“Voting is as much an emotional act as it is an intellectual one.” – Monica Crowley

Georgia’s Controversial New Voting Law 

So, is this new law racist? Is it some new version of Jim Crow?

It’s no longer possible to get a trustworthy answer to a political question by going to any single source – right or left. To answer even a question about facts, like this, you have to read multiple accounts from both sides and then (if you can get it) source material.

I did. And this is what I’ve found.

There are four primary criticisms against the law:

1. It decreases and restricts voting hours.
2. It denies water to voters waiting on line.
3. It requires voter ID, which many Black Americans don’t have access to.
4. It is racist – a new form of Jim Crow.

Claim 1. The new legislation would restrict voting by decreasing early voting hours and mandating that polls be closed at 5 p.m.

* Biden: “It’s ridiculous. Closing the polls at 5.”

* Chuck Schumer: “Republicans recently passed a bill to eliminate early voting on Sunday – a day when many church-going African-Americans participate in voter drives known as Souls to the Polls.”

The Facts: This is flat-out false. Voting hours, in fact, were expanded by adding an extra mandatory Saturday of early voting and continuing to allow Sunday voting. Early voting now must be open from at least 9 a.m. to 5 p.m., a step up from the “normal business hours” required by previous law. Counties can extend those hours to 7 a.m. to 7 p.m., as many have done in the past.

Claim 2. The bill denies voters, waiting on line to vote, easy access to water.

* Biden: “It’s an atrocity… You can’t provide water for people about to vote? Give me a break!”

* James Carville: “It is going to be illegal to give water to somebody that’s standing in line to vote. I have never heard of water being an illegal substance in the United States.”

The Facts: False. The law allows for free and easy access to water for voters, either by providing unattended receptacles of bottled water or hand-distributed by poll workers. What it prohibits is the distribution of anything – flyers, candy, water, soda – by political partisans within 150 feet of a voting building. (This was done to support the existing prohibition against political promotions by either party within 150 feet of a voting building – a regulation that is common in both Blue and Red states.)

Claim 3. The Georgia election law suppresses the vote by requiring onerous voter ID requirements that disproportionately affect Black voters.

* Biden: The voting ID requirements “adds rigid restrictions… that will effectively deny the right to vote to countless voters.”

* Facebook: “We support making voting as accessible and broad-based as possible and oppose efforts to make it harder for people to vote.”

The Facts: Half true. Half false. Yes, the law requires voters to present some form of legally valid ID, such as a driver’s license or a state ID card. But if the voter doesn’t have that, he can furnish his Social Security number. But no, there is no evidence that ID laws decrease voter turnout. Nor is there any evidence that African-Americans are less likely to carry ID than other Americans. 97% of Georgia voters have a driver’s license or a free state voter ID. And almost all have a Social Security number, the last four digits of which can be used to cast an absentee ballot thanks to the new law.

Claim 4. The bill is racist and harkens back to Jim Crow.

* Biden: “This makes Jim Crow look like Jim Eagle. I mean, this is gigantic what they’re trying to do, and it cannot be sustained.”

* Elizabeth Warren: “The Republican who is sitting in Stacey Abrams’ chair just signed a despicable voter suppression bill into law to take Georgia back to Jim Crow.”

The Facts: Jim Crow laws – which included segregation, poll taxes, grandfather clauses, and literacy tests – were designed to restrict African-American voting. Obviously, the Georgia law makes no distinctions based on race. So, the logic behind those that have criticized the law must be based on either the absurd notion that African-Americans are more in need of water or less likely than other Americans to carry ID.

 What’s Going On? 

One view comes from Kay James (who is an African-American), president of the Heritage Foundation. She says the criticism is an “attempt to rally support for a bill currently in Congress, ironically called the For the People Act, or H.R. 1, that would actually allow for greater fraud and election tampering. It would allow illegal votes to cancel out legal ones. It would diminish the very voting rights that my relatives in the 1960s, the women suffragists of the early 1900s, and all the men and women of the armed forces throughout our history fought so hard to gain and protect.”

I talked about H.R. 1 here.

My view is that this bill is about political power. The Democrats want to increase voter turnout among certain groups they consider likely to vote Democratic, including African-Americans, illegal immigrants from Central America, and convicts. Republicans want to limit voter turnout among these groups.

But of the claims made by Biden and others about the Georgia law, three were absolutely false, and the fourth – that the requirement of a voter ID would decrease the African-American vote – is not only unsupported by evidence but is patently racist.

Take a look at this…

And this…

What do you think?

“The rich swell up with pride, the poor from hunger.” – Sholom Aleichem

Does the US Really Have a Hunger Crisis?

If you google “hunger in the US,” you’ll get a plethora of articles about something called food insecurity, but little to nothing about what that means. You can deduce, however, from its use in context, that “food insecurity” means answering “yes” to either one of the following questions:

* When shopping for food, can you buy everything you want or do you have to budget?

* Do you ever experience hunger during the day or before you go to sleep?

But anyone with a high school level education in what we used to call Home Economics can tell you that budgeting is a fiscally healthy thing to do. And anyone with a rudimentary understanding of nutrition can tell you that being hungry several times a day is a good thing too.

The food insecurity warriors don’t agree. They want to live in a world where everyone has all the money they need to buy all the food they want and where everyone can, if they wish, extinguish pangs of hunger by consuming calories the moment the feeling arises.

But wouldn’t that lead to overeating and obesity?

It does. And it has very little to do with income.

Here are some facts: 

According to a recent report by the United Health Foundation, nearly 4 out of 10 (39%) low-income Americans are obese. (“Low-income” is defined as people with an income below $25,000.)

That’s about three times greater than the average obesity rate for people worldwide. A recent study of 19.2 million people published in Lancet found that only about 13% of people worldwide (10.8% of men and 14.9% of women) are obese. Another study put the figure at 11%.

