Episode 13: Bad Reputation
This week was the final straw for me when it comes to 2020. Two of the “Power Five” college conferences—Pac 12 and Big Ten—canceled football this year due to COVID concerns. The Big 12, ACC, and SEC remain committed to a 2020 season, but it feels inevitable that decision will change in the coming weeks. The economic fall-out from canceling football is in the billions of dollars for schools and local communities. The University of Wisconsin, alone, has stated that it could lose up to $100M from canceling the football season. But the bigger toil is psychological. Football, especially in the South, is a way of life, and there have been numerous studies that show sporting events lower crime. In one study, Chicago crime decreased by as much as 25% during televised sporting events. Crime is already on the rise in big cities across the country, so expect a further boost if there’s no football.
The big news of the week was Joe Biden’s selection of Kamal Harris as his VP running mate. Kamala (pronounced “comma-la”) is 55 years old and the first Black woman and first person of Indian descent to be on a major party ticket. Trained as an attorney, Harris was a prosecutor in CA who focused on sex crimes and became the first woman to be CA Attorney General. Pundits suggest Harris was a safe pick for Biden for the following reasons: she looks the part (attractive, professional, articulate) and gives Biden some much-needed youth and energy; brings coastal balance to the ticket; has some left-leaning policy positions which should appease the most liberal in the party but overall not alienate moderate Democrats; and, most importantly, help secure the Black vote and appeal to suburban women (two groups which are essential for Biden to win the election). Dissenters say her positions are inconsistent and that she is overly ambitious. Harris dated Willie Brown (who was thirty years her senior), a powerhouse in CA politics, and former Mayor of San Francisco. During their relationship, she received some favorable appointments from Brown. There are also arguments that Harris can be prickly as evidenced by her prosecutorial questioning of Zuckerberg, Kavanaugh, and Barr, and that her personality may conflict with Biden’s folksy demeanor. Lastly, some point out that she was a failed Democrat candidate and that given Biden’s age and commitment to only serve one term, that she is not ready for the top position should that opportunity occur. One fun fact on Kamala, she collects Converse Chuck Taylor sneakers, which are her go-to travel shoes.
Sadly, looting continues across the country, highlighted by crime and property destruction in Chicago, Portland, Denver, and DC. In Chicago,100 people were arrested, and 13 police officers injured after hundreds of rioters smashed windows and stole from stores in the Magnificent Mile district. Chicago shootings are up roughly 50% compared with the same period of 2019; and the city has seen 450 murders so far this year, a 55% increase. Chicago accounts for one of eight murders in major cities. According to the Mayor of Chicago, Lori Lightfoot, things are “under control” in her town, and she has rebuked President Trump’s attempts to offer federal troop support. But Chicago is not alone on the insane train. In Seattle, the city’s first Black woman Police Chief, Carmen Best, resigned after the majority of City Council endorsed the idea to cut funding to the police department by 50%. In Minneapolis, city leaders have moved to disband the police entirely and create a new “public safety” structure from the ground up. In the Bay Area, several cities have broad public support for police funding cuts that could reach 50%. And in NYC, $1 billion of the budget was shifted out of the Police Department coffers. Unbelievable. Good luck with that.
Congress remains stalled on the next version of the Corona relief package, and the Senate adjourned for August recess. (I wonder if they take afternoon naps, too?) In the absence of a deal from Congress, President Trump took action and passed an Executive Order that would go into effect on September 1st, offering corona relief in four areas: unemployment assistance (extra $400 with states responsible for $100 of the total), rent and mortgage relief by halting (maybe) evictions, student loan deferral (but not for private loans held with a bank), and pausing payroll taxes. The devil is in the detail with all of these measures, and while a payroll tax cut might increase employee take-home pay short term, it’s not clear how temporary reductions in the tax are helpful long term. Those funds will need to be paid back (unless forgiven, which Trump has pledged to do if re-elected), plus payroll taxes are necessary to fund an already underfunded Social Security. The Democrats are pushing for a $3.6 billion to support the anticipated increase in mail-in voting this year, which could be up to 70% of voters, and $25 billion to the USPS under a new pandemic relief bill, but Trump opposes the plan. I’m guessing my Xmas Cards this year will arrive in 2021.
Russia has announced the first commercially available COVID vaccine, “Sputnik V.” (Russians appear to name anything new, Sputnik! ). However, the medical community is concerned about the lack of testing of the vaccine. If there are unexpected side effects for those inoculated, it may harm the adoption of a better-tested vaccine down the road. Approximately 165 vaccines are being developed worldwide, and 30 are being tested in human trials with 8 reaching “phase 3”. Shockingly, there is some good geopolitical news in 2020. There is peace progress in the Middle East. Israel and the UAE reached a historic agreement called the Abraham Accord, to “fully normalize” their diplomatic and commercial relationship. This deal marks only the third time in Israel’s history that it has normalized relations with an Arab country—Egypt in 1979 and Jordan in 1994. As part of the deal, Israel has agreed to “delay” annexation of the occupied West Bank. The hope is that Saudi Arabia and other neighboring nation’s will feel pressure to join the Accord. The Trump administration has used concern around Iran’s regional ambitions, and the country’s attempts to develop nuclear weapons, as a bridge to unite nations in the region and find common ground.
