Marian Salzman: Reinvention, Part II

This is the seventh in a series of 12 posts expounding on the 2011 forecasts in the annual trends report from Salzman, president of Euro RSCG Worldwide PR and an internationally respected trendspotter.

“There was a crooked man and he walked a crooked mile” is a nursery rhyme but could well be the leitmotif of the last several operatic years in America. Now the question is: As millions of regular Americans set about reinventing themselves and refocusing on what will be their second, or fifth, acts, will they let high-profile corporations and celebrities gone astray do the same? Is redemption fever rising for brands and their spokespeople who have disappointed public expectations, even defrauded public trust?

I think it is. Even though today Americans feel more resentful and angrier than at arguably any time in our history since the Civil War, the ability for brands to cool the orneriness and give themselves second chances with the public will depend on what notes these errant companies and their warts-and-all spokespeople strike. For even though fire can be destructive, it is often regenerative too, stripping the understory and leaving it ripe for new growth, after leveling the tallest trees flat.

It’s highly unlikely, for example, that anybody is ready to pardon Bernie Madoff, who is serving a 150-year prison sentence in North Carolina for his $65 billion Ponzi scheme, but Madoff hasn’t asked anybody’s forgiveness, either. Does it bear asking what would happen if he did?

An auction of Madoff family belongings held at New York’s Sheraton Hotel and Towers in November arguably displayed Americans’ fascination with the abyss–but the rubbernecker-bidders were also doing some good. The $2 million they paid for such things as Madoff’s New York Mets baseball jacket (with his name on the back), 17 Rolexes and dog bowl redound to (albeit minutely, in percentage terms) the victims of the fraud.

It’s the American way, after all, to stay glued to stories of the fall, from Marilyn Monroe to Michael Jackson to the fictional Tony Soprano, whose run in Americans’ Sunday night living rooms garnered James Gandolfini three Emmys and eventually $1 million per show. Compared with people in other countries, Americans are especially lenient toward bankruptcy, which, despite double-digit growth in 2010, raised advice from financial professionals that these days bankruptcy is not only not a road to hell, but also, for many, the best route out of it.

Okay, we have to pause here to take stock that one of the reasons for the supersize anger against superstar endorsers–Tiger Woods and his loss of $22 million in celebrity endorsements in 2010, which took him from $92 million to $70 million–has found many slack-jawed about the discrepancies. But even Woods’ winter-of-discontented-sponsors fueled by his infidelity found one fan pardoning him on a New York Times comment thread: “Sometimes I feel you still need your Dad, I can relate…OK you binged…. In my opinion you are a great man that needs a second chance. Don’t Quit!!”

Hear that? In 2011, Americans, despite the bitter aftertastes of the recession, will be offering redos to possibly even the most egregious corporate and celebrity wrongdoers. Even Lindsay Lohan got some kudos earlier this year when, after her release from jail, she comically appeared at the 2010 MTV Video Music Awards with her skewerer, Chelsea Handler. The fictive role reversal saw Lohan tough-loving Handler, asking, “Do you think anyone wants to work with a drunk? Take it from me, they don’t.” The skit ended with Handler’s calling Lohan “Freckles.” Clearly, Americans have a soft spot for those who’ve fallen low, and we even root hard for them not to become Anna Nicole Smiths. So for spokespeople playing on their experience vintage to regain trust, their “we’ll make good” declamations had better feel–and be–real. As Lohan has learned, recycling learned experience is a variant on rehab: Come out wiser, and win hearts.

As for companies themselves winning hearts, corporate social responsibility has been all over the international news recently. On the opening day of the U.N. Framework Convention on Climate Change in Cancun, Mexican President Felipe Calderón, the host, joined with multinational CEOs and nonprofits to discuss accelerating the pace of a global low-carbon economy. CEOs from Coca-Cola Co., Dow Chemical Co. and FEMSA were there, and they and peers from PepsiCo, Unilever and Wal-Mart Stores, among 400 corporations, announced that they would stop using hydrofluorocarbons in new equipment by 2015, indicating the mission-driven marketing in store for multinational corporations reinventing their responses to polluting.

