation's finances, the sooner we get healthy again. ;-)

(Source Photo: here with attribution to zzz zzz)

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August 9, 2013

Government By Decision

I saw this bumper sticker on a pole in Washington, D.C. 

It says "Puppet for President 2012" and I don't know whether this was referring to Democrats, Republicans, Independents, or whoever.


But it did make a statement about the perceived ability of government to lead and perhaps that someone is "pulling the strings."


Governance is the act of administering, managing and of course implies leadership and decision-making.


Yet what is driving the American people crazy is that our government seems for all intensive purposes broken, almost paralyzed.


Current readings are of political stalemate, problems that are too big and complex and the compromises too painful after years of excess, where indecision reigns supreme, and with that the popularity of government is at all time lows--10% for Congress and 36% for the President


Here's a basic example written about today in the Wall Street Journal: despite a drop in first class mail over the last decade (thanks to email and texting) from 100 billion to fewer than 70 billion pieces of first class mail and cumulative losses from 2006 to March 2013 of $41 billion, we still can't decide whether to cut Saturday mail delivery that could save over $3 billion a year alone. 


Other examples of government indecision are almost too numerous to name:


- Should we intervene in Syria's civil war that has taken more than 100,000 lives and displaced millions?


- When should we take action against Iranian nuclear facilities that violate nuclear non-proliferation and threaten world peace?


- How should we handle militant Islamic and Al Qaeda threats that don't seem to dissipate?


- What do we do about the mounting federal deficit with a national debt approaching $17 trillion that is still rising about $2 billion a day!  

- With fiscal cliffs, debt ceiling, sequestrations, and cuts to the U.S. credit rating, can we find our way forward? 


- What should we do to get people back to work with an employment level of 58.6%, still around the lowest in the last 30 years?


- How do we reign in entitlement spending that needy people depend on, but where nearly half (49%) of Americans households today receive transfer payments, and entitlement spending has risen to $2.3 trillion annually and now are over 60% of entire federal outlays. 


- How do we improve morale of the U.S. middle-class when only 33% think their children will be better off than their parents?

- What should we do about so many hanging issues out there--immigration reform, spiraling health care costs, improving our education system, balancing surveillance and privacy, and much more?


However, the ultimate question really is whether no decision is better than a decision?


With no decision, the problems continue to escalate until they sort of magically go away on their own (i.e. they are "overcome by events") or more ominously, they reach epic crisis proportions. 


With a decision to act, we may make good decisions that positively impact the situation or we may make bad decisions that have a negative impact, but even with a bad decision, we can monitor the effects and course-correct until we show true improvement.


Decisions often mean winners and losers--and no one wants to lose anything--and there are lobbyists and special interest groups--and no one wants to be voted out of office...so what do we do?


Oh no, I can't decide!


The reality is that we will will have to make hard decisions or they will be made for us--we will either be the masters of our own fate of the slaves of our indecision. 


We can take back control and fix what is broken or wallow in despair and disrepair.


We can act now or kick the can down the road and have much more painful decisions later. 


(Source Photo: Andy Blumenthal)

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