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By Tom Demerly for tomdemerly.com

Business rewards bastards. And Seton Claggett was never a bastard.

TriSports.com in Tucson, Arizona is closing after 17 years of being one of the largest, and one of the first, online triathlon retailers. TriSports.com helped invent, define, and then sink the triathlon industry.

What happened to TriSports.com is happening to all of the triathlon and high-end bicycle business, and it is worth looking at.

Seton Claggett, TriSports.com founder and President, messaged me early today with insights on why the business is closing:

“We are closing because I was in litigation with the bank that caused me to go into BK11 4+ years ago. We went to trial on breach of contract, breach of the covenant of good faith and fair dealing, and fraud. The judge ruled last week that the bank committed all of these but ultimately did not cause us any damages. I now owe them the original $1.8M (most of this would have been paid off by now) plus millions in attorney fees and costs.”

There will be a rush to judgment about what caused TriSports.com to close. Set against Claggett’s disclosure of bank litigation I’ll suggest it was not any singular reason that TriSports.com is closing, but rather a creeping, gradual, decade-long “death by a thousand cuts” that pervades an industry populated by people who like bikes and triathlons first, and do business second. Even though Claggett was not that man- he is a formally trained and gifted businessman- the rest of the industry weighed on pricing and distribution strategies. The Internet experts will have their say, but it’s unlikely many of them will understand the real reasons TriSports.com is closing and the industry as a whole is suffering.

The people still in the bike and triathlon business will pay no heed as the industry continues to contract and fails to adapt under the ruthless crush of economic reality and accelerating business change. I know because I have been one of those people- a business owner, and I did not change, so I know firsthand.

You can’t tell a small business owner anything. I’ve tried with four businesses I worked for; people tried it with me when I owned my own business before that. We never listen.

Until we lose everything, you can’t tell us anything.

I’ve seen five other bicycle and triathlon retailers ride their businesses into the ground. TriSports.com is just the biggest of us to close. It’s the 9/11, the Black Tuesday, the Automotive Recession, the Chernobyl, the Fukushima and the Three-Mile Island of the triathlon retail industry. Once the fallout clears, the industry will be radioactive for years and will only be habitable by ego-driven mutants of the small business world deformed by their bizarre and nonsensical toxic obsession with a sport and a “business” that eats its young, then consumes itself as their internal voice tells them, “I am the one who can get this right”.

They’re wrong. The triathlon business is no longer viable on any significant scale beyond hobby. There are a lot of reasons for that, enough to fill a book.

If you want a single narrative to the complex issue of triathlon business failings, then call it the same thing triathletes suffer from as a culture: hubris. I will, however, suggest that in the case of Seton Claggett and TriSports.com, he is a rare man largely immune to hubris.

I worked at TriSports.com for over two years in their bicycle, then marketing department. One memory of many defines the experience:

The employees of TriSports.com are high in the Arizona mountains outside the sleepy town of Show Low, Arizona. It’s a town named after a bet two prospectors made over a gold strike in the area. Both of them lost. We’re putting on the annual Deuces Wild Triathlon Festival, a series of endurance races in the high, wooded area surrounding Show Low.

Most of the about-50-person staff from TriSports.com drove from Tucson to Show Low, Arizona to help put on the Show Low Triathlon Festival. It’s a massive annual multisport event with kids’ races, various distance triathlons, an off-road triathlon and an orgy of the triathletes’ favorite endurance activity, getting free stuff. The event concludes with a giant raffle benefitting charity where tons, and I mean tons, of triathlon gear and schwag are given away for a charity donation- about the same volume of stuff sold in a small triathlon store in a year. But this is TriSports.com, and we are the largest. So, we can afford to give away tons of stuff for free people probably would have bought at full price anyway.

After the festivities are over it is time to clean up.

It’s hot out and Seton Claggett is addressing us while standing chest deep in disgusting, reeking garbage inside a trash hauling semi-trailer. Every one of us is exhausted, filthy, smelly, sore, hungry and sleep deprived.

“If we leave this mess here it goes against everything we stand for.” He tells our downtrodden mass of long-faced employee volunteers as the sun sags. It’s like a scene in a book about forced labor camps. This is the triathlon industry gulag, and I am exiled here like a less-intellectual retail Solzhenitsyn banished to the labor camps for my own personal failings in this business. Like Cool Hand Luke, I gotta get my mind right.