But guess what? The numbers for higher-income Americans are almost as upsetting:

* In the $25,000 to $49,999 income bracket, 35.6% are obese.

* In the $50,000 to $74,999 bracket, 33.7% are obese.

* In the $75,000 or more bracket, 29.6% are obese.

So, Americans are fat. Big deal. We all know that.

That doesn’t mean we don’t have a food-related crisis of some sort.

The real problem 

Worldwide, according to UNICEF, undernourishment is responsible for more sickness and infirmity than any other cause. And by “undernourishment,” they mean “not having enough caloric intake to meet the minimum energy requirements necessary for good health.”

I checked WHO data and found, as I had suspected, that all the serious cases of undernourishment (20% of the population) exist exclusively in parts of Africa, India, and Indonesia.

Some Eastern European countries are in the 5% to 10% range. And interestingly, less than 5% of China’s population suffers from undernourishment.

What about the United States? The percentage is so low – so far below 1% – that it is effectively zero.

So, no, the US doesn’t have a problem with having enough to eat. Virtually 100% of our population has daily access to the calories needed to sustain a healthy life.

But we do have a problem – a very serious problem – with eating too much.

We are a country of fatties. A country of overeaters… in every income bracket.

Which brings me back to Biden’s campaign to address our so-called “hunger crisis” by rushing more food assistance to low-income people.

It includes:

* increasing food stamps by more than $1 billion a month

* providing needy children a dollar a day for snacks

* authorizing the largest children’s summer feeding program in history

This has nothing to do with health. If it did, it would be about education and setting incentives to encourage healthier eating. Instead, it will almost certainly increase the number of low-income people that will die too early from obesity and obesity-related illnesses.

So How’s Biden Doing on His Big Immigration Promises? 

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

When they took over, the Biden administration was confident that it could quickly repair the trouble on the southern border. People would no longer be held in cages. Children would no longer be separated from their parents. Migrants seeking asylum would be processed in a humane and orderly way.

On March 23, Biden signed a series of executive orders meant to reverse some policies created in the past 4 years. “We’re going to work to undo the moral and national shame of the previous administration that literally, not figuratively, ripped children from the arms of their families… and with no plan – none whatsoever – to reunify the children,” he said at the signing ceremony.

So how is all that working out?

It’s not easy to say with any certainty. That’s because the Biden administration isn’t allowing the media into the processing centers. Asked to explain this (which did not happen under Trump), Biden said that he “fully intends to be fully transparent” about the situation. Just not right now.

Many of the media are apparently okay with that. I suppose they feel certain that, whatever the conditions, they must be better than they were last year. And so there has been virtually no reporting on it from the NYT, CNN, etc. since Biden took office.

But what if it just ain’t so?

It turns out that some of the Customs officers are talking. One of them, who was willing to give only his first name, Carlos, reported the following conditions at the South Texas facility:

* Up to 80 individuals are living in 24- by 30-foot cells.

* Sheets of plastic divide the cells.

* As of 3/25, there were not enough mattresses for everyone.

* One or two agents are left to control 300 to 500 people per shift.

* Agents are leery of reporting physical or sexual assaults between the migrants because they’ll get blamed for “letting it happen.”

* Children with biological parents are being kept together.

* Children accompanied by extended family members are being separated from them.

* The number of unaccompanied minors – children under 18 who arrive without a parent – is growing daily. The law requires Border Patrol to prioritize unaccompanied minors and transfer them to the Department of Health and Human Services within 72 hours. But many are staying for 10 to 12 days.

* The majority of unaccompanied minors coming across the border already have parents or family members in the United States.

* Two-thirds of migrants traveling through Mexico report experiencing violence during the journey, including abduction, theft, extortion, torture, and rape, according to Doctors Without Borders (MSF). (MSF has been providing medical and mental health care for migrants and refugees in Mexico since 2012.)

* Almost 1 in 3 women surveyed by MSF said they had been sexually abused during their journey. 60% through rape.

Biden doesn’t like any of this. In fact, he doesn’t like it so much that he asked Kamala Harris to be in charge of this messy job.

I’m sure he and Kamala would like nothing better than for things to turn out exactly as they promised they would, once they took charge and rescinded Trump’s executive orders.

And so now, we have this surge of migrants at the border seeking asylum, and a larger surge of migrants crossing the border illegally. And because it’s well known, south of the border, that after processing, most asylum seekers and illegal entrants are allowed to enter the US so long as they promise to come back for a hearing, the Mexican cartels that are transporting many of them are actually throwing children over the walls!

Here’s what I’m wondering: How could anyone actually believe that loosening restrictions would not cause an unmanageable surge?

There are more than 300 million poor people below living below the border. And virtually all of them know that being poor in the US is much, much better than being poor where they are. They have friends and relatives that have made it to the US and are working as gardeners and housekeepers and making more than doctors do in their own countries. Why wouldn’t many of them want to do the same?

By the way, I’m all in favor of not just allowing immigration, but promoting it. But the idea that it’s somehow immoral to rationalize the process by controlling and vetting immigration is just plain stupid. Every other developed country in the world does it. Heck, just about every developing country does it too.

There are solutions to this. Solutions that sensible people from both sides of the political divide should be able to agree to. For one thing, we could do what the Canadians do: Make illegal immigration absolutely illegal. And, at the same time, introduce a large-scale temporary worker program that would permit hundreds of thousands of vetted and qualified foreigners to work in the US on permits for designated periods of times. In some cases, it could be months; in most cases, years, with the ability to return home to visit their families.

Unfortunately, that’s not going to happen because the political argument is based on lies. Open border advocates want to add millions of low-paid or no-paid immigrants to the population because they believe it will increase their voter base. And anti-immigration advocates want to severely limit immigration from Mexico and Central America because they fear the same thing.

