That Higher Plateau

When nobody listens in a time where temperatures keep rising and tempers flare shows that mankind is no where near capable of healing the wounds inflicted by mortal men. Today, the world is ruled by the unquenchable thirst for power, control, and wealth by those who are blinded by their own greed. When on one listens to reasoning or logic, when no one responds with compassion in times of crisis, and when no one who could make a difference in so many lives through acts of kindness, benevolence and humanity, is the reality of our times.

The constant evolving of technologies that could be used for the betterment of man still is to often delayed, cost prohibitive, hoarded, and otherwise used for the destructive side of man. The greed of some knows no bounds. Through-out history mankind has been both the beneficiaries of innovative technologies and have been casualties of the way man has misused those technologies. Great inventions that have changed the shape of the world and other inventions that have been used not for the greater good of mankind but to inflame the world for selfish gain.

Someone once said that everyone at some point in their life has something so profound to say, write or create that would astound the world. Their ability to convey thoughts and expressions that would elevate all of mankind to a higher plateau are so often not seen, read or heard. Fallen on the deaf ears and blind eyes of those who stand to loose their tight grip on the status-quo is much the reality of today. Too often people are caught in the whirlwind of everyday existence while the power players purposely keep those who shown an authority to improve the status-quo from ever reaching the public. And, the public’s fixation that only people with wealth or in positions of power are the only ones capable of such profound works continues to prevent humanity from reaching that higher plateau.

Sadly, today the world is being denied the instruments in which our lives and livelihoods would be enriched. Purposely denied by a power elite that cares not for the public’s welfare. For years it has been their overwhelming desire to reap more power, control and wealth that has scuttled any attempt by those persons who through their own volition created that something and if given the chance would benefit all of mankind.

Today, so few are listening or seeing the ways in which humanity can rise to that higher plateau. This, when we have a media and too many in government unwilling and incapable of seeing just what certain people are trying to do. And, if only we had access or been able to listen to those individuals who have created the means to enrich our lives our world would be a much better place had we been able to do so.

As it stands today with the world filled with chaos too much of our attention is focused not on those individuals who have that something so important and relevant but on the trivialities of meaningless legislation, aka the boarder wall or some other government policy that supercedes any endeavor that would allow more of the public to be informed that there really is a better way for us all to reach that higher plateau.

How A Successful Tourism Industry Led to Globalization

Most of us have heard the word “globalization” widely used in a variety of contexts over the past few years. But what is the actual definition of this commonly used term? Merriam-Webster defines globalization as, “The act or process of globalizing: the state of being globalized; especially: the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets.” Now that we’ve established the true definition of globalization, it’s probably easy to see how it plays a vital role in the tourism industry. After all, people visiting other countries would naturally be engaging in globalization as they purchase products and services in their travels. But what may not be as obvious is how successful tourism led to globalization. That is the topic we’ll explore in this blog.

Although it’s hard to say exactly when the tourism industry began, many historians would agree that it probably started when well-to-do citizens of ancient Rome began spending their summers in other parts of the region to escape the hustle and bustle of what was then (and is, even now) the metropolis of Rome. That would mean that tourism is, at the very least, about 2,000 years old. But the end of the Roman Empire also meant the end of tourism, albeit only for a few hundred years, as unrest in that region made travel of any sort a risky proposition at best. A few hundred years later, during medieval times, the tourism industry experienced a rebirth when large groups of people began to make holy pilgrimages. That meant that those people needed places to eat and sleep along the way. Another few hundred years later, people began to travel for other reasons – such as to improve their health and to view art, architecture, and visit historic locations. It was at this time, during the Industrial Revolution, when the tourism industry began to take the familiar form that we know today. Methods of transportation were developed, as were hotels and restaurants, to cater to tourists. Finally, beginning in the 1960s, as aircraft and ocean liners became more commonplace and more affordable for the masses, tourism became a global industry. In our day and age, if you have the time and the money, you can arrange to travel, quite literally, anywhere on the planet.

And, as it turns out, many people DO have the time and the money. According to The Statistics Portal, between the years of 2006 and 2017, the travel and tourism industry contributed $8.27 trillion dollars to the global economy. The greatest contributors include North America, the European Union, and North East Asia. While these regions continue to lead the tourism charge, other less-likely countries are making their own mark in the industry, undoubtedly due to the lucrative possibilities that tourism brings with it. Some of the most notable are African countries, such as Namibia, Zambia and Angola, to name a few.

In the KOF Globalization Index of the 100 Most Globalized Countries in 2017, it should come as no surprise that leading the list are many EU countries, including Netherlands, Belgium, Austria, Switzerland, Denmark, Sweden, France, and others. Also on the list – although further down than the EU countries – are Canada and the U.S. The KOF Index of Globalization takes into account three key indicators: economic, social and political. They define globalization as, “… the process of creating networks of connections among actors at multi-continental distances, mediated through a variety of flows including people, information and ideas, capital and goods.” While there’s no doubt about the economic impact that tourism has on the global scale, the other indicators of globalization are harder to measure – namely the social and political influences that the tourism industry brings to the global stage. But if we measure the impact of tourism on globalization with regard to the flow of people, information and ideas, as well as capital and goods, we can say with a certain level of certainty that the success of the tourism industry has more than likely led the way – both directly and indirectly – to globalization.

