How large is the US National Debt?

How large is the US National Debt? Seymour Durst created the physical clock on Sixth Avenue in New York city in order to visually articulate the US governments gross national debt. In the chart below, I have laid out how the Debt to GDP ratio has evolved over the 2nd half of the 20th century. At the present rate, the debt will be 20 trillion by 2017.

US National Debt as Percentage of GDP

How Could The Republican Convention Have Been Better

I daydream, regardless of partisanship, how might the RNC 2016 convention have been saved?

In US politics, the core objective of a major party convention is to create four days of propaganda for the nominee. The Republicans were light on policy in 2012 and heavy on the boring with the exception of the gaffes from the unlikely spontaneity of Clint Eastwood. Romney received no bounce after the convention and lost anyway. Surely in 2016, someone with the media savvy, charisma and viral-headline appeal could shake things up?

[Enter Trump]

Donald Trump Silhouette at The RNC

Donald Trump’s movement is a reaction against the establishment, of people who have had their jobs taken away from them, a mixture of causal confusion on immigration -> crime -> terrorism and a cry, no scream, against policy wonks and against political deadlock.

Trump promised implicitly to tear the elite out of their ivory towers. Like other outsiders, Trump’s doom and gloom criticism is easy. Making promises off the back of the failed politics of the past works well when combined with the cache that Trump enjoys. The solutions are catchy and facile. The dashing of policy nuance with billionaire sales tactics has worked. He will struggle massively to deliver on his policies. Destroy the deadlock? Maybe but only if he can truly establish his authoritarian hybrid in the heart of western democracy. A frighting thought as Trump just hasn’t grown much intellectually since his announcement a year ago.

Getting the Party Together

What the Republican National Convention needed to do for Trump:

  1. Project a presidential figure that can entrusted with nuclear codes; (mostly on maturity of policy)
  2. Establish a high level of unity within a divided party; (tough to quantify)
  3. While also appearing more likeable considering his nasty direct criticism of opponents is not enough to win; (like-ability could have been better if Trump hadn’t already burnt so many bridges)
  4. Crystalize around policies that attract undecided voters; (beyond the LGBTQ outreach, Trump was too pre-occupied with his drifting base)
  5. Gain acceptance from the elite or complete rejection the latter was achieved. (Rejection was the outcome, Scott Baio? The team of rival didn’t materialise. Probably works for his existing base but getting out the vote may be half-hearted)

What Actually Happened At The RNC:

From the plagiarism that humiliated Melania Trump, to the B-List celebrity spotlight, to the lack of serious political influencers on the stage (chanting “lock her up” in reference to Hillary Clinton not much due process there), to Ted Cruz’s non-endorsement of Trump and to Donald Trump’s teleprompter acceptance speech, the Republican Convention was not the launch Trump needed to win the presidency. It was a mixed bag of surprises which were moderately entertaining. Trump did not broaden his appeal, he reached out to the L…G..B…T…….Q community, yes. But he didn’t soften his image much. As an expert in mainstream media click-bait master mind, Trump focused on the negatives using debunked figures regarding immigrant crime for example. It could have been a revolutionary convention but he hasn’t evolved and remains intellectually lazy on policy….like his base.

The convention was Trump’s to win but even the ratings were bad! John McCain had more television viewers (obviously, these stats exclude online streaming & it’s apples and oranges) in 2008; 35 million versus 32 for Trump. 24 million people watched the Fox debate in August last year….leading pundits to speculate “has Trump finally peaked?” What should he have done differently?

Improvements In Time For RNC

How It Could Have Been Better

Over promising is Trump’s brand. He must have felt that to be presidential he had to temper his flare. Nonetheless, this convention awkwardly compromised by joining the tradition of nuanced affairs. Trump hasn’t up-ed his entertainment game when it was so critical, instead he’s communicated in a bland teleprompter style. His speakers sucked, he couldn’t attract anyone of consequence and putting his spoiled kids up for speeches is  dis-respectful at a minimum. In an effort to become more presidential, Trump has created a double negative; a) alienating his supporters while b) letting his speech writer dictate Republican policy. Here’s how he could have done his convention better:

1. Go After The Democratic Convention:

First of all, move the convention after the Democratic National Convention. Logistically, that would be a pain but the Republicans have always had the same image problem in their conventions regarding a lack of policy, a homogenous caucasian demographic and being creepy. Donkey and ElephantSince I can remember the Republicans convention has happened before the Democrats. And since I can remember, the Democrats have been able to expend a good 25% of their convention providing rebuttals to Republican talking points. That doesn’t add up.

