Sat, 19 Dec 2009

Vested Interest . . .

We all approach life with a vested interest -- a special interest in an existing system, arrangement, or institution for particular personal reasons [source]. Because the term has a negative connotation, we want to blame the other guy -- the lobbyist -- for having a vested interest, while we see our point of view as, somehow, pristine. But the truth is, lobbyists are little different than the rest of us, they just get paid to represent some group's point of view. Our vested interests arise from elements which benefit our goals. For everyone, their goals can be reduced to a simple statement

maximize profit.

Anything which increases profit is good. Anything which decreases profit, not so good. So how do you deal with someone with a vested interest -- which we have said is everyone?

The first step in dealing with anyone with a vested interest is to figure out what the profit is. For a business, or anyone representing a (group of) business(es) it's pretty simple, profit is the money which goes to the owners of the business. In general, the formula is pretty simple too:

profit = revenue - expenses

Anything which increases revenue and/or decreases expenses is good. Anything which decreases revenue and/or increases expenses, not so good.

For nonprofit organizations, profit can be a bit more nebulous. (By the way, just because the enterprise is nonprofit, doesn't mean that someone isn't making a great deal of money from that enterprise. Remember, individual salaries, bonuses and benefits are part of expenses in an organization.) Generally, a profit is anything which benefits the cause for which the organization was formed. Nonprofit organizations can also represent profit-making enterprises. In this case, anything which benefits the bottom line of those enterprises is a profit.

For a politician, the profit can be even more nebulous. It generally involves getting reelected. Anything which helps get the politician reelected. -- good. Anything which contributes to a lost election, not so good. The vested interests are usually displaced as they are the interests of the individuals and groups which help get the politician reelected. and are thus displaced by some degree from the actual politician themselves. The interests are as diverse as the people who support a politician, but are generally loosely focused around the politicians political leaning and the area which they are elected to represent. Thus, you might see a conservative politician being reelected to congress, just because he is successful at bringing the pork back to their district, even though they may not represent the overall political leaning of the people of the district. To find the vested interests of a politician, you usually have to follow the money which helps elect them back to the contributors and, thus, to their interests.

Individuals have vested interests, also. They generally are the same as anyone else. Those things which benefit me -- increase my salary, assure my employment, support my lifestyle, protect my family -- are good. Things which harm me either directly or indirectly, not so good. Because individuals are usually part of some other group -- business owners, unions, religious groups -- their interests sometimes become part of that larger universe.

So, how do you deal with someone with a vested interest -- which is everyone? The first thing is to figure out what their goal -- their profit --actually is. In many cases, it may not be what they have stated. In any interaction, each side takes a position. This is something which supports their interest. Generally, they are willing to change their position, but not their underlying interest. The key is to make YOUR position seem like it benefits THEIR interest in some way so they will come at least part way to meet your position and thus benefit YOUR interest.

The first thing you have to do is to try to fully understand their interest. You need to get into what their profit is and how it is derived. To know this, you have to understand their sources of "revenue" and their "expenses". Once you understand this, you can look at your interests and position and find where they align with the other party's. You can adjust your position, even if only slightly, and tailor your message to (seem to) benefit the other party's interest. This will allow the other party to see that your position and interests are of some benefit to them and, hopefully, come more toward your position and interests.

Seem simple? It's not. It's probably one of the most difficult things we have to do in life. But, we need to work at it -- all of us, all the time.

posted 08:17 [/Economy] permanent link

Sat, 17 Oct 2009

Full Employment - 30 hours?

I took an online survey today. One of the questions asked my employment status. The selection which caught my interest was:

Full Employment: 30 hours or more per week

I'm wondering when 30 hours per week became fully employed? Is this a sign of the times? It used to be that you couldn't get benefits if you didn't work at least 32 hours per week. Of course, with the cost of healthcare rising, I suppose you can't get benefits at some employers even if you work 80 hours per week.

posted 15:58 [/Economy] permanent link

Thu, 15 Oct 2009

10 and 10

I just heard something interesting. The DOW is over 10,000 while unemployment is nearing 10%. Is the recession over? I guess it depends on which 10 you're part of!

posted 07:38 [/Economy] permanent link

Sun, 30 Aug 2009

When is the Recession Over?

If you listen to the media, it's when Wall Street rebounds. OK, that's great for my 401K (really 0.41k) plan, but ask the guy or gal who's still out of work whether the recession is over and see what answer you get. I bet the answer will be quite different. I can't seem to go anywhere or talk to anyone without reminders of just how bad things really are. Many sectors of the economy will not come back for a long while. Employment in many sectors may never come back. Unemployment in my area is expected to reach 12-13%. The U.S. Burea of Labor Statistics reports for July, 2009:

In July, the number of unemployed persons was 14.5 million. The unemployment rate was 9.4 percent, little changed for the second consecutive month.

