UPDATE: On Friday the Susan G. Komen Foundation reversed their decision. Wonder how much damage they did to their brand though.

Everyone’s favorite pink charity is at it again this week.

In the past, they’ve been known to sue other breast cancer charities for unknowingly infringing on their trademark.

Because they’re the only ones allowed to be working “for a cure”.

This week they cut off funding for breast cancer screenings at Planned Parenthood, giving the BS reason that the organization is under federal investigation.

Come on, at least be honest.  The conservative Christian lobby is really powerful.  You’re certainly not the first group to cave, and you certainly won’t be the last.

After all, abortions make up well over 90% of what they do, right?

But for the Komen foundation, the backlash has been quick and cold.

For an organization whose words spell an outward and very public goal of ending breast cancer, their actions say something else.

Obviously it’s their money and they can allocate it how they see fit.

But I’d like to see a charity that stands for its cause in the face of whatever political pressures come along.  I’d like to see a charity whose mission transcends politics.

The fight to end breast cancer is a goal I think everyone can get behind.  It’s bigger than politics, or at least it should be.  It isn’t a Democrat / Republican thing.

That is, until you made it one.

-Nick

Related posts:

1. Susan G. Komen Spends Donor Money Suing “Rival” Charities Share Tweet Susan G. Komen for the Cure, a non-profit...
2. Safeway Checkout Donations Share Tweet If you’ve shopped at Safeway any time in...

Related posts brought to you by Yet Another Related Posts Plugin.

Does the evil antagonist Voldemort share any similarities to our own Republican party?

Did You Know?

Author JK Rowling has compared Voldemort to Hitler, and the Wall Street Journal has drawn parallels between Minister of Magic Cornelius Fudge and Prime Minister Neville Chamberlain.

-Nick

Related posts:

1. Occupy Wall Street: Unemployment Share Tweet Occupy Wall Street, you have our attention.  Now...
2. Occupy Wall Street: Corporate “Greed” Share Tweet Why Occupy Wall Street? Wall Street is symbolic...
3. Why Occupying the Ports is Misguided Share Tweet Yesterday the Occupy Wall Street attempted to shut...

Related posts brought to you by Yet Another Related Posts Plugin.

My econ professor has another video out!  Great stuff.

“The Tea Party: People who believe in Social Darwinism, but don’t believe in Darwin.”

-Nick

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The United States Postal Service is losing money at an alarming rate — an estimated $14 billion next year.  As a “semi-independent federal agency,” the USPS is mandated to be “revenue-neutral”, meaning it must pay for its own operation without additional taxpayer support.  Right now they’re failing their mandate, to the tune of approximately $125 per household per year.

The Good Old Days

The postal service used to be a surprisingly profitable enterprise for Uncle Sam.  In fact, during the first few years of the new millennium, the USPS could be counted on to add a billion dollars a year to the bottom line.  A profitable government agency?  Sounds to good to be true, but it was reality not even that long ago.

But of course people were pissed off about the cost of stamps and all that.  Government loses money and they’re incompetent and inefficient.  Government makes money and they’re greedy, monopolistic and corrupt.

They can’t win.

What Happened?

The postal service is suffering from both high legacy costs, from union-guaranteed retiree benefits, and over-capacity.  In many ways, the situation is similar to how the domestic auto industry looked a few years ago.  The car companies were saddled with a heavy burden of retiree pension and healthcare costs, and had the capacity to produce nearly double the vehicles the market was ready to consume. The USPS has similar legacy obligations and an impressive but underutilized delivery network.

And like the car industry, competition certainly played a role.  The domestics used to lament they were getting beaten by the Europeans at the top of the market and by the Japanese and Koreans at the bottom.  Services like FedEx and UPS are beating the Postal Service at the top of the market, and email and texting are beating them from the bottom.

Fixed legacy costs aside, the system is built to handle a volume of mail it will never see again.  In terms of the raw volume of mail delivered, the USPS peaked around 2005, when it delivered roughly 210 billion pieces of mail.

Projections place future demand somewhere in the ballpark of 150 billion.

How Much Should a Stamp Cost?

Let’s pretend for a moment that all 165 billion pieces of mail (we’re not down to 150 billion just yet) were simple letters.  Stamps cost $0.44.

To make up the projected $14 billion shortfall, how much would the USPS have to charge? Surprisingly, it would only take a $0.09 increase per piece of mail.  That would make stamps $0.53.  Not so bad right?

(This of course falsely assumes demand remains static in the face of rising prices, and does not factor in externalities like the pollution caused by running the world’s largest vehicle fleet.)