A key tenant of TriSports.com is environmental responsibility, and cramming all this garbage into the back of a couple semis to dump in a landfill is against Seton Claggett’s molecular make-up as an environmentalist, former boy scout, parent and business owner. It is against the Little Red Book of TriSports.com doctrine.

Despite the sickening, nose-permeating stench of rotting banana peels under the high Arizona sun, dirty bottles filled with congealing sports drinks, discarded race equipment soaked in athlete urine, changed diapers from spectators’ toddlers and all the other disgusting offal produced by a couple thousand athletes and their closest friends, Seton wants us to sort the garbage by hand into bins for environmentally responsible recycling and processing.

Claggett is clamped onto the ethos of environmental responsibility like the face-hugger in “Alien”. The Claggetts have two kids, and Seton’s life mission is to leave the world a better place than he found it for those kids, and for everyone else. Seton and Debbie Claggett’s unswerving attachment to environmentalism isn’t corporate feel-good window dressing. They own it. Environmental responsibility and a doctrine of leaving things better than you found them is in Claggett’s DNA, and he has cloned it into the corporate DNA of TriSports.com and its culture. Not to sell more stuff, but because Claggett doesn’t just believe it’s the right thing to do, he knows it is the right thing to do.

And now he stands chest deep is piss-smelling filth to prove it. And prove it he does.

One by one employees slowly churn into action, pulling trash bags out of the back of the disgusting mess, opening the garbage bags, pulling out discarded wet wipes with… something brown on them. It’s not just gross, it’s fucking gross. But Claggett somehow walks the walk with enough conviction he inspires the entire staff to wade into the offal and begin sorting the revolting mess into neatly organized recycling barrels.

Claggett somehow inspires a crew of tired, volunteer employees to sort filthy garbage by hand in the dark after consecutive 14-hour workdays. Show me a leader strong enough to inspire that, and I will show you Seton Claggett.

A couple hours later, in the dark, we stink like hell and the world is a slightly better place. Claggett himself is covered in filth, and the last to stop working. I have found a new hero.

The Claggetts defined themselves repeatedly with acts of generosity and kindness both large and small. When Seton saw me riding my bike to an airshow loaded down with camera equipment early one weekend morning he secured a pass for me to the Air Force base and took me with him to a private air show during the Heritage Flight Conference at Davis-Monthan AFB. When my cat Frederick died of old age Debbie had every employee sign a sympathy card for me. I still have that card.

The charity and giving doctrine of the Claggetts was infectious. It spread like a smiley-faced plague through the building. After riding my bike to work one day in a rare Tucson downpour the Human Resource Director, a woman named Susan, found dry clothes for me to put on and a towel. When I obsessively worked 70-hour weeks she counseled me for working too many hours.

But heroes are fallible and complex, and Seton Claggett is no exception. Claggett was oddly fixated on loading the dishwasher in the employee kitchen correctly. He produced a YouTube tutorial video on the correct procedure, lectured employees at meetings on the correct process and even installed a video camera over the dishwasher to verify compliance. Where did that come from? I chalk it up to Claggett’s penchant for clear thinking and process. He is a smart man, a man of organized thought, spreadsheets and analytical problem solving. To him it is incomprehensible that a person could not load a dishwasher correctly, and that detail mattered. It was a teachable moment.

The dishwasher conundrum.

The story of TriSports.com and the rise and fall of the triathlon industry deserves to be told. It’s a complex story not well suited for Internet chat room fodder. It is more complex, both worse, and better. It doesn’t fit in a 1300 word blog.

If Seton Claggett had opened a software company, an app developer, a social media outlet or any other emerging business I’ll suggest we would mention his name alongside Gates, Jobs, Buffett and Zuckerberg. Claggett is a tirelessly hard-working man with a Masters in business and a deep, analytical mindset and strong stomach for risk. Unfortunately for him his first round of entrepreneurship was spent on an industry filled largely by people long on enthusiasm for the sport, too quick to give a discount and short on business acumen.

I wager Seton Claggett’s next round at business will conclude very differently.

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By Tom Demerly and Jan Mack for tomdemerly.com

An elderly man and woman driving eastbound on Hines Drive under Telegraph Road in Dearborn Heights were rescued from serious injury or worse after a crash and vehicle fire on Wednesday, June 14, at approximately 5:15 PM by passing cyclists Nate Nalder, 41, of Dearborn, Michigan and friend Dave Taylor.

