Friday, November 27, 2009

Amsterdam and Lille – Worlds Apart?

I just attended two conferences in Europe, in Amsterdam and Lille (Northern France), that were quite different from each other though there was significant overlap in the topics they covered. I first was in Amsterdam taking part in the European Venture Philanthropy Association’s (EVPA) annual conference that can be summarized as a large networking event (over 300 participants this year) and a substantive forum. This year, the emphasis was placed on social enterprise per se and how Venture Philanthropy (VP) actors (those with money in short) can effectively support social enterprises, be they for-profit companies or NGOs. The content was of uneven quality as is often the case. As one of the speakers said, venture philanthropy or EVPA for that matter is a very big church with multiple denominations. I don’t know whether the agnostics or atheists among us will be comfortable with the metaphor but it is true that a) the definition of what venture philanthropy is and how it should be done still varies quite widely, even as the concept has been around for over 10 years in the US and 7-8 years in Europe, and b) a lot of those who attend the event every year are somewhat parochial and seem to think that the way they do things is the only right way.

That slightly (sic) narrow-mindedness led one of the speakers to open a session on the use of equity or debt in venture philanthropy by making ludicrous statements on grant-making, i.e. grants inherently generate laziness and can’t be effective. The result was a discussion on the merits of grant-making, which was not the subject, and it took way too long for the actual topic to be addressed.

In another session, that one on the possible creation of a VP fund focusing on the arts, one moderator had thoroughly thought about the systemic obstacles that explain why no such fund has been created so far while the other one merely presented his organization, which had a good illustrative value but missed the broader point.

However, other sessions, for instance on best ways to scale a social enterprise or on Ireland’s Foundation One’s story since its inception, were filled with interesting lessons.

As always, the best part of that conference is in the networking per se. Over the years, an actual European VP community – though “multi-denominational” – has emerged and thus, catching up with colleagues and enjoying that sense of camaraderie is both pleasant and valuable. Also, everyone is very much focused on meeting others and the conference is structured to allow ample breaks for networking.

Lille was quite a stark departure from the Amsterdam Conference. The so-called World Forum on Sustainable Finance (is there an epidemic of World Forums? What’s up with the name?) revolved around sustainable finance. It was a mish-mash of economists, social sector practitioners, investors, and finance professionals from all horizons, and as much as EVPA folks represent a wide array of understanding of what VP is and/or should be, I can tell you that in contrast they form a very homogenous group compared to the people I heard or ran into in Lille. 

The fundamental difference is that all EVPA folks are business people and bring that mentality to whatever philanthropic activities they have. This impacts their vision of the world, typically “I want to invest my money in order to produce tangible results”, and the way they convey it, i.e. very pragmatically and generally clearly and concisely.

In Lille, there was everything in terms of content, from crystal-clear powerpoint presentations to lengthy boring speeches that – good thing – got me to catch up on sleep (!!). The views of what sustainable finance means and how it should brought about differed also very widely. Thus, there was probably more richness and variety in Lille but the event as a result was a bit all over the place.

It is actually ironic, and probably telling, that everyone I talked to in Amsterdam to whom I said that I was on my way to Lille had not even heard of that World Forum…

Amsterdam and Lille, two worlds apart then? 

Tuesday, November 17, 2009

God Save Charlie’s – A few lessons Charlie’s teaches us

I had breakfast at Charlie’s in the South End the other day as we wanted to show this legendary diner to a young friend of ours who was in town for a few days. It was a worthy visit because not only did it delight my palate and senses but also it gave me some food for thought…

Charlie’s teaches us a thing or two about business. It is also the last symbolic bastion of the old South End in an ultra-gentrified neighborhood.

Charlie’s has been a staple in the South End for decades – it has found the formula for staying in business all these years: Consistency and Value… Consistency in their staff, quality of the food, and attention of the service. Charlie’s has been staffed and managed by the same 4 folks since the 70’s (two women and two men). Good people, very welcoming – they each have a different personality but just seem happy to be there. Prices are fine given the quality of the food and the huge portion size but the place is not cheap. You’ll order pancakes, or French toasts, or an omelet – order for two and coffee, you are looking at a $20 check. But Charlie’s offers excellent value: they serve the best French toasts I have ever eaten (and I am big and demanding on anything sweet) and thus, the “package” given the quality of the food and of the welcome is very compelling.

So, in short, a few simple lessons: provide consistent quality and value, know who you are and don’t change your personality (or corporate identity / DNA for that matter)…

Charlie’s is also one of the remnants of the old South End, i.e. the neighborhood as it was pre-gentrification. I am not going to romanticize that era – granted, it had a higher crime rate than today and a lot of the sections were just decrepit. There was much less activity all around and there was no such thing as “Restaurant Row” like today.

However, a sign that shows that the neighborhood has not only changed for the better is that Charlie’s $20 bill for an omelet and coffee for two seems actually dirt cheap compared to the neighborhood’s funky “eateries” (what a terrible word…) where you’ll have to pay about $15 just to get an order of pancakes or French toasts over brunch.

I also find it quite striking that we live in an actual state of de facto segregation in the South End today.

For those of you who don’t know the neighborhood, the South End has historically been the home of several housing projects. Since Boston is required by law to have at least 15% of its housing stock as social housing, the South End projects are not going anywhere. In the past 10-15 years, the folks who were paying market rate rents were priced out by inflation and moved further out and a lot of those who owned places cashed in and left.

As it was getting more hip and lively, the neighborhood kept attracting a younger, whiter, and wealthier crowd and that trend has not stopped. I’ve been in the South End for 5+ years now and disparities keep growing wider and wider.

I look around me and I sense that in most cases people of color look at white folks with mistrust and unease – and conversely.

Again, I don’t want to romanticize the old times but there is a consensus among the old-timers that the neighborhood had much more of a community feel in the 80’s and 90’s as folks loving the Victorian architecture or all the studio loft spaces that were available for almost nothing moved in.

I don’t sense any of this today. Most residents seem to care more about property values and new “eateries” and lounges than about their fellow neighbors.

How did we get there?

Gentrification of historic neighborhoods in downtown areas is not unique to Boston. The same has happened in a lot of big cities around the world, in the US and in Europe in particular. But this is where urban planning comes into play. It should be an essential goal of every large municipality to preserve the “social fabric” of its neighborhoods and do whatever is possible to maintain a representation of all levels of income.

By encouraging new construction or building conversions that only catered to the high end / luxury segment, the City of Boston has in my opinion failed its constituency and failed to make the downtown area a place that is lively and welcoming to everyone - where people from all walks of life feel equally comfortable.

Sunday, November 8, 2009

Nutella: Healthy Breakfast or Guilty Pleasure?

Nutella has been running a TV ad in the last couple of weeks that left me dumb-founded when I saw it recently. It basically said that Nutella is an essential part of a healthy breakfast for kids… In my head, Nutella has always been associated with guilty pleasure – at 541 calories for 100 grams (per the Nutella web site and its section on Nutrition Facts) and knowing that adults need between 2000 and 2500 calories per day to function properly (according to the USDA, the US Department of Agriculture), you’d better not feel guilty too much or too often…

1600 calories being the suggested daily intake for kids, 100 grams of Nutella and their 541 calories, that already 1/3 of what a kid needs in his or her everyday life.

Now, the folks at Nutella are smart, or scared of the outrage they could cause, or overly politically correct, or even health-conscious - or maybe all of the above... The commercial that shows a girl and a boy with their Mom at breakfast enjoying a few slices of bread with Nutella spread on them is cautious to say through the mother’s voice that “I [the mother] spread a little on all kinds of healthy things like multigrain toasts” (I put the italics). The text further adds that Nutella is made of “wholesome quality ingredients”, i.e. you don’t make your kids ingest garbage… The commercial ends with a glorious “breakfast never tasted this good”… Perfect, the “Holy Trinity” of foods, i.e. taste, quality of ingredients, and healthy nature of all. That’s a home run, Nutella – bravo, Signor Ferrero!!

