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October 2017

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NFL Kneelers Don't Understand WHY the Anthem is Played

Just had this one published in The Daily Caller which you can find here or you can just keep reading…

NFL kneelers have started a firestorm regarding our National Anthem and article after article have discussed what the National Anthem means.  Although perhaps well intentioned, most of these discussions miss the main issue.

The issue is not what the National Anthem might mean to this or that individual but rather why the National Anthem, or in smaller settings the Pledge of Allegiance, is performed before public gatherings.  And that why is unity.

Before the city council meeting or before a town hall or even yes, before a sporting event the National Anthem is performed as a sign of unity.  Before we start debating this or that point, before we perhaps engage in heated debate, and yes before we go out on the field and try to beat the tar out of the other guy we pause for and acknowledge our collective unity.

The fighting can start after that but first comes a communal declaration that we are all one; unified as Americans.

This is why the NFL kneeling movement is so divisive.  The kneelers might think they are making a point about this or that injustice but viewed from the true meaning as to why the Anthem is played, they are directly challenging the unity of America.

They are making a declaration that they are not united with the rest as Americans; that we and they are not first and foremost Americans.

Whether this is their intent or not is irrelevant.  They seem to think that because a football game is about to start, we just happen to play the National Anthem.  The why seems to be lost on them.

For an individual the meaning of the National Anthem might vary greatly.  But regardless of how we might feel about the meaning, the why it is performed, generally by all in attendance, is very clear.

Standing and honoring the National Anthem isn’t about its meaning, it is about unity.  And not surprisingly, it is by its very nature disruptive when one actively protests during a brief period of collective unity.

Whatever these kneelers desire – and that seems to cover many disparate issues - attacking unity is never going to be a unifying event.  Just ain’t going to happen.

John Conlin is an expert in organizational design and change.  He is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a USA-based 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education.

NFL Kneelers - How About Standing For School Choice?

Just had this one published at The American Thinker which you can find here or you can just keep reading…

Hey NFL kneelers.  So you are upset far too many poor black and brown kids are getting screwed by “the system”?  Me too.  Although I am a person of pallor, in my business travels I’ve been to some of the toughest neighborhoods in this country.  I’ve seen the reality these kids face.  Far too many are literally screwed from the womb and other than a minuscule chance of making it to pro sports like you all have, the opportunity of a quality education is their one and only hope.

Yet the schools they are forced to attend are a national and moral disgrace.  Their young lives are being destroyed before they even have a chance.  What future awaits a 12 year old who has terrible reading, writing, math, and language skills? These kids aren’t stupid; they know and they act accordingly. 

If you want to end “police brutality” and various criminal system problems that plague young black men, end the driver of these behaviors which is rooted in this obscene failure of public K-12 education.

Do you know the average black kid graduates high school with what is in effect an 8th grade education?  Only 1 in 20 black students, 5% were rated college-ready in the four areas of English, reading, mathematics and science.  Do you think all of this this might affect their lives in a negative fashion?  Do you think this might only re-enforce racist beliefs?

Talk to one of your fellow super star athletics, 4 time Olympic gold medal winner and the star who almost single handedly made the new WNBA, Lisa Leslie.  She was the most heavily college recruited woman of all time.  She tells a heartbreaking story of her ordeal in passing college entrance exams.  She was one of the top students in her high school class yet she initially failed these exams.  As she notes, she’s not stupid it’s just that she was never even exposed to the words and thoughts on these tests. 

She also notes she was pissed off when this happened as she discovered just how badly the school system had failed her and thousands like her.  I’d guess many of you have had similar experiences.  This is called the bigotry of low expectations and it too helps damage far too many young lives.

Imagine what would have happened if a hundred years ago it was decided those Irish or Italian or whatever were just too dang stupid to learn proper English so they were taught a “dumbed down” version.  Do you think this might have impacted their ability to advance in society?  If this had happened it would have guaranteed they and their off-spring would still be occupying the lowest economic and social rung.

Yet how many of you can have a future in broadcasting and communication or do your poor language and speaking skills take you out of the running regardless of what intelligence and insights you might bring to the table?  The schools failed you and as you live every day, the damage goes on for a lifetime.

School choice is the only solution to it all.  The way to end unwanted police attention is to end the sad state of black criminal activities  and the way to end many of those is by giving these kids a chance at a better life through a quality education.

Few parents would voluntarily send their children to these schools if they had other options.  If parents were given control of all the money spent to educate their kids – in some sort of state-regulated environment of course - it would be a game changer.  And since the schools in the hood almost always spend far more than average, almost $30,000 per pupil in DC, for the first time in history poor parents would actually have MORE money to control than their rich suburban neighbors. 

Think of it, YOU could be the catalyst to make this happen.  Your actions could forever change the trajectory of young black and brown lives in this country.  You could take your place among the greatest Americans of all time.

Rather than taking a knee, how about raising your voices for school choice and to at least give these kids a chance at a better life?

John Conlin is an expert in organizational design and change.  He is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a USA-based 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education.

Modern Conservatism is an Utter Failure

I just had this published in The Daily Caller which you can find here or you can just keep reading…

It is time to admit it; modern conservatism is almost a complete and utter failure.  The long march towards ever expanding and unrestrained government and the corresponding reductions in individual liberty show no sign of slowing.

In fact the best that might be said in defense of the modern conservative movement is think how bad it would be if they hadn’t been there.  This is little solace.

Yet the fact remains, other than communal ownership of assets, much of what the socialist and communist parties desired in 1900 has become reality in one form or another.

The universities have been almost completely lost and the intellectual rot is beginning to seep into even the hard sciences.  Public K-12 serves as indoctrination for the 50 million young minds that are forced to trudge along that assembly line of mediocracy.

And the most painful aspect of this hundred year butt-whuppin is on most issues the conservative position is the correct one; i.e. the facts overwhelmingly support the conservative thinking. 

Nobel Prize winner in economics, Friedrich Hayek's main lament at the end of his life was how little his ideas had been adopted and implemented in public policy.  Milton Freidman, another Nobel winner in economics and a genius by most accounts, has had how much influence in actual public policy and the design and implementation of the laws they create? 

Did they influence thought?  Without a doubt.  Were they generally right?  Again without a doubt.   But it sure seems little has actually been turned into reality.  The national Libertarian political party has existed for 46 years and its influence on actual policy/legislation has been next to zero.

Today’s conservative movement seems to employ a lot of folks in pretty cushy jobs, prints some magazines, hosts some websites, publishes various books, and puts on conferences until the cows come home – for those who don’t know, conferences and seminars can be big time money makers.  Sadly, its primary purpose seems to have become a self-propagating jobs program for those lucky, skilled, or connected enough to rise to the top. 

I guess someone needs to say these things but what about actual accomplishments?  What about spreading the cry of Liberty?  What about adherence to the Constitution?  What about learning the truth from The Road to Serfdom, Capitalism and Freedom, or for that matter The Fountain Head, and plotting our collective course with this in mind?  As even the Koch brothers have admitted, they have got a very poor return on their investments of hundreds of millions of dollars in trying to actually implement conservative/libertarian ideas into actual public policy.

Yet even many evolutionary psychologists will agree, much to their chagrin, “conservative” ideas and actions produce far more success than any alternative.  The real world operates on very conservative principles.  Look around you, the facts are overwhelming.

This is not to say broad swaths of the country don’t accept the truth of conservative thought.  They do but have found it difficult to find a remotely reliable political vehicle to put these beliefs into concrete action. 

What is truly frightening is that the facts all support a conservative/libertarian system yet in spite of all evidence we continue expanding upon political and governmental systems which have never worked long-term in the history of humans.

Think about it; the side that has logic, reason and facts on their side has been getting their butts kicked for over a century.  There must be a reason for this and it would seem the sooner we discover it, the better.  Not for anything as base as politics, but for the very real reason of helping us survive as a species and in the process protecting this wonderful home we call earth.

There are a number of contributing factors to this process.  First, organizations behave almost like a living entity once they are formed and thus will always fight to survive and grow.  Think of the school of a school of fish or the swarm of a hive of bees.  The school isn’t really a physical “thing”, it is just the composite of all the individual fish, yet it “lives” regardless of what may happen to any individual fish. 

Organizations are the same and this thing we call government is simply a very powerful non-profit organization and thus it behaves as such.  Note that it behaves this way almost independent of the individuals which make up the organization at any point in time.

As this organization lives it will of course attempt to capture at least one political party.  It would be almost unimaginable for this not to occur; this is the organization of governments and what do political parties fight to control?  Government.  In fact it will attempt to spread its influence across all political parties.  As certain as gravity.

Thus these incredibly powerful organizations we call government have a very real bias towards growth and expansion.  They also use their collective will to ensure at least one major political party is owned by them.  This is the reality we all face. 

But is this process sustainable for the long-term or does it grow and grow and grow until there is a catastrophic failure?  Self-correction doesn’t seem to be possible and as the last 100 years have shown, it is quite impervious to the reality on the ground.

Which brings us to the core, fundamental problem and that is one of paradigm.  Politics, in fact most of government and what used to be called the soft sciences operate on a paradigm of belief; a paradigm where one’s opinions actually matter in some real, physical sense.

As the last 100 years have shown, one can’t win an argument based within a paradigm of belief.  Everyone can have an opinion and thus what’s accepted as “true” is more based on the direction and intensity of the folks holding these views than any fundamental reality.

Hundreds of years ago The Scientific Revolution ended this type of childish thinking for what are now called the hard sciences.  The only way conservative thinking can end this hundred year butt-whuppin (and save the USA, our species, and the planet) is to quit fighting within this obviously false paradigm. 

A paradigm shift in its truest sense is what is required.  The same thinking and insights which drove The Scientific Revolution need to be now spread to all areas of our lives.  

When this occurs, the quest immediately switches to one of searching for the truth, regardless of where it leads, not pushing this or that conservative or liberal view-point.  We are not little gods and thus we don’t get to define the truth, but rather hopefully discover it.  Rather than attempting to force every event through your mental template (be it right, left or in-between), this rids oneself of the template.  

The conservative and libertarian folks out there can either embrace and help spread this new paradigm and watch things they know to be true flourish and spread across the land or they can continue their present, proven, losing strategy.  I hope my fellow Americans will step to the plate since I doubt we have another 100 years to get it right.

John Conlin is an expert in organizational design and change.  He also holds a BS in Earth Sciences and an MBA and is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education. 

The Tragic Madness of K-12

It is that most heartbreaking time of year again as the new K-12 school year begins.  Just over 50 million children will be attending that assembly line of mediocracy called the public school system.

According to The Nation's Report Card the following are the percentages of 12th graders who score at proficient or above in:

  • Geography 20% - that’s an 80% failure rate!
  • Mathematics 25% - a 75% failure rate
  • Reading 37% - a 63% failure rate
  • Science 22% - a 78% failure rate
  • Writing 27% - a 73% failure rate
  • US History 12% - an astounding 88% failure rate!

Tragically, for minorities and the poor the results are far worse.  How can one expect citizens to make wise and informed decisions if they, after 12 years of public education, remain so ignorant on such a range of issues, to say nothing of the incredible loss of human potential these results represent?  How long can a free people survive with decades of these results? 

What is so heartbreaking is that it needn’t be so.  Every President since Kennedy has hatched a plan to “reform” the failing public education system as has pretty much every governor during this same time frame.  That’s almost 60 years of multi-level governmental “education reform”. 

That same President called for putting a man on the surface of the moon and 8 years and 56 days later we did just that.  One would think creating and then executing the technology required for lunar exploration might be just a little tougher than teaching children to read. 

Yet most 4th and 8th graders are not proficient in either math or reading.  Ask yourself, how can an organization whose only purpose is education not be able to teach children of average intelligence to read in an 8 year time span?!  Kennedy and NASA got us standing on the moon in a similar span.

Yet the results speak for themselves.  Don’t blame the teachers.   The country is filled with hardworking, dedicated and loving teachers, administrators, para-pros and volunteers.  For the most part they labor mightily to succeed.  But none have the power to unravel the mess the public education system has become. 

Sure the teachers unions are resistant to change but they are not the primary reason for these failures.  Just because an organization might not be part of the solution does not necessarily mean they are the cause of the problem. 

Don’t blame lack of funds.  We spend more per pupil than almost any other country in the world.  For most states, public K-12 consumes around half the entire state budget.

When you have a dedicated work-force, plenty of money, and decades of effort striving for improvement and you still get these results you must look beyond the basic tools.  The problem at this point must be in the very design of the system.  And of course that too is where the solution must lie.

As for guidance on system improvement we need look no further than our everyday lives.  Over these same 60 years we have seen remarkable progress in almost every area of our lives, save government and education.   You would be hard pressed to find a single product, out of hundreds of millions, which hasn’t improved by orders of magnitude in the past 60 years yet the average 9th grader 60 years ago was far better educated than one today. 

So what is the difference?  K-12 public education has been built on a top-down, “we know best” design.  All these other products are built on a system that has been extraordinarily successful throughout the history of mankind. 

And what is this system design?  Free people freely interacting with other free people.  Obviously for K-12 this would occur in some sort of state-regulated environment.  This design has never failed.  It drives the improvement of every product and service that has ever existed.  The facts are overwhelming.

Yet far too many people fight these system changes as they allow their preconceived biases to blind themselves to this mountain of evidence.  Remember that just because we have “government funded” K-12 does not necessarily mean government must also run the schools.

Changing K-12 system design will unleash the wisdom of millions as the power of free people freely interacting with other free people transforms public education.  Every student will gain as will every teacher.  It’s guaranteed to work and doesn’t cost an extra dime. 

What moral and honorable reason is there for not making this change right now?  What moral and honorable reason is there for fighting to keep the same old failing system?   What moral and honorable reason is there for retaining a system which destroys millions of young lives before they have even had a chance?  What moral and honorable reason is there for keeping a system which is putting the very future of this great country at risk?  I can think of none.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.

A Subversive Idea - The End of Race

We will never end the scourge of racism until we rid ourselves of the failed "scientific" thinking it is based upon.  The very first step in being a racist is classifying individuals based on a handful of visible physical traits - sadly it is almost universal.  That still doesn't make it right or correct.

Please... please give this American Thinker piece a read and take it to heart.  The longest journey starts with the first step so let each of us take the first step and rid ourselves of this failed  belief.  Racism never ends until we do...

You can find the piece at The American Thinker here or you can just keep reading…

What if many of the things you thought were true simply weren’t?  Could you let go of your old beliefs?  Would you?  What if they struck at the core of some of your most basic concepts of self?  In earlier times people have confronted this unnerving reality, generally as the scientific revolution rolled over their old ideas.  We seem to think we are immune, that everything we know is the truth.

Thomas Kuhn, in his transforming The Structure of Scientific Revolutions argues that science is not a steady, cumulative acquisition of knowledge.  Instead, “science is a series of peaceful interludes punctuated by intellectually violent revolutions”.  After such revolutions, “one conceptual world view is replaced by another”.  It is time for another revolution and this one involves the entire concept of race.

As a scientific fact the black race doesn’t exist, neither does the white or Asian.  There is no race gene.  In the year 2000, when the scientists at the National Institutes of Health announced that they had put together a draft of the entire sequence of the human genome, the researchers unanimously declared that there is only one race – the human race

The Hispanic “race” didn’t even exist until the 1970 census – they needed some classification for “them”.  Here is a subversive idea; what if there truly isn’t any “them”?  What if the whole concept of “them” is simply a creation of our classification?  One can take data and classify it in a myriad of ways, but the classification doesn’t become real in any physical sense. 

 If we treat the idea of race like any other scientific concept; old, invalid thinking must be discarded when new discoveries are made.  Often this demands a profound shift in thinking.  Copernicus's discovery that the earth is not the center of the universe is an example of a similar realization that demanded this type of profound shift.   

In the 18th century Goethe captured this reality when discussing the profound impact of Copernicus’s discoveries:

"Of all discoveries and opinions, none may have exerted a greater effect on the human spirit than the doctrine of Copernicus. The world had scarcely become known as round and complete in itself when it was asked to waive the tremendous privilege of being the center of the universe. Never, perhaps, was a greater demand made on mankind - for by this admission so many things vanished in mist and smoke! What became of our Eden, our world of innocence, piety and poetry; the testimony of the senses; the conviction of a poetic - religious faith? No wonder his contemporaries did not wish to let all this go and offered every possible resistance to a doctrine which in its converts authorized and demanded a freedom of view and greatness of thought so far unknown, indeed not even dreamed of."

The false concept of race is treated much the same.  Ridding ourselves of this cruel fantasy is fought by those on all sides.  Ridding ourselves of this failed theory strikes at the heart of many deeply held beliefs.  Ridding ourselves of this obscenity opens us all to knowledge “which in its converts authorized and demanded a freedom of view and greatness of thought so far unknown, indeed not even dreamed of.”  Free your mind to the truth.  There are only individuals and they are not defined by their skin color.  There are only “them” after we create them.  Here is an idea – why don’t we simply stop?

Whether we like it or not, there is no scientific basis for the concept of race and focusing on a human invention will never solve the problem of racism.  Let the revolution begin.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.

 

 

 

Government has become just a jobs program

I had the following published at The Daily Caller which you can find here or you can just keep reading… ;-)

As the United States Postal Service (USPS), a quasi-public entity, loses yet another $5.6 billion in fiscal year 2016, I have a suggestion.

I could cut their costs by hundreds of millions with a very simple and relatively painless plan.  Switch all deliveries to every-other-day service.  Some addresses could be delivered Monday, Wednesday, Friday while the others would see service on Tuesday, Thursday, Saturday.  The impact on the consumers of USPS services, residence or business, would be minimal. 

With this one move hundreds of thousands of unnecessary positions could be eliminated.  Tens of thousands of polluting vehicles would be permanently taken off the road.  This of course will never happen.  Those who call themselves public servants have devised a system where they are pretty much immune from the realities the rest of us face.  Losing one’s job once employed by government?  Generally not going to happen.  Then early gold plated retirement plans follow. 

If present trends continue, in a few decades those of us not in government will see almost no benefit from the taxes we pay, especially at the state and local level; almost all of our tax dollars will be paying for retirement benefits for government workers or pay for current ones.

Modern government, at pretty much all levels, has become simply a jobs program that constantly seeks to increase its members.  And of course 90+% of these members will vote for the Democrat party, the party of government.

Anyone who isn’t a member of one of these jobs programs is a sap for playing along.  They are so confident they don’t even hide their true intentions.  Take the decades long so-called War on Poverty.  At the federal level only about 15% of the money supposedly spent to alleviate poverty actually makes it to the poor.  The other 85% employees a lot of folks.  Even granting them a wide berth for incompetence, this is obviously the true goal of these programs.  No organization truly devoted to helping the poor would consume 85% of its money before helping any poor person.  It is not logical to assume anything else.  

Or how about Veterens Administration hospitals?  Why on earth would we duplicate the entire physical hospital system just to create hospitals solely for veterans?  If it were about quality care for veterans it would make much more sense to simply cover their treatments/cost through present providers.  Veterans would see much improved service and accessibility, all hospitals would become more efficient, and the rest of us would save a ton of money.  That is not done because it would violate the true objective of the VA hospital system, a government-run jobs program. 

Our how about our public schools?  In most states K-12 public schools consume at least half the entire state budget.   According to The Friedman Foundation for Economic Choice, since 1950 the number of K-12 public students has increase by 96 % while the number of administrators has increased 700 %.

Colleges and universities?  The number of non-academic employees at U.S. colleges and universities has more than doubled in the last 25 years, vastly outpacing the growth in the number of students or faculty.  The New England Center for Investigative Reporting notes that universities and colleges collectively added 517,636 administrators and professional employees, or an average of 87 every working day for the last 25 years.

The IRS might add 16,000 new employees to deal with ObamaCare.  I’m a cynic so I’d have to guess it will take even more to repeal ObamaCare.  Across the country small towns that once got along with volunteer fire departments now have staffs of 10 or more paid firefighters.  The small town where I grew up, present population of under 2,000, now has over 6 police officers.

Allowing drivers licenses for illegal immigrants in California will “require” the hiring of an additional 1,000 employees.  War on drugs?  Jobs program.  Tough on crime?  Jobs program.  Tax the rich?  Jobs program.  Pretty much any increase in government spending?  Jobs program. 

Even the military has devolved into a jobs program.  There are over 1.3 million actively enrolled and 800,000 reserves yet it was difficult to staff 250K troops in the Middle East.  What are the other almost 2 million folks doing and what is the true purpose of the military anyhow?

It’s a scam that will sooner or later overwhelm us all.  Poverty reduction, help for veterans, or public safety; these are just feel-good cover to further expand the employment/voting machine.

It is an organizational reality that groups of individuals organized together in some fashion will take on many biologic traits; the primary one being fighting to continue in existence.  This is especially true when the individual’s income is dependent on this organization.  These organizations will all do this without anyone consciously directing it; it is simply the organic nature of organization.  There is no escaping it.

For-profit organizations are disciplined by the marketplace; it they don’t create more value than they consume, they aren’t long to last.  For a lasting for-profit business, $1.00 of input MUST create more than $1.00 in return.  There is no other option.  This is the process of creating wealth.  This positive return drives economic growth and makes us all collectively wealthier.  And it winnows the winners from the losers.

Governments at all levels are immune from these restrictions.  In fact government operates just the opposite; $1.00 of input almost always has a negative return, turning that $1.00 into $0.60 (or less!).  Thus the immutable reality is the more government takes, the poorer we all become.  Governments don’t create wealth, they consume it.  For profit-organizations drive economic growth and wealth while government steals both growth and wealth for the benefit of a chosen few, its members.

These governmental organizations will not contain themselves; it is not possible for them to do so.  The organizational biologic reality is each will behave in its self-interest even if it is not a conscious plan.

Much like an uncontrolled parasite, government is slowly killing the very entity that keeps it alive.  Think this is exaggeration?  Just the federal government today takes, borrows and spends an amount equal to the size of the ENTIRE US economy only 32 years ago.  Include total state and local government expenditures which are over $3 trillion and well over $7 trillion each and every year is sucked out of economy.  That is about the size of the entire US economy only 20 plus years ago.

Can this trajectory continue?  I think not.  Whether a government worker or not, we knowingly let this proceed at our own peril.  It will end poorly for all of us.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.

Poor Design Will Be The Death of Us All

I recently had this one published in The Daily Caller which you can find here or you can just keep reading…

Archimedes, one of the greatest mathematicians and scientists of all time understood the importance of the design of a system.  Commenting on the incredible power of levers he noted, "Give me a place to stand on, and I will move the Earth."  With a properly designed system almost anything is possible; with a poor one, almost nothing. 

The power and importance of system design is at the core of any attempt to accomplish the desired goal and the societal impact of system design can and does span decades.

During World War II wage and price controls were implemented in a foolish attempt to restrict the unrestrictable.  This led companies to compete for employees by providing tax-free health care for their employees.  This was never a well-thought public policy.  It was not debated and analyzed.  It was simply a response to the flawed thinking behind wage and price controls.

And now a little over 70 years later we are still living with this debacle as it has become only more ingrained in our collective lives.  This decades old response to a bad idea in all likelihood has forever ended any chance we might someday have a free market for health care as we do for almost every other product.  At some point it time it simply becomes “you can’t get there from here.”

Sadly, in all likelihood this one response to a foolish idea will ensure we have socialized medicine forever.  And as many have noted, socialized medicine leads to only more socialism, and socialism has never worked long-term in any society in the history of humans.  We face this bleak reality all because of a poor idea implemented decades ago.

Social security is another example of a poorly designed system that has the potential to dramatically change the course of history.  The primary problem with social security is that at its core it is a Ponzi design, i.e. it only “works” if the base forever continues to grow.  This obviously cannot continue forever.  And when it can no longer continue, what happens then?

 In 1945 there were over 40 workers supporting a single social security beneficiary.  Today it is less than 3.  When it was created the average life expectancy was around 61 years, yet benefits started at 65.  Thus by design at the time, more than half of the population would never see any benefits.  Today life expectancy is over 78 years.  You do the math. 

Much of the mindless immigration policies of the West are a foolish reaction to the need to feed the growing maw of this poorly designed system. And to make matters worse, this is occurring at the same time the number of workers needed to drive our economy is rapidly shrinking, especially for low-skill positions.  This is another quite foreseeable coming train-wreck driven by conflicting, poorly designed systems.

Yet around 59 million get social security benefits each month.  That’s about one in six people!  Does anyone believe it is a good idea to have 1 in four families in the US depending on a system whose very design ensures a catastrophic failure at some point in the future?  Right now that date is 2034, 17 years from now when social security will not be able to meet promised benefits.

Medicaid covers around 70 million people, about 1 in 5 Americans, and it will be broke in 2028.  That’s just 11 years from now.  Medicare, which covers around 49 million hits the wall in the same time frame.  Together these enrollees now exceed the number of full-time private sector workers in the United States.

Notice this isn’t about the desirability and benefit levels of these various programs – we can debate and argue about that -  just that each is built on a design which ultimately leads to catastrophic failure.  Just like the wage and price controls of WWII, each creates unintended waves that flow though time. And waves have an unfortunate habit of crashing at some point upon all in their path.

Can the light of individual freedom and liberty, to say nothing of a functioning society, survive such poorly designed systems?  We are racing to a day where we will discover this answer.  Sadly, individual freedom will most likely be the first victim and alas once lost, freedom is not likely to make a return visit.

We are stewards of this country.  In many ways we have become the stewards of individual freedom across the globe.  Knowingly building and implementing fatally flawed systems upon which millions of people come to depend is not the sign of a wise, caring, and long-lived society.  Rather it is the sign of an immature, childish, and in all likelihood short-lived society.

If we do not accept the importance of far better system design in our various government programs I fear this wonderful experiment in self-government and all the wealth it creates may soon become a distant memory.  And when it falls, no life on the planet will be left unscathed. 

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.

My Dad’s Left Hand – Part 2 – Let us end the insanity of “transgendered”

I just had this published in The Daily Caller which you can find here or you can just keep reading…

My dad’s left hand is messed up.  It didn’t develop properly in the womb.  It’s an oval-shaped thing with small, dangly, non-working nubs.  This hand is both natural - it occurred, didn’t it? - and unnatural - that’s not how a hand is supposed to be - at the same time.

But in no way is he morally inferior because of this reality. He is not defined by his left hand.  It is an aspect of him, but only one of hundreds, and not a very important one to boot.  I suppose people could use his left hand as the sole means to define him but that would be rather silly.

Approximately 3 percent  of all children born in the U.S. have a major malformation at birth.  We don’t celebrate these issues; we don’t cheer and hope for more babies with birth defects, we just deal with it.  Natural and unnatural at the same time.

Around 1.2 percent of the US population has the disease schizophrenia.  A good friend’s son came down with it while a freshman in college.  He fights the demons it unleashes on a daily basis; it is heartbreaking to witness.  Yet he too is not morally inferior, not somehow “less” simply because he has this terrible disease. 

About 2.6 percent of the US has bi-polar disorder.  A friend too fights this on a daily basis.  Educated as an attorney, he is quite intelligent and out-going yet due to his disorder he has never held a job for more than 2.5 years over the course of decades.

3 percent have some sort of eating disorder.  Without treatment up to 20 percent of those with serious eating disorders die.  Around 1 percent of female adolescents have anorexia. Think about that… one out of every one hundred young women are starving themselves, sometimes to death!  Again, this is natural – it’s happening isn’t it? – and unnatural – they are not fat, they are dying – at the same time

Should we celebrate these poor young women and help further their mental issues by agreeing they are fat and need to lose weight?  Should we assist them in their various methods of self-destruction?  Should we have our public schools celebrate, embrace, and reinforce their mental disorder?  Perhaps install fun-house type mirrors which add weight to their reflections to help them connect with their perceived body condition?  I think most would agree these would be ghoulish to even consider.