Nalder, an experienced road cyclist who frequently trains along Hines Drive, told us, “Dave Taylor and I were riding down Hines, going west. Just after we passed under Telegraph we saw a white, late model Ford Fusion driving across the lawn on the other side of the walking path. It was moving fast across the grass, maybe 45-50 MPH. It came back toward Hines, we heard a loud ‘boom’ and the car rolled three times.”

An unidentified male was driving the vehicle with a female in the passenger seat. The occupants of the vehicle were described as “elderly”. According to witnesses at the scene of the accident, a medical incident may have affected the driver. The cause of the accident has not been officially determined.

When cyclist Nate Nalder saw the accident happen he turned back toward the place where the vehicle came to rest. “I hurried and checked the traffic real quick and rode back to the car and dropped my bike and ran there to the driver’s side and pounded on the window.”

Nalder was attempting rescue from the driver’s side door, but heard a voice from the passenger side shout, “Help me, I’m trapped, get me out of here.”

The airbags in the vehicle had deployed and the interior filling with smoke. The vehicle began burning shortly after it came to rest.

“I said, ‘We got to get them out of here!’ said Nalder, directing rescue efforts of bystanders.  “I did not know the extent of his injuries so I asked him to undo his own seatbelt to kind of assess his condition. Myself and two others guys helped him out and walked him over and set him down.”

As the fire spread, and without regard for his personal safety, Nalder returned to the burning vehicle to recover the female passenger and move her to a safe distance. Another cyclist had arrived on the scene to assist Nate Nalder and Dave Taylor in the rescue. A passing motorist had stopped on the scene and phoned 911 for assistance.

It is possible that, because of the age of the vehicle occupants and the possible medical condition of the driver, the swift selfless actions of Nate Nalder and Dave Taylor at the scene prevented more serious injury from the fire or fatalities as a result of the crash and fire.

According to the account Nalder heard from the passenger of the vehicle, who was transported from the scene by emergency personnel, the driver lost the ability to control the vehicle, possibly due to a medical incident. The passenger was able to grab the steering wheel but could not control the pedals because the driver’s legs were in the way. The passenger steered the vehicle off the road away from other cars but could not control the speed of the vehicle. It struck a pole and rolled several times.

Cyclist Nate Nalder, 41, of Dearborn, Michigan and friend Dave Taylor rescued motorists from a burning vehicle on Hines Drive on Wednesday.

When we asked cyclist Nate Nalder what made him decide to respond by pulling the victims from the burning car and how he had learned to respond to an accident situation he told us:

“When I was younger in high school I was riding in the back seat of a Jeep and came over a hill and accidentally hit a friend who was walking across the street. I just jumped out and helped. It was the automatic thing to do I guess. I grew up being a Boy Scout, doing a lot of lifeguarding classes and learning CPR. Just learning how to take care of a person when they are hurt. Something just said, ‘Get over there and do what you can to help because no one else was’ I was the first person to that car I guess.”

The quick, selfless actions of Nate Nalder and Dave Taylor at the accident scene almost certainly prevented further injury to the two vehicle occupants once the car began burning.

By Tom Demerly.

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Left: Me at a training exercise in Northern Michigan with Co. “F”, 425 INF (AIRBORNE) Long Range Surveillance Unit. Right: My “Get Out of Jail Free” card for REFORGER.

25 years ago my phone rang at home. “Are you seeing this?”

“What?” I asked. “You better turn on your TV.” The Berlin wall was coming down. We won.

During my brief and very non-illustrious military “career” (if you could call it that) part of what my unit did was trained to conduct “stay-behind surveillance” on Eastern Europe, mostly along the Warsaw Pact/NATO dividing line. Especially East and West Germany. And the Berlin Wall.

We were a special operations long-range surveillance unit. Our unit trained to infiltrate deep behind the wall and watch things. Counting. Observing. Classifying. Reading. Installing sensors called “SID” or Seismic Intrusion Devices to monitor the movement of armored vehicles along key roads, aircraft movement and anything else the Warsaw Pact was doing. Then, if all went well, we would enter the intelligence into a device we called a “dumb-dog” or Digital Message Device Group (DMDG) attached to our radios and send a burst transmission with our S.A.L.U.T.E. report, a kind of outline that classifies Size, Activity, Location, Uniforms (or Unit), Time and Equipment. After that we’d quickly change positions to another hide site since the Soviets and East Germans had a nasty habit of calling in air and artillery strikes when they detected a burst radio transmission, knowing that they were being spied on in their own back yard.

