Judgement Trumps Experience

Unless you've made a commercially successful film, you have no place in the debate over movie piracy.

This isn't the first time this argument has come up in debates over movie piracy. Truthfully, it must be one of the most ignorant things I've ever heard. Do you have to be designer to spot bad design? Do you have to be a writer to recognize bad writing? Do you have to spend time making and selling horse whips to realize that the horse whip business model is becoming obsolete with the invention of the automobile?

There is no school for presidents, yet new presidents seem to do just fine. You can have tons of experience and still make poor judgement calls, as we have seen with the record industry's gradual nose dive over the last decade.

The whole reason I haven't made a commercially successful feature film is mostly because of circumstance—I have two daughters who monopolize most of my time. But even then, I have had the chance to produce feature movies numerous times and on each occasion, I've chosen not to because all my research pointed at one ugly conclusion: the current business model for making films is intrinsically flawed. A shift has happened in the last five years that has radically changed how films are getting their money recouped, or not. Piracy plays an increasingly larger role in that landscape, and that scares the shit out of me. I absolutely am not going to look an investor in the eye and tell him he's going to make his money back if I haven't done my own due diligence to prove it.

So I vowed to myself that I should make it my life's mission to completely master how film distribution worked before making my own movie. After all, doesn't it make sense that you must know how much your product will sell for before you draw up your budget? If the product doesn't sell for what you expect, then you're saving yourself a whole lot of anguish by not gathering money to create that product. Right?

After two years of research, I finally figured out what was going in the film business. At the root of problem were two key factors:

1. there was a complete misunderstanding of the new economics in play;
   
2. there was an industry-wide denial from anyone with skin in the game.

As for #1, the internet has introduced the concept of abundance into economics. For thousands of years, economics has been dominated by an understanding of how best to allocate scarce resources, but when you can copy things digitally—when each copy is an exact replica of the original—those things aren't scarce at all, but abundant. In the grand scheme of history, the internet is brand new and we're only now starting to get our head around what it is, and what it means. Sure, we try to graft Analog Age concepts onto it like Intellectual Property (as if anyone can own an idea), but the way we consume and share ideas is unlike anything we have known about how we use scarce resources. Once you get that concept (and I was militantly resistant to the idea for almost a decade), you see that business models that have been around for almost a century are becoming obsolete and new business models will inevitably replace them. The artists who have based their business models on an understanding of the new economics in play have done famously well, like Amanda Palmer who got kicked off her label (at her request) and then made $15,000 in only 3 minutes.

As for #2, I can't say I blame people in the film industry for being in denial about how things are changing. Nobody with $15 million riding on the line is seriously willing to contemplate that their business model is becoming, or has become, obsolete. What they want or don't to be true is moot—the car replaced horse & buggy drivers, the printing press replaced manuscript illuminators, and the internet will have similar effects on legacy delivery systems like records, CDs, DVDs, and books. Deny that change if you wish, but it doesn't stop the wave from destroying your sand castle.

The changes in the market are now so clear to me that it would be suicide to enter the marketplace in the traditional way to make a commercially successful movie. And if that is the only price of admission I must pay to get my message through to those in denial, then I pray for their survival as I watch their car tragically head for the cliff.

The Cliff

Bad news for you. You're asleep at the wheel—you can't see what's coming. We're not in the car ourselves, but we can see passengers with you; if you crash, they will surely be injured.

But you might also hurt us, or people we know. People look up to you, they're counting on you. What you decide will sway countless others... and you're asleep at the wheel.

We feel we see the world for as it is, and we're well aware the path is foggy. You probably fell asleep because you felt the path would never, and should never, change. Yet the path has changed, and massively. Looking ahead, we think we know—at least in broad terms—where the path will take us all. We can tell a few things for sure and we can see the cliff you're coasting towards. You're smarter than that. You should be awake. You need to be awake. Lives are at stake.

And we try. We try hard every day to get you to see the world as it is despite how you wish it might otherwise be. We also desperately wish the path weren't so foggy... but it is. If you were awake, and lucid, you'd see things as they actually are, not through the lens of how things have been or should be.

If you want to drive off that cliff, asleep at the wheel, we've given you fair warning. Still, we can't stop pestering you because our very humanity does not permit us to stand idly by and watch others needlessly spiral into oblivion.

The path has changed. It's not going back and will never go back to how it used to be. Accept it. Wake up and veer away from disaster.

As for us, we're also going off the cliff... but we're not going in a car.

We're going on a hang glider.

Punctinilification

I see this odd little error from time to time and never really understand it—"R.I.P". If we follow the logic that the first two periods mean that "R" and "I" stand for other words, then the resulting translation is "Rest in P", not "Rest in Peace". And you thought punctuation was unimportant.

I see this error crop up in many iterations... U.S.A, A.K.A, M.I.A, etc. I see it so often that I even coined a word for it way back when sniglets were all the rage—punctinilification.