It is interesting however to note that Nutella’s web site does not say anything about the 541 calories upfront – you have to dig up and find the page on Nutrition Facts where a Nutella jar label is displayed. And you are in luck only if you thought of taking your calculator with you or if the one in your cell phone has not been bugged by your GPS or something… You’ll see on the label that you’ll ingest 200 calories for 37 grams of Nutella (including 100 grams of fat…), i.e. 541 calories for 100 grams. Thank you, Mom – “I use Nutella to get my kids to eat healthy foods” says she in the commercial, yeah, right!!

If you genuinely care about nutrition for your kids, Nutella while not running away from the actual nutrition facts that are less glorious than its Holy Trinity commercial would suggest has you work pretty hard. The web site does mention “Food Pyramid and Guidelines” but only briefly. The Nutella folks have preferred to post a convenient external link to USDA’s MyPyramid’s web site, a tool explaining how to have a balanced diet.

So, alright, we get it… Nutella has a bunch of lawyers who told them how not to go overboard on the “kid targeting” craziness and thus avoid having obese young adults sue them for selling those guys breakfast that maybe tasted good but had them gulp down an insane amount of calories throughout their childhoods.

And targeting kids and their parents is a smart, sort of long-term strategy that helps Nutella build its brand equity over time to speak business language.

But if Nutella and Ferrero are as responsible as I am sure they claim to be, they’d better stop targeting our children and rather feel free to tempt us adults to succumb to guilty pleasures from time to time…

Leave our kids alone, Nutella people!!

Saturday, October 31, 2009

“Subliminal” Messages about Volunteerism?

I read last week about the main TV networks’ concerted efforts to promote volunteerism in their shows and programs vs. through Public Service Announcements (PSAs) as it is usually the case. The USA Today article gives some details about iParticipate, a multi-year campaign that is the brainchild of the Entertainment Industry Foundation and took place all of last week across major TV networks in the US.

The major difference with PSAs (the campaign includes straightforward PSAs as well) is that this time messages promoting volunteerism or community service were included in the shows’ actual story lines. The article points out that it was actually easy to convince show producers to come on board and there was none of the usual battle and nastiness between networks.

We’ll have to see what impact this initiative is going to have. I’d be curious to hear whether anyone noticed the “convergence” of messages with the same tone and content – this is quite unusual, isn’t it? A barrage of goodness… But obviously, if down the road more folks are inspired to get involved in their communities and give back, that will be all nice and good. We’ll be happy.

However, there are a couple of things that do not feel quite right here. First, I do have a slight problem with the fact that this initiative was conducted unbeknownst to most viewers (not everyone had a chance to read the USA Today article or visit the iParticipate web site). Would the message be as effective if viewers knew? Not sure. I feel a bit odd knowing that some message – however valuable – was fed (force-fed?) to viewers without proper warning with a view to influencing them. Who said manipulation?

Also, can’t we keep entertainment and good intentions separate? I understand that working on the story lines per se may be more effective than delivering straight PSAs with viewers. But this is a TV show – it’s entertainment!! Imagine my neighbor next door – it is Thursday night, she wants to watch a comedy show to relax. It is her downtime. She just wants to let her hair down. At that very moment, she may not care that much about saving the world or helping the needy – maybe she just does not want to think about it right then. When I watch Extreme Makeover Home Edition which is about generosity and the trickle down effect that being good to others creates, I want to be moved by these acts of generosity and gratefulness. I have fun watching the show and seeing the awesome houses built for those nice folks!! That is indeed entertainment but it is also my choice to watch Ty and his team bring happiness to others.

So, kudos to the entertainment industry (don’t like this picture on their web site by the way) but maybe we want to keep all the goodness blurb separate from our favorite shows’ story lines.

Monday, October 19, 2009

Where is the consensus on healthcare?

I heard report of what President Obama said about insurance companies in his weekly radio address and what the GOP response was, i.e. we would have access to more limited choices and the government would control (meaning constrain) our access to doctors and quality care if the healthcare bill in preparation were to pass.

That really made me angry to be honest with you…
· Angry at both Republicans and Democrats: why is it that I feel like neither Republicans nor Democrats are trying really hard to reach a consensus and come up with a landmark bill that will improve the way healthcare is provided in the US whereas there is a general consensus that the system in this country is not good enough by a long shot?
· Angry at Republicans: How can Republicans use scare tactics again to demean a bill that as far as I have heard is unlikely to bring about anything that the GOP representative mentioned? Well, they know scare tactics works – it has been very effective historically and it is not necessary to go back to the dark days of McCarthyism to realize this. Anyone who was in the US in the couple of years after September 2001 knows it in his/her guts.
· Angry at Democrats: it is easy and it feels good to bash Republicans but is it fair to hold only Republicans responsible for another mostly partisan bill despite its historic significance? Was Ted Kennedy the only one who could do bipartisan politics among Democrats?
· Angry at Obama: wasn’t he supposed to do politics differently? Yes, he is trying and I certainly give him credit for that. But this is not working so far and even though it is not only his or his administration’s fault, at the end of the day history will only remember the outcome of this, thus he has to try harder.

Ok, that is a lot of “politics bashing” but it does bug me that elected officials continuously discredit themselves and in the process make the general public increasingly cynical and distrustful. Or maybe I am being too negative…

Does Social Investing’s Success Mean Impact? (II)

See Part I below

Overall, the systemic or macro effect of those funds remains limited today, if not marginal. Despite the publicity that an Acumen has benefited from, the fund’s portfolio does not comprise more than about 25 companies. Root Capital that has grown rapidly over the past 5 years and now has a portfolio of 235 borrowers for $120m disbursed has spread its investments over 30 countries (source: Root Capital’s and Acumen’s web sites), i.e. an average of $4m per country since its inception in 1999. And when looking at a company’s environmental impact, how meaningful can it be – even if that enterprise’s area of intervention is a well-delimited territory – if that entity is the only one in that region trying to improve biodiversity health?

I am the first one to recognize the pioneering role that those funds are playing today. If social investing becomes a much larger industry some day, we will all have to be thankful to those entities. They are pathfinders and not only are they showing the way to those interested in creating investment vehicles but also they offer small- and medium-sized enterprises a better alternative to other forms of financing that generally revolve around less suited options such as microfinance (loans are too small for their size) and commercial banking (rates are high and those banks may not want to take a chance on relatively untested enterprises).

So yes, arguably, the systemic impact is there. But the actual macro effect of those enterprises remains minor because overall maybe a couple hundreds companies have received money from social investment funds so far – does that ever get to one tenth of a 1% of those countries’ GDP?

Now, it is not unheard of that an asset class becomes financially popular before it actually proves its value or merit. After all, the bet of those who invested in venture capital in the 80’s and 90’s was that that industry would be able to generate returns that were way above those of other asset categories.

However, the cause of social investing would be greatly helped if a few things were to happen:
· Set up a mechanism among major social funds to share and consolidate their information around impact: it should be relatively easy to find funders interested to pitch in.
· As a prerequisite, those funds should agree on simple metrics around the “straightforward stuff”: investees’ financial success, social indicators such as average / median household in communities affected or number of jobs created.
· Find a “home” to showcase those aggregate results. Maybe the White House’s Office of Social Innovation could be the right place (visibility would be great) - or some prominent foundation interested in the matter.
· Accelerate the pace of strategic investments: this is the way the impact magnitude issue could be addressed. Most funds organize their work by sector but there is a difference between supporting enterprises here and there and having an explicit strategy of - for instance - focusing only on innovative solutions that cover the whole gamut of existing and emerging technologies in energy or sanitation.

Being in the social enterprise trenches (sic), I feel that social investing will be successful, both money and impact wise. But let’s not get ahead of ourselves and let’s make sure we put in place the key ingredients that will bring about success before marveling about the “next big thing”…

Does Social Investing’s Success Mean Impact? (I)

I have been meaning to write a short piece on social investing and impact and since this is going to be a longer text than in other entries, it will come in two installments.