The Post Office Plan

In response to the sharply lower demand for their service, the Postal Service has announced plans to cut $20 billion in costs by 2015.  The plan includes:

• Closing more than 3,700 post offices
• Closing 250 mail processing centers
• Slowing delivery of first class mail
• Stopping Saturday delivery
• Eliminating up to 120,000 jobs

Of course, these painful but necessary measures have been roundly criticized by nostalgic citizens, certain businesses, and even members of Congress.  Like I said, they can’t win.

If I Was in Charge?

What would I do if I was in charge?  Probably all of the above, plus:

• Charge more.
• Charge even more for unsolicited junk mail.  In the Internet world, we have strict federal CAN-SPAM regulation for email, and email isn’t even made out of trees.
• Simplify the menu.  With the dozens of options and add-ons, it’s really confusing.  For packages, there should be two choices: Slow or Fast.  Pick one.
• Hire people who want to work there.  Every post office I go to, with the notable exception of Zephyr Cove, is a miserable experience.  You run the largest logistics operation on the planet; it’s very cool.  Yet most postal workers I encounter seem like they hate their lives and their jobs.
• Connect with ecommerce.  The real winner of online shopping was UPS, but it could have been you.  Aggressively go after their business.  Strike up deals with big ecommerce sites and eBay.
• For certain types of mail, I would slow delivery even further.  Maybe I only delivery Monday, Wednesday, and Friday.  Or maybe just Wednesdays.  I mean if someone is sending something via “snail mail” how urgent can it be?  I could probably check the mailbox once a month (or less) without any dramatic decline in my quality of life.  And I imagine I’m not alone.

Should the USPS be Completely Privatized?

It probably will be eventually, but there’s something idealistically democratic in the fact it costs the same to mail a letter across the street as it does to the middle-of-nowhere-North-Dakota.  I kind of like that.

Now is it worth $125 a year to me?  Definitely not, so let’s make sure they get back to breaking even soon.

-Nick

Related posts:

1. How Much Does a Text Message Really Cost? Share Tweet I had a hypothesis that text messaging is...
2. Why Would a One-Way Ticket Cost More Than a Round-Trip? Share Tweet As you’ve seen over the past few posts,...
3. Westin Rewards Guests for Declining Housekeeping Service Share Tweet Last weekend in St. Louis, I found an...

Related posts brought to you by Yet Another Related Posts Plugin.

Yesterday the Occupy Wall Street attempted to shut down several west coast ports, including Oakland, Portland, and Seattle.

Why?  Because they think it will somehow hurt Goldman Sachs, which owns a minority stake in a shipping company.

I can appreciate the sentiment, because we all want to stick it to Goldman, but the logic is flawed on several counts.

First, what doesn’t get shipped today will get shipped tomorrow.  You might delay a tiny fraction of cash flows for a small subsidiary company of the evil empire, but you’re not going to bring capitalism to its knees.  Remember the idiotic campaign a couple years ago to not buy gas on a certain day?  Same idea.

Second, the small amount of pain you might inflict on Goldman (if any), comes with tremendous collateral damage to real American workers — the truck drivers and longshoremen losing wages as a result of your protest.  And what about the wholesalers, distributors, retailer workers, store owners, delivery drivers, shelf-stockers, and small-business men and women who were depending on those shipments. Who’s being greedy now?

What does Occupy hope to accomplish by throwing a stick in the cogs of commerce?

Like it or not, shipping and trade creates a ton of jobs.  Even if you think corporations are evil, they still account for the majority of employment in this country.  Employment is good, right?

Not quite sure how employment can be good and desirable, yet employers are bad.

By definition, ports create value.  Otherwise they wouldn’t exist. And the beautiful thing is if you don’t want to buy what’s in those containers, you have the freedom not to.

I’m sickened by the images of protesters getting beaten and pepper-sprayed by police.  We all are.

But let’s channel that energy into something productive.  Create something of value — a viable alternative, a political platform people can get behind — instead of trying to destroy the value others have created.

-Nick

Related posts:

1. Occupy Wall Street: Corporate “Greed” Share Tweet Why Occupy Wall Street? Wall Street is symbolic...
2. Occupy Wall Street: Unemployment Share Tweet Occupy Wall Street, you have our attention.  Now...
3. Occupy Wall Street: Income Inequality Share Tweet Income Inequality: Occupy Wall Street thinks the American...

Related posts brought to you by Yet Another Related Posts Plugin.

Although the Occupy Wall Street movement hasn’t made any official statements on taxes, I think it’s pretty safe to assume they would support higher tax levels on the rich.