2. Bring Back The Trump Levity, Why Not Interrupt Ted Cruz’s Speech Using The Jumbo Tron:

During Ted Cruz’s 23 minute vote your conscious speech: Donald Trump should have commandeered the Jumbo Tron behind Cruz to interrupt his speech after the 15 minute mark to say:

Ted Cruz versus Donald Trump RNC Speech“Hey, Ted….Ted. Look behind you. It’s me up here. Wrap it up Ted. And hey, aren’t you going to endorse me at some point?” It would have been the defining moment of the entire week. Trump knew what was in Cruz’s speech so capitalize not on a random wave but a humour take over. The problem is the Trump campaign doesn’t have the broad base of talent needed, you can’t just hire your children and wing nuts like Stephen Miller.

Policy development

3. Put More Effort Into the Policy Both At Ideation and Presenting Those Outputs At The Convention

Make your arguments visually. No politician has done this successfully yet. With Trump, there was a glimmer of hope that things would be different. Bring reality tv to policy discussions. That was the revolution that has yet to materialised on either side of the aisle. Instead Trump is baking up policies without consultation. Infographical, data-led support for what you are advocating is the future of political communication. Rhetoric is great but complimenting rhetoric with visual support is uniquely appropriate for conventions. We know that debates have no props, but in the age of powerpoint, platitudes could very well be secondary to ideas and vision. Use visuals to convey the message. I might be naive but if you want people’s votes, you need to appeal to their rational selves. Show them why they should vote for Trump.

ublic Policy Visualised

4. Double Down…but…Get Serious About Policy:

Donald Trump has had a full 12 months to become competent with the facts, to study up to modify his viral policy declarations. Trump went viral every time he unveiled policy on theses issues:

  • A Wall that Mexico Will Pay For;
  • Deporting Millions of Illegal Immigrants;
  • Standup to China & Mexican;
  • Turning Away Foreign Muslims;
  • With Draw Funding with Strategic Allies To Save Money;
  • Punish US Companies That Leave and Reward US Manufacturers;
  • Re-negotiate Free Trade, NAFTA to the TPP;
  • Make American Great Again…

But like a politician, he can’t admit mistakes. These policies are cray cray. He’s only modified the wall policy by dropping the Mexico claim and then foreign muslims has been modified to troubled countries. He applies business logic to governance which is intriguing. His appeal was that he was flexible, business-like, never reveal the details of your dealings, he recognised that politicians will set exit dates for Iraq or other policy declarations which tie that politicians hands. But for the most part, over the past 12 months, his policies didn’t evolve. He tested slogans and attack lines with his crowd fanbase to defend his viral positions AND made himself available to the media so consistently (with his style of neural linguistic programming + repetitive short stream of conscious) THAT he took the mainstream by storm. At a minimum, in 2016, conventions should be policy dialogues. Do social experiments with delegates at the Republican Convention, simulate trade deal negotiations, turn the convention into a giant think tank for policy development, poll on the issues….probably needs more development but maybe conventions aren’t for ideas….

To Rigid, the teleprompter5. Return to Stream of Consciousness But Memorize Your Core Messages:

The teleprompter destroyed Donald Trump’s stream of conscious appeal, replacing his creative flow with a sophomoric oratory that any standard politician would deliver. If you need the teleprompter, just bullet point the core ideas. With bluster and blunt language, Trump inspired his base and if he could marry that with independent voters he would have achieved what was needed. Too much blunt talk with out the humility to apologize is his downfall. There is a balance however.

The Campaign Is On!

The Revenge of Rosie O’Donnell

The Donald Trump / Rosie O’Donnell was probably the most storied tabloid level media story of the 2000s. Trump said he would sue Rosie in her fat ass pockets for mentioning the 4 business bankruptcies in the 1990s. Rosie bit back by flipping her hair in the style of Trump and impersonating him in a satirical barb from her tv platform on The View. It was generally entertaining in the way that nasty public feuds unfortunately can be. Seemed almost like a coordinated effort to bring the two more brand clout, hard to measure but a very real factor in business. Now, it’s 2016…Watch Rosie’s come back attack ad produced for The Daily Show. It features an infomercial section that may resonate with independent and republican voters in the US. Maybe publicly ridiculing people you might have to work with in the future or in this case, a person who might have a vendetta to wage is NOT GOOD.

Is Chinese Shadow Lending A Problem?