Instead we offer them help.  We don’t see them as morally inferior – they aren’t – but rather as simply having a mental disorder that needs to be addressed.

Yet in what can only be called a period of country-wide insanity, we do just the opposite with those who have a transgendered disorder, i.e. they feel as though “they” are not in internal agreement with their birth gender.  The official name is gender dysphoria and somewhere between 0.3 to 0.6 percent of the US population have this disorder.   

Do we offer these people help with their disorder as we do with all those others or do we celebrate and encourage their disorder?  Sadly it seems fashionable to do the later.  Society would rightly be up in arms if more and more babies were being born with left hands like my dad’s yet somehow we are collectively expected to “encourage” this one disorder.

And the obvious reason why it is treated so differently comes down to one sad fact; it’s only because it has to do in some way with sex. This is a sad reflection on our society. 

This collective insanity is ultimately based on an obvious misunderstanding of human life.  We are not some little gods whose very whim can alter realty… like the reality of gender… rather we are the magnificent product of 3.8 billion years of evolution and are thus not infinitely pliable to whatever momentary whim that might be taken as wisdom and truth. 

But what of the poor souls with this disorder?  What of their lives?  I would no more feed these people’s mental disorder than I would agree to tell anorexic young women that they really are looking a little chubby.  Both are vile and disgusting acts and we should hold those who do so accountable. 

Having a brain which doesn’t work quite right is no different than having a pancreas which doesn’t work quite right… neither has ANY moral aspect.  But of course problems with one’s pancreas are generally not outwardly noticeable while problems with one’s brain are almost always noticeable.  Just the way it is.

I hold no animus against folks with this disorder just like I hold no animus towards my bi-polar friend, my friend’s schizophrenic son, or people like my dad who were born not exactly “right”.  They don’t need our pity.

Each is only a single facet in a multiple-faceted life.  You can embrace them or shun them as you desire.  But please, let us end this short-lived insanity that calls for us to celebrate this one, and only this one mental disorder.  These individuals deserve far more from us.

A Father’s Day Salute - My Dad’s Left Hand

I thought I’d let my warm-and-fuzzy side out for a stroll and just had this published in The Daily Caller which you can find here or you can just keep reading…

My dad’s left hand is messed up.  It didn’t develop properly in the womb.  It’s an oval-shaped thing with small, dangly, non-working nubs. 

I have never considered him handicapped.  I’d guess the same is true of most kids whose parents were in some manner not physically “right.”

He was a great athlete in his youth.  He’s also a pretty dang good carpenter, plumber, electrician, mechanic, horseman, farrier, farmer, rancher, hunter and fisher.  And yes, he can do all of those.  Better than I am on all counts, even with my working left hand. 

My dad’s birth defect - yes that’s what it is, it isn’t supposed to be like that - has absolutely no bearing on his moral standing as a human.  He is not somehow morally “less” simply because a hand didn’t develop as designed.  His hand is both natural - it occurred, didn’t it? - and unnatural - that’s not how a hand is supposed to be - at the same time.

But in no way is he morally inferior because of this reality. He is not defined by his left hand.  It is an aspect of him, but only one of hundreds, and not a very important one to boot.  I suppose people could use his left hand as the sole means to define him but that would be rather silly.

Each of us is like a multifaceted cut diamond with hundreds and hundreds of aspects.  As free individuals each of us can choose which aspects of a person are of most importance and judge and discriminate for or against them accordingly.  Not everyone is my cup-of-tea and I am certain I’m not for many others. 

I think of this when I see my college buddy’s 20-something son who has developed a serious brain malfunction.  He visits his personal hell on a regular occurrence.  It is heartbreaking to watch.  But he simply has a brain issue.  Just like my dad’s left hand, his brain simply didn’t develop exactly as designed.  It is again, both natural and unnatural at the same time but in no way is he morally inferior; he is not “less” in any way.

I think of this when I see a friend’s autistic child.  He is not morally defective; he simply got dealt a crappy hand in the development of his brain.  Natural and unnatural at the same time.

And I’ve been thinking about this as I read about the growing movement to more fully accept those whose sexual traits exist outside the norm.  Although many in these movements don’t want to accept it, these are natural and unnatural at the same time.  But not morally inferior.  Not morally defective.  Just different on one aspect of the hundreds that make us who we are.

Each of us has unnatural aspects to ourselves.  Some are small and some are large.  Some are hidden and some stand out.  But each of us is so much more than these quite natural differences.  Each individual is a cornucopia of traits.  Some we might like and some we might not.  We can choose our friends and shun others based on a single trait or the collection of the whole. 

None of us are defined by a single facet of who we are. So, why make judgments that don’t encompass the whole person?

My dad is not defined by his left hand.  We don’t need to celebrate his left hand, simply accept it for what it is; a very small and not very important part of a much larger mosaic. And I am dang lucky to have him as my dad.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.

Time to Stick a Fork in Conservatism, it's Done

Just had this published in The Daily Caller which you can find here or you can just keep reading…

 

With the Republican nomination and subsequent election of Donald Trump there has been a great deal of hand wringing regarding what it means to be conservative.  Does it mean this or that and who gets to determine which?

Many “conservative” publications have spent more than a few pixels on this topic; and yes, most of the editors believe they get to define it.  They are wrong.

In fact the framing of the entire argument is wrong.  And for all you self-identified conservatives out there please don’t get your panties in a bundle since the same can be said of liberalism.  For both, it is time to move on to something else.

The entire liberal/conservative attempt to frame the world is based on a fundamental falsehood; the falsehood that one’s beliefs and opinions somehow matter when describing reality and that you somehow have the power to pick and choose which to believe, i.e. which is a true representation of reality. 

This is a childish way of thinking.  Yours and my opinions or beliefs matter no more in politics or economics than they do in the hard sciences; which is to say they don’t matter at all.

Rather than attempting to put everything in a conservative versus liberal framework, how about casting that aside and instead building a true versus false framework?  This is what started about 600 years ago in what is now called the hard sciences, in fact this was the birthplace of “science” and look at the results!

We now just need to take the logical steps of extending this way of thinking, this way of looking at and organizing the world to all other areas of our lives - politics and economics included.  No magazine or pundit is required to tell us what it means to be conservative or liberal; instead we all should discard those labels and simply be seekers of the truth.

I can already see the eye rolls; here’s just one more schmoe attempting to tell us his truth, i.e. his opinion.  If you understand the nature of the paradigm shift I am suggesting you will quickly discover this statement makes no sense, it cannot exist in a fact-based worldview.

But I can tell you the truth as discovered over the past couple hundred years.  The first and most fundamental truth is we, humans, evolved on this planet.  Thus we are a part of the natural world and nothing we can do or build can operate outside of the boundaries set by this world.  And please, this fact says nothing about the existence or non-existence of God.

Far too much political and social thought act as though we are infinitely pliable and not the result of 3.8 billion years of evolution.  Those thoughts might have been defensible 100 years ago but not today.

Another truth is statistics.  Einstein once said God doesn’t play dice but on this he was wrong.  Statistics is a primary driver of all things.  Relating this to politics and social systems it means the many will always outperform the few.  Thus individual freedom will always outperform a top-down, hierarchical system.  This is not a political “belief” but an observation of fact and it thus points one towards a limited government way of thinking.  There is no other choice.

Somewhat tied to this is the reality of swarm intelligence and the self-organization it drives.  Swarm intelligence attempts to describe the collective behavior of group animals; think of honey bees, schools of fish, herds of bison, flocks of birds, and yes even good old humans.

The swarm acts as a significant intelligence multiplier.  Rather than relying solely on individual intelligence, this process creates a collective intelligence that is orders of magnitudes beyond that of any individual member.  You can see it in action every day in pretty much every product or service that exists.

This occurs with no leader, no management, and with no one “seeing the big picture”.  In fact having no one in charge is a key ingredient to swarm intelligence.  This incredible increase in intelligence is driven by countless interactions between individual members with each following simple rules of thumb and reacting to their local environment and those members around them.  That’s it.

And although it may be difficult to grasp, this self-organizing behavior has no cause and effect, it simply is.  Almost every advancement in human existence has been driven by this, not those powerful non-profit organizations we call government. 

When we attempt to place leaders in this process the collective intelligence plummets.  This explains why governments and their activities are always going to be far stupider than free individuals going about their daily lives.  This isn’t a political statement but a factual one.

Again, we aren’t talking about knocking off a couple group IQ points but rather magnitudinal increases in stupidity.  This stupidity multiplier isn’t restricted to governments but to all organizations, the larger the worse.  Anyone who has worked in government, the military or other large organizations has seen it every day.

Thus the facts, not some chosen political philosophy, are clear that individual freedom and limited government will always outperform systems of limited freedom and expansive government.

Liberal, conservative?  Those are childish beliefs carried over from the past.  It is time to send them to dustbin of history and to move forward as the hard sciences did centuries ago and to simply become seekers of the truth.  The future of the planet depends upon it.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.    

Time to cut the F & E lines

Just had this published in The American Thinker which you can find here or you can just keep reading…

One of the biggest gold rushes of our time looks to be the anticipated market for autonomous (self-driving) vehicles.  Worldwide there are companies and investors throwing billions at the market and what was predicted to happen in 10 years now looks like 2 at most.

The ways autonomous vehicles will impact our daily lives are just now being contemplated but one impact is clear, they have the ability to completely change how we view public transportation, all for the better.

We need to rid ourselves of a bus and rail-based paradigm for public transportation.  A complete stop should be placed on all new activities for a couple of years until the full impact of autonomous vehicles can be ascertained.

Because with autonomous vehicles we can have true public transportation; a self-driving vehicle which comes directly to your home and takes you where you need to go.  For those using present public transportation, think about it.  No more need to get to the bus or rail stop, often this alone requires you have a car; to say nothing of the personal hours saved by going directly where you want, when you want. 

The vehicle, and who knows it may be more of a covered reclined electric motorcycle than a “normal” 4 wheeled car, shows up when requested, where requested.

It deducts the trip from some sort of per-paid or credit card and off you go.  If you have more folks or need more room you simply request a larger vehicle.  And all these charges can be adjusted to the user’s income, thus ensuring the poor have full access. 

There is not a single public transportation operation in the country which charges users the full cost of the service.  Thus subsidies and taxes are already built in, let’s just quit paying for polluting, often empty buses and rail cars and instead use the funds to let the marketplace meet the needs of people; people who are guaranteed to have money in their hands to spend for whoever can provide the most value for the buck.  For the poor this has the ability to transform their lives.  No more 2 hour one-way rides to work!

Prices can be set via the marketplace with subsidies and perhaps usage limitations based on personal income.  The poorest get a monthly 30 round-trips for the maximum subsidy, with lower subsidies as incomes increase.  It can be accomplished relatively easily.

Each vehicle could come with internal advertising or not – to be determined by the user with the appropriate fare adjustment.  This will only further reduce the cost of operations.

Here in Colorado we have the Regional Transportation District (RTD).  It covers the Denver metropolitan area with bus and rail with limited bus service farther out.  Its annual budget is just under a half billion dollars and it employees almost 3,000.   

That is a lot of money that could easily be used to fund a market-driven true public transportation system.  RTD, like many cities across the country, continues to expand on an expensive and polluting bus and rail-based system of yesterday, to say nothing of offering quite limited public service and convenience to those forced to use it.  The only schedule users of this new public transportation system will need is when do they want to be picked up.

Across the country it is time to stop new spending on the F & E lines and all the rest and to prepare for a golden age of public transportation, all driven by… well, nobody.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.  We leave the Truth to God ;-)

Stewards of the Planet

I just had this published in The American Thinker which you can find here or you can just keep reading…

Over the past few hundred years we, the human race, have experienced an unparalleled explosion of knowledge.  Although our advances due to swarm intelligence have been growing since the beginning of life on the planet, during the recent past knowledge of the natural world has increased exponentially. 

The start of this rapid increase in the growth of knowledge can traced to the Scientific Revolution.  It was the spark which ignited a complete redefinition of the natural world and how we interacted with it; the ignition of a never-ending search for reality and truth.

It was a paradigm shift in the truest sense; where the old way of viewing the world gave way to a new method of thinking, where only provable, testable, and replicable facts mattered.  This new approach to thinking has transformed the world.

More than that it has transformed the human race to a position no other life has ever held.  We have become stewards of all life on the planet. 

Our technology has the capability to transform the planet – for better or worse.  Our national governments are so large and powerful they can unleash planet-destroying destruction or they can simply create poorly designed systems which sooner or later crash upon millions of citizens, sending ripples of unforeseen consequences in all directions. 

Whether we want it or not, whether we like it or not, for the first time our collective hand is on the tiller steering the future of not just human life, but all life on the planet.

This is not a small thing.  As of right now we are the only known life in a 13.8 billion year old universe; which based on most recent data contains between one and two trillion galaxies and around 700 sextillion stars (that’s a 7 with 23 zeros behind it, or 700 thousand billion billion).  Yet the fact remains, here we stand alone, stewards of it all.

How long we stand depends upon us discarding childish belief-based thinking, i.e. my beliefs and desires actually matter in relation to reality.  Rather we must embrace the progeny of the Scientific Revolution; only provable, testable facts matter in all areas of our lives. 

Yet political systems across the globe operate as though they are immune from this reality, ours included.  How long is this sustainable before it comes crashing down?  We are stewards of an unbroken torrent of life over 3.8 billion years old.  Our political systems and the structures they create should have time-frames of centuries, not just the next political cycle.

Around 66 years ago the renowned physicist Enrico Fermi asked a famous question regarding life on other planets, “Where is everybody?”   

Since the universe is extremely old and if the universe is teeming with life, which many believe it is, one would expect to see evidence of these alien lives – they could be millions or even billions of years ahead of us.  So Fermi’s question and the paradox, “Where is everybody?”   

SETI has been searching the skies for alien radio signals for decades and so far the silence is disquieting.  We are either the only life in the entire universe, a breathtaking fact if true, or we are one of a special many.  Either possibility is staggering.

So where indeed is everybody?  Perhaps it is no more complicated than it is damn tough to make it. 

From a life evolution perspective we’re just now reaching the hard part, the stewards of the planet part.  Whether we like it or not, our actions and choices are impacting more and more of the world around us and this will not be changing.  We had better move forward with our eyes wide open.

We can refuse to embrace a fact-based political paradigm but in that case the future is preordained.  We will simply become some other planet’s Fermi’s Paradox as they look into their night sky and wonder, Where is everybody?

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world primarily through K-12 education.  We leave the Truth to God ;-)

The Power of Paradigm

I just had this published at WorldNetDaily which you can find here or you can just keep reading…

“There are in fact two things, science and opinion; the former begets knowledge, the later ignorance.”  Hippocrates

A new cancer fighting drug is discovered and its use races across the globe.  New technology, new scientific discoveries all freely spread like wild fire.  The fact-based nature of these discoveries, whose roots lay in the Scientific Revolution, (which occurred roughly between 1550 and 1700) are willingly adopted by people far and wide.

Yet not so in our political world.  If this same thinking were applied to political systems every country in the world would have been copying and improving upon the US Constitution for the last 100 years.  There has never been a more prosperous, wealth-creating entity. 

Yet look around the globe and you see incredible resistance to applying the same processes which have allowed the US to become the richest, freest country the world has ever seen.  Clearly the self-propagating nature of the Scientific Revolution is not the same when confronting politics and the stickiness of paradigm is the root problem.

A paradigm is an all-encompassing way of looking at something, a world-view.  It is the means by which we put things in some sort of order and thus grant them meaning.  It is an entrance but also a wall; blocking out and ignoring those pieces which contradict the present viewpoint.

We all operate under the sway of our various paradigms.  Casting aside a paradigm is often a difficult task because it permeates so many other areas of our lives, whether consciously acknowledged or not.  In his classic work The Structure of Scientific Revolutions Thomas Kuhn calls this process a paradigm shift, where a new paradigm completely replaces the old.

Image1

Kuhn used the idea of ambiguous images to visually demonstrate the essence of a paradigm shift. These are optical illusions where one sees one image before it “flips over” to another.  Can you make the above 3-dimensional image change?  Note how you can see only one perspective or the other, it is not possible to see both at the same time.  The essence of a paradigm shift.

 

One of the most profound paradigm shifts in the history of humans was the Scientific Revolution.  It was the spark which ignited a complete redefinition of the natural world and how we interacted with it; the ignition of a never-ending search for reality and truth.

It is the fire that gives us robots roaming the surface of Mars.  It is the fire that gives us medical advancements that were almost unthinkable only a few years before.  It is the fire that allows us to live like none before. 

But there is one area which has been quite resistant to the rational, fact-based essence of the Scientific Revolution and that is politics.  Political systems across the globe operate as though they are immune from this reality, ours included. 

Kuhn noted for people who are emotionally invested in a particular world view, the paradigm makes even the possibility of other choices implausible.  Rather than a window, these paradigms become walls which block even the thought there might be alternative and more basic reality beyond. 

Thus evidence that might contradict the paradigm directly is casually discarded.  But over time this avoidance of pesky facts leads to a buildup of “unreconciled anomalies”.  Whatever your present political beliefs, these unreconciled anomalies, i.e. things not behaving according to your worldview, are cascading across the globe. 

The only question for us is the direction these anomalies drive us.  Do we double down and only do more of the same or do we step into the breach and consider a new viewpoint, a new paradigm?

One path leads to destruction and the other to salvation.  We need to end the failing paradigm which is rooted in the belief that our opinions and desires matter.  They matter no more in politics than they do in the hard sciences.  The fire that transformed our thinking during the Scientific Revolution needs to now spread to our political thinking.

By any analysis individual freedom and limited government produce superior results.  The evidence for this is overwhelming.  The laws of statistics and the swarm intelligence freedom unleashes ensures this will always be the case.  This is as much a provable fact as is gravity. 

These truths should become the backbone of all government action.  You wouldn’t board an airplane which ignored the laws of aerodynamics nor should we allow governments to operate as if the laws of statistics and swarm intelligence didn’t apply to them.

The many will always outperform the few.  The many will show far more collective intelligence than the few.  The many will adapt far quicker than the few.

Although it might seem counter-intuitive, this process which has no leader, no management and no one seeing the big picture actually leads to order, structure and progress – not chaos.  In addition, because this structure is very fluid it is quite adaptable to complexity and rapidly changing events; providing far superior results than how governments presently operate.

Top-down, hierarchical, “we know best” thinking should be tossed in the dustbin of history.  Governmental, and in fact all business organizations should be built not just to allow but to capitalize on these foundational truths.  Remember, they are as real as gravity.

Kuhn again notes the ultimate barrier to a paradigm shift is the refusal to see beyond the existing ways of thinking.  We can either collectively follow the essence of the Scientific Revolution or wait until the unreconciled anomalies so accumulate they drive us in a direction which will in all likelihood lead to our collective demise.  The choice is ours.

John Conlin is an expert in organizational design and change.  He also holds a BS in Earth Sciences and an MBA and is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education. 

Do your beliefs shape reality?

I just had this published at The American Thinker which you can find here or you can just keep reading…

What would you think if you discovered the local school was teaching your child 4+4 did not equal 8 but rather 5?  To damage a child in this manner would border on child abuse.

Luckily we have no such thing.  Schools teach students mathematics as it truly is.  They also do so in many other subjects; imparting the facts as discovered over millennium.  No one is asked their opinion or is any weight given to their feelings when learning about the world around us.

This way of thinking is a progeny of the Scientific Revolution; a time when the concept of science was created.  Science replaced the childish belief-based paradigm, i.e. my beliefs actually matter in relation to reality, with a fact-based paradigm, i.e. only provable, testable facts matter.

Bertrand Russell explained it as “… minds do not create truth or falsehood. They create beliefs, but when once the beliefs are created, the mind cannot make them true or false... What makes a belief true is a fact, and this fact does not… in any way involve the mind of the person who has the belief.”

This paradigm shift to a fact-based worldview has transformed the world to the betterment of all.  Yet one area which has shown amazing resistance to scientific thinking is political systems and their handmaiden, economics. 

It shouldn’t really surprise us since in these areas, unlike the hard sciences and mathematics, schools teach students they can pick and choose which systems to believe; as if their opinions could affect the very nature of reality.  Worse yet, the students are taught their individual beliefs don’t even have to be part of an over-arching coherent and cohesive fabric of reality; just one belief here and another, perhaps contradicting one there.

I’m not blaming the schools.  They are simply teaching from the accepted viewpoint regarding these areas; the present paradigm.  But in what is truly a frightening development, rather than moving forward to a fact-based paradigm in all things, the childish belief-based paradigm is actually expanding in schools and colleges across the land.

Among other things, not only are students being taught they can pick and choose whatever political system they like, they are now being taught they can pick and choose their own biology.  This does not just border on child abuse but clearly crosses the line.

The facts about political systems and economics should have been settled a long time ago; individual freedom and limited government is the only self-sustaining system which is supported by natural facts and real-world observation.  These truths also fit nicely in their part of a coherent and cohesive natural reality; just like all the hard sciences.

This of course makes perfect sense since we are part of the natural world and thus nothing we can construct can operate outside of this natural world.  And in the natural world all mammals, humans included, are made up of individuals who are either male or female. 

The science on this has been settled for millennium in addition to being rather apparent to any sentient human.  And as Bertrand Russell rightly notes, a person’s mind and what they may or may not feel has absolutely no effect on whether this belief is true or not.

Most people who believe foolish things do so because they were taught them.  Our public schools should not be willing participants in this charade whether we are discussing political systems, biology or any other area of existence.  It is past time to demand an end to this school-sanctioned child abuse for both the individual’s and society’s sake.  As science has taught us, ignoring reality never works out well for any.

John Conlin is an expert in organizational design and change.  He also holds a BS in Earth Sciences and an MBA and is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education. 

What is the science behind free markets and capitalism?

Just had the following published in The American Thinker which you can find here or you can just keep reading…

The economic system called capitalism has been described in many ways but at its core it is quite simply free people freely interacting with other free people.  Capitalism has transformed the world by producing more wealth than any other economic system in the history of civilization.

But why does it produce such wealth?  Some have said freedom is the magic potion; that left to their own devices free people will outperform any other economic system. 

That is true but the ultimate reason is deeper and firmly based in science and fact.  In the past few decades a great deal of research has been done on what is called swarm intelligence.  Swarm intelligence attempts to explain and understand the collective behavior of group animals; think of honey bees, schools of fish, herds of bison, flocks of birds, etc.

The intelligence of the swarm is a significant multiplier.  Rather than relying solely on individual intelligence, these groups create a collective intelligence that is orders of magnitudes beyond that of any individual member.

They do so without any leader, with no management of any sort, with no one “seeing the big picture”.  In fact having no one in charge is a key ingredient to swarm intelligence.  This incredible increase in intelligence is driven by countless interactions between individual members with each following simple rules of thumb and reacting to their local environment and those members around them.  That’s it.

Perhaps counter-intuitively, but if an individual member did attempt to become a leader the group intelligence would drop precipitously.  And although it may be difficult to grasp, this self-organizing behavior has no cause and effect, it simply is.

Think of the intelligence of one of the members of these swarms versus the intelligence of the group.  We are not talking about adding a few group IQ points but rather increases in intelligence by orders of magnitude.

My hypothesis is this same process is the scientific basis for the success of capitalism and in fact the success of the human race.  This swarm intelligence has always been at work but with our highly developed communication skills and the ability to record and store knowledge our collective swarm intelligence is truly astounding.  Just like the honey bee, our swarm is orders of magnitude more intelligent than even the brightest among us.

And thus capitalism, which is just individual freedom as expressed in an economic system, is absolutely certain to “work”.  It is a scientific fact just as certain as gravity.  And just like the swarm it does so with no leader, no management, and no one seeing the big picture; no cause and effect, it just is. 

And just like the swarm, when we attempt to place leaders in this process the collective intelligence plummets.  This explains why governments and their activities are always going to be far stupider than free individuals going about their daily lives.  This isn’t a political statement but a factual one.

Again, we aren’t talking about knocking off a couple group IQ points but rather magnitudinal increases in stupidity.  This stupidity multiplier isn’t restricted to governments but to all organizations, the larger the worse.  Anyone who has worked in government, the military or other large organizations has seen it every day.

Some economists have noted that during the Soviet Union’s existence the central planners had to daily determine the prices of literally hundreds of thousands of things and thus the system was terribly inefficient as they had no way to accurately determine this.  My hypothesis is even if they could have accurately determined each and every one of these prices, they still would have failed.  The stupidity multiplier of their command-and-control economy ensured this.

The science on this is clear.  If we want to maximize our collective well-being and wealth, if we want to maximize our freedom, if we want to maximize our collective odds for survival we must allow human swarm intelligence to do its magic.  And governments are not the solution but are rather the destroyer.  The science is clear.

John Conlin is an expert in organizational design and change.  He also holds a BS in Earth Sciences and an MBA and is the founder and President of E.I.C. Enterprises, www.eicenterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education.

The Education Plantation

Just had the following published in The American Thinker which you can find here or you can just keep reading…

In the course of my management consulting, I’ve been to some of the toughest neighborhoods in the country.

If you do business in these areas you know to always visit them early in the day when they are relatively safer. Thus in my travels I’d see four and five-year old kids playing like all four and five-year olds do.

But, as they got older, they developed an increasingly hard look in their eyes. And, by only nine or 10, many had a look in their eyes no child in America should have.

Even at that age, they had put up with more crap than one can imagine. The neighborhoods they were born into have astonishing crime rates. The few terrorize the many and unlike the police, they don’t leave.

Job opportunities are limited and youth unemployment reaches heights unheard of anywhere else in the country. A hand up is not an easy thing to find in these neighborhoods.

In many of these places a culture has taken root where the very keys to success are viewed as being somehow foreign and something to reject, not embrace. These realities are true regardless of one’s heritage but it has fallen disproportionally on black Americans.

What of the education opportunities presented to these children today? The inner-city schools these children are forced to attend are a national disgrace. Education has been called THE civil rights issue of our time by political leaders across the political spectrum.  I disagree, I believe it is the moral issue of our time.

What we see in the inner-cities is the result of a lot of factors.  But a major one is the collapse of the educational system decades ago resulting in generations of people, each receiving a lousy education.  Generations of people pretty much screwed from the womb with their only hope being a chance for a decent education.  Without that they are lost.  Without that they have little hope.  In the face of this desperate need, the schools that are forced upon these children are an obscenity.

It is quite easy for someone who has never witnessed these realities to talk about hard work and pulling one’s self up by the boot straps.  It is much easier said than done.  What future truly awaits a 12 year old with very poor reading and writing skills, little to no math skills, and no command of the English language?  They are supposed to happily go to jobs pushing a broom or flipping burgers?  And fighting for these jobs against an army of illegal immigrants who are willing to work for below-market wages?  Or is a much more logical path one of crime?  Far too many of these inner-city schools are simply one stop on the assembly line from school to prison or the cemetery.

Martin Luther King Jr. said, “The function of education is to teach one to think intensively and to think critically. Intelligence plus character - that is the goal of true education.”

But the public education system is doing neither for the poor souls forced to attend these life-destroying institutions.

How many of the problems of the inner-cities in general and of black Americans in particular find their roots in generations of failed education? We will never address the issues of race, crime, poverty and the pathologies they unleash until we at least provide an opportunity for every child in America to attend a quality school where their intelligence and character are developed to the peak of their potential.

Will every parent and child take advantage of this? Of course not. But until everyone who wants it is given a true opportunity to send their kids to quality schools, this country will fail in its basic commitment to those poorest among us. And, when you consider the resulting crime statistics and the cost of filling our prisons, that’s a problem for all of us.

For the richest country the world has ever seen to allow this destruction to these young lives is simply wrong. Not every parent is “parent-of-the-month” material but at least let’s give those who cry out for help a chance by offering them a school which at least has the potential to save their life rather than destroy it.

