Tuesday, February 28, 2017

Asian Americans versus Asian Americans

I have realized how much more bridge building is needed among and by Asian Americans. I recently attended an event a good friend of mine organized in Northern California. Karthick Ramakrishnan is the most prominent scholar on Asian American political participation; it’s probably him if anyone is in the media talking about the subject. A professor of South Asian descent, he has wanted to convene a pan-Asian coalition to advance shared interests. He has started the process, but it will take energy to sustain.

Critics of hyphenated identity claim it divides. They want us all to be simply American. They are not aware that “Asian American” is all about forming a union among people whose ancestors would not have been committed to any contact other than conquest.

Both words in the title are important. They are signals to others and one’s self. Asians are amalgamating as other immigrant communities have done in overcoming their past hatreds for the common ground of this democracy. The insistence on the American aspect of identity also is an assertion that one belongs here.

Ironically, when I was growing up, my only wish was to be accepted as simply American, and I was all too eager in assuming if I avoided anything Asian that would be so, automatically — exactly as the puppet Pinocchio became a real boy, in one of those Western fairy tales we memorized though our parents had not heard of it. “Asian American” is better than the names, the various ethnic slurs emitted by passersby and cranks on the telephone and strangers who rang the doorbell and ran off.

Of course Asian Americans are artificial. That is true of all human groupings by definition. Asian American is perhaps more deliberately constructed. It depends on constant effort to hold together.

East Asians and South Asians in particular are competitive even as colleagues. When other people say, “You all look alike,” they mean they are likely to confuse Chinese for Japanese, not brown for yellow. There are discrete cultural origins: while much of East Asia has linguistic and religious relationships dating back before national borders were set or nations were even a clear concept under law, the Indian subcontinent speaks a dialect of the Indo-European language family and more than a few persons have lineage that is Caucasian.

The function I went to was inspired by a conversation between someone East Asian, native born, and someone South Asian, an immigrant, who were candid about infighting. They did what leaders do, turn opposition into opportunity.

What unites these rivals in places such as Silicon Valley is that they form an enemy for those who deem people of color as a threat. Asians might not even have been conscious that they appeared as a menace, having no aspiration other than prosperity. For those around them who are certain demography is destiny, that very success looks like a hostile takeover.

Asian Americans, however, are registering the antagonism. They cannot help but notice it. Tech leaders are saying they cannot “outsource” the response to civil rights activists alone. So Asians who want their cousins to be able to come here have reason to join together to advocate.

Although their lack of enthusiasm for politics is faulted, their attempts to join movements likewise has met backlash. They are viewed with suspicion for their loyalties and motives.

Asian Americans also should reach across the Pacific Ocean. Asian Americans who are assimilated, some of them, have distanced ourselves as deliberately as possible. We are too wary. I count myself among those who have made this error. They — we — have learned to be cautious, because suspicions fall upon them (us) if they utter a word hinting they (we) are anything less than America Firsters. The display of indifference toward a “homeland” they/we left, were forced from, or perhaps have never set foot on (as the third generation on these shores) turns into authentic apathy. Even as others lacking the heritage take up Mandarin for an adventure, we are reluctant to expose ourselves to the disdain casually directed at our parents who had accents. We find ourselves on both sides of the line: “them” versus “us” is ambiguous for Asian Americans even if we are suffer no ambivalence on our part.

We can withhold judgment of those who adapt under the circumstances. If you find yourself the one and only child in the classroom who looks like you, especially adopted or mixed, you have no genuine choice. You cannot be expected to maintain a culture without critical mass around you.

Yet there remains a responsibility assigned to Asian Americans, regardless of their reluctance to take it on, of serving as intermediaries, translators literally and figuratively. The epiphany for many is that acquiescing to the role is in one’s self-interest, and it offers enriching experiences. You give in and learn it doesn’t impose but relieves a burden: to speak with your grandparents across generations is to speak to the other half of the world, and you are the better for it, not least in the eyes of your elders.

The last line is the most difficult to overcome, because it is internal. It is not subtle. The established members of the ethnicity and those who in that pejorative phrase coming to be appropriated with pride, “fresh off the boat” are not the same. Their mutual contempt may exceed that of observers who could not distinguish between them, aggravating them even further. There is a “disconnect” between Asian Americans who conceive of themselves as domestic racial minorities and Asian immigrants whose reference point is literally foreign. The Asian Americans who march with “Black Lives Matter” perplex the Asian immigrants, perhaps their own parents, whose sympathies are elsewhere.

These populations in fact are distinct. Old-timers came when America was the dream and Asia “backward;” newcomers, as Asia ascends and America becomes increasingly anxious. The former had to leave behind their village without any assurance they would see their family again, ever, as much due to the distance and the cost as geopolitical barriers that included concrete roadblocks. The latter connect via social media as if they had never departed; they are effectively transnational, enjoying the same jokes and soap opera as before they boarded the jumbo jet for a routine trip.

The alarm each side feels is troubling — but not as they imagine. An observer who could step away or imagine a vantage point in the not too far future would perceive that the established Asian Americans, like white ethnics, Jews, and Hispanics who are not Latinos before them, fear those coming later will spoil everything with their rudeness, their lack of refinement, their foreign ways, their arrogant disregard about fitting in, and, above all, their overwhelming numbers. If the volume of Asian immigrants in line (or not bothering to follow the protocols for queuing) bothers white Americans as a portent of power shifting, the quantity undoubtedly will disenfranchise Asian Americans who settled long ago. On their part, Asian immigrants are disappointed Asian Americans are not more welcoming even as they fear their own children will turn into Asian Americans. They, also like their predecessors of all types and every era, hope for the comfort of continuity, to be very much in America but not necessarily of America.

“Asian American” is all about bridge building. Bridge building is vital, in every direction. That means among Asian ethnicities, both East and South; to Asians overseas; and to Asians arriving now. Then there is bridge building to blacks and whites. Asian Americans, neither black nor white, can be intermediaries and mediators.

Karthick’s research is definitive. He leads a study of Asian American civic engagement. His data shows Asian Americans are a potential influence. Their numbers are headed up, and they are, on average (with caveats), educated and affluent. Yet by conventional predictors, their civic engagement is not as robust as could be.

I have confidence. America is an ongoing experiment. It is a project, thanks to the democratic process. It is not a product, to be bought and sold. It is messy, always incomplete, needing work. Asians can contribute to progress. We have to feel the desire to do so.


Put Your Money Where Your Mouth Is. Vote With Your Dollars

Are you feeling disempowered? Don’t feel as if your voice is heard, especially now that the election is over? What can you do and will it make a difference? As a consumer, you have immense power with your spending.

The Power Of The Purse

If you’ve been watching the political commentary (or reading the President’s tweets), the “power of the purse” was marked by consumers choosing not to buy products from Ivanka Trump’s brand. This was highlighted most recently, as Nordstrom responded by dropping the line. I’m not going to discuss our President’s tweet that his daughter was “treated so unfairly by @Nordstrom,” nor will I address the quote by a spokesperson for the first daughter’s fashion label, who asserted that, “the brand’s overall sales were up 21% in 2016 compared to the prior year. I will even bite my tongue and not comment on Kellyanne Conway’s promotion of Ivanka’s products on national television. (Although I might take issue with her fashion flair at the inauguration when it was noted that Paddington Bear picked out her outfit. Not to mention that she forgot that “Buy American” does not seem to cover her Gucci inauguration outfit.) I write about money and I’m trying to stay in my lane!

The point I’m trying to make is that consumers seem to “voting” a lot since the election. Neiman Marcus, Macy’s, Shoes.com, Belk, ShopStyle, Bellacor, Jet.com, and Gilt, have all dropped some or all of Ivanka’s line as well as other Trump-branded products. Also, the New York Times reported employees at T.J Maxx and Marshalls have been told that “all Ivanka Trump signage should be discarded.” The retail ballot boxes seem to be open for business.

The Cost Of The Walk Of Shame

Boycott campaigns are springing up. For instance, the hashtag #GrabYourWallet has formed and has millions of impressions and shares since Shannon Coulter, a brand and digital strategist, coined it in October of 2016. She compiled a list of retailers that have business ties to the Trump family and that list is growing.

She is asking retailors that carry Ivanka Trump’s Collection to boycott the products. These retailors include such stores as; Macy’s, Nordstrom, Amazon, Lord & Taylor, Marshalls, Zappos, etc. She is counting on people to vote with their money. The theory is that, even if sales are not hurt, reputations can be damaged.

An example of this theory was with Nike in the 1990s. It was revealed that they were using child labor and that resulted in a boycott. The goal was to create a blow to their reputation, if not to their bottom line. There was an outcry, Nike’s image was damaged, and sales were hurt. Another notable example of the “Walk Of Shame,” was with Dior. Their creative director and designer, John Galliano, was exposed as an anti-Semite after he made remarks in public. Dior fired him after a public storm of criticism.

Does Voting With Your Wallet Work?

For me, the most notable example of economics affecting politics was in South Africa. The ruling white minority didn’t just wake up one day and realize that their legal discrimination against the black majority was wrong; extreme economic pressure was applied to twist their arms. This started first with the consumer who “voted” not to buy products from companies who “supported” white South African companies. They spoke loudly.

Here in the U.S., people started to put pressure on American companies that had economic ties to companies in South Africa and could therefore benefit from apartheid. The pressure was felt and institutional investors, like banks, universities and pension funds, started to disinvest in South Africa. The movement started in the 60s, when the United Nations passed a resolution establishing a Special Committee against apartheid calling for economic boycotts and other sanctions. The movement didn’t gain real traction until the 1980s.