Sure, there are greater problems in the world than worrying about forgotten typographic characters, but I also feel that how carefully we deal with small details like punctinilification hints at how carefully we'll deal with the greater problems in the world. Put another way, if we can't take an extra split second to add a simple period at the end of an acronym, what hope do we have in solving world poverty?

New York Mayor Rudy Giuliani took a similar approach to tackling crime when he became mayor. His idea wasn't to go after the serious crimes as a sole priority, but to also focus on "incivilities", the minor crimes like vandalism, loitering, etc. The theory was that minor crimes are the tip of the iceberg that lead to major crimes later on... the result was a completely different city greatly removed of its former criminal strife.

It always sounds so... petty to snipe at missteps in grammar or spelling but I often wonder: if we forced each other to be more precise about our use of language, doesn't it follow that our thoughts would be more precise as well? George Orwell certainly thought so.

Now the AG says it's Unconstitutional

California's Attorney General Jerry Brown once said he would defend Prop 8 against those who support gay marriage... but now he's changed his mind, saying it's unconstitutional. Whoa, really? Why?

"[U]pon further reflection and a deeper probing into all the aspects of our Constitution," Brown said during an interview, "[i]t became evident that the Article 1 provision guaranteeing basic liberty, which includes the right to marry, took precedence over the initiative.... Based on my duty to defend the law and the entire Constitution, I concluded the court should protect the right to marry even in the face of the 52 percent vote."

A popular vote is not the best way to guarantee equal rights because the majority is always going to win a popular vote. Had a popular vote been taken in the 1950s, racial segregation would probably have passed. Had a popular vote been taken about woman's suffrage, it also would have passed... because women couldn't even vote. Laws are created to protect minority groups—by "minority", I mean any group not in the popular majority, not necessarily racial minorities—and if 52% of voters think gays don't have an equal right to marry doesn't mean that isn't also unconstitutional.

I'm relieved a prominent lawyer has finally come forward to say something which I feel is so glaringly obvious. What's more is that he personally voted for Prop 8 and has since said he would defend Prop 8 in his role as Attorney General. Whenever a person absorbs new information, applies thoughtful reasoning and arrives at a conclusion contradicting their previous beliefs, changing one's mind isn't "wishy-washy" or being a "flip-flop"—it's called being enlightened. I admire those with the courage to stand by their convictions, especially when their reasoning is insightful and argued well, but I abhor those who remain opinionated in the face of abundant evidence to the contrary.

You've got to hand it to Jerry Brown. Not only did he arrive at a different conclusion, but a conclusion which completely contradicted his personal beliefs. Not only should this lend further credence to Brown legal argument, but it speaks to his integrity as a public servant. Brown might personally still object to gay marriage but, as a lawyer, he can't deny that it's unfair discrimination violating equal rights guaranteed in the constitution.

Full article below:

Jerry Brown urges court to void Prop. 8
By LISA LEFF
Associated Press Writer
Published: Friday, Dec. 19, 2008

SAN FRANCISCO -- California Attorney General Jerry Brown changed course on the state's new same-sex marriage ban Friday and urged the state Supreme Court to void Proposition 8.

In a dramatic reversal, Brown filed a legal brief saying the measure that amended the California Constitution to limit marriage to a man and a woman is itself unconstitutional because it deprives a minority group of a fundamental right. Earlier, Brown had said he would defend the ballot measure against legal challenges from gay marriage supporters.

But Brown said he reached a different conclusion "upon further reflection and a deeper probing into all the aspects of our Constitution."

"It became evident that the Article 1 provision guaranteeing basic liberty, which includes the right to marry, took precedence over the initiative," he said in an interview Friday night. "Based on my duty to defend the law and the entire Constitution, I concluded the court should protect the right to marry even in the face of the 52 percent vote."

Brown, who served as governor from 1975 to 1983, is considering seeking the office again in 2010. After California voters passed Proposition 8 on Nov. 4, Brown said he personally voted against it but would fight to uphold it as the state's top lawyer.

The litigation over Proposition 8 is shaping up, Brown said, as a high-stakes conflict between the electorate's right to direct democracy and rights of minorities to equal treatment.

Brown submitted his brief in one of the three legal challenges to Proposition 8 brought by same-sex marriage supporters. The measure, a constitutional amendment that passed with 52 percent of the vote, overruled the Supreme Court decision last spring that briefly legalized gay marriage in the nation's most populous state.

Shannon Minter, legal director of the National Center for Lesbian Rights, called the attorney general's change of strategy "a major development."

"The fact that after looking at this he shifted his position and is really bucking convention by not defending Prop. 8 signals very clearly that this proposition can not be defended," Minter said.

The sponsors of Proposition 8 on Friday argued for the first time that the court should undo the marriages of the estimated 18,000 same-sex couples who exchanged vows before voters banned gay marriage at the ballot box last month.

The Yes on 8 campaign filed a brief telling the court that because the new law holds that only marriages between a man and a woman are recognized or valid in California, the state can no longer recognize the existing same-sex unions.

