That famous phrase begins Dickens’Tale of Two Cities.  Today it could be the Tale of Two States.

Please read this hyperlinked article.  As a high school senior we debated the topic of a National Right to Work Law. It was then I learned all about Open/Union/Closed shop states. Simply, a right to work law means one does not have to join a union to work. A closed shop state means one does. Unions of course want compulsory union membership, more rights for workers they say. Well the world has voted. AS the WSJ points out, no foreign manufacturer will build in a closed shop state. This weekend I saw an interview with one of the view Ohio employers in a small town. His plant made paper.  He paid workers $20 an hour plus benefits. Well in 2008 one cannot expect to make that much running a paper making machine. But real wages are possible as Toyota builds in SA, GM adds a plant near here, and the entire auto manufacturing industry has moved to Carolina, MS, and Albama. Yes the US can be competitive but not at non competitive wage rates.

Texas is booming Laredo is booming as an inland port, similar claims are made for Dallas but it is already. Houston and Dallas both boast bustling airports and Houston has the water port as well. The widening of the Panama Canal will only increase deliveries there and here.  Last night Sixty Minutes spotlighted Ohio, but they only told part of the story. Ohio needs to address its problems.

As an accounting major one needs to see the big picture. Locating a plant is a complex decision, but as this article points out, perhaps not when Ohio and Texas are the choices.

Denis Reggie is regarded as one of if not the top wedding photographer in the US. He has done some twenty Kennedy weddings, Including Arnold and Maria.  Think about that….One of the grad class in her essay on starting a business, suggested wedding invitations.  I responded that could lead to a whole host of services including planning, photography, catering, etc.

in terms of CVP, read about Denis on his site. He will photograph a wedding in Belgium and then follow the party to the Mediterranean for the party afterward and photograph that too. Some fun eh? A case study in operating  a business. And I would bet the ‘conclave at his house for two days for a mere $2K is a bargain…

Learn more about Spaceship One here.

Read the reviews of this book here.   I checked Amazon. While some of his titles trade for pennies, Buckley’s God and Man still fetches twelve bucks, an incredible statement about a 1951 book re published and updated in 1977.  There’s that demand and supply thing.

See more of his creations at Boyd Coddington’s website

While Hunter S. Thompson gets credit for gonzo journlism he should really only get credit for whacked out drugged out whatever lifestyle  which led to his suicide.  Instead try this 1965 delight that got the real gonzo journalist,  Tom Wolfe , rolling to be the best journalist of the post 1960s era.  College has evolved to a sort of cafeteria style fast food drive by window experience. It wasn’t then.  And this book set the tone for others that followed including The Pump House Gang  and Radical Chic and Mau Mauing the Flak Catchers.  His later Bonfire of the Vanities about a Master of the Universe bond Trader was made into a movie starring Tom Hanks.  If your college English courses did not expose you to Tom, well, happily you encountered him here.

Two that Mattered

Individuals make a difference. We lost two such folk this past week. Different though similar, their devotion to craft made them stand out from the crowd.

William F. Buckley passed at age 82, still working in his study. That is a deserved
passing for any of us that have spilled some ink trying to cast a better light on this world. Buckley was a first. He was the first to question academic liberalism in God and Man at Yale. Note his title was Man singular not village or multi-cultural man. I read it in 1966, if you have not you should. Or you might try one of the other forty books he authored. He founded National Review, a journal of conservative opinion when there was no other. He went on television in Firing Line. His debates reflected an academic tone, setting a standard for civility that sent shows like Crossfire, rather deservedly, finally off the air. Today talking head shows about right and left are common, they were not in the 1960s. His column continued to run in newspapers his entire life. He was an avid sailor writing about an Atlantic crossing and explaining celestial navigation in a video. Here is a renaissance man in modern times. His reverence, manners, and good taste set a standard sorely lacking in most of the attack dogs of politics on 24/7 cable tv. They are armed with talking points. Buckley was armed with a wit and intelligence grounded in a philosophy that never required a scripted presence. Take that Carville and Hannity, and try to do better by us.

Boyd Coddington was the modern incantation of the Big Daddy Ed Roth/George Barris 1950s California Hot Rod scene. Tom Wolfe gained fame writing about them in The Kandy Kolored Tangerine Flake Streamlined Baby. (Try that one for a look at the hot rod scene and an introduction to real gonzo journalism.)

And what is a hot rod but an individual expression of automotive art? Boyd creations can fetch five or six figure amounts at the Barrett auctions. He would hand craft a suspension piece from a solid piece of billet aluminum; art is as they say, in the eye of the beholder.

From his website, An unusual honor for Boyd was to have the only hot rod displayed at the Smithsonian Institution, when his ’33 coupe was part of a 1993 exhibit titled “Sculpture on Wheels.” Like Buckley this individualism ended up on the television as viewers tracked how he built some original creations.

These individuals were all about just that, being their individual selves. It is said that committees build giraffes but it took a daVinci to paint the ceiling of the Sistine Chapel. The same is true here, no committee builds hot rods. Plymouth tried it and we got a six cylinder automatic named Prowler. Now the car and marque are already gone. Sigh, committees, no, individuals, si’.

We are going to vote for a directional leadership this year. We are told that change is in the air. I hope this leads to some serious questions about change. While many like to bemoan the state of the United States, everyone wants to come here. There is a reason for that. Let’s hope the two in the race can tell us what and how they would preserve that uniqueness of this place that produces Buckleys and Coddingtons. Achievement is about vision and purpose, consider Burt Rutan’s Spaceship One. Private initiative and ingenuity put a sixty year old in jeans and a ball cap to the edge of space for a mere $20 M. NASA can’t do that. Will we preserve the culture that produced such men?