Every year we participated in an operation called REFORGER or “REturn of FORces to GERmany”. Part of our unit would go to England to cross-train with the British Special Air Service, another part would go to Germany to their special Long Range Surveillance School, and a third part would go to REFORGER.

At REFORGER, business was serious.

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Construction of the Berlin Wall showing open kill zones, the early installation of the anti-scaling barrier and the raked areas where mines were installed.

We flew on a C-130 from Selfridge ANGB in Mt. Clemens, Michigan to Lajes, Portugal. In Portugal we landed to refuel, stretch our legs, and receive a briefing that, once in Germany, we were “at war”. Equipment was changed. Uniforms were sterilized of insignia that identified our unit. And we were given a yellow “get out of jail free” card to hand to friendly forces when our own units captured us and they had no idea who or what we were. We, of course, were not allowed to say a thing to them. Only, “Call the number on the card”.

During the time we were deployed to Europe near the East/West German border espionage was the national industry. A briefing told us “1 in 8 East Germans are involved in some form of espionage”. “While inside West Germany you will be under constant East German surveillance.” There was no way to shake it. And the East Germans weren’t subtle about it. An apartment building across the street from the former WWII German barracks we lived in constantly had observers in the window. They took our photos as we came and went. We went through ridiculous rituals to evade surveillance. Following one incident we were forbidden to wear uniforms off post.

The place we were staying was built before WWII and it hadn’t been updated since. Especially the plumbing. It was build out of quant stone and concrete and had low ceilings and iron bars. The basement, really a dungeon, was where our equipment masters kept our armory. Drawing your equipment down there was like a scene from a Bond movie or “Where Eagles Dare”. The only thing missing was “Q”, and we didn’t have any Aston-Martins. Or fancy suits. Or watches that shot missiles.

Our surveillance patrols consisted of six-man teams, sometimes less, sometimes more depending on what we were doing. Sometimes other members of different services, and even different countries joined us.

I was our team’s “Scout Observer”, the guy who looked at stuff. I had to be able to identify things. Part of the reason I landed this job was I had an encyclopedic knowledge of military equipment, theirs and ours. Especially aircraft. Another reason is because I had graduated as honor graduate from my schooling at Ft. Benning, Georgia.

The Berlin Wall was different in different places depending on where you were along its length. Sometimes it was simply a bricked-up building booby-trapped with mines. Other times it was a brightly lit open expanse, the “kill zone”, with mines and dog runs on each side of the wall. Where we visited this day it was actually a series of barriers; a barbed wire topped, chain link fence, a carefully raked pea-gravel kill-zone with anti-personnel mines and interlocking fields of sniper fire, the wall itself- a tall, concrete affair with what looked like a horizontal row of large diameter pipe on top of it. The sinister thing was, if a person lived crossing the minefield and the sniper kill zone, and actually managed to scale the wall itself, they were greeted on top by these rotating cylinders. They would simply spin backwards under your desperate grasp until a sniper’s bullet found you. In this spot, many people had tried to get across. None made it.

We were observing an interesting phenomenon. The East Germans had closed a factory near the wall and taken it over as an observation post to look on our side of the wall. The OP was located atop a high smoke stack that used to be part of the now abandoned factory. At the top of the smoke stack was an East German observer.

The intel we had was that this observer would change at regular intervals. It was freezing up there in the smoke stack observation point, and the poor East German border guard, or whoever he was, must have been miserable. He surveiled our side of the border through rifle scopes and powerful binoculars.

But he was not entirely without creature comforts.

One day a rickety-looking Lada compact jitney of a car pulled up near the base of Red Smokestack OP. It jerked to a halt. Oddly, a woman dressed in a huge, poofy white fur coat climbed out, carrying a cylinder from which steam was rising. Nerve gas? Radioactive isotope? It was soup to be delivered to the man in the tower. Two border guards accepted the soup canister and one appeared to try to make progress with the woman in the fur coat. He failed, she returned to her decrepit little car, reversed away from the kill zone and left. One of the guards spent the next few minutes carrying the large thermos of soup up to the top of the guard tower.

We later learned that observation assignment to the guard tower OP was a kind of “punishment detail”. That the border guards who watched from the tower got there because they had screwed something up, been late to report to duty, etc. It must have been miserable up there in the freezing wind. And it is no wonder East German morale among their supposedly “elite” border guard units was reported to be poor just before the wall came down.

