Looking back, buying half of Discovery Plastics was the best investment I ever made. The experience of being an entrepreneur taught me more than I've ever learned sitting in business school or seminar classrooms by a hundredfold.
I'm a big cheerleader for small business ownership. When you start your own business, you embark on a great journey. You experience times of drama, adventure, fun, fear and pleasure - sometimes all within the same ten-minute period. You make new friends as well.
You don't just learn about business; you learn more about yourself, too. You test your limits and extend your capabilities. And, in my opinion, you become a stronger and better person for doing so. I've seen this happen over and over again with owners of successful, growing businesses of all kinds.
You also taste freedom as you've never known it and you'll never want to be a wage slave for someone else again. (posted 11/2/21, permalink)
The Truth About Diversity, Inclusion, Equity And White Privilege: I just returned my ballot for the November 2nd election. One of the items on the ballot was a proposed amendment for the Clark County Charter, which would establish a Department of Diversity, Equity and Inclusion. The Voters' Pamphlet contained a four-paragraph Statement In Favor of the amendment but no Statement Against. Too bad. I would have gladly provided one.
Of course, you cant have diversity, inclusion, equity (a word that used to mean 'ownership; now it's means 'equality' and is used by people too lazy to add the extra syllable) without the phrase White Privilege appearing in short order.
My dad was hard-working, with a blue-collar job at the Pennsylvania Railroad. When I was in high school, our only family car was a 1956 Ford Mainline Tudor base model (with no options - not even a radio). My parents paid my school tuition, but I worked hard every summer to earn "spending money," including bus fare to and from school as well as books. Many of my fellow classmates were in the same boat.
The majority of the school's students lived within Philadelphia city limits and used public transit to commute. Riding the 'R' bus and the Broad Street Subway to school every day - freezing at the bus stop in the winter (there were no bus shelters in those days) and holding one's nose during in a crowded public transport conveyance during the hot, humid days of May - is not White Privilege.
During my work career, I have been an employee, a manager and a business owner. I always treated customers, fellow workers and my employees fairly regardless of skin color, ethnicity, gender or sexual orientation. I never looked for 'diversity'; I sought talent and a good work ethic, regardless of the 'package' it came in. As 78 year-old white male, I have no interest in 'white privilege' accusations. Any 'privilege' has been fairly earned due to a strong work ethic and a prudent approach to spending and investing. My wife shares the same values and helped us greatly in preparing for a comfortable retirement.
I have always been results-oriented. So, I wonder, just how do you measure the results/performance of a Department of Diversity and Inclusion? I don't think you can; therefore, it's a useless department. I never had such a thing in my business. We just treated everyone fairly because it was ingrained in our firm's culture.
Politicians, bureaucrats and social scientists have been "having conversations" about race, diversity and privilege for over 60 years and nothing has been accomplished. Why? Because no one is willing to make the hard choices required to eliminate the root causes of minority underachievement.
It is important to note that not all minorities are chronic underachievers - Asians are generally overachievers as a group, for example. It is also important to recognize that not every minority individual is an underachiever.
Underachievement is not caused by poverty. Forty years ago, the 'boat people' came to the U.S. with no money. They worked at menial jobs, scrimped, saved and bought or started businesses that required little up-front money. I'm told that Asian and Russian immigrants have taken over the janitorial market in the Portland (Oregon) market. Why? Because they do a better job at better prices. Many of the small nursing homes around here are now owned and operated by Russian immigrant families.
Even though the educational system in poor neighborhoods is generally lousy (public education is lousy in many 'good' neighborhoods, too), you can't blame poor education for the lack of black-owned businesses. Many Vietnamese immigrants of the late 1970s had only a rudimentary education. They succeeded because they worked hard and were willing to learn.
In the 1970s, blacks in large eastern cities complained that too many businesses in their neighborhoods were owned by Jews. Indeed, there were Jewish-owned businesses in black neighborhoods. And when those owners got old, they found that their college-educated children wanted no part of the business.