"Proposition 8's brevity is matched by its clarity. There are no conditional clauses, exceptions, exemptions or exclusions," reads the brief co-written by Kenneth Starr, dean of Pepperdine University's law school and the former independent counsel who investigated President Bill Clinton.

Both Brown and gay rights groups maintain that the gay marriage ban may not be applied retroactively.

The Supreme Court could hear arguments in the litigation as soon as March. The measure's backers announced Friday that Starr, a former federal judge and U.S. solicitor general, had signed on as their lead counsel and would argue the cases.

The new brief provides a preview of how Proposition 8's supporters plan to defend the measure. It asserts that the Supreme Court lacks the authority or historical precedent to throw out Proposition 8.

"For this court to rule otherwise would be to tear asunder a lavish body of jurisprudence," the court papers state. "That body of decisional law commands judges - as servants of the people - to bow to the will of those whom they serve - even if the substantive result of what people have wrought in constitution-amending is deemed unenlightened."

Starr declined comment Friday, but co-counsel Andrew Pugno said the brief was filed in response to a question the court's seven justices posed to lawyers on both sides, not as an attack on the gay married couples. "The people passed Prop. 8," he said. "We are defending that."

Pugno called Brown's decision to challenge the voter-approved measure, as well as the argument advanced by the attorney general, "totally unprecedented."

"His legal duty as attorney general of the state is to defend initiatives passed by the voters," he said. "Oftentimes, attorneys general have defended measures they personally opposed."

Jesse Choper, a constitutional law professor at the University of California, Berkeley Boalt School of Law, said Brown has to show that there is a right to marry or to be free from discrimination on the basis of sexual orientation that cannot be taken away by a constitutional amendment. "It is not an easy argument, but that doesn't mean it's not going to win," Choper said.

The cases are Strauss v. Horton, S168047; City and County of San Francisco v. Horton, S168078; and Tyler v. State of California, S168066. Link.

Bad news for the Yes on 8 voters

I had another epiphany a few days ago about gay marriage, and it's extremely bad news for anyone against gay marriage in America...

A gay marriage ban is inherently discriminatory and—because the American constitution is based on total equality—gay marriage bans will eventually be ruled unconstitutional by the U.S. Supreme Court. It's just a question of when.

Maybe it won't happen with the current Supreme Court, but it will happen. It has to.

So, bad news for everyone who voted "Yes" on Prop 8 this year: like all the male chauvinists who lost when women were granted suffrage, and like all the racists who lost when blacks were granted civil rights, you're also going to lose on this issue. Why? Because you can't stop progress. Some traditions become extinct because they ought to become extinct, and this is one tradition which deserves to die.

What drives me crazy about the Yes on 8 crowd is their oft-heralded refrain, the so-called "activist" judges. I have no tolerance for that nonsense—judges are lawyers who've been through law school, who preside over countless cases to rule fairly, and are best prepared to interpret what equality and fairness means in our constitution. If a judge deems a practice unfair, and an appeals judge agrees with him, it's time to STFU and move on.

On a side note, I continue to be amazed how some Christians, normally a group promoting equality and goodness towards all, are on the wrong side of history about this issue. Then again, Christians did start the crusades, among other perversions of the Christian teachings. I wonder if a Christian sect ever rationalized slavery due to the rules set up for it in the Bible (Exodus 21:7)?

Republicans. Terrorists.*

I once worked for a political advertising company doing campaigns for Democrats across the nation. We had this one East Coast Senator running on a platform promoting The Ten Commandments being posted in public schools within their state. I have pretty strong feelings about the separation of Church and State and was quite relieved nobody asked me to do any graphic design on her campaign because it might have gotten me fired. We all have lines in the sand and that's mine.

Advertising is about using images to evoke feelings, and those feelings can sway elections. If you crop a photo with enough space around a person's portrait, that person appears friendly, but if you crop the photo with no space at all, that same photo appears claustrophobic and makes the person appear threatening.

Given how powerful a single image can be, you can even cram a political mailer with dummy text and know that even a single unflattering image of your opponent can be enough to leave a lasting impression on undecided voters. Consider this last RNC mailer doing the rounds. Here's the front cover:



The use of the large word "TERRORISTS" in collage cut-out letters subconsciously paints a picture of kidnappers ransoming our children, and the image of planes in the background reminds us of 9/11. But who is this mailer for or against? Here's the inside:



Ah, well this mailer isn't calling Obama a terrorist, not really. But if you looked at this mailer across the room, you can't help but see a connection between Obama's picture and the word "TERRORIST". To understand the full context of the mailer, you have to read the mailer's finer print (the truth and accuracy of its statements are fodder for someone else's blog, I'm sure), but its tacit intent is self-evident: Obama is a terrorist. Governor Palin's speeches of late call Obama "palling around with terrorists". Her statements also do not explicitly claim Obama is a terrorist, but if you say "Obama" and "terrorist" enough times in the same sentence, the two ideas merge into an informal epithet: Obama the terrorist. Does that phrase sound like any other terrorist you know?