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While observing the wall, I learned a profound and sad lesson about humankind. Ducks had flown into a river on the NATO (free) side of the border. They paddled around as ducks do. But then, in complete contravention to all official doctrine surrounding border activity, the ducks took to wing, flew a brief circle over the pond on the West German side, and then flew directly over the Berlin Wall into East Germany. The ducks crossed the border without a thought or a care. No clearance, no identification, no checkpoint, no shooting. They just flew across the border.

My concept of freedom was forever altered in that moment. My respect for the wisdom of man was also. The ducks could come and go. We built artificial barriers to separate ideas and ideals.

Of course, The Wall didn’t work. And one day my phone rang. And the war that never started, a war that Tom Clancy wrote was, “A war with no battles, no monuments… only casualties” was over. And while I always stop short of declaring a “winner” in any war, I was quietly pleased to see that the cause of freedom and liberty had won the day the wall came down.

CoF425IRAQ

Our unit was one of the smallest and least known of the entire U.S. arsenal. To this day, even its modest Wikipedia page is short and light on details. In the records of units who participated in REFORGER, our unit is buried deep inside another. That I know of, there is not a single photo of us in Germany. An unofficial unit insignia we made had the inscription, “Around The World, Unseen.” We were, as my Patrol Leader was fond of saying, “Like smoke in a hurricane”.

What we learned from the Cold War and the Berlin Wall coming down served us well. In the first Gulf War Long Range Surveillance Teams, now part of a new secret U.S. Army Special Forces unit, penetrated deep into Iraq to survey routes for armored invasions, find Scud missiles and direct airstrikes and rescue downed U.S. airmen. Long Range Surveillance and its value was more than proven. Again, as it was by the reconnaissance teams before us, the LRRPs in Vietnam and recon and intelligence units in WWII.

 

 

 

 

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At this hour the mystery of Malaysia Airlines flight 370’s disappearance is one of the most baffling chapters in aviation history. With every hour that passes the mystery becomes more remarkable.  There was no distress signal, automated or manual, no radar track to a known accident site, no anomalistic flight data transmitted, no covert hijacking signal, no wreckage, no diversion to a remote airfield under duress, no witnesses of an actual crash in one of the world’s busiest shipping lanes.

That the aircraft likely vanished over one of the busiest commercial shipping areas in the world, the Straits of Malacca, with 50,000 to 90,000 ships a year passing through it’s narrow, 500-mile passage is even more remarkable.

When you perform a statistical analysis of aircraft accidents over the previous 30 years that involve more than 100 passengers you see how truly bizarre this mystery is.

The U.S. Federal Aviation Administration maintains a detailed database of aviation accidents broken into 18 accident causation categories. They include “Crew Resource Management”, “Fuel Ignition”, “Fuel Exhaustion”, “Incorrect Piloting Techniques” and others.  All of them leave some trace to conduct a forensic investigation.

That MH370 left no trace, electronic or otherwise, is its most remarkable anomaly. Given the volume and sophistication of systems to avoid just such a disappearance one explanation is some willful intervention to counter each of these surveillance and tracking systems took place. Someone intentionally lost the aircraft.

One unnamed source has already proffered an opinion on this disappearance: MH370 was hijacked in a 9/11 style terrorist attack. The target may have been the Petronas Towers in Kuala Lumpur, a hauntingly similar target to New York’s Twin Towers. The attack failed when some intervention, perhaps by crew, passengers or other force led to the flight’s termination in a similar way to United Airlines flight 93 that crashed in Shanksville, Pennsylvania when passengers attempted to intervene in the hijacking and retake the aircraft before reaching its intended target.

It is possible the flight disappeared when it descended to low altitude for the willful purpose of evading radar as it turned back toward Kuala Lumpur on its attack run. This admittedly outlandish theory is partially supported by Fisherman Azid Ibrahim, 66 of Kota Baru, Indonesia. Ibrahim told the New Strait Times that an airplane appeared to fly low below thick cloud deck. He followed the aircraft for about five minutes before it disappeared without crashing. Another witness reported a similar sighting about 30 km (18.6 miles) away from Kota Baru.  Businessman Alif Fathi Abdul Hadi, 29, reported to the Malaysian Maritime Enforcement Agency (MMEA) that he saw “bright white lights”, descending fast into the sea at about 1:45am that same day. A third report from an oil rig also reported seeing a large aircraft flying at low altitude over the region, then a burning object.