Poverty in Mexico and Central America is a big problem. A big, humanitarian problem. But once a humanitarian problem becomes a political issue, the human factor disappears, and things usually go from bad to worse. That is what’s happening now at the border.

“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.” – John Maynard Keynes

Something Rotten in the EEC 

In mid-March, the European Central Bank (ECB) took a bold new step towards trying to deal with the debt it has accumulated since its chief economist announced the bank’s intention to “make sure the yield curves do not move ahead of the economy.”

What does that mean?

It means that it’s going to do everything in its power to create a negative gap between the interest rates that investors will get for buying ECB bonds and inflation.

Still confused? So am I! Let me try again.

The ECB is trying to create a situation where ECB bond holders – people and institutions that support the EEC lending the ECB billions of euros (by buying ECB bonds) – will get shafted by seeing the rates they are getting on those bonds eaten up by a higher rate of inflation.

You believe in the EEC. So, you lend the ECB a million euros for 10 years. This IOU (bond) comes with a guaranteed 2.5% return (yield) on your million euros. You check your investment calculator. In 10 years, your investment will be worth about 1.3 million euros. Not a lot, but something.

Or so you think. What you don’t know – or aren’t aware of – is that the ECB is planning to keep inflation at 5.5% over that 10-year span.  That three-point gap between the 2.5% yield you are getting and the 5.5% yearly devaluation of the euro has made you poorer. Instead of making 300,000 euros, you’ve actually lost about 300,000.

This is bad news for the bond investor, but good news for the government that creates this policy. A negative 3% real yield brings down the real value of a government’s debt load by 46% over 20 years. And a negative 5% real yield brings it down by 64% over 20 years.

If this sounds like the EEC has decided to make its lenders pay for its overspending, you are seeing it the way I do. But it’s a clever policy because it is (1) gradual, and (2) indirect, and therefore almost nobody understands it.  And if anybody does get it, it can easily be explained as the natural fluctuations of the market. (Not true.) And if that fails, it will be revealed as another way of taxing the rich. (Bond holders are generally rich.) So who cares?

It is a clever policy. Not just because it will fly under the radar, but mostly because it will be tolerated by the people that are being robbed. It’s an extra “tax” on their bond holdings. And not a huge tax. Just a few percentage points. The ECB won’t be biting off the hands that feed it. It’ll be merely nibbling at them, at a rate of 3% to 5% per year.

In a recent issue of Postcards from the Fringe, Tom Dyson called this a form of “financial repression… when big, heavily indebted industrialized countries turn their sovereign bonds into certificates of confiscation in order to reduce their debt.” By pushing inflation rates up while keeping yield curves down (below inflation rates), they “effectively create a tax on holders of government bonds by probably something like 3% to 5% a year.”

It’s been done before, Tom argues.

“From 1945 to 1980, the US Federal Reserve mostly kept inflation a few percent over interest rates – not like this. It’s not too much that it scares people to dump bonds, but enough to keep the debt pile shrinking consistently over the long term.”

So, a question for those of us who have, in the past, liked the idea of lending our government our money in return for a guaranteed return: Does it make any sense anymore?

“Change is vital, improvement the logical form of change.” – James Cash Penney

If It Ain’t Broke… Fix It Anyway!

How to Aim Your Business After It’s Been Started

If you want your business to grow quickly and easily, commit yourself to giving your customers as much as you possibly can. Give them full value for what they paid for on the first sale, and then give them more than they expect with every subsequent purchase.

Don’t settle for building a base of satisfied customers. Shoot for happy, thrilled, and even astonished fans of your business that will help you grow your business over time.

The Ready, Fire, Aim strategy is about starting off with a good and fair relationship with your customers and building on that by giving them more and more.

By resisting the urge to over-analyze the business plan and over-refine the product prior to the launch, Ready, Fire, Aim gives you more cash and (just as important) more flexibility for “aiming” the business and improving the product line thereafter.

Put differently, by launching your business when it’s “good enough” but not yet “perfect,” you give yourself extra time and money and customer feedback to make it perfect later on. And you do that without sacrificing your chances of success.

If your launch succeeds, you roll it out, bringing in more new customers and cash flow every day. The rollout itself is fairly easy from a marketing perspective: mostly more of the same with some testing to “tweak” the offer.

Meanwhile, you flow those new customers through what I used to call a gauntlet of free benefits and services, as well as a separate gauntlet of new product offers that you are developing as you go.

If, as I said, they are more than satisfied with their experience of your company, if they are happy and impressed or even astonished, they will become not only loyal, long-term customers, they will become unpaid advertisers for your business and its products by recommending you to friends and family, and by giving you positive ratings on the internet.

To ensure that your customers are always happy with your products and services, you cannot leave well enough alone. You have to give more. You have to set higher standards. You have to establish a companywide policy of incremental improvement – regularly upgrading your products and customer service by small degrees. And you must do that even when there is no evidence that your customers are in any way unhappy.

The Ongoing Process of Incremental Improvement 

Incremental improvement involves collecting feedback from your customers every day. Not just passive feedback (i.e., complaints and questions) but also active feedback. You must reach out to them and ask, “How can I make our relationship better?”

Once or twice a year, you should get together with your product development team and figure out how to incorporate all that feedback into making your products (and your customers’ experience of buying them) easier, more useful, and more enjoyable.

None of what I’m saying is meant to deny the importance of making a profit. Keeping your business profitable is the best and only way to ensure that it can continue to pursue its mission, which is to provide your customers with increasingly better products over time.

In making improvements, you should promote them to your customers. You should remind them, in every way you can, that you are in business to make their lives better. By communicating your commitment, you will engender in them gratitude and the need for reciprocity. And those feelings will spur them to reward you with more of their patronage.

