Dear 2016

Dear 2016,


With no regards,

P.S.: As for your boy 2017, a preemptive…

P.P.S.: I know there are plenty of people who fight against the whole “this year was horrible” sentiments because they don’t see time as a stable, solid construct. And that’s fine if all corners of society were not built with firm calendars in mind. Since they are, though, we can be honest and say that the last twelve months have been pretty rough on wide swaths of society. (In fairness, on an individual level, many of you may have enjoyed a bountiful year while others struggled mightily.) The best wish for 2017 is that everyone survives the fight that’s sure to come.

And fight we must.

Election Day – The Piñatas

Twelve years ago this week was the first time I distinctly remember voting in any election. The infamous 2000 election may or may not have been the first time I ever voted, but it was a blur in comparison to the George W. Bush/John Kerry cycle of 2004. (Attending undergrad out of state, I could have sent an absentee ballot or I may have actually been at home, but on everything I know, I seriously don’t remember.)

It was my first steady gig after undergrad, a low-paying, per diem internship at a boutique public relations firm in the Union Square section of Manhattan. In the prior weeks leading up to Election Day, there had been multiple rallies against the War on Terror at the nearby Union Square Park which, while largely embodied the freedom and spirit of prior generations, felt like the protestations of a bunch of well-to-do white kids who didn’t have to punch a clock just yet. As much of a nuisance as those rallies may have been, they were honestly harmless to the psyche as I could participate or walk away on my own accord. What was seared to memory, unfortunately, was going to work.

The only thing conservative at this firm was the color scheme of its walls (white and with nothing on them), but regardless of political learnings, the account executives, office manager and fellow interns were some of the brightest and kindest people you could work with in an industry not exactly renown for brightness or kindness. Yet, there was as great tension inside the company, largely created by its principal owners.

They were heavily liberal, with the ‘big idea’ owner (the original namesake of the company) less vocal about his learnings than the ‘financing’ owner, who admitted to being a checklist liberal – pretty much whatever Republicans hate, she checks off – on a regular basis as we got closer to Election Day. This was a bit weird because while some of my learnings were admittedly similar, growing up in black and brown communities in New York City taught me that even if people claim to be on the same team, there’s a chance that you’re not really teammates. This unfortunate fact proved to be the case when the agency spent October and the first week of November preparing for an Election Night party where it would host clients, friends in the media and whoever felt like mooching on its dime.

The openly ‘checklist liberal’ owner pretty much used the party as less about the agency and much, much more about herself. This wasn’t a shock to those of us who worked there, but in retrospect, it’s far more apparent as every single person who worked there left within four years because of her behavior. (There were likely other reasons, but after being passed over for a full-time position because she said I didn’t have “the look” for PR, my voluntary departure started a mass exodus of the firm months later.) The guest list was largely created by owners with the account execs having some invites of their own. The office manager handled all of the logistics while the interns pretty much… interned, or rather, gofered. Business didn’t shut down for the sake of the party, but the days leading up to it were incredibly chaotic.

(Now, before we move to this part, let me be fair to you, dear reader: this is largely how I remember the moment as the haze of twelve years could affect my recollection. However, I would bet that any of the former employees who were there can attest to that time.)

It was Monday, with all but two important decorations having arrived to the office. At some point in the afternoon, however, the icons of this soiree made their way upstairs. Specially made and shipped in from Mexico, two life-sized piñatas of George W. Bush were delivered. The ‘checklist liberal’ owner had the grand idea of whacking these things as the precincts were reporting in to national media, a way of beating the stuffing out of incumbent President as well as doing so at the ballot box. The problem was that these piñatas needed to go somewhere. After all, we were indoors. There were no trees, no polls, and in this particular space, no pillars to wrap anything around.

After going on non-stop errands that morning and early afternoon, I took a late lunch break to eat and gather myself, but what I saw when I returned shocked me to the core. As soon as the elevator to the office floor opened, I saw that one of the Bush piñatas was hung from the ceiling in the middle of the office. As I stepped out, to my left, I saw the other piñata hanging in the ceiling of the elevator bank.