Obama's image in this mailer is also strikingly similar to another infamous black man hailed as a terrorist. And he was muslim. What a coincidence.



* The two are completely unrelated.

Pruden's Law

As I was watching the debates last night, I had to laugh when McCain invoked Ronald Reagan. Mine was neither a scoff nor derisive chuckle, merely an amused reflection. At the Republican debates, I remember how almost every candidate cited Reagan, much in the same way that Democrats cite Kennedy.

Even so, it makes me think of Godwin's Law:

As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one.

I'm not comparing anyone to Hitler, so don't even. But it does make me laugh how frequently Republicans invoke Reagan as, supposedly, a tactic to remind the Old Guard of the Jellybean Days. Meaning, "Vote for me... because I'm like Reagan!"

The intent of naming something is not simply to call attention to it, but to take away its power. At the beginning of any historical/political discussion, if someone were to say, "Okay, so we're going to defy Godwin's Law, riiiiiight?", then nobody wants to run the supertanker onto the beach.

If we were to do the same for Reagan, I'd call it Pruden's Law and define it thusly:

As a debate among conservative political candidates grows longer, the probability of a comparison involving Ronald Reagan approaches one.

If any of you decide to add this to Wiki, call it Pruden's Law! Because you heard it here first.

Um, no.

I really love it when people leave comments on my blog—it's a form of respect, of engagement, and it pleases me to know someone has taken time out of their day to react to something I've written. Even passionate disagreement is welcome because conflicting points of view are the best way to unearth the deeper truths. Bring it.

However, what I don't love is when people use anonymity as carte blanche to be snide, condescending, judgmental, self-righteous, spiteful, disrespectful, or just plain rude. If you've got strong feelings about something—enough to ignore a basic level of human decency and leave a comment which involves one or more of the above flavors of ill will—you're invited to start your own fucking blog. It's a complete mystery to me why anyone would expect me to publish comments that dis me on my own blog. Besides, not only are ad hominem attacks a typical sign of a weak argument, but they're also generally uncool. Snootiness is like an overpowering body odor—nobody wants to stand next to you.

I might be persuaded to publish rude or bombastic comments if their authors had balls big enough to affix their name and signature to their inciting comment, but unfortunately, all that can be too easily faked. I can save the Flamers out there a lot of time by simply saying:

"Um, no."

Photography is your PAL

Today, I checked out InkTip's "produced films" page and found this disheartening snippet:

Juan Frausto of Vendetta Pictures has commenced principle photography on the horror feature ‘RoadKill,’ which was written by InkTip scribe David Zagorski...

Even in the film business, I see everyone confuse "principle" for "principal", almost as often as confusing "it's" for "its", but not often enough that I'm sure which version is the correct usage. Google searches inevitably lead me to Paul Brians' amazing grammar cornucopia, Common Errors in English. Indeed:

Generations of teachers have tried to drill this one into students’ heads by reminding them, “The principal is your pal.” Many don’t seem convinced. “Principal” is a noun and adjective referring to someone or something which is highest in rank or importance. (In a loan, the principal is the more substantial part of the money, the interest is—or should be—the lesser.) “Principle” is only a noun, and has to do with law or doctrine: “The workers fought hard for the principle of collective bargaining.” Link.

However, I did hear someone on NPR yesterday say "heart-rending", so I'm not worried about the decline of Western civilization just yet.

Back to chastity belts

I hope I'm not being an nobhead about this, but I can't help but wonder:

If Sarah Palin, the Republicans' nominee for Vice President, is a proponent of abstinence-only sex education...

...and her own 17 year old daughter is 5 months pregnant...

...what does that say about the effectiveness of abstinence-only sex education?

And can Palin say, with a straight face, that she isn't quietly questioning her approach to sex ed?

I respect those who stand up for their values, but you cross a line when you apply your values at the expense of real world facts. Sure, you can claim to be "right" by saying abstinence works, or you can prevent teen pregnancies by accepting that teenagers have sex as they've always done... and you can promote condom use.

Do you want to be right, or do you want your 17 year old daughter to accidentally get pregnant? Yes, the choices are really that simple.

The Big Three get what comes around

News comes today of America's Big Three automakers on the verge of bankruptcy. I have two contradictory reactions of equal conviction: empathy—in that the employees of these iconic companies are in grave danger of losing their jobs—and contempt—in that these companies steadfastly rejected innovations like hybrids and let unions dictate the terms and costs of doing business.

I regret auto workers have their backs against the wall. It's awful. Most people just want to show up for a job, do their work and go home, and these poor people might soon be on the dole. That completely blows. On the other hand, the autoworkers union has been bolstering a doomed industrial age business model—the ceiling was bound to fall sometime.