So, how come no blacks moved in to take over these small retail businesses in their own neighborhoods? How come there are Korean green grocers and not black ones? How come the 'gas and go' convenience stores are run by Pakistanis and Indians, not blacks? How come three black families won't pool their money and their labor to run a 24-hour, round-the-clock market (each family taking one shift)? In today's entrepreneurial environment, you can create your own job.
Underachievement in the black community is not about racism. It is about a bankrupt, thug culture of uncaring, absent fathers, welfare-based poverty, poor education and self-defeating behavior - all aided and abetted by disingenuous "leaders" - self-serving liberals and black race-baiters who cry 'racist' every time things don't go their way (or when their 'business' is slow). Until ghetto blacks learn self-respect and embrace the culture of the American dream, things will only get worse. Ghetto culture is not a culture - it is a disease. Spending more money on inner city schools is a waste of time since schools cannot imbue culture.
Black conservative Thomas Sowell has written, "You cannot take any people, of any color, and exempt them from the requirements of civilization without ruinous consequences to them and to society at large. Murder rates among black males were going down - repeat, down - during the much-lamented 1950s, while it went up after the much celebrated 1960s, reaching levels more than double what they had been before."
If you're worried about fixing ethnic imbalances and providing equal opportunity, start at the root causes.
Almost 60 years ago, Daniel Patrick Moynihan issued an alarming report on the breakdown of the black family in urban ghettos. In 'The Negro Family: The Case for Action', Assistant Secretary of Labor Moynihan warned that the deterioration of the black family would result in soaring crime rates if it continued unchecked. At the time, the illegitimacy rate among African-Americans was 25% while illegitimacy nationwide, stood at 7.7%. In the late-1960s, thanks largely to Lyndon Johnson's Great Society welfare policies, the out-of-wedlock birth rate soared. Today, the out-of-wedlock rate for blacks is over 72% with even higher rates in inner cities.
Baltimore native Ellen Sauerbrey wrote, "Until the 1960s, there were strong social sanctions against unwed motherhood. But when Lyndon Johnson launched the Great Society, welfare payments, food stamps, government housing and Medicaid enabled unwed teens to have their babies without fear of consequences."
Moynihan recommended employment programs to help young black people find work. And that is precisely what President Trump was trying to do during his time as president. Give opportunities to those people who want improve their lives. Before the virus struck, minority communities were enjoying the best economic numbers in their history. What has Biden done to fix root causes? Or improve the lot of minorities?
Former Clinton advisor William Galston wrote, "You need only do three things in this country to avoid poverty - finish high school, marry before having a child, and marry after the age of 20. Only 8% of the families who do this are poor; 79% of those who fail to do this are poor." There are two main reasons that American children are poor: Their parents don't work much and fathers are absent from the home. This is true for all races.
Some time ago, there was an article in the Costco Connection magazine - entitled 'Diversity: The New Business Growth Enabler' - which urged business owners to become more "culturally intelligent." No measurable benefits were touted. Were there stories told of craggy old white guys who saved their little company by bringing a gaggle of gays and blacks onboard, increasing revenues by 56%? No. Do we learn of a bunch of skinhead punks who joined a failing wholesaler and improved profits 41% while reducing inventory levels. Nope. The story didn't even make reference to the role of transvestites in saving a certain venerable English shoe firm, as told in 'Kinky Boots'.
There was no useful business advice in the article. Just a bunch of unicorn-flatulence, progressivism and political correctness. And that's the problem - all wind, no action. Expect a Department of Diversity to be equally useless.
Diversity is crap. Imagine Smokey Robinson telling The Miracles, "Now fellas, I know we got a tight group but the people are complainin' that its not diverse, So Ronnie and Pete, I've got to let you two go. I'm bringing on a tone-deaf Asian and a fat, white, flannel-shirted Lesbian to replace you."
You don't build success on diversity. You build success on talent and a single-minded focused performance from your team. That's how miracles are created in business. Or any other organization. Just ask Smokey. (posted 10/27/21, permalink)
Crazy Money: David Snowball wrote in the Mutual Fund Observer, a monthly online newsletter, "The U.S. Federal Reserve is the most powerful and influential financial institution on the planet. Period. Full stop. Its interventions have shaped the post-2008 financial landscape like no institution in history. Those interventions have underwritten a stock market whose valuations have more than doubled, from a Schiller PE ratio of 15 in 2009 to 38 today. Depending on which manager you speak with, the Fed has either been providing steroids … or opioids."
