Welcome to week 364! The articles below caught my attention this week. What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********). Article titles preceded by [SR] require a subscription.
This week completes the seventh year of TIF Weekly, which first appeared on 27 April 2011 and took a one-year sabbatical after year six. I’d like to express my thanks to you for making the time to consider what I find and my thoughts about them.
(7 March 2019): “Brand Reputations That Took a Hit in 2019” Statista
********Statista “offers daily infographic about trending topics covering Media and Society.” This brief piece focuses on the Humpty Dumpties of the world of brands, with Facebook and Tesla Motors taking the biggest tumbles, followed by McDonald’s. Based upon the Axios and Harris Poll The 100 Most Visible Companies, a look at the Poll will also show that the companies that improved their reputations the most during the year were Samsung, Sony, and 21st Century Fox. The Poll makes for an interesting browse.
********Brand reputation is very much “in the news” in Asheville, North Carolina. The naming rights for what was once known as The Asheville Civic Center and is now known as The U.S. Cellular Center are up for consideration. The highest bidder for those rights was Harrah’s Cherokee Casino, which is owned by the Eastern Band of the Cherokee Indians; it bid $3.25 million for five years in contrast to a $543,000 bid for three years by U.S. Cellular. But, as the article notes, many in the local community would be offended by the association of gambling with the city. Then there is the issue of branding. Stephanie Brown, the CEO of Asheville tourism development group Explore Asheville, recently remarked that “the casino’s gaming brand is ‘inconsistent with our community identity.’” She goes on to note: “(Harrah’s is) buying affiliation with our community identity and our destination brand . . . But that connection is a two way street that ties Asheville to their national corporate gaming identity—and those characteristics are not positive for any of Asheville’s goals—not as a place to live, go to college, to visit or to locate a business.”
********Strictly from a dollar-and-cents standpoint, there is an interesting question here: “Will the short-term benefit of additional funds from Harrah’s compensate for the long-term cost of (alleged) injury to the Asheville brand?” Related to that is the issue of whether there might be some long-term benefits, too, speaking strictly in money terms. This is an involved issue. Unsurprisingly, brand valuation is a business, as Wikipedia makes clear. Three leading firms are: Interbrand, Kantar Millward Brown, and Brand Finance. Although brand valuation is typically (and more easily) associated with businesses, it can and has been done for cities. Here is one example from the Guardian, which briefly discusses some aspects of the methodology used by the consulting firm Saffron which generated the valuations. The point of all this is simply to indicate that professional guidance is available for cities that want help in thinking systematically about their brands.
(2 April 2019): “NC was once a top source of lithium. Growing demand could lead to a mine near Charlotte.” The Charlotte Observer
——–“A region west of Charlotte that was once a mother lode of lithium, the increasingly vital metal that powers cellphones, Teslas and cordless tools, may soon be one again. A recently-formed company, Piedmont Lithium Limited, is applying for permits to launch an open-pit lithium mining operation that it says would be the only one of its type in the United States. Piedmont plans to extract lithium from mineral deposits in Gaston County, 25 miles west of Charlotte, in what geologists call the Carolina Tin-Spodumene Belt. Mines in the belt supplied most of the world’s lithium from the 1950s through the 1980s, before producers turned to cheaper deposits in South America and Australia.” Piedmont Lithium believes that there is enough lithium at the site to be mined for 13 years. It also says that North Carolina is attractive “because of its low labor costs, corporate tax rate and lack of state mining royalties.” The mine would be open pit, like a quarry, and “as much as 500 feet deep.
********This article appeared later—April 9th—in The News and Observer. Both The Charlotte Observer and The News and Observer are owned by The McClatchy Company.
(3 April 2019): “Short of Workers, U.S. Builders and Farmers Crave More Immigrants” The New York Times
——–Builders are facing “a demographic reality that could hamstring industries besides their own: Their labor force is shrinking. President Trump’s threat to close the Mexican border, a move that would cause damage to both economies, only adds to the pressure. Immigration—often illegal—has long acted as a supply line for low-skilled workers. Even before Mr. Trump ratcheted up border enforcement, economic growth in Mexico and the aging of the country’s population were reducing the flow of Mexican workers into the United States.” According to the Pew Research Center, “Immigration has been padding the labor force for years. Over the last two decades, immigrants and their children accounted for more than half the growth of the population of 25- to 64-year-olds . . . Over the next 20 years, they will have to plug the hole left by the retirement of the baby boom generation.” The Trump administration “has tried to shift immigration policy to limit the entry of less-educated immigrants and draw more workers with advanced degrees, businesses are still hungry for immigrants with lesser skills.” In the hotel and lodging industry” immigrants make up almost one-third of the workers . . . and over a fifth of workers in the food service industry.”
********As the article notes, “Businesses scrambling for low-skilled workers provide a glimpse into the kind of strains a future of low immigration might bring.” A case in point is “agriculture, where seven in 10 workers were born in Mexico, and only one in four was born in the United States.” As a result of the increased difficulty in securing workers, some California growers are relocating their operations to Mexico.