Thus, the Big Three have created an artifical market with high production costs that can't compete internationally. Unions have bullied the Big Three into paying employees more than the market says they are worth, and the Big Three have consistently spurned electric cars and their current intermediary, the hybrid (only in the last few years have the Big Three really committed to producing and selling hybrids). And this is only the latest chapter in how the Big Three have stifled competitive innovation—the film Tucker: The Man and His Dream tells a tragic tale:

[Tucker is] the story of entrepreneur Preston Tucker and the innovative car he designed in the late 1940s. The car was attractive, economical, and safe, and had many features not found on the cars of that time—an air-cooled rear engine, disk brakes, independent 4-wheel suspension, an additional center headlight that pivoted left and right for better vision when turning, a padded dash, seatbelts, and a popout safety windshield. Tucker's promotional activities generated widespread public excitement and interest in the car, but the powerful auto industry blocked its production. Only 50 cars were ever made.

So, as sorry as I feel for the auto workers who might lose their jobs, as I read news of the Big Three's impending bankruptcy, I can't help but think, They bloody well had it coming to them.

Big Three face bankruptcy fears
After huge losses and plunging sales, experts aren't ruling out the possibility that GM, Ford or Chrysler might eventually be forced to declare bankruptcy.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: August 6, 2008: 10:00 AM EDT

NEW YORK (CNNMoney.com) -- It's been a bumpy road for Detroit's Big Three automakers for the past few years. But it may get worse.

Some experts fear that GM, Ford and Chrysler - their sales plunging as fewer consumers buy gas-guzzling pickups and SUVs - could be forced to head for bankruptcy.

Last week, General Motors (GM, Fortune 500) reported a $15.5 billion second quarter net loss. While its operating loss was only $6.3 billion, that's still more than the market value of the company.

GM's loss followed an $8.7 billion loss at Ford Motor (F, Fortune 500) and came on the same day that the industry reported a 13% drop in sales, its worst month in 16 years.

Chrysler LLC, which was bought by private equity group Cerberus Capital a year ago and does not report financial results, relies even more heavily on sales of light trucks, such as pickups and SUVs, than do GM and Ford. Chrysler also has virtually no overseas sales to fall back upon.

As such, the credit markets have expressed doubts about Chrysler's prospects, as its finance arm was recently able to raise only $24 billion of the $30 billion it sought. The company has stopped offering leases to its customers due to credit market concerns and the declining value its used vehicles.

'Clock is ticking'
All this had led to increased speculation that there could be a bankruptcy in the next year at one or more of the Big Three automakers. Credit rating firm Standard & Poor's cut GM and Ford deeper into junk bond status last week, leaving their debt just barely above the level normally associated with firms at significant risk of near-term default.

"The clock is certainly ticking," said David Cole, chairman of the Center for Automotive Research. "Obviously there's a risk. Nobody is home free."

Most experts wouldn't give odds that one of them will stumble into bankruptcy, but said there is a chance they could be forced into doing so if market conditions don't improve.

"We think they wouldn't choose to file. But there is a risk they could be overwhelmed by the events," said Bob Schulz, S&P's senior automotive credit analyst.

Making matters worse for the Big Three is the fact that it will take years to fully adapt to the changing consumer trends - or, the shift away from gas-guzzling trucks and SUVs to smaller cars.

"Fixing their product mix and cutting their staff down to manageable levels is going to take a fair amount of time to work down to the bottom line," said Bob Schnorbus, chief economist with J.D. Power & Associates. "If they continue to lose money at the current rate, their chances [of bankruptcy] are uncomfortably high."

But spokespeople at all three automakers insist that bankruptcy is not on the table and said the companies have adequate cash reserves to see them through additional losses.

For example, GM spokeswoman Renee Rashid-Merem pointed out steps GM took in July to raise cash, including suspending its dividend, planned asset sales and additional cost cuts.

GM still has about $26 billion in cash and credit lines available to it. Ford is in the best cash position of the three, ending the second quarter with $26.6 billion in cash and $11.6 billion in available credit lines. Chrysler has $9.4 billion in unrestricted cash and securities on hand at the end of the second quarter.

But GM burned through about $3.6 billion in cash in the second quarter alone. Experts say even with the large cash reserves on hand, the automakers don't have much more than a year to show significant improvement before they reach a crisis point.

"GM looks like they have four or five quarters to get their act together," said Shelly Lombard, analyst for GimmeCredit, a fixed income research firm. Her most recent note on GM is titled "Being pecked to death by ducks."

What would follow bankruptcy?
Even if one or more of the Big Three were to file for bankruptcy, it would likely to be under Chapter 11, which allows companies to continue operations as it tries to shed costs, rather than Chapter 7 liquidation.

"They may not be running the business well. But they're still selling a lot of cars," said Lombard. "It's not buggy whips, it's a real business. I don't think any of them are going away."

Instead, most industry experts say that a bankrupt Big Three automaker might shed some of their weaker brands. To that end, GM is already looking to sell its Hummer brand, for example.

However, filing for bankruptcy protection would be a mixed blessing for the Big Three. On the one hand, a bankrupt automaker would have an advantage over its U.S. rivals since it would be able to shed some burdensome costs

However, most auto experts believe a significant percentage of buyers would shy away from an automaker in bankruptcy due to concerns about getting warranty work done on their vehicle.