I was working at Chase Bank as the movement took hold. I remember being at a shareholder’s meeting in the early 1970s, which was conducted by our then Chairman, David Rockefeller. He indicated, in response to hecklers in the meeting, that Chase was not going to do business with South Africa until their discriminatory policies ended. I was impressed that the collective global shareholders were voting with their money. It worked. In 1986, the U.S. implemented the disinvestment campaign incorporating it into federal legislation. This all led to putting enough pressure on the South African government to start negotiation that ultimately led to the dismantling of the apartheid system.

As a side note, Britain never joined the movement. They said that they thought that the economic sanctions were “unconstitutional.”

The “bottom line” to all this? Economic pressure is real. So, get out and vote… with your wallet!


Sunday, February 26, 2017

Is The Dow Jones Industrial Average Index Misleading Or Meaningless Or Both?

Like many of us, I thought that the Dow Jones industrial Average index (DJIA) is comprising thirty of the most important companies of the United States of America by using their market capitalization. I was completely wrong. There is no correlation between the importance of the companies and the index.

According to Wikipedia, DJIA is criticized for being a price weighted average, which gives higher-priced stocks more influence over the average than their lower-priced counterparts, but takes no account of the relative industry size or market capitalization of the components. For example, a $1 increase in a lower-priced stock can be negated by a $1 decrease in a much higher-priced stock, even though the lower-priced stock experienced a larger percentage change. In addition, a $1 move in the smallest component of the DJIA has the same effect as a $1 move in the largest component of the average.

Journalists have been using the DJIA as THE indicator of the strength of 30 of the largest companies in the United States. Size matters for the selection of the companies. Why does it not matter for the weighting of those companies?

Analyzing the composition might be an eye opener!

God bless Goldman Sachs!

Among the 30 companies composing the DJIA index, Goldman Sachs has the lion share. Yes, tiny Goldman is approaching a record $ 100 billion market capitalization. It had a record price yesterday. But few investors might know that 8.32% of the index is represented by Goldman Sachs. Yes, you read well. Each time an investor buys a dollar of the index one twelfth of that money is invested in Goldman Sachs shares. This is pure bonanza, but might explain some of the market value of Goldman. This is confirmed by the fact that an important portion of the twenty largest shareholders of Goldman Sachs are Exchange Traded Funds or indexed funds.

But it is also totally unfair: it gives a structural advantage to Goldman Sachs vis-à-vis its competitors of Wall Street. The next bank, JP Morgan Chase (#16) is only gratified of a 3.01% share while its market capitalization is $ 327 billion. With three times the market cap, JP Morgan Chase is only weighted as 40% of Goldman Sachs. In total, the four companies representing financial sector only represents 16.83% of the DJIA, contrary to conventional wisdom.

What about General Electric?

I do not want to give a heart attack to my former boss and friend, Jack Welch, and my former GE colleagues. However, General Electric is # 30 out of #30. The least important company of the Dow Jones. The fact that it would have a $ 270 billion market capitalization (2.7x Goldman) is irrelevant. It is gratified with a share of 1.10%. When one dollar goes to the DJIA, 8.3 go to Goldman and 1 to General Electric.

Should #8 McDonald be worth 4.20% ($ 105 billion) when Coca Cola ($ 177 billion) # 26 is worth 1.34%. The bottom ten include Microsoft, Intel and Cisco. Why would United Healthcare be # 5 with 5.46% when Pfizer is # 28 with 1.11%.

Telling the truth

No, the index is not manipulated. It has a methodology that explains those aberrations. The DJIA, by not being based on market capitalization, does not represent the substance of the components from an investor’s viewpoint. . It should therefore not be the bell weather of Wall Street. The media, and particularly the Wall Street Journal, have made the DJIA what it is not: an index representing the values of 30 American corporations.

Time for the SEC to look whether the DJIA might need to be more transparent to investors? Maybe the media should reconsider this index that, in fact, is meaningless.


10 Things Smart People Won't Say

There are some things you simply never want to say at work.

These phrases carry special power: they have an uncanny ability to make you look bad even when the words are true.

Worst of all, there’s no taking them back once they slip out.

I’m not talking about shocking slips of the tongue, off-color jokes, or politically incorrect faux pas. These aren’t the only ways to make yourself look bad.

Often it’s the subtle remarks—the ones that paint us as incompetent and unconfident—that do the most damage.

No matter how talented you are or what you’ve accomplished, there are certain phrases that instantly change the way people see you and can forever cast you in a negative light. These phrases are so loaded with negative implications that they undermine careers in short order.

1. “This is the way it’s always been done.” Technology-fueled change is happening so fast that even a six-month-old process could be outdated. Saying this is the way it’s always been done not only makes you sound lazy and resistant to change, but it could make your boss wonder why you haven’t tried to improve things on your own. If you really are doing things the way they’ve always been done, there’s almost certainly a better way.

2. “It’s not my fault.” It’s never a good idea to cast blame. Be accountable. If you had any role—no matter how small—in whatever went wrong, own it. If not, offer an objective, dispassionate explanation of what happened. Stick to the facts, and let your boss and colleagues draw their own conclusions about who’s to blame. The moment you start pointing fingers is the moment people start seeing you as someone who lacks accountability for their actions. This makes people nervous. Some will avoid working with you altogether, and others will strike first and blame you when something goes wrong.

3. “I can’t.” I can’t is it’s not my fault’s twisted sister. People don’t like to hear I can’t because they think it means I won’t. Saying I can’t suggests that you’re not willing to do what it takes to get the job done. If you really can’t do something because you truly lack the necessary skills, you need to offer an alternative solution. Instead of saying what you can’t do, say what you can do. For example, instead of saying “I can’t stay late tonight,” say “I can come in early tomorrow morning. Will that work?” Instead of “I can’t run those numbers,” say “I don’t yet know how to run that type of analysis. Is there someone who can show me so that I can do it on my own next time?”

4. “It’s not fair.” Everyone knows that life isn’t fair. Saying it’s not fair suggests that you think life is supposed to be fair, which makes you look immature and naïve. If you don’t want to make yourself look bad, you need to stick to the facts, stay constructive, and leave your interpretation out of it. For instance, you could say, “I noticed that you assigned Ann that big project I was hoping for. Would you mind telling me what went into that decision? I’d like to know why you thought I wasn’t a good fit, so that I can work on improving those skills.”

5. “That’s not in my job description.” This often sarcastic phrase makes you sound as though you’re only willing to do the bare minimum required to keep getting a paycheck, which is a bad thing if you like job security. If your boss asks you to do something that you feel is inappropriate for your position (as opposed to morally or ethically inappropriate), the best move is to complete the task eagerly. Later, schedule a conversation with your boss to discuss your role in the company and whether your job description needs an update. This ensures that you avoid looking petty. It also enables you and your boss to develop a long-term understanding of what you should and shouldn’t be doing.

6. “This may be a silly idea …/I’m going to ask a stupid question.” These overly passive phrases instantly erode your credibility. Even if you follow these phrases with a great idea, they suggest that you lack confidence, which makes the people you’re speaking to lose confidence in you. Don’t be your own worst critic. If you’re not confident in what you’re saying, no one else will be either. And, if you really don’t know something, say, “I don’t have that information right now, but I’ll find out and get right back to you.”

7. “I’ll try.” Just like the word think, try sounds tentative and suggests that you lack confidence in your ability to execute the task. Take full ownership of your capabilities. If you’re asked to do something, either commit to doing it or offer an alternative, but don’t say that you’ll try because it sounds like you won’t try all that hard.

8. “This will only take a minute.” Saying that something only takes a minute undermines your skills and gives the impression that you rush through tasks. Unless you’re literally going to complete the task in 60 seconds, feel free to say that it won’t take long, but don’t make it sound as though the task can be completed any sooner than it can actually be finished.

9. “I hate this job.” The last thing anyone wants to hear at work is someone complaining about how much they hate their job. Doing so labels you as a negative person and brings down the morale of the group. Bosses are quick to catch on to naysayers who drag down morale, and they know that there are always enthusiastic replacements waiting just around the corner.

10. “He’s lazy/incompetent/a jerk.” There is no upside to making a disparaging remark about a colleague. If your remark is accurate, everybody already knows it, so there’s no need to point it out. If your remark is inaccurate, you’re the one who ends up looking like a jerk. There will always be rude or incompetent people in any workplace, and chances are that everyone knows who they are. If you don’t have the power to help them improve or to fire them, then you have nothing to gain by broadcasting their ineptitude. Announcing your colleague’s incompetence comes across as an insecure attempt to make you look better. Your callousness will inevitably come back to haunt you in the form of your coworkers’ negative opinions of you.

Bringing It All Together

These phrases have a tendency to sneak up on you, so you’re going to have to catch yourself until you’ve solidified the habit of not saying them.

What other phrases should be on this list? Please share your thoughts in the comments section below as I learn just as much from you as you do from me.


Saturday, February 25, 2017

Why Trump's Travel Ban Is Bad For Business

As the leader of a company that makes euphoric ice cream, I sometimes feel a bit more Willy Wonka than your average CEO. We play with our food. We wear a lot of tie dye. Our board is led by activists, most of whom have been arrested sticking up for something they believe in. And we offer yoga classes weekly at our office.

But don’t let our hippie roots or quirky culture fool you. Our business started 39 years ago with one ice cream shop in a renovated gas station in Burlington, Vermont. Today, in partnership with our parent company Unilever, we are a global, multicultural, multinational company doing business in almost 40 countries around the world. This didn’t happen by accident. It’s the result of a committed global team of business women and men who have taken a small American company to the four corners of the earth. A strong focus on innovation across all aspects of our business, from our products to our social mission, is the key to our sustained success. The fuel that drives that innovation is our commitment to create diverse teams that value and foster differences of opinion, points of view, and celebrates different life experiences. This commitment to diversity and inclusivity is not just the secret behind our company’s success it is the foundation of our nation’s success.