The Fed is printing money at an ever-increasing rate. And you wonder why everything costs so much more this year?
James Lileks wrote that "everything is more expensive - you have baseline prices in your head, and everything is 15 - 20% more. Everyone's used to it. But everyone knows. The only people who don't think it's important are the people who have other people do these things for them."
"My questions for anyone seeking political office would be this: describe your grocery store visits over the last year. In detail. What brands? Do you use self-checkout? Do you bag? What's the non-sale price of orange juice? What's the median cost of a 12-pack of soda, averaged out over sale and non-sale weeks?"
Indeed. Here's one small example: the newest Matrix resin cast 1:43 scale model cars from China now are priced at $135.00 - an increase of 35% in six months. (posted 9/15/21, permalink)
You Have To Stay In The Game: On January 17, 1961, President Eisenhower gave a televised farewell address to the nation. I remember watching it. Ike was just over 70 years old at the time but seemed really old to 17 year-old me. The speech contained the usual "thank you for giving me the privilege of serving as your president" and other niceties. Then things got weird.
Ike got a serious look and said that "we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.
This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence - economic, political, even spiritual - is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.
We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."
He added, "The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded. Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite."
I didn't understand what he was getting at. At the time, neither did the press. But it turned out ol' Ike was quite prescient.
Have you noticed that we seem to have eternal military operations now? And the military brass gets very upset when a president wants to get out of these engagements. Notice how they turned against Donald Trump when he implemented simple, cheap solutions to problems. Remember the Mother of All Bombs? It was developed in 2003 but it wasn't until 2017 - early in Trump's term - that he ordered it to be used. The bomb destroyed a network of tunnels and caves in southern Afghanistan, killing 94 ISIS-K militants, including four commanders. Few, if any civilians, were killed.
A few days later, the U.S. fired a barrage of 59 Tomahawk cruise missiles into Syria in retaliation for the regime of Bashar Assad using nerve agents to attack his own people. It was a simple action and no ground troops were involved. Syria experienced the might of the U.S. via special delivery from a ship anchored far away.
President Trump came up with decisive, effective and creative solutions to military dilemmas. He destroyed the ISIS caliphate in Syria with shock and awe. Nine months after President Trump promised to defeat ISIS "quickly and effectively," U.S.-backed forces captured Raqqa, which had served as the ISIS capital.
Trump also wanted the U.S. to downsize its role as the world's policeman. He wanted to reduce our presence in Iraq and get out of Afghanistan in an orderly fashion. And the military turned against him. As did their friends, the defense contractors, who contributed heavily to the Democratic Party in 2020. A recent Government Accountability Office (GAO) report found that 14 major military contractors have hired 1,718 former senior Pentagon officials over a five-year span.
The military believes No Wars = No Military. Defense contractors believe No Wars = No Money. Both insist that the U.S. must "stay in the game."
And that brings me to a story. In late October, 1977, I was called to my boss' office and told to close the door. He informed me that I had been selected to participate in Rohm and Haas Company's Assessment Center. I had never heard of it and was informed that no one talks about it. This was 22 years before 'Fight Club'. It was a program of tests which would reveal who was a candidate for top management and who wasn't. I was 34 years-old at the time and had been rising through the company's ranks at a pretty good pace with commensurate salary increases.
The Assessment Center was held offsite in an old refurbished mansion. It was a three-day event and there were about 20 of us - all from different divisions of the company. I had not previously met any of my counterparts. Some of the exercises were solo tests; others were team efforts. Teams were rotated so that no one was on the same team twice.
The final exercise had five teams of four competing for top prize. Each team was given a series of project proposals and had to decide which projects in which to invest and which to decline. My team was a really good one - we were in general agreement and were very goal-oriented. We were presented with a half-dozen proposals. It seemed as if the first couple were sure bets but the risks increased with subsequent offerings. Once we voted a project, we were given an envelope telling us how our investment did. We fully-funded three and made money. We partially-funded a fourth and broke even on it. We passed on the last two and, when the envelopes were opened, we found out that both were big money-losers. We were the first group finished and retired to the onsite bar for a celebratory drink. It turned out that we earned it - our group made more money than any of the other teams. One team lost everything and went bankrupt.
