Selasa, 31 Juli 2012

Unblock Your Blessings!


Have you ever considered that you might have things present in your life that are blocking your blessings? I'd bet that you might.

Here's an analogy. What if you plowed a field, sowed seeds into fertile ground, watered them and then covered the ground with plywood or even concrete? Those seeds might have a hard time coming to life and bearing fruit! Wouldn't you agree?

I'm going to share some thoughts about blessing blockers over the next few weeks as I'm guided because this is something that I came to understand in my own life. Sometimes you're doing or have done many of the right things, but things still haven't opened up the way you wanted or expected. Why?

Maybe your blessings are being blocked?! The good news is there is a way to identify and remove these obstacles and that's what we want to do together. For example, the first thing you must do is take care of all the seeds you've already sown. Make sure they're being nurtured and cared for. A lot of times we neglect the investments (career, relationships, business, ministry) that we've already made and then wonder why they don't produce the way they could or used to.

What are some things that you've found that block blessings from flowing in your life?

White House: Happy Days Are Here Again!

After offering our own updated GDP forecast for the second and third quarters of 2012 earlier this morning, we were looking over the White House's 27 July 2012 Mid-Session Review for the budget of the U.S. government, and specifically at Table 2, where the White House forecasts that the average GDP growth rate for the calendar year of 2012 will be 2.6%.

Taking into account that the annualized GDP growth rate for the first quarter of 2012 was just recorded on the same date of 27 July 2012 to be 2.0% and that the first indication for the real growth rate of GDP in the second quarter was 1.5%, to hit that 2.6% mark, the White House apparently believes that economic growth in the U.S. will surge to reach an average annualized growth rate of 3.5% in both the third and fourth quarters of 2012.

Since we're now one month into the third quarter of 2012, clearly, this means that the White House believes that happy days are here again!

Updated GDP Forecast for 2012-Q2 and a Peek at Q3

Since the U.S. Bureau of Economic Analysis revised the data we use to project future GDP for the U.S., we're updating our forecast accordingly from what we had previously posted:

Real GDP vs Climbing Limo vs Modified Limo Forecasts, 2004-Present, 2012-Q1 Final (Revised)

Going by our preferred Modified Limo forecasting technique, we now see a 50% probability that real GDP in 2012-Q2 will be finalized at a value over $13,608.0 billion, and a 50% probability that it will be finalized under that level.

The BEA's first advance estimate for the quarter is $13,558.0 billion, so at present, it appears that we overshot the target by 0.37%, although we are still within our originally projected forecast range (where we had given a 68.2% probability of that 2012-Q2 real GDP would fall between $13,367.7 billion and $13,649.9 billion in terms of constant 2005 U.S. dollars.

Peeking ahead, using the BEA's first estimate of 2012-Q2's GDP (they will "finalize" the estimate for the quarter with their third estimate in September 2012), we would project real GDP in 2012-Q3 to be roughly $13,617.1 billion in the inflation-adjusted terms of chained 2005 U.S. dollars, with a 68.2% probability of falling between $13,475.3 billion and $13,758.9 billion.

All-in-all, that suggests a pretty lackluster GDP growth rate is in store for the third quarter of 2012.

Senin, 30 Juli 2012

The GDP Revision

On Friday, 27 July 2012, the Bureau of Economic Analysis revised its estimates of the U.S.' inflation-adjusted GDP going back to the first quarter of 2009. Our animated chart below shows what changed:

Before and After 27 July 2012 GDP Revision, Real GDP in Chained 2005 U.S. Dollars from 2000-Q1 through 2012-Q2

The quick takeaways:

  • The U.S. economy performed better than previously reported in 2009, as the December 2007 recession bottomed and began turning around.

  • The economic recovery following the bottoming of the recession has been far weaker than the previously reported data indicated.

  • We really don't know what to make of the GDP data recorded in 2011-Q4 onward, where the reported data is really characterized by its relative lack of adjustment in the BEA's 27 July 2012 revision. It would be really odd that after the rather large adjustments of 2009 through 2011-Q3 that the BEA would suddenly master the determination of GDP for just these most recent quarters.

Taking the bigger picture into account, given the typical 6 to 18 month lag in time from when macroeconomic policies are implemented to when they begin having a measurable effect upon the economy, it would appear that the policies implemented by the U.S. government and Federal Reserve in 2008 were more effective in arresting the decline of U.S. GDP and initiating the economic recovery in the second quarter of 2009 than the data previously suggested.

Meanwhile, the revised GDP data suggests that policies implemented by the U.S. government in and after 2009 would appear to have been largely ineffective in promoting a more robust economic recovery, as they failed build on the energy it took to arrest the decline and to begin the recovery in the first place.

We wonder when the policy makers of 2009 and afterward first recognized that their policies weren't working the way they believed they would. And perhaps a better question is why didn't they adapt those policies once they did?



Update

Our chart above uses the animated PNG format, where your ability to see the animation may depend upon whether your web browser supports the format. If that's not you, here are the frames for the animation:





Jumat, 27 Juli 2012

New Jobless Claims: Initial Confirmation of Our Hypothesis

Do high gasoline prices affect the number of layoffs in the United States?

Three and a half weeks ago, we announced that we were going to run a live test on the U.S. economy to answer this question, where by having the average gasoline price across the nation drop below $3.50 per gallon, the level that has come to define high gasoline prices in the U.S., we would trigger a downward shift in the established trend for the number of seasonally-adjusted new jobless claims filed each week [1].

With yesterday's report on the number of initial unemployment insurance claims being filed through the week ending 21 July 2012, we can confirm that a such shift has indeed taken place. Here's the graphic proof:

Residual Distribution for Seasonally-Adjusted Initial Unemployment <br />Insurance Claims, 26 March 2011 - 21 July 2012

As we had expected, the week of the 4 July 2012 holiday played a bit of havoc in our being able to claim success for our experiment sooner, as a number of automakers delayed their annual mid-year plant shutdowns by a week, amplifying the seasonally-adjusted figure reported by the Bureau of Labor Statistics for the week ending 14 July 2012. Simply put, the BLS' statistical adjustments didn't account for the difference in the timing of the automakers shutdowns from previous years, so the figure recorded for that week is far higher than it would otherwise have been recorded if the BLS' data jocks could have anticipated the automakers' change in practice from previous years.

