Tag Archives: Business

How to Avoid a Tech Counterrevolution

By Leonid Bershidsky – It’s easy to laugh at a juice squeezer produced by a relatively small startup, whose real competence is in making fancy fruit-and-vegetable packets. It’s not really problem-solving tech; it’s a money-raising gimmick.

The problem is deeper though. Musk, a slicker marketer than Zuckerberg, talks about initially releasing a technology that would help people with brain damage — from strokes, for example.

Facebook is talking about “sharing thoughts,” hitting precisely on the most worrying aspects of the nascent technology: Who wants to share uncensored thoughts, especially with a company that collects information about its users without explaining to them exactly what is harvested? Who wants to give a machine built by a corporate entity access to one’s brain?

Tasks that desperately need automation and tech solutions are narrow. Thinking smaller and applying resources and energy to narrow, specific problems could be a good chance to build trust before it disappears entirely. more> https://goo.gl/MEm63N

The $7 Trillion Hazard That Lies Beneath the M&A Boom

By Chris Bryant Tara Lachapelle – The global M&A boom has left a giant footprint on corporate balance sheets, and we’re not just talking about all that debt. Goodwill — the difference between what assets are worth on paper and how much an acquirer paid for them — is also soaring, and that could spell trouble for corporate earnings.

At S&P 500 companies, goodwill has risen by two-thirds over the past decade and accounts for more than one-third of net assets.

In the past two years, takeover targets have sold for a median of 11 times Ebitda — essentially 11 years of profit — whereas the multiple was only about 7-9 times in the years leading up to the recent merger frenzy.

As for who’s sitting on the most absolute goodwill, beer takes the cake. Anheuser-Busch InBev SA’s goodwill doubled to a cool $136.5 billion after its $100 billion takeover of SAB Miller Plc.

Impairments deplete shareholder equity, which makes lenders and bondholders nervous. Companies that financed takeovers with lots debt are particularly exposed. more> https://goo.gl/Ube7e8

Here’s the real Rust Belt jobs problem — and it’s not offshoring or automation

By Josh Pacewicz and Stephanie Lee Mudge – Many struggling U.S. cities and states compete fiercely with one another to attract and keep firms that offer jobs. Unfortunately, these are not the “good” jobs that Americans are looking for, jobs with middle-class pay, benefits and security.

This race to the bottom drains public coffers, preoccupies local leaders and fuels voter cynicism. “America First” sidesteps the problem.

Since the corporate mergers and restructurings in the 1980s, most cities depend not on one or two large factories but on many small subsidiary operations — light manufacturing, food processing, professional service firms, call centers, hotels and retail. These smaller subsidiaries mostly move between struggling cities and towns rather than leaving for other countries.

Much of the blame for that falls on federal policy. Unions have been hobbled by a changing legal environment. A corporate merger wave unleashed by financial deregulation eliminated local owners who paid workers living wages and contributed generously to their towns.

Tax code changes led to ballooning senior managers’ earnings at the expense of line-workers’ wages. Without changing the federal policies that led to these trends, bringing manufacturing back will not create good, safe jobs. more> https://goo.gl/leRpP1

If US trade with China is so unfair, why is GM the best-selling car there?

By Tim Fernholz – While the US taxes imported cars and cars parts at a maximum of 2.5%, China charges tariffs of between 21% and 30%. This gives foreign automakers who want to sell in China a big incentive to manufacture there to avoid the import charge. But China also requires foreign subsidiaries to operate as 50-50 joint ventures with Chinese companies. These, of course, then become classrooms for Chinese engineers to gain foreign know-how.

This isn’t exactly anyone’s definition of “fair” trade, but there is a logic to the situation. The system came into play in 2001, after China joined the World Trade Organization. At the time, Chinese industry was much further behind America’s. The idea was that future rounds of WTO negotiations would lower China’s trade barriers further, but global trade talks have stagnated completely.

Ironically enough, therefore, this “unfair” situation for America is a product of globalization’s stumbles, not the unyielding march forward that the Trump administration portrays it as.

And any attempts to convince China to drop its protections will now be coming from the most protectionist American administration in recent memory. more> https://goo.gl/7Supvh

What’s Wrong With America’s Current Approach to Cybersecurity?

By Gregory Michaelidis – Go behind the headlines of the latest megahack, and what you’ll find is a growing public-safety and national-security crisis.

We are barely discussing how to help people help themselves in the digital world, let alone do their part in protecting our major networks and critical infrastructure.

Until we embrace a vision of public cybersecurity that sees people, at all ranges of skill, as essential to our collective security, there will be no widespread cybersecurity.

Right now, America’s collective cybersecurity effort is headed toward near-certain failure for reasons within our own control. In less than a decade — thanks to the influx of dollars and high-level policy and press attention — cybersecurity has transformed what is actually a “people problem with a technology component” into its exact opposite.