Hope for Detroit?
Yet, there is a case to be made that the Big Three will eventually bounce back. In some respects, they should be in better position now than they were just a few years ago. Even as their losses started to pile up in 2005, that was due mainly to costs that were too high, not weak demand.

And while the Big Three were losing market share to Asian automakers, they were maintaining strong sales on expensive pickups and SUVs, which are far more profitable than smaller cars.

But less than a year ago, GM, Ford and Chrysler all won major concessions from the United Auto Workers union that will eventually allow them to significantly lower their health care and benefit-related costs.

At that time, it actually appeared that all three might be getting close to a return to profitability.

But before it could start seeing any of these savings, fuel prices began to soar. With that, consumers stopped buying as many trucks. This March was the first month in five years that cars outsold light trucks in the U.S. market.

In addition to pain at the pump, rising job losses and falling home prices have battered consumer confidence and leave the industry poised to record an 18% drop in sales, the largest decline since 1980, according to J.D. Power & Associates

J.D. Power is projecting no improvement in sales until late 2009 at best.

Still, the Center for Automotive Research's Cole said if the Big Three are able to hang on during this slump, there is a chance that pent-up demand in 2009 could lead to much stronger sales just as some of the labor cost savings finally start to kick in next year.

"It could be a much more robust future than they've had in quite some time," said Cole. "The trick is to survive long enough to get to that future. That's where the challenge really lies." Link.

Subsidizing a Healthier Nation

If you've been around long enough, you know I feel strongly about how bad America is about handling its waistline. My conservative readers are quick to remind me that we live in a free country with freedom of choice, that the citizenry always knows best how to manage their own life, and that government has no place in telling its citizens what to do.

And sure, that's a great theory, and true for a lot of things. Yet for weight control, I categorically disagree. Based on results—i.e., our shameful epidemic of obesity—Americans do not know how to manage their own weight. Yes, it's a free society and people are welcome to shoot themselves in the head if they really want to... just don't expect me to pay for the gun.

The problem with obesity is the suffocating health care costs which follow it. Obviously, obesity is not the singular cause for diabetes, but it is a disproportionately large factor in causing diabetes. If you smoke, eat high cholesterol foods, and are overweight... your chances of getting cancer, a heart attack, or diabetes goes off the charts. So these factors, together, are contributing causes to higher health costs. Which means taxpayers are subsidizing suicidal lifestyle choices by its citizens. When did this start becoming acceptable???

If you have private health care, and your poor lifestyle choices land you in the hospital with million dollar health care fees, game on—I have no problem with that. But the moment you ask me to start paying for your lung cancer operation because you smoked 2 packs a day for 30 years, or your quadruple bypass operation from a lifetime of eating red meat, or your stomach-stapling operation to manage your diabetes because you've been guzzling 40 oz. tubs of diet coke... yeah, shocker: I've got a huuuuuge problem with that. Conservatives who scream about lower government spending should be ahead of me in line about this injustice... yet they harp instead about "freedom of choice". Well, we tried freedom of choice for food and look where that got us—an obesity epidemic.

Nobody likes being told what to do. I don't think a government program telling people what to eat or when to work out would ever work. However, I do think circumstances can be shaped to give people sharper motivations to make better choices. My personal favorite has been a tax on fatty foods, the revenue of which would subsidize healthier foods: Big Macs get more expensive and healthy sandwiches get rock bottom cheap (that way the poor aren't punished because they can still eat cheaply, albeit better). Another option is giving tax credits to companies offering fitness programs to their employees—the payoff is a healthier and happier workforce who live longer (read: pay more taxes) and become more productive.

Still not convinced something like that would be financially viable? One company in Nebraska has been doing it for 16 years, and with impressive results. Their program sponsors a fitness program, including massages, pre-shift stretching, and quarterly checkups measuring weight, body fat, and flexibility. The prize is a 3 day company-paid trip to climb a 14,000 foot peak in Colorado. Of the 565 employees, 103 have qualified, more than ever before. Not only are the employees more fit, but the company pays about half the regional average in health-care costs, which is a savings of $2 million.

Morale of the story? It's cheaper to have healthier employees. Wow. What a concept. Imagine if we grafted that mindset onto an entire nation? How much money do you think we might save? More importantly, how much healthier, and how much happier, would we all be?

'Wellness' a healthy investment for company
LINCOLN, Nebraska (CNN) -- Lincoln Industries looks like a typical blue-collar plant -- workers cutting, bending, plating and polishing steel for products such as motorcycle tailpipes and truck exhausts amid the din of machinery.

But the 565-employee Nebraska company is different.

Lincoln Industries has three full-time employees devoted to "wellness," and offers on-site massages and pre-shift stretching.

Most unusual of all: The company requires all employees to undergo quarterly checkups measuring weight, body fat and flexibility. It also conducts annual blood, vision and hearing tests.