In the next phase of our experiment, we're going to see if we can boost the national average price of gasoline in the U.S. back up over the $3.50 per gallon mark to trigger yet another shift in the number of layoffs resulting in new unemployment benefit claims filed each week before a new trend has a chance to really get started. With the price of Brent crude oil rising in recent weeks, which is pushing gasoline prices across the U.S. higher, we should observe a negative upward shift in the number of new jobless claims filed each week if we can sustain an increase in the price of Brent crude over $106.50 per barrel [2].

We're not sure yet if our Eurominions can do this, and we realize that many may be unhappy with our manipulation of global oil prices just for the sake of seeing if they affect the level of new jobless claims in the United States, but remember, "it's supposed to hurt. It's science!"

Besides, what can possibly go wrong?

Notes

[1] A less fun, alternate explanation for what's just happened is that we recognized that the average price of gasoline in the U.S. was about to fall cross the $3.50 per gallon level that has previously preceded shifts in the established trends for new jobless claims by 2-3 weeks, so we predicted that a shift in the established trend for new jobless claims would take place within two to three weeks, the typical lag time between an event that affects the business outlook for U.S. employers and when it shows up in the BLS' data.

[2] Don't blame us! There are other factors that have been driving up oil prices in recent weeks! We just happen to be at a place where we're close to where they result in crossing that critical $3.50 per gallon threshold again. As for our causing gasoline prices to change, well, that would be impossible for us to do, right?

[3] Shh! Somebody's noticed!

Kamis, 26 Juli 2012

Should You Rob a Bank?

A group of economists recently published an article looking at the statistical return to bank robberies in Britain. John Timmer reviews their results:

The results were not pretty. For guidance on the appropriateness of knocking over a bank, the authors first suggest that a would-be robber might check with a vicar or police officer, but "[f]or the statistics, look no further. We can help. We can tell you exactly why robbing banks is a bad idea."

The basic problem is the average haul from a bank job: for the three-year period, it was only £20,330.50 (~$31,613). And it gets worse, as the average robbery involved 1.6 thieves. So the authors conclude, "The return on an average bank robbery is, frankly, rubbish. It is not unimaginable wealth. It is a very modest £12,706.60 per person per raid."

"Given that the average UK wage for those in full-time employment is around £26,000, it will give him a modest life-style for no more than 6 months," the authors note. If a robber keeps hitting banks at a rate sufficient to maintain that modest lifestyle, by a year and a half into their career, odds are better than not they'll have been caught. "As a profitable occupation, bank robbery leaves a lot to be desired."

Worse still, the success of a robbery was a bit like winning the lottery, as the standard deviation on the £20,330.50 was £53,510.20. That means some robbers did far better than average, but it also means that fully a third of robberies failed entirely.

We thought we'd look at the economics of bank robbery in the United States, using the FBI's published statistics for bank crimes in 2011 as our starting point.

Here, the FBI combines 5,014 robberies, 60 burglaries and 12 larcenies into its total of 5,086 bank crimes in the U.S. for 2011.

Of these 5,086 bank crimes, 4,534 resulted in the offenders making off with loot, or 89.2% of the total. That is what we'll call our "initial success rate", as the remaining 552 bank crimes failed to produce any income at all for the offenders for any length of time.

Next, we factored in the 973 bank crimes where the loot that had been stolen was able to be recovered by law enforcement. That lowers the number of successful bank robberies in the United States in 2011 to 3,561. This figure also means that the actual success rate for robbing banks in the U.S. is much lower than our initial success rate would suggest, as the offenders were only able to hang onto the loot in 70.0% of all bank crimes.

We next looked at the offenders "take" - the loot they robbed from the banks! Since nearly 99.8% was in the form of cash, we limited our math to only consider this portion of their take.

The total amount of cash that offenders stole from banks in 2011 was $38,331,491.85. For the total of all 5,086 bank crimes, the average take per crime was $7,536.67.

Dropping out the bank crimes where the offenders failed to take any loot increases the take per initially successful crime to $8,454.23. Adjusting the math to take into account the $8,051,992.97 that law enforcement was later able to recover, we find that the average successful take of a bank robbery in the U.S. in 2011 is just slightly higher at $8,503.09.

Unlike Britain, where the average is 1.6 criminals per bank job, bank crimes in the U.S. would appear to be more of a solitary pursuit. For the 5,086 bank crimes recorded in 2011, the FBI believes just 6,088 people were involved. That works out to an average of 1.2 people per each bank crime.

The average take per successful offender then in the U.S. in 2011 is $7,085.91. This amount is the equivalent of working at the federal minimum wage of $7.25 per hour for just over 977 hours, or about six and a half months if working at that rate full time.

By contrast, the median expected annual salary of an entry level bank teller in the U.S. is $22,896.

So, if an offender wants to continue their life of stealing cash from banks and live at least as well as the lowly paid entry level employee they face across the counter as they commit their crimes, they'll have to rob more than two banks per year.

And that's where our tool today comes into play! Here, we're considering the odds that you'll continue to be successful in robbing banks if you continue to rob banks. Just enter the odds of success and the number of bank crimes into the tool and we'll do the rest!












Your Personal Bank Crime Data
Input DataValues
Success Rate of Bank Crimes [%]
Number of Bank Crimes You'll Attempt










Your Cumulative Odds of Success
Calculated ResultsValues
The Odds That You'll Succeed In That Many Bank Crimes
Your Estimated "Take" from All Your Bank Crimes

Using our default 70% success rate, we estimate that a prospective bank robber has less than a 50% chance of successfully committing two bank robberies in their choice of career.

And suddenly, choosing to be that person behind the counter looks pretty good in comparison. If only Boston's "Trench Coat Bandit", pictured above, was that smart - somehow, we don't think the 22 and a half years he'll be staying as a guest of the state of Massachusetts pays as well in comparison.