With the huge tax drama playing out in Congress, it seems inconceivable that the top federal income tax bracket was 50% as recently as 1980.  And in the “good old days” of the 1950s? Over 90%.  Hard to believe, but after a certain level of income, $9 out of every $10 you earned would go to Uncle Sam.  And so the argument goes, if we want to encourage hard work, why “punish” top earners with such a heavy tax burden?

But that was 90% — a far cry from the not-even-40% proposal that caused Fox News to make like the world was ending.

I believe this fearmongering is pure silliness if not downright irresponsible.  Here’s why:

Nobody likes higher taxes, but there’s no way a 4 percentage point increase in the highest marginal tax rate induces large-scale economic catastrophe.

Let’s say I’m a small business owner (Full disclosure: I am) who wants to grow my business above and beyond the $250,000 mark.  Every $100 after tax I earn over that today would net me $96 if the tax rate was raised tomorrow.  I’m still $96 better off than I was!

Obviously there is a point of diminishing returns, but I think it’s crazy to say business will suddenly grind to a halt if we ask high earners to pay a small percentage more.

Side Note: this ignores non-financial motivation that I would argue is really important too.  Intrinsic motivators like independence, mastery, building something valuable, or simply helping people clearly play a role in business decisions.  Consider Norway, where taxes are sky high, yet they have more entrepreneurs per capita than we do.  An attractive tax environment can encourage business growth, but let’s not pretend it’s the  only factor.

Class Warfare?

Occupy Wall Street claims to represent the bottom 99% of America, who they feel are grossly underrepresented.  Here’s the thing: they top 1% definitely have it good, as the data will attest, but they only have 1% of the votes.  If your representative is catering too much to the elite at the expense of the 99%, it seems like it would be pretty easy to find majority support to fire him.

Are the rich paying their “fair share”? Are the poor?

• The top 1% of tax payers pay 38% of all federal income tax.
• The top 10% account for 70% of all income tax receipts.
• The bottom 47% pay no federal income tax.

Shows all taxes, incl. federal, state, local, sales, property, etc.

On the flip side of the tax debate is how the money gets used.  According to a recent poll, Americans believe $0.51 of every tax dollar is wasted.  Congress doesn’t just have an ugly budget problem, they have a huge perception problem.  Perception is reality, and the perception is that they are incredibly poor stewards of our hard-earned dollars.

Occupy Wall Street has some legitimate beef, but they have a perception problem too.  Even as they claim to be the 99%, they’re being viewed as an ultra-liberal fringe group.  Let’s be real: most of the 99% are too busy working to go camp out and protest.

Will Occupy Wall Street be dismissed as a bunch of vocal hippies with no lasting influence on the national discourse?  Or will they list some concrete goals and gain more centrist support?

Homer’s flat tax proposal:

The debt crisis explained, with a healthy dose of f-bombs:

-Nick

Related posts:

1. Occupy Wall Street: Unemployment Share Tweet Occupy Wall Street, you have our attention.  Now...
2. Occupy Wall Street: Corporate “Greed” Share Tweet Why Occupy Wall Street? Wall Street is symbolic...
3. Occupy Wall Street: Income Inequality Share Tweet Income Inequality: Occupy Wall Street thinks the American...

Related posts brought to you by Yet Another Related Posts Plugin.

Income Inequality:

Occupy Wall Street thinks the American middle class is disappearing.  And they’re right.

Pay for top executives has risen 7 times faster than that of their workers.

That’s great if you’re the CEO, but most of us aren’t.  In fact, after adjusting for inflation, real household incomes are down 10% over the last 10 years.

In defense of CEOs, running a huge corporation is far more complex today than it ever has been in the past.  Think about the pace of change, globalization, emerging technologies, the speed of competition.  A good CEO is worth more today than ever before.

Also, no company exists in a vacuum.  It’s each company’s goal to hire the best talent out there for the best price.  By definition, CEOs aren’t overpaid; they’re paid exactly what the market has decided they’re worth.

What’s bad about income inequality?

Too much income inequality is the stuff revolutions are made of.  Seriously.  Remember “let them eat cake”?  It didn’t end well for the people with the cake.

What’s good about income inequality?

A certain amount of income inequality is important.  There’s a sweet spot where innovators and hard workers are rewarded and lazy idiots who make poor choices aren’t.  The trick is everyone has a different idea of what level is best, and not surprisingly, your income level might influence your opinion.

Income equality is typically manipulated on a macro level with limits to employee compensation (which is dumb — let companies pay their people what they’re worth) and “progressive” taxes, which I’ll discuss tomorrow.