John Conlin is a self-employed management consultant who lives in Littleton, Colorado. He started End The Education Plantation because he’s seen first-hand the harm being caused by our nation’s schools and believes it’s time to do something about that. For more information, go to www.EndTheEducationPlantation.org.

System design advice for the Trump administration

As the Trump revolution gears up it is time to understand the solution to many issues facing government is as much system design as overall philosophy.  Obviously fewer regulations, less government, and more individual freedom are superior.  Real world results across the globe prove this beyond any doubt.

But within this framework, the design of these systems is something that needs renewed attention as it is fundamental to the results generated.  First let’s think about regulation and law.  The first step in analyzing a new or reviewing an established regulation is a clear definition of its goal.  Why does it exist and what do we want it to accomplish?  If this can’t be done then why do we have the regulation in the first place?  Nothing should move forward until this is clearly defined or the regulation is tossed in the dustbin.

But here is where regulation and law often goes awry.  It is the wrong path to attempt to determine exactly HOW to do this.  Rather effective regulation and law should set the boundaries between acceptable and unacceptable actions.  That’s it.  And perhaps counter-intuitively, acceptable actions should be undefined while unacceptable actions should be clearly defined.

As long as the participants stay within these boundaries they are free to do as they desire.  This imbibes the regulation and the area it attempts to regulate with life, flexibility and elegance; rather than a static unbending rule which doesn’t, and in fact can’t react to a changing world.

And speaking of life, organizations of all sorts behave much like a living organism.  Trump’s cabinet teams will soon be overseeing huge multi-layer organizations.  Some have called them the permanent bureaucracy since administrations come and go but they remain in place.

By their very nature these organizations are resistant to change and in many cases will be actively hostile to the actions taken by their new temporary leaders.  Unlike for-profit organizations which are ultimately restrained by the realities of the marketplace, the powerful non-profit organizations we call government are by their very nature not capable of self-correction.    

In addition they are far too large for a single person or even a committed team to transform them from the top-down simply by strength of character.  And of course there are unions and civil service rules which make them even more resistant to change.  Cutting funding is always an option but it can’t be the only tool since these permanent bureaucracies will almost assuredly make the most politically painful cuts first - to the people, not their organization - to ensure no more come their way.

Obviously the best option would be to never have these bureaucracies in the first place but for those that remain the only way to truly and continuously transform these permanent bureaucracies is to change their design.  Without changing their system design they will remain in place long after the Trump team has moved on.

Just like regulations, these organizational designs need to be re-built to imbibe them with life; the ability to change and react to changing circumstances.  Top-down hierarchical organizations, which occur nowhere in the natural world, have shown themselves to be both unwilling and unable to change via their own efforts.  This is especially true of the non-profit organizations we call government.

It is not possible to provide a single answer on how best to design these systems, that would be in direct contradiction to the functioning of these “living” systems but they must be built on a foundation which leverages two key facts.  First, the unbending law of statistics proves the many will always outperform the few and thus individual freedom designs versus top-down, “we-know-best” will be superior in providing positive results. 

Second, free individuals acting on local information will show far higher intelligence than a single individual(s) attempting to direct them; think of the intelligence in a school of fish or a bee hive versus the intelligence of an individual fish or bee.  One is orders of magnitude more intelligent and dynamic than the other.  The same is true with humans.  Effective, lasting, living and adaptive systems must be built on these two foundational facts.  Carpe diem President Trump.  Change the system design and change the world.

A Plea to Betsy DeVos and President-elect Trump

Foreword – I don’t really like the method I am proposing in the following but I have over 30 years’ experience in re-organizing businesses and can state with absolute certainty that this country’s K-12 public school districts simply do not have the ability to transform in any meaningful manner.  It just isn’t possible. 

If we want to finally fix the failing K-12 public education system and help save every child whose heart beats today, we must take action.  Yes, God bless the school choice movement but their impact over the past 25 years as a percent of all K-12 students has been minuscule.  The solution is in changing the system and brute force and blackmail seems to be the only possible method to do so. 

jc

A Plea to President Trump

And so the Trump revolution begins.  If President Trump truly wants to make America great again he must address the sad state of K-12 public education.  It is both the cause and the solution to many of this country’s problems.  Positive national transformation is simply not possible without fixing K-12.

As an experienced manager you know one should always focus on why rather than who when addressing this or that failure.  Don’t blame the teachers.  This country is filled with hardworking, dedicated, and loving teachers, administrators, para-pros and volunteers.  They are not the problem.

Don’t blame the unions.  Yes, unions are always resistant to change but not being part of the solution does not mean they are therefore the source of the problem.  Rather the problem is K-12’s basic top-down system design.

On a per-pupil basis we spend more money on K-12 education than any other country on the planet.  Yet the fact remains most 8th graders are not proficient in either math or reading.  Only about 25% of incoming college freshmen are prepared for college, just 4% for blacks.  And few wake up the day before high school graduation and decide to attend college.  Most of these kids have been on a college-track for years and these are the results?!  What of those who weren’t on a college-track?

And the poorer one is, the worse it is.  The schools poor kids are forced to attend are a national and moral disgrace.  Their lives are being destroyed before they even have a chance.  And sadly far too many of these kids have black and brown skin.  If you don’t want opportunity to continue to be rationed by parent’s zip code, then the Trump administration must act quickly and boldly.

You must act quickly because you are only 7 years old once.  Most studies show if a child is not performing at grade level by 5th grade the odds are they never will.  Far too many school improvement plans act as though the goal is the school, not the students.  Plans taking 10-plus years to even begin to implement are a joke to every child whose heart beats today.  These supposed “improvements” will not impact a single one since they will have already moved far down that vast assembly line of K-12 education. 

You must act boldly because the present clearly isn’t working.  President Trump, in your business experiences you have witnessed the wonders of the marketplace.  How free people freely interacting with other free people can quickly and profoundly transform any area they touch.  Education is no different.

On average this country annually spends around $11,000 per pupil on K-12 public education.  In many inner-cities it is often more than double this.  Please push for introduction of a bill which forces any state that accepts federal education dollars to change the method(s) used to fund K-12. Rather than funding the education establishment, force the states to fund children instead.  The bill will require states accepting federal education dollars to give sole control to the parents to determine how and where these education dollars are spent, of course in some sort of state-regulated environment.  As icing on top, this won’t cost an extra dime.

This one simple change, which could be implemented right now, will unleash the wisdom of millions as the power of free people freely interacting with other free people transforms public education.  Every student will gain as will every teacher.

There are a couple models for this.  At the federal level a similar tactic was used in the 1984 highway bill which forced a national 21 year old drinking age; so what we are proposing is not new or unique and has been upheld by the Supreme Court.

At the state-level we have a model in the effective state-based regulation of beverage alcohol.  This country has one of the best regulated alcohol markets in the world while also being the most dynamic and innovative.  The same can be done with K-12 public education.  Let each state become a laboratory in democracy and watch the transformation happen before our eyes.  Leave it to the states to decide how to do it; the law will simply demand they must if they want to continue to receive federal education dollars.

The only way to fix a failing system is to change the system.  It is within your power to unleash the wisdom of millions by ending the failing, top-down, “we know best” system design of K-12.  Replace it with freedom.  Replace it with true opportunity.  Perhaps go for the whole enchilada and get rid of the entire Department of Education in the process.  It is a remnant of this failing system.

Will this be disruptive?  Of course.  But will it literally save this country and millions of young lives?  Without a doubt.  You have had the courage to do what the vast majority thought impossible; please do not avert your eyes to this on-going American tragedy.

And as a secondary benefit, can you imagine your inroads into all communities but especially the black and brown communities if you come with a $11,000 - $20,000 check to be used by parents to educate their children?  You will transform the political realities of the entire country while saving millions of young lives.  You will go down as one of the most transformational Presidents in the country’s history.

I beg you to bring freedom to K-12 public education.  The eyes of 75 million young Americans are upon you.  Please don’t let them down.

John Conlin is the founder and President of End the Education Plantation, www.EndtheEducationPlantation.org.   He started it because he’s seen first-hand the harm being caused by our nation’s schools and believes it’s time to do something about that.   

No Need For Kings

Just had this published in The American Thinker which you can find here or you can just keep reading…

I don’t like royalty.  Never did, never will.  You’ll never hear me referring to anyone as Prince-this or Queen-that.  I just don’t buy it.  Folks from other countries might choose to anoint others as their “betters” and to then bow down before them but not me.  I don’t care if it is governmental royalty, celebrity royalty or political royalty; you won’t see me on bended knee before them.

Perhaps it’s because I’m just some schmoe from fly-over country but the concept of royalty and me just don’t mix.  Royalty is based on an ancient, wrong-headed belief that “it’s in the blood”.  This is patently offensive to me as well as being quite provably false. 

This sick and twisted thinking is what drove and continues to drive the racial and ethnic stupidity that flows throughout this country. 

I am a proud American.  Perhaps I am naïve but I profoundly believe in the creed that all people are created equal.  Not as in the book Animal Farm where some are more equal than others (that’s royalty by another name) but that at our most basic, every single one of us has equal standing simply by our existence.  I’ll leave it to God to make judgements about our individual moral standing, for me we are all equal.  And please, this doesn’t mean we are all equal in our various abilities; that is a spurious argument at best.

One of the most profound moments in human history was the founding of this country on the premise that all people are created equal and that no royalty or ruling class was required; individual citizens could do just fine running their own country.  It was the people who had a government, not the other way around.

And a foundational belief in this equality is the absolute need for all citizens to be equal under the law.  Rich or poor, powerful or powerless; all are to be treated equally under the law.  If this is cast aside then so must the concept that all people are created equal.

If this is cast aside then we really do have royalty, whether called that or not.  If we allow this to be, it unravels the entire basis for this country.  The concept of equal justice under the law is not just important, it is fundamental.  Without it the words of our Constitution are simply a sad joke for those silly enough to believe them.  Is this where we have arrived where only saps like me are duped by this quaint notion?

How am I supposed to sit on a jury and decide my fellow citizen’s fate when I know that our political royalty are held to a different and almost always lower standard?  How can I demand my fellow citizens tell the truth under oath when no such demand is made of our royalty?  Why should I participate in any system whereby my fellow citizens are held to a higher standard than our political royalty?

I refuse.  Others in this country seem bent on anointing politicians as their betters and then rushing to bow down before them.  Screw that.  Although others might be quite ready to freely cast aside the fundamental notion of our individual equality and bow before their “betters”, I will not. 

John Conlin is President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading a fact-based paradigm here and around the world primarily through K-12 education.  He is an expert in organizational design and change. 

Our political Battle of Agincourt

As I sit here this morning my heart is heavy and I fear for my country, for my grandchildren, for my fellow citizens.  Immunity deals revealed, government-directed late Friday afternoon document dumps, media and government collusion to a degree few imagined; just more drips from what seems to be a never-ending flow of obvious corruption and criminality from the highest reaches of the federal government. 

To any honest observer this entire FBI – Justice Department “investigation” of Clinton’s use and destruction of a private email server is a joke, a charade, a kabuki dance for us deplorable rubes from fly-over country.  The fix has been in from the start. 

The concept of equal justice under the law lays tattered at our feet.  It seems there remains not a single soul in the FBI or Department of Justice whose personal honor has more worth than a paycheck.

When did we lose our freedom?  How did we lose our freedom?  And sadly why are so many quite willing to elevate people to royalty and to then eagerly bow before them?

Shakespeare coined many a phrase about scurvy politicians and cowards and they ring as true today as when they were written. 

But to my fellow deplorables and all who love freedom I offer another piece of Shakespearean wisdom. 

Let this be our cry.  Let this be our roar.  No matter how vile or whether we agree on other subjects, all who fight for freedom will be forever our band of brothers and sisters. 

This day is called the feast of Crispian:
He that outlives this day, and comes safe home,
Will stand a tip-toe when the day is named,
And rouse him at the name of Crispian.
He that shall live this day, and see old age,
Will yearly on the vigil feast his neighbours,
And say 'To-morrow is Saint Crispian:'
Then will he strip his sleeve and show his scars.
And say 'These wounds I had on Crispin's day.'
Old men forget: yet all shall be forgot,
But he'll remember with advantages
What feats he did that day: then shall our names.
Familiar in his mouth as household words
Harry the king, Bedford and Exeter,
Warwick and Talbot, Salisbury and Gloucester,
Be in their flowing cups freshly remember'd.
This story shall the good man teach his son;
And Crispin Crispian shall ne'er go by,
From this day to the ending of the world,
But we in it shall be remember'd;
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne'er so vile,
This day shall gentle his condition:
And gentlemen in England now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Saint Crispin's day.

Let today be the beginning of our political Battle of Agincourt.  Let us never stop until we stand on the field of victory or lie in piles of smoldering corpses.  And this isn’t about Trump; he has a role to play and his election is important but our salvation lay in the hearts of millions of freedom loving Americans, hero’s all.  Do not look to others to lead; become the leader, grab the reins wherever you may be and make a stand.

Don’t listen to those who say we can’t win because we are outnumbered.  At the Battle of Agincourt the English fought in the mud; many naked and covered with feces from the rampant sickness.  They were outnumbered by at least 3 to 1.  And they lost 400 while killing at least 6,000 Frenchmen.

Never forget that “Cowards die many times before their deaths.  The valiant never taste of death but once.”

And for those who find Trump and us deplorables far too despicable to stand with and fight, I’ll again let Shakespeare provide the response:

“That he which hath no stomach to this fight,

   Let him depart; his passport shall be made,

   And crowns for convoy put into his purse;

   We would not die in that man's company

   That fears his fellowship to die with us.”

 We will let posterity determine the worth of their manhood’s.  Ours will stand long after theirs are but dust in the wind.

John Conlin is President and founder of E.I.C. Enterprises, www.EICEnterprises.org, a 501(c)3 non-profit dedicated to spreading a fact-based paradigm here and around the world primarily through K-12 education.  He is an expert in organizational design and change. 

The Organization as a Life Form

The following was recently published in The American Thinker, which you can find here or you can simply keep reading ;-)

 

Take a few individuals and put them together in an organization of almost any sort and an amazing thing happens.  The organization effectively becomes alive.  It creates a heartbeat of its very own and it, the organization, will fight to stay alive from that point forward. 

This is true of all types of organizations, both for- and non-profit.  Even though the organization is an artificial entity it will mimic a biologic life form.

It will first and foremost fight to stay alive.  It will seek to expand and grow.  It will seek out resources and will fight to retain these resources for its own uses.  It will attempt to take care of its own in all of its actions.

And it will do these things almost regardless of who the individual members are or how often they come and go.  Although directed by living people, the organization has a life of its own in many profound ways.   This isn’t a philosophical position, it is a fact. 

In a for-profit organization all of these organizational drives are tempered by the reality of the marketplace.  They must convince individuals to voluntarily part with their money for whatever goods and services are offered and to do so in a profitable manner.  Otherwise they will cease to exist.  These organizational heartbeats depend on success to survive.

But non-profit organizations aren’t bound by this reality.  And the biggest, most powerful, and most threatening non-profit organizations that exist are government.

The non-profits we call government don’t have to convince people to voluntarily part with their money.  They can force the issue.  They don’t have to provide quality goods and/or services and achieving these goals at a profit or even breakeven is not required.  Thus there are no feedback loops whereby reality can easily alter the path of these non-profit entities.  Effective feedback allows for gradual change and adaptation.  A lack of feedback sets the stage for catastrophic failures.

Government is often said to be inefficient.  It is not.  It is very efficient but its goal is not necessarily what we the people believe.  As an example look at the federal war on poverty.  Since this “war” was declared in 1964, the federal government has spent over $22 trillion on anti-poverty programs.  But only about 15% of the money allocated to fighting this “war” actually makes it to the poor.  85% is consumed by the entity.  The organization is quite effective at keeping resources for itself. 

Analyze almost any government program and you will see how efficient the entity is in retaining resources for itself.  100 plus governmental organizations involved in a single issue?  As they say in the software business, that’s not a bug, that’s a feature!

This is also the reason the non-profits we call government will never be satisfied with the money sent to them via taxes.  From the organization’s perspective (not necessarily the employees but the organization itself), it will always be underfunded.  Always. 

These non-profits generally grow by constantly adding people, either directly as employees or indirectly by making others dependent on their actions and favors.  These individuals will almost always vote in their own self-interest and thus the entity rewards and strengthens itself in a democracy by this constant expansion.

And amazingly, these activities have almost no relationship to the actual people who staff the organization. Some people might hasten the speed of expansion, others to slow it but the organizational entity behaves as it does by its very nature.  The process is much like a honey bee hive where the hive itself (an abstraction really) mimics intelligence and purpose, even though its individual bees have very little of either.

And these people can all be quite moral and “good public servants”, yet the organization will operate as it will.  Swarm intelligence and the self-organization it drives ensure this is true in almost all situations related to government.

We need to collectively understand and accept this very biologic nature of every entity created by this thing we call government.  Every single position, every single bureaucracy becomes another beating heart that will strive to continue and grow.

It is easy to blame one political party for the expansion of these non-profits but this growth occurs with either a Republican or Democrat at the helm.    

We see this most spectacularly in the transformation of the federal government.  Rather than the constitutionally construed federation of states with federal power being strictly limited, the non-profit we call the federal government has expanded to effectively subjugate the states and all citizens.

From an organizational perspective this was to be expected.  In fact it would be shocking if this were not the case.  The federal government has become much like the Ring of Power in Tolkien’s Lord of the Rings; one ring to rule them all.

For all citizens the ultimate question isn’t whether this evolution is good or bad but rather it is sustainable and can it work long-term?  The answer to this is clear.  Left unrestrained government is much like a kudzu plant.  Sooner or later it is destined to overgrow its environment until it collapses in a catastrophic failure; remember that lack of feedback.  Unless the life of these non-profits is constrained in some way, this process will always occur.

This is neither a conservative nor liberal issue; it is a basic reality of organizational behavior.  These organizations truly live in many profound ways and unless we citizens understand and accept this fact we will never be able to manage them.  We either learn to do so or they will most certainly be the destroyer of us all.

John Conlin is an expert in organizational design and change.  He is also President and founder of E.I.C. Enterprises, www.eicenterprises.org, a 501(c)3 non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education.  

Honey Bees and Government

The following was published in The Federalist on 7/23/16.  The original is here or you can just keep reading ;-)

What Bees Can Teach Us About Why People Should Run Their Own Lives


Top-down, command-and-control systems will sooner or later create catastrophic failures. It’s not so with self-organizing systems.


July 23, 2016 By John Conlin

Individual honey bees aren’t very smart, yet honey bee hives, which may contain tens of thousands of individual bees, show remarkable intelligence. Scientists who study this type of swarm intelligence point out a key ingredient: no one is in charge. The hive functions just fine with no management, just countless interactions between individual bees with each following simple rules of thumb. A system like this is called self-organizing. Life itself is self-organizing.

That’s how swarm intelligence works: simple creatures following simple rules, each one acting on local information. No bee sees the big picture. No bee tells any other bee what to do. No fearless leader is required or desired. In fact, if a self-appointed “super-bee” were to attempt to take charge of this process, the entire hive would cease to function and all the bees would be doomed.


How Bees Find the Best Food

As an example, look at how the hive “knows” what is a better food source and reacts accordingly. Consider two foraging bees. Each bee returns to the hive and does an intricate dance that tells the surrounding bees the location of the food sources. In addition, the length and vigor of the dance transmits information regarding the volume of food available.
Just like the honey bee, we’ve unknowingly used swarm intelligence to develop knowledge and create wealth that allows us to collectively live like none before.

One bee has found a so-so food source, while the other has found a great food source. One bee dances for a while and the other dances far longer and thus impacts many more bees. Many more bees are thus directed to visit the better food source. Once they come back they too do a longer and more vigorous dance, again affecting many more bees than those few returning from the so-so food source.

Thus with absolutely no central, controlling intelligence—in fact, with little intelligence at all—the hive behaves very intelligently and directs the vast majority to the better food source, thus ensuring all are better off.

Although we humans like to think of ourselves as quite smart, we are much like the honey bee. Unlike the honey bee, we have complex language, the ability to use tools, and the ability to store and transmit information over generations. This lets each of us believe in our vast individual intelligence when in reality we each enjoy the fruits of millions and millions of lessons learned since the dawn of life itself.

Just like the honey bee, we’ve unknowingly used swarm intelligence to develop knowledge and create wealth that allows us to collectively live like none before. The beauty of swarm intelligence and self-organizing systems is that even for complex systems like human life and survival, behavior may be coordinated by relatively simple interactions. Here’s the key: in a self-organizing system there literally is no cause and effect. It just is.

Government Prevents the Honey Bee Principle

Yet also in the past hundred years we have seen across the globe a tremendous growth in powerful organizations that blatantly operate against the reality of self-organization and swarm intelligence. These organizations are government. Government typically attempts to do the opposite of those things that make for smart group behavior like decentralized control, response to local feedback, and simple rules of thumb. Self-organizing systems are an incredible strategy to deal with complexity. Government is not.

We must pull back from the brink and once again allow self-organizing systems to do their magic.

We have allowed these authoritative non-profit organizations (government) to become far too large and powerful. This violates almost every aspect we know about swarm intelligence. In addition, this in effect makes those who operate these non-profits into self-appointed “super-bees.”

They act as though they know better than the hive. Rather than allowing the wonder of swarm intelligence to freely operate, government “super-bees” instead direct vast swaths of our collective lives, to the detriment of all. As these organizations grow larger and larger, they are beginning to threaten the very continuation of life itself. Top-down, command-and-control systems will sooner or later create catastrophic failures. It’s not so with self-organizing systems.

One of the wonders of this country’s founding is its individual freedom-based political system, which limited government and allowed swarm intelligence and self-organization to flourish like never before.

The incredible wealth and individual freedom this country has produced in the past few hundred years versus the rest of the world proves this reality. We must pull back from the brink and once again allow self-organizing systems to do their magic. As government grows and grows, we are creating more and more super-bees. If we continue down our present path, those self-anointed super-bees will be the death of us all.


John Conlin is president and founder of E.I.C. Enterprises, a non-profit dedicated to spreading the truth here and around the world, primarily through K-12 education. He is a life-long entrepreneur and an expert in organizational design and change. His book, The Unified Theory, will be published in late fall by E.I.C. Publishing.

 

A Search For The Truth

When was the last time you were shocked or even offended by the truth?  When a discovery or accumulation of facts forced you, even demanded you re-think closely-held beliefs?  Forced you to discard an old idea and all it was built upon and replace it all with something new, even if you did not want to accept it?

For many, an examination of the wonders of the universe causes this shock.  Anyone who has investigated the incredible strangeness of the quantum world knows it well.

An honest search for the truth in all areas of one’s life is certain to demand this on an on-going basis.  It is a statistical certainty that no one’s belief system is an exact overlap of reality, and isn’t reality fundamentally the essence of the truth?

There are of course a few misguided souls who state there is no such thing as truth, everything is made-up.  But of course they throw these easy ideas away as soon as a loved one enters an operating room.  Then they will want the best science (truth) can provide.  And they never seem to purchase products or get on airplanes that are built ignoring the truth.  These fools can be ignored.

But the truth can not be ignored, not without great risk.  Yet in far too many areas of life we causally look at truth as something that is pliable to our desires… our wants… our beliefs.

Regardless of your political viewpoint, can anyone look at our politicians in action and state they are arguing and fighting in an aggressive search for the truth?  Yet government takes trillions of dollars from individuals – would not a reasonable person demand this money be spent building on the truth?  Many people treat economics as simply a pliable method to support their preconceived notions.  The social arena?  There is no truth, only beliefs and feelings that must be supported and promoted in whatever manner possible (and of course anyone who disagrees must have evil, wicked intent.)

Look around you.  It affects many, even scientists.  It is truly amazing how far too many scientists’ political views correspond almost exactly with their views on certain subjects, like global warming.  It is a statistical impossibility for this to occur in an honest search for the truth.

But we proceed down this path at our own peril.  We seem to think we can ignore that truth is based on facts.  Bertrand Russell captured this essence; “…minds do not create truth or falsehood.  They create beliefs, but when once the beliefs are created, the mind cannot make them true or false…  [w]hat makes a belief true is a fact, and this fact does not in any way involve the mind of the person who has the belief.”

A search for the truth.  Something that has taken us from single-celled organisms to the majestic creatures we are today.  In all but our most recent past, ignoring the truth was often met with a crushing response from the natural world.  Our collective prosperity now allows one to seemingly ignore truth with no obvious unpleasant repercussions.

So now, as we finally have arrived at a point where humans understand life, earth, and the cosmos to an astonishing degree, is not a time to ignore the truth.  The forces we deal with are powerful and unforgiving.  We have taken over our own evolution (whether we like it or not) and this process will only accelerate.  We have learned our activities can have a profound impact on our planet, for now our only home.  We have discovered so many things.  Now is not the time to let our prosperity lull us into foolishness.  Whether shocked, dismayed, or overjoyed; we must all continue in the quest for the truth, regardless of where it leads.

My Dad's Left Hand - A Father's Day Salute

My dad’s left hand is messed up.  It didn’t develop properly in the womb.  It’s an oval-shaped thing with small, dangly, non-working nubs. 

I have never considered him handicapped.  I’d guess the same is true of most kids whose parents were in some manner not physically “right.”

He was a great athlete in his youth.  He’s also a pretty dang good carpenter, plumber, electrician, mechanic, horseman, farrier, farmer, rancher, hunter and fisher.  And yes, he can do all of those.  Better than I am on all counts, even with my working left hand. 

My dad’s birth defect - yes that’s what it is, it isn’t supposed to be like that - has absolutely no bearing on his moral standing as a human.  He is not somehow morally “less” simply because a hand didn’t develop as designed.  His hand is both natural - it occurred, didn’t it? - and unnatural - that’s not how a hand is supposed to be - at the same time.

But in no way is he morally inferior because of this reality. He is not defined by his left hand.  It is an aspect of him, but only one of hundreds, and not a very important one to boot.  I suppose people could use his left hand as the sole means to define him but that would be rather silly.

Each of us is like a multifaceted cut diamond with hundreds and hundreds of aspects.  As free individuals each of us can choose which aspects of a person are of most importance and judge and discriminate for or against them accordingly.  Not everyone is my cup-of-tea and I am certain I’m not for many others. 

I think of this when I see my college buddy’s 20-something son who has developed a serious brain malfunction.  He visits his personal hell on a regular occurrence.  It is heartbreaking to watch.  But he simply has a brain issue.  Just like my dad’s left hand, his brain simply didn’t develop exactly as designed.  It is again, both natural and unnatural at the same time but in no way is he morally inferior; he is not “less” in any way.

I think of this when I see a friend’s autistic child.  He is not morally defective; he simply got dealt a crappy hand in the development of his brain.  Natural and unnatural at the same time.

And I’ve been thinking about this as I read about the growing movement to more fully accept those whose sexual traits exist outside the norm.  Although many in these movements don’t want to accept it, these are natural and unnatural at the same time.  But not morally inferior.  Not morally defective.  Just different on one aspect of the hundreds that make us who we are.

Each of us has unnatural aspects to ourselves.  Some are small and some are large.  Some are hidden and some stand out.  But each of us is so much more than these quite natural differences.  Each individual is a cornucopia of traits.  Some we might like and some we might not.  We can choose our friends and shun others based on a single trait or the collection of the whole. 

None of us are defined by a single facet of who we are. So, why make judgments that don’t encompass the whole person?

My dad is not defined by his left hand.  We don’t need to celebrate his left hand, simply accept it for what it is; a very small and not very important part of a much larger mosaic. And I am dang lucky to have him as my dad.

If you agree... please share ;-)

 

A good idea for the 4th

The following is copied from the 07/03/2015 Wall Street Journal.  Why doesn't the industry unite around this rather than fighting for goodies from the leviathan's trough?  "I deserve lower taxes!"  "NO!  I deserve lower taxes, you're too big"  and on and on it goes... 