Rabu, 25 Juli 2012

Review lesson and tax lesson using authentic materials

The two lessons I taught this morning... both received high praise.

Context

The client is an international tax consultancy.  The lessons are held on-site and the minimalistic luxurious conference room is equipped with a large flatscreen intended for videoconferencing, but accomodates my computer hook up as well.  There are two groups, 90 min once a week.  The first group is lower level (A2-B1) of mostly clerks who conduct more straightforward tax declartions for international clients and then a higher group (B1-B2) which consists mostly of advisors who guide their clients through international tax regulation.  The lesson today for the first group was to review what we had learned.  The follow lesson to the higher group was based on the Germany-US Double Taxation Agreement.

Lesson One - Review

I had just returned from vacation so we when through my selection of photos and discussed what makes a good beach.


Then we began the real lesson...
  • I gave them an envelope filled with the vocabulary words we had seen over the past few lessons.  I keep a running excel list of vocab which I send to them post lesson.  The spreadsheet is open during the lesson and instead of a whiteboard I fill the columns.  To create the cards, I simply paste to word, change the size of the cells, print, and cut out.
  • Then, I asked them to choose 4 colors from a selection of color cards I collected from the hardware store.
  • Next, I asked them to group the words by color.  In order to do this, the learners had to understand the word and explain to their group why it should fit with the color.  In the process they were explaining the meanings of the unknown words.  I stepped in for troublesome words they were avoiding and asked for the pronunciation of other (like exaggerate).  But the rationale was their own.  For example, one group put 'to order' with the caramel color because he envisioned ordering dessert.  Because their office phones have a green button to make a call, both groups placed all the telephone words with green.  The next time we do telephoning, I will probably print the exercises on green paper.  Words from the email lesson tended to be in blue.... hmmm.
  • They then changed groups and had to explain to others how they had grouped the words.  I filled in gaps and answered questions.  By the end, I was confident that we had reviewed and could use most of the words, especially the business specific lexis.
  • We then moved onto a jeopardy game to assess our learning.  I used a free jeopardy game for this and two teams.  It was effective and students like it.  I recommend the site.  Note:  You will have to download the application and the game text file to make sure it works on your computer.  I did not use the online version because I am never 100% certain about connection and I don't like the ads.

    You can find the online game version of the game we played here.
  • To conclude the lesson we reviewed our course plan and expectations and discussed what was working, what they had used in their jobs, and what could be improved.


Lesson Two - Double Taxation Agreements

The second lesson began as the first, with my vacation pictures... but they wanted to chat a bit more comparing Italy and Croatia.  No problem... let them play with the English a bit.

Then the lesson began...
  • Warmer - what is a Double Taxation Agreement (DTA) and why do we need them?
    Here are the discussion questions... this allowed those with more experience to clarify what we are talking about (actually all the participants work with regulations like this).

    Why do taxation agreements exist?
    What flaws are in these agreements?  Give examples.
    Are there any loopholes which can be exploited?  Give examples.
  • Next, I gave them a word cloud from the US-Germany DTA.  The document was available from the IRS website in the US.  I cut and pasted it into wordle and printed to pdf.  I handed out copies of the cloud.  The task was like Taboo.  They had to describe words and their partner had to say which word from the cloud they meant.  This was a risky deep-ending activity and I wasn't sure, but their command of lexis in this discourse community was quite good.  I only jumped in to challenge them a bit and make sure some of the key words were covered.  By the end of the activity their minds were ready for the text.

  • They did not receive the whole text, only the cases included in the treaty (starting page 7).
    Germany US DTA
  • Luckily for me the US-Germany DTA included specific examples for how to apply the treaty.  When I use contracts and formal legal documents in the future, I will search for these examples.  One example reads...
          Facts:
A third-country resident establishes a German company for the purpose of acquiring a large U.S. manufacturing company. The sole business activity of the German company (other than holding the stock of the U.S. company) is the operation of a small retailing outlet which sells products manufactured by the U.S. company. Is the German company entitled to treaty benefits under paragraph 1(c) with respect to dividends it receives from the U.S. manufacturer?

The task was to read the case and check understanding with a partner.

  • Next, the learners were to describe their situation to their 'tax advisor' and find out if they could use the DTA and why.  The 'tax advisors' were given the answers from the DTA.  For example the answer to the case above reads...

          Analysis:

The dividends would not be entitled to benefits. Although there is, arguably, a business connection between the U.S. and the German businesses, the "substantiality" test described in the preceding examples is not met.


  • They were having trouble with this task and understanding was not 100% so I gave them a follow-up task.   Explain the case using graphic representation.  Show the investors, subsidiaries, dividend flow, etc.  This produced the outcome I was looking for.  They were better able to explain the situation and why the DTA did or did not apply in this case.  One woman stated during the lesson, "These are exactly like the cases we deal with on a daily basis.  Where did you get these examples?"
  • The surrounding discussion was amazing.  The learners were activating vocabulary.  I was able to make corrections on functional language.  We had reached flow.  In addition, they were linking all this to their previous knowledge and questioning if the US-Germany DTA was really so.  They were learning more than just English.

So... two great lessons this morning.  One a simple review lesson, the second shows the benefits of a good communicative event analysis ("I have to explain the impacts of double taxation") and tapping the discourse community.

    The Regulation of the American People

    With the role of red bureaucratic tape in hampering small business just in the news, we thought we'd take a historic look at how many pages of new rules and regulations the federal government spits out every year.

    Or rather, in each year beginning with 1936, because that's all as far back as we could find the data! Our chart below visualizes what we found:

    Number of Pages of Regulations Added to the Federal Register Each Year, 1936-2011

    Generally speaking, with the exception of the period of World War 2, we find that the federal government used to be pretty well contained when it came to imposing new rules and regulations on the American people - at least, all the way up to 1970, when it appears to have undergone a bureaucratic explosion!

    Here, the creation of the Environmental Protection Agency appears to have been the impetus for unleashing unprecedented waves of new rules and regulations affecting nearly every aspect of American life all throughout the next decade.