The charcoal smeared faces of generations huddled around communal chimneys has given way to a diligent youth globe trotting with the promise of economic opportunity unparalleled  since the expansive growth of the American baby-boomer. The shimmering lights of Shanghai shine outwardly despite a nationalist protectionism that, of course, only the Chinese-themselves can enjoy. It’s an economic system that plays the world very effectively even if its internal logic is stunted by state control. However, according to The Economist, China needs financial reform and it is edging or leaning towards reform but ever so slowly. 
Shanghai

In the interim of further liberalisation, there has been a large increase in the number of bad loans by banks in China where the investments are failing at a higher rate. The debt to GDP has increased to 260% against Chinese GDP in the past 5 years and the solution is now to engage in shadow lending products which are difficult to liquidate during a downturn but are currently working to support bank profitability. Shadow lending investments is interesting because it’s difficult to know what is inside these shadow lending products. Bad lending by Chinese banks have pushed them into this more risky territory. Most bankers do not know what is in the shadow lending products. So what? A problem will arise if this shadow lending is impacted by a recession. However, The Economist story is an old repeated narrative where each week they try to engage readers with the thought of economic calamity centred on China.

Isn’t in the case that the political control of banking means bad lending is underwritten by an interventionist state? The risk will be redistributed in the form of bailouts surely. Also, from a western perspective, since the inbound and outbound investment by Chinese banks as so small any economic downturn is unlikely to have devastating effects on the global economy. The total banking sector valuation in China is $40 Trillion USD or 40% of the entire world GDP….the west waits in the wings to gain more access to this relatively low risk market. It will probably not happen with the current political structure, i.e. reforms will have to be in the interest of the Politburo….

Lessons from a Masters In Business Administration: Liabilities vs. Assets

Liabilities vs. Assets: the money you give away is a liability, whereas the money they have given you is an asset. Banks have huge short-term liabilities – a.k.a. money in their customers’ accounts which can be withdrawn at anytime.  For a bank, a loan is an asset because it is means repayment while money held for customers are liabilities for a bank.

Decision Trees:  Making decisions in business is not always that easy. If you drill for oil in a certain spot in Alberta, Canada, you will have to spend $10 million in drilling costs. From this exploration, there are two possible outcomes. There is a 30% chance that you will find nothing and a 70% chance that you will make $20 million. Multiply the outcomes by a percentage, and you get $0.0000000 versus a positive $14million. So the investment is possibly worth $14million. Probabilities have to be accurate to make this a valid measure….

Learn Excel: Regression Analysis is used to determine why someone who lives close to the bank, chooses or doesn’t choose to use that service over another. Do older people use online banking? Regression is essentially a Large N study or large number of pieces of data study, where you will be asked to make sense of this data, and simplify those trends. These questions can be analysed using a rather useful little program. Excel is essential for an MBA program. Learn as much Excel as possible before you start your MBA.

Why You Should Consider An MBA: The people who go to business school are in two camps, those who know exactly why they are there, and those who know only somewhat. The first group have taken time off from the standard McKinsey or banking backgrounds and they want to make a specific career change. The second want a change in their life but are not sure which kind. An MBA will teach you the language of business which is invaluable.  You will not be the intellectual elite, the artistic, or creative elite. An MBA prepares you to be the “competent elite.” (Laurence Shames) Many people hate MBAs because they engage in too much cost-benefit analysis, and too little humanity.

The Top US Schools: Stanford is known as a place for Silicon Valley entrepreneurs. Kellogg is famous for marketing: building a brand is what Kellogg people do. Wharton is for financiers, Columbia is similarly plugged into New York, Sloan School is for engineers, and scientists.

In Order To Apply: You will be expected to explain 1) why you want to come to a business school? 2) why that particular business school? 3) what have you done in life that makes you think that a business education would be worth the time of that school, and yours? Describe a leadership situation, a difficult moral decision, the intentions of coming to that business school…

Course Structure: Harvard MBA is broken down into 10 courses, finance 1, accounting, marketing, operations, and organizational behaviour, then finance 2, negotiating, strategy, leadership, and corporate accountability, and a macroeconomics course called Business, Government, and International Economics, known to all as ‘Biggie.” Grades are curved: so if you get 94%, and everyone else gets 95% you are screwed. In an MBA, participation is 50% of the grades.  Like all professional programs, you have to know what you want, and what you are good at before you proceed.

[This is a synopsis of several books on the MBA experience including What They Teach You At Harvard Business School by P.D. Broughton]

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