Pro Commerce

Whine and wine

 I make no pretense at being interested in fine wine.  I long ago decided I was not impressed with people (usually doctors) who were wine experts.  I noticed they had a couple of glasses of wine and they couldn't tell a fine dinner from a plate at a roadside diner.

But I do have an interest in the business concern that people who want to spend a lot on wine and subsequently on dinner, sometimes don't want to drink a whole expensive bottle.  They really want to spend $17 on one glass rather than $80 on a bottle they won't want to finish.

 This photo shows a technical solution.  Everything from the uncorking to the storage and dispensing into a glass is done in a nitrogen environment. Without exposure to oxygen the wine never changes its flavor.  An expensive bottle can be uncorked, stored for many meals and served in perfect condition one glass at a time.

The other interesting element in the machine is the use of nitrogen.  There are many inert gases that could be used, but they would all have to be bought and brought into the wine serving establishment.  Nitrogen can be made with an electric pump cooling ordinary air (about two cubic feet of machine) to the point where nitrogen liquifies out into a separate gas, in any premises.

Mud thrown at the dead?

 Yesterday's Wall Street Journal has an obituary for Max Palevsky.  Max was a big donor to Lefty causes for forty years, one of the 'Malibu Mafia' of big Lefty donors.

I had only two connections to Max.  One was my friend Leonard Koren who started and ran an exciting 1970's LA magazine WET (Leonard is still a friend). WET was a leading edge magazine and it led Leonard to San Francisco where he interviewed me several times. Max was a major funder of WET.  

The second was another friend Black Panther leader Huey Newton.  Some day I'll write about why Huey and I were friends.  Huey has such an awful media reputation, there is no way I can explain our friendship.  Back to Max, who funded Huey on a personal level and gave him a luxury penthouse apartment in Oakland on Lake Merritt where he could live in safety (with a few body guards).

Thanks Max on behalf of both my friends.

In Max's obituary I learned that he helped fund Jann Wenner and his Rolling Stone Magazine  from the beginning. Max lent Jann $10,000 as a personal loan then had the temerity to ask for repayment. Max got repaid in kind in his obituary where Wenner says: "We had the typical Max falling out ...he could be very rigid."

The word "typical" from Wenner really applies to Wenner.  Here is what I wrote about Wenner five years ago: "I knew Jann in the late 1960s when his Rolling Stone had just passed the 100,000 circulation mark.

"I was a banker studying the investment potential in the San Francisco music scene. I took Jann to lunch. He asked me to help arrange a loan so he could buy out Ralph Gleason, his partner, a friend of mine, and the leading local pop music critic. When he told me he planned to buy Gleason out for $25,000 I said that the price was ridiculous, Ralph’s share was worth something in the hundreds of thousands --- I wouldn’t help him get a loan from my bank, The Bank of California.

"Jann remembered my moral rejection of him. When The Seven Laws of Money was published in 1974, to widespread acclaim in the alternative press, only the Rolling Stone wrote a negative piece. Not just negative; nasty."

Max was an extreme Lefty and he backed up his ideology with money.  Another extreme Lefty who tries to buy Democratic party love with his money, Wenner, should never be considered a reliable source by anyone.

The alpha heresy and Smith's book

 William Koestler wrote about the Alpha heresy in the communist world.  It was common among intellectuals to explain why they didn't write: 'If I came to understand something by myself, then only the others who have done the same will understand me and they don't need to hear it from me.'

In Lee Smith's book The Strong Horse, he has an Egyptian character who burns his own writing and expresses the same view as Koestler's communist intellectual.

The problem for me and my readers is that Smith's book falls into that same category.  You have either learned during your life that he is right or you never will.  Only a few people out of ten million will understand what Smith says.  I do because I spent many years living among Arabs, I paid close attention and I'm honest with myself.

 Smith tells us in clear and enticing language that Arab society is 100% tribal, it is based on tribal identity and fundamentally requires violence toward other tribes.  An Arab state leader is always duplicitous in keeping his own people focused on some other tribe's problems while secretly provoking trouble within other tribes.  The Arab world has always been tribes against other tribes and especially against minorities.  It is not going to change.