This brings us to BP and, yes, the egregious “Toxic Tony” Hayward, whose “I would like my life back” response to the Gulf of Mexico oil spill catastrophe cost him his CEO job and made the petroleum behemoth look anything but responsible. I criticized not only BP’s oil spill response but also Hayward’s self-inflicted branding debacle back in June. But half a year later, even though the company’s rehabilitation task remains steep, the oil spill compensation fund has paid out $2 billion in three months. It could actually be that a rebooted BP will be the learner in this equation, becoming wiser and more responsible. Though one might still wonder how much they have learned, based on their challenge just last week that the oil spill estimates may have been overstated by 50 percent, prompting William Reilly, co-chairman of the presidential oil spill commission to say, “Wow.”

So maybe BP isn’t the best example yet, but clearly businesses that embrace principles of social entrepreneurship–discovering how to “unstick” society when it has gotten stuck, by changing the system–are having widespread impact in making the new buzzphrase “social value” the litmus test for success for not only social entrepreneurs but profit-oriented businesses, too.

Traditional businesses might even see that a hybrid of profit and social values can have huge reinvention benefits, modeled possibly on innovators in developing countries–such as Hindustan Unilever, which has used microfinance principles to nurture a sales force in some of the poorest parts of India. No question about it: More and more, social mission redounds to image. Especially when reinventions need wings for their second chances to get off the ground.

Previously:
“Mad as Hell–and Only Getting Madder”
“Talk to the Hands”
“Net Gain”
“Public Mycasting System”
“Booting Up”
“Yes, We Can…Reinvent Ourselves”

Tomorrow:
“Separated at Worth”

Read more: Reinvention, Tony Hayward, Lindsay Lohan, Bankruptcy, Bp, Trust, Trends, Corporate Social Responsibility, Anger, Social Entrepreneurship, Celebrity Spokespeople, Tiger Woods, Trendspotting, Social Value, Bernard Madoff, Climate Change, Rehabilitation, Csr, Brands, Business News

Jim Wallis: President Obama Should Have Fought This One

He should have fought this one. The richest 2 percent of the country just got an extension of tax cuts they didn’t need at great cost to us all. President Barack Obama should have been fighting against the self-interest of the very wealthiest Americans long before this. So he is now backed into a corner, and just made a compromise that he thinks is the best deal possible when up against the clock. He got some good things for working families in the payroll tax cut, the extension of unemployment benefits, various refundable tax credits, and the important middle class tax cut. But the president is now presiding over the great redistribution of wealth that has been going on for a very long time — the redistribution of wealth from the middle and the bottom to the top of American society — and leaving us with the most economic inequality in American history. This will only grow larger with the Obama “compromise.”

Had he fought earlier, he could have answered the issues concerning the protection of the small businesses who are the primary job creators. Obama could have focused the higher tax rates on the very rich and protected those more in the middle who are really creating jobs. But now, most of the people who will be keeping their tax cuts are not job creators. After all, how many jobs will the Goldman Sachs traders create, or the hedge fund gamblers, or the celebrities who dominate our lives? Almost none. On the contrary, they have been the “job destroyers,” having wrecked this economy and the lives of so many people.

Let’s be clear here. At the root of the crisis was just a handful of banks — not the banking industry, not business in general, but a handful of very rich people taking big risks. They are already getting richer because of our taxpayer bailout, and now we’re giving them more tax breaks and estate tax bonanzas. There is socialism in America, but it’s only for the rich. Risk has been socialized for some of the very richest people in the country, and then, the “free market” pain is distributed to all the rest.

The rich are too big to fail in America, while many in the rest of the country really are failing. The president did want to keep some things for average Americans in this compromise, but he lost the big battle a long time ago by not fighting the people whose greed, recklessness, and utter lack of concern for the common good have led us into this terrible crisis. He waited too long to fight, to force a national debate on economic fairness, to counter the distortions of the Republicans who clearly don’t mind adding huge sums to the deficit as long as it benefits their wealthy patrons; and who will now seek to reduce the deficit by adding more pain to the rest of us — especially those on the bottom and increasingly shaky middle rungs of the economy. And now, he and the rest of us are all backed into corners without a way out.

Our national economic philosophy is clearly now to reward the casino gamblers on Wall Street and to leave the majority of the country standing outside the casino with a tin cup — hoping that the gamblers are at least big tippers. More tax breaks and benefits for the very wealthiest people in America is not only bad economics and bad policy; it is fundamentally immoral. In a letter to the president signed by over 100 religious leaders, we said just that.

So far, they haven’t listened.

portrait-jim-wallisJim Wallis is the author of Rediscovering Values: On Wall Street, Main Street, and Your Street — A Moral Compass for the New Economy, and CEO of Sojourners. He blogs at www.godspolitics.com. Follow Jim on Twitter @JimWallis.