    That changed in the 1980s, as the number of new rules and regulations being issued each year was brought under control. In the 1990s though, the number of federal regulations began creeping steadily upward.

    In the first decade of the twenty-first century though, the amount of new rules and regulations issued each year was largely stable. That changed with the financial crisis of 2008, which saw new rules and regulations issued by the federal government spike in that year, but which abated with the waning of the crisis in 2009 as the number of pages issued to the Federal Register fell.

    In 2010 however, President Obama cranked up the federal government's regulation mill to all time highs, keeping it there at least through 2011.

    Wayne Crews' data for 2010 through 24 July 2012 indicates that the federal government is currently on pace to issue at least 76,300 pages of new rules and regulations this year, but we suspect the actual figure will be much larger.

    The reason why is because of ObamaCare, where the recent Supreme Court decision allowing the law to go into effect will require the federal government to issue a very large number of new rules and regulations before next year:

    With the Supreme Court giving President Obama's new health care law a green light, federal and state officials are turning to implementation of the law -- a lengthy and massive undertaking still in its early stages, but already costing money and expanding the government.

    The Health and Human Services Department "was given a billion dollars implementation money," Republican Rep. Denny Rehberg of Montana said. "That money is gone already on additional bureaucrats and IT programs, computerization for the implementation."

    "Oh boy," Stan Dorn of the Urban Institute said. "HHS has a huge amount of work to do and the states do, too. There will be new health insurance marketplaces in every state in the country, places you can go online, compare health plans."

    The IRS, Health and Human Services and many other agencies will now write thousands of pages of regulations -- an effort well under way:

    "There's already 13,000 pages of regulations, and they're not even done yet," Rehberg said.

    We anticipate that most of the new rules and regulations related to the implementation of ObamaCare will be issued after the 6 November 2012 election, mainly to avoid drawing an even more negative response from voters beforehand. So add *that* to your fiscal cliff to worry about in 2013!

    Data Sources

    Crews, Wayne. Ten Thousand Commandments. Federal Register Pages, 1936-Present [Google Docs Spreadsheet]. Accessed 24 July 2012.

    Crews, Wayne. Ten Thousand Commandments. Federal Regulation - The Updates. Accessed 24 July 2012.

    Selasa, 24 Juli 2012

    The Crushing Burden of Old Debt

    Italy is the eighth largest economy in the world and the second-biggest manufacturing economy in Europe. The Italian government's tax collections from year to year have been near rock-steady as a percentage share of the country's GDP and, for over a decade now, the country has been running comparatively small annual budget deficits.

    Italy Government Spending and Tax Revenue per Capita vs <br />GDP per Capita, 2000-2011

    And yet, the Italian government is now behaving as if its financial situation is so dire that the nation itself is in imminent danger of going under.

    How exactly does that happen?

    The short answer is that Italy is burdened by the policies of its past. In the 1980s, the nation began running up a truly phenomenal national debt in a short period of time, peaking at over 120% of the country's GDP in 1994, before falling back to be below 105% of GDP in 2007. Since then, it has ballooned back over 120% of GDP.

    Italian Government Debt (% of GDP)

    Starting from such a high level, Italy had little room to be able to absorb the impact from financial crises within its borders, such as the one driving markets today, where the Italian province of Sicily is at risk of defaulting on its own public debts and obligations.

    PALERMO: As the Prime Minister, Mario Monti, fights to protect Italy from the contagion driving up its borrowing costs to perilous levels, one region in particular has been in the spotlight: Sicily, which some fear has become "the Greece" of Italy, at risk of defaulting on its high public debts.

    Mr Monti wrote to Sicily's regional president last week warning that he had "serious concerns" that the region was at risk of default. The day before, an official in the Sicily branch of Italy's leading industrialists' association called for the island to be put into receivership by the central government to clean up its finances.

    When headlines about a potential Sicilian default ricocheted around the globe, the government quickly played down concerns and said it would send €400 million ($469 million), to ease Sicily's liquidity crunch so it could continue to pay salaries and pensions. One government official said Mr Monti's letter had been intended for a domestic audience and that Sicily's problems could not spread to other Italian regions.

    But with Europe's debt crisis, local politics quickly become international problems. And the flare-up over Sicily highlights the challenges that Mr Monti is facing in trying to use pressure from European leaders and international markets to push Italy's political class to cut costs.

    The equivalent situation in the United States would be for the U.S. government to be forced to provide special financing for the state of Illinois, so it could continue functioning.

    The problem though is the amount of borrowing the government would have to do to prop up the fiscally failing region. With such a high national debt level already, the government would have to add even more to it to fund its bailout, increasing the risk of a default.

    Lenders respond to that situation by demanding higher interest rates on the money they loan to the government. The critical threshold appears to be when a country's bond yields (the interest rates that governments pay to the people who loan them money) rise above 7%, when bond traders have to begin posting more collateral because the government-issued debt has become riskier to bond investors, who must weigh in the increased probability that Italy will default on its debt to them.

    If Italy's national debt burden, its national debt to national income (GDP) ratio hadn't already been so high, it would have been in a much better position to weather the crisis. Unfortunately, that high debt level and Europe's deteriorating economic situation have combined to put Italy at imminent risk of a fiscal crisis.

    In other words, Italy has run out of its national debt safety margin. It is at imminent risk of failing today because of the crushing burden of its old debt, unlike other nations going through their own debt crises in the Eurozone:

    ... Italy - and Sicily in particular - has been driven into dire financial straits not by austerity but by the rampant public spending of the past, the product of an entrenched jobs-for-votes system that helped keep Italian governments in power and Sicilians employed.

    Last month, Italy's audit court issued a scathing report saying that Sicily had €7 billion of liabilities at the end of 2011 and showed "signs of unstoppable decline". Sicily's unemployment rate is 19.5 per cent, twice the national average, and 38.8 per cent of young people do not have jobs.

    Eventually, the supply of other people's money runs out and a long-delayed reckoning with reality takes place. For Italy, it appears that reckoning with its wasteful spending past will take place much sooner than its past leaders had hoped.