It is interesting to compare the success that social investing has been enjoying, as an asset class and as a career path in particular, and the impact that companies that have received funding from those entities have actually had so far. As a result of last year’s financial meltdown, the creation of appropriate investment vehicles, and an increasing interest among many (young and old) in addressing social issues, the whole gamut of social investment funds have gotten a lot of attention lately. It is commonplace to hear that whatever their business models (returning money to investors or not, and if so, serving below-market, at-market, or above-market returns) funds find it pretty easy to raise capital these days.

Also, social investing in its hybrid form represents a very compelling value proposition for young professionals who want to do good and do well, as it supposedly constitutes the perfect combination of for-profit rigor and efficiency and social impact. I have seen first- hand how so many “Millennials” contemplating careers in business are almost magnetically drawn to that career option. And this is probably true also for a lot of us, even those with grey hair (yes, I know, how did that happen?), who have had hybrid careers and believe that market mechanisms can bring about social change when used appropriately.

However, the magnitude of the impact that those social venture funds have through the enterprises they support remains a question mark. Funds like Acumen, Root Capital, E+Co, or Verde Ventures take impact measurement very seriously. Since they mostly receive grant and/or subsidized money, their “raison d’être” is more about the impact they can show than about attractive returns they can serve. Those funds’ web sites certainly try to be informative on the subject. E+Co measures the impact of its clean tech investees by tracking 34 social, financial, and environmental indicators and has a very straightforward section on its web site showing numbers related to the three sets of indicators. Acumen Fund explains its BACO (for "best available charitable option") methodology on its web site but does not elaborate on its portfolios’ actual impact. In order to quantify its investments’ social impact, Acumen compares them to the universe of existing charitable options for that explicit social issue. Root Capital shows cumulative results on its web site (number of loans and borrowers, repayment rate, but also organic agriculture under cultivation or number of farmers reached).

Today social and environmental monitoring remains expensive and there are no cases that I know of where investees are the ones paying for that cost. Monitoring is expensive because of its frequency and complexity. Most funds have set up declarative monitoring processes whereby portfolio companies report on a series of indicators previously agreed upon with the funds. However, a couple of times a year, those funds have to send their staff or external consultants to check impact for themselves. Also, while social monitoring can be relatively straightforward if such indicators as number of jobs created or variation in income of families impacted are used, environmental evaluation is more complex and time-consuming. Thorough baseline studies presenting biodiversity health status of the area affected have to be carried out before relevant measures of what is expected to improve can be determined. Moreover, it is inherently difficult to isolate the impact on biodiversity health of actual actions undertaken by the companies involved as other factors may come into play.

Thus, social investment funds are up against a double pressure of having to raise grant money to pay for M&E (whatever money they make out of their investments is rarely enough to pay for the whole monitoring cost) and showing those funders and the rest of the world the social and environmental benefits generated by the enterprises they are backing.

Saturday, October 10, 2009

Dynamite Barack

I was a bit stunned when I read about Barack Obama winning the Nobel Peace Prize yesterday. My reactions (in order) were: what??? – then great!! – and well, there could be a backlash here. And oh yes also, I thought, Bill Clinton must be fuming (and that made me laugh…).

The main explanation for the Prize seems to be around providing encouragement to Obama for him to continue the good work he has started, especially around putting diplomacy back in the picture front and center (a stark departure from his predecessor) and making early efforts on nuclear weapons reduction (ongoing negotiations with Iran). Obviously, we should not forget how appalling the image of the US overseas was when Bush was around and how that has changed in not even a year. Now, I can’t say that the other accomplishments measure up with those of previous winners but yes, I get it, it is about encouraging him.

It has been interesting recently, including following the skit on Saturday Night Live (SNL) last week during which the actor playing Obama essentially said that he had done nothing since becoming a President, to start hearing here and there (among his supporters too) that actually, not much had been accomplished since January. Those same folks seem to agree that a lot has been started but are we seeing results? Don’t want to get into this question now (I actually think there have been some significant accomplishments though I have my frustrations with this administration) but my point is that the tremendous pressure that comes naturally out of receiving such a high honor will only be compounded by this insidious impression circulating that we have not seen much yet. And this could create a backlash for Obama.

PS. For the intellectuals among you, you will have noticed the oh so subtle reference to Alfred Nobel in the title of this posting, the inventor of dynamite and creator of the Nobel Prizes. But the Peace Prize is actually awarded by Norway now (not Sweden) – so yeah, you can call me on that one…

Oh by the way, talking about intellectuals and subtle references, one of my students used the word “self-effacement” the other day – that was nice. Rarely hear that word mentioned – maybe a combination of lack of vocabulary and lack of self-effacement…

Thursday, October 1, 2009

Kanye and My Mother

I was in Europe last week and I got there just after Obama had commented Kanye’s outburst at the Music Video Award ceremony (timely by the way that he did that just before he was supposed to be one of the first guests of Jay Leno’s comedy show – by the way, I still don’t get how different that show is from what he was doing on the Late Night…). Not only was the US media inundated with the Kanye thing (sic) – Dr Phil was on Larry King Live to give his two cents on this important national issue – but when I got to Paris, my mother asked me what was going on with Obama lashing on that guy (she had no idea who Kanye was by the way…) and said it had been all over the news in France in the past 2 days…

Alright, people – I am sorry but this is the side effect of globalization. With no filter for relevance, the most unimportant news is crossing the pond and traveling to the city of lights and beyond – I am sure the Kuala Lumpur tabloids did their home pages on Kanye’s outburst too… I am not a media basher most of the time but Kanye taking the mike from that poor girl, a matter of national (international!!) importance, really??

I am all for having fun and blowing some steam off after completing a boring task or discussing a serious or difficult issue. But Kanye trumping healthcare reform, wow, Larry King and others in the country + media around the world, you are not doing your job properly here…

Sunday, September 13, 2009

San Fran and SOCAP09

I was in San Francisco last week to attend SOCAP09, the second edition of an annual conference focusing on social capital markets. Social investing is the fastest growing segment in the broader social sector, the boundaries of which keeps expanding by the way. Pure-play VC firms doing clean tech or PE firms focusing on emerging markets with no particular social emphasis in their mission are arguably part of this ever-bigger social sector.

The place was bustling last week and there seem to be so many new initiatives – I try to keep informed on what is going on in that space but I was blown away by the number of projects that I did not know about. The level of excitement and activity made me feel that social investing is on the cusp of a tipping point. Maybe it is a fad and nothing much will happen, in that social capital will remain marginal in the greater investment community – but it has the potential to become really big.

My sense is that the size of the socially-conscious investment community is going to grow, mainly through institutions or individuals that may not have that sole focus but 1) are under some obligation to be perceived as more socially-focused, 2) are interested to diversity their asset base and as such, view investing in emerging countries or focusing on clean tech as potential big wins.

The labor market in terms of number of folks, and particularly recent MBA grads, anxious to enter the sector is going to explode for sure. It is one of the hottest areas for MBA students right now and a lot of them seem to be ready to do anything to intern in the sector for free... Now, they won’t work full-time for free for long, thus the sector will have to grow and hire for that enormous interest to be fulfilled.

But this whole sector of social investing could become humongous… It will be fun to be involved and follow its progress.

On the by the way mode – and yes, I like making digressions - the conference took place at the Fort Mason Center in San Francisco, a very cool place by the water that houses a number of local nonprofits. The view of the Golden Gate from where we were was to die for – what a gorgeous city in general, wow!! Who is moving there with me??

Wednesday, September 9, 2009

If Puzzled, Play it Cold…

Alright, folks, I am going to be honest with you, I am puzzled… The stock market is going up and down: it had a strong summer since early July and fears of catastrophe (the DJ index hitting 6000 or even 5000) that went around in March have totally vanished, so it seems. However, the index took a hit last week and I have also read a number of comments to the effect that the stock market with its sharp rebound since March and a good performance in 2009 (about a 10% increase overall) is getting ahead of itself and is showing too much confidence in the soundness of our economic system and the strength and imminence of the economic recovery.