All in all, I felt I did very well on the various tests.
In November, I was called to the office of my designated Assessment Center evaluator - a man I had never met before. It turned out that I was rated as "average" by the assessors. While they gave me props for creativity and a pleasant demeanor, I was too "decisive" (the judges didn't like my recommendation that one of the fictional employees be summarily fired), somewhat "flip" and "curt" in my internal correspondence in the In-Basket Test (Of 20 individuals, I was the only person to complete every in-basket assignment within the tight time limit assigned) and failed the proposal-investment test. Regarding the proposal-investment assignment, the report stated that I "exercised poor judgement in convincing the group to rest on their accomplishments rather than work productively during the remaining minutes of the exercise."
"How can this be?" I asked. "We made more money than any other team." "Ahhh," replied my evaluator, "You should have kept investing, even if the projects lost money. You have to stay in the game."
This was a great moment of insight - I had suddenly learned more about the company's management than they had learned about me. This explained many of the high-level decisions to keep poor-performing divisions. To not exit markets when profitability had turned permanently south. To look askance at new business opportunities because "our people couldn't compete." I realized that my kind of thinking didn't fit in at R&H.
My Assessment Center results didn't bother me, because I had already planned to leave the corporation and go into business with a friend. In early October, my wife and I had traveled to Oregon to look over the small plastics business, the town, the housing situation and the school system. Soon after my meeting with the Assessment Center guy, I sent a deposit check for my share of the business and we began preparing our home for sale. And, as soon as we sold it, I resigned from Rohm and Haas and headed off to Oregon. And it worked out fine. Our small business venture grew and became very profitable - because, if we didn't see an opportunity as a good money-maker, we passed on it. On the other hand, we never passed up a good money-making opportunity.
By 1985, Discovery Plastics' net profit and ROTA (Return on Total Assets) were solidly in the upper quartile of the plastics fabrication industry. Specifically, by 1985, Discovery Plastics' NPBT (Net Profit Before Taxes) was almost 3 times the median of other plastic distributor/fabricators. In 1984, Discovery Plastics' ROTA was 19.5% - almost 4 times the median of other plastic distributor/fabricators. Discovery's RONA (Return On Net Assets - aka: Return On Investment) was just over 53% for the year.
The company's goal was to increase sales without giving up profit; we targeted a gross profit of 35-40%, which we usually met each year. In 1987, our gross profit was 38.9%. Over an 11-year period, Discovery Plastics' sales grew at a rate of over 44% per year. In late 1989, we sold the company to a large ($220 million) store fixture conglomerate. In just over a decade, our company had grown from a small storefront operation with 3 employees to the largest producer of acrylic store displays in North America with over 70 employees.
We were "in the game" for 11 years but we knew when it was time to get out. And we did.
As Commander-in Chief, Donald J. Trump didn't accept "staying in the game." He questioned the need for a ubiquitous and worldwide military presence - and the generals hated him for it. Because, to them, it's all about Staying In The Game. All those years ago, Ike knew that, too. (posted 9/15/21, permalink)
No Longer Observing 9/11: Mark Steyn wrote, "We shall not resume our anniversary observances today. The war is lost, at home and abroad. On the domestic front, we doubled the rate of Muslim immigration to the west and began assimilating ourselves with Islam's strictures on freedom of expression and the like. The decade-and-a-half since the Danish Mohammed cartoons has been one long remorseless surrender on core western liberties. When a school teacher gets beheaded in the street, there is no outrage at the act, just a mild regret that he should have been foolish enough to provoke his own fate. Even the milder jests from the immediate post-9/11 era - the cartoon of the woman trying on new burqas in the changing room and wondering, "Does my bomb look big in this?" - would not be published today."