-Nick

Related posts:

1. Occupy Wall Street: Unemployment Share Tweet Occupy Wall Street, you have our attention.  Now...
2. Occupy Wall Street: Corporate “Greed” Share Tweet Why Occupy Wall Street? Wall Street is symbolic...
3. Amazon Mechanical Turk: Hire Your Own Minions for $2.71 an Hour Share Tweet I was working on a project that I...

Related posts brought to you by Yet Another Related Posts Plugin.

Why Occupy Wall Street?

Wall Street is symbolic of our larger economy.  That’s why news tickers show the minute by minute movement of the Dow.

Despite providing mechanisms for growing companies to raise money with IPOs and hire more employees, Wall Street is easy to hate.

Despite giving average citizens an opportunity to earn an average 10% annual return for the past 100 years, Wall Street is easy to hate.  Why?

Here’s my theory: It’s far away (unless you’re in NYC), it deals with volumes of money unfathomable to normal people, and it’s incredibly complex.  Far too complex for any regulator to regulate.  On top of that, Wall Street firms nearly collapsed the economy and were deemed “Too Big to Fail”, receiving billions in bailout money with no oversight or recourse.  Read The Big Short.

One of the biggest non-bailout complaints about Wall Street is over their obsession with short-term profits, seemingly at the expense of long-term viability.  Although this strategy seems to work out for the investors over the long run, if you don’t like it you can put your money elsewhere.  My initial returns with peer-to-peer lending at Prosper.com are “beating the Street.”

Wall Street is a market, subject to the same laws as every other market.  If enough people are pissed off enough to stop doing business with them, they’ll have no choice but to change.  Which leads me to corporate greed.

Corporate “Greed”

I put “greed” in quotation marks.  Are corporations inherently greedy?  Am I greedy to want a larger percentage of online shoe sales to flow through ShoeSniper.com, even though I can buy groceries and pay my bills today?

Corporate profits have rebounded sharply from the valley of the recession, yet high unemployment persists.  This means that companies have found ways to operate more efficiently.  They’re lean and mean.  Does that make them greedy?  I find it interesting we demand lean operation of our government, but vilify corporations for putting it into action.

Corporations exist to serve customers.  Without customers, they make no money, and cease to exist.  And then everybody gets laid off — not a good situation.  If you think certain corporations are too greedy, don’t do business with them.  Maybe they’ll change their practices or maybe they won’t miss you at all.  But again, if enough customers hit the road, they’ll have no choice but to care.

Calvin explains corporations. (Click to expand)

What does Occupy Wall Street want to see happen to address perceived corporate greed?  Should companies be forced to hire more people even if they don’t need them?

What makes Goldman greedy and Apple benevolent?  One sells shiny products you can touch and the other sells a complex host of financial services, but I assure you both firms are out to make as much money as they can.

-Nick

Related posts:

1. Occupy Wall Street: Unemployment Share Tweet Occupy Wall Street, you have our attention.  Now...
2. Rework Share Tweet Rework, by 37signals co-founders Jason Fried and David...
3. Free Marketing Advice for Safeway Share Tweet As a business nerd and as the primary...

Related posts brought to you by Yet Another Related Posts Plugin.

Occupy Wall Street, you have our attention.  Now what?

I’ve been closely following the month-old Occupy Wall Street movement.  If you haven’t heard about it, a group of mad-as-hell-and-not-going-to-take-it-anymore demonstrators decided to camp out in Zuccotti Park in lower Manhattan to express their disgust with the current state of political and economic affairs in this country.

True story.

Without any central leadership, Occupy Wall Street has inspired related protests and demonstrations all across the country.  Will this group become a major national influence like the Tea Party, or will their lack of a clear message usher them quietly from the spotlight?

So what’s all the fuss about?  Where the Tea Party had a very clear and concise message that was easy to get behind (Government is inefficient, expensive, and ineffective, and we’d be better off with less of it), it’s hard to tell what exactly Occupy stands for.

We know they are against corporate “greed”, they’re pissed off about high-unemployment, they’re sick of politicians catering to the super-wealthy, they’re anti-war, and they’re upset about the growing income inequality in America.  And, in one point of agreement with the Tea Party, they’re vehemently opposed to the bailout money given Wall Street with zero accountability.

But it’s one thing to be pissed off — even rightfully so — and an entirely different thing to offer up viable solutions that enumerate exactly what you’d propose to do differently.  Occupy Wall Street has yet to put forward any concrete “demands” or official policy requests.