"When you get the encouragement from somebody to help you with nutrition and to help with a more active lifestyle, it makes it easier to be able to attain a lifestyle that most people want to attain anyway," says Hank Orme, president of Lincoln Industries.

The program has been in place 16 years.

The company ranks workers on their fitness, from platinum, gold and silver down to "non-medal." To achieve platinum, they must reach fitness goals and be nonsmokers -- and the company offers smoking cessation classes.

For employees, reaching platinum means a three-day, company-paid trip each summer to climb a 14,000-foot peak in Colorado. This year, 103 qualified, the most ever. And 70 made the climb.

For the company, the payoff is significantly lower health-care costs. The company pays less than $4,000 per employee, about half the regional average and a savings of more than $2 million. That makes the $400,000 Lincoln Industries spends each year on wellness a bargain.

"The return on investment is extraordinary," Orme says.

The investment in "wellness" pays other dividends, according to Orme. He says fitter workers are more productive, have better morale and are safer. As evidence, he points to worker's compensation claims. Ongoing safety training and an increasingly fit workforce have pushed worker's comp costs down from $500,000 five years ago to less than $10,000 so far this year.

Seven years ago, shift leader Howard Tegtmeier was in the non-medal category. The 49-year-old smoked, drank, was overweight and took 12 pills a day to treat high blood pressure, high cholesterol and diabetes.

"I just made the decision it was time to change my life, and the wellness program showed me ways to do that," Tegtmeier says.

Tegtmeier says he no longer smokes or drinks. His weight is down from 230 to 180, thanks to diet and exercise. His cholesterol and blood pressure are also down, and he says he no longer needs medication.

Tonya Vyhlidal, Wellness and Life Enhancement director, says Lincoln Industries doesn't pressure workers who don't want to participate. But sooner or later, she says, the company's "culture" attracts most employees to live healthier lives.

The company sponsors races, helps with gym memberships or exercise equipment, offers healthy choices in the vending machines and hosts classes on health and nutrition.

"There's a way to engage everyone. Even those that are really resistant," Vyhlidal says, adding that she'll offer employees suggestions based on what makes them feel fulfilled: "Do you like to ride a bike? Ride a bike. Do you like to cook? You may need a different cookbook."

This month, Tegtmeier and 69 co-workers climbed Mount Bierstadt, a 14,060-foot mountain. All of them reached the summit. It was Tegtmeier's fourth climb with the company.

"The view up here is wonderful," he said. Link.

Well done, GM

Today Honda rolled out a zero emissions vehicle:

Honda's new zero-emission, hydrogen fuel cell car rolled off a Japanese production line Monday and is headed to southern California, where Hollywood is already abuzz over the latest splash in green motoring.

The FCX Clarity, which runs on hydrogen and electricity, emits only water and none of the gases believed to induce global warming. It is also two times more energy efficient than a gas-electric hybrid and three times that of a standard gasoline-powered car, the company says.

Honda expects to lease out a "few dozen" units this year and about 200 units over three years. In California, a three-year lease will run $600 a month, which includes maintenance and collision coverage. Link.

This strikes me as bitterly ironic since it was General Motors' EV1—the first legitimate zero emissions vehicle made in America—was decommissioned and shredded in 2003 because GM claimed the EV1's would never be profitable and it was "cheaper to sue the State of California to roll back clean vehicle regulations than it was to build electric vehicles." You can watch the tragic tale in the superb documentary, Who Killed the Electric Car?

Amazingly, it was the EV1's unexpected success which scared the Japanese into thinking they would lose an edge in the automobile wars... so the Japanese designed the first hybrid cars. So, okay, Americans ended up buying Japanese-made hybrids instead of American hybrids. We snoozed, we lost.

But we had a second chance to get it right—because hybrids still run on gas. We had the chance to resurrect and redesign a zero emissions vehicle using no gas at all. It is, in fact, what more and more American consumers have been crying out for.

And now the Japanese have beat us. Again.

So well done, GM. Thanks for shredding all your EV1's. That was really, really smart.

Cheating is part of the game

I just finished listening to an NPR about cheating in baseball. The scope was broad, covering things like a man in a skyscraper with binoculars relaying a catcher's signals to the batter's team, to things like moving the back fence further back to make it harder to hit a home run, and even things like painting greater numbers on the back fence to make it seem harder to hit a home run.

The gist was that cheating is part of the game, and while steroid use is explicitly illegal, most baseball players probably view sterioids as simply another way to gain an advantage over the other team given the pervasive attitude towards cheating.

The tacit implication is that the honest team, the one which refuses to cheat in any way, is destined to lose.

I'm reminded of a story Hans told me once about a bank owner. This bank was quite small and could barely make ends meet but they were installing a brand new ATM. This happened back when ATMs were still a new contraption, and new means expensive. "How can you afford to install one of those? Aren't ATMs really expensive?" they were asked. "Our competition already has ATMs. We can't afford to not install an ATM. If we don't, we'll be out of business within the month."