For some reason, it is "wrong" to criticize Islam - although moderate Democrat Tulsi Gabbard wrote, "Let us never forget that it was the Islamist ideology, which inspired the terrorist attacks and declaration of war against America on 9/11, is the foundation for so-called “Islamic” countries like Pakistan, Turkey, Iran, and Saudi Arabia's discriminatory policies against Christians, Hindus, Buddhists, etc." Yes, they hate America - we are The Great Satan - and, in much of the Middle East, they rejoiced and danced in the streets when the Towers fell. Let us never forget that.
Mark continued, "In the broader society, our rulers quickly determined that it was easier to punish us than our enemies. The post-9/11 security state surely helped soften up western populations for the Chi-Com-19 lockdowns, in which entire nations have been reduced to TSA-administered airports.
As for the war overseas, it ended with a military that can do everything except win handing the keys to Afghanistan back to the guys who pulled off 9/11 - and apologizing for the two-decade inconvenience by gifting the mullahs with some of the most expensive infrastructure on the planet plus an air force, approximately five assault rifles for every Taliban fighter, and express check-in for the forty-seven per cent of the Afghan population that apparently served as US translators."
Mark concluded, "There are honorable ways to lose a war. This was not one of them. We have dishonored the dead of 9/11 and insulted their sacrifice." Tough words, but understandable. And true. The local newspaper didn't even mention 9/11 on its primary news page Saturday.
In Pennsylvania, President George W. Bush spoke. This is the man who cared more for protecting the Saudis than Americans while the WTC fires were still burning, who abandoned the hunt for bin Laden a short time later, and who leveraged our anger to pursue a bunch of nation-building and tyrant-toppling in the Middle East. And who now speaks of "domestic terrorism" and "angry America" - his code for Trump supporters.
In New York, President Joe Biden attended the WTC ceremony accompanied by 'Doctor' Jill, Obama and the Clintons. I'm sure the Carters couldn't come because of their age. Biden, the main attraction in NYC Saturday, is the man who, as VP, opposed the raid to get Osama bin Laden and later, as president, caused America's humiliating defeat in Afghanistan.
I guess all the ex-presidents were invited except Donald Trump - the only president with a real connection to New York. In 2001, Trump the Builder sent over 200 of his constructions workers to help at the WTC site. And, after Biden and his entourage left on Saturday, Trump showed up and took to the streets of New York, shaking hands with first responders. He's a class act and a man of the people.
I think, as a nation, we're confused, angered and ashamed. Biden waved the white flag in Afghanistan. When he assumed office, the war was basically over. There had been no U.S. casualties for over a year. An exit plan was in place and it was working. But Biden inexplicably canceled the plan and gave everything away to the terrorists - the same bunch who started everything 20 years ago.
The enemy has won and America's own ruling class appears to have been on their side all along. Meanwhile, China smiles. And thinks about new ways to undermine us. (posted 9/13/21, permalink)
Boeing's Woes: Glenn Beaton, a Boeing engineer in the late 1970s has provided some insight on Boeing's current woes. He wrote, "The current president of Boeing is a former investment banker. Although his immediate predecessor was an aerospace engineer, the one before that had a Yale liberal arts degree and a Harvard MBA. (I'm convinced that companies hire Harvard MBAs not because Harvard teaches them anything but because Harvard admitted them. Companies figure, usually correctly, that a person admitted to the Harvard MBA program must be smart.) The president before that had a B.A. in accounting, and the ones before him were lawyers and other MBAs."
The airplane company was once the Province of Engineers seeking technical excellence; now its run by a bunch of MBAs who've never spent a minute riveting or welding. When the company moved its headquarters to Chicago, it lost its way. "When the headquarters is located in proximity to a principal business - Boeing's was in Seattle - the corporate center is inevitably drawn into day-to-day business operations," a senior Boeing executive once explained. "And that statement, more than anything, captures a cardinal truth about the aerospace giant. The present 737 Max disaster can be traced back two decades - to the moment Boeing's leadership decided to divorce itself from the firm's own culture."
In Glenn's day, upper management came through the engineer ranks, promoted from within. Today, not so much. Harvard MBAs, remember?