A Too Dry Fourth of July

If you’re old enough to serve, you’re old enough to be served. Let’s change the drinking age.

By
William McAloon
July 2, 2015 7:08 p.m. ET
Photo: Getty Images

Sure we’re safer—but at what expense? How much liberty must we sacrifice to remain safe?

No, I’m not referring to the Patriot Act. I’m talking about the drinking-age laws. In particular the age restriction for young military personnel. The arrival of Independence Day this weekend strikes me as a good time to think about freeing America’s men and women in uniform from drinking laws that treat them like children.

The thought came to me a few weeks ago while watching a New York Yankees game on TV when a comforting image popped up: a group of young sailors and Marines enjoying the game. As the camera zoomed in, I could see these seamen and lance corporals, many with stacks of ribbons from sea service and combat, smiling as they cheered on the Yankees, their laps filled with hot dogs and other bounty from the concession stand. Not a beer in sight.

Then it dawned on me: Those young military men and women must have been under 21, not legally old enough to buy a beer at a ball game. It’s going to be the same this Fourth of July, from sea to shining sea—or at least from Oakland, where the Athletics are playing the Seattle Mariners, to New York, where the Yankees face the Tampa Bay Rays. Independence Day weekend. How un-American is that!

As a former active duty Marine officer, I served with men and women who did multiple deployments to Afghanistan and Iraq before being legally permitted to drink their first beer. I know that those who are under 21 aren’t necessarily deprived of the occasional cold one or cocktail, thanks to patriotic bartenders. Millions of these young service members’ underage civilian peers also have access to alcohol.

So why does America have a law that is widely ignored? Because we’re “safer.”

Yes, pegging the drinking age at 18 would likely result in more drunken-driving tragedies, but a certain amount of risk is involved in every attempt to impose legal limits on behavior. Lives would also be saved by raising the drinking age to 25 or 30, but we certainly don’t do that.

Young adults, either college students or those starting out in jobs, are learning to live on their own and make decisions for themselves. That is precisely the wrong time for them to receive a message that the law doesn’t matter. Laws should be reasonable, limited and enforceable—and in the case of the drinking laws, they’re none of the above.

There are plenty of debates in the U.S. about balancing rights and security. Lawmakers and the intelligence community are warned that domestic spying might make us safer, but it’s too big an intrusion on privacy. Why not have a conversation about the drinking age and the loss of personal freedom?

Three decades ago, states set their own legal drinking ages, but that was effectively ended by the National Minimum Drinking Age Act of 1984, which mandated a 10% cut in federal highway funds for states that didn’t ban anyone under 21 from buying or publicly possessing alcohol. That puts the U.S. among a handful of developed nations, including Japan and South Korea, with a minimum drinking age over 18.

Maybe the rest of the world knows something we don’t: Better to let young adults learn to drink responsibly than to make consuming alcohol illicit and thus more alluring. College administrators regularly wrestle with the evidence that binge drinking and dangerous activity increases when booze moves from the bar to private settings.

America tells its 18-year-olds that they are adults. They can vote. And they can join the military. We send thousands of these men and women into combat and tell them that they are mature enough to die for their country but not mature enough to drink. Here’s a suggestion for people who complain that the current generation of young people is too babied: Start treating them like adults.

Candidates vying for the 2016 presidential nomination covet the youth vote. They could do worse than proposing to go back to setting the drinking age at 18, ending this era when disrespect for the law generally is increased by a drinking-age law that is widely ignored.

Failing that, maybe Washington would go for this compromise, one that would encourage enlistment in America’s all-volunteer military: Sign up for the Army, Navy, Air Force or Marines at age 18 and you can drink legally with your brothers and sisters in arms. Happy Independence Day.

Mr. McAloon is a former captain in the U.S. Marine Corps and an Operation Enduring Freedom veteran.

 

 

 

More fussing about beer

I think ABI must have hit a chord with that Super Bowl ad “Brewed the Hard Way”.  See the previous post if you haven’t already read my copious wisdom.

Recent headlines…

  • “How craft beer is fighting back against Budweiser's belligerent Super Bowl ad”
  • “Beer fans lash out after craft brew Super Bowl ad”
  • “Reaction to Bud's craft-beer-slamming Super Bowl ad includes this made-in-Oregon spoof”
  • “Shots fired, shots returned! Craft beer hits back at Budweiser's attempted takedown”
  • “A-B Wins the Super Bowl, Again.  Airs Controversial Anti-Craft Ad”… thanks Harry ;-)
  • “Analyzing Budweiser's Hypocritical, Anti-Craft Beer Super Bowl Ad”
  • “Craft beer enthusiasts still foaming over Budweiser's Super Bowl ad”
  • “The Frothy Backlash to Budweiser Ad Mocking Craft Beer”
  • “Budweiser’s Awful Super Bowl Ad Is a Perfect Illustration of Why Young People Don’t Drink It”
  • “How Budweiser Upset Every Craft Beer Drinker and Brewer In America”

Belligerent?  Fans lash out?  Craft hits back?  Controversial?  Anti-craft?  Awful?  The vapors certainly seem to be making a comeback.  And no, I’m not talking about the song Turning Japanese ;-)

The brand Budweiser has been mentioned more in the last 5 days than it has in the last 5 years... well that might be an exaggeration but you get my point.  And that is a failure?  Who knows, the backlash against the backlash might just drive more people to give it a swig.

And people who are never going to drink the product anyhow are aflame in the twitter-verse.  This is the intersection of many things; social media, marketing, competition, cowardice and of course a hearty serving of idiots – which is what you will find in abundance in the twitter-verse. 

First, many craft brewers saw this as a chance to piggy-back on ABI’s ad.  This is a common response from small competitors in all types of markets… and it’s not a bad strategy.  The craft brewers who responded in some way to this ad all got A TON of free PR.  Their names were also mentioned more in the last few days than in all the years prior. 

MillerCoors had to respond so they too would be included in MANY of these stories… presenting themselves as kind of like a buddy to craft brewers.  Interesting strategy… I think I’ve heard of that from some business genius.

And of course the media plays it up because they need to feed the beast… the constant need for material to fill the space between the ads.  And “controversy” helps drive those click-rates… as do over-the-top headlines.  “Ronald Reagan dies!  His hair”

A side note about PR… back when I was running my tech-company, we would get great PR.  We were written about on a very regular basis.  And the next day the phone would ring off the hook!  Unfortunately the calls were all from real estate folks (you’ll be needing more space!), copy machine sales reps, telephone sales reps, etc. (I always tipped my hat to the sales folks, good prospecting on their part… although I didn’t appreciate their calls)  I don’t think we once got a clear lead from any PR we got.  Now we weren’t selling a consumer product but PR ain’t all it’s cracked up to be ;-)

Back to twitter-land… This reality also drives the “need” for rapid response, so that one can piggy-back ASAP.  And it drives the imperative that everyone and his dog jump in to get a piece of the action.  This drives a feeding-frenzy that generally WAY over-states the true impact/feelings of these responses.  In twitter-land, an hour or two (forget days) is a LONG time.   And it is just about as deep.

Just the other day The Wall Street Journal ran a piece on talk radio.  The listeners are still there in droves, but advertising rates have fallen as many national advertisers have fled from these stations… why?  Fear of being twitter-bombed by a small group of motivated activists.  It started in 2012 when liberal activists organized social media campaigns to go against advertisers on conservative talk shows.  Rush Limbaugh and his famous “slut” comment was one of the first of these campaigns.

But corporate America is not the land of the courageous.  Few people ever got fired for not doing something or not making a decision.  Now doing something?  That’s where the risk is.  So the easiest path is to roll over and attempt to offend no one… which is of course impossible. 

Thus my amazement (and admiration) that ABI actually did the piece.  I know a hell of a lot of beer distributors, ABI and MillerCoors, were cheering on that ad.  I know ‘cause they told me so.

I think more companies (and people) need to simply stand up to this feigned outrage by a handful of people… and never forget those 500 million tweets per day.  Get over it and go live your life however you desire.  And leave me the-f alone.

Getting the vapors and hiding behind our petticoats ain’t the way to go… especially for a mainstream BEER brand.  If beer gets as pussy-fied as a lot of the rest of the world, we are all lost ;-)  And trust me, the folks who drink Budweiser, Coors, etc. aren’t pussy-fied… nor do I expect them to ever be so. 

If I want to advertise to them, I’d be wise to understand this reality.  And if some blouse-wearing poodle walker - thank you Grounds Keeper Willie ;-) gets a’ fluttered, so be it.  They aren’t going to be purchasing the product anyhow so why exactly do we care what they think?! 

And guess what… the vast majority of craft beer drinkers also aren’t some pussy-fied, blouse-wearing poodle walkers so the craft industry walks on thin ice when they present themselves as such, vapors and all. 

Craft brewer aren’t doing themselves any favors (or proving their intellectual honesty) when they act as crybabies over this Fussing ad, yet they see nothing wrong with things like “Craft for Crap” where you can trade in a bottle of crap (yeah, Bud, etc.) for a craft beer.  Perhaps the big dog brewers should start talking about real crap like WAY over-aged beer… brewers who are afraid to even put code-dates on their beer… bottling line/manufacturing cleanliness, and other little things ;-) 

Or we could say hooray for all beer.  Some you might enjoy… some not.  So?

The vast majority of Americans aren’t pussy-fied, blouse-wearing poodle walkers; we do them a disservice acting as though they are and they can’t take a little good-natured ribbing… going in both directions. 

I’ve done many a re-organization where loud voices and cursing were the norm in the planning process.  Vigorous debate leads to better solutions.  And after the yelling was over, we go out and drink a few beers… and yes, even enjoy each other’s company.

Back to the ad… in summary I think both played to their audiences and each got a healthy, hooray for our side!  Super… now get back to work.

Was the ad for Budweiser over the top?

Inquiring minds want to know… what did I think about the ABI Super Bowl ad “Brewed the Hard Way”?

My Super Bowl party with all my friends was going full steam ahead… composed of my dog and I watching the game with more than a few cold beers.  And then this insulting, tone-deaf, Budweiser ad.  Why I almost got the vapors!  If not for my faithful dog helping to resuscitate me with another cold beer, I might not have made it. 

(In all honesty, my dog is the biggest beer thief on the planet; turn your back for a minute and he goes from sound asleep pooch to evil beer-lapping fiend – if I had dropped from the vapors he would have first consumed my beer and then rifled through my pockets looking for the car keys.  He does leave my gin-and-tonics alone though, but not my dill pickles)

Anyhoo, I thought the ad was freaking great.  I’m surprised they ran it but I tip my hat to them for doing so.  That brand name is one of the most wide known brands in the entire world… you’ve got to leverage what you’ve got, not hide from it.  And here’s a shocker… whether it is your cup-of-tea or not, it’s a damn good, well made beer.

And tweaking – no, not twerking ;-) the craft snobs will most likely go down pretty well with anyone who might be a possible Budweiser consumer.  This country has a long and glorious history of enjoying snobs of all sorts getting taken down a peg or two.

And for the vast majority of beer consumers, they don’t know or care about ABI’s purchase of craft brewers so this “conflict” is meaningless to them.  Good god, it’s a freaking ad! 

To all the craft folks who’ve got their panties in a bundle, grow up.  Has a sense of humor been abandoned by all of you?  Many companies, Proctor and Gamble was the best at it, set one division/product line against the other all the time.    

They’d have 5 people hawking different laundry detergents to the same chain and they were told to fight for THEIR brand… and they were measured by how THEIR brand did.  If you could take space from another P&G brand for yours… you did it.  If they couldn’t fight for their brand, screw them.  This drove everyone to excellence… or the door ;-)

Brand “conflicts” are the norm when a company has similar products in various categories.  And cheering one on can have the perceived effect to some sensitive souls of “dissing” another.  So?

Just because ABI is playing in the craft world, they should be ashamed of brands like Bud and Bud Light?!  “yeah, we came to our senses… that Bud stuff is watered down crap and we’re sorry we even produced it.”  And those millions of drinkers who make them the 1st and 3rd most popular brands in the country?  “Only” about 1 out of 4 beers consumed in this country are one of those two.  Guess you folks are dumb asses.  Please.   

Was it a good ad?  I don’t know since the only accurate measure of ad effectiveness is people parting with their money and purchasing your product.  So we’ll have to wait and see. 

In addition one should be careful from confusing a well-liked ad to a good/effective ad.  We get all these spur-of-the-moment measurements of how much someone likes or dislikes an ad.  Just like focus-groups, these have almost no meaning.  Historically one of the most disliked ads in TV history, “ring around the collar” was also one of the most effective.  People supposedly found the ads offensive but they sure purchased Wisk to solve this problem. 

Will this ad sour craft brewers from considering selling to ABI?  Only the idiots. 

And of course in today’s connected, social media world this all takes on a much bigger image than is truly there.  Do not forget this point.  The illusion is much bigger than the reality.  Everyone and his dog has an opinion and they toss them about on every conceivable subject.  Ponder these stats…

Every second, on average, around 6,000 tweets are tweeted on Twitter, which corresponds to over 350,000 tweets sent per minute, 500 million tweets per day and around 200 billion tweets per year.

Anyone who spends too much time chasing this mirage will quickly find nothing really is at the end-of-the-rainbow.  And no matter what one does, there will be someone who isn’t happy with it and will tell the universe their opinion – like anyone is listening.  Why even little ol’ Johnny sometimes upsets a person or two ;-)

The responses I’ve read in the various trade publications seems like the beer equivalent of high school cliques on steroids.  And on second thought, that is perhaps too generous, perhaps middle school is more accurate.  I guess the vapors affect more than just me ;-)

Not to let a chance go by to kick your competitor in the groin, MC jumps into the collective outcry that beer REALLY is worth fussing over!   I can guarantee you that is the case where my dog is involved.  So MillerCoor’s tweet carries some big impact out of the 500 million sent on the same day?  Sure.  

Much ado about nothing.  A good ad from ABI for a good product.  Here’s a shocking idea… perhaps Bud can be a good beer as can Goose Island (or whatever).  They are not mutually exclusive.  It is not a zero sum game.

And in the rough-and-tumble of competition, you might consider my cheering for my team an insult to yours… get over it.

And for those who decry the ad since we should be all about “brand beer”?  That ship has sailed.  The entire regulatory structure of the 3-tier system is under attack, mostly by those inside the fort, and you worry about protecting “brand beer”?!   What planet are you on?

I see a ton of people, almost all of them craft, who clearly have no intention of supporting “brand beer”.  Where was the outcry from “the industry” when they disparage pretty much every product that isn’t theirs? 

This will be for an upcoming post but the unity of “brand beer” is long gone, the 3-tier as has operated for the last 80 years will soon be a thing of the past… and those who aren’t fighting solely for themselves will find that to be a foolish choice. 

 

Craft brewers and food trucks

What can craft brewers and food trucks teach us about economics, government policy and freedom?

When the dot.com explosion hit, fueled by the rapid growth of the Internet, few would have thought it would be a boon for the low-tech world of delivery.  Yet FedEx, UPS, and even the good ol’ post office saw incredible delivery growth as all those on-line purchases had to be delivered by somebody.

Did anyone plan this?  Nope.  It just happened.  No government-driven genius, just the marketplace responding to a new world of on-line purchasing.

Much the same has/is happening with the explosion of craft brewers and more specifically their tap rooms - places we used to call bars ;-)

These tap rooms are incredibly popular.  In fact if I were to start a craft brewer today, this is where I’d spend my efforts, not trying to be the next New Belgium.  $6 per beer that has no transportation costs… few if any packaging costs… no sharing of the margin with those greedy distributors or retailers… just one heck of a lot of profit for the folks brewing the stuff.  That’s where I’d stake my claim.  As long as I can fill the place with people, I’m going to make a lot of money.

But in many places around the country these tap rooms are legally required to be just that, places where the craft brewer can sell their product.  Nothing more.  No kitchens providing food… just tap rooms providing beer.

And this is where the wonders of the marketplace again show their abilities.  How did the marketplace … for those who need a definition, the marketplace or capitalism are better described as…

Free people freely interacting with other free people.

So how did the marketplace respond?  With the genius of food trucks.  Although the tap rooms might not have a kitchen, they probably have a food truck parked outside that can provide some yumminess whenever your heart desires.  This wasn’t anyone’s grand plan… no government expert required… just the marketplace responding to a need/opportunity.  A true win-win-win for all involved – the craft brewer, the food truck operator, and the customer.

The craft brewer doesn’t have the expense of running a kitchen (something which they probably have little, if any expertise in) and better yet, they in effect become 7 restaurants in one (in many cases even more).  The tap room has this type of food on Monday, another on Tuesday, another on Wednesday, etc.  Some are actually multiple restaurants in the same day… afternoon we’re this type of restaurant, in the evening we’re this type. 

Most craft brewer’s web sites “sell” the various food trucks that will be at their place.  They can be a strong marketing draw.  It isn’t just the beer that is driving folks to some of these places.  In many cases the lack of a kitchen has actually been turned into a strong positive!

Sure the craft brewer doesn’t get any of these food sale dollars, but they don’t have the headaches and expenses of providing the eating opportunity.

This in turn has driven the food truck industry to new heights.  The quality and variety of food being offered has increased by orders of magnitude.  These ain’t no roach coaches of old.

The food truck operators and the craft brewers act as symbiotic organisms… one’s success/improvement flows to the other and vice versa.  Better food brings more people… the food truck wins and so does the craft brewer.

Better beer/marketing of the tap room brings more people… the craft brewer wins and so does the food truck.

Craft brewers fight to get the best food trucks… the food trucks win and the craft brewer wins.

Poor beer or marketing and/or lousy food hurts both the brewer and the food truck… thus it is quickly punished by fewer people for both.  That symbiotic relationship functions in both directions ;-)

And throughout this beautiful dance, the customer wins every single time.  Win-win-win.

Just a thought this holiday season and one to keep in mind as you fine-tune your political philosophy and think about who to vote for.

And as a last little X-mas present, the next time you hear someone spouting off about the “evils” of capitalism or the marketplace, remember those are just words.  What they are describing is a process of free people freely interacting with other free people, bound by a general set of laws and regulations.  Who could be against that?  ;-)

Why am I on my soap-box?  As the patriot and brewer Sam Adams noted,

It does not take a majority to prevail... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men

This is needed today, perhaps more than at any time in this country’s history.  Please, grab some matches and go set some brushfires of freedom yourself!

From this black-hearted, mercenary… Happy holidays to all!  Now get back to work.

Should beer/alcohol/beverage distributors enter the legal marijuana world?

First the news from the elections… Oregon legalized.  Alaska legalized.  DC legalized.  4 states plus DC now have full legal adult marijuana.  Guam approved medical marijuana.  Various cities around the country voted to decriminalize.  In 2016 we will have 10+ states looking to legalize.  Whether one agrees or not, this is a tidal wave that is a’coming.

Now my post…

It seems many are kind of confused about this opportunity.  After my last email I’ve been contacted by quite a few folks who have some interest in exploring the new wild and wooly world of legal marijuana.  I personally am tired of providing free consulting… it really doesn’t pay well ;-) but I thought I’d toss one final freebie out there regarding my thoughts.

Alcohol distributors can safely and easily enter this industry will little fear if they understand a few things… 

  1. I see few synergies between a beer/alcohol/beverage distributor and almost any aspect of the marijuana business.  For those looking to jump into this business for this reason, you’re barking up the wrong tree.  Other than perhaps some technology and backroom stuff, these are very different industries and will operate quite differently.  And for those thinking that perhaps marijuana and alcohol will be available at the same locations… not going to happen in our relevant time frame… and I’m personally not certain it would be a good idea in the first place.
  2. Although this is a regulated market (as it should be), I see no need for an independent distribution tier.  So again, for those thinking they will use their present operations to become the marijuana distributor, ain’t going to happen.  Colorado law forced complete vertical integration for at least the first 10 months (you had to grow at least 70% of what you sold).  And even now, completely integrated operations – from grow to retail – are the norm and I would guess they will likely remain so for at least the near- to mid-term.  Washington outlawed vertical integration… you can either grow or retail, but not both.  How other state’s regulatory structure will take place is anyone’s guess.  They will probably follow one of these two general designs.  But the development of a 3-tier system simply isn’t in the cards.  If that is your hope, don’t waste your money in this industry.
  3. Therefore beer, wine, and spirits distributors should view this simply as an exciting, high-growth (and high risk) investment/business opportunity.  That’s it.  Nothing more.  Nothing less.  It has nothing to do with your present operations (nor should it).  If you have the money and desire, it could very well be the start of something like the dot.com boon at its infancy.  Go back and look at those election results if you need any convincing.
  4. This isn’t a “gray” legal area.  It is black and white.  From a federal perspective, any activity involved in marijuana… and that includes supporting services of ANY type are quite clearly illegal.  As the head of Colorado’s Marijuana Enforcement Division noted at a recent seminar I attended, from the Colorado governor on down… they could all be arrested for violated federal law. Think of it as this analogy… based on federal law, the states of Colorado and Washington have set up a regulatory structure to regulate and tax the mafia’s activity.  They are aiding and abetting the violation of numerous federal laws… and all who knowingly participate are also in violation of these laws.  The accountant to the mob still goes to jail ;-)  As does the advertising agency that knowingly takes their money to help them generate demand for their illegal activity… as does the bank… as does the attorneys… as does all of us.  Now I clearly don’t see this happening (nor do thousands of businesses, some quite large) and I believe the next national election will kind of settle this with a “let the states decide” punt from both major political parties.  But until (if?) federal law changes, this is the reality from the federal perspective.  If this concerns you or if you truly believe a “perp walk” might be in your future, don’t enter this industry.
  5. Thus, any tying of your present federal permit with a marijuana business is freaking stupid!  There are no synergies anyhow, don’t connect the two in any way.  This is quite easily accomplished.   But I hear from far too many who mistake the synergies (which don’t exist) and think about tying the two together.  Don’t.  On the plus side, if you do enter, don’t tie them together and still end up getting grief from the feds, the odds are great they would simply force you to divest yourself of one or the other.  No perp walk in your future ;-)
  6. This also will temporarily break the hearts of those weed merchants who hope for the big cash-out from beer, wine, and spirits suppliers.  Ain’t happening until at least the feds change their perspective on marijuana.
  7. That said, for those willing to jump into a high return/high risk/high growth industry, distributors have the opportunity to leverage their business expertise on distributing controlled consumer goods to build an incredibly profitable stand-alone operation.  The overall level of business expertise in this industry is rather low… you start out way in the lead on this aspect.

I look at you all for potential partners with my edibles business since you have the cash to invest and understand how to build brands via DSD.  And rather than having you attempting to learn all about this nascent industry, we provide turnkey for everything.  That’s some significant value on our side of the equation.

This is a “never-before market” so I’m still not certain from our perspective it might not be better to go with established marijuana operations in various states and to teach them both the manufacturing and DSD aspects.  That I’ve got down.  But since I know you all, you get the first shot.  That’s it for free consulting.  If you want to learn more about the marijuana industry, either join our team or go talk to someone else… I’ve got a start-up to get going ;-)

 

 

Marijuana - A prohibition market or a legal state-regulated market?

Legal marijuana is coming to this nation like a tidal wave.  And it is about time.  When one combines the pro-cannabis folks with the “prohibition doesn’t work” folks, a large majority is saying it is time to end the failed war on weed.

Remember the decision isn’t really about “for” or “against” marijuana.  Marijuana is everywhere.  There isn’t a high school kid in this country (or unfortunately many middle schoolers) who couldn’t get some in a matter of minutes.  The decision is whether the present state of prohibition is superior to an adult legal, state-regulated marketplace…  whether a flourishing, illegal, unregulated, “sell-to-anyone” market is better than a legal effective state-regulated market.

To me that decision is a no-brainer.  I would hope the folks in the beverage alcohol business would wholeheartedly agree.  We know it works.  The failed experiment called Prohibition and the 81 years since has proven the effectiveness of state regulation.  This country has the best regulated alcohol industry in the entire world (and at the same time also probably one of the most competitive and dynamic).  We can and should do the same with marijuana.

On the medical side, there is no question marijuana provides medical benefits.  The Washington Post reports on a 2013 survey in the New England Journal of Medicine that found nearly 8-in-10 doctors approved the use of medical marijuana.  You can find that here.  The same article notes that a recent wide-ranging survey in California found medical marijuana patients agree, with 92 percent saying medical marijuana alleviated symptoms of their serious medical conditions.

A recent letter to the editor in The Wall Street Journal from an experienced MD notes that cannabis is well known to provide pain relief for 3 – 7 level pain (on the 1 – 10 pain schedule).  For anyone who has witnessed the tragedy of the very common addition to opiate-based pain pills, cannabis is far superior. 

This explains the pharmaceutical industry’s cynical financial support of anti-legalization efforts around the country… they are THE MAIN financial supporters fighting to keep marijuana illicit and mired in the black market.  As they say, always follow the money.

But on the medical front, the antidotal evidence is overwhelming.  Is this the magic elixir that some claim can solve every malady known to man?  ;-)  Probably not, but the health benefits for many is indisputable.

On the flip side some are concerned about marijuana’s possible neurological effects on young brains.  They completely miss the point.  Whether these effects exist or not are open to serious debate… but the main point is… is prohibition a better means to restrict young folks from consuming or is a legal, state-regulated environment? 

In the 10 months of full legalization in Colorado, the dispensaries have never been cited for selling to an underage individual.  NEVER.  It’s kind of hard to improve on 100%!  ;-)

Again the beverage alcohol industry shows the truth… it is MUCH more difficult for underage people to get beer, wine, or spirits than the so-called “prohibition” of marijuana.  Go ask any high schooler anywhere in the country… what’s easier to get?  Beer or weed?  You’ll get close to 100% saying weed.  So how is this better protecting young minds from marijuana’s supposed neurological effects?  It isn’t.  It works in just the opposite direction.

Milton Friedman, renowned economist and philosopher captured this perfectly in this quote “One of the great mistakes is to judge policies and programs by their intentions rather than their results”

And of course this striking observation… “See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That's literally true.” 

Prohibition or a legal, state-regulated market… the choice is pretty straightforward… whether one likes this fact or not is irrelevant.

Some anti-cannabis folks will say, “yeah, but a lot of these folks just want to get high”… to which I respond… so what?!  Based on 2013 dollar figures, this country consumes about 42 CASES of beer for every 3.3 BOTTLES of non-alcoholic beer.  While there is non-alcoholic wine, its sales are basically meaningless.  Unless one is the designated driver (or has an alcohol issue), no one goes to bars and orders mock-tails.   And I don’t think this industry or consumers have to apologize for this. 

People consume alcoholic beverages because of the alcohol.  A beer or two (or more!) with friends… a glass of wine while making dinner… a martini to relax with after work… and we don’t have to apologize to anyone. 

The VAST majority of adult alcohol consumers don’t consume to get hammered.  Guess what… although the effect of marijuana is different than alcohol, most present day adult marijuana consumers (whether smoking or edibles) also don’t consume to get wasted. 

Whether it is your personal cup-of-tea is up to you, but I don’t think the fledgling legal state-regulated marijuana industry has to apologize either… whether consumed for medical benefits or simply others.  At least that’s my take.

And it is the take of a lot of folks.  The New York Times, Seattle Times, Providence Journal, The Economist, National Review, Denver Post, The Nation, Las Vegas Review Journal, Star-Ledger, The Indianapolis Star, The Orange County Register, The Baltimore Sun, and numerous other editorial boards have all recently endorsed full legalization. 

Five Nobel Prize-winning economists recently released a UN report recommending that countries end their war on drugs.  Travel guru Rick Steves sits on the board of the National Organization for the Reform of Marijuana Laws (NORML) and is a vocal supporter of legal weed.  Right now he’s traveling the state of Oregon trying to ensure passage of their legalization efforts.  The late scientist Carl Sagan and good ol’ Rodney Dangerfield were consumers and supporters. 