(5 April 2019): “This 99-year-old federal law is stifling jobs and shifting higher costs to consumers” The Washington Post
********This piece expresses the opinion of columnist George F. Will. Its subject is the Merchant Marine Act of 1920, otherwise known as The Jones Act, which provides that “cargo transported by water between U.S. ports must travel in ships that are U.S.-built, U.S.-owned, U.S.-registered and U.S.-crewed.” Will argues, drawing up a lengthy and well-documented article by the Cato Institute, that “The Jones Act illustrates how protectionism creates dependent industries that then squander resources (ingenuity, money) on manipulating the government. The act also illustrates the asymmetry that explains much of what government does—the law of dispersed costs and concentrated benefits. The act’s likely annual costs to the economy (tens of billions) are too widely distributed to be much noticed; its benefits enrich a relative few, who use their ill-gotten profits to finance the defense of the government’s favoritism.” Utah Senator Mike Lee has introduced a bill called The Open America’s Water Act of 2019 to repeal “the Jones Act’s requirements that cargo transported by water between U.S. ports must travel in ships that are U.S.-built.” Such laws making shipping goods to and from Alaska, Hawaii, Guam, and Puerto Rico especially expensive.
(6 April 2019): [SR] “The Battle for the Last Unconquered Screen—The One in Your Car” The Wall Street Journal
——–“The auto industry and Silicon Valley are locked in a battle for control of one of the last unconquered screens: your car dashboard display. At stake are billions of dollars in revenue from ads and services as well as the balance of power between two big industries. And then there is the future of the dash itself, a source of endless complaints from drivers frustrated by its glitchy concoction of buttons and technologies. Car makers, trying to overcome this poor track record, are counting on these few square inches to help build closer relationships with customers. Some fear handing control to Silicon Valley. Alphabet Inc. and Apple Inc., meanwhile, are itching to put their familiar screens and apps inside vehicles.”
********The article goes on to note that data-driven products making use of the screen and knowledge about driver behavior “could create as much as $750 billion in new revenue by 2030.” Ky Tang, an executive director of Silicon Valley’s Telenav Inc., notes: “We see this as the battle for the fourth screen,” following television, computer and mobile phone. In 2011, the four screens included tablets, so maybe this is the fifth screen? Whatever the number, the screen on one’s auto dashboard will be a much-disputed terrain.
(6 April 2019): “The black-white wealth gap is unchanged after half a century” The Economist
——–”American history is replete with horrific episodes that prevented the accumulation of black wealth for centuries: first slavery, then indentured servitude under Jim, Crow, segregated housing and schooling, seizure of property and racial discrimination. The result was that in 1962, two years before the passage of landmark civil-rights legislation and the Great Society programme, the average wealth of white households was seven times greater that that of black households. Yet after decades of declining discrimination and the construction of a modern welfare state, that ratio remains the same.” The multiple for median wealth is even larger: “The typical black family has just $17,100 compared with the typical white one, which has $171,000.”
********The article goes on to point out that “Determining what lies behind the persistent wealth gap is essential to fixing it. The thinking ascendant on the left blames both present-day discrimination and the long history of racist public policies, such as redlining, an official practice that made it harder for blacks to get mortgages, and so permanently disrupted the transmission of wealth between generations.” One cure for all of that is reparations. But reparations given as a lump-sum, as put forward in “baby bond” proposals, “would not lead to wealth convergence if present-day racial income patterns remained fixed.” Furthermore, “the politics of reparations remain treacherous. Even race-neutral anti-poverty programmes, like cash welfare and food stamps, already attract fierce opposition, in no small part because they are often seen by white voters as handouts to minorities and immigrants.”
(6 April 2019): “MIB: Michael Lewis” The Big Picture
********This episode of Masters in Business, with Barry Ritholtz, features best-selling author Michael Lewis, whose most recent book is The Fifth Risk. In an engaging and spirited interview of one hour and thirty-five minutes, Lewis speaks about his time at Salomon Brothers, his developing love for writing, and the path he took through his sequence of highly-successful books. Definitely worth a listen—it made me want to read through all of his books. You can find them at his official website, which draws attention to his latest project—the podcast “Against the Rules.”
(9 April 2019): “Immigrants In The U.S. Send Billions of Dollars Home” Statista
********This graphic shows how much in aggregate immigrants in the U.S. send to their home countries. Countries receiving the most funds are Mexico, then China, then India. The information is based upon work done by Pew Research, which you can view here. The interactive features of the link allow one to select outgoing or incoming remittances. For example, the countries that UK immigrants send the most funds to are Nigeria, India, France, and Pakistan.
(10 April 2019): “Google Flips the Switch on Its Next Big Money Maker” Bloomberg.com
——–The next big money maker is Google Maps. “an indispensable part of life for more than a billion people . . . The service has been mostly free, and free from ads, since it launched 14 years ago. Interviews with Google executives and customers show this is changing as the internet giant increases the ways advertisers can reach Maps users . . . The app now regularly highlights sponsored locations, and shows extra paid listings when people look for nearby gas stations, coffee shops or other businesses.” Brian Nowak, a Morgan Stanley analyst, notes: “Sometimes I say the most under-monetized asset that I cover is Google Maps . . . It’s almost like a utility where it’s kind of waiting for you to flip the switch on.” Apparently, the switch is being flipped.
********A glimpse of the way one analyst and Google thinks. What asset is likely to be monetized next?
May you have a good week!