It almost felt good when I heard several folks on CNBC last week say that they had no idea where the stock market was heading… I still have a hard time reconciling the couple of apparently very solid explanations that I got in March about the possibility of the Dow hitting rock bottom (way below 7000) and the current seemingly widespread feeling that a Dow below 9000 seems rather unlikely. How did we get from one to the other so quickly?

Also, the question of the US public debt is an interesting one… Some numbers came out in the past 2 weeks, to the order of 7 to 10 trillion (depending on whether you count the free espressos in or out I guess…) as the US public debt total by the end of the next decade. Those are astounding numbers, aren’t they? But obviously, you have to look at what they represent relative to the US economy and to the country’s ability to sustain debt over the long run. On those two aspects, NYT columnist and Nobel Prize Winner R. Krugman says that we should not worry. In his blog entry The burden of debt, he mentions the examples of the Belgian and Italian economies as having taken on much more public debt as a % of their GDP than the US is currently and also draws a lesson from US history as the country had a huge debt after WWII that went down gradually as a % of GDP (despite the arm race with Russia) because the economy grew so much during those years. His point is that you don’t have to repay your debt as long as you stabilize it over time.

Warren Buffett in another NYT column, The Greenback Effect, argues that as long as there are folks out there who are willing to buy US Treasury bonds, the US economy is good to go. However, he does point out that this lifeline is the country’s very danger because once the Chinese and other sovereign funds stop buying those US Treasuries, guess who will be in major trouble. What that means is that the dollar should continue to be viewed as a currency of reference and the US economy has to be perceived as having reasonably strong prospects.

I find all of this a bit unnerving though - both Krugman and even Buffett seem quite optimistic to me. With the country having a huge amount of private debt ($13.8 trillion or 120% of the US annual income in 2008) as well - though the financial meltdown has prompted lots of folks to start to repay some of what they owe and to engage in saving, I am not sure I see how the “fundamentals of our economy are strong”, as McCain famously said amid the meltdown last year. The Obama administration is arguably not saying that exactly – nor is Krugman – but they are not that far.

I’d like someone to explain to me how a system can sustain itself and remain the anchor of the global economy over time with so much private and public debt – how about some serious systemic risk? Anyone?

PS. By the way, and let me go on a tangent here, I was just in San Francisco last week and on my way back I listened to Coldplay’s Viva la Vida album on the plane. I knew the main song only and I really liked Cemeteries of London and also Lovers in Japan. I’ve missed Coldplay a couple of times in concert in my area but good news - after my wife Anne and I saw a piece about Chris Martin on 60 Minutes some time ago, I think I finally convinced her to go and see them in concert… well, now they have to come back to the States…

Saturday, August 29, 2009

The Wonderful World of Panera

So, I am sitting at Panera Bread on High Street the other day in-between meetings, checking emails (got me a while to get on their free wireless network by the way). I stayed there for quite a bit and it was just interesting to observe the movements in the store. And before I get there and tell you more, let me just say - for those who are curious to know - that I find the pastries / breakfast items in general good but too sweet.

In the course of the 40-50 minutes I spent there, I saw a wide array of customers and staff. Customers were either tourists waiting to hop on a city tour, go to the nearby Aquarium, or visit Faneuil Hall which is just close by or people working in the office buildings around. I would characterize the style of the tourists I saw as preppy / suburban for the most part. Those folks may have stayed in nearby hotels too which happen to all be expensive.

There was a pretty strong disconnect between those tourists and the Panera Bread crew – all good people it seems and a reflection of America’s Lumpen Proletariat: Saïd, the store manager, from North Africa; several Latino men and women, generally in non-customer facing positions (fixing sandwiches), a couple of African-American folks, including one who had the distinct honor to clean the bathrooms every 10-15 minutes, and a middle-aged lady from I would guess Kurdistan or Iraq, maybe Iran.

The reason why you’ll find those folks working at Panera is because Panera does not pay high wages. Here in Massachusetts there is a minimum wage and I don’t know to what extent it is enforced. But I am guessing the Panera employees make less than $10 an hour – more like $7-8. In the meantime, I am paying around $2-2.50 with tax for my too sweet muffin / scone and $1.80 for a small cup of coffee. So, yes this is an expensive place.

It is “prime location”, mind you. The store is at the very end of High Street, at the corner of the new Rose Kennedy Greenway (where the Central Artery used to be) and the whole area has been beautified with the extra bonus of being close to the water and Boston Harbor.

That Panera Bread store is quite typical of other coffee / sandwich places in big cities in America: top location, hefty prices, underpaid staff, pretty fat margins I would guess (I can’t see how the rent makes up more than a small percentage of the overall cost).

Alright, but let’s be positive for a second – and I am thinking in particular of the non-US folks I saw in that store. Isn’t that what the American Dream is all about as well? Saïd is a store manager for god’s sake – I did not see any “white anglo” in the staff, he is the boss. The Panera crew did not seem overly depressed (can’t say that the big guy cleaning the bathrooms seemed particularly overjoyed though). They are making $7-8 an hour and hopefully, they get health insurance. Then they probably have another job and their spouse works hard too and their kids will someday go to college – perhaps to a state school and on from there.

I am thinking that they have to believe that it is possible to come to this country, stay, and thrive to some extent at least. Or not? The middle-aged woman from Kurdistan / Iraq (who wore a headscarf btw) sat down next to me for her break – I observed her discretely and at some point she looked outside and just stared blankly. The light was gorgeous that morning, beautiful late summer day. But I could no help but think about where that lady’s mind must have been wandering at that moment – maybe back home in her village, or small town, or big city, having fun with her cousins and friends?

The American Dream, whether she and others believe in it, comes at a price – even in the Wonderful World of Panera.

Wednesday, August 26, 2009

Ach, Gross Berlin…

The Track and Field World Championships ended last Sunday in Berlin. It was a wonderful week of competition and the crowd seemed absolutely overjoyed – I saw repeated “olas” (Mexican waves) in the public throughout the competition. Who said the Germans did not know how to have fun? Usain Bolt was the star of these Championships because of his historic world records on the 100 and 200 meters. But there were so many other great performances that I was just impressed with the terrific “ensemble cast”….

The US did pretty well as usual in those track and field competitions. They remain the only country that wins medals across the board, in pretty much all disciplines. Well sure, the Jamaicans kicked their butts in the sprint, both in men and women’s races. And for the Jamaicans, beating the Americans is always as sweet as if Puerto Rico defeated the US in basketball…

My favorite athlete of this generation, Allyson Felix, saved America’s day in sprint by beautifully winning the 200 meters (her third victory in a row in a world championship). That girl is amazing – I’ve had an eye on her since she ran junior championships – she was already terrific and it was not hard to predict that she would be a star. But she has everything going for her, her grace, her smarts (she finished her undergrad degree), and her sweetness.

It is just sad that track and field has to take so much of a back seat to football / baseball / basketball in this country. Such a beautiful sport!!

Sunday, August 23, 2009

Different Views on Headscarf

I have often had questions as to why the burqa – or rather the headscarf - debate sounds quite different in the US than it does in continental Europe. It is actually more about the headscarf that views seem to differ across the pond than about the burqa – indeed, the burqa appears to cause widespread disapproval in Western countries. I guess that most people are put off by the appearance of a woman veiled from head to toe.

The fact that headscarf stirs much less controversy in the US than it does in Europe is related to the notions of freedom of expression and tolerance for religious practice. The picture on both fronts may not be that rosy in actuality in the US but there is still a deep belief among most Americans that those are fundamental rights – mostly, because most people here do not want those rights to be denied to them...

In continental Europe the main reason why the headscarf, even if in lightest form, provokes strong reactions is because most people view it as a sign of oppression. There is a general belief that somehow the practice is imposed upon women – even when they “freely” accept to wear a headscarf - and that at the end of the day the headscarf is just a reflection of women’s lesser status compared to that of men.