The Business Model and Today’s Economy – A Warning to Universities and Investors

As spring is upon us, this is the time deans and higher education vice presidents across the land embark on their yearly budget exercise. Given the rosy economic scenario painted by improving wages, job reports and corporate profits, it would not be out-of-place to start dreaming of expanding their own little circles and propose larger budgets and increased hiring for their respective units – what Warren Buffett has dubbed the institutional imperative. My warning: beware!

As an academician, I have often heard high-ranking officials espouse how public universities should be run using a business model. My own university president is a strong proponent of the idea. The problem is that universities are saddled with challenges most companies don’t have to deal with. For example, let us suppose that demand for your company’s product goes down. To keep your company viable and responsible to stockholders you will cut down on production. Fewer sales means less personnel will be needed leading to workforce reductions. Despite lower revenue, the bottom line is kept steady by lowering expenses for materials and personnel.

Let’s look at what happens at a university. Let’s suppose demand for your product, classes, goes down – i.e., fewer students are enrolled. The cost of materials to run a class is minimal as compared to personnel and physical plant costs. You can’t shut down buildings so your only recourse is personnel reductions. Here is a problem corporations don’t have. They never have a case where the few remaining clients demand that the company put out as much product as before the reduction in demand. But if you have a class of 40 reduced to 30 or even 20 students the university cannot cancel it. These students registered for the class well in advance, before the semester even began. Their schedules and even graduation are predicated on it. If the class does not make, students will be in an uproar and in this day and age they have no trouble letting the world know – online. As the news become viral, the university will gain a bad reputation. It will affect future enrollment. Any whisper of lower enrollment sends chills down high administrator’s backs.

Here is another difference between corporations and higher education providers. Corporation hires are more fungible. If you let go someone all you need is several weeks’ notice. Not so for academia. You may let go of staff personnel that way but instructors are on an academic year contract. University administrators may decide not to renew a contract for a non-tenured instructor after the academic year but they cannot terminate during. That means hiring and budget decisions have to be made well in advance.

Back in 2007 I was in the middle of this dilemma. I was the founder and Chair of the Idaho State University Budget Committee. Our mandate, as I saw it, was to keep abreast of economic developments so we could best advise administrators of “hiccups” leading to reductions in state allocations to higher education. Once those came about, we would provide advice on budget allocations to programs and hiring. Academic hires have to be done months ahead of time so timely input meant looking ahead at least six months. It was within that time frame I warned our higher administration of the coming economic slowdown and real estate problems at the epicenter of the Financial Crisis. That message went unheeded at the time so, for the next couple of years, our committee was saddled with helping the administration muddle through ever diminishing budgets.

The unemployment rate at the time of my warning in 2007 was 4.4%, wages increased by 0.3% for the month and 4.4% for the year, and S&P 500 profits were up 16% for the year. GDP growth was pegged at 3%. Sound familiar? There was plenty of reason to be optimistic and yet, the future did not play out that way. The same will happen this year, although the main factors behind the economic stall will be different.

There is a financial storm developing. This time around, the low-pressure front will be due to demographic forces resulting in a decrease in spending from the 46-50 age group, a group dubbed the peak spenders. There will be a prolonged and marked decrease in consumer spending that will lead to a protracted economic downturn starting this year and lasting as long as 2023.

State general accounts will dwindle as sales tax revenues drop and a rise in unemployment leads to lower personal tax revenues. These are the two main pillars filling state coffers. The two others are real estate and corporate taxes. While real estate tax revenue will remain steady, corporate tax revenue will mirror plummeting corporate profits. The bottom line is that state support for public universities will take a cut and once again these institutions will have the difficult task of managing their budgets by reducing personnel. This is, therefore, no time to be dreaming about expanding departments, but instead, a time of planning for retrenchment.

Administrators should shun the temptation to pass down the buck and use university reserves to meet the immediate challenge. Next year will be no better. In fact, this downhill process will continue to get worse, and as I mentioned above, will last until 2023. University officials will be forced to face the music at some point in time so they might as well brainstorm and come up with a 5- or 6-year plan to deal with the malaise.

The warning goes double for those invested in the stock market. The same forces at work within state finances will also hobble our economy and wreak havoc on corporate profits and prices. Stock portfolios will take a substantial hit. My advice is to heed the current stock market warning. We just went through a correction, but these are only birth pangs of the financial storm ahead. The wise will use any uptick as an opportunity to whittle down stock holdings. There will be many who will mock me now, but when the brunt of the tempest comes you will want to be totally out of the stock market.