As noted above… whether “pro-cannabis” or simply “anti-prohibition”, it sure seems like the time has come for a state-regulated marketplace for legal adult consumption… kind of like the 21st amendment 81 years ago.

 

So what is the state of the burgeoning legal marijuana world?

 

Right now 23 states and DC allow some form of legal marijuana.

Colorado and Washington are presently the only 2 states that have fully legalized adult marijuana consumption.  2014 ballot initiatives in both Alaska and Oregon may make these the next states to implement full legalization.  DC has just approved a 2014 ballot measure which will legalize.  Arizona, California, Maine, Massachusetts, Montana, and Nevada are all on track for 2016 efforts for full legalization. 

Florida, Ohio, and Pennsylvania have pending legislation and/or ballot measures.  One would guess that by the end of 2014, over half of the states will have some form of legal marijuana.  By the time the next administration takes office, we could see 5 – 10 states with full legal adult consumption and well over half with some form of legal consumption.

The Marijuana Policy Institute, an organization which drives legalization efforts, has produced a 48 second video which you can find by clicking on, a new short video where they show the 17 states plus DC that they believe will have full legalization by 2019. 

One expert estimates legalization in California alone will create a $31B market, including all ancillary products and services.  Actually this should be better stated not as “creating” a market, since the market already exists and is in operation now.  These sales are happening now. 

It should be stated that legalization in California (and everywhere) will bring to the surface, and allow effective regulation of the present market… just like the end of prohibition and legal, state regulation did to alcohol 81 years ago.  One hasn’t seen bootleggers hawking illicit alcohol for over 81 years… hopefully soon the days of street-corner dealers hawking marijuana to kids and anyone with the money will be just as ancient history.

Assuming Texas at the same to slightly smaller size, these 17 states alone could represent close to a $100B market; all within 5 years!  To put that in perspective, that’s the size of the total US beer market.  Just California or Florida alone could easily match the dollar sales of the ENTIRE craft beer segment.

 

What has been the Colorado experience?

As of January 1, 2014 Colorado became the first state to fully legalize adult “recreational” marijuana.  In fact, Colorado is the first place in the world to allow full adult consumption via a state-regulated market.  After the first 10 months, one would have to declare this effort an astounding success. 

In fact The Brookings Institute just released a report entitled 'Colorado's Rollout of Legal Marijuana is Succeeding', analyzing the first six months of Colorado's legalized cannabis commerce and taxation policies.  The author calls the implementation of the new Colorado law "a resounding success." He continues, "My research shows that regardless of the merits of the policy itself, Colorado has created a smart regulatory system that balances safety and security with access to legal marijuana."

  • Teen marijuana use has not soared as some feared, in fact it has declined.  This has occurred in other places that have made marijuana more legally available too.
  • Crime is down across the board (although it may be a stretch to attribute this all to legal marijuana)
  • Although the media continues to discuss the dangers of stoned drivers, accidents and fatalities are also down.  A recent report in the Washington Post notes that since legalization, Colorado auto fatalities have reached “near-historic lows”.
  • Marijuana sales in Colorado saw a 10 percent bump in August. The sales of recreational and medical marijuana in Colorado each jumped more than 10 percent from July to August 2014, according to numbers released by the Colorado Department of Revenue.  In August, customers purchased more than $33 million in recreational cannabis — up from $29.7 million in July and $24.7 million in June. Consumers bought more than $32.2 million in medical marijuana in August — up from $28.9 million in July and $28.6 million in June.
  • Thus total sales for August were $65.2 million!  Assuming flat growth (which is very conservative since sales were up 25% last month and 10% in August), this straight lines to an annual projection of $782,000,000.  Not a bad first year for a relatively low population state!  And remember, most of these sales were occurring anyhow; just in the illegal, unregulated, sell-to-anyone market.  This legal, state regulated effort is far superior.
  • The marijuana tax numbers are also adding up. Since Jan. 1, Colorado has brought in more than $45.2 million in taxes, licenses and fees for recreational and medical marijuana.
  • A recent study estimates Colorado market demand to be in excess of 10 tons per month.
  • Edible products have been extremely in demand.  In Colorado it was just reported that edibles make up 45% of all marijuana sales! Some experts predict that in 20 years no one will smoke marijuana, it will all be edibles.  I don’t know about that, but the market for edibles is truly astounding.
  • Pot tourism is larger than most predicted.  This of course will decline as more and more states provide some means of legalization but it does give an indication that demand for legal marijuana is most likely higher than many predicted and crosses a much broader demographic than just “young stoners”.  It also seems many of these new and present recreational and medical users are drawn to edibles over smoking. 

I believe other states will experience much the same as Colorado, further fueling the drive towards legalization in all states and the Feds, i.e “the sky hasn’t fallen” and the benefits are proven by the facts on the ground.  The reality is this product(s) is being sold in the black, “sell-to-anyone” market today; some sort of legalization via a state-regulated market is clearly becoming a better solution than the failed policies of prohibition.

Should you jump into this new world?  That depends.  It’s not for the faint of heart and everything regarding marijuana is more difficult… and will probably continue to be so at least until the federal and state laws get in sync.  But of course this is also the reason there is such an incredible opportunity in this burgeoning industry. 

Can you be fired for doing a legal act outside of the workplace?

Can an employee be fired for doing a legal activity outside of work hours?  One would hope the beer and alcohol industry would strongly support a person’s right to legal activities outside of the workplace… without workplace retribution. 

If not what happens when employers, with the goal of keeping health care costs down and looking out for the health of their workers, demand workers not drink alcohol… period?  Sure testing might be an issue but the point is a larger one… if I as your employer discovers you are drinking in the evenings or on the weekend, can I fire you?  I would hope most in this industry would respond with a resounding, NO!

Welcome to the wonderful world of legal marijuana.  A world where for now, laws at various levels of government simply aren’t in sync with each other. 

First a summary of the lay of the land…

At the federal level, marijuana is still categorized as a Schedule 1 drug, defined as…

Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Schedule I drugs are the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence. Some examples of Schedule I drugs are:

heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote

We can talk about that stupidity later, but that is the position of the federal government.  Oh but wait, is it?  The Department of Justice (DOJ), the highest law enforcement office of the land, has another take.  They have basically said they’ll step back and let the states handle this.  They laid out their 8 priorities in a memo… basically if these 8 things aren’t violated, the DOJ will take no action and they recommend attorneys general follow this same guidance.

According to the guidance, DOJ will still prosecute individuals or entities to prevent:

  1. The distribution of marijuana to minors
  2. Revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels
  3. The diversion of marijuana from states where it is legal under state law in some form to other states
  4. State-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity
  5. Violence and the use of firearms in the cultivation and distribution of marijuana
  6. Drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use
  7. Growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands
  8. Preventing marijuana possession or use on federal property

That last one is really a laugh… All of the Colorado ski resorts operate with leases on federal property.  If you’ve ridden many chair lifts or skied upon some “smoke shacks”, you know what I’m talking about.  But back to our larger point…

But Colorado and Washington both have legal adult consumption.  Oregon and Alaska are voting on the same in less than a month.  In Oregon, that travel guru Rick Steves is even traveling the state trying to ensure the passage (he did the same 2 years ago in Washington).  He sits on the board of NORML (National Organization for the Reform of Marijuana Laws) and is consumer of, and strong supporter of legal weed.

23 states and DC already have some form of legal marijuana. Arizona, California, Maine, Massachusetts, Montana, and Nevada are all on track for 2016 efforts for full legalization. 

Florida, Ohio, and Pennsylvania have pending legislation and/or ballot measures.  By the time the next administration takes office, more than half of the states will have some variety of legal marijuana and 5 to 7 states (perhaps more) will have full legal adult consumption.

Which circles us back to the point of this post… can an employer fire an employee for legal activity during non-work hours?

The Colorado Supreme Court recently heard an argument on this very subject.  A brief synopsis follows (you can find the original here):

Brandon Coats was partially paralyzed in a car crash as a teenager, using a wheelchair, and has been a medical marijuana patient since 2010 when he discovered that using pot helped calm violent seizures and muscle spasms. Coats was a telephone call-center operator with Dish Network for three years before he failed a cheek-swab random drug test in 2010 and was fired. Dish Network has a zero-tolerance policy against using illegal drugs.

On Tuesday, the Colorado Supreme Court heard oral arguments in Brandon Coats’ case that may have major impact on marijuana and the workplace. Colorado voters first approved a constitutional amendment authorizing the use of medical marijuana in 2000. Marijuana for recreational use was approved by voters in 2012 and started being sold in retail shops in Colorado on April 1, 2014.

Twenty-three states and the District of Columbia now have medical marijuana laws. Washington and Colorado laws specifically state that employers do not have to accommodate employees’ marijuana use. But other states such as Arizona, Nevada, New York, Minnesota, and Delaware grant various levels of protections to medical marijuana card holders from discrimination.

Additionally, the Supreme Courts for the states of California, Washington, and Montana have all ruled that an employer has no duty to accommodate the use of an “illegal drug” such as marijuana. The fact that marijuana remains a schedule one “illegal drug” under federal law has been critical in each ruling for the employer.

Coats brought his lawsuit against Dish under Colorado’s lawful off-duty activities law, which specifically says employers cannot fire people for doing something legal on their own time. Originally the law was enacted to protect cigarette smokers and multiple states have similar laws. Both the trial judge and Colorado Court of Appeals have already ruled against Coats “legal use” argument holding that as long as marijuana is illegal under federal law the state law does not apply.

During the Tuesday Colorado Supreme Court hearing the justices did little to telegraph how they may vote. A ruling may be months away.

I think the betting money is on the “get-out-of-jail-free” card based on the fact that weed is still an “illegal drug”, per the Feds.  Thus you will still be able to fire folks for consuming marijuana even if the activity was legal, at least for a while.

But what happens once this situation changes?  And the betting money is on it changing at the federal level.  As it stands now, the governors of both Colorado and Washington could be arrested and easily convicted for violating various federal laws… as could every government employee who works in marijuana enforcement.  The accountant for the mob still goes to jail too ;-) and from the federal law perspective, these folks are all part of a criminal conspiracy involving illegal drugs and money laundering.

And of course the thousands (10,000 or so in Colorado alone) of folks who work in the marijuana industry… in addition to all of the consumers.  Those 23 states and DC with some version of legal weed?  Anyone associated with it (starting with the governors), whether through regulation, employment, or consumption… all could be arrested and easily convicted.

Is that going to happen or are the Feds going to start changing in an effort to get these laws in sync with one another?  That I believe is a no-brainer but it probably won’t happen until the next administration.  I don’t expect this to occur via a federal-level “let’s legalize it” effort but rather through a “let the states decide” movement… and anything that furthers the efforts of state’s rights can’t be all wrong ;-)

Of course the Colorado Supreme Court could surprise everybody and rule for Mr. Coats.  If that happens, employment law is going to be turned on its head for quite some time.  But this tide is already well past turning.

The FBI has a policy of no-marijuana use for the past 3 years for new applicants (even this is an admission of the prevalence of marijuana consumption in the US), but in just the past couple weeks FBI Director Comey said apply… even if you’re lighting up on the drive to the job interview!  You see the FBI needs talented, tech folks… white collar hackers… and the reality is a lot of these folks consume weed.

“I have to hire a great work force to compete with those cyber criminals and some of those kids want to smoke weed on the way to the interview,” Comey said.  The FBI could possibly amend those strict rules soon. Comey told the conference the bureau is “grappling with the question right now” of how to change the drug policy without scaring off the cream of the hacking crop.

I’ve talked to many folks in many industries and a lot are taking the same path… loosening the strict zero tolerance rules for the simple fact they can’t staff their businesses without it.  Craft brewers would die on the vine if they attempted to enforce a no-use policy!  And their drinkers would abandon them in droves in protest.  That’s just the reality on the street.

So… should an employer be able to fire a worker for legal activity outside of the work place?  I think the beverage alcohol industry should think long and hard about this one… a poor choice might come back and bite real hard.  You don’t have to be “pro-pot” (but I think anti-prohibition is a very righteous position)… just pro-individual rights.  Or at least that’s my take on it.  Let me know yours.

 

The Insanity of the 21 drinking age

One of my many complaints about the world is the federally-mandated 21 year-old drinking age.  That we have brave men and women risking their lives for our collective freedom and safety… people who are entrusted with incredible power, who make life and death decisions on a regular basis… yet that they can’t legally drink a cold beer is BS in my book.

Almost all states allow young women to have an abortion at 18 without any parental consent… yet she doesn’t have the maturity to drink a cold beer for another 3 years?!  Regardless of one’s beliefs on abortion, this reality makes no sense.

CNN just ran a piece which you can find here on what science is telling us about this crazy policy.  Of you can read it in its entirety below…

 

21: Science's limit when it comes to the drinking age

By Jen Christensen, CNN

updated 7:11 PM EDT, Tue July 15, 2014

Source: CNN

(CNN) -- On July 17, 1984, President Ronald Reagan signed into law the National Minimum Drinking Age Act, which withheld a percentage of highway funds from any state that didn't raise the minimum drinking age to 21.

The week before, Reagan had declared ice cream a "nutritious" food.

Perhaps that's a hint that politicians don't always know what's best for your health.

Thirty years later, there is a group of people with Ph.Ds and MDs who take issue with the drinking age. They say, from a scientific standpoint, that the law may target the wrong teen behavior.

The law came into being to solve a serious public health problem.

Before the minimum drinking age law, 16- to 20-year-olds were the most common drunken drivers.

When the drinking age was raised, the number of fatal crashes involving a young driver dropped significantly, from 61% in 1982 to 31% in 1995. It went down more for that age group than any older age group.

But while the law did have a significant impact on drinking and driving, it did not stop kids from drinking. In fact, it may have made drinking even more appealing to teens, whose brains naturally seek out risk more than adult brains do -- without considering what the consequences might be.

A survey of students at 56 colleges across the country just a couple years after the legislation passed found that "significantly more under-age students drank compared to those of legal age." This study concluded that "the increase in purchase age appears to have been not only ineffective but actually counter-productive, at least in the short run."

The definition of adulthood is not clear-cut when it comes to science.

"There's no magic that happens physically to someone when they are 21 as compared to age 18," said Dr. William Graf, a professor of pediatric neurology at Yale.

The American Psychological Association (PDF) says that drawing a single line between adolescence and adulthood under the law is at odds with developmental science. They say adolescence usually begins at about age 10 and ends around 19, but really it depends; maturity is based on an individual's experiences.

Developing brains

Current data from the National Survey on Drug Use and Health and Monitoring the Future, the two official surveys that monitor such topics, suggest that roughly 65% of college students (generally aged 18 to 22) drink alcohol in any given month.

Most of the college students who choose to drink are binge drinking, according to a study out of Harvard. Seven out of 10 are consuming five or more drinks in a row.

Binge drinking can have a damaging impact on a developing brain. Evidence suggests that heavy exposure to alcohol can cause irreversible brain damage and cognitive deficits, including memory problems.

Scientists say the teenage years are one of the most important times for brain development, next to infancy. Neurons in the brain are growing and strengthening, connections are developing to allow the brain to transmit information faster and allow the brain to process more complex thoughts, and the brain goes through a kind of pruning process to eliminates synapses that are infrequently used.

All this brain development has a huge impact on a person's development and mental well-being. It also means that young people have lapses in judgment during this time period as they try to figure out how to be adults.

The limbic system, the part of your brain that is involved in processing social and emotional information, develops early in adolescents. But the prefrontal cortex, the part of the brain that involves judgment, impulse control and abstract thought and the ability to anticipate the consequences of your actions, isn't fully shaped until your late 20s.

Mimicking behavior

Abigail A. Baird, associate professor of psychology at Vassar College, has spent her career trying to understand what happens with the typical adolescent brain.

Baird argues that if anything, in terms of biology, the age limits on driving and drinking should be flipped.

"If I were queen for the day, I would move the drinking age to 18 and maybe not let them drive until they were 21, at least not with other people besides your parents in the car," Baird said.

She likes the idea of graduated driver's license laws that slowly let young drivers have more responsibility as they get more practice in the car. This is based on the theory that they will learn how to avoid accidents as they gain experience.

The statistics back her up. Before states introduced graduated licensing systems during the first six months of solo driving, newly licensed drivers were about eight times more likely to be involved in fatal crashes than more experienced drivers.

"We all know adolescents are obsessed with learning from their peers. ... Adolescents learn based on experience. They are not good at learning abstractly; that's what changes a lot between 18 and 21. When you get older, you can learn from reading stories about people and by really feeling for other people."

Baird believes that society could use the way young people learn, to help them learn how to drink responsibly at an earlier age. If drinking were less of a clandestine affair, perhaps a teen's peers could model more appropriate behavior for younger participants. She says it's important to learn how to behave around alcohol.

"Find me a business dinner that you will go to where you are not offered alcohol," Baird challenged. "In our society, you do need to know what do around it and how much you can handle."

 -------------------------------------------------------------------------------

Wisdom from CNN?!  Go figure ;-)  If you want to watch an interesting video of drinking ages around the globe go here

Is the concept of “we mutually pledge to each other our lives, our fortunes and our sacred honor" only for saps?

First a clarification… in a recent post, which you can find here, I referenced a Steve and some have mistakenly believed I was speaking about my buddy and associate Steve Cook.  I was not.  I was referencing the Brewers Association inspired NYT op-ed by Steve Hindy.  And I didn’t even get a dang t-shirt!  ;-)  I’ll let you all figure that out. 

All I can say is that for 25+ years I have worked with beer wholesalers and I can tell you that you can take their word to the bank.  I’ll do a handshake deal with almost any beer distributor in the country, regardless of how many zeroes are in the deal.  The same cannot be said of others. 

To all the beer wholesalers out there… the craft brewers are not your opponent and it is destructive to think of them in that manner (and the same to you craft beer folks regarding distributors) but the BA is most definitely an opponent if not an outright enemy.  Accept reality as it is and deal with it.

But onward and upward… one thing a good manager (or consultant) must do is to always try to manage the “what if’s”.  What if this happens?  What if that happens?  How does that affect the company?  In this process one has to mentally project the business (or system) 5 or 10 years out.  What incentives does it drive?  How does it work once the dust has settled?

That’s why the present battles over franchise protection and carve-outs are so lacking.  Many of the arguments are focused solely on the here-and-now.  I don’t hear too many folks projecting out what these things might mean 5 or 10 years down the road.  And if history is any guide, tomorrow will actually show up.  ;-) 

That was one of the many insights of the founders of this country… they attempted to set up a system which would work today, next year, and 200 years down the road.  Does anyone see any such thinking in these carve-out/franchise arguments today?  Nope.  Government is simply a means to achieve one’s short-term financial goals.  Beyond that?  Who cares!  ;-) 

Let’s all see who can control the power (and the feedin’ trough… ‘cause that’s what it all comes down to) and they are today’s winners.  These battles are a microcosm of our larger society.  The founders of this country stated “we mutually pledge to each other our lives, our fortunes and our sacred honor.”  They meant those words and they captured the reality they faced.  From that to “how can I set up the trough for me”.  Sad.

I personally still see things lining up where the 3-tier system disappears in the relatively near future.  As I noted before, beer and beverage distributors are the last line of defense.  And I believe some of the larger distribs think they can survive quite nicely without it (I think they are wrong).

Craft brewers are going to regret the world they bring about.  A handful will prosper via alliances with MC or ABI but the rest are going to be local brewpubs.  And the Heinekens of the world will also have to choose a partner and hope it all works out for them.

Intellectually one can make a strong case that carve-outs are actually ass-backwards.  Beer distributors actually do (can) build small craft brands much more than they do established nationally advertised and supported brands.  One can argue that franchise protection should be applied to the small brewer with the carve-out being reserved for large, national brands.  I won’t hold my breath but if one analyzes the reality on the street that is much more consistent with the way things actually operate.

My argument remains that these things don’t need to be enforced by government.  Let the marketplace sort it out like happens in other industries.

It’s kind of funny but I’m working on an unrelated business start-up right now and I plan to offer strong franchise protection to my business partners.  Not government enforced… I WANT to do it.  I not only want them to make a good margin on the product, I want them to own and build equity in the manufacturing and distribution rights.  This is a proven method to ensure commitment from a business partner and to allow them to share in the financial rewards of success.

 Long ago I wrote a blog entitled, Plenty to Go Around, which you can find here.  Perhaps everyone in this industry should give it a read.  Do you have a mindset of scarcity or abundance?  I won’t hold my breath for the BA and others to get on board but as I noted above, the individual craft brewers remain supply-chain partners, not the opponent.

But since I remain a cynic, I’m still betting the 3-tier system is going to be taken apart… piece by piece with little thought given to the future… and few will be happy with where this takes us.  But what the heck do I know? ;-) 

 

 

 

 

 

 

Franchise law, carve-outs, and the 3-tier system

Well it seems the pot is really starting to boil.  The Brewers Association and NBWA are getting out the short knives.  Craft brewers and distributors are manning the ramparts.  Bars and restaurants are beginning to rise against the special treatment afforded to craft brewers, just because they brew the stuff.  Some distributors are telling NBWA to stay out of their state’s business.  It seems as if everybody is upset with someone… ah, ain’t spring swell?  ;-)

As some of you know, I was going to get into this fight, earning me my new nickname of Bad News Conlin ;-)  And it seems some may have plagiarized my work (and even my title), eh Steve?  I won’t even begin to discuss the self-serving (and unprofessional) actions of various organizations and individuals… but enough of that ;-) 

I’m heading in other directions and plan to leave this fight for others.  But I thought I’d throw out my 2 cents worth in an attempt to save the most dynamic and entrepreneurial beverage alcohol industry the world has ever seen.

It’s kind of funny how dang near everybody in this industry is making more money than ever before, yet the fighting only escalates as the dollar signs go higher and higher.  I think there is a word for this… but why go down that street?  ;-)

Let’s start at the beginning… December 5th, 1933.  Without that, none of you exist in your present form.  And the wisdom of the 21st Amendment.  I’d have to guess it never would have passed if it had attempted to determine the nation’s alcohol laws.  This side wouldn’t have like that.  That side wouldn’t have like this… and it would have died.

Instead the framers of the amendment made the right (and easiest) choice.  Let the stinken’ states decide.  It was clear the country wanted legal alcohol.  The well intentioned (well, at least somewhat well intentioned) 18th Amendment was a classic example of federal government over-reach.  Rather than following the basic structure of that failed experiment, the 21st Amendment went the other direction.  States-rights.  Alcohol consumption is by definition a local issue… my getting drunk every Saturday in Littleton doesn’t affect anyone in California.  So the 21st Amendment was written to both legalize alcohol AND to let the states decide alcohol regulation.

And part of this wisdom was the creation of the 3-tier system; a mandatory system whereby distinct “tiers” would only be allowed to operate in the production, transportation and sale of beverage alcohol.  THIS system is the reason we have the most dynamic beer, wine, and spirits industries in the entire world.  On this point there really can’t be any debate.  In these fights this point must never be forgotten.  It is the design that holds the entire system in place.

Yes, it in effect does use government to create a protected monopoly, the beverage alcohol distributor.  But the pluses to society FAR outweigh the negatives.

So everybody that’s fussing and feuding right now should pause and consider if their actions and desires help or hurt the 3-tier system.  For without the 3-tier, most of the players in this industry, brewers, distributors and even retail, would find their existence quite tenuous.  Alas, that has as much chance as the proverbial snowball in hell.

The beer industry (and general beverage alcohol) is undergoing a cultural revolution.  Not that long ago, all the players (brewers, distributors, retail) were basically family businesses.  And family businesses see the world and operated quite differently than public companies with their “professional” management.

Family businesses generally think much longer term… they have no need to focus on quarterly results and daily stock price.  Family businesses generally have a much stronger bond to their employees, to their customers and to their local communities.  This isn’t a moral statement, just a factual observation.

With the dominance of retail chain grocery, the family retail business isn’t quite as dead as the dodo but it is close.  Thus the way retail thinks has undergone a transformation.  And during this same time frame the power of these chains has increased exponentially.

It wasn’t that long ago that the major brewers were all family businesses.  Well A-B really wasn’t but Gussie and then the Third ran it as such.  Now all the major brewers are huge, international businesses… and they think as such.  Again this isn’t a moral issue; it’s simply the way it is.

Of course the upstart prettiest girl at the dance craft brewers are family businesses but I’m not certain they have the time frame thinking of the typical family business, perhaps in 20 or so years they might.  They are more creations of a “gold rush” mentality (and reality)… gettin’ some while the gettin’s good.  Is every craft brewer this way?  Of course not, but I’m speaking of in general.  And do they in general have an appreciation of the system design that has allowed them to flourish?  Nope.  And do they care?  Nope.  That’s just the way it is during a gold rush.

Thus the beer distributor is the only remaining player who still truly thinks and acts as a family business.  Again, no moral aspect to this… just the way it is.

But even our lovable beer distributor has undergone a transformation over the past 30 years.  Back in the day when every community had 4 – 6 distributors, each one was a nice family business that provided a nice living for the owners.  Now the typical distributor (of which there are now 2 in every community) is a VERY profitable enterprise – and about as recession-proof as any industry in the country (and as close as is possible to printing money)… most distributors rank in at least the top 0.5% (you’re there if your income is $1M per year).  That means 99.5% of all Americans make less than you do.  And many rank in the top 0.1%.  Thus 99.9% of all Americans make less than you do.

Not what most think of when they think of the “typical” family business, eh?  And for the most part, not a group that is going to get sympathetic treatment by the media.  And you are created by the government and state law.  If a brewer wants to go to market, they MUST use you.  There is no way around it.  It’s that or throw out the 3-tier system. 

Pull back and look at it from a non-distributor view-point… you’re a creation of the government AND you’re in the top 0.5% of all incomes.  I can hear the tiny violins playing right now ;-)

There was another transformation which also occurred during the past 30 years.  Beer distributors used their political power to pass franchise laws.  So now not only does a brewer have to use a distributor to reach retail and the end consumer, they in effect are forced to give up ownership of their brands, forever.  That one is kind of hard to swallow.

Beer distributor talk about how they build brands and thus deserve an equity piece of every brand they distribute.  That may or may not be the situation, but does the state really have to be involved?  Why can’t each party simply come to terms with the other and have this agreement captured in a contract.  That’s how every other business works.  Just because this is a regulated product does not mean that government must have their thumbs on the scales.

I firmly believe the entire beer industry is doing themselves and more importantly, society a disservice in the direction this fight is going.  And that direction is carve-outs for the small brewer.  If anyone thinks the definition of “small” will remain the same, I have a bridge to sell you.  Carve-outs are an affront to the 3-tier system.  Ultimately you can have one or the other but not both.

Carve-outs are the small brewer’s response to a clearly unfair situation… namely franchise laws.  And please don’t talk about the ability to terminate “without cause”.  We all know that is a self-serving illusion.

It seems to me that either franchise laws go or the 3-tier system does.  I know and love beer distributors but I vote to get rid of franchise laws.  The attempts to evade these self-serving laws are setting up the destruction of the entire 3-tier system.  The issue of pre-prohibition tied houses will pale in comparison when international brewers team up with incredibly powerful chain retail.

Sure without franchise laws one will see a lot more “churn” with the smaller brewers.  So?  One will also see an explosion of new distributors.  Beer distributors will have to fight to keep every brand they have, every day… again, so?  That’s the way it works in the competitive world the rest of us live in.