The second reason stems from the long tradition of separation of state and church. It gets back to the early 20th century in most Western European countries and there is till discomfort today about the church interfering in government’s affairs and anyone displaying signs of religious affiliation openly. And yes, there is probably a double standard between the headscarf and the Christian cross or David’s star but signs of affiliation are generally not welcome.

Also, and a corollary to this, the baby boomer’s generation and even more the Generation Xers in Europe grew up with a religion in general but feel detached from it for the most part. Even in countries like Spain and Italy, the percentage of those practicing religion is way below 20%. Thus, dealing with an immigrant population that mostly considers its religion quite seriously can only create tensions – let alone when obvious (sic) “exterior signs of affiliation” come into play.

Friday, August 14, 2009

Nice walk with the Minute Man

I spent a wonderful couple of hours today walking in the Minute Man National Historical Park. The Park is a stretch along Lexington Road in Concord / Lexington that includes a 5-mile trail along the historic route where the American militia man / patriots fought the British colonial forces on April 19th, 1775. This is “where the Revolution began” according to American history (as a National Park Service flyer points out…). For those like me who love nature, trails, and history, this is a perfect combination. I did not know the National Park existed until today. I just was familiar with the nearby Minuteman Bikeway that connects the Alewife subway station to Bedford and is well over 10 miles long. Do not expect everyone to say hi back on the trail though - after all, this is Massasuchetts...

Note that a number of plaques (I plead guilty, I am a “serial plaque reader”…) read, “British soldier(s) buried here” and next to those plaques, a small paper had been placed saying that the plaque honored the memory of “too often forgotten British soldiers” – well, yes, the poor lads lost that battle and their lives but it was a bit bizarre to realize that they had been buried where they were killed pretty much.

More info about the Minute Man National Historical Park at Enjoy!!

To cap the day, I had a haircut… Not that anyone cares, I know.

Wednesday, August 12, 2009

Unemployment in Europe – Two sides of the same coin

I was in continental Europe for a few weeks last month and the situation as far as the economic crisis is concerned felt different that it does here in the US. The main concern that I saw was the risk of unemployment vs. unemployment itself – as there have been fewer layoffs over there than in the US. The fear of unemployment is understandable, mostly among those who are little skilled and/or depend on their paychecks to just go by. But I have felt that in Europe a far broader section of the population is concerned, the prevailing thought being, “if I lose my job, it is going to be nearly impossible to find another one”.

I think there is definitely awareness that the existence of a solid safety net has contributed to making the labor market more and more rigid, leading folks who have a job to generally stick to it even when their level of satisfaction is low and discouraging a lot of companies, especially smaller ones, to create new jobs as not only do they have to pay high social charges but also – and more importantly – they know that they have little leeway as to eliminating positions even when a downturn occurs.

The high level of rigidity of the job market and the comforting safety are the two sides of the same coin, but not until my last trip did I notice how inherently rigid the labor market has become, at least in most people’s eyes, resulting in a sharp increase in pessimism about the immediate future.

Monday, August 10, 2009

A Favorite Boston Story – Thomas and the Police Details

Boston’s Mayor announced last week that he was in favor of maintaining police staff at construction sites around the city whereas the Governor has advocated for the use of civilian flaggers on lower-speed road in an effort to curb the cost of police details. According to the Boston Globe article published last week, Menino pushing for police as flaggers, police details cost the state a whopping $20-25m per year (and that is only the state portion) and Patrick’s plan could reduce that number by about $6-7m. The Mayor however has used a – hum – original argument since he cited the tortuous nature of Boston roads to justify the need for cops in all situations (article says, “But city officials contend that Boston’s road infrastructure is far more complex than that of any other community in the state and that roads with low speed limits can still have heavy traffic volume that calls for a trained Boston police officer”).

I did not grow up in Boston and there are a number of “only in Boston“ things (that locals seem to take pride of actually) that irritate the hell out of me… Police details are one of those. The question that goes around in my mind about these “only in Boston” characteristics is, how do other cities manage safety around construction sites? Why only in Boston do we resort to cops as flaggers – bearing in mind actually that not all construction sites have an impact on traffic but still, you’ll find cops there?

A newspaper story about how much money cops can make on details came out about 2 years ago and the highest-paid police officers could actually double their salaries through details. On average, I believe that the extra pay brings an additional 20% to cops. So, yes, essentially, it is a way to increase cops’ compensation. This is what it comes down to.

The value to the community as far as police work is concerned is limited in my opinion. Let’s hear what the police union thinks… In that same article, the union rep said, “If you can put an additional 300 to 400 officers into every neighborhood [working details], it’s a great deterrent.” My first reaction is, do we have to rely on cops hanging out doing details for us to be safe? Is this how police work is going to be conducted from now on?

No later than yesterday, I saw two (why two btw?) cops doing details, their backs turned to traffic, chatting with each other and hanging out with the construction workers. In the meantime, a car ran a red light in front of me and they did not see it… And I won’t mention the number of times that I saw cops speaking on their cell phones even though the use of phones is banned during details. But maybe they were placing important calls – that’s probably what it was…

So, is it surprising that a couple of months away from an election that promises to be one of the most competitive in years for Menino, the Mayor has backed the police unions’ stance around the Governor’s plan? Let’s remember that Menino was not exactly the police force’s hero when in 2005 a number of disagreements arose during contract renegotiations.

In sum, I’ll ask the Mayor to respect our intelligence and not use bogus arguments while his move is clearly political. Thank you Mayor Menino, and yes, I’ll let you shake my hand next time you are on Tremont St…

Wednesday, August 5, 2009

Modern Tale of Two Cities

I just finished reading Tale of Two Cities by Charles Dickens. It took me a while (I am not a fast reader) but I really enjoyed it. It is not exactly easy to get into this novel – I guess the 1859 English (the year that book was written) did not help but overall it is a great read. Dickens is very effective at using personal stories (those of a French family having settled in England and of a couple of Paris-based tavern owners mainly) and weaving them into that time’s events.

Tale of Two Cities has become the book of reference about the French Revolution in the English-speaking world even though Dickens himself never claimed his novel related actual stories collected from witnesses. The 60+-year difference between the time he wrote the novel and the French Revolution would not have made that easy anyway.

There are a couple of things that I found remarkable in the book, some of which turned out to be very “modern", i.e. be relevant today:
1) The first few chapters describe the condition of France’s common people in the 1770’s and 1780’s and Dickens suggests masterfully that the abuse they are taking – they are considered less than human beings - cannot last forever. For instance, the accidental death of a child (son of some peasant) that is run over by a Marquis’s carriage is viewed as a nuisance (to him…) by that Marquis. It causes him inconvenience. No feelings there whatsoever for the child and his parents because that kid is a lesser human being at best. It does not sound hugely different from the way slaves were treated in this country's plantations…

2) Dickens portrays the French Revolution as a terrible thing frankly. The end – and climax – of the book takes place around 1793-94 at the worst of the so-called Terror (no picture needed there) and thus, makes little mention of the few years between the time the Bastille was seized in 1789 and the era when the Terror began. By then, the whole thing which was at first a huge and successful liberation movement had become a bloodshed.

3) With that preamble, it is not surprising that horror seems inevitable in the second half of the book. That era seems marked by chaos and indiscriminate murder supported by the populace who seems to have lost any sense of what life is worth. Increasingly, the entire population is at risk actually and anyone irrespective of his/her social class can be brought to the Guillotine and executed.

