Why Not a Windfall Tax on Goldman Sachs?

Yesterday the WSJ ran an article describing how angry shareholders at Goldman Sachs want the company compensation to be changed so that more profits flow to them.

In the words of Sarah Palin, it sounded a bit "bass ackwards" to me.

I can't for the life of me figure out why shareholders from Goldman Sachs should gain more than they already have from the current fiasco surrounding the TARP bailouts and the investment banking industry.

What the shareholders should be angry about is that the Goldman Sachs employees operated so outrageously and selfishly that they have angered the entire country at a time when we face enormous financial challenges.

For the uninitiated, windfall taxes are taxes levied on certain industries when they experience windfall profits due to unusual economic conditions. Are conditions any more unusual than this? Can anyone make a case that Goldman Sachs hasn't benefitted disproportionately from the fact that it - and other players in the financial services industry - were encouraged to take bailout money from the federal government BECAUSE OF OUTRAGEOUS RISKS THAT THEY TOOK THAT PUT OUR COUNTRY'S ECONOMIC FUTURE IN CRITICAL DANGER.

Opponents of windfall taxes say that they act as a disincentive to seek out profits - and that the profits need to be reinvested to promote innovations that will benefit society as a whole. Well, I think the last thing we need is for the financial community to be developing more "innovative" financial products that are likely to cost society as a whole anywhere near what their more recent innovations did.

Our country faces enormous economic challenges. The only way we're going to solve them is by working toward constructive solutions where we are creating a long-term pipeline of products and services that will truly be valuable to global markets and to global society. In order to do this, we need policy initiatives that encourage behavior that will help us get there. This means upgrading education, investing in basic research, and rewarding innovators who truly add value. It also means figuring out the best ways for productive hard working Americans to participate in an economy that is increasingly global.

I'm having a hard time figuring out what value comes from a financial services industry where the focus is on short term profits and on moving money around in an elaborate shell-game that smart, well-informed people can't understand.

The structural changes we need to make as a nation are going to require new ways of thinking from everyone, including unions, business leaders, policy makers, educators, scientists, students, and entrepreneurs. We can't treat it as an internal zero-sum game or we're all going to lose as other countries pull ahead. Already, we are in dire straits when it comes to public education. The US recently finished 17th and 24th (out of 30 countries) respectively on in an important test measuring math and science understanding among 15-year-olds. The quality of public education is a critical indicator of our future economic health and we all need to work together to make it work better.

In this same vein, a healthy financial services industry that helps to make sure capital flows to responsible industries and businesses that contribute to our economic well-being is absolutely necessary. And if the industry as it currently exists can change its ways to get there, then I think all of us would be happy to see it thrive. But that's not where we are, and I don't see how we get there unless the people and companies that drove us toward the economic cliff through reckless risk-taking and unfettered greed are held to account.

Is it Racist to Cite a Study?

TechFlash is running my post on the challenges facing America as a leader in high tech. A friend sent me email suggesting that point #6 might be perceived as racist.

I love America (and no, I won't be getting a lapel pin) and I love what immigration has done for America, but I think we've got to be "eyes wide open" when it comes to our current immigration policies in the context of innovation and competitiveness.

When it comes to America's long-term chances for retaining tech leadership, I think we've got a twin challenge: 1) attracting the best people so that they want to innovate here in America; and 2) confronting the fact that high schoolers here AND in Mexico score terribly when it comes to understanding math and science. American high schoolers do badly, and Mexican students do even worse.

When Mexico is the largest source of US immigration, how Mexican students do in school and - because of the importance of tech to the economy - especially in math and science - matters to us all.

Latino students here in America drop out in higher numbers than the population as a whole. I think it's an issue we all need to be paying attention to. What we do about it is open for debate. I agree with the people who say we need a drastic overhaul of K-12 education - and I also believe there are larger cultural issues around the value of education - especially in the Latino community - we need to address.

Similarly, I think we need to understand the implications of the gender gap in tech. Women are making up a higher percentage of college students and the workforce and they're underrepresented in tech. If tech is the future of America, then given demographic trends, it's a problem for America that women and Latinos are underrepresented in tech.

The New Trust Environment

I've started blogging for Fast Company. Read here for my post on The New Trust Environment. As someone who's worked in very senior communications roles, I think communications professionals should use their influence to help companies BE better, not just LOOK better. It's an important difference that some people in the profession don't seem to get.