On the lighter side, the world’s last remaining Blockbuster store in Bend, Oregon, has converted into a rental property for three nights only and listed on AirBnB. Three lucky winners will get the keys to the store (literally) and have access to the full inventory of movies and a VHS player in a makeshift living room complete with a pull-out couch and bean bags. The rental is available to locals only, and the price per night is $4 (not a typo) and includes a variety of snacks—pizza, candy, popcorn, and soda. Reservations are available starting Monday at 1 pm PT. I’m guessing there’s one house rule: Be Kind. Rewind. (Sadly, anyone under 40 won’t get this reference.) In NYC, the MTA has a problem: subway riders are taking off masks to unlock their iPhones. The problem is so bad that MTA sent a letter to Tim Cook asking him to prioritize a fix in the software.
I. Below are the articles I found interesting the past week:
This McKinsey report is a fantastic overview of how COVID has pushed leaders beyond traditional thinking and ushered in a new, more enlightened form of leadership. I have been a CEO and now coach them and this report nails most of the concepts I work on with my clients: 1) the importance of moving quickly and taking bold action 2) being authentic and vulnerable 3) focusing on tasks that only a CEO can do (and delegating everything else) 4) accepting responsibility to a broad set of stakeholders that extend beyond the business, and 5) the importance and power of forming a peer group, especially outside your industry, for support and to share best practices.
I’m curious when I meet people who brag about the number of hours they work. My first three thoughts are in this order: (1) bullshit (2) who cares—I measure results (3) you must not be a good leader and manager. The best leaders are effective at building scalable teams, and if you find yourself consistently working excessive hours, then chances are YOU are limiting your organization’s growth.
Why business owners don’t like long vacations—and how to change
America’s rich have an odd bedfellow in Democrat Governor, Andrew Cuomo. Mr. Cuomo has criticized attempts by Congresswoman Ocasio-Cortez (affectionately known as AOC) to increase taxes on New York City’s uber-rich. Taxing the filthy wealthy feels good when you say it, but it’s specious. The reality is that cities like New York already rely on the wealthy disproportionately for their tax base, so raising taxes may force them to leave (or spend time at their second and third home) and take their tax dollars elsewhere. It’s already happening. Residents of high tax states and cities are fleeing for lower tax areas. With rising crime, underfunded police and increasing homelessness, our major cities can ill afford to lose their tax base. Higher taxes on the rich? Be careful of what you ask for.
Retail chains abandon Manhattan: 'It’s unsustainable'
New Yorkers flee the city in droves
This article is a great reminder to spend time with people and do things that bring you joy and happiness. Take some time this weekend and do this exercise and evaluate if you need to make any adjustments.
Want a more meaningful life? Ask yourself: “Who would I take to a remote island?”
II. The rest of the best
The treatment that could crush COVID
Seven books that will change your life
A 3-step technique for improving memory power
III. Stats that made me go WOW!
- A record 76% of Americans are eligible to vote by mail in the 2020 election. Mail voting has expanded unevenly along partisan lines, with states prone to vote Democrat implementing some of the most comprehensive mail voting programs. Ballots can be mailed directly to 38M voters in eight states; Absentee voting is allowed for 120M voters in 34 states, and 50M voters in eight states can do Absentee voting with an “excuse” (other than COVID). Experts predict 80M mail ballots will flood election offices in November; double the number returned in 2016.
- US gun sales are surging, led primarily by first-time buyers. FBI figures show more than 3.6 million firearms background checks requested on buyers in July, a 79% increase from the same period last year. TSA has reported that they are finding guns in passenger carry-on bags at 3x the rate before COVID. Atlanta airport had the most gun seizures last month, with 27, followed by Dallas-Forth worth and Denver at 13 each, and Nashville airport had 12. Shockingly, 80% of the guns confiscated were loaded! What could go wrong?!
- The country’s largest mall landlord is Simon Property Group (NYSE: SPG). They collected 51% of the rent due in April and May, and that figured rebounded to 73% in July. Currently, Simon reported that 91% of its US tenants were open and operating. Investors are encouraged that the company is also in talks with Amazon to turn large, vacated spaces previously occupied by Sears and JC Penney into Amazon distribution centers.
- GDP shrank for western, industrialized countries in the first half of 2020: Spain (-22.7%); United Kingdom (-22.1%); France (-18.9%); Italy (-17.1%); Germany (-11.9%); USA (-10.6%)
- For the fourth straight month, roughly 1/3 of Americans failed to make a full, on-time housing payment.
IV. Name that Tune!
As I write this email, I am listening to “Bad Reputation” by Freedy Johnston
Born in Kinsley, Kansas, Frederic John Fatzer was interested in music at an early age but had limited options growing up in a small town. The lack of Freedy was a nickname, and Johnston was his mother’s maiden name, and he changed his name to Freedy Johnston and moved to NYC in 1985 to pursue a career in music. He worked odd jobs from restaurants to low-level office jobs before six Bar/None Records when he debuted his music in 1989, without commercial success. Johnston sold some of his family’s farmland to finance his next album, Can You Fly, which released in 1982 and was named by the New York Times as one of the best albums of the year. The follow-up, This Perfect World, featured “Bad Reputation,” released on Elektra Records and Rolling Stone named Johnston “songwriter of the year.” Johnston’s music appears on one of my favorite movies in 1996, “KingPin.”
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