PIckups are gaining in popularity across the pond.   On my trip over in 1981 I was struck by the fact that in continental Europe there were not any pickup trucks, even small ones from Nissan.  Now they are catching on but in small numbers.  They avoid the Vaule Added Tax VAT by posing as business vehicles. We recently reported that dispoisable income in Britain surpassed that of the US. Clearly here is evidence of that. IN the 1950-60s Britain drove the Mini, a tiny fwd 1100cc auto that has morped into the vehicle now sold by BMW. Now they can afford larger thirstier vehicles. Remember that gasoline in Europe costs well over $4 a gallon.

Accounting students need to kow more about the derivatives market. Take a look at the ever reliable

Wikipedia article on puts and calls.   The basics of puts and calls are covered at this cboe site.

In concert read the article on derivatives. You will need this knowledge when we get to the section on accounting for options in Intermediate II.

MSO bought Ermeri’s cookbooks, tv shows, and kitchen products.  Check out the details here.

For an outlay of $50 M Martha says she will add $14 M per year in revenue, net or gross she did not say.

So, real mystery, why did Foodtv and Emeril split the blanket. Foodtv does not seem to have anything to replace their 7:00 PM CST anchor show of Emeril.  Anyone know?

The Dallas Investor Forum has Albert Meyer as its guest this past Saturday, here is his profile.

Albert’s Investing Tenets
Allocate capital for the long term by finding companies worth holding “forever”
Invest only in high-quality companies that shine after our rigorous due diligence process
Focus on management integrity, good corporate governance, earning quality, free cash flow and competitive advantages
Favor enterprises whose leaders have skin in the game, through personal ownership of substantial portions of the company, and yet modest annual compensation
Discount conventional wisdom and mainstream thinking, especially as propagated by Wall Street
Albert Meyer CA, CPA
President

Albert Meyer is founder and President of Bastiat Capital. Mr. Meyer draws on 15 years as an accounting professor and 11 years in equity research. Mr. Meyer, a Deloitte & Touche alumnus, is a Chartered Accountant and a Certified Public Accountant.

Mr. Meyer was formerly an Accounting Professor at Spring Arbor University in Michigan and Assistant Academic Dean at the University of Natal, South Africa. In 1995, Mr. Meyer was awarded the Michiganian of the Year award for exposing the New Era Philanthropy Foundation, a Ponzi scheme that defrauded non-profits of hundreds of millions of dollars. In 2005, the American Accounting Association honored Mr. Meyer with the Accounting Exemplar Award.

In 1996, he joined Martin Capital Management as a portfolio manager. During this time he questioned Coca-Cola’s accounting practices; which, subsequently, led to a number of publications including a cover story in the New York Times and Harvard Case Studies.

At the end of 1998, Behind the Numbers hired him as a research analyst. Mr. Meyer’s report on Tyco was the first published assault on the company’s accounting and governance practices.

In 2002, Mr. Meyer founded 2nd Opinion Research, an independent equity research firm.

The Fast 50 is Fast Company’s list of the 50 most innovative companies in the US.  Unlike Forbes or Fortune’s list of simply the biggest companies this is  list of those that really bring something to the table thru innovation.

Method at leftn founded in 2000n sold $100 M of eco friendly cleaing products last year. Elsewhere Fast Company is absolutely gaga over Google, devoting numerous pages to flattering photos of their managers. Indeed the photos of shaggy haired Silicon Valley latte sipping types echoes an era of coffee houses and societal  hippie drop outs of the sixties, except these guys are filthy rich from GOOG options. Just ask Al Gore who was lucky enough to snage a Board Seat.

I found number 42 interesting. Recall discount shoe seller Payless, yeah Payless?  Well look who is shining now.  Seems the new CEO decided DESIGN needed to take center stage. And so the company now features the hottest new female shoe designs sold thru some 400 re modeled hip stores. So in 2006 Payless doubled earnings.  Design, it’s what innovation is all about.   Click here for a look at the Payless Designer page.

What do you read?  My assignment to do a book report draws a sea of blank faces. If you are not keepig pace you are falling behind. Saying you read on the net would be fine but only if it really happens. One of my reads is Fast Company.   FC is all about innovation. In addition FC has hit on the concept of Design, even Business Week has quarterly features on Innovation.  I am firmly convinced that the first Business School which embraces the concept of design, overhauling its MBA program to include faculty from the Art Department, yes the Art Department, to teach the importance of integrating design into both service (thnk Apple Leopard) and product (Mazda Miata) will leap to the front of the pack.  Contrast those products  with the gosh awful MSFT Office 2007 or the slab sided new F 150, losers both to be sure. 

So, what’s in your backpack?

Tata is clearly employing Deming’s TQM in its takeovers.   I asigned Tata as one of the companies in the auto industry to take a look at.  This article shows that Tata adapt itself, printing brochures in Korean and enrolling managers in Korean language class in its bid for Daewoo.

Tata is 66% owned by charitable trusts. Those trusts tend to take the long term view, classic Deming.  The result is the opposite of the slash and burn approach of most takeovers, managers stay in place and work with new joint oversight boards.  This is not the case in America where for example Chevron has dumped virtually all the human assets in Gulf, Texaco, and Unocal.  Now the oil industry is short of qualified workers. No wonder.