Seldom have times been easier for an honest writer. There are so many “hot topics” around that it boggles the mind. So, still in recovery mode from our snow event, we will keep it short in order to (more importantly) “keep it warm.”
Small Business Optimism Collapses
National Federation of Independent Business (NFIB) publishes an optimism report each month. A composite – street level look – at the immediate future. Not surprisingly, the press release just out says:
“Owners expecting better business conditions declined 24 points
WASHINGTON, D.C. (Jan. 12, 2021) – The NFIB Small Business Optimism Index declined 5.5 points in December to 95.9, falling below the average Index value since 1973 of 98. Nine of the 10 Index components declined and only one improved. Owners expecting better business conditions over the next six months declined 24 points to a net negative 16%.
“This month’s drop in small business optimism is historically very large, and most of the decline was due to the outlook of sales and business conditions in 2021,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses are concerned about potential new economic policy in the new administration and the increased spread of COVID-19 that is causing renewed government-mandated business closures across the nation.”
One of the tip-offs to us that this was coming was the drop in federal employment numbers reported last week. Quickly rising layoffs in the Challenger data, too.
The next “Biggie” is tomorrow’s Consumer Prices Report. It promises to present the Policy Nightmare the incoming administration will have to deal with.
Starting with ceteris parabus (*all things equal) basis December, here’s the dynamic of the pending straw about to be hoisted onto the ‘camel’s back.’
Dim Times Ahead? Thank Social Media
We begin with the expectation that January business will fall somewhat again. One reason is in the gig economy things may cool: With president Trump’s Tweetstorms over, Twitter has just seriously pissed off a lot of users. It was reflected in stock prices Monday. App dev slowdowns coming?
As ABC reported Monday: “Twitter without Trump tumbles along with other tech shares.” Our concern is there is something much larger in play. I described this for our Peoplenomics.com subscribers a couple of years ago. OK, then December 18, 2013 was more than a couple of years ago. But, what I forecast in the report ” As we look ahead, we’re troubled by the increasing number of “time-circular” business plans emergent in social media.”
The report derides American corporate marketers for being both lazy and stupid. Which, I’m willing to stick with today. Because what they did was take company-based websites – where customers could interact with real product people – and they off-loaded them to Facebook and social media.
It seemed like a good idea at the time, after all, it was free.
We predicted what was coming, however. Social media held customers hostage. So, in order to communicate with their own people, companies had to pay what amounts to ransom to communicate with them.
That’s the “time-circularity” of it: Load in the audience free, then stick it to the deep pockets down the road. Spun off lots of billionaires, but it was (and it’s becoming more obvious) all too good to be True.
Social Media Echoes 1929 Behavior
Just as in present times, the run-up, blow-off, and then utter collapse of the U.S. economy was based on a massive tech bubble collapsing.
Fact is, high rollers of the era were all involved in “Radio” in much the same way “Social” has spawned this latest crop of billionaires.
Critically, we should point out that Radio was a huge systemic threat to America back then. Radio was (at first) only loosely licensed. But, it was not until after the Depression had begun to dig in – and the need for a scapegoat became apparent – that Congress decided to seize control of the air waves. Just as they are about to seize control of social media. How far will they go?
That bit of calculus is something we’ll travel with on the subscriber side. But simply: The bigger the coming Social/Tech crash, the bigger the “communications grab” will be.
Key point: I stand by the long-term prediction offered in my book Broken Web – that the Internet would eventually require something akin to a radio license (content origination control under the guise of ‘bandwidth management’).
If you have enough technical savvy to understand FM modulation indexes (and both frequency-hopping and spread spectrum), then you could connect the dashed lines of the modern rhyme with the “dark web” and “tor” for content sharing and the skirting of DRM (oops! Digital Rights Management.)
It is likely after the crash, and perhaps three or four years from now, but likely not even that long. Because the online protests will need to be addressed, but can’t be until the (transient) “free speech issues” have cooled off a bit.
Thing is, though, Social is what took America to the brink of Digital Civil War through monetizing every Tom, Dick, and Harry (and a lot more Dicks than expected). When it all comes out in the end (hearings) the agendas in play will be revealed, as well. And with that, likely criminal prosecutions for promotion of an uprising by corporate chieftains.
But, my oh my: What a dandy monetization it has been!
On to the Daily Distractions
One of our most intrepid “news tippers” who feeds us lots of ideas, wrote up a very solid commentary today – directly applicable and explaining all the mis (and dis) information the web, lately:
“You may see some postings on the internet re: House proceedings for 01/11/2021 and that Speaker Pelosi is “gone.“ What occurred is the Speaker did appoint Rep. Debbie Dingell to act as Speaker Pro Tempore for 01/11/2021 only.