How to Create Great Products That Keep Getting Better 

For our purposes, “broke” means the product is not selling well, as in your customers are not buying it. If your customers are not buying it, you should not fix it. This advice runs contrary to what most business experts will say. But I have found, over and over again through the years, that it is almost impossible to make a bad (weak-selling) product good (strong-selling) by improving it incrementally. It is much smarter to drop it, go back to the drawing board, and come up with something significantly different.

Let me say that again to emphasize my point: If the product fails to sell well, trash it. If it does sell, improve it.

There are no proven rules about how to improve products. Everything I recommend to my clients is based on instinct and intuition (which, of course, is based on experience). My policy is to improve best-selling products as much and as often as we possibly can, and to let our customers know that they are always getting better.

Products that sell moderately well should be improved too, but only after the top-selling ones have been taken care of.

To avoid putting your employees through incremental-improvement hell, you should come to an agreement about how to deal with ideas for product improvement – how to determine if they are actually better, how to calculate their potential costs and benefits, and how to schedule them into production so you don’t overburden the system.

I have become such a compulsive product improver that most of the CEOs I deal with have developed ways to manage my constant suggestions. I recognize that not all of my ideas will actually improve things, so I never insist on any particular improvement. I make suggestions and have faith that over the long run things will get better.

How Often Should You Make Improvements? 

Several of the businesses I work with hold yearly meetings to brainstorm and plan product improvements. Several others do this once every two years, and one works on a once-every-five-years schedule. In contrast, my clients who are in the business of selling digital information products via the internet are able to improve their products almost instantaneously.

How often you improve the product depends on how much hardware the product has. As a general rule, the more fixed parts it has, the less frequently you can improve it.

But the main rule is: Improve your products as often as you can.

How Big Should the Improvements Be? 

Again, there is no science to this, but my preference is to make small changes incrementally. Since I have made many mistakes about whether certain changes would be seen as favorable, I shy away from radical moves. My preference, when working with a product that is selling well (and is, therefore, good) is to change one thing at a time, and then to see how customers respond to it.

Incremental changes can easily be rescinded. Fundamental transformations cannot. I want the quality of my clients’ products to be always angling upward. We don’t need sharp upward movements. I’d rather have a gradual incline.

I think our customers like that approach. It allows them to see constant improvements and feel that they are in a relationship with a business that is always one step ahead of them. Constant, incremental improvements allow for more frequent communication with your customers, too. And experience proves that the more contact you have with them, the more sales you will enjoy.

Car manufacturers have long understood the perceived value of incremental improvements. With every new improvement in the steering function or the dashboard, they enjoy an additional opportunity to distinguish their product from the competition and get past customers to exchange old models for new ones.

How Should You Communicate Those Changes? 

If you make it a policy to continually improve your products incrementally, you will have many wonderful, ongoing opportunities to speak to your customers about the great new changes you are working on. Making product improvements transparent to customers (and even competitors) might seem foolish to the businessperson who sees the value of any improvements as limited. But as a businessperson who believes that wealth can be infinitely improved, you will be happy to share next year’s improvements with the rest of the world, because you know that as soon as you get them into the pipeline you will be working on some others.

The product goal is constant, never-ending improvement, because the business goal is constant, never-ending sales.

“If we take the route of the permanent handout, the American character will itself be impoverished.” – Richard Nixon

Free money is popular! Who woulda thunk? 

A vast majority of Americans – 72% to 76% – support Biden’s $1.9 trillion COVID bailout, “including a sizable share of Republican voters,” according to the NYT.

I’m surprised it isn’t 95%. It’s hard to say no to free money.

Of course, it’s not free. And the people getting the checks now will be paying for it later on – but with interest.

That isn’t the case for the people that passed the bill. Unlike the working classes in America, the retirement accounts of our elected officials and government workers are protected against inflation.

The bill was sold as a necessary step to help Americans survive the lockdown-triggered economic collapse that began last March and continues. And there’s no doubt that some of it will have a stimulating effect on the economy. The question is: How much?

Last night, at the bar at Fina y Mar at Rancho Santana, I asked a half-dozen people I was drinking with whether they thought the bill would be helpful. The response was roughly the same as the NYT poll: Four thought it would; two thought it wouldn’t.

Then I asked them if they know any of the provisions of the bill.

“Checks for unemployed people,” one said.

“Money for small businesses that have employees, if they keep them employed,” another said.

“I think there’s money in there for small business operators,” a third said.

Well, not exactly. Here are the data:

* $413 billion for another round of stimulus checks

* $246 billion for unemployment provisions

* $75 billion towards vaccinations, medical supplies, and treatments

* $19 billion for “public health” programs

* $26 billion for live venues, restaurants, and bars

* $7.2 billion in additional funds for the Paycheck Protection Program

That adds up to $786 billion of the $1.9 trillion assigned to pandemic relief.

Where is the remaining $1.2 trillion going? Take a look…

* $100 million for a Silicon Valley subway system

* $1.5 million for a bridge that Chuck Schumer has been wanting to connect NY and Canada

* $500 million towards “grants to fund activities related to the arts, humanities, libraries and museums, and Native American language preservation”

* $30 billion for public transit agencies

* $4 billion towards mental health assistance

* $6 billion for the Indian Health Service

* $15 billion towards economic injury disaster loans

* $15 billion to help airlines make payroll

* $4.5 billion for the Low Income Home Energy Assistance program

* $15 billion towards a temporary 5% increase in Federal Medicaid to states offering eligibility to lower-income adults

* $19 billion in rental assistance

* $39 billion for child care

* $86 billion for employers insured by the Pension Benefit Guaranty Corp.

* $129 billion for elementary and secondary schools, regardless of their reopening status, and $40 billion for higher education (According to the Congressional Budget Office, Congress has already given $113 billion to schools and “most of those funds remain to be spent.”)