It goes without saying that we all want to live and work in safe and secure communities. These are uncertain times that pose new risks for all of us, both at home and abroad. The problems we face as a free society are complicated and I don’t pretend to have the answers. However, I do know that banning people from predominantly Muslim countries, including refugees from war, is not the path to security. If anything, it undermines our moral authority as the leader of the free world. It erodes our reputation as a country committed to liberty and justice for all. And it robs our companies, universities, and hospitals from the innovators and job creators that will continue to make America’s economy the envy of the world.

Given the president’s experience as a CEO, it was alarming that he would slam the front door of our nation on potential employees and employers who sought legal entry into the U.S.

That’s why the Executive Order barring citizens from predominantly Muslim countries is so threatening to our country’s business community and economy at large. Given the president’s experience as a CEO, it was alarming that he would slam the front door of our nation on potential employees and employers who sought legal entry into the U.S. If I indiscriminately stopped hiring people simply because they came from a particular place, I’d be putting my global business at a competitive disadvantage. Yet that’s exactly what this order would do to our country and our economy.

More meaningfully, the proposed ban is a direct assault on our country’s values of inclusion and respect. I am proud to join other CEOs—from the entertainment, coffee, automotive, tech and gaming industries, to name a few—in denouncing religious discrimination under any guise. As business leaders we have the right and the responsibility to speak out against injustice and to create a more dynamic and inclusive economy.

I am an optimist at heart. I am encouraged by the growing list of companies and CEOs who’ve spoken out to defend the values on which our nation was founded—values that have made our companies the engines that drive the world’s economy. And while we must remain vigilant against those who seek to hurt us, we must not sacrifice our ideals in the process. Our companies and our economy depend on it.


Friday, February 24, 2017

Wall Street Agent or Responsible Chair?

The Education Secretary appears uneducated about public education. The Office of Management and Budget nominee didn't notice his full-time nanny in the house when it came time to account for household employees on his taxes, and doesn't believe in funding government programs. The Treasury Secretary found treasure in the misfortunes of those he foreclosed upon as a banker. Next to this, the Trump administration may figure it can slip by nominee Walter "Jay" Clayton to chair the Securities and Exchange Commission Chair while the public is rubber necking more controversial nominees.

What there is to see with Clayton isn't comforting. He works for Sullivan & Cromwell, one of the clutch of K Street law firms who argue that Washington should go easy on Wall Street. Goldman Sachs is one of Clayton's major clients; and Clayton's spouse works for Goldman Sachs. He's also represented several major financial firms guilty of mortgage securitization fraud. As a Goldman attorney, he helps stack the deck of Goldman alumni, (which is starting to look like it should be renamed Government Sachs), joining National Economic Council Director Gary Cohn, Treasury Secretary Mnuchin, senior advisor Steve Bannon, and others.

A rational Senate would ideally advise the Trump administration that it could do better if it truly wants to "drain the swamp." It could nominate an enforcement veteran or an investor advocate.

What's tough to see in the Clayton nomination is also discomforting. Why him? Sullivan & Cromwell boasts many notable banking attorney such as H. Rodgin Cohen; was Clayton recommended as a reliable agent? Clayton has published roughly zero articles exclusively under his name. (He has co-authored a few.) Why the lack of interest in public discourse? Does he think an opinion could antagonize a potential client? Given his relative youth, (he's a 1988 University of Pennsylvania graduate) will he spin back through the revolving door to a better office at the firm?

What's seen and unseen makes the Clayton confirmation hearing important. Senator should insist on clear affirmations of key policy goals. Dismissing questions because he needs to study the issue should disqualify him, as the nation can't afford on-the-job training. Deflections to "work with the committee" on the issues should also disqualify.

Here are some of the key areas senators can ask to decide whether a Clayton-chaired SEC will serve the American investor and hold Wall Street accountable.

DISCLOSURE

Burden

Under the previous chair, the SEC embarked on a review of what corporations must disclose to investors, predicated on the concept that investors were burdened by too much information. Yet the only expressions of this burden came from issuers, not investors. In fact, more than 1.2 million investors have sought more information about political contributions by corporations. Some other investors seek information about the environment, the workforce, corporate tax loophole participation and more. Moreover, search engines along with the emergence of Big Data show the power of analysis to uncover important, revealing trends and information. Scandals abound because of non-disclosure. Will you continue the SEC's effort to reduce disclosure?

Political spending disclosure

Regarding the 1.2 million investors who have petitioned the SEC to draft rules requiring firms to disclose all their political spending, what are your views? Do you think shareholders should be able to know how their investments in corporations are deployed on political issues?

Materiality

Disclosure turns on what's material. The Financial Accounting Standards Board proposes a radical change to the definition of materiality. Under their definition, instead of information that "could" affect an investor's view being deemed material, materiality will now mean information that "would" definitely affect investor decision making. Further, FASB recommends the standard be a legal, not an accounting, determination. That means the firms' counsel will referee whether or not a firm should disclose information, not the firm's independent auditor. In short, this new definition will allow companies to reduce disclosure if they choose to. Do you support FASB's new concept of materiality?

Buybacks

Instead of increasing investment, corporate America has used more than $3 trillion dollars in the ten years ending in 2013 to purchase their own stock. Studies show that these buybacks may serve to increase the share price just as senior executives exercise their stock options. Do you believe the SEC should collect data on the timing of option exercises and buybacks to ensure that CEOs aren't undermining basic decisions such as corporate investment so as to gain more compensation?

ENFORCEMENT

Waivers

Waivers from mandatory penalties following misconduct have become the norm. Do you believe that consideration of waivers for mandatory penalties are part of the SEC's enforcement arsenal that can deter bad behavior? If so, do you think waivers should be the exception, or the rule?

Too Big To Jail

Sullivan & Cromwell defended major banks, such as HSBC, that committed massive misconduct. When defending HSBC, your firm helped convince the Department of Justice, in consultation with the Federal Reserve and Treasury, that indictment of this mega-bank would lead to contagion throughout the financial sector. After Attorney General Eric Holder used similar thinking in testimony, this became known as the "too big to jail" theory. Do you think some banks are too big to jail? Will you weigh the size of a bank when you consider penalties the SEC applies after findings of such misconduct?

Individual accountability

The SEC fines companies as its main enforcement penalty. But companies don't commit misdeeds; individuals do. And penalties aren't paid by culpable executives at these wayward firms; their shareholders who certainly didn't conspire in the conduct do pay. What is your philosophy of enforcement as it relates to individuals?

Bribery

You've written about the Foreign Corrupt Practices Act, focusing on the compliance burden. The Chair of the SEC, however, will need every tool including the FCPA to combat serious conflict of interest problems. For example, the SEC found serious bribery problems in China by JP Morgan. Do you favor lightening currently required compliance with this foreign bribery statute?

MISC RULEMAKING

FSOC

President Trump signed an Executive Order directing the Treasury Secretary, as chair of the Financial Stability Oversight Council, to identify Dodd-Frank rules that should be rolled back. He cited the law's impact on loan-making, despite the rise in loan-making reported by the FDIC. In your purview, the Dow has recently hit record highs, signifying some health on Wall Street. FSOC members currently are largely Obama appointees. You would be one of the few Trump appointees. Can you name some Dodd Frank rules that should be eliminated, why, and why elimination would help protect investors?

CEO Pay Ratio

The simplest of Dodd Frank's rules calls for publicly traded companies to disclose the CEO's pay as a ratio of the firm's median-paid worker. It will help investors "unit-price" shop CEO pay to easily check if one firm is wasting money on a CEO relative to a peer. Naturally, CEOs would rather not face that investor scrutiny and the political contest leading to final rule-making spanned many years. In fact, it's not over, as acting Chair Piwowar opened an informal comment period in February, apparently presaging his intent to nullify the rule. Do you think investor understanding of CEO pay is important? Do you think the SEC should re-open a finalized regulation mandated by Congress?

Conflicts Of Interest

Sullivan & Cromwell's clients are America's individual elites along with giant corporations. The firm doesn't represent seniors evicted from their homes owing to reverse mortgage scams; it represents the reverse mortgage firms. It doesn't represent shareholders filing resolutions; it represents the issuers contesting them. Your client list means that you have been in constant conversation with an insular demographic of massive banks over the course of your career. The Chair of the SEC requires that the chair understand and represents the interests of average American investors. Trump advisor Gary Cohn recently noted that personnel is policy, a view that many in Washington share. How will you make sure the interests of average investors is central to your decision-making?


Economic Impact: Women, Monetary Worth, and the Role of HR in Enabling Financial Equity

What does worth mean to you? That is the question Amanda Steinberg, poses in her new book, Worth It: Your Life, Your Money, Your Terms. Steinberg is a serial entrepreneur, CEO/Founder of WorthFM, a practical savings and investment platform for women, and founder of the brilliant financial advice website for women, DailyWorth. After finding herself in debt from living the perfect life she thought she wanted based on society's definition of worth, Steinberg hit rock bottom. She clawed her way out of a life that wasn't working for her and into the next phase of her life, one where she decided what worth would mean to her.

The journey to transformation is never easy and seldom a straight line. Steinberg's book gives readers an important tool: the ability to accelerate the journey from financial paranoia to financial fluency in a practical way. Instead of fixing women, the book works with the readers in a language that makes sense for the context in which a woman lives and works.

Transformation, one in which a new paradigm permanently replaces a former paradigm, requires focus on the individual change journey. Prosci's journey of transformation starts with 'awareness' that change is afoot, that the current way of being no longer works within the environment in which it resides. The next stage, personal desire, is achieved when the person decides that she wants to participate in the change. The stage that follows is where the change is actively sought through new knowledge and enablement. Transformation is sustained at the final stage, when the culture, policy, and practices that define the world around the person are set up to validate the new way of being. Only at this stage can transformation be sustained because the world around you is demonstrating that the new paradigm is now mainstream.