If you don't already know that, Smith's book is a waste of your time.  You may never understand why Israel needs a wall to keep Arab tribal warfare confined. You will not understand Israel's willingness to make war against any neighbor, for its own survival. Only strength, military strength and the willingness to use it, matters in the Middle East.  

The U.S. is a clumsy, incompetent government when it acts in the Middle East. This has been true for a long time, but the U.S. is so powerful that the current incompetence isn't very harmful to our own interests. President Obama's feckless, weak, pull-out-as-soon-as-possible posture is making everything worse in the Middle East, as Lebanon kisses the Syrian tyrants feet, while Afghanistan and everyone else tries to take sides with the emerging strong horse: Iran.

What we really know about education

My experience in education was a decade in the 1960s when I led several school reform efforts.  I put on and organized a travelling education fair to show new education innovations, was on a foundation board (Portola Institute) that tried a dozen on-site training innovations and was president of a blue ribbon organization to change public schools in San Francisco (SCOPE).  

I succeeded in getting a good education for my own kids, by setting up a few innovative schools. That worked only because they attracted the best teachers.  For my son, this was a minor benefit.  Violence from black and Latino boy gangs still made school unpleasant. The reforms only lasted a few years before the whole system swamped them.

Good K-12 education, from my experience, requires three things: a genuinely safe physical environment, segregating students into top, middle and bottom and having appropriate teachers for each and lastly, leaving the top students plenty of time to do their own self motivated study.

Curriculum is irrelevant.  Math has to be good, taught by good teachers, who aren't often available.  Internet classes work in math, for the best students.

 Nobody in public schools knows how to assure the first (safety).  Private schools can kick out the rowdies.

The second (teachers matching student skills) is only possible in dense urban areas.  Really bright and skilled teachers who can challenge top students are rare and almost non-existent in less dense areas.

Above 12th grade, education is simple.  Only classroom discussion works, in small classes (8-14 students), with intelligent, neutral facilitators.  The business model for that is hard to create. 

Sorry to be so negative about education.  That is my experience.

150 years later

 I just happen to be reading a history of the Jackson-Van Buren era, 1828 to 1842.  Van Buren created the Democratic Party and Jackson made it the successful party of patronage, slavery and Indian suppression.

What is most stunning in reading the history of the Jackson-Van Buren era is to read the way the Democratic Party destroyed the American banking system, generating the most devastating depression in a fifty year period.  

The Jackson-Van Buren ranting against Wall Street, New York, brokers and big finance is the same language we hear from the modern Democrats, Reid-Pelosi and Obama.   

The 150 year old Democratic Party created and supported the corrupt Freddie Mae and Freddie Mac mortgage banks and are trying to re-make American finance with the same political ideology that they used 150 years ago to wreak havoc.

The simple solution, disconnecting wild and untameable finance from cautious solid commerce, is anathema to their doctrinaire: 'all problems can be corrected with 2,000 page legislation'.  

Retiring at 75 is in your future

For most of the advanced world, we are going to have to work longer. Most who can, will work to age 75.  Older workers may only work 20-30 hour weeks.

 Two reasons for extending our work years: we start work later in life these days and we have to keep the ratio of workers to retirees balanced to avoid a big tax burden on younger workers.

The two countries where this will be most evident are Japan and the U.S..  Japan has a declining population and this is a simple way to maintain the standard of living.  Efforts along this line are slowly getting underway.  The U.S. has a vigor and vitality that could not survive higher taxes on younger workers so there is a need to keep the age-tax ratio balanced.

Many other countries have the same aging population problem.  However, many of these countries, Britain, France, Italy, Spain...etc are too meek to confront the problem, and too subsumed by the welfare blanket to find their way out of the dilemma.

When we start solving this problem there will be a great demand for higher level technical education.  If you are going to work until 75 today, you need to effectively operate a Blackberry, Smart phone, use email and operate most Office program products.  The list will keep growing and tech education must accommodate.  Mostly it will be private education businesses.  

Get to work entrepreneurs and get technologically flexible all you old folks out there.