Without franchise laws the “need” for small brewer self-distribution goes away.  Here’s my recommendation for the craft brewer who wants to enter distribution.  Go to your local retailers and sell in your product.  That’s something YOU should be doing anyhow.  While at the retailer, ask them who they think is the best performing beer/alcohol distributor that services them.  Go to that distributor and tell them you have already sold in these products/quantities at these retailers and they are awaiting delivery.  Close the sale with the distributor.  The craft brewer can spend their time building the brand and not attempting to become a warehousing and delivery entity.  Sure they have to share the margin with the distributor (So what?  Distributors add real, tangible value) but the craft brewer is not force by law to forever giving up equity in their brands just to get distribution.  If they chose to, fine – that’s part of your negotiations.

Let me repeat, take away franchise laws and the intellectual arguments for self-distribution disappears.  And self-distribution is quite clearly the end of any type of 3-tier system.

Some distributors will say, without franchise laws (or getting equity in the brands) they won’t distribute their products.  No problemo.  The issue isn’t whether you will or won’t, the issue is will anyone.  Again, welcome to a competitive world beer distributors.  You won’t determine any of this, the marketplace will.  And you will do what the marketplace demands or you will pay the consequences.

The real problem beer distributors have with ridding themselves of franchise protection is with the big 2.  They are afraid what ABI and MC would do to them without franchise protection.  First, don’t forget the brands are theirs.  Perhaps the world doesn’t require as many beer distributors as are presently out there.  So?  Do you all have some god-given right to a monopoly which puts you as some of the richest individuals in the country?

I know distributors and their employees quite well.  I believe most (but not all) would fare quite well in a world without franchise protection.  Will some have to go through gut-wrenching changes?  Of course.  Will some cease to exist?  Again, of course.  Welcome to the world the rest of us operate in each and every day.

But most will survive and prosper in this new world.  I have yet to see a huge, multi-location distributor outperform the smaller, local distrib.  Never.  Add value and prosper.   Or if you truly are this century’s buggy whip manufacturer, then you are toast no matter what.  Please don’t destroy the dynamism of this industry as you fight to keep your government-protected rice bowl.

Have the courage to see that franchise laws are sowing the seeds of your ultimate destruction.  Get rid of them and draw a line in the sand… there is now no reason for carve outs from a system that has served society well for over 80 years.  Carve outs are the ultimate enemy and they will destroy the very structure that made the small brewer possible.  They will also destroy the most dynamic beverage alcohol industry the world has ever seen.  Getting rid of franchise laws will cause you some pain.  Allowing carve-outs to take root will cause your demise.  It seems the choice is pretty straightforward.

I know many out there will disagree with me but that intellectual position is based on one assumption… that the volume limits for carve-out exemptions will remain low (and controllable).  I simple do not believe that will happen… and once you give in on the intellectual arguments against carve-outs, the only barrier left in place is the volume cap. 

It is beyond naive to think that the BA, state craft brewers associations, and individual craft brewers are not going to continually push to increase these limits… forever.  Distributors, you are the only players left in the market who think long term.  If you give in, the 3-tier system disappears.  Based on my contrarian analysis, it’s as simple as that.

 

 

It's settled... legal pot is headed your way!

It’s settled… legal marijuana will soon be coming to your state.  As you respond with a well-deserved, whaaaaa?... let me explain.  The first reports on legal weed sales in Colorado have arrived and they are amazing… 50% higher than previous predictions.  It looks like the legal weed industry (both “medical” and recreational) will be a $1,000,000,000 (yeah, that’s one billion) industry.  That’s in Colorado.  Can you imagine what it would (will?) be in a state with a large population?

This will bring in a couple hundred million in annual tax revenue for the state.  How many states in the union would like to tap into this free deluge of taxes?  Where else can they find this much easy money? 

Sure, they will wrap it in “good for the children” BS but what they really are eyeing is a mountain of greenbacks… all racing to the state coffers.  Money that the politicians get to spend!  Why do you think so many big-government politicians are vocal supporters of global warming (er, climate change)?  The way they “address” this issue is to tax carbon, thereby giving them a never-ending river of money to spend… and power to grab. 

To help get this initiative passed in Colorado, the first $40 million in taxes must go to school construction… oh, those precious little tykes!  See how that makes everything all right ;-)

Of course here in Colorado our fool governor is already planning new spending on this river of free money.  That’s the reason more taxes never solves any present problem, instead the leviathan simple gets bigger and bigger… but that’s a rant for another day.

These numbers also really bring to light just how large the illicit drug trade is.  Assuming some of these sales are from pot-tourists and perhaps this legalization has slightly increased consumption, these are still amazing numbers.   Each and every day this marketplace is operating in every state in the land.  It seems it can operate above ground or below, but it is going to happen.  With this type of money flowing, it is not surprising that criminal gangs fight so hard to control it.  And now our legal criminal gangs - politicians ;-) are going to be fighting for their take too.

No question I am a cynic but I don’t see many states walking away from this fire-hose of free money.  And as I noted in a previous post, unfortunately the serious potential problems with legal pot most likely won’t be evident for years and years… but that river of tax money can start right away.  And after a couple months of legal sales, the sky hasn’t fallen in Colorado.  So far there really haven’t been any reported downsides… some concerns about stoned driving but no facts that support those claims yet.

If I were a betting man, I’d have to wager legal weed is coming to your state, probably sooner rather than later.  If this is an industry you’re thinking of joining, I recommend you move quickly.  Many states are doing the ol’ marijuana two-step… starting with medical marijuana and then heading towards full legalization… mimicking either alcohol “control” states (where the state runs the stores) or “license” states (where the stores are independently operated under a license from the state).

If you are going to jump in, get moving on the medical side first.  At least here in Colorado, they have a considerable advantage once full legalization hits.

As I’ve always told my clients (mainly because I need them to be 100% honest with me)…

1.      1.    I don’t make moral judgments… things like running the mistress’s expenses through the company ;-)

2.      2.    I’m not the IRS… things like running the mistress’s expenses through the company ;-)

So if you want to talk more about this industry, give me a call.  Unless there is a huge, unforeseen issue, one would have to guess it is here to stay.  And of course once the politicians start spending this additional money, it will be difficult to voluntarily turn off the spigot… for then they would have to find a new source of funds (dang tough to find a politically viable source which will provide this level of coinage) or they would have to cut programs and people (ain’t going to happen).  Therefore once this thing gets going, it takes on a life of its own and most likely won’t ever end.  A ton of money is going to be made by a lot of folks.  That’s just the way it is.

A grand experiment indeed.

 

Holy Guacamole… continued

We are 14 days into the biggest social experiment in our lifetimes… the legalization of marijuana in Colorado (and soon Washington).  This is the first place in the modern world where weed is legal for retail sale.

It is a social experiment of immense (and unknown) proportions.  Many liken this episode to the 21st amendment which repealed alcohol prohibition and legalized (once again) its production, sale, and consumption.  I believe this analysis is actually backwards… I think a better comparison is with the 18th amendment, the one that outlawed alcohol.

You see, the 18th amendment was a grand, well intentioned (for now we’ll ignore the anti-Catholic/anti-immigrant aspects) experiment.  That’s what it was, an experiment.  Fed up with the excesses of rampant alcohol abuse, a motivated group convinced the country that the solution was to outlaw the product.  We all know how that experiment worked out.

Legalization of weed is also a grand, well intentioned experiment.  I personally believe it will work out a lot better than prohibition but that’s all that is, a belief.  No matter how one looks at the issue, it is an experiment whose long-term consequences are unknown.  And it sure looks like it is going to be copied throughout the country, years and years before these consequences are truly known.

Why is it going to be copied around the country?  Good ol’ cold, hard cash is going to drive it like a racing freight train across the country.  Not illicit cold, hard cash but cold hard cash as in a tax windfall for states that jump in the pool.

Here are some quotes from a Denver Post article, you can find the full article here… (emphasis added is mine)

Only one week into Colorado’s history-making recreational marijuana industry, one shop has already sold out of pot, others fear they may soon join it and perhaps as many as 100,000 people have legally purchased marijuana at Colorado stores.

Industry advocates estimate Colorado stores have already done more than $5 million in sales — including $1 million on New Year’s Day — though National Cannabis Industry Association executive director Aaron Smith acknowledges those are “back-of-the-envelope” figures. The owner of one store said she expects to make as much in sales in the first 10 days of January as she did all of last year selling medical marijuana.

Many shops have imposed caps on maximum purchase amounts well below the caps required under state law. Numerous store owners say they have sold out of marijuana-infused edible products. Toni Fox, the owner of 3D Cannabis Center in Denver, said she closed her store down on Monday and Tuesday this week, just to restock and give her staff a rest.

Even for stores that reported robust inventory, like High Country Healing in Silverthorne, owners said marijuana could become scarce across the industry if more stores don’t get their licenses approved and open to absorb the flood of interest.

“None of us could really prepare for what was going to hit us,” High Country Healing’s owner, Nick Brown, said on Tuesday. “I think we all thought we would see huge demand and lines. But I don’t think any of us expected what was happened over the last six days.”

More than 10,000 people bought marijuana at Colorado’s recreational pot shops on Jan. 1, according to industry estimates and tallies provided by the stores. And, while that initial surge was expected, the sustained interest was not. Brown and several other store owners said they saw only a slight drop-off in sales in the days after Jan. 1.

Colorado is looking at a flood of weed-related tax revenue flowing into the state.  It sure looks like it will be a windfall bigger than anyone expected… and other states aren’t going to just sit back and watch it happen.  Thus the experiment is taking wings right before our eyes.  Hopefully it turns out a lot better than the 18th Amendment.

It is mind-numbing to watch it happening… and this from a guy whose views lean libertarian.  The Denver Post… the major newspaper in the front range of Colorado has even started a website “exploring the culture of pot” which you can find here or just go to www.thecannabist.co.  This isn’t High Times magazine… in effect this is each of your local newspapers!

Want to know how to make the best weed-infused butter possible?  Want to check out the reviews for the “strain of the day”?  Cooking with cannabis, here’s how!  “Find a store near you”… just enter your zip code.

Want to know what the pricing and product situation is?  You can’t order marijuana on-line but you can be an educated price shopper.  Click here to see prices at one store… on a WHOLE range of products.  Of course there is smoking weed.  But edibles are huge.  Candy, flavored sprays, concentrated oils for use in vaporizers.  It’s all here.

Want the best vaporizer out there?  Check out our reviews!  Elliot, here’s a new market for FIN ;-)  Sorry, I couldn’t pass that one up.

Lots of opportunity here for everyone.  Perhaps a new income stream for Harry and Benj ;-)  Perhaps with a publication name like Wacky Weed Weekly ™?  Or Stoner’s Daily ™ or The Daily Stone™ or ??   Please send me some of your suggestions for a title.

Amazing to watch this process.  That disconnect between illegal and legal still rattles around my head.  How this all ends?  Will this prove to be a mirror image of the wisdom of the 21st Amendment or the well-intentioned but foolish 18th Amendment?

Is everyone in Colorado going to end up like this?  Seriously, you might enjoy that link and video ;-)  Or is it going to work out alright?

And what about alcohol sales?  It seems the general consensus is that legal weed will have a minimum impact.  I tend to agree but we must remember this is simply a WAG, nothing more.  (don’t know what a WAG is?  You should).

But I can’t help but believe there will be some sort of “lottery effect”.  Was all this money (and there is A LOT) being spent anyway, just in the illicit trade?  If so, this legalization is a good thing.  It also puts into perspective how MASSIVE the illicit drug trade is.

 Or more likely, a portion of this money was being spent in the black market anyway and is now circulating in the legal trade.  But one would think that at least a portion of this money is ADDITIONAL spending, and thus the lottery effect on alcohol sales.  It’s probably the later with the only question being how many additional, new incremental dollars are being spent on the weed-market and where these incremental dollars are coming from.  We’ll know the answer to that sometime down the road.

Strange world where smoking weed is more accepted than smoking cigarettes.  Will kids even bother with cigarettes?  I think weed is probably cheaper.  Or will being loaded become “uncool”?  Again, heck if I know.

And lastly a correction… I wrongly stated that out-of-staters could purchase up to 1 ounce at a time.  That privilege is reserved for in-stater’s.  If you are not from Colorado, you can only purchase ¼ ounce per retail visit.  I guess it will take more stops to fill up that glove box than I first thought ;-)  Oh, and the cops in surrounding states suggest you keep it in the trunk, not upfront with the passengers - really.  Well actually they also recommend you don’t bring it into/through their states… yeah, right.

Let me know what you all think of it.  It is amazing to watch.

Holy guacamole! Legal weed arrives in Colorado

Well in 2 days it will be weed-thirty in Colorado!  Yes that’s right, as of January 1, 2014 legal retail marijuana shops will be opening throughout Colorado.  Screw that medicinal bull; this is weed for those who simply desire it.  This became law via citizen initiative and won with strong support… 55% to 44% with almost 69% voter turnout.

Since this is a topic near and dear to many a beer wholesaler’s heart ;-), I thought I’d give all you non-Coloradoans an update on the Mile High scene.

First, it is interesting to watch and listen to people as they discuss the topic of legal marijuana.  You can hear a disconnect from many as they still think of the product as an illicit drug rather than the legal, state-regulated product that it will be in 2 days.  One would have probably heard the same types of things during the end of Prohibition.  But of course Prohibition lasted only a little over 13 years so for most adults they could remember a time when alcohol was legal.

That’s not the situation for marijuana.  There is no one alive who remembers a time when it wasn’t illegal… and for the Feds it remains a Schedule 1 drug… and for what that means I’ll let the Federal Drug Enforcement Agency’s website tell the tale (which you can find in its entirety here if you choose)

Drug Schedules

Drugs, substances, and certain chemicals used to make drugs are classified into five (5) distinct categories or schedules depending upon the drug’s acceptable medical use and the drug’s abuse or dependency potential. The abuse rate is a determinate factor in the scheduling of the drug; for example, Schedule I drugs are considered the most dangerous class of drugs with a high potential for abuse and potentially severe psychological and/or physical dependence. As the drug schedule changes-- Schedule II, Schedule III, etc., so does the abuse potential-- Schedule V drugs represents the least potential for abuse…

Schedule I

Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Schedule I drugs are the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence. Some examples of Schedule I drugs are:

heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote

So heroin, acid, ecstasy, Quaaludes, peyote and weed are classified the same by the federal government!  Yikes!  Schedule 2 drugs (by their reasoning not as dangerous as Schedule 1 drugs) include cocaine, meth, oxycodone (OxyContin) to name a few.  Earth to the Feds… coke, meth, and hillbilly heroin are one HECK of a lot more addictive and dangerous than weed. 

As a side note to all you parents out there… the Feds also include Ritalin as a Schedule 2 drug, i.e. in the same category as coke and meth.  Yet Ritalin is handed out like candy to children (generally boys) around the country… sorry, that’s just me temporarily getting on my soap-box again ;-)

Back to legal marijuana… since this product has never been legal in the memory of any living American, it is somewhat understandable that people still think of it as illegal and build their arguments from this perspective.  Denver City Council went round and round arguing that it should be illegal to smoke weed (on private property!) if anyone else could either smell it or see you doing it.  This foolishness was finally voted down but it shows how the illegal/legal mental divide will remain with us… probably for many years.

Of course under-age use is always a concern.  This one is harder to predict but my gut says most younger folks who want weed have no problem finding it right now… from middle school on up.  Some have predicted a rise in older use since they long ago lost their connection ;-) and I’d have to guess this might be the biggest user impact of legal weed. 

And of course there is that old belief that marijuana is a “gate-way” drug that leads to harder drug use.  In a counter-intuitive fashion, I think it might just go the other way.  When marijuana is illegal you must purchase it from someone who in all likelihood has quick and easy connections to those selling (and using) other drugs.  With legal weed this connection is broken.  Someone buying legal weed will no longer be dealing with people who will readily sell them other drugs.  At least that’s my guess right now.

In addition, one comedian was talking about legal weed and teenage use and his take was that legal marijuana will end up LOWERING teenage/youth use… when the kids sit around and watch grandma and granddad passing the bong, it will change the whole ‘illicit’ attraction.  He said it much funnier than that though ;-)

This transitionary period (forward if the experiment works or backwards if it becomes a huge failure) will be one of working out a lot of kinks and contradictions.  Since marijuana is illegal from a federal perspective, the weed industry can’t find any bankers who will accept their business… this is a problem for the “medical” marijuana retailers in every state too.  Financial institutions can’t knowingly do business with any individual/organization who is committing a crime.  Thus out of self-preservation, the banks refuse to do business with the weed industry.  To solve this problem Washington State is proposing the creation of a state-owned bank solely for the weed industry.  Many think this too is destined to fail since from the Feds perspective, it doesn’t matter who owns the bank… knowingly doing business with criminals is still against federal banking and financial law… and every one of these retail establishments, their grow operations, and every consumer is labeled a criminal under federal law.

Employers in Colorado and across the country can still fire you from your job for smoking during off-hours, even though you are using a now legal product... and using it on your time.  I personally don’t think this one will stand but that’s the law right now.  Expect the marijuana lobby to respond to this injustice with alcohol as their foil… “Perhaps we should pass a law where an employer can fire you for consuming a beer or two after work or over the weekend.”  The beverage alcohol industry should be prepared to address this since it most certainly is coming.  It will be interesting to see which side NBWA and state associations take on this one.

Weed might be legal in the state BUT on federal land (think national forests, BLM land, and national monuments)… if you smoke you are breaking the law and can be arrested.

Smoking in public is also against the law as is in public establishments, i.e. bars and restaurants, concert venues, etc.  But I think any analysis of reality will tell you this will rarely be enforced.  I find it difficult to believe cops are going to be on the prowl outside (or inside) of bars looking for folks who are lighting up a quick one.

And a quick one it will probably be… A letter writer to the local paper noted that the image of people standing around smoking joint after joint is based on the past.  This legal weed packs a punch. 

As a side note, a number of years ago I heard an agricultural geneticist talk about the incredible advances in the potency of marijuana that was achieved by a bunch of backyard geneticists.  To put it in perspective he noted that if similar advances were made with vegetables, one would be growing tomatoes that were four feet in diameter and watermelons twenty feet long!  I’d have to guess this trend will only continue.

Back to the letter writer… this writer explained it is far too expensive and far too powerful for this type of use… this is the infamous one or two-toke material.  Folks will grab a quick hit or two and then go about their business… or so this letter writer’s prediction.

In fact there are products called vaporizers (and others) that allow smokers to capitalize on this feature.  The magazine High Times did a review of some, which you can find here.  Here’s their lead paragraph…

Since our first vaporizer buyer's guide in 2011, a plethora of new pen-sized vapes have hit the market – offering cannabis consumers a stealthy, convenient way to get high in almost any location or situation. But with so many options, how can John Q. Stoner know which ones are worthy of their cash and stash, and which ones are worthy of the trash? Well, fear not, loyal readers – that’s where we come in. Our diligent staff has reviewed and rated (on a scale of 1 to 5) 15 top vapor pens so that you can get ripped without getting ripped off. We’ve provided vital specs on each of the following devices and judged them based on seven criteria: affordability, durability, versatility, high, stealth, health, and ease of refill. But first, some general info ...

This whole legal world should be an interesting experiment, eh?  Weed-based tours are already set up for January 1… think craft beer tours… and this could be a pretty big out-of-state attraction.  I’m certain in the very near-term we will see combined tours… weed and craft brewers.  I’d also have to guess car-based trips to our fair state will be going up substantially in the near term… with many going home with a glove-box full of high quality weed.  It is only legal to purchase (and possess) up to one ounce… but there are a lot of stores and it is not illegal to go back to the same store multiple times… so going home with a 6-month supply probably won’t be too tough… or if you want to sell back home, you can probably pay for your entire vacation with the proceeds.

Law enforcement around the country is already complaining that Colorado (and Washington State) are flooding their states with marijuana.  Assuming this experiment doesn’t go badly, I’d have to guess legal marijuana will quickly be adopted by many more states.  As the beer, wine, and spirits industries know so well… even folks who don’t like the product LOVE the tax revenue.  I can easily see state legislatures complaining that they are getting all of the impact of semi-legal marijuana without any of the tax dollars that come along with it.  Call me a cynic but I’d bet the dollars will win every time ;-)

From the beverage alcohol industry’s perspective… what does legal weed mean for beer, wine, and spirits sales?  Heck if I know!  If anything I’d guess perhaps a slight downward push but it is hard to say.  Are stoners more likely to stay home and drink or simply stay home or head to the local on-premise establishment?  We’ll know in a year or two.

Is there opportunity for distributors here?  From your present business model I’d have to guess not.  I simply don’t see a need for warehousing and distribution of this product.  There is though A LOT of money to be made… whether it’s grow operations or retail (or perhaps retail chain?) I’d guess folks are going to make a ton of money.  Probably be a little Wild West aspect to it for a while.  Do you jump in or not?  I think this will first be decided by your feelings on the Prohibition-aspect… is this an illicit drug or a legal, state-regulated product?  Your call.  In a week or two, the view from retail.

The Coming Artisanal/Craft Era

Paradigm shift - a radical change in underlying beliefs or theory.  Some times in history it is evident that one is living in an on-going paradigm shift.  The French and American revolutions might be examples.

But I believe most of the time we are unaware of the incremental small changes that are occurring around us.  If you could step out of the here-and-now and look down on what is happening it might be quite evident… but since we live in the here-and-now we often don’t see the paradigm shifts until they have already happened.  It is always easier to view the past than the present.  Then one can look back and see how “obvious” these changes were.

With that intro, I believe we are in the midst of a profound paradigm shift that will rock most consumer product companies to their core.  Over the recent few decades this country has seen the growth of large consumer product companies with their associated strong national/mega-brands.  The smaller local and regional players were hit pretty hard during this time… in fact most have been squashed as this national/mega-brand reality simply rolled over them.

But that tide has already turned.  I believe we are in the midst of an explosion of artisan or craft consumer products that will only accelerate over the coming decades.  One sees it in this industry with the explosion of craft brewers.  The Brewers Association reports that as of June 2013 there were 2,538 breweries in the US… more than at any time in the country’s history.  And hundreds more are coming on-line.

Although it hasn’t receive as much attention, the craft/artisanal distilling industry is following the same path as craft brewers… although at an even faster pace. 

The local paper in Denver had a recent story on an artisanal cheese manufacturer.  This paradigm shift is not localized to any one industry or region.  It is the tip-of-the-spear and it is moving like lightning.  And I believe it will sooner or later impact nearly every consumer products company and every mega-brand in the entire country.

At its core, this is what is driving the present downward trends for all the beer mega-brands… that compounded by being used as a Cash Cow… which is being milked like a milkmaid mainlining Red Bull ;-)

The high-water marks for the beer mega-brands might have already been reached and they might face a long-term prospect of continued decline.  It might not be so much that the consumer doesn’t desire a light lager… just that they don’t want THOSE light lagers.  For any craft folks reading this, I believe this just might be an opportunity for you… there are only so many IPAs the world needs ;-)

There are many things driving this profound paradigm shift…

Technology and manufacturing – Since we live in the here-and-now we often don’t really understand how far and how fast things have changed on this front.  Small players can product world-class product… for relatively small investments.  This is true for manufacturing, packaging, labeling… the whole nine yards.  And although there still might be some economy of scale advantages for the mega-manufacturer (and these have historically been quite large), these advantages are shrinking all the time.  And all evidence is that this will only continue.  In addition, in a world where customer choice is king, being smaller and nimbler is an advantage, not a weakness.  The huge plant employing hundreds and hundreds might be turning into an albatross, not a competitive advantage.

People power – In addition, as the large consumer products companies have flattened their organizational charts and technology has replace thousands of positions, there is much less upward mobility for their employees.  Life-time employment is a thing of the past.  So there are people with tremendous knowledge and skill sets who are available.

Hard economic times – Perhaps counter-intuitively, tough times cause an explosion in entrepreneurial activities.  The risk/reward decisions become easier when you don’t have many other options… trust me, I’ve got some been there, done that on this topic ;-)

Intangibles – People are social animals… we long to belong to a team.  Few of us strive to be some anonymous schlep at some large, face-less, soul-less corporation.  These smaller companies offer a great deal of personal fulfillment… sure everyone would like to hit the long ball and get rich but getting up every day and loving what you do is worth a lot more than $$.  Talk to almost any employee at a craft brewer.  In addition, in a smaller organization you can actually see the results of your efforts.  If you work for a huge multinational company your efforts simply disappear into the ether whether you bust your butt or surf the web all day.  This is not true in a smaller company.

The changing consumer – let’s use the ubiquitous smart phone as an example.  Here is a product which has already become the most important item in many people’s lives.  It is the primary means that they use to interact with the world around them.  And it allows almost complete personalization… almost every aspect of it can be changed to fit the user’s desires.  And it can easily be changed tomorrow and the next day and the next.  Ring tones can be personalized to whatever you want… ring tones can tell you exactly who is calling.  You can listen to the music you want when you want.  You can watch video entertainment of your choice and time… the concept of TV is being transformed as we speak.  It offers immediacy… these folks don’t email (that’s soooo 2000).  They don’t leave voice messages… why take the time?  They text which is about as immediate as one can get… hit send and it’s at the other’s phone in a matter of seconds.  To believe that this consumer, and all who follow, will be drawn to some mass-produced, mass-marketed mega-brand is beyond wishful thinking.    

Combine all these factors and one can get a fleeting glimpse of the profound consumer products paradigm shift that is occurring under our feet.

Will the beer mega-brands go the way of the dodo?  Not anytime soon. There still are A LOT of bottles and pints of these brands being consumed.  Brand Budweiser has been declining for years and it is still the number three beer brand in the country.

Will they see continued volume and share growth?  I’d bet against it.  I think the future is in the other direction.  And it might come faster than any of us can imagine. 

Historically one often speaks of eras… no question the last few decades have been the era of the mega-brand.  Perhaps that era is coming to a close?

Beer, spirits, cheese, you name it… the small artisanal explosion is already happening.  Where it goes is anyone’s guess, but it will leave its scars on more than a few large consumer products companies and their associated mega-brands.  And perhaps on their distributors too.

 

Drinking age sanity

I had planned to use this post to discuss the strategies and risks behind line-extensions... but the following was just published at National Review Online and it is a must read.  I couldn't agree more!

You can find the original link here,

http://www.nationalreview.com/articles/343680/cheers-drinking-reform-charles-c-w-cooke?pg=1

And here is the wisdom of Mr. Charles Cooke...

Cheers for Drinking Reform
It should be a libertarian’s dream issue.

By Charles C. W. Cooke

Alcohol occupies a peculiar position in the culture of the United States. Like so much else besides, it is subject to the ongoing brawl between puritanism and libertarianism, two philosophies that have long jockeyed for dominance here. Americans have made many contributions to the bar — including the perfection and popularization of the cocktail. But puritanism has survived, enjoying a rich history of its own. Benjamin Rush’s inquiries into alcoholism spawned a variety of anti-alcohol movements at the outset of the new republic; in the 1850s, “temperance” overlapped uncomfortably with the Know Nothing movement’s distaste for secular principles; and in the 1920s the 18th Amendment was passed, in part on the back of widespread mistrust of immigrants and the drinks they brought with them. The role of alcohol in society, remember, is the only such question ever to have been placed within the U.S. Constitution. Nowadays, the folly of Prohibition is widely known. But in practice it still obtains for some, as a deviant exception to the rule of adulthood.

In the United States, we treat 18-year-olds as full citizens. At this age, a man may vote and he may serve as a juror — or he may search for excuses as to why he should do neither. He may smoke cigarettes and fly an airplane. He may get married, or he may eschew that road in favor of pornography and promiscuity. He may enter into contracts, max out his credit cards, and run a business into the ground. He may join the military, putting his life in danger. In some jurisdictions, he may run for public office. Less welcome but no less real are the opportunities to be executed by the state for capital crimes and to sign up for the Selective Service. But what he may not do — in any of the fifty states — is walk to a bar and buy an alcoholic drink. This is nonsense — an aberration from the usual rules. What sense does it make to deprive an adult of just one feature of adulthood, and why are the arguments in favor of doing so taken seriously?