You know, it’s one thing to read about or watch stories about the lynchings of African-Americans throughout American history, or to even be aware of its horrific presence across the ages of civilization. It’s a completely different, though, to witness not just one, but two nooses, used as some sort of comedic and cathartic props. Unquestionably, I wasn’t exactly a fan of the 43rd President of the United States, a dime a dozen in the so-called most liberal city in America. And yes, he was powerful, far from poor, and most certainly, white.

But to hang anything representing a person in effigy, even if this wasn’t as abhorrent as what we saw recently for a Wisconsin Badgers football game, was an absolute insult of my humanity. And yes, for those of you in the back, an insult of my blackness.

Now, let’s be real. Quite a few of you that are reading this are black and somewhat entrenched in your job after years in your profession. You’re feeling something pretty strong, and I’m going to guess that you’re saying something to the effect of “oh HELL NAH, I’d’ve walked right the f*** out!” Nope. In those shoes, no way in hell you would have left. To be completely honest, you have the faintest clue on what you would have done. No matter your pride, your conscious, your levels of woke, you’re currently thinking as someone who is years from trying to jumpstart your career. At 22 years old, fresh out of college and having yet to get the attention of a company for a full-time position, walking away from that small, but important paycheck wasn’t on the table. Nor was speaking out, nor was ripping the piñatas down, nor was even asking either of the firm owners about the appropriateness of putting a rope around the neck of anything, even if it was made of paper mache.

The remainder of the party preparations is pretty nondescript in comparison. There were pizzas being delivered, utensils to pick up, furniture to be moved and at some point, a change of attire. Guests began to arrive at around rush hour, familiar faces and new ones to greet until the rented projection screen showed CNN or whatever channel was decided upon that wasn’t FOX News.

I left at around 9, prior to the close of polls in the city. Like most of us who voted for Kerry, we were hoping that despite not having the strongest candidacy for the Donkeys, whatever those protesters on Union Square were angry about or our soldiers were dying for would have had some sort of finality by this night. Yet, as I walked towards 14th Street, I do recall looking behind me, staring northward at the Empire State Building a mile away, soaking in the rare silence of New York City.

I was supposed to be sullen, disappointed, or maybe infuriated at the shellacking the Senator from Massachusetts was taking. Yet, I couldn’t help but to love the quiet. It was a muting of liberals who doth protest too much, the under-the-table fist pumping of conservatives who still had no full understanding of what they wrought, and the rumble of a nearly empty subway underneath my feet.

That night was the only time I could ever say that I was glad that the ‘bad guys’ won.

Tomorrow, Election Day story #2.

How We’ve Become Casualties of Financialization

Bull_goes____07_11_2014_largeI’m proud of my bachelor’s degree. It came from one of the truly great colleges this world has to offer, regardless of size and study. With its credentials in business academia, Babson College is what boxing media could liken to being one of the best pound-for-pound fighters in the world. Yet, there were a few things that I learned there that I wouldn’t exactly place in my moral code, and not exactly because of the school or the professors themselves.

As a C student in Financial Accounting and C- student in Finance, I mostly understood the principles, but lacked mightily in execution, at least on exams. A few of those very principles, however, always seemed a bit warped, manipulative and unnecessarily complex. After all, I was part of the guinea pig undergrad classes where case studies on Enron and the like were being crafted, the Compaq/HP merger was dissected heavily and debates on the merits of the Sarbanes-Oxley Act (SOX) were raging from within.

Even as someone who didn’t fully grasp all the intricacies of financial models, I quickly understood that something felt off in that world. We were talking about Arthur Andersen as the poster child for conflicts of interest. We were asking the same question as most people were in the early 2000s: what the hell was Enron in the first place? We were talking about leveraging debt as a good thing for a growing business, even though we had no idea of how much the speed of technological advances would challenge such growth. Most of all, we were conversing much more about making business decisions with shareholders in mind first before any and everyone else, though taking care of the latter helps the former’s long-term investment strategy.