4) That leads me to the last remark about the very modern nature of the book. While I was reading the last 50 pages that describe the heyday of the Terror period, I got a sense of what massive killings, indiscriminate bloodshed, and civil war could be. One of the main characters, Madame Defarge, the wife in the couple owning that tavern, becomes more and more obsessed with vengeance and fascinated with the Guillotine (that takes a quasi sacred place for her). She wants as many folks as possible to be executed, under the premise that they are all enemies of the Republic. Another central character, Dr Manette, becomes her target even though the guy is almost a saint, having been a prisoner at the Bastille under the Old Regime (which gained him a great reputation) and served as a doctor in prisons, honoring the Republic. She gets to a point where she can not trust her husband himself (who took care of Manette many years before but is like his wife full of hatred and resentment) and talks to friends of hers about her plot against Manette, admitting that she sadly cannot rely on her husband to bring Manette to justice…
Next thing I thought (and the book ends shortly after) is that one day she would start having suspicions about her husband and in her eyes, he too would need to be executed as an enemy of the Republic... Very interesting to see how that slippery slope can work and how one can turn against his/her very loved ones when the level of madness and fanaticism (because it is fanaticism right there) reaches a high.

In sum, an enjoyable read that resonated with some of today’s realities.

Tuesday, August 4, 2009

Disco Night

It is fun to see that PBS is airing a special Disco Night program these days as part of its summer fundraising drive. I mentioned in an earlier post that a Police concert was used also as an incentive for viewers to donate money in a fundraiser this spring. There is something good about aging then and slowly but surely being in PBS’s main target audience…

I got to watch only part of the show (the first 20 minutes) and it was great to see Taste of Honey (no idea those two ladies – who are still hot by the way – were “guitar heroes”…), the folks who created Disco Inferno, or two of the ladies of Chic’s early days. By the way, I always thought that their greatest hit “Le Freak c’est Chic” was spelled “Le Fric…”, which means money in slang in French… Not sure I understand why “Le Freak c’est Chic” but it is irrelevant, isn’t it?

Sunday, August 2, 2009

Goldman’s profits or Goldman profits?

I was somewhat shocked that the announcement of Goldman Sachs’s huge profits did not stir more controversy. Goldman posted a record $3.44bn in profits for the second quarter of 2009 and, as a typical professional services firm, has set aside an enormous amount to be distributed as bonuses to its employees in 2009 ($11.4bn). This means that the average bonus (i.e. total profits distributed by the number of employees, including assistants and folks in the mailroom) will amount to $770,000. Why would anyone be shocked? Good for the folks in the mailroom (hopefully, they have a mailroom at Goldman…) and the assistants.

But that is not the point. Two interesting New York Times articles (see reference below) break down the sources of Goldman’s profits and it turns out that the bank made most of its money on trading activities. It reminded me of a presentation I attended late May during which investment management legend André Perold (long-time professor at Harvard Business School) explained, comparing Goldman’s balance sheet and off-balance sheet numbers (trading numbers are captured off balance sheet), that it had essentially become a trading firm as trading totals dwarfed any of Goldman’s more traditional banking activities by a enormous order of magnitude.

One of the articles also said that Goldman had increased its risk exposure in the past few months, which means that they took some “winning” – but risky – positions, and while the risk that they took (that can be measured by the “value at risk” ratio, i.e. how much the firm could lose in one single day) was not as high as the one that was prevalent just before the meltdown, it was still significant and much higher than that of its competitors. In trading, that is how you win big: if you don’t play big, you won’t win big – but you can lose big too…

And that is the main problem I have with these ballooning profits – that they were rooted in high exposure to risk – AGAIN…

What have we learned from the meltdown? What has Goldman Sachs learned from the meltdown? What is the nature of their business? What is their mission? I’d be curious to know. Are they a bank? A trading firm? Why are they around to begin with? What value do they create for society?

I don’t want to fall into the simplistic and cynical view that large financial institutions know by now that they can engage in whatever risky practices because they are pretty sure that the government is going to bail them out, as long as they are big enough.

I don’t think that those firms are led by loose cannons. But it is hard, reading that piece of news, not to wonder how what was supposed to be a new post-meltdown world order is going to be different from what it was before the crisis.

Also, working with MBA students on their career choices, I am probably particularly sensitive to compensation questions and the extent to which compensation is the main driver behind the interest in Finance jobs of the current generation of MBA grads. Oh yes, I have heard everything: those jobs are intellectually challenging, I’ll be with like-minded people, I like the hectic work pace, etc. and all that is true and is arguably exciting for a 27-year old. But how can numbers like that $770k (again it is an average, thus the number will probably be higher for any post-MBA folks) not be a huge draw for those young folks, and how then can their perceptions of a fair compensation – or for that matter of their own worth – not be totally screwed up by such an incredibly high figure?

Tuesday, July 28, 2009

Health care reform and PR challenges

It does not seem as though there will be much progress on the healthcare reform before the fall. I am not going to enter into the “Washington insider” part of the story, how the Administration has worked with moderate Democrats and with Republicans, and what needs to happen for that reform bill to pass – I don’t know much about this. The thing that has struck me so far is how little we in the public know about what this reform will consist of in detail. I have heard about a government-managed insurance option that would compete with the private insurance solutions. I have heard about incentives that would hopefully encourage people to have a healthier lifestyle, in exchange for lower premiums – things here and there but really not a clear or thorough picture of what the new system would entail.

The Obama Administration that has done very few communication faux-pas so far has surprised me here in its failure to explain simply to the general public what they have in mind. Maybe I missed it but I went on the New York Times and Boston Globe web sites and did not find any simple and accessible articles presenting the reform in detail.

That lack of clarity makes it easier for opponents of the reform to take any one bit of it that they don’t like and make a huge deal out of it. Case in point is the argument that supposedly with the new system the public won’t be able to make decisions regarding their care any longer and everything will be decided by the government. I understand that this could not be farther from the truth – but the lack of details and transparency about the Obama Administration’s intentions create a fertile ground for that kind of questionable debates to happen. No wonder that the public opinion is only moderately in favor of a major healthcare system overhaul…

Gates Incident (Ctd) – Maybe I am the one who doesn’t get it…

So alright, just one more post about the Skip Gates affair. Yesterday the 911 call details of the concerned neighbor / passer-by were released and the main comment I heard in the media was that the woman who called did not specify that the two men she saw (Gates and the cab driver who helped him open his door) were black. She said, “maybe Latino for one of them, I am not sure”. Then, the comments generally went, you see, this was not a call motivated by those guys’ skin color – and thus, implicitly, what are you complaining about? Race has nothing to do with this, we live in a wonderful country…

Well, the whole thing about bias (and I speak in general, not specifically about this woman) is that it is really powerful when it gets internalized. You see black kids together and you may want to cross the street, you see two black guys getting into a house by forcing the door, it has to be suspicious - they attract your attention more than two white folks would. That is what bias is about. At some point, you don’t even realize you have a bias – it becomes part of your intuition.

I am going to share a quick anecdote that helped me understand how bias can play out even in the most mundane situations. I like walking around and exploring cities by foot. I did plenty of these walks in Boston the first few years I was back from DC and one day, I found myself in an exquisite part of Newton by the river – it was kind of a peninsula (not exactly sure how to call it). It was a narrow strip of land and there was basically one main street lined up with trees, just very nice. It was during the day – very quiet - and there was no way that as a non-resident I could go unnoticed. And I did not – I saw two or three folks, some closer than others, who were looking in my direction. I nodded and smiled and said hi when people were close enough. Two things that struck me that day: good manners matter – smiling and being polite make you much less threatening. And the very fact that I looked white and was dressed rather conservatively did not raise any eye-brows – I managed to be pretty much transparent, which is what I wanted. Good thing that I am not wearing on my face that I have an Arabic name and I am 50% North African…

Everyone has to hear black folks in this county when they talk about what it is to be black in America (and African-American in particular). A friend told me one day, being black is a 24/7 thing. You are never anonymous. Try to go to a developing country with your Western looks – you’ll see what it is to not be anonymous – the 24/7 thing… It may disturb a lot of folks when they hear what it is to be black in America today, but what everyone should do is listen and appreciate what they will hear. Maybe that is the main “learning opportunity” of this whole thing.