Innovation: Competition and Collaboration in the Innovation Race

TechFlash ran my post on Competition and Collaboration as a guest column back in September. You can read it here.

How We Killed the Killer Whales - A Failure of Capitalism

I love capitalism. When it works, it's great. But boy, when it fails - wow, it fails spectacularly. Nowhere is this more evident than in the tortured saga of the endangered killer whales of the San Juan Islands.

The Southern Resident killer whales are a unique species officially listed as an endangered species under the ESA act of 1973. There are only 85 of them in the world. Right now, special interest groups are working to gut proposed rules that would give these intelligent social animals - all part of an extended family - a chance to survive. All in the name of unrestrained capitalism.

The orca whales haven't always been seen as a revenue source. A few decades ago, they were viewed mainly in term of competition for salmon and were routinely shot at by fishermen and anyone else on the water who had a gun. Then came the discovery that these whales were not killers, but intelligent marine mammals who were very social and when removed from their pods, would "play" with humans and even perform tricks.

Soon the whales became targets of business interests with a voracious appetite. Almost half the population was captured or killed in order to entertain us from pens in marine parks around the world. Under the committed leadership of Republican Ralph Munro, the direct capture and killing was stopped. The orca became a symbol of pride in Washington State.

Then the slow torture began. The first whale watching boats started to appear, and for several years it was low key. Visitors on the few whale watching boats would search for the whales and often be rewarded with a closeup show. Then "Free Willy" came out and the cash really started to flow. More people wanted in. The number of whale watching boats mushroomed.

Today there are more whale watching boats chasing around after the whales than there are whales to be chased. In the morning, a plane goes up to find the whales, radios to the fleet, and the whale watching boats converge.

The science shows that in the presence of boats, the whales show distinct signs of stress. Respiration gets faster, dive times get longer, and their ability to find food gets dramatically impaired. Since the whales travel in smaller groups or pods, on a busy day, more than a hundred boats have been recorded surrounding a smaller group of whales. All this at a time when the science shows they're starving and when it's explicitly against the law to "pursue" an endangered species.

The industry has fought all regulation, insisting that they can police themselves and observe "voluntary" guidelines. In this they've been aided and abetted by people with good motives who fear that if the whales aren't watched constantly, we'll forget that they're here. Last year, hundeds of thousands of people piled into boats in B.C. and Washington State for the thrill of seeing whales in their natural environment.

Only it's not "natural" anymore. If you imagine a pack of Harleys chasing after a pack of endangered wolves 12 or more hours a day, you've got some sense of what this family of whales is going through. The whale watch operators market and deliver a closeup experience - all while maintaining that they respectfully observe a 100 yard distance requirement. It's a lie. (The pictures above were taken this summer from the sites of whale watch operators in good standing with the Pacific Whale Watch Association - the largest industry group.)

NOAA, which holds responsibility for developing and implementing a recovery plan for the whales, recently proposed new rules that would give the whales respite for a 1/2 mile no-go zone along the Western shore of San Juan Island. Boats would also be required to stay 200 yards away. It's not enough, and the industry folks reacted predictably. If they can't pursue the whales at close distance, business will suffer. Of course, they've had many years to prepare. (One person at a hearing on the proposed rules yesterday scoffed at the mention of distress and said within earshot and to much laughter that the extra work must be good for the whales because his own doctor had told him to exercise more.)

On a longer-term economic basis, dithering about the threat from boats makes no sense. The other identified threats to the whales - depleted salmon and a buildup of toxins - are broader ecosystem issues that affect us all and are going to take many years and hundreds of millions or even billions of dollars to solve. We only complicate things by not doing what we can now.

The whales are at a tipping point, and if we don't move forcefully soon, they'll almost certainly die out. And when that happens, they'll become not a source of pride for the San Juan Islands and Washington State, but a source of embarassment. After all, it's hard to retain a green, clean identity when you don't do what you can to save a species that has become your iconic brand.

(And btw, you actually can help save the whales by commenting on the proposed new rules at the NOAA site - please do it soon as comments will close And for those who want to take the deep dive yourselves, please read the broader recovery plan.)

The Death of the Sound Bite and the Rise of the Credible, Communicative Whistleblower

The demise of the sound bite has begun.