Lobbying the federal government in the 1980s, Mothers Against Drunk Driving claimed that there was a connection between young-adult drinkers and the worrying number of deaths caused by drunk driving. Their evidence is by no means indisputable. Traffic fatalities in the 1980s decreased considerably less after the drinking was raised than they did during the same period in Europe, where drinking is common at 18 and below; and, as the research of Harvard’s Jeffrey Miron shows, the “drinking age does not produce its main claimed benefit.” But, arguendo, let’s presume that MADD was correct. A bigger question would still remain: If practicality wins out in that arena, why is it alone? Why is William Pitt’s “Necessity” justifiable as the “plea for every infringement” in this domain but not in others?

Should we perhaps raise the marriage age or age of consent to 21? And if not, why not? After all, young people often think they are in love when they are not, and young lust can lead to inordinately bad decisions. (Just ask Romeo and Juliet.) Should we make home ownership illegal until one has 20 years and 12 months under one’s belt? Again: If not, why not? Perhaps our young people need a little time to rehearse in the marketplace before they make the biggest financial decisions of their lives? In fact, given that purchasing a house is top of almost all common stressors, one might classify being forced to navigate the mortgage market while sober as cruel and unusual punishment.

The answer to these questions is that there already exists a cutoff point beyond which your personal choices are deemed to be nobody else’s business. The rapper and producer Dr. Dre had, he said, “a house, a Mercedes, a Corvette and a million dollars in the bank before [he] could buy alcohol legally.” This inconsistency is grotesque. Are we to indulge an arrangement by which a father might say, “I’m really proud of you for joining the military, son. But don’t you dare have a drink”? In Personal Reminiscences, Robert E. Lee quotes Stonewall Jackson as having claimed to be “more afraid of alcohol than of all the bullets of the enemy.” That was certainly Jackson’s prerogative; alcohol, like so many things, can be terribly destructive. But recognition of this is neither basis for wise law nor sufficient reason to deprive young adults of their choices. Guns are destructive, too. Smoking is destructive. Paint thinner is destructive — I would buy a round for the first politician who defended the notion that the state should insist on age limits for the patrons of Home Depot.

 The 26th Amendment lowered the minimum voting age from 21 to 18 and, in doing so, corrected the untenable incongruity of 18-year olds’ being drafted into the military and sent to fight in the jungles of Vietnam but asked to wait three years before they might cast a ballot. In the wake of the change, with 18 set as the new yardstick, a majority of states saw fit to lower their drinking ages. Between 1970 and 1976, 30 did so. This logical trend was cut short by federal overreach. And what an overreach! Under the provisions of the Federal Underage Drinking Act, any state that holds out and allows its resident adults to enjoy a drink before they reach the age of 21 will be punished with a 10 percent decrease in its annual federal highway funds. This is no less than legalized bribery, one of many means by which the federal government circumvents the restrictions imposed on it by the Constitution and buys off the states. That since 1988 not a single state has told the feds to bugger off and mind their own business is a testament to the craven, upside-down nature of modern American federalism. (Also to the tyranny of self-interested majorities: Whatever demographic changes are visited on the United States in the years to come, we will likely not see an electorate that cares that much that people 18 to 20 years of age are deprived of the opportunity to go drinking

The law is an ass, and it is faithfully treated as such. Winston Churchill, who, having “taken more out of alcohol than alcohol [took] out of [him],” would no doubt have opposed the status quo on libationary grounds. But Churchill also wisely counseled against contriving a legal framework that undermines respect for the law. “If you have ten thousand regulations,” he enjoined, “you destroy all respect for the law.” Quite so. With the exception of the equally asinine laws against marijuana, it is difficult to think of another law that has become such an open joke among those at whom it is aimed. It’s not just the drinking bit: We introduce our citizens to the responsibilities of adulthood by encouraging them to get their hands on — and casually and routinely use — false identification documents. This in turn causes the purveyors of fake documents to proliferate and pushes them into the mainstream.

Drinking Reform has few public champions, which is a shame, because the issue presents those who habitually exalt limited government, individual liberty, and the rule of law with a golden opportunity to prove them congruous. Truth be told, it should be a libertarian’s dream issue. Why haven’t prominent figures picked it up? Benjamin Franklin said that beer was “proof that God loves us and wants us to be happy”; he also warned that the United States would remain a republic “if you can keep it.” Federalism’s advocates are missing an opportunity to demonstrate what happens to republican principles when the federal government gets too powerful. What better way than a call for the repeal of the Federal Underage Drinking Act to introduce to the young people of America both of Franklin’s principles at the same time?

— Charles C. W. Cooke is an editorial associate at National Review.

 

The ABI – Grupo Modelo Antitrust Charade

I’ve been asked repeatedly my take on the Department of Justice’s decision to fight the ABI – Grupo Modelo deal.  None of the reporters who asked wanted to quote my response… it doesn’t fit into the narrative… although they all agreed.  They’ve seen enough so that they are cynics too ;-)

Thus let me weigh in and tell you my cynical take on the DOJ’s decision to sue to stop this merger.  I believe the decision comes down to a simply thing… ABI must not have greased the right palms and/or didn’t grease them enough.

 Brito and crew were there at every Presidential debate......... but they must have been a little slow in reaching for the ol’ checkbook.  Welcome to the new world of crony capitalism… well actually when it comes to antitrust enforcement, it seems that has always been a world heavily influenced by politics.  Facts?  Not so much.  Political beliefs and who’s scratching whose back?  Oh yeah.

Think I’m a cynic?  Well duh.  But think this analysis is wrong?  Consider this:

  • A two year DOJ investigation into Google’s practices recently ended with basically no action.  Many articles have been written, and I mean many, on how during this time Google spent $25,000,000 on lobbying efforts.  Most of the writers noted that this was a pretty good investment.  And if you consider market power, etc. Google is far more “dangerous” to the public than ABI will ever be. 
  • Facebook now employees close to 15 lobbyists.  Do you think they do this just because they like to piss money away?!  This is the essence of crony capitalism.  Equal treatment under the law?  That’s for saps who don’t know how to play the game.  And of course it gives tremendous power to our political overlords, who bestow their favors on the chosen few.

As for ABI, I’d guess they thought they would be dealing with a different administration and this deal would have sailed through… which it very likely would have.  Same facts but different results.

So as you read the various handwringing’s over what ABI might have to do to get this blessing, don’t necessarily believe for a moment it is about hard facts and cold statistics.  Those are only used as window dressing to support decisions that have already been made… and to bolster the power of these political overlords.

Think this rant is just Conlin going off the deep end again?  This quote from an article in The National Review Online states how the game is played… “As law professor D. Daniel Sokol told the Wall Street Journal, in antitrust cases “Defining the market is 90% of the game. . . . If you win that battle, the rest is easy.”  Every professor in my MBA program felt the same way.

You can read the entire article here, http://www.nationalreview.com/articles/339916/brew-busters-daniel-foster

And this process isn’t restricted to ABI.  How many folks out there are either for this or against it based solely on what they think it means to them?  Let’s at least drop the charade that this is about “market power” or protecting that helpless little consumer… it’s about winners and losers being decided by some political power.  We cheer it when it lines our pockets… we curse it when it empties them.

Nothing less, nothing more.  I have no ability to change this but I refuse to act as though this is really about the DOJ “protecting” the poor citizens of this country.  It’s about protecting things, just not what they say it is.

Think about the supposed “solutions” that are being offered… selling a brewery is going to change the US beer market?  Divesting a brand?  That’s just the economic pain the government wants to inflict as payment to get this thing approved.

Since I don’t have the necessary facts to offer ABI a hard suggestion, I’ll instead answer with my gut… I wouldn’t give an inch on anything of importance.  This isn’t ultimately about facts so why act as though it is?  If I don’t want to piss away a ton of money over the next few years (and waste a lot of management time) I might tell them to screw off.  About that penalty?  You were foolish to give in and include it in the deal.

Wait 3 more years and restart the deal.  You already own 50% of the dang thing… you’re not going nowhere.  There will be a new administration and next time either they will be more politically aligned with letting these deals happen or ABI can get better at writing the right checks to the right folks.

Isn’t this crony capitalism fun?  ;-)

Can the 21st Amendment be the model?

The 21st amendment to the Constitution repealed the 18th Amendment, the failed experiment called Prohibition.  But it did something else of equal importance.  Rather than attempting to decide and dictate all of the issues related to alcohol laws and regulations, the amendment simply stated that alcohol regulation was to be decided at the state level.

There was genius in this decision.  It greatly increased the odds of the amendment actually being ratified. Attempting to dictate every aspect of alcohol regulation for the entire country would simply have insured the amendment would never become law.

The 21st Amendment allowed states and their citizens to craft laws and regulations that fit their unique desires and situations.  It built on the reality that an individual’s consumption of alcohol is a local issue.  It allowed effective control of beverage alcohol while creating a framework where competition and the marketplace would still flourish.  It has been a tremendous success.

I believe a similar model should be used to transform the K-12 public education system.  End The Education Plantation, www.EndtheEducationPlantation.org is a single issue, non-partisan organization which has only one goal:  Passage of federal legislation requiring any state or school district that accepts any federal education dollars to offer Education Freedom Accounts to every child attending school in that state or district. These Freedom Accounts would have to equal at least 95 percent of the total per pupil spending of that district or state.  Other than that, we defer all other decisions to the states on how/where these funds can be used. This only demands that parents control the money spent on the education of their children.

In effect, this legislation would force states to create a state-regulated market for K-12 education (and pre-K and higher education if they desire). Just like the 21st Amendment, we use federal power to force Federalism in the education of this country’s youth.

This will unleash the wisdom of millions and is guaranteed to improve the educational outcomes of rich, poor and middle-class children alike.

Obviously different states will decide different things. Regardless of your political beliefs, some states will make decisions you agree with and others you disagree with. Guess what. That’s happening right now.

The public education system of this country is failing far too many children.  Seventy percent of all eighth graders are not proficient in reading.  It’s worse for minorities.  And, sadly, the future of most kids is somewhat set by the eighth grade.

The vast majority of these non-proficient children will NEVER become good at reading.  Think of what this means for their job prospects, their cultural activities, and how they will raise the next generation.  Most fourth and eighth graders are also not proficient in math. This does not bode well for any of us.

ACT reports 75 percent of all incoming freshman are not prepared for college. Only four percent of African-American high school graduates are ready for college.

And few students wake up the day before high school graduation and decide to attend college. Most of these students have been preparing for college for years. Yet only 25% are ready?

And what of those who didn’t take the more difficult classes and don’t plan to go to college? Do you think their educations are any better? A recent article talked about a small manufacturer who was looking to fill some entry level positions. Out of 100 applicants with high school diplomas, only three could pass a simple math test!  And of those three, none knew how to read a ruler.  This is simply wrong.

Yet the country spends more money per pupil than every other country on the planet, save one -- over $12,000 per student per year.  In most parts of the country you can attend a pretty good private school for that amount.

Our country is filled with dedicated and loving teachers, administrators, para-pros and volunteers.  It is not the people who are failing.  It is not that we spend too little money.  It is that the top-down, expert-driven system is simply failing.  And the only way to fix a failing system is to CHANGE it.

We don’t claim to know the answer to every question.  We don’t have to.  Rather we know the system that will find the best answers for the lowest cost -- freedom and competition.  Our proposed legislation would, in effect, force states to create a marketplace for K-12 public education.  Let us unleash the wisdom of millions and let them discover and create better schools for all of our kids.

The future of today’s children and in a very real sense the future of the country depends on it.  The genius of the 21st Amendment, which has served the country quite well for 80 years, can be the model for transforming this country’s K-12 public education system.  Raise your voice. 

Regardless of your wealth or education, no one is immune from these failings.  We will either collectively solve this problem or we will collectively watch this problem destroy our country.  If not us, who?  If not now, when?  Please step to the plate.  50 million children and the very soul of this country are pleading for us to do something.  Join us.

Here’s what Milton Friedman wrote in 2004…

Government is committed to assuring that all children receive a minimum education. It currently does so by setting up and running schools, assigning students within a designated catchment area to each school. Students are thereby deprived of choice. They go to the designated school or else they do not benefit from the government commitment and their parents must pay twice for their education—once in the form of taxes, again in tuition.

Equally important, government is deprived of the benefits of competition. It is as if the government decided that the automobiles it uses must be built in government factories. What do you think the quality and cost of government cars would be? Or, to take another example, it is as if recipients of food stamps were required to spend them in a specified government-run grocery store.

It is only the tyranny of the status quo that leads us to take it for granted that in schooling, government monopoly is the best way for the government to achieve its objective.

A far more effective and equitable way for government to finance education is to finance students, not schools. Assign a specified sum of money to each child and let him or her and his or her parents choose the school that they believe best, perhaps a government school, perhaps a private school, perhaps homeschooling. Let the schools in turn, whether government or private, set their own tuition rates, and control their own operating procedures. That would provide real competition for all schools, competition powered by the ultimate beneficiaries of the program, the nation’s children.

That’s all we are trying to do.  I hope we can count on you.  If you agree, please spread the word.

 

 

Chesbay, MillerCoors, City Beverage and Freedom

First a quick note about the Chesbay dustup and the Illinois Liquor Commission’s decision on allowing ABI to continue their ownership in City Beverage.  That decision which some have called surprising and confusing is EXACTLY the reason I counsel against legal actions like the Chesbay dustup.

As a regulated industry, as much as is possible we need to stay out of courtrooms.  For once in the courtroom, one person’s judgment (whether right or wrong) can forever change the industry.  And surprising and confusing decisions happen all the time.  Putting 79 years of post-prohibition regulation in a single person’s hands is simply a risk not worth taking. 

So Chesbay gets to exit this year with their money (less legal expenses)… Reyes Beverage Group gets to complete a transaction which makes perfect strategic sense… and MillerCoors gets to extract some type of performance commitment from the Reyes’s and get out of a legal battle where most sides were against them.  And the industry wins because this thing goes away.

As for the City Beverage decision… who knows.  AB has had that stake for many years and the world hasn’t ended… and it is Chicago and Illinois… unfortunately a world of political pay-to-play if there ever were one.  I’m not saying this decision was that… just that it is rather sad that the fine people of the state of Illinois allow this level of political corruption to continue.  It sullies every decision, whether corrupt or not since one can never be certain.  One would hope that sooner or later the folks in Illinois will tire of seeing their governors and other elected officials cooling their heels in jail… and as has been noted before by some cynical types… only the stupid and greedy politicians get caught in the first place (we have one of those, ex-governor Blago sitting in a prison here in Colorado at this very moment).  The “good” ones simply never get caught.  Perhaps free people should demand more from our elected officials.

And on that note a couple points.  First, many folks out there think I’m crazy for putting my beliefs out there in front of all (my associate Steve Cook being one).  They think it is bad for business and one should never do it.  I take a longer view… how do we expect the incredible bounty and freedom each of us enjoys to continue if we are afraid to speak up?  I realize it can be dangerous to enter the culture wars (where both sides are generally wrong) but speaking in favor of freedom is never wrong.

Which brings me to my second point… it seems that good ol’ Guinness is not only a great beer, the lineage of the Guinness line has produced a pretty good thinker too…

Following is a brief interview from National Review Online (http://www.nationalreview.com/articles/332478/have-drink-guinness-interview) with the great grandson of the founding Guinness.

It is worth the read (I haven’t read the book yet) to hear what a foreigner has to say about the freedoms of this great country and the risks to them.

Have a Drink of Guinness

November 5, 2012 3:00 A.M.

"Like a precious family heirloom, freedom is not just ours to enjoy, but to treasure, protect, and pass on to future generations,” says Os Guinness in an interview with NRO’s Kathryn Jean Lopez. Guinness, great grandson of that famous Dublin brewer, has recently written a book, A Free People’s Suicide: Sustainable Freedom and the American Future. Here, the social critic helps remind us of what’s special about the United States.

KATHRYN JEAN LOPEZ: What concerns you about freedom in the United States as you watch us right before a presidential election?

OS GUINNESS: I am a longtime admirer of the U.S. and its enormous significance for the world. But as your presidential elections have become more and more of grand popularity contest, dominated by money to an obscene degree, they have less and less to say about the real “state of the Union.” One of the recent conventions, for example, was well described as “more Pat Boone than Winston Churchill.” The present condition of American freedom is only one of many themes that are conspicuous by their absence in this election.

LOPEZ: “Suicide,” in the title of your new book, is a bit strong, isn’t it?

GUINNESS: The title comes from Abraham Lincoln: “As a nation of freemen, we must live through all time, or die by suicide.” On the one hand, he was referring to the open-ended challenge of what George Washington earlier called “the great experiment” — and experiments are always open-ended. On the other hand, he was echoing a point made by many historians: Strong free peoples bring themselves down. It won’t be the Nazis, the Soviets, or Islamic extremists who bring America down, but Americans and American ideas.

LOPEZ: From an outsider’s perspective, are you saying, “Who do you Americans think you are”? Do you think we overestimate our importance in the world?

GUINNESS: I would caution against the tone of hubris that is so common in American rhetoric, especially after the collapse of the Soviet Union in 1989 — hubris being not only overweening pride but also the illusion of invulnerability. References to “American exceptionalism,” the “second American century,” and the like roll off the tongue easily and send patriotic shivers down the spines of American audiences. But when they are used as a litmus test of patriotism, they inoculate Americans against thinking seriously about the real health of the Republic and America’s true standing in the world in the global era.

LOPEZ: “Freedom must be guarded vigilantly against internal as well as external dangers,” you say. How can we do this?

GUINNESS: Awareness of domestic dangers was a characteristic emphasis of the Founders, and they learned it from their reading of classical writers, such as the Greek historian Polybius and the great Roman orator Cicero. Curiously, the Founders actually downplayed the danger of external enemies and emphasized the menace of internal enemies, such as Polybius’s notion of “the corruption of customs.” The present generation of Americans, on the other hand, has done the opposite, and so concentrated on external menaces (Homeland Security, and so on) that it has almost completely ignored internal dangers. In the long run, the internal dangers will prove the more important.

LOPEZ: How is freedom the greatest enemy of freedom?

GUINNESS: The rewards of freedom are always sweet, but its demands are stern, for at its heart is the paradox that the greatest enemy of freedom is freedom. There are several reasons for this, but the deepest concerns a simple moral fact: True freedom requires ordering, and the only ordering appropriate to freedom is self-restraint, yet self-restraint is precisely what freedom invariably undermines when it flourishes. So the most common way to lose freedom is to allow it to slide down into permissiveness and then license.

LOPEZ: What do mean when you say that freedom could prove to be “America’s idol”?

GUINNESS: By “idol,” I mean the Jewish and Christian understanding of the term as something of great human importance and value that is elevated into being a supreme ground of trust and then an object of devotion, when it should not be asked to bear that weight and it will always disappoint its devotees. Freedom is often idolized like that in the U.S., as if it were supreme, self-evident, and self-sustaining. I refuse to take part, for example, when Americans sing the hymn about freedom’s “holy light.” I have lived under totalitarian Communism, so I prize freedom as much as anyone and have long fought for freedom of conscience and speech. But freedom must be understood and guarded with great realism, and we must never forget its limits and its duties.

LOPEZ: What is “sustainable freedom”? It sounds as if it might have something to do with green jobs.

GUINNESS: “Sustainability” is a vogue term today. People talk about sustainable pretty well everything — sustainable development, sustainable capitalism, sustainable environments — but curiously no one talks about sustainable freedom. The American Founders, in contrast, knew that they faced three tasks in establishing this great Republic: winning freedom (the Revolution), ordering freedom (the Constitution), and sustaining freedom (or “perpetuating our institutions,” as they put it). Needless to say, the third task is ours today, but I have only ever heard one American (John Gardner), and not a single national American leader, address the need to renew freedom in every generation. That is amazing because the Founders’ view of how to sustain freedom is probably the most brilliant and audacious proposal the world has known, but at the very moment they most need it, modern Americans ignore it.

LOPEZ: What do you mean by the “golden triangle of freedom?”

GUINNESS: “The golden triangle of freedom” is my term for the means by which the Founders believed they could create a free society that could stay free forever — which, if you think about it, was and is an extraordinarily daring idea. Alexis de Tocqueville called it “the habits of the heart,” but the Founders themselves never gave it a name. It runs like this: Freedom requires virtue, virtue requires faith of some sort, and faith of any sort requires freedom — which in turn requires virtue, and so on ad infinitum. From orthodox and conservative Christians such as George Mason right across to deists and freethinkers such as Thomas Jefferson and Ben Franklin, there was virtual unanimity over this emphasis. But it nearly goes without saying that all three legs of the triangle are either contested or openly dismissed today. But if the Founders’ system is abandoned, what will go in its place? I have never heard anyone give a moment’s thought to that question.

LOPEZ: How is the problem of freedom the “problem of the heart”?

GUINNESS: From St. Augustine to Machiavelli to John Kenneth Galbraith, many commentators, despite their very different worldviews, have blamed the instability of free societies on the restlessness of the human heart. This is made worse today because of the way our consumer societies are deliberately fuelled through stoking restlessness. We have replaced the notion of the good life with our consumer ideal of the life with goods, and in the process we have plunged ourselves deeper and deeper into debt, and we cannot stop. Have you ever pondered the irony of the prevalence of addictions and recovery groups in the land of the free?

LOPEZ: How have Americans become their own worst enemies?

GUINNESS: There are many varieties of freedom in America today, but they share a common characteristic: In Isaiah Berlin’s terms, they are essentially positive and not negative. This means that Americans have both abandoned the Founders’ view of sustainable, negative freedom (the freedom not to be interfered with) and espoused notions of positive freedom (the “freedom” to have various guaranteed benefits) that are unsustainable in their essence. Thus it is only a matter of time before American freedom will undermine itself. If things go on as they are now, the time will come when, as the designer of the Titanic said, it will be a mathematical certainty that the ship will sink.

LOPEZ: How can we be better stewards of freedom? Why should we be?

 GUINNESS: In today’s climate of atomistic individualism, we rarely think of our ancestors and even less of our children’s children. (“What has posterity ever done for us?”) But like a precious family heirloom, freedom is not just ours to enjoy, but to treasure, protect, and pass on to future generations. The missing key to sustainable freedom is civic education and transmission. It used to be understood that in a free society, everyone is born free, but not everyone is capable of it. Citizens have to be educated for liberty, which was once called liberal or civic education. Yet this practice has disappeared all over the Western world, and certainly in American public education since the 1960s. Without civic education, freedom can never become a “habit of the heart.”

LOPEZ: You write: “Unless America succeeds in revaluing citizenship, in restoring civic education, and in revitalizing education that proves as powerful as the potency of mass entertainment and consumer advertising, the American unum will no longer be able to balance the American pluribus, and America’s freedom itself will continue to wither.” We can’t exactly do that before November 6, can we?

GUINNESS: No, restoring civic education and forming the habits of the heart will take at least a generation, and it will have to start with serious leadership that America so obviously now lacks. But unless such a restoration happens, the consequences will be severe, for E pluribus unum is not only America’s motto but also its greatest achievement and its greatest need. The American unum has been lost since the Sixties. If this continues, there will soon be no unifying American identity and vision to balance the pluribus, and the days of the Republic will be numbered.

LOPEZ: Does all this matter to Europe in a particular way?

GUINNESS: Your Founders called America the novus ordo seclorum, and historians termed the U.S. “the first new nation,” but the rest of the world went on its ancient way unimpressed. Today in the global era, however, almost all the world is experiencing the gale-force winds of modernity that the U.S. faced and answered — mostly with striking success — more than two centuries ago. Seen this way, never has America been more relevant to the world than now. Thus the European Union now talks of “unity out of diversity” instead of E pluribus unum. But at the very moment when the American model is more relevant than ever, America has lost its sense of identity and lost confidence in its own way. The brilliant settlement between religion and public life, for example, which James Madison called “the true remedy,” is being squandered through the now-50 years of fruitless culture wars. Yet who dares say “a plague on both your houses” and then find a way forward in the interest of all Americans? No one, to my knowledge.

LOPEZ: Could today’s time of testing be as decisive as the Civil War?

GUINNESS: The crisis of freedom touches the very heart of America, and as it is deepened and intensified by the many movements coming out of the 1960s, it will prove more decisive for America than the depression years of the 1930s, and it may even rival the Civil War era for the decisive stamp it puts on America.

LOPEZ: “No self-respecting American will ever be opposed to freedom any more than to love” — you have hit on the problem there, haven’t you? Who is going to believe that the Obama administration is truly eroding religious freedom? Who will believe that the president doesn’t value it as we have in the past? He must obviously value it on some level, by definition.

GUINNESS: The Obama administration has been talking, but not walking its own talk. If you listen to the president’s remarks on religious freedom, and even more to the powerful speech by Secretary of State Hillary Clinton, you would hear statements worthy of Roger Williams and James Madison. But their health-care mandates tell a different story. Kowtowing to the LGBT agenda, this administration stands in shame as perhaps the greatest official violator of freedom of thought, conscience, religion, and belief in American history.

LOPEZ: If Americans would immediately appreciate only one thing about our freedom, what would you hope it would be?

GUINNESS: I would hope that Americans would thank God for their freedom and celebrate the achievements of their great pioneers of freedom — with an equally frank admission of the egregious blind spots and shortcomings. But at the same time, they need to reexamine the subtle challenges of freedom, and in particular face up to the tough requirements of what it takes to sustain freedom. The American Founders got slavery and the place of women badly wrong from the start. But the world has never seen a more brilliant and daring answer to the instability and transience of freedom than theirs. The question today is whether, as their heirs, you are worthy of that gift and are able to keep it going. I hope and pray you are and will.

— Kathryn Jean Lopez is editor-at-large of National Review Online.

 

Something to think about from the descendent of a great beer-man.  You might know my thinking on this… this can only be solved by fixing this country’s K-12 public education system.  Until that is done, all is for naught.  www.EndtheEducationPlantation.org

 Still accepting checks and money orders ;-)  And we do NEED the money.  How’s that for blatant pan-handling?

 

 

 

A Political Rant

For this post we are going to take a brief detour from the beer and beverage worlds to enter that most daunting of all arenas… politics.  I realize in polite company this is one of the few topics which should be avoided at all costs… and I probably should heed that advice.  But sometimes you need to scream I’m mad as hell and I’m not going to take it anymore… so damn the torpedoes and full speed ahead.  If it costs me a client or two, so be it.

 

And please don’t think I’m cheerleading for either major political party… they both have more than enough faults.  Both political parties use raw partisanship to play us as saps… to blind us to what is really happening.

 

What has brought this rant to a head?  Well last week was the annual NBWA Legislative Conference in DC, our annual suck-up to lesser men and women who have far too much power over all of us.  This is not a knock on Craig and NBWA, I think they do a pretty dang good job and sadly, ANY industry in this country had better be in DC (and every state capital)… if you are not you are a fool.  That’s just the way it is today.  In a regulated industry like ours, the imperative is even greater.

 

But I also spoke to MANY distributors who had to bite their tongues and not tell their esteemed Representatives and Senators how they really felt about what is going on in DC right now… DC currently being the most dangerous place in the world for the well being of the entire planet.  Once again, not a knock on Craig, the purpose of these visits are to accomplish the industry’s goals and Lobbying 101 says stay on target and only on target… but it sure is tough.

 

The entire episode has me disheartened and distressed... and yes, mad as hell.  The weather was beautiful so I walked about and visited many of the awe inspiring memorials.  The words of Lincoln, Jefferson, and Kennedy echoed in my mind.  The horrors of the Holocaust museum brought more than a few tears to my eyes.  The honor, courage, and sacrifice of those represented at Arlington, the Vietnam Wall, Korea, WWI and II memorials brought even more tears… and a questioning of my own worth and gratitude for these others.  That these individuals gave their all for this country, in most cases for the freedom of others shook me to my core.  It is one thing to fight for your own freedom; it is a damned sight different thing to fight and die for another’s freedom. 