* $350 billion for state and local governments, using a formula that favors sending more money to states that strictly enforced economic lockdowns

* Some of these expenditures we all agreed, were indirectly related to the Corona Economy. But which of them were necessary? We had a good arguments about that. But some, like the $500 million allocated to the arts and the $100 million destined for the Silicon Valley transit system, left everyone, even the big-government people, speechless.

That’s a fact, but opinions vary:

“We’re here today because Pelosi, Schumer, and Biden decided to use a pandemic to push forward a progressive wish list – items to reward political allies, friends, and donors at the expense of the American working class,” said Representative Jason T. Smith (R-MO).

“This is a spectacular piece of legislation,” Nancy Pelosi told reporters Friday evening. “While the Senate has prevented us temporarily from passing one aspect of it, let us not be distracted from what is in here, because it is a great bill.”

“I am known as a dove [one who supports low interest rates and generous government assistance],” said Olivier Blanchard, MIT economics professor and former International Monetary Fund chief economist. “I believe that the absolute priority is to protect people and firms affected by COVID. Still, I agree [that] the $1.9 trillion program could overheat the economy so badly as to be counterproductive. Protection can be achieved with less.”

Those are the facts and some of the opinions. You should make your own assessment.

The Hidden Choreography of a Compelling (and Very Profitable) Marketing Tool 

“Advertising is fundamentally persuasion and persuasion is not a science, but an art.” – William Bernbach

As a consultant to one of the world’s largest digital publishing networks, I’ve had the opportunity to see the interview-tisement develop gradually over the years, from the crude and amateurish efforts that were common 10 and 15 years ago to the kind that turn ordinary books into NYT bestsellers… make instant celebrities out of college professors, pastry chefs, and fitness teachers… and result in tens of millions of dollars in sales for the expert lucky enough to be endorsed by Oprah Winfrey.

As with the direct-marketing copy that you’re familiar with – whether you’re writing it yourself or working with a copywriter – the script for the interview must achieve credibility on several levels. Not only for the guru and the product you are selling, but (very important) for the host himself. And the way you establish his credibility is to have him play the role of skeptic – in a moderate, reasonable, likable way. If he is not likable (both to the guru and to the audience), the interview is not pleasant to watch. It becomes emotionally complicated, and the message is lost. (This is the big secret that Howard Stern learned in his journey from shock jock to perhaps the best interviewer in America.)

Introducing the Guru 

You begin with the host on camera, speaking directly to the audience. He is holding research reports in his hand, which he will refer to a bit in introducing the guru, and perhaps later in the interview.

The introduction should initially be about the guru’s credibility, not track record. When it is all about track record, it becomes obvious to the audience that they are about to watch a con job. So the host begins with whatever you have about the guru that is universally recognized as credible… a good educational pedigree, a prior position with a prestigious post, a mention of publications, etc. After announcing the guru’s formal credentials, the host mentions the new idea/ system/ whatever that the guru has been invited to talk about. And he describes it in a way that is relevant, arresting, credible (again), and offers an indirect promise of some kind.

At this point, the host might take a look at his research reports and read a few things about performance and perhaps a few testimonials.

Until now, the host is NOT at all skeptical. There is no reason for him to be. He could evince the slightest gesture or the smallest comment of skepticism when he mentions a hard-to-believe performance claim, but that is all. His job during the introduction is not to confront the guru, but to give the audience a reason to think, “Wow, this is going to be interesting!”

The First Impression 

The introduction ends with the host welcoming the guru to the show. He does this by turning away from the camera to where the guru is seated.

(Note: Until now, the camera has been on the host only. This is important. The guru should not be seen until the entire introduction is completed.)

In response to being welcomed to the show, the guru smiles and says, “Thank you.” And maybe, “Happy to be here.” He does NOT start acting like a cheesy infomercial guest, barking, “I’m really excited to be here… I have so much I want to say” crap. The goal here is for the audience to see him as modest, likable, and approachable.

And, by the way, this is the protocol of every good and serious TV interview program that exists. Check for yourself if you do not believe me. Even if the guru is Tony Robbins, you will see that when he is interviewed he does this simple smile-and thank-you bit.

The First 2 Questions 

This is where the host begins the transition to intelligent, skeptical interviewer, acting as the representative of the audience, including the most skeptical of them.

That said, his first question should be only moderately skeptical. So it could, for example, be about some hard-to-believe statistic from the guru’s track record. But posed in a way that does not really challenge.

And in response to the undeniably amazing statistic that the host has just mentioned, the guru says something self-effacing, like, “Yeah, I got lucky that time.”

The host gives the guru a glance, saying, “Okay, you’re being modest” – and asks another such question.

This time, the guru admits that there must be something he’s done that is more than just luck. But he still makes an effort at modesty, presenting as someone who’s not looking to be in the spotlight. He’s there simply to answer questions about his new idea/ system/ whatever.

The Real Interview 

The guru has proven himself to be honest and likeable and confident of his abilities… so now the real interview begins, and the tougher questions are asked.

How the guru answers these more challenging questions is of upmost importance. He should not appear to be reading marketing copy on a prompter. He should not look/ act like he is trying to sell anything. Rather, he is earnestly trying to explain how his idea/ system/ whatever works. He’s undeniably excited about it, because it is genuinely good and smart. His answers are carefully posed. He lets the facts speak for themselves.

A very powerful element of this portion of the interview is the “factual correction.” In posing what he thinks are tough questions, the host makes a statement that is incorrect. In correcting the error, the guru is kind and paternal, demonstrating once again his natural modesty and trustworthiness, but also his superior knowledge of the subject at hand.

During the course of the interview, there should be two or three such corrections, each one adding to the credibility of the guru and his brilliant idea/ system/ whatever.

And now, there’s a subtle change in the host. He has lost his skepticism. His questions now come from his genuine interest in and excitement about the idea/ system/ whatever – and the conversation flows quickly and with exuberance.