Miscalculating union voters

 Two of the biggest groups in the Democratic Party are union members and government employees; half of each belong to the other. That is roughly 20 million people.  About 60% vote regularly.  12 million voters.  This November, 2010, will see about 45 million votes for Democrat members of Congress. Over 20% are union and government employees.

One thing that I don't think incumbent Democrats have figured out is the union members and government employees won't be particularly interested in getting out the vote for ObamaCare.

They already have luxury medical care.

Red spot business model

 I would like to nominate a sort-of-self-serve Japanese diner for most brilliant business model.

 We had "automats" in the East when I was a kid.  The food was in a glass wall with little doors that opened with coins. The Red Spots are a little different. 

The Japanese version is 20 seats around a horseshoe counter in 1,000 square feet.  You buy food tickets from a vending machine that offers 60 different dishes. Bring the tickets to the counter and one person brings the food, almost immediately, 24 hours a day, while two people work in the back in the kitchen. There is no cashier or cash register, the machine has all the cash in it. (Or credit card payments.)

The average bill seems to be about $5.00.  I don't know rents in Red Spot areas but I do know wages.  I would guess that weekly costs for rent and staff, generously, at $8,000, food at 40% and revenue conservatively at $24,000 per week. 

That is $8,800 a week net, conservatively. 

Rude advice for unemployed

If I were young, unemployed for a long time and didn't have a family or were just starting a family, I would emigrate.

I don't think the prospects for longterm full-time employment in the United States are very good.  I think it is bad, unless you have Internet skills or a retail background.

The wonderful thing about emigration is that many countries, Canada and most of Europe, will let you move to their country, help you get work and give an American all the work visa support necessary.

Once you are settled in Canada or France, Britain, Germany and a few other places, you will find very generous welfare, free education, free health care, short working hours, long vacations and the big prize: nearly lifetime employment.

Sounds good.  Time to think about emigrating.

Complacency

 Over the forty years I have been a business consultant I have watched the life-cycle of more than a thousand businesses, big and small.  

Nearly all established businesses finally close.  There is one reason that dominates all others.  Many people, whose ideas about business come from 19th Century political ideology, think competition, especially competition from bigger businesses, monopolies and chains are what drive others out of business. No way.

The reason most established businesses close is complacency.  The businesses are comfortable with the way everything is running and they want to stay comfortable.  As owners get old, the idea of major change, adapting to changing market conditions, just becomes onerous, too much effort.

The perfect story is in today's Wall Street Journal.  Plastic corks have gained 20% of the wine corking business in the past decade.  For one reason.  Traditional corks that cost $01.5 cents have a risk of contaminating the wine they enclose.  The Spanish-Portuguese cork industry was on a permanent Latin siesta and did nothing to deal with the spoilage problem.  

The plastic corking industry sprung up, with prices over $.02, to solve the problem.  One company in North Carolina was first to market with the best technology, Nomacorc, and dominates the plastic cork industry.

Complacency, by an entire industry, is why you have to throw that cork in the recycling bin not the compost.

Political division goes back a ways

In my younger days, when JFK was president, I was president of the San Francisco Young Republicans.  I worked on many political campaigns and ran a few myself.  I had good ties with most local party leaders and many national figures.  When I hear and read about the horrific divisions and political conflict in this country, I am forced to remember the days of JFK.

Unfortunately for all of my readers who weren't there, a popular mythology has grown up about the wonderful days of JFK.  None of that is true.  

I can remember vividly conversations in every social environment where hatred of JFK and his policies were on one side of the discussion and hatred of Richard Nixon were on the other.  The venom was flowing and it was vicious.

The hostility to JFK focused on his pro-labor stance, when anti-labor hostility was growing rapidly.  Kennedy also infuriated his opponents with his views on expanding welfare.  Many, such as myself, didn't like J. F. Kennedy's anti-black neutrality, his brother's similar position or both of their support for Dixiecrat politics. Many Democrats and Lefties abhorred his anti-communism.

I remember vividly a discussion at my office the day before Kennedy's assassination.  No one could figure out why he would go to Dallas where the anti-JFK hatred was palpable.