Saturday, July 25, 2009

The Skip Gates affair

It is just mind-boggling how the Skip Gates incident has escalated in the past week – since Tuesday really after it was disclosed and the DA did his best to diffuse the incident. Everyone seems to have had a point of view since then, so that of course kept fueling the debate. But this tells me two things:

1) We still have serious issues with racism in this country - the very fact that some folks reacted so strongly, complaining that the race card was being played or uttering that they could not fathom how race was an issue in the first place is evidence enough that racism is alive and well;

2) There is a silent majority (mostly white lower middle class / blue collar) – or hopefully minority from a pure number standpoint – that sort of woke up with that incident and expressed discontent and frustration with the way the police officer was being portrayed in some media outlets. This is an intuition on my part based on many comments I read on the Boston Globe web site that were frankly pretty scary. Essentially, it seems as though a lot of folks in that group feel disfranchised and resent people like Gates who they see as elitist (which he may very well be). They probably have the same resentment towards wealthy and influential white folks – and for some good reason as socio-economic disparities have dangerously widened in this country in the past 15-20 years.
But the ugly part of the story here is that above and beyond that resentment towards those who have means and power, there may be frustration also against minorities, namely Blacks and Latinos, who according to those folks have received preferential treatments for quite a while. Moreover, since it has become increasingly politically incorrect and certainly slippery to address race issues, t hose guys who would like to denounce what they see as preferential treatments are just stuck saying nothing – and only being able to express themselves when elections come.
The combination of resentment and frustration towards elites and about preferential treatments / double standards produces that hostility against the Gates, Obamas, or Patricks of the world.

Obama with his usual political shrewdness has been the first one to back down and try to have everyone come to his/her senses. Those guys – the protagonists - will have a beer at the White House – or whatever – and we won’t see any riots as no poor black man was shot and killed by police this time. But it does not mean that we as a country can look ourselves proudly in the mirror and think that we’ve done such a great job of putting racism behind us.

Back in town

I was in Europe for a while and stopped writing… Sorry!! That shows that I have not yet fully comprehended what the concept of a blog is about. Remaining silent for a number of weeks – hmmm, not the point!! I’ll try to get better at this. I’ve actually been back for over two weeks but I always seem to find things to do that take precedence over writing a blog entry –though it is not exactly as if there has not been any interesting news to comment on lately…

Friday, May 1, 2009


I liked Yaoundé overall. It is not as hectic as other major African cities I have known like Dakar and I hear that Douala (country’s economic capital) is much more painful to navigate than Yaoundé is. There are plenty of hills and mountains around, a lot of green and brown / red because of the climate. The city feels safe and folks are nice. Those are broad generalizations of course but it is interesting how after 3 days one can develop that feeling of safety or not when one move or walk around. I have taken collective taxis, which did not even cross my mind when I got here (not something someone from a Western nation traveling to a poor country would think of doing) and today I can tell that I would move around that way if I lived here. It is very convenient, there are lots of small yellow taxis. Before getting into the cab, people suggest a price and tell their destination (e.g. “300 Carrefour Bastos”) and the driver says yeah or nay…

Also, it is interesting to see how the economy is geared towards consumption in small quantities. For those not having a cell phone (which was my case and I could not call local numbers from my hotel – go figure…), they just find someone on the street who sell SIM cards and phone cards for cell phones but also lend cell phones for anyone to call – rate is 20 cents a minute… By the same token, my hotel did not have wireless, so guests could either use desktops and pay 500 Francs CFA an hour (less than a buck) or use their own computers, get connected to the hotel’s local network and pay 1000 Francs CFA… You have your own laptop – it costs you more. Supposedly, the connection is faster. That is how they justified the price difference when I asked…

The folks I ran into were all very polite (same with each other) and willing to help. Almost no hustling even though there are few non-African travelers or business folks around – so, one gets spotted quickly. It is just nice to be able to go around one’s business freely and concern-free. There is a certain nonchalance also – did not see a lot of people who seemed to run around and rush from one place to the next and be stressed out. That contributes to the ambiance of fine and calm pace, which I liked.

Ministry of Fauna

I wrote this waiting for a guy working for the German cooperation agency GTZ at the Ministry of Forestry and Fauna in Yaoundé, Cameroon, last week. Our friend is actually based in the Ministry per se which itself is housed in a big government office tower. I went up to the 7th floor with 7-8 other folks in the elevator and a guy pressing on the corresponding buttons in the elevator. I am not good at descriptions, so I am not sure that you will be able to visualize the picture, but basically the whole thing looks a bit old and shabby. Stained carpet, old office furniture, some folks sitting in the hallways here and there. A number of offices with closed doors. The office of the guy I am to meet with is under renovation, so there is a nice strident noise less than 10 feet (3 meters) away from me… I forgot to mention that the building entrance is all marble – tower must have been built in the 70s and must have looked quite nice for a while.

I did not get the full picture of what happens in the forestry and fauna sectors in Cameroon, so I won’t claim to say anything thorough and even exactly accurate. One quick thing right away: it is interesting (and not uncommon) to see forestry and fauna under the same ministry’s umbrella. Sustainable forestry is a growing trend but standard practices in forestry still dominate the landscape and are not particularly good for the fauna or flora… But considering the glass half-full, there seem to be signs of hope in the forestry sector as several major operators are moving towards certification under the pressure of demand in their countries (largely in Europe) and small-sized operators may be able to carve a niche, operate sustainably, and make some money.

Investing and Africa

Alright, that interesting project I alluded to is the review of a venture fund that makes loans to businesses that produce not only economic benefits but also social and environmental ones (the so-called “triple bottom line”). This fund, Verde Ventures, affiliated to big-time NGO Conservation International is thinking of expanding its activities to new sectors and new geographies (most of its work has centered on coffee and ecotourism in Latin America so far). A potential new investor asked to conduct a review of their operations and assess the potential of VV’s expansion into Africa. Hence, the somewhat (understatement…) busy time in the past few weeks and current trip to Africa….

Madrid, Madrid

I have been off line for a while because I started a new interesting project that I will have a chance to write more about. Not that my readership missed me that much and demanded to read an update – but hey, who knows? Who do we write blogs for? For others first? But who are they? Or for ourselves? Anyway, I will revisit this topic at a later point I am sure. Alright then, in mid-March I spent a wonderful long weekend in Madrid – weather was gorgeous and warm for that time of year, in the lower 70’s (over 20 degrees Celsius), exactly when we needed after the long Boston winter.

What struck me in Madrid is the money that has been poured into infrastructure and public spaces. The subway has undergone a vast improvement / expansion plan – absolutely modern and efficient today, a lot of trains throughout the day and at night, a lot of new stations that have made the network pretty dense. There are good bus connections from what I could tell in the outer subway stations to reach suburbs where the subway does not get yet - and there is also a brand-new light rail system that I did not have a chance to experiment.

The real estate boom that has characterized Spain in the last several years before the meltdown has been accompanied by the construction of new monuments or public spaces all across town. I am certainly biased with respect to the place and importance of culture in society, having grown up in France, but the myriad of monuments and public areas, old and new (the Prado garden which dates back to the 17th century is wonderful) make Madrid so livable and just great.

So, the 64-thousand-dollar question to which I don’t have an answer is who foots the bill (and how…). Obviously, it is a big one. In America we would say, “well, that’s why they pay higher taxes in Europe”. Why is it such a bad thing anyway? At least, everyone gets something concrete (a much improved public transportation system) and, granted this is a bit more subjective, a better quality of life thanks to the presence of art in more and more public spaces (free and accessible).

I am not sure Americans realize that so many cities around the world have gone through those beautification processes which have often entailed the integration of more art accessible to everyone. Several US cities have done a good job of revamping parts of their downtown areas, for instance with the construction of ballparks (baseball stadium) that triggered the resurgence of the area around them, especially through the arrival of retail stores and restaurants. Denver, San Diego, and Baltimore are just a couple of examples. But - and this is where it goes back to the subjective part – don’t we need more than just sport, food and shopping?