The False Close and the Real Close

The penultimate portion of the interview begins with the host (and the audience he’s representing) becoming a true believer. (“How can we get in on this?” he asks.) This is equivalent to the false close in a DM promo. The benefits are repeated and the offer is presented – but only matter-of-factly – by the guru. There is no need to pitch the product hard. The believers are believers.

Now, the extra bonuses and benefits are introduced and we get the “call to action.” Reading from a piece of paper that was given to him, the host might say, “According to your chief of marketing, audience members that want to take advantage of this today will be given…”

The guru responds by either acknowledging that or even being surprised by all the extras. As each one is mentioned, he adds some information about it.

And, finally, we go back to where we began, with the host speaking directly to the audience, emphasizing the great value they will get by responding immediately.

“People don’t buy art based on the personality of the artist. Or there wouldn’t be much art bought and sold.” – David L. Wolper

Buying Investment-Grade Art: An Inside View 

There is so much bullshit in the art world. So many flakes and fakes and posers. The art business has always had a fair amount of graft and fraud, but in the past several decades this shady side of the industry has ballooned to the point where it may be larger than the legitimate market.

I’ve collected art for 40 years, and I had an art business for 20 years. I have no idea whether my thoughts on art are conventional or radical. They are based on my personal experience.

What I Know About Art as an Investment 

Art has no intrinsic economic value. Unlike coal or oil or timber, it can’t be used to fuel trains, planes, and automobiles. The value of any individual work of art depends on the demand for it in the art market. And the strength of that demand is subjective.

If you stop to think about the supply of art, the millions – no, billions – of art objects that exist in the world today, you will have your first and most important lesson about art as an investment. And that is this: Most art, probably 98% of it, is barely worth the material it’s made from.

You are in Italy on vacation and buy an oil painting of a Tuscan landscape from a small gallery in Siena. You pay $1,200. But the moment you walk out the door, its value has probably dropped by 50% to 70% – and the only person that’s going to pay you the 50% is the dealer that sold it to you. And only if he thinks you’ll be coming back to buy more from him.

As the years go by, your Tuscan landscape changes hands, going from one person to another, and finally ends up in a garage sale or flea market. Its price at that time (adjusted for inflation) will almost certainly be less than $120, which means your investment would have lost 90% of its value.

This is not to say that if, instead of just letting it go, you offered it for sale now and then, you might one day find a buyer that values it as highly as you once did. It’s not likely, but it’s possible that you’d then get back your $1,200. Maybe even a bit more to cover inflation.

But as a rule, in purely economic terms, 98% of the world’s art objects aren’t worth the price you will pay for them – whatever that is.

Then there’s the other 2%…

For that very small part of the market that deals in a certain kind of art, the economics are very different.

Defining Our Terms 

What is this little part of the art market where values rise over time and sometimes fortunes are made? What sort of art is that? How do you even define it?

You may have heard the following terms: fine art, collectible art, investment-grade art, and museum-quality art.

Of those four, let’s throw out “fine art,” because it’s meaningless. Of the other three, I don’t have a preference. But for the sake of simplicity (and because the topic here is investing), let’s use “investment-grade art.”

What makes one still life worth $100 while another, virtually identical to the average viewer, is worth $1 million?

Contrary to what many believe, it’s not a question of beauty. Or of brilliance. Or even technical virtuosity. It has little to nothing to do with all the descriptive adjectives you are likely to hear from a docent or auctioneer or read in a gallery brochure. In fact, it has little to nothing to do with aesthetics.

No, a piece of art becomes valuable because of its history. An artist’s work takes its first step towards historical importance when one or several influential critics come to the conclusion that it is important.

Jackson Pollock’s experience is a good example. For years, he worked in relative obscurity, producing the sort of abstractions that were popular at the time. Then the up-and-coming critic Clement Greenberg decided that one of the experimental pieces that Pollack had been doing was a work of genius… and he immediately started to be sold by Peggy Guggenheim’s prestigious Art of This Century gallery in New York City.

To give you an idea of how inexpensive Pollack’s paintings were back then, MoMA bought this piece – “The She Wolf” – for $650 in 1943:

Since the 1950s, Pollack has been included in every significant history book about modern art and has been taught in every art appreciation class. And in 2015, this “drip painting” (Number 17A, done in 1948) sold for $200 million:

Once an artist’s work is in the collection catalog of a dozen major museums, and has been selling at auctions for millions of dollars, and has made its way into the pages of respected books on art, there is virtually no chance its value will depreciate. That’s because everyone one involved with it – the collectors, the museums, dealers, and the uber-wealthy people that have bought it – have a vested interest in seeing the price rise.

Although investment-grade art can offer smart investors returns equal to or greater than stocks, and although the rules for investing in art are similar in some ways to the rules for investing in stocks, there are also differences. For example:

* The size of the market for investment-grade art is much, much smaller than the market for stocks (i.e., there are far fewer players).

* The number of factors that influence the price of investment-grade art are far fewer than the number of factors that influence stock valuations.

* Because of the above two facts, those that participate in the investment-grade art market, as a whole and even individually, have much greater control of market prices than do 99% of stock investors.

Put differently, the investible art market is a private club comprised of dealers, brokers, critics, auction houses, museums, collectors, and investors. And unlike most other markets, all of these diverse players benefit from the same thing: the gradual and steady appreciation of the art product ad infinitum over time.

Each does his part. The dealers manage the artists and their production. The brokers buy and sell it. The critics promote it. The scholars memorialize it. The museums validate it. The collectors hoard it. And the investors profit from it.

Let me put this in more pragmatic terms… 

From a long-term perspective, the single most important factor in the value of a work of art is the artist’s status in the art history books. Next to that is the number of world-class museums that own and display it. Another extremely important factor is the total market “capitalization” of the artist’s work – i.e., how many millions of dollars large corporations and wealthy individuals have invested in it.

