Week of January 28, 2002
[Note: Some now-dead links have been removed from archived items.]

CREDIBLE THREAT: MoreThanZero offers a useful analysis of why Bush's saber-rattling makes strategic sense when you consider its dynamic effects.

While Bush's speech made us all a little nervous, it was intended to make terrorist sponsors nervous. The jangling of European nerves was a side effect. This was a forceful speech intended to show terrorist regimes and dictators that:

a) we won't necessarily be restrained by a need to please Europe or other parts of the world, and

b) we won't be restrained by waiting for an open act of aggression on your part.

The point was to increase our threat power. It would not have been effective if it weren't as jarring as it was. A credible threat can save lives, avoid conflict and increase bargaining power, however unattractive and realpolitik it may seem. A threat can actually eliminate the need for action rather than make it necessary.

This is not exactly a new lesson—it was behind much Cold War strategy—but it bears repeating. [Posted 2/3.]

CONTROL FREAKS VS. APPLES: Other bloggers have already picked it up, but John Tierney's examination of "anarchist" views on free trade in apples is a must read. It's amazing how often opponents of international trade voice a hatred for fresh produce.

The stasist vision of an autarkic economy is a theme of chapter one of The Future and Its Enemies. Even a relatively mainstream guy like Adam Werbach, the former president of the Sierra Club, can get away with arguing that "We should demand that the Safeway in Idaho carry only native potatoes." He also hates Wal-Mart. (See "Willful Ignorance" below for the importance of Wal-Mart.) [Posted 2/3.]

CONTROL FREAKS II: Lionel Jospin, prime minister of the world capital of technocracy, calls for the United Nations to establish what awkwardly translates as "mastered globalization." Just another reminder that "regulation" is a warm fuzzy word in the land of Cardinal Richelieu. [Posted 2/3.]

FAKE DRUGS, CONT'D: The Dallas police department's fake drugs scandal continues to grow, as does the number of cases the district attorney's office is working to dismiss—now at 74, involving 47 defendants. According to this Dallas Morning News report, "Prosecutors tossed out two felony drug-delivery cases Thursday against two people after laboratory tests showed that the seized substances—which field-tested positive as methamphetamine—contained no illicit drugs." Just a reminder that not all police are heroes. [Posted 2/3.]

RUDE NOTE: While I'm picking on the Dallas police, or at least a few of their number, it's worth putting the NYPD and NYFD's September 11 heroism in context. Decisive action in the face of an emergency that threatens your city and your own life requires both good leadership and personal courage. It doesn't come with the uniform.

In 1992, my city was not so lucky. The police and fire departments let Los Angeles burn for three terrifying nights, leaving defense of the city to armed civilians, until the governor sent in the National Guard. Nobody outside L.A. even remembers the riots—certainly nobody outside L.A. remembers that arsonists drove off fire fighters with gunfire—but nobody who was there will forget. The best account of the Rodney King case and its destructive aftermath is Lou Cannon's Official Negligence. [Posted 2/3.]

BOOK UPDATE: If you've ordered an autographed copy of The Future and Its Enemies via PayPal (see link at left), the book is on its way. If you prefer to pay by check, please email me for the address. In all cases, please be sure to note to whom (if anyone) you want the book inscribed. I have about 30 more copies available at this discounted price. Thanks for all your orders! I've certainly learned a thing or two about the wonders of running a shipping business. At least I can pay the sales taxes online. And the employees at the Oak Lawn post office are very nice, as long as you're comfortable with your speed expectations set at "Southern." [Posted 2/3.]

BAD TEACHERS: Today's Dallas Morning News features a remarkable story titled "Bad teachers get push toward door." It's remarkable first of all for admitting what everyone knows but journalists rarely say in print: There are bad teachers in every school, the system protects their jobs, and getting rid of them would improve education.

The other remarkable aspect of Scott Parks's piece is that it draws a direct connection between accountability—measured by test results—and principals' willingness (or eagerness) to do something about bad teachers. Writes Parks:

School principals can recite the bloodless bureaucratic procedures and paperwork for evaluating, disciplining and firing bad teachers.

In candid moments, they also can share stories about the practical methods they use to get rid of bad teachers. You won't find these stories in a college textbook.

"It may not be nice, but it'll be legal," said Robert Ward, principal of Madison High School in Dallas.

Some principals use ostracism. Others put out-of-favor teachers on hallway duty or make them serve on marginal committees that meet after school. Others take away a teacher's permanent classroom.

