Here’s a little laundry list of issues I’ve got with Toyota, most of them personal experience:

• I was given weather proof mats with the purchase of my car, to be shipped to my address. Two years later, still no mats.
• A few months after making the purchase and at 11,000 miles (1,000 miles over the 10,000 mile new purchase full warrant), the front bumper came unhitched from the wheel well. Mind you, this is cosmetic, but I expected the company to fix it. They did not, and quoted me a $800 price tag. Needless to say, I’ve learned to deal with it.
• Servicing the vehicle with the dealership has historically been expensive. The first 30k miles brought on a a couple of $250+ routine services. Even the routine oil changes were expensive at $50+. Over the last six months, the price of an oil change has fallen to around $30, much closer to my expectations.
• My little tray in the console between the front seats is stuck and won’t open. Apparently, a card of some type fell behind the latch, so I can’t get it open. Mostly cosmetic, but still very annoying.
• The company has 12 vehicles listed with a recall. 12… Really? I think we can call that a systemic issue at this point.

It’s a little early to criticize the company for its handling of the issue. After all, lets be honest, this isn’t an exploding gas tank problem. According to statistics from the company, over 80% of Toyota’s vehicles are still on the road after 20 years. I couldn’t even find Toyota listed when I googled for top ten automobile recalls (here’s one example). At this point, my issues isn’t with the company having recalls. My issue is with how poorly the company is handling the recalls. Here’s how the company has responded:

• Running a weak commercial
• A Washington Post Op-Ed by Toyota’s president of Toyota Motor Corporation
• A USA Today Op-Ed by president and COO of Toyota Motor Sales
• Shutting down operations at two US plants

I know the company is strong in its corporate culture, and maybe in Japan the brand carries enough strength to inspire confidence with consumers. But here in the US, we want to see executives stepping up to plate and taking responsibility for the problems. Failure to do just that it was drove many of us away from our own domestic car companies

Ultimately, I think Toyota is (hopefully) taking the right operational steps… but they are failing miserably in the PR department. I’ve almost reached my breaking point, between hearing about a new recall every morning on CNBC to listening to the talking heads opine about the issue in the evening. The company has to step up and reassure me as an existing customer. For me, that means some level of personal communication. It also means making a vehicle at an affordable price point that dominates in the quality and performance categories. Oh, and sending me my floor mats.

Unfortunately, I don’t earn my living thinking about UT football… so I need to get this off my brain so I can be productive. Here’s a download of some things going through my head:

Thoughts on Kiffin’s Exit:

• Let’s be honest… Kiffin’s career flourished at USC and his persona/identity is riddled with USC references (i.e. we adopted a “USC/West Coast” offense). I’d wager that inside his psyche, this was his dream job all along. The school has plenty of money, California loves big personalities, and he has a history with the school. I know its hard not to take it personal, but the guy made a career move. Ill timed and very inconsiderate, but he has wagered his entire career on making USC successful. He failed in the pros, he’s jumped ship on an SEC school after talking trash about most others, and now he’s inheriting a very bruised USC program. If he can’t make it work and quick, he will be reconciled to a tier 2 coach for the rest of his career. Particularly once his dad retires from football.
• I’ve supported Kiffin from the start, but let’s just be honest, the guy has a mouth on him. I grew up seeing Tennessee football and their coaches as classy and confident, not mouthy and arrogant. I’m not sure Kiffin ever fit the Tennessee culture, as much as we tried/pretended he did. Good riddance.
• While the fans are devastated by this, the real victims are the current players, including those enrolled for this season. They were sold loyalty, performance, and discipline from a team of coaches that turned on them in a moment of real need. We need leadership right now from the players. If they don’t step up, this team will have a very difficult time. We still have much of the same team that lost to the national champions by a blocked field goal… Much of that team is returning next year. I repeat, most of that team is returning next year.
• Recruiting is going to take a serious hit… Frankly, I don’t see anyway we hold together a recruiting class that makes it into the top 10. Fortunately, a couple of our large recruiting holes (i.e. quarterback) are “locked in” barring transfer restrictions from NCAA.
• The coaching cabinet is going to be cleared out… although I hope we hold on to some of them, specifically Lance Thompson and Kippy Brown (who has been named interim-head coach).
• I’m not one for taking pot shots at people in leadership positions, but from a business and competitive economics environment, what was Mike Hamilton thinking providing a $800k buyout for a young up-and-comer like Lane Kiffin. I don’t remember the link or the specifics, but I think we had a $4M buyout to fire him in his first year, but he could leave us for $800k. You know we were paying about 80% of competitive salaries in the SEC, so you know there was some flight risk involved. You’ve got to create more protection than that.