 

Yet today we hear from many elected representatives that we must change the very foundation of this country… that we voted for “change” and the old rules don’t apply.  I have yet to understand how going from having 95% of the country employed to having 91.5% of the country employed (the national rate as of 04/03/09), a difference of 3.5%!!, is cause for a remaking of the very fabric of our society.  That we can spend our way to prosperity.  Churchill famously said

 

I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.

Seems fairly obvious to me.  Has any society ever taxed its way to prosperity?  Or regulated its way to prosperity?  Or borrowed its way to prosperity?  If it were possible would there ever be a country which wasn’t prosperous?  Look around.  Look at history.  Is this the case?  Why doesn’t government just send us all a check for a million dollars and then we’d all be rich?  There are realities we confront, whether we like it or not.  Just as science is a constant search for the truth, the focus of our political system should also be the search for the truth, not raw political power.  But politics and government today operate with a truth be damned-type of mindset.  Our very lives are put at risk by this arrogance.  The entire planet is put at risk by this arrogance. If you spend the time and effort you will find that every economic problem we are currently facing has government’s fingerprints all over it.  Let us never forget Tolstoy’s statement:

 

Government is an association of men who do violence to the rest of us.

 

Or that font of wisdom, P.J. O’Rourke...

 

Giving money and power to government is like giving whiskey and car keys to teenage boys

 

The old Soviet Union failed because its economic system failed.  It simply didn’t work because it contradicted reality… and reality is a pesky little thing which bends for no person… regardless of how much one might hope and dream.  China is successful because it has embraced free (er) markets.  Some have suggested that the US is heading towards European-style socialism (with some looking forward to it and some dreading it).  Both miss the mark.  Without the US being the US, European socialism isn’t possible in Europe, let alone the US!

 

Let us take a little stroll down memory lane.  At the end of World War II, the US had a tremendous transfer of wealth to Western Europe.  They have used this to luxury to build social systems which are forecast to be unsustainable in only a number of years… from handouts of hundreds of millions of dollars to unsustainable social welfare in a little over 60 years!  They have allowed this social system to become a wealth consuming beast… Western Europe doesn’t even have money (or desire) to even defend themselves!  They basically have given up having any type of effective military, instead being happy to hide under the protective cover of our military might.  Defense of the country is one of the primary reasons to even have a federal government.  Instead they fund an unsustainable social system as they race towards the abyss.

 

In the 1970’s began another huge transfer of wealth to the oil producing nations, generally in the Middle East.  A lot of these dollars were recycled back to Europe, thus helping them sustain their socialist life style.  Around the same time the Detroit automakers (and the wonderful UAW) were in the process of committing industrial suicide by their construction of some of the worst cars ever produced in this country (along with completely unsustainable union contracts).  Thus began another tremendous transfer of wealth to Japan and later to the Asian Tigers.  At least these countries used this wealth transfer to create successful, modern, and wealthy economies.  And again, a lot of this wealth was recycled back to Europe.  And this oil related transfer continues to this day… again feeding the European social disaster.

 

Take the US economy out of this equation and NONE of this is possible.  If we become European socialists, the whole world-wide equation changes… and not for the better anywhere on the freaking planet.  You probably often hear about how the US consumes a great deal of the world’s energy… what you don’t hear is how much of the world’s wealth is created here.  Medicine, technology… things that make the entire world a better, wealthier, healthier, and more peaceful place. 

 

That’s a fact, Jack.  And what of this thing we call government?  We seem to forget that words matter.  Our emotions, our opinions, our very integration with the world around us are all influenced by words.  But words are just that, words.  No matter how much one might hope, they have no influence on the real physical world.  Yet we often use words as though they represent real, physical things.  Government is such a word.  Both political parties habitually speak of government doing this or that… often in almost mystical terms; much like God intervening in our puny little lives and magically transforming reality.  Government will do this, government will solve that.  But this thing we call government is an abstraction. 

 

In this fashion it is just like a corporation, an artificial entity created by other words.  Lord Haldane’s classic quote regarding corporations says it all:

 

"My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation."

 

This also defines the government.  This is not a moral statement but rather a physical fact. Governments don’t do anything since they don’t exist… the people who are either elected or work for governments do these things.  Again a fact.  These people are held to the same natural laws which exist for the rest of us—and they have no higher wisdom or moral authority.  In fact you could make a strong case that far too many of them are moral and intellectual inferiors.  William F. Buckley noted…

 

I'd rather entrust the government of the United States to the first 2,000 people listed in the Boston telephone directory than to the faculty of Harvard University.

 

Well I know beer distributors and I’d rather entrust the government of the United States to ANY 2,000 owners or employees than to the present band of clowns we both elect and hire to operate the government of this great nation.  The next time you read about how government is going to do this or that, replace the word with any company name, like Microsoft and see if you think it still makes sense.

 

This is not to imply that governments or corporations are static, passive things.  Far from it.  Although they are artificial entities, once created they behave much like a living entity.  They seek to sustain themselves, to protect themselves, and to grow.  A for-profit corporation’s existence is limited by profit… how effectively they can convince individuals to freely part with their money.  Government knows no such bounds. 

 

Many years ago, H.L. Mencken noted the reality of government (and sadly our current situation… especially the last quote)…

 

“The government consists of a gang of men exactly like you and me. They have, taking one with another, no special talent for the business of government; they have only a talent for getting and holding office. Their principal device to that end is to search out groups who pant and pine for something they can't get and to promise to give it to them. Nine times out of ten that promise is worth nothing. The tenth time is made good by looting A to satisfy B. In other words, government is a broker in pillage, and every election is sort of an advance auction sale of stolen goods”

 

The legislature, like the executive, has ceased to be even the creature of the people: it is the creature of pressure groups, and most of them, it must be manifest, are of dubious wisdom and even more dubious honesty. Laws are no longer made by a rational process of public discussion; they are made by a process of blackmail and intimidation, and they are executed in the same manner. The typical lawmaker of today is a man wholly devoid of principle—a mere counter in a grotesque and knavish game…. If the right pressure could be applied to him he would be cheerfully in favor of chiropractic, astrology or cannibalism.”

 

"The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

 

Unfortunately for us all, our governments and political processes operate as though they are immune from any reality other than pure political power and the proper spin of the masses.  Today we hear how government is going to stimulate the economy.  So this abstraction called government is going to stimulate (whatever that means) another abstraction called the economy.  The economy is the sum of literally billions and billions of individual decisions and transactions made each and every day.  How do a handful of government employees plan to “stimulate” these transactions?  How do they know better than the individuals voluntarily making the transactions?  Hayek called this “The Fatal Conceit”.  It seems government can either:

·                    Take money from someone and give it to someone else, or

·                    Borrow money and give it to someone, or

·                    Print more money and give it to someone

 

I fail to understand how any of these will “stimulate” these billions of transactions which make up the economy.  

 

We seem to be in the process of voluntarily giving away the freedoms (and the wealth and prosperity these freedoms allow to be created) that our forefathers gave their very lives to create and defend.  Will future generations curse us for the damage we did?  Will they wonder how we could so casually abandon the freedoms that exist no where else on the entire planet?  Is our generation going to be the one which proves the following quote…

 

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

·         From bondage to spiritual faith;

·         From spiritual faith to great courage;

·         From courage to liberty;

·         From liberty to abundance;

·         From abundance to complacency;

·         From complacency to apathy;

·         From apathy to dependence;

·         From dependence back into bondage


Is our time up?  Our going back to bondage will leave the world aflame.  May God have mercy on our souls is we allow this to pass.  Perhaps some late night, when all the tourists have abandoned the memorials, our political “leaders” of all stripes should sneak down and have a quiet talk with John and Abe and Thomas.  Read what they said… what they did.  Perhaps they should run their hands over the names on the Wall.  Perhaps they should weep at Arlington.  The words are right there:

“Let every nation know, whether it wishes us well or ill, that we shall pay any price - bear any burden - meet any hardship - support any friend - oppose any foe to assure the survival and the success of liberty”


“In the long history of the world, only a few generations have been granted the role of defending freedom.  In the hour of maximum danger I do not shrink from this responsibility, I welcome it”


“… It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us--that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain…”

 

“We hold these truths to be self-evident that all men are created equal, that they are endowed by their Creator with certain inalienable rights, among these are life, liberty, and the pursuit of happiness, that to secure these rights governments are instituted among men. We...solemnly publish and declare, that these colonies are and of right ought to be free and independent states...And for the support of this declaration, with a firm reliance on the protection of divine providence, we mutually pledge our lives, our fortunes, and our sacred honor.” 

 

Re-read that last quote.   The individuals who formed this country really did risk those things.  But today, do our political “leaders”, who swear a sacred oath to this country – not to this or that political party – actually believe those words?  Or have those words simply become a suckers game?  Where the creation of and fight for political power is all that matters?  Where sacred honor is laughed at?  Where fortunes aren’t to be risked but rather to be made?  And where only those who believe such outdated sentiments put their lives and honor on the line?  Disheartening indeed.

 

For those who take the path of handing over their very lives to the lesser men and women whose only claim to greatness is their ability to get elected, I leave you with the words of a famous American patriot (and home brewer!) who did put his life, fortune, and sacred honor on the line, Samuel Adams…

If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsel of arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen


I for one will lick no hands.  I will not live in servitude.  I will never forget or forgive those who casually attempt to take my God-given rights away.  Nor should you.

 

Beer and Beer Wholesaling

Rather than just throw stones, here is my argument for both - and I’m not even a beer wholesaler – just a black-hearted, mercenary management consultant ;-)


A quote from the prohibition days….

Tell us Senator, what is your opinion of alcohol?  Well, if by alcohol you mean that hearty spirit which brings laughter and livelihood to social gatherings, which lubricates the gears of business transactions, which makes life’s hardships easier to bear, then I say hurrah for it and I support its legal sales and consumption.  However, if by alcohol you mean that evil essence which robs the family budget, which is a toxin to the body and mind, which causes men to assault one another and fail in their professions, then I say fie on it, and I will work with all my power to prevent its sale and consumption.


This industry has made a mistake by focusing on the last part of this quote rather than the first.  We sell and distribute enjoyment, a minor pleasure of life.  If we are going to win the long-term battle we need to start it on the emotional side.  The sad reality is that many (most?) Americans respond to their emotions rather than facts and logic.  We need to accept this and take charge of the emotional message. 


Beer is a wonderful product.  So are wine and spirits.  We don’t need to have any apology following that with  “…but of course it can be abused or use in moderation”.  Do you say that when you state your grandma’s cookies are good?  Yeah and if you eat 20 lbs of them per day you’ll get very fat and most definitely damage your health. Does this need to be said?


We don’t need to apologize and there is nothing to apologize for.  But over the past 30 or so years we have let our enemies define the argument.  A handful of single issue zealots have almost completely controlled the emotional message and they have done a very good job of it.  Now much of this thinking is ingrained in the general media’s and general population’s mind – see Phil’s comments on our “dangerous and addictive” product.  Even those on our side use these terms.


But truth is on our side.  We sell light-hearted enjoyment, we sell fun.  When my 72 year old mother enjoys a couple of glasses of wine or a gin and tonic she does not turn into a dangerous raving lunatic and she does not need to be controlled.  When my 80 year old father drinks a few cold beers or a couple scotch and waters, neither does he.  They have nothing to apologize for.  And we need to start saying it loud and clear.


Our enemies talk about how bad our products are and I think they have some of us brainwashed too.  Lots of products can be misused.  Almost every product or activity can be destructive if done to excess (even sex! – or so I’m told).  Everything can be abused – we don’t need to keep apologizing and restating that our product can be abused (of course in advertisements this may be necessary since all business actions must be viewed with a fear of tort lawyers and their lawsuits anymore, or so it seems – but that’s a rant for another day).


Go back to the quote I started with; sex, chocolate, exercise, everything could be framed in the same manner.

Ultimately our argument is about freedom.  Do people have the freedom to choose?  Do they have the common sense (and right) to make these choices for themselves?  Or do a handful of individuals (both unelected and elected) reserve for themselves the power to determine our rights… our choices… our freedoms? 


If we continue to let our enemies define the argument we will continue to go backwards, we will continue to see attacks and losses – we will continue to see falsehoods become ingrained in everyday thinking – we will continue to see brainwashing that defies logic, but is real just the same.

A handful of single issue emotional zealots are driving this discussion and long-term, if we want to win we had better start to take control of the battle – pointing out the hypocrisy, pointing out the illogic.

This is not just something for beer wholesalers to do. Brewers, wine, spirits, retailers – all need to join in this battle.  And yes this requires the wine and liquor folks to stop pushing for equivalency – it is the most divisive issue the industry confronts.  The competitive landscape has already adjusted to the present tax situation – which in most cases has been in effect since prohibition.  To change it now, to be “fair”, is only an attempt to enact a short-term pricing gain on their products versus beer.  The market is where the market is – this is not an attempt to build the market, the wine and spirits folks are simply attempting to attack a market member.  And to then think you are going to get cooperation from the group you are attacking is simply stupid.  It forces beer people to respond.  The wine and liquor people need to think about this.  What is more important?  Defending the entire industry against an assault which is well under way – and the other side is winning! – or attempting to change a 73 year old tax policy as an assault on an industry member.  If one of us goes down, we all go down.  We truly are in the same boat – if it sinks we all drown, it doesn’t matter who is drilling holes in the boat or who’s bailing – if the boat sinks we go down.  This silliness should stop. 

Now if this law had been passed in the last couple of years, one could make the argument that it was wrong and needed to be changed, disrupted the market etc.  But that is not the case.  This is just a frontal assault on the beer industry – and how do they think Congress would respond if their argument won the day?  Will their tax rate be lowered or beer’s raised?  Of course beer’s would be raised substantially.  And then you want to be friends?  Please.  It is divisive and it needs to end.  The wine and spirits people have to give up on this one since they’re the only ones bringing it up.  And at the same time the beer people don’t need to be pushing the message that a drink is not a drink – although as any drinker knows from experience – drinking beer is different than drinking shots.  It simply is.  But is this the message we want to spend our time and energy on?  There is only so much “message space” we will get.  This is the message that we and our industry partners want to waste resources on?  All while our real enemies are laughing all the way to the bank?  Beer, wine and spirits people need to fight, but fight for consumers, for retailers, not fight with each other through the powers of Congress and state legislatures.


And how about those various rules and regulations that apply to beer and alcohol products?  Wholesalers don’t need to apologize for anything – either in the generation of these laws or seeking to maintain them.  A great deal of what happens in Congress and state legislatures around the country is this or that group either trying to get something out of government, or using government to help them and hurt their competitors.  We are unique in that often when we go to DC we just ask to be left alone.


Right now banks and credit unions are rushing to the bulwarks to stop Wal-Mart from entering the banking business.  Does anyone really think this is some altruistic call to arms to help protect the poor consumer? 


Milk, much more important to families and kids than beer, “is marketed and sold under a highly complex system of federal and state rules and regulations. These programs were created in the early 1930s when milk prices fell in half as a result on the Great Depression. It was believed that only government intervention could settle the milk strikes and confusion that ensued. Congress intervened and created programs aimed to enhance milk prices by setting minimum prices and temporarily suspending competition.”  All milk prices around the country are set by a crazed set of rules depending on how far you are located from Eau Claire, WI ! This costs the average family many dollars a year, yet it is still in place – and vigorously defended.


Or how about agriculture subsidies?  The Heritage Foundation notes that “farm subsidies are America’s largest and most expensive corporate welfare program.”  And the VAST majority goes to corporate farming operations, not the family farmer.  These subsidies cost the average family hundreds of dollars a year, yet they are still in place.  Does the 3-tier system cost families hundreds of dollars a year?  Not remotely. 


No, the problem is not in defending this or that law or regulation.  If I were in your shoes I’d defend them too.  The problem comes about when in the defense of this or that law, our very industry sides with our enemies!  I won’t get into the wisdom of the respective laws, but when in defense of distribution or pricing laws we actually attack our very industry something is wrong.  Damaging the entire beverage alcohol industry as part of a legal defense to support sometimes questionable laws and regulations is short-sighted and does permanent and long-term damage.  This I cannot sit back and silently observe.  Change is the law of life – wholesalers are not immune.  Fight like heck to keep these laws but don’t throw out the baby with the bath water.  Some you will lose, so lick your wounds, adapt your business and move on.  But keep the industry alive and vibrant – not huddled behind a wall waiting for our next loss – fighting with ourselves while our enemies control the message.


Yell out to all that will hear, working for a beer distributor (or a brewer) is one of the best jobs you can have.  A typical sales rep makes anywhere from $35K - $65K, a driver can make $30K to $60K – and they earn every penny. ALL employees are well paid, generally with great benefits. And Costco pays $9/hour with no benefits?!  Costco wants a short-term price advantage over their competitors, nothing more, nothing less.  Wholesalers are one of the strongest and most loyal employers in any community.  I’ll put a beer wholesaler up against ANY employer – and I have worked in every industry imaginable.  No one provides the service levels of a beer wholesaler.  How many beers are consumed in this country each and every day?  And how many of them are “bad” or out of date? Most consumers have NEVER had a bad beer! Wholesalers do an incredible job – let’s tell people.


And let’s talk about kids drinking beer or any alcoholic product.  NO ONE wants their business.  Even the most morally deficient business person wouldn’t want their business.  Why?  Because it doesn’t make business sense.  Marketing and advertising dollars are precious commodities, why waste them on people who 1) can’t legally purchase your product  2) don’t have the disposal income to make the effort worthwhile.  There are much better places to spend your limited sales and marketing efforts.  This is a disingenuous argument that has never stood up to any type of rational analysis.

Let’s take a real look at highway deaths and the issue of alcohol.  As most of us already know, the 40% - 50% figure is an illusion.  Generally most state the true number is around 25%, but some make a good case the real number is closer to 12 – 14%.  Drunk driving deaths are a terrible, terrible thing.  You know what?  ANY accidental death on our highways is a terrible thing.  For the deceased, for those family members and loved ones, whether alcohol was involved does not matter.  The death or injury is what matters.  Although the media acts as though alcohol is the only thing that matters.  And many in the general public swallow this hook line and sinker.

That’s the first thing if there is a fatal accident, was there alcohol involved?  No, then fine and no story.  If there is alcohol involved it is a huge deal.  Not to be crass, but the people are just as dead.  What about the 75%+ of the fatalities that ARE NOT caused by drunk drivers?  What do we hear about those?  Are these deaths somehow acceptable?   Where are the cries for doing something?

I’m certain each of you have seen it too but about a year ago there was a terrible accident here in Colorado.  Four sixteen year olds RAN a stop sign and were broadsided.  All died. Terrible collision, terrible tragedy.  A rather big deal for a media whose moral motto is “it if bleeds, it leads”.  Of course evil alcohol was suspected.  When it was discovered that there was none involved the story died almost instantly.  But gee, they ignored the FACT that drug paraphernalia littered the car.  This was treated as almost a throw-away fact.  The kids were stoned to the gills but that didn’t get anyone excited.  No new calls for stricter laws.  No calls for more roadside checkpoints.  No knee jerk reaction, in fact no reaction of any sort.  Nope, just a sigh of relief that evil alcohol wasn’t involved and the story ended.  We all know how the story would have proceeded if an empty 6 pack was found in the wreckage.

A while before that two 20 somethings were doing 95 mph in a 45 mph zone at night.  But their lane is closed due to construction – car careens through the barricades and goes airborne, flips in the air and both die.  The driver’s blood alcohol level was .0015%  Yes that’s right, not .015% but .0015%.  What is this?  Perhaps one beer, maybe an orange juice?  Yet the media portrayed it as a drunk driver death and the regular characters jumped in with calls for stricter DUI enforcement, more road side sobriety check points, etc.  Guess what?  Having one beer (or quite a few for that matter) does not make you into a crazed loon.  This driver was simply an idiot who made what for him was a fatal mistake.  I don’t celebrate his death but it had nothing to do with alcohol.


And a comment on road side sobriety check points – I won’t bother getting on my conservative/libertarian soapbox about how the whole concept of check points goes against the ideals this country was founded on.  They are simply a lousy way to catch drunken drivers.  Most police forces have stopped publishing the number of vehicles stopped and alcohol arrests made since the number of arrests is generally below .5% of the vehicles checked!  And very, very few of even those are drunk, but rather have simply been drinking and are not intoxicated.  But police forces have discovered they are great ways to raise money.   They ticket lots of people, and arrest a few – just not for drunk driving, all while filling their coffers.  This is now the dirty little secret of road side check points.


I say the following somewhat with tongue in cheek, but if the goal is to save people’s lives let’s do something about caffeine related accidents.  Let’s test after the accident.  Were you driving while wired?  Anyone who drinks caffeinated products has over-consumed – we’re talking about almost a 100% “abuse” rate!  We all know the symptoms and they are VERY real.  Yet I don’t hear, nor do I believe there should be, calls for stricter regulations of caffeinated products.


What percentage of road rage incidents are caffeine driven?  What percentage of all accidents are caffeine fueled?  I don’t know about deaths but I’ll bet everything I own that there are many, many more accidents that are “caused” by caffeine than alcohol.  Please notice also that I put caused in parenthesis – pointing out how language has been distorted to change its very meaning.  Caffeine of course doesn’t cause accidents – people making mistakes, people not paying attention, this is what causes accidents – individuals.  Guess what, the same is true for alcohol.  It does not cause accidents – individuals do.  Following too closely, speeding, driving aggressively, driving recklessly, not taking time to look clearly – how many people do these things because they are wired on caffeine?


Or how about alcohol versus drugs?  No one wants teenagers drinking beer or doing drugs.  But let’s get real.  One is profoundly different (and more destructive than the other).  You have to be pretty hard core to go slam a six pack before school in the morning – not so with weed and many other illicit drugs.  You have to be pretty hard core to pound a couple forties over lunch break – not so with weed.  You have to be pretty hard core to be drinking from the time you get up until the time you go to bed – not so with weed.  In fact marijuana lends itself to just the type of teen and pre-teen abuse that is the most damaging to the child.  Sneaking a beer or two on a Saturday night does not do the same damage as becoming a regular dope smoker – smoking dope is so much more insidious since you can (and perhaps will) do it almost anytime – not so with ANY alcohol product.


I grew up in Colorado and back in the days of sanity, had an 18 year old drinking age for 3.2 beer.  At 21 you were legal for “real” beer, wine, and spirits.  I met a few kids from California in the 3.2 beer joints and they all said the same thing – they wished CA had the same sense.  Instead they had a 21 year old drinking age and until then, almost everyone smoked dope – it was sooooooooo much easier to get than a 12 pack of beer.  This was and is insane.  Sure we’d rather kids do neither but if they are going to be stupid, at least minimize the damage their stupidity can do.  And yes, I freely admit to being stupid as a kid – I think that is one of the definitions of being a kid and growing up.  I’m still not beyond being stupid but that’s another story.


Yet we quietly watch the world where restrictions on alcohol are becoming stricter, driven by a handful of single interest zealots, while marijuana becomes more legal each and every day.  Is something wrong with this picture? Although many wholesalers may disagree with my following point, as a matter of honesty I must admit that I favor some sort of legalization of illegal drugs.  Prohibition simply doesn’t work and the damage done by the drug wars far exceeds that done by letting folks simply live their lives – but also forcing them to live with the consequences of their actions.  People’s lives are their own – they can do with them what they will and live with the consequences of their actions. 


And guess what; almost all illicit drugs are already “semi-legal”.  ANY young adult, ANY college student, ANY high school student, and sadly many junior high students have these drugs readily available.  It is personal choices, not limited availability which stops them from using.  If they want them they can find them and without too much difficulty.  Almost any adult who wants drugs can find them with only a modest amount of effort.  Hell the media and the police regularly tell us where these “open air drug markets” are.  I travel around the country and if desired, anyone could fly into any medium to large city and purchase drugs within an hour or so.  So how freaking illegal can they be?


And as my last point on this long rant, not that I expect a huge push to change the laws but I have to point out the insanity of the national 21 drinking age.  Ignoring for a minute the quaint idea that the words in the US Constitution actually mean what they say – in which case the powers of the federal government are enumerated – they are clearly stated – with all other power reserved for the states or the people, and of course the 21st amendment… it is insane that the men and women of our armed services, individuals who put their lives on the line each and every day for OUR freedoms, individuals who leave their blood on the battle field for US, individuals who are responsible for operating multi-million dollar machines, individuals who operate and control equipment of enormous destructive capacity, individuals who are responsible for the very lives of their fellow soldiers and civilians, individuals with this amount of responsibility are not responsible enough to drink a cold beer!  Bullshit!


In states around the country, a 16 year old girl can legally have an abortion without her parents consent, yet she is still 5 years away from being able to legally enjoy a beer.  Is there something wrong with this picture?  Let us take back the message and shout it out loud – the truth IS on our side and we have nothing to apologize for.


John Conlin, President of Conlin Beverage Consulting has been providing operational and financial management consulting services to the beer and beverage distribution industries since 1986.

Have some out there lost their minds?

Have some out there lost their minds?  Across the country, state associations and individual wholesalers are working feverously to defend and strengthen the 3 tier system.  I’ve no problem with that – in fact I support the general goal.  But some of the methods and arguments being used by people on our side are short-sighted to say the least.

In the April 2nd Seattle Times, the executive director of the Washington State Beer and Wine Association penned an op-ed entitled “The Best in Moderation” http://seattletimes.nwsource.com/html/opinion/2002903035_satrdr01.html . 

To quote from the first paragraph “Unlike other products we buy in the store, such as potato chips or bran flakes, alcohol is a dangerous and addictive substance, responsible for the destruction of lives due to drunken driving and alcoholism.  And he’s on our side?!

If you don’t think a tort lawyer will sometime in the future being using this quote then you are practicing self-delusion.  Has anyone been paying attention to what has happened to the tobacco industry over the past 30 years?  The class-action lawsuit is just around the corner and we are putting wood on the fire.

What damage are we doing to the entire beer industry (and for that matter wine and spirits) in these attempts to fight changes in distribution?  We are walking the exact same path as the tobacco folks - seeking compromise from our neo-prohibitionist opponents who have no desire for any type of compromise - cowering from an honest discussion about individual freedom and liberty, and the folly of prohibitionist thinking.  Talking about our products much the same as our enemies!  I know the old saying about politics creating strange bedfellows but when we are on the same side as neo-prohibitionists, one of us is WRONG – and in this case it is far too many on our side.  To have state associations talking about how dangerous and additive our products are, how higher prices are a positive thing, how even greater and more restrictive rules and regulations are necessary to protect “the children”.  This is not just a Washington state issue, this insanity is occurring throughout the country.

If I were a politician, after listening to these arguments I would never, ever listen to you again about why I shouldn’t vote to increase excise taxes – perhaps substantially since higher prices are so “good” for all.  And at the same time we’re supposed to go the Washington DC in early May and lobby for the repeal of the 1991 federal excise tax increase?!  Please help me with this logic.  In fact if I were a politician I’m not certain I would listen to much of anything the beer wholesaling industry said.  It seems we will take almost any position in defense of ourselves.

I’m just a management consultant who has worked with beer wholesalers for the past 20 years and for my business’s sake I should probably just keep my mouth shut – but I can’t be silent on the sideline when I witness this insanity.  I’m a strong supporter of the 3 tier system, beer wholesalers, and beer, wine and spirits in general but some of these actions are not thought through.  Change is the law of life.  Wholesalers are not immune.  But in the spectacle that is playing out before us, the attempted cure is probably much more harmful than the disease itself. 

John Conlin, President of Conlin Beverage Consulting has been providing operational and financial management consulting services to the beer and beverage distribution industries since 1986.