It was odd, but even odder was the fact that our professors – many of them incredible and instrumental to our academic and professional careers – were imploring us to take heed from these scandals in order to avoid industry scrutiny, political shaming and most of all, legal trouble. This, of course, was being considered while they were largely telling us that growing the shareholder value was the top priority of a business. The academic conversations and the real-time immediacy of the markets made for contradictions and compromise, but as long as we did our jobs and understood the law, we would become part of a new gilded age in the economy.

And then the Great Recession happened. Or rather, it was happening long before most of the world knew it was happening.

The scams are well known to us now: reckless housing speculation, toxic derivatives, subprime mortgages and the securities they backed, predatory lending, etc. Those are the ones that punched us into a concussed state, but as we still wobble to our feet, the financial system that was supposed to be reformed keeps hitting us with low blows and rabbit punches.

Though many were really just doing their jobs – including friends and former classmates relatively too young at the time to make complex decisions about these financial instruments – the industry, many policymakers and regulators essentially learned nothing from the recent past.

The thing about Enron and others was that they were the idiots who got caught doing what I’m sure plenty of other companies big, medium and small were doing. And as horrible as the aftermath was for so many people who worked at these companies – retirement savings wiped away, fraudulent stock, public and private embarrassment – the damage was not nearly as widespread for the public as what the Great Recession wrought. (Although without question, the people of California got royally screwed.) The effects of the economic downturn are being felt in incredible ways to this day, and there seems to be no end in sight.

All of this comes to mind because of a recent op-ed in Time from its economics columnist Rena Foroohar titled ‘American Capitalism’s Great Crisis,’ where she dives into the financialization of the country’s economy (though she also reminds readers that it’s not strictly an American concern, but we’re just so damn good at it).

During my 23 years in business and economic journalism, I’ve long wondered why our market system doesn’t serve companies, workers and consumers better than it does. For some time now, finance has been thought by most to be at the very top of the economic hierarchy, the most aspirational part of an advanced service economy that graduated from agriculture and manufacturing. But research shows just how the unintended consequences of this misguided belief have endangered the very system America has prided itself on exporting around the world.

America’s economic illness has a name: financialization. It’s an academic term for the trend by which Wall Street and its methods have come to reign supreme in America, permeating not just the financial industry but also much of American business. It includes everything from the growth in size and scope of finance and financial activity in the economy; to the rise of debt-fueled speculation over productive lending; to the ascendancy of shareholder value as the sole model for corporate governance; to the proliferation of risky, selfish thinking in both the private and public sectors; to the increasing political power of financiers and the CEOs they enrich; to the way in which a “markets know best” ideology remains the status quo. Financialization is a big, unfriendly word with broad, disconcerting implications.

The entire op-ed is worth your time as it’s full of anecdotal insights and is incredibly well-written for those of us who aren’t fluent in finance or economic lingo. Foroohar laments quite a few painful realities of having finance as the lead dog of American business: a housing market that continues to puff heaps of air into a weak balloon, a tenuous (at best) job market, the trade-off of research and development for stock buybacks and many other disastrous results of financialization.

However, this passage blared like the Bat-phone:

Of course, there are other elements to the story of America’s slow-growth economy, including familiar trends from globalization to technology-related job destruction. These are clearly massive challenges in their own right. But the single biggest unexplored reason for long-term slower growth is that the financial system has stopped serving the real economy and now serves mainly itself. A lack of real fiscal action on the part of politicians forced the Fed to pump $4.5 trillion in monetary stimulus into the economy after 2008. This shows just how broken the model is, since the central bank’s best efforts have resulted in record stock prices (which enrich mainly the wealthiest 10% of the population that owns more than 80% of all stocks) but also a lackluster 2% economy with almost no income growth.