State of women and personal financial worth

Noting the L'Oréal marketing message, "I don't mind spending more...because I'm worth it," Steinberg begins her book by analyzing how a woman's worth is tied to the material and financial wealth she consumes, and more importantly, displays to the world. The book leads us through defining self-worth on our own terms and using that definition as a platform to gain control and freedom in financing the rest of our lives.

The first step of transformation is to start from where you are. Worth It's biggest impact is that Steinberg can meet each of her readers from where they are starting their financial transformation because she has been at most of those stages herself. From both a place of empathy and actual experience, by the end of the book, the reader has experienced that needed catalyst and change tools from which she is able to stop working for money and instead make the kind of decisions that enable money to work for her. Money stops becoming a way we parade our perceived worth to the world and instead becomes a funder for the lives we want to lead.

The financial worth of many industries resides in the hands of women. Women make up 80% to 90% of most buying decisions. Analyzing years of data collected from readers of TheDailyWorth, Steinberg found that women were heavily focused on managing money in the short-term, focusing on household finances. While most women were managing or co-managing their long-term investments, they claimed a novice-level understanding or they relied on financial advisors and had little insight or understanding into the decisions being made. That means a woman is either relying on someone else to manage her long-term financial health or it isn't happening at all. That has to change. "Women are different than we were 50 years ago. Our lives are not defined solely upon our place in our family. We have jobs, we are making money. If we can't manifest this kind of power in throughout our lives, we are still reliant on other people," says Steinberg.

Even if women could invest it, they couldn't earn it

There are countless well-meaning programs in place to help women negotiate for more money during the hiring process. There are an equal number of programs aimed at 'empowering' women to self-advocate for promotions and raises. Yet, who can forget Satya Nadella, the newly appointed Microsoft CEO at the time, telling women at the Grace Hopper Conference, the largest event of its kind focused on increasing and enabling women in technology fields, to trust the system when it came to achieving pay equity.

It's easy to blame women for not managing money better. Maybe we women are too distracted with the nitty-gritty of working all day at home or in the office and then working all night, again, at the office or at home. Steinberg rightly points out that women are not the problem. Who or what is at fault? The system.

The challenges in the system status quo do not stop with compensation packages. In addition to discovering that women in large multi-national corporations make 75% of what men get paid, Procurement Leaders, in partnership with Forbes, found considerable disparity in high-paying, high-influence roles continues to exist. The 2017 study found that men fill 90% of senior roles while holding 45% of entry-level jobs.

Nadella is not a bad person nor is he an irresponsible leader. He grew up in a system that has norms. Norms that determine who gets paid what. His awareness of the problem happened immediately after making those unfortunate remarks. Disparity in the worth of compensation packages among the genders is a symptom of an antiquated system that favors one population, white males, over all others. And, with the current pace of change, women's salaries will not be on par with men until at least 2085.

While disparity in compensation worth could easily be construed as a philanthropic topic categorized as a women-only issue, the economic impact tells us otherwise. While women hold significant consumer buying-power, the potential to add significant growth to the global economy can be found in the compensation packages they are awarded. While women will contribute $18 trillion to the global economy by 2018 according to EY, the real impact comes from righting the wrong of pay disparity. If women were paid on par with men in the workforce, a staggering $12 trillion would be added to the global economy today. According to McKinsey, that equals more than the combined GDPs of the UK, France, and Japan.

Role of HR in creating economic equity

While it's easy to blame women for not learning how to negotiate better, the hard part is transforming the system and the unconscious bias of its inhabitants. Yet, that is exactly what needs to happen if women are going to fulfill their ability to equally contribute to the world around them.

Leaders from many companies, particularly in the technology industry, publically shared the analysis of their own pay disparity. While others, including SAP and Intel, have found pay parity in their workforce while others found challenges regarding pay disparity and their corrective actions plans. And even more leaders have committed to increase both the representation and pay equity in their businesses via government-led transformation programs targeting technology businesses. This is a good thing, but only if it leads to results.

Pay equity laws have been in place in the United States since 1963 with many states having their own legislation decades prior. Massachusetts, an early leader in pay equality, passed its first pay equity act in 1945. Last year, bay state governor, Charlie Baker, signed an update to the law making it illegal for HR departments to ask for salary history and forbidding open discussions about earning among colleagues. That law is expected to take effect in 2018. While the new Massachusetts law, and many that have followed in other states, provide more clarity, the challenge is that these laws remain too fuzzy for most HR departments to implement. That is no excuse.

HR departments have analyzed talent pools like marketing executives analyze buyers in the market. They have learned that alignment between personal and corporate culture are critical in the selection to join and stay at a company. The cultural brand has become the golden carrot that attracts and retains the best talent. For women, that is not enough nor has it ever been. Women want a great culture and to be paid fairly.

HR has the opportunity to not only conduct analysis into pay disparity in the workforce; they must also lead the charge in transforming how decision-makers decide on compensation worth. The analysis provides the much needed awareness catalyst for HR to share with executive-level decision-makers who determine cultural values and organizational priorities. Rather than investing heavily in programs designed to 'fix' women into displaying masculine gender traits that often backfire, the real opportunity for HR can be found in creating a new paradigm to eliminate the bias associated with salary decisions made by those in charge, at every level of the business, starting with mid-level managers who hold the most power for the majority of the organization's workforce.

The first step HR should take is simple to design and yet extremely difficult to implement. "HR's most critical role is to change the corporate narrative about money, wealth, and financial health," says Steinberg.


Thursday, February 23, 2017

Consumer Watchdogs Wake Up As Trump Dismantles Protections

Kelly Lewis is worried.

With a controversial new administration in power, she’s concerned that consumers like her will suffer. And for good reason. Corporate cheerleaders have been appointed to lead federal agencies dedicated to consumer protection. Much-needed regulations are about to be unceremoniously rolled back.

“I don’t think anyone will serve their customers better,” says Lewis, a guidebook publisher and entrepreneur.

Her misgivings are shared by many Americans, regardless of their political persuasion. A sense of dread seems to be sweeping the country ― a well-founded premonition that essential consumer protections are on the verge of being abandoned. The feeling is being fueled by the heated rhetoric of newly-elected politicians and their noisy surrogates who shout down any dissenters.

“There is a real reason to be concerned about how the government will protect consumer rights,” says Chris Dore, a partner at the consumer class action law firm Edelson PC. “Taking the teeth away from agencies like the Consumer Financial Protection Bureau, Federal Trade Commission and Federal Communications Commission, poses a significant risk to how corporations will treat consumers. The rollback of regulations combined with a lack of enforcement will create an environment that will encourage companies to not only cut corners but blatantly take advantage of consumers to pad the bottom line.”

But while these may be trying times, they are not hopeless times. A strong net of consumer protection is beginning to unfold, comprised of advocates, attorneys and private groups. Together, they may not be able to replace a collection of soon-to-be neutered federal agencies, but they can help. So can you.

Watchdogs are waking up

There’s a sense among traditional watchdog groups (including, ahem, traditional media organizations) that times are changing. And they are slowly waking from an eight-year slumber.

You don’t have to work in a newsroom to feel the collective sense of urgency. Traditional service journalism is enjoying a resurgence the likes of which hasn’t been seen in a generation. Consumer advocates feel energized by the thought that government may yield to corporate interests without a fight.

Part of the challenge, at least for now, is separating the talk in Washington from the real threat. Simply saying you’ll get rid of the Consumer Financial Protection Bureau, for example, doesn’t make it so. Nor does it necessarily translate into a surge of financial service-related complaints. It’s a long, drawn-out process that moves at the glacial pace of government.

The most effective watchdogs aren’t waiting for the collapse of any federal agency. They’re speaking up now, hoping to avoid a consumer apocalypse. But beyond sounding the alarms, there’s not much more they can do than to wait for their first patient to arrive. That probably will happen soon.

Advocates for hire

But some companies also see an opportunity. Take Copatient, a service that helps negotiate your medical bills.

“Most consumers do not even know their rights when it comes to medical bills,” says Copatient CEO Thomas Torre. “Medical bills are big, complicated and expensive, and most people just pay them not realizing their rights as a consumer of healthcare.”

In fact, 8 in 10 bills reviewed by Copatient reviews contain savings opportunities related to errors or overcharges. Once errors are identified, the company helps consumers negotiate with the hospital or physician. On average, Copatient claims to save patients 40 percent ― or $3,000 on their medical bills.

Of course, Copatient isn’t free. It operates on a contingency basis, taking 35 percent of the money it saves its customers.

Another place where there’s both money to be made ― and consumers to be protected ― is air travel. Companies such as AirHelp offer their services to passengers who have been delayed or had their flights canceled in Europe, where a consumer protection rule such as EU 261 applies.

EU 261 requires airlines to offer cash compensation to delayed passengers in many instances. The regulation can also apply to passengers flying to the United States. AirHelp charges a 25 percent service fee for most of the cases it advocates on behalf of travelers, although the costs may vary.

DIY advocacy

Consumers are not waiting for their worst fears to be realized. They’re using all of the resources at their disposal to force companies to do what they promised and to protect their rights. But it’s not an easy path.

“There’s no magic elixir you can swallow to protect your customer rights,” says Cheryl Reed, a spokeswoman for Angie’s List, a business referral site. “But it’s not as hard as you might think to become an empowered consumer. It will take some time and effort, though.”

Marci Bloem decided to take matters into her own hands when she ran into trouble with DirecTV recently. AT&T, DirecTV’s parent company, claimed she owed it $167 for a gateway device, “when in fact I returned it when we switched servers in 2015,” she says.