Monday, March 16, 2009

Dr. Ross

It was a treat seeing George Clooney (Le Beau George…), Julianne Margulies, and Eriq LaSalle back in ER the other night (no in the ER since the characters played by Clooney and Margulies are now in Takoma, WA and the surgeon played by LaSalle is at Northwestern…). Seeing Le Beau George made me think that I don’t know that many examples of TV series lead actors who became worldwide movie stars. That Clooney guy is sure to go anywhere in this world – he will be recognized. A true old-school movie star…

I read about ER ratings’ slide in the last several years (now the 49th most seen show nationally or something like that). I have remained among the ER faithful (though missing the earlier era) – but I am sure a lot of folks, including those who got tired of the series, enjoyed that episode last Thursday and maybe also felt a bit sad that ER lost some of its momentum over time.

AIG and a Call for Service

Alright so, there was this outcry over the weekend about the bonuses paid to AIG folks amounting to millions of dollars that will come from the $160bn the company got in bailout money. The Obama Administration was on the defensive of course, displaying a combination of tactics, saying “this is outrageous” and “but this is the best we could do”. They probably understood (Summers and Bernanke are the two I saw) that they had to show empathy and reflect what 99% of folks out there were thinking (it is outrageous) and then they could explain what the administration did, i.e. they had to comply with existing contracts that included clauses about bonus payments (not sure how those were calculated – even when the company loses billions of dollars, those guys get bonuses – pretty good deal…).

That is the story. We have to pay those people to retain them. I don’t know who those folks are, nor what they do exactly, so I won’t make a definite judgment about how valuable they are. But it does seem to me as though the Administration, now holding a 80% stake of AIG, could be more creative and offer something that would be in line with Obama’s Call for Service (in his victory and inaugural speeches and in his state of the union address).

Since working for AIG is basically a government job tantamount to a “rescue mission”, why not call on the thousands of folks unemployed / ill-employed / seeking a challenge / willing to help who would be happy to get involved in salvaging AIG for a set period of time (6 months for instance, renewable once) for a decent amount of money but something lower than they would get in a Finance job (e.g. $100k)? That short experience would look good on their résumés – it would be a quasi-Obama Administration job (something likely to be carried as a badge of honor in the future) focusing on a complex and difficult mission (preventing the AIG-Titanic boat from sinking and thus avoiding a snowball effect in the rest of the global financial system). The opportunity cost for those folks would be acceptable – being away from high-paying jobs (assuming they could get one of the few that are left…) for only 6 months to a year would not be that bad…

I love the Obama Administration – don’t get me wrong… But they have been showing two facets that I don’t like that much: they have not been hugely creative in coming up with solutions to this mess and they have adopted a very middle-of-the-road approach that probably makes sense in a lot of cases (this mess is more complex that most of us understand, so let’s not be tempted by rash solutions) but sometimes they should draw the line in actions vs. in words (saying “this is outrageous” is not enough).

Sunday, March 15, 2009

New Labor?

I read an interesting article in the New York Times the other day (“Job Losses Hint at Vast Remaking of Economy”) whose punch line was basically that a significant portion of the jobs that vanished as a result of the current downturn are not going to come back. McKinsey partner and Harvard Business School (HBS) professor Bhaskar Chakravorti had a more optimistic message in an interview for HBS’s Working Knowledge (“Creative Entrepreneurship in a Downturn”) in late February that new needs will emerge in this time of crisis and resources will be available at a relatively lower cost. That will constitute a kind of “private stimulus” that will contribute to getting us out of the current mess.

It seems as though we are seeing and hearing different things regarding the job situation, how bad unemployment could get, and what we should do to improve the situation. A significant portion of the stimulus plan is going to pay for those infrastructure jobs that the Administration says are needed because our infrastructure is crumbling. Well, they have a point there. However, it is a “shot in the arm”-type solution that will get a number of folks out of unemployment in the short run only – until those bridges or roads are fixed. And then what?

We should focus our resources, we being the government, the corporate community, and society, on thinking about what will be reservoirs for those jobs that in the long run will sustain the economy. Green technologies are big and we all sense that anything related to reducing our dependence on oil and our environmental footprint will be increasingly needed and popular in the years to come. There is also a sense however that a bubble might be forming in the green tech / cleantech world and there will be winners and losers. I guess Venture Capitalists live by that risk, one home run out of 10 tries, but the likelihood or imminence of that bubble bursting might discourage some investors.

Then, related to the jobs that are not coming back (re. the NYT article), what about the folks who got trained on those jobs and are not skilled at anything else really? If the plan is for all those people to go back to unskilled jobs, that is not going to help them (low salaries) or the broader economy as a whole.

As to the question that the Administration does not want to ask bluntly, what about the jobs that should disappear? I don’t want to be too hard on General Motors and Detroit and I know that pension plans have weighed significantly on their accounts and thus have given us a biased view of those folks’ profitability but it is not as though we have not seen the Big Three’s competitive positions eroding in the past 20 years – and mind you, they have certainly been trying to do something about it, but it has not worked so far.

I found ironic actually that GM recently announced that they would discontinue Saturn as a brand whereas when it was introduced Saturn was supposed to lead the way and show the world how differently GM was going to make cars from then on.

So, the temptation is to have GM and the other car makers throw the towel and let markets do their magic (or damage…). Of course, the human price would be huge because of the millions of folks depending on the Big Three directly and indirectly for their livelihoods – but supporting those companies over time just because they provide jobs does not make any sense either. And how about diversification in the Detroit area? Easier said than done for sure – but depending so much on the Big Three is not healthy for the Greater Detroit area – that is certain.

Wednesday, March 4, 2009

TV Recycling

I was flipping through the channels last night and stumbled upon a show on CW in which I recognized the actress who played the mother of the clan in cultish Arrested Development. It is so funny to see all those actors being “recycled” from one series to the next – it almost feels like always the same players get to play…

I must say I loved that the Freaks and Geeks folks popped up in more and more TV shows and movies - and how about the two main characters in Arrested Development who have become movie stars now (Jason Bateman and Michael Cera) – didn’t they play together in Juno? Maybe this recycling thing should inspire our new administration, at least it is very in line with the green “zeitgeist” (or whatever). Hum, I should think about this “recycling of people” thing – with folks losing jobs, I feel there is something there…

Lahore and Munich

I was sad to hear on the BBC yesterday morning about the shooting in Lahore that targeted Sri Lanka’s national cricket team and killed several policemen and injured a few players and others.

But I was also very surprised that I had to look for a while on,, or for the account of that attack… According to the BBC, that attack was the worst incident affecting athletes since 1972 and the Munich tragedy… The BBC journalist shared that they had received scores of emails from folks being shocked and angered by what had happened.

I guess this has to do with cricket being like a religion in many Asian countries and a very minor sport elsewhere, including in the US. But also, is it just that we have given up on Pakistan and are getting used to attacks here? Or as long as there are not dozens of casualties like in Bombay, why should we even bother? It is also maybe time to tell the US media that we are not on an island here and we should care about human lives everywhere – life has the same worth anywhere, America!!

Tuesday, March 3, 2009

The Police and Andre

I saw a concert by Police the other night on PBS at part of their fundraising drive. Police on PBS – wow!! That was unexpected.

Does that mean that the “Police generation” who must be in its 40s today is becoming PBS’s target audience? I thought our baby-boomer friends were PBS’s primary audience. Well, maybe PBS featuring Police surprised me because I thought, “I am getting old if PBS is now showing concerts of groups I love”. I should be happy though because as time goes by, I’ll have more and more opportunities to catch music from the 70’s and early 80’s on PBS.

And kudos to those PBS for being “adaptive” in its marketing – you guys rock (huh, really?). Anyways, this is always better than André Rieu, the Dutch Huguenot (yes, I like those French-sounding Dutch names) Conductor Extraordinaire, or rather “you might as well shoot me” Conductor Extraordinaire – I must say I can’t stand that guy…