Now that I’ve got that off my chest, let’s talk about where we go from here:

• New head coach and recruiting coordinator… STAT! We need to analyze and make decisions on the current recruiting class. Now to be clear, I’m a big Kippy Brown fan and don’t mean to pass him up for head coach, but I’ve heard he isn’t interested. Some of the other coaches may be able to transition with a new coaching staff (can we keep lance Thompson, please?) and some of them need to find other homes. Either way, it needs to happen fast. As an aside, please stick with a pro-style or smash mount offensive strategy. Let’s not get gimmicky. Here are my three picks for head coach:
  • Will Muschamp–This guy is the heir apparent for Texas, so he won’t be cheap or easy to secure–he currently makes $900k + bonuses at Texas. The current coach, Mac Brown, has a contract through 2015, so maybe Muschacamp can be enticed away with an early opportunity to head coach. He’s a UGA graduate and worked at Auburn and LSU, so he knows the SEC. He’s currently the defensive guy at Texas, a school with a phenomenal recruiting and winning track record. He’s young and he’s fiery.
  • John Gruden–This guy is a little untested in SEC football, although he did work as a grad assistant at UT back in the mid-80′s. His recent stint as head coach of Tampa Bay brought a Super Bowl win and a couple of division titles, and he’s had mostly positive years. One thing that I think is a big selling point is that he has left a wake of successful assistant coaches during his time at Tampa, leading me to believe that he knows how to identity and develop talent– a critical skill for a college coach. His wife is a UT graduate and I’ve heard, although I can’t confirm, she was a cheerleader.
  • Kirby Smart– I know this is a LONG SHOT, but the current defensive coordinator at ‘Bama is a stud. He’s young, an awesome recruiter with experience all over the SEC, and worked Bama’s defense (with Saban, of course) into the monster that became the national champions. That defense destroyed Florida. I repeat, that defense destroyed Florida. He would be hard to get, seeing as he just turned down a lucrative offer from his alma-mater to be defensive coordinator at UGA, but the guys is a rising star. Also, making the career move from ‘Bama to the Vols would be a mini-version of Kiffin leaving for USC. All’s fair in love and war… and SEC football is war (thank you to my ‘Bama friends taking pot shots on my twitter and facebook accounts last night).

So, all is not lost Orange Nation. Maintain your composure, stay positive, and don’t riot on the campus (again). If you need a laugh, just remember that at least Lane Kiffin used a Trojan to screw Tennessee.

Back to work and… Go Vols!

So enjoy…

The Obama administration is reporting that they have “saved or created”150,000 American jobs and that they are ramping up the stimulus to “save or create” an additional 600,00 jobs. The problem with this claim is that its total political drivel–you can’t measure “jobs saved.” The Department of Labor doesn’t do it, the Bureau of Labor Statistics, neither does any other legitimate organization that collects economic data. Any attempt to make that claim is bogus. Is it possible to estimate, from a theoretical perspective, the multiplier effect of stimulus spending? Yes, but not with any real accuracy or focus. It’s like a 3rd baseman trying to extrapolate how many runs  he prevented from scoring based on the number of balls he fields. Fielding a hit ball consistently makes him a solid 3rd baseman, but it doesn’t mean every ball is the equivalent of preventing a run.

We know that some jobs have been created. The government is pumping an enormous amount of money into every thing from overhauling our national laboratories, to NASA, to community organizations. In true big-government fashion, they can hire people to dig holes (which this deficit is certainly doing) and hire people to fill the hole just dug (if only the deficit was that easy to fill). But is that really having an affect?

In reality, this “saved and created” is just a bait-and-switch political maneuver. When we look at the aggregate data, we know that unemployment is at 9.4% as of May (see here). This is the highest rate since the early 1980′s and is an almost 2% increase since January (when Obama took office). You can put all the lipstick you want on a pig, but it’s still a big… and this country is still experiencing high unemployment.

Think about this the next time you vote… Hopefully we don’t find ourselves so over-leveraged with debt that we’re not in the position to finance the necessary responsibilities of government (a-hem… national security).

Hat tip to Prof Greg Mankiw at Harvard for his “Create or Save” thoughts, and to William McGurn on his “The Media Fall for Phony ‘Jobs’ Claim” at WSJ.