    Senin, 23 Juli 2012

    Lessons learned from the military to BE

    Back from vacation and ready to work :)

    As some of you may know, I was in the US Army before I was an English trainer.  As a Sapper (combat engineer) my life was consumed by the neverending cycle of training-execution-training.  During my seven years in the military and three years in combat, I rose to the position of platoon sergeant, including designing several company training programs in insurgent tactics and dealing with improvised explosive devices.  I was passionate about training and adopted the military's models and processes whole-heartedly.

    Your author doing a little training... note, I had to swim back, too.

    However, after my CELTA and beginning in the BE field, I seemed to forget much of what I had learned and practiced during my previous career.  It wasn't until about a year ago that I sat down and took stock of my military experience and how it applied to my new passion.  In the end, I distilled five points which apply to in-company training.

    1.  The Mission Essential Task List (METL)

    A METL is a list of key tasks a unit must be able to successfully accomplish in order to fulfill their mission.  For example, when I entered the Army in 2002, we were still trained in the 1980-90s conventional warfare skills.  In that situation, a combat engineer platoon must be able to emplace a standard NATO minefield.  This essential task supported the company's METL to emplace a battional defense.  Below platoon, a squad had a list of essential supporting tasks for the minefield.  Below that, each individual soldier had to master a list of key tasks (such as arm a mine) for the whole unit to be successful.

    As an English trainer, this shows us two things.  First, our learners do not exist in communication isolation.  They belong to teams, departments, and business units.  The individual skills we teach them are part of a larger goal.  It is helpful for us to consider how we are supporting these goals.  Second, the key skills needed by the learners are mostly determined by their position within the structure.  In English training, the most generic METL is the ALTE can do statements.  These are particularly valuable for pre-experienced learners just as the individual soldier task list drives the basic training program in the Army.  However, once we are in-company, a key part of pertinent training is defining the essential skills for the learners, their teams, and their departments.

    2.  Task, Condition, Standard (TCS)

    To evaulate performance, every task needed is outlined using the task, condition, standard format.  Basically, the task is restating what the learner should be able to do.  The condition outlines the environment in which they are expected to perform the task.  And finally the standard is a 'checklist' of performance steps for them to correctly execute.

    For example, here are the standards for throwing a hand grenade:
    FM 3-23.30 Grenades and Pyrotechnic Signals, Dept. of the Army, approved for public release 

    Back to English teaching, this sounds like something we should be doing with our skills training.  Yet measuring can do statements in this way is not universal.  Oxford University Press and John Hughes have taken a step in this direction with their skills assessment criteria in the Teacher Book from Business Result.  However, I would like to see more of this in 'opening a meeting', 'making arrangements on the telephone', etc.  For myself, I have set the task of writing out some of these performance steps and the conditions under which they must be performed (e.g. in a conference room with projector and presentation).  Perhaps we need to borrow something from our academic colleagues on this one... they are the experts at assessment.


    Writing a letter home in 2003 near Hit, Iraq

    3.  Crawl-Walk-Run

    Once each needed skill is defined in the METL and the TCSs are set, the military trains to proficiency using the crawl, walk, run approach.  Under this approach, the task and the standards are kept the same, but the conditions are changed.  This means increasing speed, spontaneity, complexity, and realism.

    From FM 7-1 Battle Focused Training, Dept. of the Army, approved for public release

    Note, the performance steps remain the same, only the situation becomes more difficult.  For example, in a presentation setting, this could mean that questions from the audience become more difficult, speakers could have non-native accents, etc.

    In general, I try to incorporate this into my training.  So, when the learners become confident that they can participate in a meeting, I start adding more challenging elements.  For example, I will add in listening with Asian accents, add the element of interruptions and unclear vocabulary, place the meeting under pressure constraints such as time or consensus, reduce/remove prep time, add an additional skill like note taking, etc.  This helps build the difficulty.

    4.  Train as you fight, fight as you train

    This all adds up to the next lesson.  In the military the goal (especially in the run phase) is to make the training as realistic as possible.  In the Army this means using live ammunition, throwing in surprises, and generally making the situation as confusing as possible.

    I believe once our learners in the BE classroom have mastered the basics in the supportive environment of the classroom, it is time to make the training reflect the real world.  In group classes, here is where the participants themselves really add to the course.  They can ask the tough questions and play the role of difficult people.  They can give the pointed criticism needed to make the situation more realistic.  As Claire Hart pointed out on her blog, getting the learners out of the class on the factory floor adds needed realism.

    In short, we need to prepare them for the battlefield.


    5.  The After Action Review (AAR)

    The final lesson distilled was the importance of the After Action Review.  Basically, this was a post training meeting to take stock of our performance and formally acknowledges strengths, areas for improvement, and lessons learned.  In the military, we had formal drawn out AARs with written summaries but perhaps more effective were the 5 minutes 'hot wash' AARs.  In these short meetings we sat down as a team and discussed the training event with the following agenda.
    • Review the training objective
    • What was supposed to happen?
    • Relavent training resources we used
    • What happened?  Why?
      • What did we do well?
      • What do we need better?
      • What lessons did we learn?
    • Make a plan to improve shortcomings and build upon strengths
    Overall, AARs were direct and candid, but never personal.  I am still amazed at how the participants were able to criticism.  But the key factor here was that everyone had the same goal... make the team better.

    In an in-company training environment we need to use AAR like breaks to critically assess our performance.  In some courses, this can be done after every lesson.  But not all of our participants are going to have such thick skins.  As trainers, our job is to effectively observe their performance and offer feedback without hurting any feelings or damaging reputations.  This is certainly not easy, but the AAR was the key link between our current skills and future improvement.

    Conclusion

    I am certainly not advocating that we systematically formalize all of our training and execute it lock-step as we did in the military.  Much is to be said for the holistic approach, and such formalized training does not always align with the learners' expectations and desires.  Additionally, implementing these methods requires a significant amount of planning and admin time which can eat away at choosing and designing the best activities.  However, I feel that as professional in-company trainers, such an approach toward training helps us to ensure that the time spent in class is actually making a positive impact on their job performance.