That's a load of people, but it's worse in some states. Take California:

California’s unemployment rate was 11.9 percent in July, and nonfarm payroll jobs declined by 35,800 during the month, according to data released today by the California Employment Development Department (EDD) from two separate surveys.

An Michigan is hovering around 15 percent unemployment. Many sectors of the economy are even worse than that. Wall Street needs to get better, but profits there have to be reflected in increased employment to really make a dent in the recession.

From a personal perspective, the possibility of being layed off at any time is nerve racking. One doesn't know whether to do anything or not. This reduces consumer confidence which reduces consumer spending and consumer spending is a mainstay of the economy and so the spiral continues downward.

posted 15:00 [/Economy] permanent link

Fri, 28 Aug 2009

Renewable Energy . . . How about not using it?

I heard a story about the area used by various energy sources. I got to thinking that the best way to have green energy is to not use it. We can save vast amounts of energy, help global warming and save money by conserving. So why isn't conservation at the top of everyone's agenda? Simple, it isn't profitable. In our greedy world, if you can figure out a way for someone to make a profit from something, they will promote it. In fact, they'll come out of the woodwork to push it to the public. But how do you make a profit from not doing something? I suppose you might make money from telling others how to save money by conserving energy. We'll have to work on it.

posted 18:37 [/Economy] permanent link

Wed, 29 Jul 2009

Regional Transit Cutbacks, Sign of the Times?

Sacramento Regional Transit (RT) has announced cutbacks in service because of the economy. This is unfortunate as, people can be more dependent on public transit in a poor economy when they either don't have or can't afford to drive their cars. It's interesting that these cutbacks come at the same time that RT received several million dollars in economic stimulus money from the federal government. Unfortunately, this money can't be used to stop the cutbacks, but has strings which mean it must be used for maintenance and cleanup. Seems like keeping the service would be more of an economic stimulus --allowing people to looks for jobs and get to them -- if it could be used to maintain the service levels. Oh well, that's politicians for you, never really in touch with reality, just in touch with contributors and special interests!

posted 07:38 [/Economy] permanent link

Sun, 12 Jul 2009

Cars on K Street?

In Sacramento, the K Street mall is a pedestrian mall, i.e. no cars. Here's an article proposing that cars be returned to K Street. The mall has been without cars since 1969, but some businesses think that it should be restored to auto traffic to help increase business. I'm not sure how I feel about that. I don't spend much time downtown, and the mall is sort of going to seed, so I think it might be plausible. I'm not sure that cars are the answer for this area. I don't think that driving by will actually be the answer since, once the predominantly government-based population is gone, there is little reason to drive in this area on any street. One place I think that they should ban cars is in Old Sacramento. At least to me, personally, that would make it a much more appealing place to spend a week end day. Given the current economic conditions, it will be interesting to see just what we can afford for any option.

posted 07:46 [/Economy] permanent link

Sun, 21 Jun 2009

California Imploding, We Need Compromise!

The State of California is imploding under the crush of the budget crisis and STILL the legislature is at an impasse, unable to do the basic job for which they were elected. The State will go into bankruptcy, ruining the lives of millions of californians because these idealogs refuse to compromise!

Politics is the art of compromise. Yet the representatives in Sacramento are, seemingly incapable of doing so. They don't even deserve the title politician as they are so unwilling to give toward the center. They really should be called special interest lackeys as they are more interested in their own narrow special interests than the interests of the people of California. This is true of radicals on both sides.

posted 08:20 [/Economy] permanent link

Thu, 18 Jun 2009

Leading Economic Barometer Up

A recent blog stated:

Vendor performance, the interest rate spread, real money supply, stock prices, consumer expectations, and building permits contributed positively to the index, more than offsetting the negative contributions from weekly hours and initial unemployment claims.

The question becomes more than offsetting for whom? Certainly not for the guy who just got laid off and had to file for unemployment or the gal who had her hours cut so the company could maintain their profit margin. Sure, it's a good thing to know that the economy is getting better for someone, at least. But, trickle down economics is a failed theory, because the benefits never trickle.

posted 08:17 [/Economy] permanent link

Mon, 15 Jun 2009

Gas Going Up . . . Inflation on the rise?

Yesterday, paid $3.01.9 for super and today $2.83.9 for regular at Costco. This is one of the cheapest places around. Gas is definitely on the rise. I wonder if inflation is going to be our next major problem. With people getting layed off, furloughed, and taking pay cuts to keep their jobs, inflation would be one of the worst things that could happen.

posted 06:32 [/Economy] permanent link