So, the big news is that I’m engaged… I’ve got a wedding website up at masonick-miller.com, so go check it out!

I’m a firm believer that too much of a good thing is a bad thing. Applied to personal talents, a strength overdone is a weakness. That pretty much sums up my perspective on any technology, no matter how controversial or mundane. But this absolutely blows my mind. One teen couldn’t read a clock. Another one wondered how he would interact if he wasn’t able to send 17,500 text messages per month (seriously… I’m speechless), and another one seemed clueless about an actual newspaper. I know we celebrate that youth engage technology and are curious, but is this how social media is affecting their problem solving and social interaction skills? I mean, I honestly thought this was a joke at first.

Let me sum up my grumpy old man rant by saying that the real power/opportunity/market for social media is so misunderstood and abused by soooooo many. And apparently parents don’t teach their children constraint.

I’m always a little stunned when anything I’ve written gets attention… To be honest, my blog is really a whiteboard of sorts for my own mind. I do it in a semi-public venue because: a. I like getting outside opinions on my thoughts, b. it creates a validation for me as a brand. You want a character reference at a job interview? I can give you that. I can also give you a blog with 5 years of my thoughts. With my minimal marketing, I typically get between 25 and 35 visits per day. As you can tell, I don’t get around much (in a digital sense).

When checking my blog analytics, I noticed that I’ve been getting a little traffic from knoxify.com. After some quick analysis, I discovered that I’m listed under “More Knoxville Blogs.” I don’t know how long I’ve been listed there, but I’m appreciative. I’m also not sure what occurred that is driving traffic through knoxify.com and to my site… but I’ll take it.

I like the knoxify sight and subscribe to the RSS feed, but I really like the two guys leading the effort. I’ve never met either of them in person, but their fingerprints are on some things that I admire and support. Besides, they both seem genuinely interested in advancing our local community. I love it when the world wide web goes local– rock on!

So, here’s to the knoxify folks for listing! Thanks!

The stimulus screw-up bill, formally named the American Recovery and Reivestment Act, is the product of a particular economic school of thought. It isn’t a “new” idea. In fact, the idea was formally fathered by John Maynard Keynes almost 100 years ago and has been in practice (unsuccessfully!) for centuries. At the core of his theory is the idea that government directed discretionary spending can spur economic growth by creating demand. With doubt being cast on the economy and blame being levied on free markets and stock exchanges, the last couple of years have seen a resurgence of Keynes economic theory. President Obama has been a consistent advocate for this idea.

I’ve previously argued the fallacy of this notion… simply put, you’re robbing Peter to pay Paul. The point can be made that there are some legitimate infrastructure projects that need federal spending, but I’m not convinced that the 1,400 pages of legislation was true to that notion (i.e. reseeding the National Lawn, voter registration aid for ACORN, etc). Building up to the vote, politicians (including President Obama) made emotional and fearful arguments about the necessity of the legislation. In reality, I think they preyed on fear in order to build momentum around the legislation. Will the legislation spur some economic activity? In the short-term, probably so. Will their be negative consequences to the legislation? Absolutely. Will the negative consequences outweigh the short-term benefits? I’d wager yes. And here is why…

The cost of the legislation is near to one trillion dollars. Given the fact that we operate in a deficit (i.e. we spend more than we collect on taxes, tariffs, etc), that means the trillion dollars commitment is currently unfunded. For the short-term, the government can utilize its reputation (i.e. the good faith and credit) to set in motion these plans with little to no capital expenditure. As a matter of business principle, that will only go so far. Ultimately, there must be money to fulfill the commitments. In order to have that money, government has three options: 1. raise taxes, 2. cut spending in other areas, or 3. print more money. Each of these has a negative consequence.