Now, as many top economists and investors predict an era of much lower asset-price returns over the next 30 years, America’s ability to offer up even the appearance of growth—via financially oriented strategies like low interest rates, more and more consumer credit, tax-deferred debt financing for businesses, and asset bubbles that make people feel richer than we really are, until they burst—is at an end.

This pinch is particularly evident in the tumult many American businesses face. Lending to small business has fallen particularly sharply, as has the number of startup firms. In the early 1980s, new companies made up half of all U.S. businesses. For all the talk of Silicon Valley startups, the number of new firms as a share of all businesses has actually shrunk. From 1978 to 2012 it declined by 44%, a trend that numerous researchers and even many investors and businesspeople link to the financial industry’s change in focus from lending to speculation. The wane in entrepreneurship means less economic vibrancy, given that new businesses are the nation’s foremost source of job creation and GDP growth. Buffett summed it up in his folksy way: “You’ve now got a body of people who’ve decided they’d rather go to the casino than the restaurant” of capitalism.

So, essentially, despite all of the prior wildfires in the American economy, we’ve created a financial vacuum that has more suction than a Dyson. All for “right now” type of thinking. Lovely.

The Time article is an excellent observation of the financial calamity not only over the past two economic downturns and the current jobless recovery but of the last few decades. One can point to anywhere on the timeline and recall where (s)he was impacted by said shifts, whether it was watching parents suffer through economic malaise as children or enduring them as adults – job reductions, increased debts and/or heavier workloads coupled with income stagnation for those who have remained employed.

A recent conversation with a friend crystallized some of this in my mind, but in relation to the media industry. To have a career in media in 2016 means that your jobs are not remotely close to being secure. Sadly beyond the technological changes, much of the insecurity is a result of companies deploying some of the same slash and burn tactics from the Great Recession for the benefit of stockholders and stockholders alone. In 2008-2011, it was about reducing costs while sneakily trying to erase some regrettable business decisions. Now in this so-called recovery, companies that would be considered largely healthy by common sense and proper accounting suddenly go through corporate hypochondria. Stockholders see companies that are supposedly bloated with costly overhead, which has been code for “too much staff”. Going lean would allow them to “save money” and the new-found funds would compel innovation, despite all evidence that these staff reductions strain resources even more, kills morale and triggers instability.

(Not to mention that all of the major media players now see themselves as tech-infused “digital content companies”, which in itself is dangerous because of… have you seen the techbros?)

I would bet that if you looked into your field and industry, going lean and chasing short-term visions of stockholders haven’t made the businesses within all that much stronger. Instead, in the media industry, content providers (as they call themselves now) play it safe by minimalizing risk and innovation while also browbeating the public with a news cycle that lives in the lowest common denominator. On one end of the vertically integrated media company business plan is Disney’s mostly well-executed and rather diverse Marvel Universe, but at the other is CBS thinking that its attempts at primetime TV diversity (the recently canceled TV version of Rush Hour that nobody asked for) and nostalgia (see this year’s upfront slate) are grand ideas. Jake Tapper really did leave journalism for CNN. Online publishers will immediately publish posts of Twitter reactions to breaking news, which is funny because you could just… I don’t know, go to Twitter. This is just a minuscule fraction of the machine financialization has created, eschewing honest creativity, expression and stability for the quarterly earnings for a very select few.

I occasionally look back to my bachelor’s diploma. Though Babson wasn’t my last educational stop or the grantor of my last business degree, it was by far the most impactful institution I ever attended. And as promised by its great professors and administrators, what I learned and done there had changed the way I look at the world, for better or worse. Yet, I hope that formal business education is beginning to refine itself to make students aware of the painful results of making the shareholders the top – or far too often, the only – priority of doing business. We didn’t have that so much back in the early 2000s or even the first half of the 2010s.

It’s easy to be a pessimist about the conclusion of Foroohar’s op-ed, that despite how broken the system is, we can fix the rules we wrote and re-wrote. Perhaps it starts in school, but more than anything else, there’s a group of people who probably need to feel the fire of their drastic decisions in order for the system to right itself for everyone’s benefit; the shareholders themselves.