Anyone who watched Barack Obama's nuanced and deep discussion on Letterman last night got a great introduction to why the sound bite is on its way out. I for one, am happy to see it go. (Note: CBS - you're making a huge mistake by not putting the full interview online.)

Sound bites are an invention of modern media, including both the journalists and the people they cover. Basically, the idea behind the sound bite was to provide a pithy quote that would get featured in the media distillation of whatever event or interview had just taken place. Because first impressions can so often become reality, the sound bite became all important. Whether an interview "worked" or not depended in large measure on whether a key sound bite got picked up. I've advised many people on how to give a good interview that features a great sound bite that encapsulates a point of view or "key message."

The reason sound bites are on their way out is that they imply that someone else has to make the decision about what's important and that viewers or readers or listeners can't make that judgment for themselves. Now that so many people have access to the same material as journalists, they're in a position where they can figure out for themselves what the sound bites should be. Media and the blogosphere can amplify - but curious people will investigate and make their own decisions. And that's good for us all.

Today, there's a lot of focus on the bad news in the world of journalism and media. But I think there's a lot of great news too. Increasingly, people don't need a filter to determine which sources they find credible or which people they trust. And anyone with curiosity and a desire to dig deeper can research a topic in ways that even journalists couldn't previously.

In the case of whistleblowing, the death of the sound bite is a wonderful thing. Nowhere is this more evident than in the case of Wendell Potter, the former communications chief for CIGNA who has become a thoughtful whistleblower against the people he was once paid to represent. Potter has been getting a lot of attention for deciding to speak out against the policies and practices he witnessed and participated in as a key executive in the health insurance industry. He's been doing a lot of TV and on a recent Friday, he was even on Bill Mahar.

As a communications expert, Potter is too smart to revert to sound bites. This doesn't mean that he can't come up with a good anecdote or quote - but the genius of his contribution now is that he knows that everyone has the power to source him directly. Which means the people who might criticize him with a sharp sound bite - in this case the vested interests that want to protect the health insurance industry as it exists today - know that journalists and bloggers and everyday citizens have access to Potters congressional testimony and to a variety of broadcast interviews. He's a rational man making very rational claims.....and he does it in a way that is thoughtful, nuanced, and not easy to reduce to a sound bite - which makes it much harder for his critics to attack.

Because he wants to be trusted, Potter makes sure that everyone knows where he's coming from. We know that Potter made lots of money as a corporate executive and we can follow the money trail for ourselves. Potter is an extremely effective foil against the excesses of the corporate world because he understands it and he knows how the game works. What Potter is doing now is something that is going to be repeated over and over again. Media people, PR people and CEOs better get ready. The tilt toward transparency is getting sharper.

As someone who, like Potter, has a love for journalism, and a lengthy history in corporate communications, I think Potter's example is one to watch. Although journalists can help validate Potter's motives and claims, ultimately it is Potter himself who will make the difference. And now that he can't be discredited with a smarmy sound bite, his example will inspire others.

Tomorrow's whistleblowers - especially those who are smart communicators - are going to become more empowered and effective. And although journalists may play a role in putting them in the spotlight, ultimately each whistleblower is going to succeed or fail based on the case they make directly that they have a perspective and point of view worth listening to.

A Top 10 List for My Unemployed, Underemployed, and Soon-to-be Graduating Nieces and Nephews

For a long time, I've wanted to share some hopefully sage advice about what I've learned after almost three decades in the work world. And I suppose no time feels more opportune than when so many of you are unemployed or underemployed in an economy that's getting tougher and more competitive all the time.

A lot of you have told me that when it comes to work, I'm the "cool" aunt. I suspect a lot of that actually has to do with your Uncle Mike. After all, it really helps in the "coolness" factor to have an aunt who's married to and worked with the guy who started a game company that delivered a title which rocketed to #1 in the world. I suppose it also also helps that I can answer yes to the question "Did you really get to work with Bill Gates?"

Many of you have asked me directly for work-related counsel; several of you have not. I'm not going to discriminate. This Top 10 list is to all of you.

Here goes:

1) Work to become the story you want to tell. All of us have the chance to shape our lives into a narrative that we can feel proud of. Ideally, you will all lead interesting lives that blend family, friendship, work, and community in ways that make you and others around you proud. If you're not, know that you alone hold the power to change the narrative for your own life.

2) Become a Net Contributor. On any job, always bring an attitute of "what can I do to add value to the business?" Then do it - without worrying about whether you're going to get direct praise and/or rewards immediately. The people who think of themselves as net contributors often seem showered in lucky breaks in the work world. There's a correlation.