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In December 2011 the Co- pilot on MH370, Fariq Abdul Hamid, broke regulations when he allowed female passengers Jonti Roos and Jaan Maree into the cockpit, while flying, for a flight from Phuket, Thailand to Kuala Lumpur, Malaysia. The 53-year old captain of MH370, Zaharie Ahmad Shah, had a room in his house dedicated to a computer flight simulator where he could practice flying a Boeing 777. And familiarize others with how to do it.

In an interesting literary parallel, Ian Fleming’s 1961 novel and 1965 film “Thunderball” depicts a fictional RAF pilot named François Derval who is extorted by sexual coercion into stealing an aircraft for a terrorist plot.

This is speculation. But it has origins extrapolated from known statistical data of airline accidents along with an analysis of the region, its vulnerabilities, its known terrorist activity and additional factors. It also is partially reinforced by the emerging navigation tracks of MH370 that show it returning toward Kuala Lumpur where it originated and where the Petronas Towers are.

It is also as implausible a theory as the 9/11 terror attacks were on 9/10. Before the 9/11 attacks and former President Bush’s election the Clinton administration had intelligence that suggested a coordinated attack using airliners in the Pacific region was a plausible threat. One analysis suggested the attacks might originate from Indonesia. The theories were not regarded as actionable. By 9/12 this paradigm had shifted.

When will know the facts about MH370’s disappearance? That is another mystery. Until then all we have is questions and speculation as passing time creates more depth to one of the most bizarre mysteries in aviation history.

By Tom Demerly.

trojanhorse

In much the same way as Franklin Roosevelt is remembered for the Social Security Act of 1935, President Barack Obama will be remembered for the Affordable Care Act.

And it may be a larger success than any of us imagine.

The Affordable Care Act could be a masterfully engineered piece of legislation that has already set in motion the only means possible to topple big medicine and make U.S. health care affordable. But not how you think.

We’ve all seen the charts and YouTubes comparing the cost of medical procedures in the U.S. to other countries. They make a case for health care being significantly more expensive in the U.S. than in other countries that already have a state subsidized or administered medical system.  It’s possible the authors of the ACA did a masterful “Potomac two-step” in selling the ACA to the powerful medical, pharmaceutical and hospital lobby. Washington sold them a Trojan horse.

ACA critics have pointed to a host of administrative problems that are likely short lived. Those problems aren’t “structural”.

A structural problem built into ACA is that the weight of medical costs in the U.S. is spread over the broader economic “ice” of the American population. That ice is still too thin to support big medicine’s current financial weight. One of two things can happen: The ice can break or some weight can be removed.

Since ACA is law, and law can presumably be enforced, the “ice” that is ACA will be held up by Washington. The weight that comes off the ACA ice will be U.S. “Big Medicine” getting whittled down to functional size. No more massive, glossy prescription drug marketing campaigns. No more mini-malls and valet parking at hospitals. No more health care providers filing endless reams of electronic files, paying staff to interpret billing and insurance logistics and creating their own internal television networks to promote themselves. Malpractice litigation will be reformed. Medicine will become more medical, less commercial and litigious.

The ACA will dry up hospital "malls" and commercial dining areas and other accessories to hospital operation.

The ACA will dry up hospital “malls” and commercial dining area and other accessories to hospital operation.

There will be blood. Hospital staff, already strained in many places, will be trimmed. Logistics will be streamlined, even doctors will earn less. Health care suppliers will suffer mightily; with many going bankrupt like auto component suppliers did in the U.S. automotive bailout. And just like the automotive bailout many of the financial negotiations that were abrasive and costly between unions and car companies will now be quickly dispensed in bankruptcy court. And for once, it will be the medical companies that will take the hit. The ACA may protect the citizen-patient.

“Health care quality will contract while health care access will expand.”

If this is the direction of ACA, intended or not, the process will be an abrasive one. We the people in the first decade of ACA will experience constant changes in health care logistics and a general decline in the quality of health care. In short, our health care infrastructure will contract to a scale similar to those of countries with functioning social medicine. In many ways that will appear as a downgrade. But in the spirit of ACA it will spread access to health care across a broader population. Instead of high-income people getting great health care and middle and lower class people getting none or reduced levels with exposure to financial ruin, everyone will get a roughly equivalent level of healthcare services and products. Health care quality will contract while health care access will expand. The optimal balance will be when the two conflicting agendas meet in the middle.