Bloem appealed to AT&T in writing, but it stubbornly insisted that she pay her bill. The case dragged on for more than a year-and-a-half. Bill collectors began harassing her. Collections agencies got involved.

Finally, she decided to become her own advocate. She sent a brief, polite email to an AT&T executive whose name she found online. (I list the names, numbers and email addresses for AT&Ts execs on my consumer advocacy site.)

“Within one hour, AT&T phoned me two times and said they had found the gateway and I didn’t owe them anything,” she says.

She’s part of a trend. A more aggressive watchdog media, private companies and fed-up consumers are taking matters into their own hands. And sometimes, they’re winning. Maybe that’s what voters had in mind in the last presidential election ― that no one can do a better job of protecting consumers than consumers and private companies. Indeed, that the government has no business protecting consumers.

But the message seems to be getting lost on people like Lewis, the guidebook publisher. She isn’t sitting around to wait for the protections she’s relied on to be removed. Like many consumers, she’s discouraged by the direction the country has taken, if not also despondent.

“This is a loud signal for me to leave the United States,” she says. “I am planning on moving abroad.”

Christopher Elliott specializes in solving seemingly unsolvable consumer problems. Contact him with your questions on his advocacy website. You can also follow him on Twitter, Facebook and Google or sign up for his newsletter.


Wednesday, February 22, 2017

Hyperinflation In The US -- A Real Or Imagined Threat?

After seeing the latest string of events unfold right before our eyes, many are openly pondering whether we may see hyperinflation hit the US shores. But rather than ponder Trump’s latest executive orders or over the top pronouncements, let us first look at what hyperinflation is and how it works.

What Is Hyperinflation?

Hyperinflation is simply inflation that has grown out of control. The phenomenon is brought about by several factors although increased money supply is often the most likely culprit.

Indeed, when monetary supply goes unchecked, the price of basic goods goes up, and the currency loses its value. So, in a nutshell, if the conditions are right out of control inflation really can happen. Interestingly, there are many roads to rapid increases in prices. Let’s take a look.

Other Causes of Rapid Inflation

War is one of the most common causes of hyperinflation. Investors have little confidence in a currency whose country is at war whether the war is political or economic. A loss of investor confidence can cause a rapid drop in currency values. When a currency falls quickly enough, other problems soon arise. Not the least of which is mass bank withdrawals.

Run on Bank Funds. If residents lose confidence in their nation's paper notes, they often withdraw bank funds en masse. However, this doesn’t just impact the banks, it can tank an economy in a hurry.

Furthermore, given that most banks only keep 5% of their total deposits on-hand, if enough depositors request their funds at the same time it wouldn’t take long before banks run out of cash. As banks rush to sell assets and call in loans held by members, panic would ensue triggering more waves of bank withdrawals. The only way for banks to fulfil requests in such an event is to sell assets, but far below market rates, and this affects both cash and asset values.

Bank Closures. Mass withdrawals eventually lead to bank closures. In the past, this has led to losses so large that anyone who wasn’t quick enough to withdrawal their savings lost everything. Indeed, a similar scenario played out during the Great Depression. And as we know from that bit of history when banks suffer the population experiences even greater turmoil.

Travel throughout the US Grinds to a Halt. Interstate travel is crucial for business. When travel stops for any reason, the business community is significantly affected. Firms that operate in different states may be forced to shut down, and since business is a key economic driver, the effects will be felt immediately.

How a Depression in the US Could Play Out

If we were to experience an economic collapse it would happen quickly. Indeed, financial meltdowns happen so quickly that most businesses, investors, and households scarcely have time to act.

If ever the US economy becomes so fragile that consumers decide their money is safer under the mattress than in the banks, get ready. It could happen in this manner.

  1. Rapid Increase in Gold Prices. As the dollar loses value, gold prices will inevitably skyrocket. Since the purchasing power of gold rarely goes down, gold and other precious metals perform well in most any type of economic contraction. And as more people rush to buy gold, it will only rise in value.
  1. Rise in the Price of Other Precious Metals. As pandemonium spreads and gold prices go up, the value of other precious metals will increase as well. Many investors will be in a hurry to invest in metals that do not lose value before the dollar value can get any worse. Just like in the case of gold, the rise in demand will result in an increase in precious metal prices.
  1. Food Shortages. Another aspect of depressions is they often lead to food shortages. As panic sets in, households attempt to stock up on food and other products needed for day to day survival. But instead of purchasing a week's worth of groceries, when under duress many shoppers purchase an entire month worth of groceries, if not more.
  1. Violent Outbreaks. It’s well documented that deep recessions fuel crime. Namely, depressed economies lead to mass youth unemployment. And the number of idol youth grows large enough they may take out their frustrations on those around them. And as basic necessities become harder to find large numbers of young adults organize themselves into groups and begin riots and looting, which almost always ends in violence.
  1. Worldwide Panic. Were a scenario such as this one to play out in the States, the situation could quickly lead to recessions in other economies that do business with the US. Any sign of domestic recession can, therefore, cause panic elsewhere in the world.

Who Could Benefit from Depression in the US?

China. Asia's largest economy has already shown a propensity to buy large sums of gold. Hence, If a major depression were to break out in the US we could expect China to quickly sweep in and increase their reserves by acquiring record quantities of gold. Doing so could offset at least some of the losses that come about as a result of decreased manufactured goods demand in the US.

Russia. While once the second most powerful nation in the world, Russia’s Soviet fortunes faded away after the Cold War. However, Putin’s recent actions reveal a nation in a relentless pursuit to reclaim their former glory. His moves also show that Russia is not above flexing their military might to achieve their ends.

If the US economy collapses, Russia would likely do two things 1) look to replace US trade with trade from several other countries 2) exert their muscle first on their closest neighbors before branching out and doing the same throughout the rest of Europe. If this is their intent, military motives could explain help explain their most recent gold acquisitions.

Other Rogue States. Rogue states that the US is currently odds with such as Iran, North Korea, etc. could benefit immensely from an American depression. Given that the poor state of economic affairs could weaken infrastructure in the States, most of America's resources would be tied up in the rebuilding process which would leave minimal resources to tend to the country’s national defense. As such, rogue nations could find themselves possessing a tactical advantage over the US.

Likelihood of a Collapse of the US Economy

While the likelihood of an economic collapse in the US is low, the current gold buying trends could be an indication that tough times are just on the horizon. That notwithstanding, there's no immediate cause for alarm. Of course, that's not to say that you shouldn't prepare for the worst and for the best.

After all, the country suffered quite a blow in 2008, and the economy may not be as resilient if a recession of similar magnitude was to reoccur.


Engaging PepsiCo's Top Leadership and a "New Deal" on Lifelong Learning

PepsiCo is a multi-billion dollar leader in consumer packaged goods sales, in part, due to its history of investing in employee and leadership development. Indra Nooyi, Chairman and CEO of PepsiCo, was kind enough to write the foreword to my book, Learning to Succeed: Rethinking Corporate Education in a World of Unrelenting Change. Nooyi writes, "At PepsiCo, we have established a comprehensive learning organization that values and prioritizes professional development for every employee throughout the company... our learning initiatives link directly to our company's strategic goals." This strategic approach is what I recommend, supported by frameworks and successful case studies, throughout Learning to Succeed.

Nooyi affirms that the concrete recommendations in Learning to Succeed are as applicable for a large-scale conglomerate like PepsiCo as for a small business seeking to stay competitive while in growth mode. "The book astutely maps...elements, such as C-suite sponsorship, structural innovation, and a cultural aptitude for change, while also pinpointing the roadblocks that organizations will need to overcome to become fully functioning learning organizations..." - Indra Nooyi, Foreword, Learning to Succeed.

Last semester, I taught an intensive course at Columbia on Organizational Strategy and Learning which reviewed and analyzed many of these same topics. The graduate students in my course are earning master's degrees in fields ranging from Enterprise Risk Management to Actuarial Science to Nonprofit Management to Strategic Communication. As part of these programs, they are learning market-driven functional skills and management best practices. In my course, in particular, we explored the competitive advantages companies can create by building strong talent development programs and aligning with strategic and operational priorities. To tie this to the "real world," I invited guest speakers in prominent positions at companies including BlackRock, McKinsey, JP Morgan, United Nations, and AIG, to engage with my students. These guests discussed issues in strategy, leadership, and talent development and facilitated dynamic exchanges with my students, who offered input from readings, case studies, and their own career experiences.

As the final guest lecturer of the course, Umran Beba, Chief Human Resources Officer at PepsiCo, joined us to discuss her career path and ascension to the C-Suite. She started at the company in her home country of Turkey, in the marketing department. "While I enjoyed the thrill of launching original campaigns, I decided to open up opportunity for myself by moving across departments," she said. She is now based out of PepsiCo's headquarters in Purchase, NY, and oversees human capital management and operations. She shared her experiences in such intimidating circumstances as attending leadership retreats as the only female in attendance--and how she used those trials as an advantage to develop her voice, her core values, and what she prioritizes as a leader.

As a reflective and productive scholar/practitioner, Beba codified and translated her experiences and recently contributed to publish a white paper for the World Economic Forum: "Realizing Human Potential in the Fourth Industrial Revolution: An Agenda for Leaders to Shape the Future of Education, Gender and Work." In it, the authors propose "a new deal on lifelong learning," urging the public and private sectors to adopt new models that support learning throughout career spans.

Columbia's School of Professional Studies is rooted in this new deal on lifelong learning as we continue to develop quality, practicum-based educational programming for all ages. We believe, as Beba and the leadership at PepsiCo have repeatedly communicated, that organizations like ours must continue to work together to enable ongoing learning and retooling at all stages of workers' careers.