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Job Openings Rose In October

WASHINGTON (By Andrea Ricci) – Job openings rose in October from the prior month, government data showed on Tuesday, while the job openings rate increased.

Job openings, a measure of labor demand, rose 351,000 to a seasonally adjusted 3.4 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey. September job openings were upwardly revised to 3.0 million.

In October, the job openings rate — a gauge of how many jobs were still open at the end of the month — rose to 2.5 percent from an upwardly revised 2.3 percent in September.

The rate of new hires was steady at 3.2 percent, while the separations rate edged down to 3.1 percent from 3.2 percent, the Labor Department said.

With the rise in October, job openings were 44 percent higher than the trough in July 2009, just as the worst U.S. recession in decades was ending, the Labor Department said.

“Overall, the October JOLTS report shows that while job openings are continuing to improve, hiring remains subdued,” said Barclays Capital economist Nicholas Tenev in a note.

“We look for hiring to pick up to fill vacancies over the coming months as overall economic activity accelerates,” he said.

In October, 4.2 million people were hired, little changed from September but 9 percent more than the June 2009 low. The number of hires was still lower than at the start of the recession in December 2007, when 5 million people were hired, the department said.

The rate of people who quit their jobs in October, which can serve as a measure of workers’ willingness or ability to change jobs, was little changed at 1.5 percent for total nonfarm payrolls and 1.7 percent for private employers, the report said.

The layoffs and discharges level was essentially unchanged in October for total nonfarm and total private payrolls but fell for government.

(Reporting by Andrea Ricci; Editing by James Dalgleish)

Copyright 2010 Thomson Reuters. Click for Restrictions.

Read more: Unemployment Crisis, US Economy, Job Openings, Economic Crisis, Employment, October Jobs, Business News

Kristie Arslan: The Small Business Case for Extending Tax Cuts

Congress has important work to finish before the 111th Congress comes to a close. Much of its agenda includes priorities that are critical to the nation’s smallest businesses. While the recent passage of the Small Business Jobs Act was a major accomplishment, small businesses also need relief from onerous paperwork burdens created by the IRS Form 1099 expansion provision hidden deep within the health care reform legislation, as well as resolution of a suite of tax issues, including the Alternative Minimum Tax (AMT), the estate tax and the Bush-era tax cuts.

Much of the political posturing over the Bush-era tax cuts focuses on how much money one earns – either below the $250,000 threshold or above it. The tax cut debate gets bogged down about whether the individuals who benefit from the tax cuts are middle-class or ultra-wealthy. What’s missing from this discussion is the fact that 23 million of these individual taxpayers are something else, too: they are business owners. While Congressional leaders – and the White House – debate the merits of who deserves these tax cuts, self-employed business owners are depending on this extension for their businesses’ very survival.

Seventy-eight percent of small businesses are self-employed and they collectively contribute close to a trillion dollars to our economy every year. Contrary to government policy that often regards them as home-based “hobby” businesses, the self-employed have real jobs in fields like finance, real estate, manufacturing and health care. They aren’t simply sitting at home in their pajamas and bunny slippers. They support their families and their communities. And they create job opportunities and spur economic growth when they are thriving.

Unfortunately, the current economic climate has made the outlook for many self-employed businesses uncertain. Many if not most are just trying to stay afloat until the economic recovery translates into increased sales and business growth. The smallest challenge – from a new paperwork requirement to a higher health insurance premium – can push a self-employed business from the edge to oblivion.

A higher tax bill come April 15th is no exception. The average self-employed business owner makes about $87,000 per year. By letting the Bush-era tax cuts expire, this average business owner will see his or her tax liability increase by about $2,100. This may be small change to a large corporation, but to a small business $2,100 could represent the cost of purchasing new accounting software, advertising their business online or paying their phone bill. It could also be used to hire extra help during the holidays or pay a health insurance deductible.

Small businesses are used to narrow margins, but the fact is some won’t survive a tax hike. While lower taxes means less in the Treasury, what the economy would gain by curbing the national debt could be negated by lost small business growth and job creation opportunities. Raising the debt ceiling in a period of fiscal uncertainly without doubt requires serious consideration, but so should our policies to support the nation’s current and future entrepreneurs.

