GLASS-STEAGALL | Anniversary of Northern Rock

Run on Northern Rock, Sept. 14, 2007, first in
UK in 150 years. This is what Glass-Steagall
was design to prevent.

OXFORD, Sept. 14, 2017 – I'm here in Oxford for the annual Oxford Alumni Weekend. 

The lead business story today on BBC News "Business Live" at 8:30 a.m. this morning was the 10th anniversary of "the first run on UK banks in 150 years," i.e., Northern Rock. The bank was nationalized five months laters.

What has happened in the ten years since then? (1) Bank reserves are higher than they were then. (2) Retail banks have been separated from investment arms of the banks. This sounds a lot like what Senator Carter Glass tried to put in place along with Treasury Secretary Will Woodin in 1933. Rep. Henry Steagall from Alabama was pushing through federal deposit insurance for the banks and the Glass part was to protect the taxpayer.

The BBC announcer asked an expert whether the reforms are enough. The expert, a professor, who says no, that there are still too many risks.

The fear here is that the Bank of England will soon respond to good news and possible signs of inflation by raising interest rates. In the UK, that means a rise in the cost of variable-rate mortgages. Some mortgage-holders will be taken by surprise. Defaults may increase and cause insolvency among weaker financial institutions.

At least the new £10 note has Jane Austen on the back. Has the USA ever had the picture of a woman on a greenback? We were supposed to get Harriet Tubman but reports are that Trump has killed that idea.

TRUMP | Triumphal Triumvirate Trampled

Why did Benedictine-trained ideologues
advance extreme agendas? Was St
Benedict somehow responsible?

Among many of my fellow alumni of Benedictine schools (I attended Ampleforth College and Portsmouth Abbey School for a total of six years), it has been a source of embarrassment that three key advisers to Donald Trump are graduates of these schools. 

The three people constituted a strategic triumvirate. All three are now out. In reverse order:

1. Sebastian (Seb) Gorka 

Sebastian Lukács Gorka attended St Benedict's School for Boys, Ealing Abbey. He was the last of the three to leave his job at the White House, which he did on August 25. He issued a resignation letter, but the White House insists that he did not resign — implying that he was fired. The White House announcement said: "Sebastian Gorka did not resign, but I can confirm he no longer works at the White House."

Gorka was a deputy assistant to President Trump, focusing on national security and terrorism. He was closely aligned with departed senior strategist Steve Bannon, and he seemed to link his departure with Bannon’s in his exit letter.

2. Stephen K. Bannon

Steve Bannon attended St Benedict's College preparatory school in Richmond, Virginia. He was Donald Trump's chief strategist before and after Trump's election. On August 19, Bannon was forced out. The decision was "mutually agreed" by White House Chief of Staff John Kelly and Bannon. 

3. Sean Spicer

Spicer attended Portsmouth Abbey School. He was Press Secretary at the Trump White House. He resigned on July 21 after opposing President Donald Trump's appointment of Anthony Scaramucci as communications director. (PS Sept. 6, 2017: He damaged his rep working for Trump, says Politico.) 

LONDON | Pay Phone to Solarbox

Yesterday the "solarbox" was launched in London, an innovation of two graduates from the London School of Economics, spurred by a competition held by London Mayor Boris Johnson during the summer.

The obsolescing red phone booths are being repainted green and are being redeployed as free public charging stations for cell phones and other digital devices, paid for by ads.

The first one was installed yesterday in Tottenham Court Road, the main retail electronic shopping district. Another one is scheduled to follow in January.

Despite the spread of cell phones, many cities like New York, London, Moscow have a large number of pay phones on the street. I remember last time I was in Moscow the 20-kopeck coin was very valuable because it was the only way to make a call on the pay phone and there were not enough of these coins in circulation, so people in an emergency would offer to pay several rubles for a 20-kopeck coin.

In New York City, the phone booth before the cell-phone era was a crucial amenity, and also served as a changing room for Clark Kent to transform himself into Superman while Lois Lane wasn't paying attention. The City of New York continues to collect revenue from them because private advertising agencies find them useful as places to put up advertising. New York City has also been experimenting with making phone booths into WiFi hotspots.