Tuesday, February 21, 2017

Amazon Gets Heat Over Holocaust Denial Books

Amazon is coming under fire in Europe for peddling books that claim the Holocaust never happened amid a resurgence of anti-Semitism and other hate speech. 

Holocaust denial is a crime in France, Italy and Germany with penalties that can include prison. Amazon removed several books from its websites in those countries following an investigation by the London Sunday Times that found dozens of books denying the Holocaust for sale. Most of the books are self-published.

Books included “The Myth of the Extermination of Jews” and “Holocaust: The Greatest Lie Ever Told.” Most of the titles are still available on Amazon’s sites in the U.K. and U.S., where Holocaust denial is not a crime.

A spokesman for the Holocaust Educational Trust attacked the books as anti-Semitic and called Amazon’s sales of the books “shocking.”

“The Holocaust was one of the most well-documented and researched periods in history, yet over 70 years later, there are still those who deliberately deny, denigrate and belittle the memory of the Holocaust,” spokeswoman Karen Pollock told the London Times. “Holocaust denial is highly offensive and the intent is anti-Semitism, pure and simple.”

Gideon Falter of the Campaign Against Anti-Semitism in Britain complained to the Independent that Amazon standards “prohibit the sale of ‘offensive material’ but these titles are sold by Amazon.”

He added: “Anybody searching Amazon for books about the Holocaust, including children working on school projects, will inevitably be shown Amazon’s squalid cesspool of neo-Nazi titles.”

Holocaust deniers are enjoying a new popularity amid the rise of extreme nationalism. The bizarre and ugly phenomenon is explored in the 2016 film “Denial.” The movie stars Rachel Weisz as the real-life Jewish author Deborah Lipstadt, who was sued for libel by Holocaust denier David Irving. She was forced to prove in court that the Holocaust happened. Irving lost the case. 

The new pressure on Amazon comes amid demands that social networking companies such as Facebook and Twitter crack down on an increase of hate speech online.

Amazon has not made any comment about the controversy or why the company removed the books from certain European websites.


Sunday, February 19, 2017

How Trump's Environmental Policies Can Kill 220,000 Jobs And Eradicate Dozens of Species

This story has been condensed from a piece on Ecosystem Marketplace

US President Donald Trump and his cohorts in Congress have vowed to revive rural America by eliminating what he claims are burdensome environmental regulations, but the best that can be said about the initiatives launched so far is that they  might boost profits for some of the energy and agriculture interests that support Republicans on the House Resources Committee.

You can't, however, say they'll create more jobs than they destroy, because profits aren't jobs. In fact, they're often the opposite: companies save money by cutting jobs, and in this case, the jobs they cut will be those that pay people to plant trees, restore rivers, and turn soggy, unproductive farms into wetlands that filter water, purify air, and slow climate change.

Those jobs are part of a $25 billion "restoration economy" that directly employs 126,000 people and supports 95,000 other jobs - mostly in small businesses - according to a 2015 survey that environmental economist Todd BenDor conducted through the University of North Carolina at Chapel Hill.

That's more jobs than logging, more than coal mining, and more than iron and steel, as you can see here:

The restoration economy is already providing jobs for loggers across Oregon, and even some coal miners in Virginia, but it could disappear if the GOP environmental rollback continues. Here are 11 things you need to know to understand it.

1.   It's not Solar and Wind


The restoration economy is not to be confused with the renewable energy boom that employs 374,000 people in solar parks and 101,738 on wind farms. Like those, however, the restoration economy is part of a burgeoning "green economy" that's transforming forests, farms, and fields around the world.

2.   It's Government-Driven


State and federal governments helped the wind and solar sectors get off the ground, but both of those sectors are humming along on their own now because they provide a cost-effective way to produce electricity, which everyone needs.

The demand for restoration, however, isn't as automatic as the demand for electricity is, because most companies and even some landowners won't clean up their messes without an incentive to do so.

Economists call these messes "externalities" because they dump an internal responsibility on the external world, and governments are created in part to deal with them - mostly through "command-and-control" regulation, but also through systems that let polluters either fix their messes or create something as good or better than what they destroy.

Under the Endangered Species Act, for example, a local government that wants to build a road through sensitive habitat can petition the Fish and Wildlife Service for permission to do so. If permission is granted, it still has to make good by restoring degraded habitat in the same region.

3.   It's Often Market-Based


Pioneered in the 1960s, environmental markets offer flexibility in meeting commitments. That local government mentioned above, for example, can either restore the land itself, or it can turn to a "conservation bank".

These are usually created by green entrepreneurs who identify marginal land and restore it to a stable state that performs ecosystem services like flood control or water purification. They make money by selling credits to entities - personal, public, or private - that need to offset their environmental impacts on species, wetlands or streams.

At least $2.8 billion per year flows through ecosystem markets in the United States, according to Ecosystem Marketplace research.

4.   Infrastructure Also Drives Restoration


The federal government - especially the military - holds itself to high environmental standards, as do many states. Government activities alone support thousands of restoration jobs.

Government agencies are big buyers of credits, often to offset damage caused by infrastructure projects, but the link between infrastructure and restoration goes even deeper than that. In Philadelphia, for example, restoration workers are using water fees to restore degraded forests and fields as part of a plan to better manage storm runoff. In California, meadows and streams that control floods are legally treated as green infrastructure, to be funded from that pot of money. "Green infrastructure", it turns out, is prettier than concrete and lasts longer to boot.

Trump wants to "expedite" infrastructure roll-outs, and he can do so without weakening environmental provisions by removing unnecessary delays in the permitting process (see point 11, below).

5.   Markets Can Reduce Regulations


Nature is complex, and rigid regulations often fail to address that complexity, as environmental economist Todd BenDor makes clear when he points to regulations requiring the placement of silt fences in new subdivisions along waterways.

"They're supposed to prevent erosion, but they often fail or are put in the wrong places," he says. "Markets can simply enact a limit on erosion, allowing the landowner the freedom to be creative and efficient in any way they see fit in order to meet that limit."

Done right, environmental markets can replace overly prescriptive regulations, but they still require government oversight and regulation.

"Markets are entirely reliant on strong monitoring, verification, and enforcement of limits," says BenDor. "Provisions must be made to ensure that, but in reality it's often a problem."

6.   Restoration Stimulates Rural Economies


In 2015, BenDor published a study called "Estimating the Size and Impact of the Ecological Restoration Economy", which found restoration businesses in all 50 states. California had the most, but four "Red" states filled out the top five: Virginia, Florida, Texas, and North Carolina. Last place went to North Dakota.

By their very nature, restoration projects are located in rural areas, and a study by Cathy Kellon and Taylor Hesselgrave of EcoTrust found that Oregon alone had more than 7,000 watershed restoration projects, which generated nearly 6,500 jobs from 2001 through 2010. Many of those jobs went to unemployed loggers.

"The jobs created by restoration activities are located mostly in rural areas, in communities hard hit by the economic downturn," report authors wrote. "Restoration also stimulates demand for the products and services of local businesses such as plant nurseries, heavy equipment companies, and rock and gravel companies."

7.   It's been Mapped


Last year, the US Department of Agriculture's Office of Environmental Markets, together with Ecosystem Marketplace publisher Forest Trends and the Environmental Protection Agency, published an online Atlas of Ecosystem Markets, which you can access here.

8.   The Jobs are Robot-Proof


Environmental regulations didn't kill coal; natural gas and renewables did. Regulations didn't stifle the western oil boom, either; that was low energy prices. Even if Trump & Co do prop the coal sector, jobs won't go to people; they'll go to machines, which took most of the jobs America lost in the last decade.

BenDor's research shows restoration jobs are evenly divided between white-collar planners, designers, and engineers and the green-collar guys doing the actual earth moving and site construction.

Almost all involve time in the great outdoors, and they can't be exported or done by robots.

9.   The Jobs are Cost-Effective


Because restoration work is labor-intensive, the money goes to people instead of machines, and every $1 million invested generates 33 jobs on average. Every $1 million invested in oil, on the other hand, generates 5.2 jobs per $1 million invested. In coal, the figure is 6.9 jobs.

10.  It Doesn't Stifle Business


Some industry groups claim the Endangered Species Act blocks development, but researchers reviewed 88,000 consultations between 2008 and 2015 and found that no projects had been stopped or even changed in a major way to protect habitat.

Even proponents of the system concede, however, that the permitting process is slow and tedious.

11.  It Can Be Improved


While the Fish and Wildlife Service administers credits for mitigation of endangered species, the Army Corps of Engineers approves mitigation credits for streams and wetlands, and they're notoriously underfunded. This leads to long and costly delays, according to unpublished research that BenDor conducted with Daniel Spethmann of Working Lands Investment Partners and David Urban of Ecosystem Investment Partners.

Delays are so costly, they argue, that companies in the restoration sector might be better off paying 50-fold higher permitting prices that would give the agencies the staff needed to properly process permits, akin to expedited building permits, rather than paying banks the interest on loans for land where environmental improvements are being held up.


Saturday, February 18, 2017

Pet Health Insurance

If you consider your dog or cat to be a member of the family, you are not a pet owner -- you are a "pet parent." There's a vast difference, according to Robert Jackson, CEO of HealthyPaws.com, a pet insurance provider.

Jackson's company, he says, provides health and accident insurance benefits to people who would "do anything" to save their pets. But "anything" can be expensive! The costs of an emergency surgery or a stay in intensive care could easily ring up a bill of $3,000 or more -- as I recently learned when my Yorkie needed surgery.

Pet health insurance is not designed to cover the ordinary annual costs of owning a pet such as vaccinations, health examinations and regular teeth cleaning, which, according to the American Pet Products Association, costs the average cat owner $196 and the average dog owner $233.