Principals have never felt more pressure to increase student test scores, and everyone knows that the single biggest factor is teacher quality.

The vast majority of their teachers are hard-working, committed and competent, principals say. But an unknown number stifle learning. The extreme measures are saved for them.

"Sometimes you just have to humiliate them out the door," said one principal, who asked not to be associated with that comment.

Naturally, union representatives sound as though the only problems are personal or political clashes between principals and teachers. While such problems undoubtedly exist, and there are plenty of bad principals, schools can't improve if they're not allowed to replace poor teachers with better ones. [Posted 2/3.]

SAME AMERICA: In response to the State of the Union address, Chuck Freund argues that September 11 did not fundamentally change America. It merely revealed the America that already existed: "American strength emerges from the system Americans had built before the attack, a system they understood as the basis of their commonality of values, their prosperity, and their opportunity. It is precisely in defense of the existing system and its values that Americans have exerted themselves when under threat, and not because of any transmogrification." As usual, Chuck is right. The myth that "everything has changed" is perpetrated by those who either don't understand or don't appreciate the country's strengths. [Posted 2/3.]

WILLFUL IGNORANCE: Speaking of those who don't understand or appreciate the country's strengths, David Brooks—the hardest working man in punditry—comes to mind. He's made himself famous and popular through hard work, humorous writing, a Veblenesque contempt for his fellow Americans, and a willful ignorance of the business world he insists on writing about. His latest display of ignorance and faux populist snobbery is this article on the demise of Kmart.

"Kmart is about the rise and triumph of theming," writes Brooks. "Stores can't just sell things any more, they have to have a theme. This is not news at the upper end, but it is relatively novel among discount stores. Kmart's rivals have themes, or personalities."

Wrong. Kmart is about the rise and triumph of strategy and operations. Theming may complement strategy and operations, but it is no substitute for them. Wal-Mart, arguably the biggest story in American business over the past two decades, did not succeed because it has down-home charm. It succeeded because it developed amazingly efficient logistical systems and squeezed suppliers for every penny. Along the way to bringing national brands at low, low prices to rural America, Wal-Mart revolutionized retailing.

McKinsey & Co. estimates that a quarter of the increase in national productivity from 1995 to 1999 "can be explained in just two syllables: Wal-Mart, whose operational innovations—including the 'big-box' format, 'everyday low prices,' electronic data interchange with suppliers, and economies of scale in warehouses—forced competitors to adapt." [EDITOR'S NOTE: My summary statement is misleading. Retail labor productivity overall is what contributed a quarter of the overall increase, and Wal-Mart was the driving factor behind that jump. But Wal-Mart didn't by itself account for a quarter of the increase in productivity overall. For a more careful discussion, see my NYT column on the subject.--vp, 2/28/02.]

Kmart couldn't compete with Wal-Mart on price and, unlike Target, failed to come up with an alternative strategy to bring in customers. Target is quite upfront about the reason it developed its trend-leader strategy, and, contrary to Brooks's cutsy-poo analysis, it has nothing to do with pleasing employees looking for a cool place to work. (I shop at Target, and those employees aren't bucking for roles on Friends.) As Dave Gerton, Target's buyer for home decor told an industrial designers conference I attended in 1999, "We're not going to succeed if we try to be the price leader." If you can't beat Wal-Mart at its own game, you'd better change games.

Aesthetic value is real value to real people, despite the moans of Marxists, unimaginative geeks, and David Brooks. But the increasing importance of aesthetics doesn't do much to explain the fall of Kmart. For a more intelligent analysis of Kmart's demise and the future—and eternal verities—of retailing, read Jeff Taylor's analysis on Reason Online. [Posted 2/3.]

HAPPY BIRTHDAY: It's my brother Sam's 40th birthday. Here he is carrying the Olympic torch in 1996.

He was chosen because of his many community activities, notably (back then) teaching schoolkids geography while dressed up as "Geo-Man," whose costume included a globe over his head. But he's also a competitive long-distance runner. Unlike most other torch bearers, he ran at racing pace—whoosh!

Although I'm back from my travels, I've got to get on top of some work (and book orders!) before I resume posting over the weekend. [Posted 2/1.]

AGAINST THE DEAD HAND: I've previously recommended Brink Lindsey's new book on globalization, Against the Dead Hand, but I haven't actually explained its argument. I do so in today's NYT column, which runs as the Davos set meets in Manhattan. [Posted 1/31.]