3) Remember that your reputation follows you everywhere. The people you meet now might end up playing an important role for you many years or even decades ahead. If you don't think you're the type of person that other people will speak highly of and want to work with again, than figure out what changes you need to make now to become that person.

4) Be curious and keep learning. In the age of globalization and the Internet, you have access to the best minds and the best thinking on any range of topics. Find something that stimulates you and follow the path to keep learning and find out more until you become an expert - at which point, hopefully, you'll have gained an understanding of how fun it is to have some in-depth knowledge and an even greater appreciation for how much more there is to learn. All of which can easily become an attitude and a mindset that will make you much more valuable no matter what you do.

5) Have empathy for anyone who might consider hiring you. This means you need to understand things from their perspective. When you're applying or interviewing for a new job, keep in mind that the people who make hiring decisions have two big things on their mind: 1) Is this person going to add more value than anyone else I might hire; and 2) How do I know that hiring this person isn't going to be a mistake and a problem down the road.

When I first started in the work world, I didn't know what it was like to sit on the other side of the hiring desk interviewing streams of candidates. The secret is they want you to be a great candidate because they've got a job to fill and typically a lot of other things to do with their time. The sooner they find the right person, the better off they are.

I've made many hiring decisions where I knew the decision would have a profound impact on someone else's life. The candidates who stood out for me (many of whom got job offers) had two things in common: a) a track record that showed they loved working hard and delivering results; and 2) the ability to make me feel comfortable that any hiring risk (and there always is) was absolutely worth it.

Make sure that before you go to an interview you know how you're going to handle those two issues.

6) Understand that the best contacts are the ones you make for yourself. The whole notion that you have to have the right contacts starting out is simply false. Everyone who comes to know you as a good, hard worker is a potential contact. Over time, the number of the people who can vouch for you should grow....as long as you're thinking, "How can I be a contributor who always does more than I'm expected to do?"

7) Don't ask for an informational interview without understanding that it is an interview. You might not be interviewing for a specific job, but you are interviewing for the chance to demonstrate that you're the type of person who should be given access to whatever networks that person has. I learned this early in my career when I was woefully unprepared for an informational interview. I was left almost in tears when the person turned it into a rigorous interview and I came up short. The interviewer closed the session by giving me valuable advice that has always stayed with me: In the work world, you are constantly being evaluated. If you go to an informational interview with the idea that you want the person on the other end to help you, you have to demonstrate from the outset why and how you are worthy of that help.

8) Figure out how you can get the experience you need to compete for the job you want - even if you have to work at no or reduced pay for a time to do it. (This is a good reason to not take on heavy personal or financial obligations too early.) When I was working summers during college as a waitress at Crater Lake Lodge, I decided I'd rather be a ranger, so I volunteered in my limited off-time for whatever job the Park Service wanted done. The Chief Ranger noticed my initiative, and ended up being a friend and mentor who helped me get into the Park Service as a seasonal ranger (complete with Smokey the Bear hat). It's still the coolest summer job anyone I've ever known had.

Years later, after I was at Microsoft, I wanted to switch from being an editor to being a product manager -- which involves managing all aspects of marketing for a product. It was a very sought after job. Since no one had made that transition before, I found a way to do product management work in my "spare" time for eight months in order to become a better candidate. And I took classes at night to fill in some gaps in my knowledge. No one suggested I work two jobs or even go back to school - I just knew that's what it would take to get the job against all the Harvard and Stanford 4.0 MBAs I was competing against.

9) Be flexible in finding ways to make money from something you love. When I graduated with a journalism degree, the country was in a deep recession and it seemed no one was hiring new journalism graduates. I knew I loved writing so I figured out who was paying for writers and editors and found a way in - even though I had to work on subjects that I sometimes had no interest in. (I still remember the agony of editing a several-hundred page manual on "Women's Tailored Clothing.") I still write everyday as part of my work and love it - even though colleagues don't think of me as a "writer" - which is great, because that's not what I'm paid to do.

10) Do something good for the world beyond your job. Volunteer. Get involved in your community. Become an activist for causes you care about. Your good works might not lead you to a new, more interesting job in the near term, but they will help you become the type of person that others want to work with and be around over the longer term. And that's a key part of what it takes to have a successful career.