Should you consider buying health insurance for your pet? In recent years, it has become a far more respected product. Consumer Reports has studied the "best buys" of pet insurance, concluding that if you choose wisely, the odds are good that your policy will pay for itself at some point in your pet's life.

There are even websites such as PetInsuranceReview.com that compare premium costs and coverages on pet health policies. HealthyPaws.com consistently gets high ratings based on its pricing and reliable payment of claims.

If you're thinking about getting pet medical insurance, here are five things you should know:

--The cost of coverage depends on the age of the pet, the breed (and there is a category for mixed breeds) and your zip code. An online calculator on HealthyPaws.com gives instant quotes.

You can lower the premium by agreeing to pay a higher deductible or co-pay. A popular option at Healthy Paws is a $200 deductible with 80 percent coverage with a 20 percent copay. For a small, young dog, that works out to about $25 per month, which is automatically renewed on your credit card until you cancel.

--Not all costs are covered. Again, pet insurance is not meant for the ordinary annual costs of owning a pet. Annual heartworm tests and meds, shots and dental are not covered in most policies. But you are typically covered for expenses in case of an accident, emergency or illness -- including cancer, hereditary and congenital conditions, surgery, diagnostic treatments, prescription drugs and a long list of other potential costs.

--The costs of covered care are reimbursed. HealthyPaws has simplified the payment of claims with its own app. You can simply take a photo of the bill and upload it to submit your claim, which is reimbursed promptly. Jackson notes that in some emergency situations the company will work with the vet to pre-approve the costs and pay the bill directly to the animal hospital.

--Coverage starts 15 days after the application is approved. You don't need to send in your pet's medical records until you file a claim. Then the company will quickly check with the vet and reimburse you for your costs, after you have satisfied the deductible and made the co-payment.

--More tips: Buy insurance when your pet is young. Pets with pre-existing conditions cannot be covered, so it's best to buy when you first get your dog or cat. Also, while all breeds are covered, there is one major exclusion: A one-year waiting period for coverage for hip dysplasia for certain breeds such as German shepherds, prone to this condition. And you cannot purchase new coverage for this condition after the pet is 6 years old.

Is pet insurance worth the cost? That all depends on whether your furry friend leads a charmed life or whether its nine lives are marred by as many veterinary interventions. But unlike paying for an extended warranty on an appliance that can be replaced if it really breaks down, the costs of a pet illness are unlimited and potentially very expensive. And, as I now know personally, that's The Savage Truth.


Friday, February 17, 2017

Personal Finance Checklist At Age 50

In a youth-oriented culture, it is easy to feel a little over the hill by the time you turn 50. When it comes to building wealth though, your 50s are the prime of your life - a period when you have a chance to emerge from debt, enjoy your peak earning years and start to see your investments make a serious contribution to your net worth.

To take advantage of this crucial phase of your financial life, it is important to understand some key factors that can help you make the most of your 50s.

Personal finance checklist at age 50

As you look over your financial situation once you turn 50, here are some things you should attend to:

1. Shift more heavily from borrowing to saving

Early in your career, accumulated savings are likely to be modest and it seems you are taking out one loan after another: student loans, car loans, home mortgages, etc. By the time you reach age 50 though, you should have greatly reduced your debt burden. In its place, you should see a growing portfolio of retirement assets. This is the type of trend that can feed on itself: the more you retire your debt, the more of your monthly budget can go to savings rather than loan payments.

2. Estimate your Social Security benefits

The U.S. Social Security Administration will provide you with a free projection of your retirement benefits based on your career earnings so far. While this will remain subject to change based on your subsequent earnings, by age 50 you should have enough of a track record to get a sense of what contribution Social Security will make to your retirement income. This projection can also help you start to think seriously about the pros and cons of retiring early or working longer to achieve the maximum annual benefit.

3. Reassess your retirement goals

In addition to Social Security, look at your other retirement savings and see how much income they project to provide. Knowing where you stand will help you make more concrete plans about the future, including when to retire and what kind of lifestyle to expect.

4. Use catch-up retirement saving opportunities

Looking at your projected Social Security benefits and your savings accounts relative to your goals may tell you that you have some catching up to do. Fortunately, the government gives you some catch-up opportunities in the form off additional tax-deferred retirement contributions to 401(k) or individual retirement account (IRA) plans that you can make once you turn 50. Use this as an incentive to start making extra contributions.

5. Keep your asset allocation aggressive

People often feel their investments should get more conservative as they get older, but age 50 is too soon to throttle back to a less growth-oriented asset allocation. At that age, you are probably still more than a decade away from retirement, and still have an investment time horizon of some 30 or so years stretched out ahead of you. Plus, if you are contributing heavily to your retirement plans, this positive cash flow will help smooth out some of the volatility from growth investments.

6. Update your will

If you first made a will when you started your family, you might find things are radically different by the time you turn 50. Your kids may be on the verge of adulthood and your net worth may be substantially greater, so it is a good time to take a fresh look at what provisions you've made for your survivors.

7. Don't be shy about discounts

Turning 50 makes you eligible for AARP membership. Don't let that make you feel old - just look at the discounts available, and think of it as an advantage you've earned.

8. Take advantage of senior checking accounts

Some banks offer checking accounts for older customers that have no monthly fees. Eligibility is often set at age 50, and with free checking getting harder to find these days, signing up for one of these accounts can be another advantage of getting older.

9. Survey your career opportunities

Since these can be your peak earnings years, you should assess whether your current employer is the best place to capitalize on those years, or whether you could do better somewhere else. To think more defensively, you should also take an honest look at whether your job skills need freshening up so your employer does not view you as out of date.

With proper attention to your finances, this could be your greatest decade for wealth building. After all, it is too late for procrastination and too early for slowing down. This is prime time.

More from Richard Barrington and MoneyRates.com:

Personal finance checklist for age 40

Turning 30? See this personal finance checklist

IRA money market accounts


Thursday, February 16, 2017

Uberizing Big Trucks: 18 Wheels Have Never Been So Cool Or Important

For the commute-weary driver, autonomous technology represents a sexy splurge, but for fleet operations, full autonomy represents the singular business imperative of the 21st century.

When a nondescript tractor trailer trundled 120 miles down a Colorado highway completely unmanned last year, safely reaching a shipping warehouse with a cargo of 45,000 cans of beer, the experiment in autonomous freight movement was largely crowded out by flashier headlines by the big rig’s smaller cousin: the driverless car.

But while autonomous cars may be provocative, autonomous trucks are practical―and promise to be radically transformative for an industry struggling to balance hiring demands with liability, labor and safety regulations.

The lay public’s intense fascination in driverless rides is couched in their misunderstanding, or the media’s deliberate misstatement, of the technology’s current pace. Now, understand that it’s racing, but not faster than speed-throttling government regulation will allow.

The National Highway Traffic Safety Administration rates autonomy―that is, the level of human or alternatively computer operation of a vehicle―at five graduated tiers.

At Level Zero, the human driver controls everything from steering to throttling. Skipping up to Level Two you find combined functions of cruise control and lane-centering, at least momentarily disengaging human drivers from control of the steering wheel and throttle pedals. At Level Three you begin to find restrained autonomy: drivers are still required to perform safety-critical functions (when variable weather or traffic conditions overwhelm the vehicle’s computers).

Levels Four and Five, though, are the moonshot: drivers are not required in either instance, and at its zenith neither are conventional human controls. Otto’s beer run, which relegated the driver to the sleeper bunk, clocked in at Level Four, the first in the nation.

The freight industry entered 2016 with a deficit of 48,000 truckers, according to industry figures, and the American Trucking Association estimates that this deficit may swell to 175,000 within the space of eight years.

Increase in shipping growth coupled with a diminished labor force requires longer routes, especially for owner-operators, and these more rigorous hauls create a whole host of safety concerns for the driving public.

According to federal statistics, in excess of 400,000 trucks crashed in 2014 (the most recent year for which that data is available). Human error―failing to recognize a dangerous situation or to respond properly―was to blame in almost every instance.

Cutting-edge computers of the sort employed by the driverless, beer-loaded big rig, which married advanced mapping, locationing, and radar, are capable of reading and responding to dangerous situations in ways no human can.

Just a few months ago, a family traveling down the Autobahn was alerted by their Tesla’s autopilot system (for now, a misnomer, as Tesla’s road-legal vehicles register at Level Two autonomy) to the imminent possibility of a two-car wreck down-road. Footage from the car’s dash camera records the alert just as the two cars collide in frightening fashion.

”When it happened, when the other cars started hitting the brakes, I also started hitting the brakes,” the driver, Frank van Hoesel told NBC News. “But then the car was already almost stopped.”

Apply that same technology to a 40 ton. eighteen wheeler and you’ve dramatically reduced. Reduced risk means diminished liability, which in turn squashes cost―for manufacturers, retailers, and consumers alike.

For the commute-weary driver, autonomous technology represents a sexy splurge, an investment in safety and sanity, but for fleet operations, Levels Four and Five autonomy represent the singular business imperative of the 21st century.

Increased operational efficiency, diminished liability, and safer roads ― who says practicality can’t be sexy?


Exxon Adviser Resigns Over Oil Giant's 'Targeted Attacks' On NGOs

A research scholar at New York University has resigned from Exxon Mobil Corp.’s External Citizenship Advisory Panel, citing what she calls the oil giant’s “targeted attacks” on environmental groups under former CEO Rex Tillerson’s watch.

In a letter this week to Exxon Mobil Foundation president Ben Soraci, Sarah Labowitz expressed her disgust with the company’s continued assault on organizations investigating whether Exxon covered up the risks of climate change.

Labowitz, a co-founder and co-director of New York University’s Stern Center for Business and Human Rights, told The Huffington Post that she has studied many companies facing serious public criticism, often in her field of human rights. For the most part, she said, “they don’t shoot the messenger ― which is what Exxon is doing.”