Creating a job of your own by choosing to be self-employed is just as important and valuable to the economy as being hired to perform an office or factory job. Self-employment deserves to be supported in the same way policymakers support those segments of the economy that spend millions on lobbying and campaign contributions. In these times of economic uncertainty, pulling the rug out from under them by raising their taxes could be devastating.

While a permanent extension of the Bush tax cuts is preferred, the compromise between President Obama and Congressional leaders ensures that the small business community will remain on the road to recovery. Congress must move forward with policies that will help fuel the engine of economic growth – America’s small businesses.

Kristie Arslan is Executive Director of the National Association for the Self-Employed (www.nase.org) which represents the nation’s 23 million and growing self-employed and micro-businesses.

This blog post is cross-posted with The Hill’s CongressBlog.

Read more: Small Business, Self-Employed, Economy, Tax Cuts, Tax Bill, Alternative Minimum Tax, Job Creation, Obama Job Creation, Bush Tax Cuts, Business News

Ronnie Shows: Don’t Write Obama Off

If you were to read the headlines these days, it would appear that President Barack Obama has no chance at a second-term in the White House. Pundits and political experts keep saying that his “coalition is eroding” and that the liberal base is “abandoning the president” over his tax cut deal. Personally, I find all these predictions to be premature.

Just two years ago, when the President was elected and Democrats made even more gains in Congress, all of these same political pundits and experts were writing off the GOP. In the fall of 2008, no one on CNN, MSNBC or even Fox News was saying that Republicans would make historic gains in 2010. In other words, in politics, two years is an eternity and President Obama has a long time to right the ship and win reelection.

When Bill Clinton was running for president, James Carville famously said the campaign was: “about the economy, stupid.” But today, while fixing the economy is important, it’s really about creating jobs. After all, many of America’s largest companies are recording record profits and have stopped laying off people by the thousands. The problem is that they are not rushing to rehire the people that they let go. For the President to win a second term, he needs to find ways to get these companies hiring again.

There are several things the President can do to stimulate job growth in the United States — everything from being more assertive with his politics to reigning in job-killing provisions at the agency level.

First and foremost, President Obama needs to demand that Republicans are willing to work with him to pass legislation and enact policies to improve the country’s ability to create jobs. Republicans in Congress seem to have determined that their strategy for the next two years: thwart the President at all costs. In fact, Senate Minority Leader Mitch McConnell even admitted that his goal is not to create jobs or reduce the deficit but to prevent President Obama from winning a second term. That is outrageous and the President needs to let Americans know that he won’t stand for that type of crude politics.

One thing that is preventing a lot of large companies from starting to rehire employees is their uncertainty about what the future holds. The President’s health care reform legislation was ambitious, but it created a level of uncertainty for a lot of large companies. This uncertainty makes them hesitant about rehiring people. I am not saying we should repeal healthcare reform, but we need to be honest that it may have stifled job creation.

This is why the President and his administration need to find ways to work with big business to help them create jobs. This can mean a lot of things. Take for example something small and relatively unknown like the Environmental Protection Agency’s “chemical action plans.” These plans to review the safety of chemicals — that are not known to be harmful — will cause many chemical companies to lose business by scarring off their customers. That will result in the loss of good paying jobs which are important in many rural economies such as my home state of Mississippi. No matter how well-meaning they are, administration proposals like these will not get Americans back to work.

What I am really saying is that the President needs to examine his Administration from top to bottom and find ways to create jobs. That means everything from getting tougher with his political rhetoric, to eliminating proposals that stifle job growth. If he can get America back to work, he can win a second term. That would be a victory for Obama and the nation.

Read more: Jobs, Congress, Barack Obama, Economic Crisis, Bill Blinton, Msnbc, Cnn, Its the Economy Stupid, Fox News, James Carville, Healthcare, Republicans, Politics News

Microsoft plans to ramp up browser privacy

SEATTLE (Reuters) – Microsoft Corp plans to give users of its new Internet browser the ability to stop certain sites from gathering information from users as the company looks to head off federal online privacy legislation.

Elizabeth Edwards dies

WASHINGTON (Reuters) – Elizabeth Edwards, a best-selling author and the estranged wife of former Democratic vice presidential nominee John Edwards, who endured revelations about her husband’s infidelity, died on Tuesday at age 61.

TD Bank said in talks to buy Chrysler Financial

NEW YORK/TORONTO (Reuters) – Toronto-Dominion Bank is in talks to buy lender Chrysler Financial from private equity firm Cerberus Capital Management , a source familiar with the matter said on…