My brother shared some data the other day that explains why the group is so upset. This week we’ll explore some of the numbers and what’s behind them.

Unemployment

With 26 million Americans unemployed (9%) or underemployed (another 8%), this is a huge issue.  If I’m running for office, I would speak to these people because they probably have some extra time on their hands to go out and vote.  Our corporations (good for them) have figured out how to make money with less people.  Our school system has left people saddled with debt and poorly equipped to handle the demands of our new service economy.

Endemic high unemployment is a trademark of failed economic policy, but I’m not ready to say our current 3-year spike qualifies us a failed state just yet.  Recessions come and go and even though this is a stubborn one, I believe it too will pass.  The difference is this one was almost entirely caused by Wall Street’s manipulation of complex financial instruments, and they got off better than scot-free.  Should you be angry?  Absolutely, it’s sickening.  But it’s over; we’re not getting our money back.

Politicians all have their own plans to “create jobs”, but historically government jobs programs have had lackluster success.  Instead they should focus on building a business environment that is competitive on the global stage, investing in promising new technology, and encouraging smart regulatory and growth strategies.

Yes, in some ways, the system is rigged against you.  But it’s no ones’ “fault” you’re unemployed; not Wall Street’s, not Obama’s, not Bush’s.  No one owes you a job; you have to earn it.  Take some personal responsibility.

One thing’s for certain: you’re not going to find a job playing the victim and camping out in the financial district.  Learn what skills are in demand.  Not everyone gets to work their dream job, but companies will always need workers.  Or, create your own opportunities or freelance.

You can bitch and moan (and again, even rightfully so), but that doesn’t change the past or the near-term reality.  Defeatist?  Yeah probably.

So what is Occupy Wall Street’s answer to the problem of high unemployment?  Who knows?  Unemployment is such a complex macroeconomic figure, no amount of Occupation (pun intended) is going to fix it overnight.  If someone had the magic bullet for long term, uninterrupted job growth I imagine they’d be pretty popular.

-Nick

Related posts:

1. Unsafe to Occupy Share Tweet This lovely little notice has been in our...

Related posts brought to you by Yet Another Related Posts Plugin.

These are real words from a real person who won a real election in America.

• “There are hundreds and hundreds of scientists, many of them holding Nobel Prizes, who believe in intelligent design.”
• “[Gay marriage] is probably the biggest issue that will impact our state and our nation in, at least, the last 30 years.  I am not understating that.”
• “Take a picture of The Lion King for instance, and a teacher might say, ‘Do you know that the music for this movie was written by a gay man?’ The message is: I’m better at what I do, because I’m gay.”
• ”I’m very concerned about the international moves they’re making, particularly … moving the United States off the dollar and onto a global currency, like Russia and China are calling for.”
• “[New Hampshire is the] state of Lexington and Concord, you started the battle for liberty right here in your backyard.” (Massachusetts)
• “There isn’t even one study that can be produced that shows that carbon dioxide is a harmful gas.” (here’s one)
• “This may be an opportunity for her [Melissa Etheridge] now to be open to some spiritual things, now that she is suffering with that physical disease [cancer]. She is a lesbian.”
• Florescent light bulbs pose a “very real threat to children, disabled people, pets, senior citizens.”
• ”And what a bizarre time we’re in, when a judge will say to little children that you can’t say the pledge of allegiance, but you must learn that homosexuality is normal and you should try it.”
• “My husband and I have never gotten a penny of money from the (family) farm.” (Financial reports show tens of thousands of dollars in personal income from said farm)
• “I wish the American media would take a great look at the views of the people in Congress and find out if they are pro-America or anti-America.”
• “We also know that the very founders that wrote those documents worked tirelessly until slavery was no more in the United States.” (Abolition took almost another 90 years; all the founders were long dead.)
• ”I find it interesting that it was back in the 1970s that the swine flu broke out under another, then under another Democrat president, Jimmy Carter. I’m not blaming this on President Obama, I just think it’s an interesting coincidence.”
• ”We’re running out of rich people in this country.” (The US still has more millionaires than any other country)
• Gay marriage “will change our state forever.”
• “I stand here today … to formally announce my candidacy for President of the United States.”

-Nick

Related posts:

1. How Should Countries Measure Success? Share Tweet I read a really interesting article in Inc....
2. California vs. the Internet: 2011 Affiliate Nexus Battle Share Tweet Yesterday I had the opportunity to take a...
3. Domain Registry of America Scam Share Tweet Have you received a letter from Domain Registry...

Related posts brought to you by Yet Another Related Posts Plugin.