As Labowitz put it in her resignation letter to Soraci, “Few respond with the kind of vehemence and aggressive attack strategy that Exxon has executed over the last year.” 

Exxon’s current strain of legal trouble dates back to November 2015, when New York Attorney General Eric Schneiderman subpoenaed the oil giant to obtain documents related to allegations that it had lied to the public and its investors about the risks of climate change. In March, a coalition of state attorneys general, including Maura Healey of Massachusetts, pledged to crack down on corporate climate fraud, after InsideClimate News and the Los Angeles Times reported that Exxon executives were aware of the climate risks associated with carbon dioxide emissions but had funded research to cover up those risks and block solutions.

In June, Exxon hit back, filing a lawsuit against Healey in the company’s home state of Texas in an effort to bar a civil investigative demand from her office. Shortly thereafter, Labowitz told HuffPost, the company began advancing a conspiracy argument that she finds particularly troubling.

In October, Exxon filed a motion in U.S. District Court in Fort Worth, Texas, that sought to invalidate Schneiderman’s subpoena, arguing the investigations by the New York and Massachusetts AGs were “biased attempts to further a political agenda for financial gain.” The company claimed that “revelations from third-party disclosures about secret and deliberately concealed collaboration with anti-oil and gas activists and a private law firm” had shown the AGs were “incapable of impartial investigations” and were “attempting to silence political opponents.”

Exxon Mobil then turned its attention to non-governmental organizations, including the Union of Concerned Scientists, warning them in a series of letters not to destroy or delete communications related to their probes of Exxon ― including communications with the press. The move hinted at future subpoenas. 

At that time, a company spokesman told HuffPost that Exxon had been left with no choice but to “vigorously defend” itself. To show what Exxon was up against, the spokesman shared a link to a draft agenda for a January meeting of environmental group leaders at the Rockefeller Family Fund. First covered by The Wall Street Journal in April and later published at The Washington Free Beacon, a conservative site, the letter appears to list several of the meeting participants’ common goals, including “to establish in the public’s mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm.”

Created in 2009, Exxon Mobil’s External Citizenship Advisory Panel consists of five independent experts and is tasked with reviewing the company’s corporate citizenship activities, including its effects on human rights and the environment. 

Labowitz, who had served on the panel since 2014, told HuffPost that she began to notice a pattern. She raised her concerns, both privately and during formal advisory meetings, and encouraged company leaders to find alternative approaches. 

Then last week, Exxon “doubled down,” as Labowitz put it. In court papers filed Feb. 1, Exxon wrote that the Massachusetts and New York AGs were “at the forefront of a conspiracy to violate ExxonMobil’s constitutional rights,” as E&E News reported. 

“I think that’s the wrong way to go,” Labowitz said. “I don’t think it’s helpful to them and I don’t think it’s helpful to society at large.”

In her scathing resignation letter, Labowitz argues that Exxon Mobil’s approach undermines democratic principles. “I am disappointed that instead of examining its own record and seeking to restore a respected place for itself in the public debate, Exxon has chosen to turn up the temperature on civil society groups,” the letter reads.

Exxon spokesman Alan Jeffers told HuffPost that while the company regrets Labowitz’s decision to resign, it takes issue with some of her conclusions.

“We have never characterized any action by civil society representatives as illegal,” he said in an email. “What we have done is defend the company, on behalf of all shareholders, from politically motivated investigations that are biased, in bad faith and without legal merit.”

“We did not start this,” Jeffers went on, “but will vigorously defend ourselves against false allegations and mischaracterizations of our climate research and investor communications.”

Labowitz’s departure comes just days after Tillerson, the former Exxon head, took over as President Donald Trump’s secretary of state. During his confirmation process, Tillerson faced serious questions about his ties to Russia and the company’s decades-long, well-documented climate change cover-up. He refused to discuss what the company knew about climate change and when it knew it, saying, “Since I’m no longer with Exxon Mobil, I can’t speak on their behalf.”

Kathy Mulvey, climate accountability campaign manager at the Union of Concerned Scientists, said that Labowitz’s departure “speaks volumes” about the kind of corporate citizen Exxon is. 

“All companies try to protect themselves, but Exxon’s recent attacks have crossed a line,” Mulvey said in a statement. “Going after nonprofits and interfering with independent state investigations shows that ExxonMobil will stop at nothing to protect its bottom line. Ms. Labowitz took a bold stand against ExxonMobil’s climate deception and bullying.”

Mulvey urged other panel members to likewise call out the company’s behavior.

Ultimately, Labowitz says it will be important for Exxon to restore itself as a credible participant in the climate change discussion. If it continues down its current path, Labowitz believes it will do so at its own peril.

“I hope they find a way out of this. I don’t think that this kind of attack strategy is the way forward,” she said. “What happens if they win in arguing this is an illegal conspiracy? I think that it erodes their credibility in a way that is so unhelpful to them, and to the broader debate about the response to climate change.” 

Labowitz - ECAP - Feb 6 2017 by Chris DAngelo on Scribd


Wednesday, February 15, 2017

American Apparel Post-Mortem: A Lesson In Visionary Leadership

The beginning of 2017 came with disappointing news from American Apparel. As a crusader for domestic-made products, the retailer's weakness came not from its altruistic model, but from errant leadership and a reluctance to grow with market changes. A brand that had a strong identity and morals lost its way from the top down, ultimately leading to its demise through an acquisition and shuttering of its retail stores.

In the brand's infancy, founder and CEO Dov Charney displayed unique leadership and forward-thinking visions. The brand's identity began to evolve as early as 1997, becoming known as a no-frills American-made manufacturer of quality products that rejected what has become a standard practice of human exploitation in the apparel industry. It swiftly gained recognition, opening 150 stores after its first year and nearly doubling that in the next three years. It continued to gain traction and in 2008 company shares reached $14. Yet Charney's infamous reputation for inappropriate behavior and the company's inability to change with the industry caused it to sell recently to Gildan Activewear Inc, a Canadian clothes manufacturer.

Contract Help from Employees
The signs were there. Once a desired workplace destination, in recent years American Apparel's ratings on sites like Glassdoor.com have plunged, with comments from current and former employees deriding the culture and leadership. A proactive leadership team will internalize this kind of feedback to 1.) determine if the gripes are legitimate, and if so 2.) concoct an action plan that addresses the issues.

In a similar vein, strong leadership will take time to walk through their company and hear what employees from every level have to say about their jobs. Usually problems arise for employees that work with the product or customers every day and can identify what is not working.

For example, talking with a store-level employee might yield information about displays that work and don't. Factory-level employees, while not high on the org chart, can likewise be valuable sources of information about supply chain issues and specifically what is not working.

These criticisms can be the biggest assets to your company. Documenting these ideas then trying to find solutions can move your brand to leading the industry rather than just playing catch-up. It has been publicly reported that previous American Apparel leadership had significant mismanagement the brand, creating a ripple effect that led to disorganization and the dissatisfaction plainly evident on Glassdoor.

Create a Culture of Engagement
So what is the solution? A Hay Group poll found that engaged employees showed 43 percent more productivity. Engagement can come in the form of encouragement, transparency and integration in company happenings. Having employees understand how their work contributes to the overall company's goals can help engage employees.

Transparency between employees and leadership can also give employees the confidence to approach leadership to raise concerns and bring ideas. Target recently used this model in their internal communication to create a culture of togetherness and inclusion. That culture will allow your employees to feel empowered rather than hindered to contribute.

Conversely, when your brand and its leadership are at loggerheads over litigation, remaining silent only breeds unease and anxiety.

Embrace Change
Since its founding, American Apparel remained positioned as a young-ish, niche brand that marketed with controversial sexualized advertising. The campaigns had stayed relatively similar all through its life. Many consumers knew what to expect and did not see much change in their product.

But some things did change. For instance, the age-old axiom that "sex sells" has, during the dawn of a new era in social justice and gender equality voices, weathered criticism. A look at the brand's arc of advertising sees a relentless adherence to this strategy, even as the world around it changed.

Responding to changing market forces and consumer trends is as important as good ideas themselves. American Apparel had a strong business model - producing quality products without human exploitation - but failed to hammer home that message in marketing their products. Operationally, the brick-and-mortar outlet failed to innovate online and create a strong online shopping presence.

Perhaps these changes could have saved the company, or at least staved off bankruptcy a bit longer, but they are far from the only brand to meet this kind of demise. The scandal with their then-CEO - and the failure to replace him in a timely fashion - stunted their growth and ultimately their demise. One important role of leadership is to continue to look forward for the brand, even when that means cleaning house.

Remember Brand Identity
While change can mean growth, forgetting your brand and confusing your consumers can be detrimental. Your brand identity is set to tell the story of your company in a clear, consistent voice. It is what consumers will connect with and learn to trust. Brand loyalty has become as strong as advertising in the past years; consumers will forgive a company numerous failures if they feel the brand is connected to them. Keeping your brand in mind when you are thinking of taking the company in a new direction can help your consumers feel comfortable and enthusiastic with the change.

American Apparel made the mistake of not reiterating why they were spending $30 for a T-shirt. Its original mission was to produce quality American products without exploiting its labor force. This message was not reinforced in its marketing and consumers began to seek cheaper, faster fashion. Its failure to advertise its message led to its failure when the change to fast fashion dominated the market.

While Dov Charney brought a strong vision and a commendable mission to the apparel industry, he also became a distraction that drew attention from the core product and inhibited the leadership's ability to keep up with market trends. True visionary leadership doesn't only come from visionary individuals. Constant auditing and contribution from all employees will help your brand stay on top of its needs and the needs of consumers. Innovation is a very delicate to get right and see through to success. It's a moving target. If you miss it often enough, you will find yourself out of chances.