I'm not equating ATMs with cheating, but ATMs were a new technology to gain advantage over the competition in the same way cheating is used to gain advantage. If your competition is using a tool or technology you aren't using because you think it's "unfair" or "immoral", and your competition is winning because of it, you might want to reconsider your business strategy to take back your advantage. For example, Disney has already conceded that movie piracy is a successful business model to compete against... and in China, Microsoft doesn't sell MS Office for $150, but for $3.

Cheating is part of the game. Get used to it... or you should pre-pay your funeral costs.

You cut the pizza, and I'll choose which slice you get

A day before the Democratic National Committee's Rules and Bylaws Committee is set to determine how to seat the delegations of Florida and Michigan, the Clinton campaign's chief lawyer said the committee is compelled to seat both delegations fully and not award Sen. Barack Obama any delegates from Michigan. Link.

You have to wonder, would Clinton's campaign lawyer be insisting Michigan and Florida's delegates should be counted if it meant Hillary wouldn't get the nomination?

Michigan and Florida were told their votes wouldn't count before they moved their primary dates, but they did it anyway, so guess what? Their votes shouldn't count. Period. When broken, rules are designed to have consequences or there's no point in having rules at all.

Not to mention that if Obama knew the DNC might rescind back the rules, he wouldn't have taken his name off the ticket in Michigan. So if the DNC goes back on their word, how is that fair in any way to Obama?

The Perfect Voicemail

I once worked full-time at a San Francisco ad agency for 9 months. For anyone living outside the bubble of the advertising world, you can view time in the advertising world like dog years: 9 months is a long ass time.

Why does it feel so long? Because, at peak time, I might have fielded as many as 200 phone calls every day. Sure, most of these calls were simple did-you-do-this-yet questions, but it wasn't uncommon to leave my desk for a loo break to find 8 voicemails waiting for me. That's 8 voicemails I had to slog through in their entirety before pressing "delete". At 1.5–3 minutes per voicemail, that's 12-24 minutes out of my day... which means I would likely get more voicemails while I'm collecting my voicemails.

Most of us don't think about the economy of words when leaving voicemails, but in a hectic (and stressful) business arena, every word on a voicemail must be chosen with extreme care. An unneeded sentence or two results in wasted time... and wasted time accumulates.

As with all things, we often learn how best to do something by watching how others do it so spectacularly unwell.

The unperfect voicemail:

"Hey Ross, how you doing? Haven't spoken to you in a long time. How's the fam? Hey, look, I've got this thing on my desk... I'm not really sure what it is. Someone handed to me and it looks pretty important. Does this have anything to do with the BMW job? Well, nevermind, I guess I could look at it right now. Hold on... [pause] yeeeeeeah... it looks like it is... okay... okay... let me see. Okay, let's do this: let's move the art into a bubble on the top right, and let the bullets flow beneath it in a 3" box—no, wait, that would look weird, huh? Hmmmm. Shit, I don't know... okay, why don't just call me when you get back to your desk and we'll chat about it then. My number is [speaks his phone number blazingly fast, near incomprehensibly]. Okay, I guess I'll talk to you later. Gimme a call. Bye."

Total time: 1 minute 21 seconds

I used to imagine throwing daggers through the phone at people who'd leave me a message like that. Not only do I have to repeatedly listen to the entire message simply to get to their phone number, which I can barely understand anyway, but the message is effectively useless and takes me hostage by forcing me to listen to pointless rambling lest I miss that one crucial piece of information.

Now, here's the perfect voicemail:

"Ross, Bob here. My number's 4-1-5-5-1-5-1-6-5-4. Call me about BMW. Just looked at the docs and I have some urgent comments. Again, my number is 4-1-5-5-1-5-1-6-5-4. It's 4:47 on Thursday. Bye."

Total Time: 20 seconds

Why this is a perfect voicemail:

1. I know who's calling, and that they're calling me.
   
2. I know what the phone number is at the beginning of the message—thankfully, I know while listening to the entire email that if I want to write down the number, all I have to do is replay the voicemail from the beginning. I cannot emphasize how helpful this one tip is to a listener!
   
3. The phone number is clearly spoken, twice, so I don't have to stress about not being able to transcribe it. Twice is important because sometimes cell phones garble at exactly the wrong moment and you have to have a cow while waiting for the person to call you back.
   
4. I know what the message is about, generally.
   
5. I know what the message is about, specifically.
   
6. I know that Bob has comments for me.
   
7. I know Bob's comments are urgent.
   
8. I know when Bob called, since some phone systems don't always say when people call.

Furthermore, I know Bob always leaves this kind of message so when I hear his voice come on, I'm not stressed out, but relieved. And when I finally delete his message, I think to myself, "I love getting voicemails from Bob. They're perfect."

P.S. It is also extremely useful when leaving large amounts of information to someone on a voicemail to say up at the beginning, "I'm going to leave you a long message now, but if you want, just delete this message and call me to talk about it."