The good news for first-time art investors is that all of this information is publicly available. In fact, most of it can be obtained quickly through Google searches and auction records.

As I said, I’ve been buying and selling art for about 40 years – which is about as much time as I’ve been an active investor in the financial markets. My experience has been that, although there are some similarities (like the advantage of buying blue-chip when you can afford it and holding it long-term), investing in art feels more like investing in historical artifacts than in stocks or bonds. In other words, buying a statue by Henry Moore is more like buying a Tiffany lamp than a share of Microsoft or Walmart.

If you think about investment art as historical artifacts rather than as objects of beauty, and follow the common-sense rules one would follow when buying historical artifacts, your buying decisions will likely be sound.

“Procrastination is the thief of time.” – Edward Young

What Are You Waiting For? Start Firing Already! 

You are ready. Your start-up idea passed the various tests you gave it. You have a handle on the size of the market you’ll be competing in, the size of the lead players, the way they sell their products, and how your product might distinguish itself.

You’ve also done your best to understand the key investment considerations, including how much capital you’ll need to discover whether your marketing model works and, if it does, how many additional dollars you’ll have to come up with to get the business to the point where its cash flow is sufficient for future growth.

You don’t know all the details. And you understand that your product, however much you like it, is still untested in the market and may have to be altered or adjusted as the months go by.

You don’t know everything. You probably don’t know enough. But you have done all the essential work to get you, your product, and your business ready to go.

So, go head. Fire!

What?

You don’t feel quite ready to fire? You think that you should wait a bit longer, polish off a few hazy pieces and take care of a few last-minute chores?

The Fear of Firing: One Reason & Two Excuses Why Good Business Ideas Don’t Get Done 

Having done all the essential work to get your business ready to go, you might think that putting it into motion would be as simple as flipping a switch. And for a small percentage of first-time entrepreneurs, that’s true. But for many, the very process of working through the getting-ready stage ushers in a new and often surprising problem – something I call the fear of firing.

The fear of firing is a sense of anxiety that presents itself gradually during the early stages of getting the business idea ready. It then surges as the would-be entrepreneur realizes that the thinking and dreaming and planning is over and the next step is taking action: making that first sale.

The fear of firing is different than the fear of failure, that all-too popular explanation for procrastination in personal achievement endeavors of every sort. The fear of firing is a particular kind of anxiety that affects entrepreneurs. It is about launching a business. And although the fear of failure may be one component of the anxiety one feels, there are several other fears that are just as important – and just as real.

For example, there is the fear of losing money – the initial capital that will be invested in the start-up business – put at risk both by the entrepreneur and, in many cases, by other early investors.

There is also the fear of wasted time – the fear of spending the next year or so, working 24/7, which is what it generally takes (whether you like it or not) to get a new business into positive cash flow and profitability.

There is also – and I think this may be the most disabling worry – the fear of stepping into the unknown, of putting oneself in a constant position of having to solve problems that are new and confusing and/or complex.

These are real fears, not to be dismissed as irrational. I’ll tell you how I have learned to deal with them in a moment. But we have to recognize that for most people these fears do not present themselves as fear. Nor are they experienced with the rapid heartbeat, sweaty palms, and all the other common symptoms of fear. Instead, they present themselves as necessities and urgencies, exigencies that must be dealt with before pulling the trigger and making that first real-time and real-market sale.

In the first edition of Ready, Fire, Aim, I focused on two of these feelings: the desire to further perfect the product, and the impulse to take care of dozens of small chores that keep appearing in one’s head.

As I said, these do not feel like fears. They feel like necessary and urgent tasks that must be done before the trigger is pulled. In fact, they are almost always quite the contrary. They are tasks that can be done – and, in fact, are better done –after the business has been launched. But because of the repressed anxiety, they don’t feel that way.

In an article in the Early to Rise e-zine, Robert Ringer explained why the first feeling – the desire to make the product perfect before you test the market’s appetite for it – is a mistake:

I believe all successful people share this trait [the willingness to move ahead with a good but imperfect product]. You cannot be action-oriented unless you are willing to make mistakes – even willing to look foolish or stupid. Remember the Michael Jordan ads where Jordan said that he’s missed something like 22 game-winning shots? He then finished by adding, “I succeed because I fail.”

People who are obsessed with playing the “what if” game are destined never to get out of the starting gate. In doing a brain scan on Bill Gates, the one thing I zeroed in on, above all else, was his strategy for getting Microsoft’s software out to the public as quickly as possible – bugs be damned!

Clearly, Gates’ philosophy has been that Microsoft can always deal with the predictable bugs and customer backlash down the road. And the biggest Microsoft haters in the world would have to admit that it’s a strategy that hasn’t worked out all that badly for Bill & Friends.

Microsoft is a perfect example of Ready, Fire, Aim in action. And if you think that Apple always gets everything right before launching a product, how do you account for their constant upgrades? Yes, Apple’s new products are always good. Good is what you are looking for. But they are almost never perfect at the outset. You can’t upgrade something that’s perfect.

The second symptom of the fear of firing – the sudden impulse to take care of every new little detail now – must be recognized for what it is: a symptom of the fear of firing.

My argument, in a single sentence, is this: In starting a business, activating the sales process quickly is generally more important than either perfecting the product or the business plan.

Do a quick but solid analysis of the market. Determine that your entry product adds some value to the competition that will be noticed and appreciated. Select a marketing strategy that is based on the best practices of the most successful companies in the industry. And then test your optimal selling strategy (OSS) as quickly and as cheaply as you can.

By restricting, as much as possible, the time and money you invest in launching your new business to the strategy above, you will be able to preserve capital, patience, and energy for refining marketing and product development after you’ve launched.