• Raise taxes– Raising taxes is cutting into the discretionary spending of individual citizens. First, it is very unpopular with the citizen being taxed. Second, time has show us that individuals have much more economic impact when spending their own money than the government does when spending it through increased taxes. Thirdly, less discretionary money ont he top means high net worth individuals and companies have less money to invest, pay salaries, etc. Ultimately, raising taxes can deepen a recession and slow recovery.
• Cut spending– When spending is the popular answer to the problem, I am very doubtful that cuts will be an effective solution. Besides, we’d have to look at military or entitlement expenditures as possible cost savers. I don’t think Obama has the political clout or courage to tackle cuts in either area (although, as I’ve written before, entitlement programs have the potential to be far more destructive in the long-term).
• Print more money–As the supply of money increases, the value of money decreases. I won’t get into the complex economic of the point, but basically you’ll find everything costing more…

So the question is, how will we pay for this 1 trillion expenditure? Ultimately, I think it will be a combination of all three. Will it be in the near-term? Probably not. In fact, I think Obama may not face the full consequences of his actions unless he sees a second term. This near-term benefit, long-term consequences is the core problem with Keynesian philosophy. That and the moral danger of the public realizing that they can vote themselves money (in the short-term). The public doesn’t have the interest or the training to really think through the economic consequences of Keynesian theory. To be honest, with today’s news media, they probably wouldn’t have the information necessary even if they wanted to. Besides, why would they oppose these actions? They aren’t worried about long-term consequences… Instead, their self-interest in comfort survival doesn’t consider long-term consequences, even when the near-term benefit is minor.

Usually, I feel lonely when trying to make these arguments, but not today. I have a fellow native Tennessean and Nobel laureate, James M. Buchanan, to look to for guidance and support. Dr. Buchanan argues that utilizing government discretionary spending is masking self-interest and irresponsible fiscal behavior around weak, populist, and purely theoretical intellectual arguments. The near-term benefits are outweighed by long-term consequences like higher taxes, inflation, and budget problems. Aside from that, this type of spending typically leads to new “entitlements,” which further ties the hands of tax payers and the democratic process.

Where will this lead us? In the short-term, I don’t know. So far, we haven’t seen a very     strong sign of support from the stock marekt. Long-term, I think my generation is going to carry this burden for years to come.

The Girl let me know about this site– Daily Plate. Basically, I can track my caloric intake and exercise with an online diary to chart my progress towards weight loss and running a 5k later this year. Some information that I found interesting about my lifestyle and health goals include:

Daily caloric intake goal: 2,170
Weekly weight-loss goal: 2 lbs.
Current weight: 255 lbs.
BMI: 30.24 (not good! overweight is above 25!)

I’m kind of frustrated that I let myself get this out of shape. In 2005 I was running 2 miles 4x per week and weighing around 215 lbs. If I can stick to this program, I should be able to lose around 10 lbs. by the end of the month. I’d like to see myself in ideal condition by the summer months. Right now, I think that looks like 225-230 lbs. and running 2 miles comfortably.

On a side note, I’m a little worried about my right knee. It has a verys trange popping/sliding thing going on right above the knee cap. I injured this knee when I was 12 years old and wasn’t able to walk on it for a 3 month time period. I’m concerned that this may be a later effect of that injury. I don’t notice it when I’m running, but it is very obvious when on the bike.

Honestly, we need something to happen… Unfortunately, I think Congress and the White House are chasing the wrong economic philosophy. The president COULD see to it that the 14,000 page stimuls bill wasn’t so loaded down with pork. Congress COULD take legitimate action towards freeing up credit and responsible use of TARP funds. Instead, we’re worrying about executive compensation, cramming incredibly partisan legislation through the legislative process, all the while screaming “the sky is falling, the sky is falling.”

In the end, things are going to be fine… as long as we let things be and free up asset allocation. Remember, this is NOT the first time we’ve faced a recession. In fact, over the last 100 years we’ve faced 21 recessions( see Seeking Alpha for more information). The market needs to reestablish an equilibrium, which will only happen once the necessary information is made available and assets have liquidity to move around. In the mean time, look at some of these historical quotes on economic downturns in order to gain a little perspective:

“The truth is that Wall Street gamblers are one of the causes of our frequent business depressions” –FLoyd Parsons, October 1923

“There are two great dangers to the continuance of prosperity. The first is the false idea that business is still governed by a cycle of boom and depression, and the second is that the leaders of business will think that the country is broke because some of their friends are. And also there is the danger that many executives who have been playing the market instead of working will not know how to get back to real work.” –Samuel Crowther, January 1930

“Those who favor a deficit as an alleged anti-recessionary measure tell us that it will be ‘temporary.’ But there is no such thing as temporary large-scale deficit financing.” –Senator Harry F. Byrd, October 1958

“Prosperity is when people buy things they can’t afford; recession is when they stop doing it.” –H. E. Martz, February 1963

“A recession is when your neeighbor loses his job. A depression is when you lose your job. And panic is when you wife loses her job.” –Winston Pendelton, November 1990