London's phone booths are famously red, like their mail boxes ("pillar boxes"). The color goes back to the red St. George's cross, the central red "plus sign" of the Union Jack, which in turn can be traced to the red cross of the crusaders. In Dublin the colors were changed to dark green. The solarboxes are light green.

The LSE students who invented the solarbox were Kirsty Kenney and Harold Craston. They won a £5,000 ($8,000) financing.

FOOD BIZ | Killer Tomato (Comment)

Matt Paice with His Pop-Up Stand in London, Walks Away 
with Tastiest Startup Award from Virgin.

Killer Tomato is a product launched at a popup store in London.

It changes the perception that vegetarian food must be bland.

The startup was founded by Matt Paice (full disclosure: he is a nephew). 

His meat-free Mexican food is said to "pack a punch".

He scooped up the Tastiest Startup award from Virgin Startup for his Killer Tomato street food startup.

Comment

In New York City, Brooklyn is thought of as the culinary innovation epicenter.  The best new restaurants are heavily concentrated there.  Food startups in the United States attracted $350 million in 2012 according to CB Insights, and Brooklyn has been outperforming the rest of the nation in formation of quality restaurants and other new ventures.

London startups are getting the same attention, with a 25 percent increase in the number of restaurants opened in 2012 compared with 2011. This sector offers flexibility in the ways that sales can be made -  from food vans to dining clubs, pop-up restaurants to home online retail, or even simple market stalls. 

I have a suggestion for Matt's next product, an alcoholic adaptation called Tequila Tomato. Could be sold online in plastic bottles as a Bloody Mary Mix.

NYC | Urban Flooding Wake-Up Call (Guest Post)

Robert Trentlyon, Boolavardier
(Photo by JT Marlin)

The following post was sent to me by Bob Trentlyon, a Yale man (Monsieur Boolavardier, I call him) and former publisher of the Chelsea-Clinton News and other fine newspapers. Bob has asked me to post his comments on my blog in the hopes of being read by people he hasn't reached before. Here's what Bob wants you to know:

Justin Gillis of the New York Times performed an important public service when he wrote a major piece in the January 14 "Science" section entitled “The Flood Next Time”.  He wrote about the inexorable rise of the Atlantic Ocean and its impact upon the east coast of the United States.  Not only is the sea level rising, but the land mass in many places is sinking. Not only is the sea level rising, but it is rising faster.  That means that flooding and hurricanes will create even more damage.  This means that we have to do something about it very soon.   

There are three options - moving to higher ground, resilience, or sustainability.  Moving to higher ground is the most logical, but I am not sure or able that millions of New Yorkers are ready or able to do that.  Resilience means living with the higher water, raising your building, and making continual repairs.  Sustainability means protecting yourself from storms and flooding by building storm surge barriers (SSBs). 

Restoring marshes, and building berms will be done using either  resilience or sustainability. In England there is a 50 year plan for London and for all the neighboring towns.  The London Environment Committee tells the towns what they must do to fit in with the 50 year plan.  The latest North Sea storms had no impact on London, because of storm surge barriers on the Thames that had been in place for many years.

Two cities that have lived with resilience and have chosen storm surge barriers are St. Petersburg, Russia and Venice, Italy.  Both of them had been plagued by flooding for hundreds of years.  St. Petersburg is situated at the mouth of the Neva River. The Neva River Estuary that leads into the North Sea closely resembles the Hudson River estuary. This past year the storm surge barriers were finally completed, and this past fall St. Petersburg was not flooded for the first time in 307 years. The British company Halroyd was the major adviser on the project. The St. Petersburg extensive series of gates and barriers is much longer than what is proposed for the five mile stretch between Sandy Hook and the Rockaways. In Venice, the Venetians were tired of their first floors being flooded every year. The Venetians, with a big assist from the Italian government, are presently testing their new SSBs.

In smaller residential buildings resilience means making do with what we have and modifying existing structures.  It means moving machinery to a higher floor or even the roof. It means vacating living space on the ground floor and eventually the second floor.  There would be some governmental money to assist the owner in making these changes, but not enough. The streets would still be flooded every year in the flood zone.  The flood zone will expand as time goes on.  Most housing modifications in the future will be paid by the owner of the building and passed on to the tenants.  Flood insurance will not exist or be limited, and government aid will be either minimal or non-existent.