If this irks you, remember: If you don’t put all your money on the first spin of the wheel, there will be plenty of time and resources left to perfect your business plan later.

And keep this in mind: For every product or business idea that has failed because it wasn’t perfected before it was launched, a hundred never got launched because their champions (entrepreneurs or executives) got caught up in the make-it-perfect-first game.

Procrastination: The Two-Headed Killer of Good Business Ideas 

In the world of entrepreneurship, stillbirths are born from a two-headed monster. The first has a tattoo on its forehead of The God of Perfectionism. The other’s forehead bears the image of The God of One Final Detail.

Across the body of the torso that supports these two heads is a depiction of The Monster of Procrastination.

The two heads have wild hair and bright eyes. And when they talk, they both say the same thing: “I will get to it as soon as I finish up with such and such.”

Those are the words I most frequently hear after someone tells me excitedly about a new business idea they have.

And when I hear those words, I think: “Fat chance. You’re not going to start anything. Ever!”

That’s not a nice thing to think about someone surging with hopes and dreams. And, to be honest, I feel a little bit ashamed of myself each time. But experience has taught me that, however bright and ambitious and even successful someone has been in other areas of life, when the subject is starting a new business, the impulse to get started later is a dream killer.

More than a few times, when I liked the dreamer and thought the dream was possible, I’ve tried to overcome their impulse to procrastinate by offering to be a partner in the deal.

“Okay,” I’d say. “Here’s what we can do. I’ll give you some general advice. You learn the business and you do all the work. I’ll invest 80% or 90% of the money. And we’ll be partners.”

(Note: There was a time when I offered to put up all the money. I’ve since learned that this is a big mistake, that without “skin in the game,” the determination to follow through on all the difficult and challenging work dissipates as the work increases. And the work always increases.)

I have made this offer many, many times. And most of the time, the answer was, “That sounds great. Let me think about it and get back to you.” Of those that procrastinated, none ever got back to me. And I’m pretty sure that none of them ever succeeded in turning their great idea into a business.

Of the dozen or so that did not hesitate to take me up on my offer, all but two (that I remember) succeeded. Four became information publishers. One became a multi-millionaire in the advertising business. One created a $30 million business in the health and wellness field. And another (a group of three friends) created the largest and most successful training program for copywriters in the world.

After talking about their dreams for so long, these people were all emotionally ready to get going the moment I made the offer.

These experiences confirmed my belief in how much a part of success taking action is. What separated the few from the many that turned me down was not skill or knowledge or experience. It was their willingness to fire when the time was right for firing.

The Psychology of Procrastination 

Some say that entrepreneurs are born, not made. I don’t want to believe that. I do believe that anyone that is bright and ambitious can learn the skills needed to start and grow a successful business. But I have to admit that the instinct to procrastinate often seems built-in. Likewise, the impulse to get going right away seems to be an inherent personality trait.

When I think about my own personality, I can see that I lack some of the traits that are commonly attributed to entrepreneurs. I’m not, by nature, a risk taker when it comes to investing my money. On the contrary, I am very reluctant to engage in any form of gambling. I am also naturally a skeptical person. I don’t take easily to new ideas – especially those I can’t fully understand. But when I hear or conjure up an idea that feels good and exciting to me, my brain and my emotions immediately lock into the forward gear. And (usually) that means: Full speed ahead!

My Take on the GameStop/Reddit Fiasco

 “A scam is a scam. A fraud is a fraud.” – Emily Thornberry

Last week, I predicted that, despite the hype and bravado of those behind this fiasco, the share price of GameStop would eventually come back down to where it should be and tens of thousands of small fry investors would lose most (up to 90%) of the money they put into it.

Sadly, this is happening.

Here’s the way I saw it: 

I’m not a studied investment analyst, but you don’t have to be one to understand what was going on here. Some very bright people on Reddit, posing as anti-Wall Street rebels, devised a very clever scheme to pump and dump a number of overly leveraged shorts in order to make a ton of money. And they did. The story they sold – taking down the hedge funds – was just a story. There was never any real possibility that the billions those hedge funds lost would put them out of business. But there was a very good chance that the early promoters would be able to get rich at the expense of the people that bought the story.

The takeaways:

There is a huge distinction between speculating and investing. If you don’t know the difference, you shouldn’t speculate. You should invest your stock money in a no-load index fund.

Hedge funds are allowed to manipulate the market. For years, they have been putting their gurus on TV to badmouth companies in which they have short positions, waiting for the prices to fall, and then returning their “borrowed” stock and cashing in on the difference.

When mom-and-pop investors play the same game and win (but just temporarily), you get to see all the sleazebags that are profiting from their unethical but legal hustles. And it’s not just the funds themselves, but the gurus they put on TV and the TV executives that allow them to play their dirty game at the expense of their listeners.

And let’s not forget the politicians and investment officials that came out calling for regulations to “protect” the little guys. People like Janet Yellen, who got paid $800,000 in speaking fees by the hedge fund Citadel last year for… well… for being the likely candidate for Treasury Secretary this year.

On a positive note, this fiasco may have a good result. Hedge funds will likely be a bit more careful on how far they go short. Retail investors will be reluctant to fall for the same scam twice. And when gurus go on TV to bring down share prices for personal gain, they will do so with more caution because they’ll know that millions of investors now understand the game. (And, by the way, that’s how a free market is supposed to work.)

If you’d like to understand more of the details of what happened, here are three links that do a good job of explaining it. (Most of the media explanations I’ve seen on the subject are confusing or just plain wrong.)

https://www.visualcapitalist.com/the-crazy-world-of-stonks-explained/

https://seekingalpha.com/article/4402481-why-gamestops-stock-price-go-up-explaining-squeeze

https://www.polygon.com/2021/1/27/22252600/gamestop-stock-gme-why-whats-happening-explain