It’s possible President Obama’s ACA will be remembered as the savior of the American patient, not the American medical industry. Getting there will require a long and painful period of financial and legislative surgery that includes some painful amputations with no anaesthetic.

By Tom Demerly.

the-waltons-40th-anniversary-today-show-interview

I walked into my friend Mark’s house around 6:30 PM one evening. He lives about a block away. I was returning, in a small way, one of the many big favors he has done for me since I moved back to Michigan. What I saw was shocking. To me at least.

Mark and his wife were seated at a small, round table with a tablecloth. They each had plates, and cups. They were eating food with knives, forks and spoons. It was like the set of a 1950’s movie: a husband and wife having dinner around 6:30 PM, a new baby sound asleep in another room. It was positively… normal.

It struck me pretty hard: This is what that fleeting, ephemeral thing called “normal” looks like.

Like many people I didn’t have  a “normal” family when I was a kid. I had a dad with mental problems, a single mom, and two sisters long gone for those reasons. My childhood was not bad. I didn’t have everything I wanted, I did have everything I needed. But my childhood was different from what I saw at Mark’s house that night.

My family was fractured. Fractured by distance, disapproval, loneliness, lack of communication, forgiveness and trust. In other words, we’re like most families. We have our problems. We have more skeletons than a medical school.  One sister got married in Africa; I’ve got a niece in who lives in Japan. The only way we could keep our distance any better would involve NASA.

Two things that happened in the last decade caused me to revisit the value of family: I almost died and so did my 91-year old mom. As I type this she lays in Beaumont Hospital after two heart surgeries in three days.

When I moved back to Michigan my friends urged me to moderate the fractures in my family. It took time, but I did. It was frightening and humbling. It has also been rewarding and invigorating.

Peace efforts within a family are a lot like negotiating between warring factions in a third world country. Since I have a little exposure to the later, I used what I learned there.

Firstly, you approach it with ownership of your own mistakes and a lot of humility. Secondly, you do a lot of listening. You do what author Stephen Covey said, “Seek first to understand, then to be understood.” Thirdly, you bring some pretty thick skin.

A critical mindset is that you have to leave the past where it belongs- behind you.  You talk a lot about how things could be. Should be. You replace blame with empathy; you replace the lesser past with the idea of a greater future. And you focus on the half of the glass that is full. And mostly, you forgive. Living in the previous world of family arguments, disconnects, betrayals, broken promises and let-downs cannot result in a constructive dialog. It doesn’t foster healing.

Not everyone will get it at first. Families are made of complex personalities and complex pasts. But the behaviors of listening, understanding and forgiving are as contagious as the ones that drive families apart.

Ultimately we decide which behaviors we want in our family by which ones we choose to live in our present. When we make that decision and live it, we get along better.

By Tom Demerly.

20100617_poverty_33  Is our lower class truly poor? Or, is there a cultural shift in expectations that create a conspicuously affluent, but fundamentally impoverished lower class?

The answer points to an important idea: We need to re-orient our society to value education, initiative and personal responsibility and de-emphasize conspicuous consumption and government support of basic necessities.

The United States is in an accelerating crisis that is creating more economic distance between an affluent upper class and a growing “lower class”.

Consider these oddly disparate statistics:

  • 88% of Americans own a cell phone, with 56% owning a smart phone.[i]
  • “Nearly 90% of Americans now own a computer, MP3 player, game console, e-book reader, cell phone, or tablet computer.”[ii]
  • “95% of Americans own a car…”[iii]
  • 15.4% of people in the U.S. were uninsured [in 2012].[iv]
  • “75% of Americans don’t have enough savings to cover their bills for six months.”[v]

Our lower class is often measured by income and employment statistics. But is our lower class truly poor? Or, is a part of the current crisis a cultural shift in expectations that create a conspicuously affluent but fundamentally impoverished lower class? Does a portion of our lower class spend money on the wrong things? And, if so, how could that change?

There is an argument that the U.S. has the richest- and most underemployed- lower class in the world. Our lower class has privately owned cars, cell phones and non-utilitarian clothing but lacks education, savings and healthcare. They have some of the icing but little of the cake. As a result our society must prop up the foundation of personal financial responsibility by subsidizing necessities like food, medical care, housing, education and retirement.