When you and I were school-age kids a course on “Civics” was taught (as was penmanship, grammar, spelling, etc., now gone the way of the dinosaur, as did the study of Latin). As such, the term “Speaker Pro Tempore” is virtually meaningless to the rank and file, who may be assuming that “Nancy is gone.” (see 1st hyperlink)
Do you remember a 1995 film, The American President (written by Aaron Sorkin, who later created the TV series The West Wing)? There’s a line of dialogue where President Shepherd (Michael Douglas) in a lengthy speech before the press corps states… “America isn’t easy. America is advanced citizenship. You’ve gotta want it bad, ‘cause it’s gonna put up a fight.” (see 2nd hyperlink)
Do we as US citizens in a nation now torn apart by unimaginable political strife coupled by a public health catastrophe need a refresher course in “Civics” (constitutional law or “Con Law” in law school)? I guarantee if 1,000 Americans (those born here and who are non-lawyers) were rounded up and given the same citizenship test administered to those wanting to become naturalized US citizens, almost all of those 1,000 test takers would fail the exam.”
Grand Perspective! Thank you [Linda].
Speaking of Grand Reads…
Events this week – including and especially Social Media getting into the censorship game (and Amazon’s cancelling Parler hosting) raises other issues involving “historical rhymes.”
We assume you’ve been following “Parler goes dark after Amazon pulls hosting amid concerns over violent posts.”
A number of our readers have been bright-enough to ask a critical question – which may not come up until the Digital Inquisition begins in Washington:
Was there any communication between Google, Apple, Amazon, and other online operators in the decision to censor the sitting president?
We see how social is using their “power of the purse” to “rein-in government.” Read carefully the CNBC story about how “Amazon, Microsoft, Facebook and others pause political contributions after U.S. Capitol riot.”
Good catch by the NY Times biz section (the good part of the paper): “IBM Doesn’t Donate to Politicians. Other Firms Should Take Note.” Say, don’t they pay a dividend, too? >>> HELLO FAANGs? <<<
They may be able to keep it up, too since “IBM received the most patents in 2020. Here’s the rest of the top 20.”
Politicians – who only act the charade of being “responsive to voters” when convenient (or when in a tight race, and then only for a few weeks at a stretch) will get the message loud and clear.
And media that don’t toe-the-mark on support the Rich Boys Club of Social will not down be penalized with lower ad costs and massive drops in organic search.
Which will all be claimed “Coincidental, ain’t it?”
Coffee Pot Chatter
What will people be talking about on today’s bean-refresher run?
TDS is where our bet is as “Florida Officials Investigate Report of Manatee With ‘Trump’ on Its Back” but it will be a hotly debated point.
If you’re in Chicago, maybe the question “Are recreational marijuana sales in Illinois underperforming given the state’s large population?” (One possible answer: Is gang weed cheaper since it’s tax-free? Duh.)
Latest word on the herd as we head for 91-million global Covid cases: “EU Gets Vaccine Boost As WHO Dampens Hope Of Herd Immunity.” And speaking of source: China Places 5 Million More Under Lockdown To Stamp Out Virus Cluster.
On that, Dow futures were up 70 with an hour and a half to go. Way we look at things, the rally that began just ahead of the close yesterday could be running up to the close today. So we can all be “surprised” by the inflation number in tomorrow’s CPI.
Maybe some people will…but not all.
Something Useful: The Screw-it Pile
I was cleaning off my desktop this morning and ran across some notes on a dandy little book Too Nice for Your Own Good: How to Stop Making 9 Self-Sabotaging Mistakes.
Thought about America being in a “self-sabotage” mode at the moment.
Among the list of easy-to-fix errors people make? Mistake #5 hits home for people posting comments:
“Reasoning with Irrationality.”
It simply doesn’t work.
After working 60-years, a lot of things come into focus. One of the most important is the Pareto Distribution. Written up on Wikipedia as follows:
“The Pareto principle states that for many outcomes roughly 80% of consequences come from 20% of the causes (the “vital few”). Other names for this principle are the 80/20 rule, the law of the vital few, or the principle of factor sparsity.
Management consultant Joseph M. Juran developed the concept in the context of quality control, and improvement, naming it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896. In his first work, Cours d’économie politique, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population. The Pareto principle is only tangentially related to Pareto efficiency.
One of the ways to get a “lot done in Life” is to focus on the 20% of effort that gets 80% of results, plain and simple. If I don’t see an 80% chance of my doing something having a good pay-off, it goes in the “screw-it pile.”
The Screw-It pile gets bigger, but not as fast as the completed tasks. Especially if you take the time wasted on getting worked up over anything – place it immediately in the “Screw-It Pile” and move back to useful efforts.
Write when you get rich,