Official Washington and Silicon Valley have adopted a set of faulty assumptions about cybersecurity and internalized them to such a degree it’s practically a new religion, somewhere between late-19th-century technological determinism and medieval alchemy. more> https://goo.gl/elH8r2

Staying Rich Without Manufacturing Will Be Hard

By Noah Smith – One common assertion is that while manufacturing jobs have declined, output has actually risen. But this piece of conventional wisdom is now outdated. U.S. manufacturing output is almost exactly the same as it was just before the financial crisis of 2008:

It isn’t just manufacturing employment and the sector’s share of gross domestic product that are hurting in the U.S. It’s total output. The U.S. doesn’t really make more stuff than it used to.

And, more troubling, the U.S. is now losing computer manufacturing. Susan Houseman et al. show that U.S. computer production began to fall during the Great Recession. In semiconductors, output has grown slightly, but has been far outpaced by most East Asian countries. Meanwhile, trade deficits in these areas have been climbing.

Faced with this evidence, many skeptics will question why the sector is important at all.

Why should a country specialize in making things, when it can instead specialize in designing, marketing and financing the making of things? more> https://goo.gl/5xRTIf

There’s a Green Card-holder at the heart of Greek philosophy

By David V Johnson – A state that, without due process, simply ignores the rights and obligations it has extended to that legal resident makes a serious breach of its moral authority and the rule of law.

This is why the state’s treatment of its non-citizen legal residents – its visa-holders and permanent resident aliens – can say as much about its health as its treatment of citizens.

The idea that the non-citizen resident is crucial to diagnosing the state’s health is evident in Plato’s Republic.

In the course of the Republic‘s 10 books, Socrates offers a considered analysis of justice and the ideally just state. It can be simplified to one principle: justice is reason ruling.

When rationality rules in government, the state is just. Similarly, when rationality governs the emotions and desires of the soul, a person is just.

When reason fails to rule, whether in the state or the person, injustice obtains. more> https://goo.gl/oTURh3

The Republican Health-Care Bill Is Not Designed to Actually Work

By Jonathan Bernstein – In other words, it’s not exactly designed to pass and become a law that actually works.

Speaker Paul Ryan might get the necessary 218 Republicans to close their eyes, hold hands, and jump over a cliff in order to get the bill to the Senate. It’s still unlikely that the bill will pass in the Senate, where Republicans have a much slimmer majority. And that majority includes some senators who simply won’t vote for significant cuts in Medicaid, since that would mean stripping health care away from people (voters!) who currently have it.

Indeed, the bill is hardly certain to pass the House, where many Republicans want (among other things) much deeper Medicaid cuts.

So, as Ezra Klein asks, what’s the point? What’s the problem the bill is supposed to solve? more> https://goo.gl/uDcmwc

Related>

When Bankers Started Playing With Other People’s Money

By William D. Cohan – On April 10, 1970, nearly a year after first filing its IPO prospectus with the SEC, DLJ pulled it off, raising $12 million from the public and as a result fundamentally altering how Wall Street has functioned ever since. “Going public changed Wall Street permanently and forever,” Richard Jenrette (the J in DLJ) told the Times.

On April 10, 1970, nearly a year after first filing its IPO prospectus with the SEC, DLJ pulled it off, raising $12 million from the public and as a result fundamentally altering how Wall Street has functioned ever since. “Going public changed Wall Street permanently and forever,” Richard Jenrette (the J in DLJ) told the Times.

The truth was going public made perfect sense for DLJ and the many Wall Street firms—nearly every one—that followed its lead.

The problem is that the country is still dealing with the unintended consequences of the DLJ IPO to this day. And, of course, back in 1970, very few people, if any, were paying attention to what a small private partnership on Wall Street was trying to do to change the system. And honestly, the importance of the DLJ IPO has still not been fully appreciated. But it was a seminal event.

Ultimately, the unintended consequences of the DLJ IPO would be devastating. In October 1970, Weeden & Co. followed DLJ’s lead and went public. Then the floodgates opened. more> https://goo.gl/z6MzwK

Your Brain as Laboratory: The Science of Meditation

By John Yates +- an define science as the systematic study of the natural world through observation and experiment, yielding an organized body of knowledge on a particular subject. The human mind is undeniably a suitable subject for scientific study, and one purpose of meditation is careful observation of one’s own mind.

This observation reveals consistent patterns that meditators share with one another and with teachers who direct their practice.

However, meditation is not simply passive observation, nor could it be, since the very act of observation is itself an activity of mind. Rather the meditator intentionally employs attention, awareness, and other mental faculties in a variety of ways to better understand the functional behavior of the mind. more> https://goo.gl/Pp47U6