If storm surges and flooding can be controlled by building barriers at two or three strategic locations that would be more effective and much cheaper than fortifying hundreds of miles of NYC shoreline and tens of thousands of buildings.  Why are some people afraid of having SSBs studied?

COACHING | A Business in the National Interest

I just finished reading "New Coach" by Lis Paice, at http://amzn.to/V7AnNn on Amazon. It gets 7,000 hits on Google, so the publisher, the Open University in the UK, is doing a good job of promoting it there. 

But so far not apparently in the USA. I just wrote the first review on the U.S. Amazon site. 

Yet I would argue that the book is needed much more on this side of the Atlantic than it is in the UK. 

Medical care costs are eating the USA alive – it is the most worrisome part of the Federal Budget. Medical cost increases  are ultimately the only convincing target of the mindless "sequester" by House Republicans. We have some time to deal with rising medical care costs, and the ruat caelum approach of fiscal ideologues is flirting with destroying America's recovery, in which the rest of the world has a big stake.  

The book is written by the former Dean of Postgraduate Medical Education for London, Dr. Elisabeth Paice, OBE ("Lis Paice" is her coaching name). After 16 years in her job overseeing the clinical training in the London hospitals of British medical schools, she retired to become a personal coach.

This book is a record of her early years as a coach trainee inside the National Health Service – what she learned about herself, about her anonymous clients and people in general. The book has broader significance than the author claims. The United States has a medical care system that functions well for the 1 percent, and attracts wealthy people from overseas to get high-quality high-cost care, but does not work so well for the 99 percent. The United States ranks at the top (#2 after East Timor) in how much the public spends on health care (18.2% of GDP, vs. more like 10% in most OECD countries), but ranks 37th among U.N. members in overall measures of health outcomes. The UK ranks at the top, with the Netherlands and Australia, on outcomes. The difference is not just the single-payer approach of the NHS, since a country like France does almost as well while relying on private businesses for health care delivery. 

The key to running a medical care service with full coverage at half the cost of the the United States, with better outcomes, seems to be the NHS reliance on teams instead of super-doctors. Building teams that function efficiently and effectively on behalf of the patients is a major challenge of the National Health Service, to the point that mentoring is a key NHS program. Dr. Paice was named the NHS "Mentor of the Year" in 2010, so her peers think she is pretty good at this team-building exercise. 

A coach is a kind of mentor, but as the author of "New Coach" makes clear, a key difference is that a coach is an equal, whereas a mentor is a parental figure. It was important for the King's coach in "The King's Speech" to call the king "Bertie" - thereby establishing a relationship or equality. 

A coach and her client may share the same encounter, but they do not share the same experience. The experience for clients should be one of talking about their past, present and future. The role of the coach is to ask questions, to summarize what the client says periodically, and to provide facts when useful. The coach may also provide some sympathetic or congratulatory comments, but in a non-directing way. What the coach must not do is talk about herself, or try to "rescue" clients by intervening on their behalf.

One of the book's most instructive stories - and, indeed, this is as much a book of morality tales as any collection of Hans Christian Andersen,the Brothers Grimm or Jean de LaFontaine - is about a failed coaching experience. The client was having a problem at work and Dr. Paice solved it with a couple of phone calls in the presence of her client. The client was grateful but never came back. Takeaway: The coach's job is not to solve problems; it is to inspire clients to solve their own problems.

The book has some delightful humor. For example:

I have heard people say that pessimists are happier than optimists - because things usually turn out better than they had expected - but it has not been my experience. Eeyore was not a happy donkey.

At another point, Dr. Paice tells the story of an early session with the leader of the NHS coaching course. Each of the trainees was to listen to the problems of the other and offer advice. Each of the eight people in the course said they thought they had given very good advice but unfortunately they didn't get good advice. In other words, people like giving advice and they hate getting it. This is another reason why coaches are proscribed from offering advice.

This book is especially value for three groups of people, those who:
- Are thinking of becoming coaches.
- Are thinking they might make good use of a coach.
- Are sure they have no need of a coach.

When Obamacare gets to the point where the medical establishment realizes that it needs to move from the Famous Doctor concept to a team approach, it will surely catch up to the NHS in discovering the importance of teams. When that happens, sooner the better, Lis Paice's book could be one of the Gospels for a new approach to medical care.