"Meanwhile, Boeing's dearth of upper management engineering experience is offset by a wealth of wokeness. They of course mandate extensive diversity training and occasionally purge those who resist. The latest is that they intend to increase the number of black employees by 20%.
What's important financially is that they get airplane orders by keeping the progs off their back with racial quotas that they simultaneously boast about and deny, and lobby furiously to curry multibillion dollar tax breaks.
Unsurprisingly, the company is now plagued by design and safety issues. It turns out that airplanes don't get designed and built on their own or by investment bankers or by racial quotas or by skillful lobbyists or by tax breaks or by Harvard MBAs.
They get designed and built by engineers – people trained in math, science, chemistry and physics who think, despite what they are told today, that 2 + 2 = 4. Boeing was once full of such people. So was America." (posted 9/13/21, permalink)
Occam's Blackhawk: When something happens that makes no sense, the human mind searches for answers. In trying to fit pieces of the puzzle together, people develop possible explanations. Too often, those who scoff at such ideas label them Conspiracy Theories - a dismissive term, and, these days, a short stroll to the charge that, not only is the very idea preposterous, but also the person who offered it is crazy. Just because answers and/or proof is not readily available, doesn't mean the explanation is wrong. It's just unproven at this moment. Ask Galileo di Vincenzo Bonaiuti de' Galilei about that.
Shari Goodman at American Thinker has posited that Biden's "mishandling" of Afghanistan (and everything else he touches) may be because he's being blackmailed by the Chinese.
She wrote, "Why would our military commanders willingly give up Bagram, a strategic airport built by the Russians, and why would they willingly leave $85 billion in military hardware behind? Why would they leave thousands of Americans stranded behind enemy lines while providing the Taliban a 'kill list' of those Americans left behind? Unlike previous withdrawals, where it is customary upon withdrawal to first evacuate our citizens, and then destroy the equipment and blow up the bases, we did the opposite. We did not evacuate our citizens. We did not destroy the equipment. And we did not blow up the bases."
These are fair questions No one in the Biden Administration or the Pentagon has explained this strange, beyond-stupid behavior.
Goodman observed, "We have learned that the Biden administration cut off all communication with the anti-Taliban resistance group, the National Front. Although Ali Nazar, head of foreign relations for the group, has said he "tried to reach out," there has been no response from the Biden administration. Glenn Beck recently reported that his mission to rescue Afghan Christians has been blocked by our State Department and the White House, and he fears that they may be burned alive or crucified by the Taliban.
Are we to believe that our military leadership, led by four-star generals, is so naïve and incompetent? Highly unlikely!"
"A more likely scenario is that Afghanistan was surrendered at the urging of the Red Chinese, who saw an opportunity to blackmail old Joe for the many kickbacks he and his son, Hunter, had been taking throughout his years in Washington, D.C." We know about many of the deals from the information on Hunter's laptop. And why is Hunter not being investigated? Or in jail? "As far back as 2013, Hunter Biden's equity firm scored a $1.5-billion deal with the Bank of China only days after his father paid an official visit to the country. The deal was made at a time when the Red Chinese declared their sovereignty over the South China Sea."
Shari Goodman's scenario is truly frightening but also possible. All this seems intentional. Blackmail suddenly becomes a plausible explanation. Cocaine Mitch and other Republican congresscritters have been unusually quiet. The Democrats have been unusually supportive of Biden the amoral, serial liar and his chaotic surrender to the Taliban. Who else has been blackmailed or paid-off by Red China?
Don Surber wrote, "Biden did this deliberately. I am convinced that he is nothing more than an agent of Red China. We had that war won. No casualties in 18 months. He threw it all away. .. When this is over, Biden will have killed more American civilians than Osama bin Laden did. Biden is pure evil."
China is doing rare mineral exploration in various places including Afghanistan, exploiting parasitically upon U.S. development & technology. Biden is helping them by shutting down U.S. mineral exploration and resource mining on federal lands. The Taliban officials have declared China as their closest ally in the international community. Militants say Beijing is ready to invest in and reconstruct Afghanistan and describe the nation as their principal partner. Is anyone surprised?
Connect the dots. It all fits. (posted 9/9/21, permalink)
Killadelphia: Philadelphia has 