    The Tax Burden of ObamaCare

    Upon which income earners will fall the greatest burden of paying the greatest tax burden from the Patient Protection and Affordable Care Act (aka "ObamaCare")?

    To find out, we tapped our detailed income distribution data for individuals for the year 2010, the most recent year for which it is available (the data for 2011 will be published in September 2012). We then took Henry Blodget's description of how ObamaCare's mandate penalty tax is calculated, then multiplied the amount of tax that would have to be paid for a given level of total money income by the number of people we estimate earned it in 2010!

    Here's what we found:

    https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgrf9JZzD887fo1BvoQDQs0prLaYVw5iE5r-8LuiyX_tdQb9jhwiEhdVHFfrvEEZ7_RDepJjAts-lZJQgjOJMGpRE2670t1PcmtOIuF7oxlN3yoUUf4mCBotgYLcBP1Zd5KhzlTE2rrFIs/s1600/2010-obamacare-mandate-tax-distribution-total-money-income-individuals-age-15-up.png

    Two quick notes:

    • Over 90% of the burden of ObamaCare will be paid by individuals with incomes below $200,000.

    • Over one third of the burden will fall upon people with incomes between $9,500 and $37,300, whose ObamaCare tax will be a flat $695 beginning in 2016.

    Of course, the alternative to paying the ObamaCare mandate tax is to have health insurance, either on your own or through your employer, which in 2011, cost $5,429 on average for Single coverage and $15,073 for Family coverage in 2011. Henry Blodget describes the "maximum" tax that might have to be paid by high income individuals:

    ... the penalty can never be more than the cost of a "Bronze" heath insurance plan purchased through one of the state "exchanges" that will be created as part of Obamacare. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016, with the costs rising thereafter.

    And that's what sets up the lottery math for healthy Americans, who are much likelier to benefit by dropping their health insurance coverage than paying for it under the ObamaCare law.

    Just so long as they also take steps to under-withhold their income taxes, since it appears that the IRS will only be able to collect the tax by seizing part or all of these individual's annual tax refunds!

    Jumat, 20 Juli 2012

    High Five!

    Just when we thought U.S. patents couldn't get any sillier, we found a patented invention for an "Apparatus For Simulating a 'High Five'"!

    Issued to Albert Cohen of Troy, New York on 18 October 1994, U.S. Patent 5,356,330 solves the following problems:

    ...the hand-arm configuration of the invention allows a user to simulate a "high-five" in celebration of a positive event, thereby providing the user with a convenient outlet for the release of excitement. Further, the hand-arm configuration synergistically improves the hand-eye coordination of a user and/or, depending upon specific placement, provides an exercise device for enhancing the jumping skills of a user. More specifically, when the hand-arm configuration is mounted at a sufficient height above the normal reach of a user, the user must jump upwards to strike the simulated hand, thereby simulating many of the jumping drills commonly practiced by basketball players. As such, the leg strength and coordination of a user may be improved through the practice of the present invention.

    No, we're not making this up! Here's what the invention looks like:

    U.S. Patent 5,356,330

    Here's hoping you have a positive event to simulate with a convenient outlet for your excitement this weekend!

    And if it helps, here's an old clip of the "High Five'n White Guys" as they go site-seeing in Seattle (and yes, that really is a young Bill Nye)!

    Kamis, 19 Juli 2012

    Barack Obama: Crony Capitalist in Chief? Part 2

    Chevrolet Volt - Source: Department of Energy

    In mid-2008, General Motors was a failing company. Unable to unload their product line of gas guzzlers, the wrong cars and trucks to be trying to sell at a time of record high gasoline prices, the company's high union-driven labor costs were combined with the extremely high pension and health care costs it had awarded its unions in better times, the company was quickly heading for bankruptcy and quite possibly for liquidation.

    In that environment, GM decided to bet big on a new mass market production car, one that could deliver 50 miles per gallon - more than double the mileage of the average vehicles of its product line - and it would bring it to market in 2010, making a technological leap in the process: the Chevrolet Volt.

    From Failure to Federal Entity

    And then, General Motors, as it was, failed. In December 2008, the company's management and its unions sought and received a special bridge financing from the federal government which would provide a cushion of time during which the company would attempt to restructure itself before becoming insolvent.

    Chevrolet Volt Recharging - Source: General Services Administration

    In January 2009, Barack Obama was sworn into office and changed the direction of the company's restructuring efforts, forcing out the company's CEO as he increased the federal government's role in managing the company as it prepared to enter bankruptcy. Ultimately, the U.S. government would become the largest stakeholder in the company that acquired GM's name, trademarks and assets in the company's bankruptcy. For all practical purposes, GM became an entity of the U.S. federal government.

    In the restructuring that followed, GM closed plants, dealerships and shut down entire product lines as it laid off many of its employees. Yet the Chevy Volt, with its "green" imprimatur that augmented President Obama's willingness to spend billions of dollars to back various risky "clean energy" technology initiatives as part of his 2009 economic stimulus bill, was given the green light to go forward into production, even though it was clear that it would face a difficult path to market success in a recessionary economy.

    After the Chevy Volt was introduced, it was declared to be 2011's Car of the Year, in both the United States and in Europe.

    Declared by many in the press to be a innovation revelation, a "pioneering" automotive engineering and computer programming achievement. An primary electric battery-powered automobile that can travel solely on electricity for up to 50 miles before switching to a backup gasoline-powered motor, meaning it burns very little gasoline and emits very little pollution into the environment. A car whose electric battery can be recharged overnight by plugging it into a regular wall socket or very quickly using a special recharging station.

    Comparison of Volt and Its Competition, 19 July 2012 (Screen shot) - Source: Chevrolet

    And yet, hardly anybody seems to want to buy it, even though its $39,995 sticker price can be offset with a special $7,500 federal tax credit, which would lower the basic price of the four door sedan for consumers to $32,495, making it very competitive with other vehicles in its class.

    Political Calculations: Chevy Volt Sales, December 2010 Through June 2012

    With sales so far below expectations, the Chevy Volt should be headed off the market, given that its production numbers are worse than the all-time automotive flop that was Ford's Edsel. And yet, there are two unique entities, aside from General Motors, that are determined to keep it afloat: the U.S. federal government and General Electric.

    Stacking the Deck for His Favorites

    President Obama admires a Chevy Volt - Source: White House

    It's easy to understand why the federal government under President Obama is so keen to use its power to make the Chevrolet Volt a success, as so many of President Obama's other green technology investments have failed. Here, to help stack the deck in the Chevy Volt's favor, President Obama has mandated that the vehicles that automakers produce must increase their average gasoline fuel efficiency to 35.5 miles per gallon by 2016, which will rise to an average of 54.6 miles per gallon by 2025.

    By contrast, the average new vehicle fuel economy in February 2012 was 23.7 miles per gallon. Unless automakers like GM produce vehicles like the Chevrolet Volt in mass quantities and in very short order, they will have to pay large penalties to the federal government based upon how far below the fuel economy standard that their vehicles fall. As an established product on the market today, the Chevy Volt stands to benefit from the President's Obama's fuel economy mandate.

    More interesting though is General Electric, itself a major federal bailout recipient in 2009, and a company whose nearly every product relies upon the federal government's contracts, mandates, subsidies and other support for its revenue.

    Unable to compete in the marketplace independently of such government assistance, GE relies upon its close contacts with federal officials to sustain its revenues - using its influence to lobby for favorable legislation, affect regulations and their enforcement, and also to create special tax breaks from which it benefits.

    That level of influence was kicked up a notch during the Obama administration as GE's CEO, Jeffrey Immelt, became a close adviser of President Obama, serving as the chairman of the President's Council on Jobs and Competitiveness.

    Here, just months after the Volt had a major setback with a number of vehicle fires, General Electric announced in February 2012 that it would acquire nearly 12,000 Chevy Volts by 2015, and the sudden surge in sales for the Chevy Volt in March 2012 likely reflects a large number of GE managers and employees purchasing the car.

    GE's motivating factor in supporting the Chevy Volt at such a critical time is fairly transparent. GE collects 10% of every dollar invested in electric vehicles.

    On a side note, the ever-tax credit conscious company would also cash in on the $7,500 federal tax credit for each of its Chevy Volt purchases. For the full total of 12,000 Volts that GE has indicated it would purchase by 2015, the company will receive a total of $90 million back from the federal government. The gains for the company would be only greater if President Obama's 2012 budget proposal to increase the tax credit to $10,000 had gone anywhere.

    GE then has a very direct stake in making sure the Chevy Volt succeeds in the market. If the Chevy Volt flops, a political change in Washington D.C. could derail President Obama's mandated fuel economy standards that are critical to GE's current business strategy.

    As your "ecoimagination" might tell you, GE CEO Jeffrey Immelt is a major fan of automotive fuel economy standards, and since he has clearly had the President's ear, he has every incentive to use his special connection to push for standards that would force the adoption of the products GE manufactures. And if that means buying up to 12,000 Chevy Volts over the next three years to help keep its production line from permanently shutting down, and helping President Obama avoid the embarrassment of yet another green energy failure in the process, all the better for business in the Crony Capitalists Club.

    Whether or not any of that is in the best interest of regular Americans is another matter. Clearly, despite President Obama's wishes that they should drive Chevrolet Volts, they are so far very determined to not do so.

    It would be one thing if it were only GE, GM and individual American consumers who were involved, but under President Obama's federal government, every American taxpayer is being forced to contribute to all this waste for no meaningful purpose other than benefiting the members of the club. Instead, we find that the time, effort and resources being devoted toward putting Americans in Chevy Volts is proving to be economically destructive, especially when you consider that just about anything else would be a better use of these scarce resources.

    References

    U.S. Department of Energy. One Million Electric Vehicles by 2015, February 2011 Status Report. February 2011.

    Rabu, 18 Juli 2012

    "Seven Things I Learned from Rap Music"


    Since the days of Kurtis Blow, I have loved rap music.  I'll grant you that some of it's becoming hard to justify, but there are some lessons that I've learned from it over the years that have helped me in life. Here are some of my favorites:

    "You don't grind, you don't shine." - Mike Jones

    If this current economy has reminded us of anything, it's that most of us should no longer expect financial prosperity to come without sacrifice. Solomon said that there is profit in all hard work and the converse is true: if you don't grind, you don't shine. Put your top effort into creating the future you desire.

    "If I can't change the people around me, I change the people around me." - Chuck D

    The Bible says that we should not be deceived; that bad company corrupts good morals. Throughout the Proverbs, there are warnings to choose our friends and associations very carefully. A lot of who we become results from those with whom we spend the majority of our time. Surround yourself with people who are pursuing purpose.

    "Before we go any further, let's be friends." - Whodini

    Relationship advice from the great Rappin' Jalil (or was it Ecstacy? or Grandmaster Dee?). A lot of times we push relationships too far, too fast because of infatuation and hormones. I advise my sisters all the time to resist the urge to let relationships become "sexualized" too soon because once a guy has sex on his mind, he can't think. Let's not just get to know one another. Let's be friends.

    "You see me? I eat, sleep, _____ and talk rap. You see that '98 Mercedes on TV? I bought that." - Juvenile

    One thing that I've always admired in successful people is their focus. Solomon spoke of this, too, when he advised that we should do with all our might whatever it is that we do. This is in Ecclesiastes 9:10 in case you're wondering.

    "It's what you keep, not what you cop." ~Beanie Sigel

    Making money doesn't profit much if you spend it all. We Americans have developed the nasty habit of spending even MORE than we earn.  W. Clement Stone said, "If you cannot save money, the seeds of greatness are not in you."  Wise words.  Very. 


    "Don't let a win go to your head or a loss to your heart." - Chuck D

    Fight to stay encouraged when things are tough by taking control of your emotions. Don't take it personally. Things happen to all of us in this life. Also, use the positive emotions of victories to propel yourself forward without becoming complacent. Good seasons don't last always the same way Winter doesn't last forever.

    "It takes two to make a thing go ri-ight! It takes two to make it out of sight!" ~Rob Base and DJ EZ Rock (See also Ecclesiastes 4:9-12 because Solomon said it, too: "Two are better than one...")



    Barack Obama: Crony Capitalist in Chief? Part 1

    President Obama opened a controversy when he made the following comments during a campaign stop at a fire station in Roanoke, Virginia:

    If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business. you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

    That was news to a lot of business people and entrepreneurs who actually have built their own businesses, many from scratch, many without the benefit of any government research or support. We wondered where President Obama may have gotten the idea businesses were so completely dependent upon the government to even be in business.

    And then, it came to us! We remembered that two of the biggest business basket cases of President Obama's tenure in office are represented by General Motors and General Electric! Neither one of these companies is capable of existing without significant government support, as both are highly dependent upon government contracts, subsidies, mandates and special protections for their revenue.

    In fact, both businesses are so dependent upon the federal government for their cash flows that they have effectively become junior partners or subsidiaries of the federal government. As a result, rather than recognizing that his proper role as President involves running the federal government and not setting the agendas for America's businesses, President Obama instead views himself as the CEO of America's crony capitalists.

    What is crony capitalism? Investopedia explains:

    A description of capitalist society as being based on the close relationships between businessmen and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the ruling government in the form of tax breaks, government grants and other incentives.

    Does the progressive worldview behind President Obama's comments seem clearer now?

    If it helps bring greater clarity, there is a different word that perhaps better describes the political system that goes hand-in-hand with the economic system of crony capitalism: corporatism:

    Corporatism, Italian corporativismo, also called corporativism, the theory and practice of organizing society into "corporations" subordinate to the state. According to corporatist theory, workers and employers would be organized into industrial and professional corporations serving as organs of political representation and controlling to a large extent the persons and activities within their jurisdiction.

    In Part 2 of this series, we'll reveal what we suspect will become the modern-day example of why crony capitalism, and the corporatism it entails, is really a destructive economic and political system.

    [Note: The link for Part 2 will not be live until 19 July 2012!]

    Selasa, 17 Juli 2012

    Maryland vs Virginia: Tax Returns

    We're going to feature three charts today, in which we'll compare the states of Maryland and Virginia in the United States. Why? Well, aside from the rivalry between each state's respective college football programs, Maryland has long held a reputation for reportedly being the home to the largest concentration of millionaires (aka "rich, seafood-loving snobs") in the United States, while Virginia maintains itself as a much more down-home kind of place, especially once when you get away from the parts closest to Maryland.

    Is that changing?

    We ask the question because of the ongoing controversy of whether or not Maryland's chronically high state income taxes are progressively convincing its highest income earners to live and work somewhere else.

    To find out, we'll turn to the people who would know: the IRS. Since the 1997 tax year, the rapacious government agency has published data for the number of tax returns filed in each state, including breaking out data by Adjusted Gross Income (AGI) ranges. Even though what we'd really like to do is see how many million-dollar plus tax returns were filed in each state, the IRS has been inconsistent about reporting this data from year to year, so we'll substitute the number of tax returns filed in each year with am AGI of $200,000 or greater.

    Our first chart shows the number of federal income tax returns filed in the states of Maryland and Virginia from 1997 through 2010:

    Number of Federal Income Tax Returns with Adjusted Gross Incomes $200,000 or Greater, 1997-2010, Maryland and Virginia

    Right away, we see that something is up - although both states started very near the same level in 1997, Virginia would appear to have strongly outpaced Maryland in adding to the ranks of its highest income earners in the years from 1997 through 2010.

    But is that as strong a pace as it seems? There are two main factors that might play into the numbers here - the relative economic growth between the two states and the respective size of each state's population.

    Considering economic growth first, we'll look at the year-over-year growth rate of the number of $200,000 or greater AGI earners, since that value would be more likely to be affected by economic factors, because incomes change faster than population. Here, a state with stronger economic performance will see higher growth rates, which affect the number of $200,000+ tax returns filed each year by boosting people's incomes.

    Year Over Year Growth Rate of Federal Income Tax Returns with Adjusted Gross Incomes $200,000 or Greater, 1997-2010, Maryland and Virginia

    We find that Virginia has outpaced the economic growth of Maryland in eight of the 12 years of data presented in the chart, sometimes greatly, while Maryland has only edged Virginia in four. This factor suggests that Virginia's economy has been considerably more robust and dynamic than Maryland's economy has been during this period of time.

    One thing we do note is that in bad economic times, which correspond to negative growth rates, each state's performance is similar, while Virginia has typically outstripped Maryland in good economic times. Even though its economy has gone through larger boom-bust type cycles, Virginia's busts have been no worse than those of Maryland's less dynamic economy.

    That's not the entire story though, since we still need to consider the change in each state's population over time. To do that, we'll calculate each state's percentage of the number of tax returns with an AGI of $200,000 or more with respect to the total number of tax returns filed in each tax year from 1997 through 2010.

    Percentage of Federal Income Tax Returns with Adjusted Gross Incomes $200,000 or Greater, 1997-2010, Maryland and Virginia

    This chart is telling because what it communicates is that while Maryland has long had a larger share of higher income earners as compared to its full population of income tax filers, Virginia's population of high income earners as a share of its full population of income tax filers has nearly fully converged with the level observed in Maryland.

    Taken all together with the data presented in the previous charts, what that means is that Virginia is doing much better than Maryland in attracting a growing number of high income earners to live and work within its state borders. If all things had been equal, we would see the gap between the percentage share of high AGI tax filers for Maryland and Virginia either hold largely constant over time, or if Maryland were a more positive place for high income earners, the gap would grow over time as Maryland's share of these tax filers would separate from Virginia. Instead, it appears that high income earners are increasingly finding their homes more often in Virginia than in Maryland.

    There are reasons for that. And though this analysis doesn't definitively answer the question, each state's relative level of taxation on high income earners and their influence on the choice of where to live and work is among the reasons for what we observe.

    References

    IRS. Statistics of Income. Historical Table 2. 1997-2010. Accessed 17 July 2012.