By contrast Forbes reports that China’s personal savings rate is the highest in the world.[vi] One reason, according to both Forbes and the BBC, is that China subsidizes few truly useful social programs. The Chinese must fund their own retirement. China does not yet have national social security legislation.[vii] And despite numerous other Chinese social programs the emerging Chinese middle class and larger, accelerating lower class still feel the need to save money for a rainy day according to one BBC report.

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On the back of a manufacturing economy bolstered by consumers in the west, Chinese are saving more money than any nation while Americans are saving less.

This is ominous as it puts the U.S. at a strategic disadvantage to China in the economic sector. This also increases U.S. social reliance on government administration of vital programs, a paradigm that has significant risk given the federal government’s weak balance sheet. In short, it weakens our country, not only exclusively, but more dramatically in comparison to our global economic competitors.

“The Affordable Care Act doesn’t provide health care for the poor; it provides financial care for the healthcare industry.”

An additional concern about our current social and governmental direction is that programs like the Affordable Care Act don’t provide health care for the poor; it provides financial care for the healthcare industry. Unlike the federal government’s bailout of the auto industry in 2008-10 there is little provision for a return on investment or any remuneration from the ACA. Its current configuration requires the costs of administration but little revenue stream for administrators. The government becomes a billing agent for private healthcare and pharmaceuticals.

We need to change the direction of America toward valuing the things we’ve discounted over these previous two decades; access to education, quality of education, valuing teachers as pivotal contributors to our nation’s future. We need to teach and reward personal responsibility and initiative. Wealth is not measured by possessions but by capability, output and income.

By Tom Demerly.

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Here we go; Holiday Shopping Season. Black Friday, Cyber Monday. This is the 25-day period when retailers earn their net profit for the year and consumers do most of their buying.

Before the gun goes off this Thursday at midnight (and even before) let’s take a brief look at what customers should demand in the post-recession economy.

There are more retailers and fewer customers than any time since the early 1980’s according to industry expert Mark Ellwood, author of Bargain Fever; How to Shop in a Discounted World. That means you have more choices and retailers have to get it right.  The margin for error- literally and figuratively- is razor thin. A well-run retailer is doing well to earn 1% net profit on gross sales after all expenses at the end of the year. Also, this year, the holiday shopping season is unusually short, only 25 days, because of Thanksgiving’s proximity to Christmas on the calendar.

Stores, both online and brick and mortar, have two major tools to earn sales: Great customer service and lowest price. A wide spectrum exists between these extremes and some especially skilled retailers manage to combine the two. Whether you aspire to the Tiffany’s personal shopping experience or a Walmart elbow-throwing, door-busting footrace to the big screen aisle these are the minimum standards you should expect as a customer:

1.    You should be treated as a Lady or Gentlemen.

You’re giving away hard-earned money at the end of the worst recession in history. You’re not a number, not a commodity. You’re not easily replaceable. Life long retailer and founder of the quirky, niche specialty retailer Harry’s Army Surplus in Dearborn, Michigan, Irv Zeltzer, said it best, “Every dollar has 100 cents”.  To earn that precious 100 cents retailers should treat you with respect and reverence. Retailers should value you.

2.    You Deserve to be Waited On.

Remember when clerks waited on you? Good service means there are employees or well-designed online resources to find out information and help you with buying decisions. This is a key feature since it adds value and savings to a purchase by reducing costly errors and returns. Your time is tangibly valuable. A sales associate or web resource that helps you make a faster, wiser purchase saves you time, and time is money.  Smart retailers also know good customer service reduces returns and adds to sales and profits.

3.    You Deserve Honesty and Openness in Pricing.

There are a lot of pricing shenanigans this time of year, triple and quadruple mark-downs, fine print, weird return policies, coupons, membership buying. Straightforward pricing is a key tool to understanding the value of a purchase. Beware of convoluted pricing schemes. Remember, the time it takes you to figure out if a deal is any good just cost you something more valuable than money; it cost you your time.

4.    You Deserve Good Service After the Sale.

Retailers should do “back end” planning for their post-holiday returns and customer service. The staff should know the policies and be empowered to make decisions. Lines shouldn’t be long and waits to make returns should be short. Retailers have a great opportunity to retain customers and earn new ones with great service after the sale. They need to get this right. It will bring in customers during the other 345 days of the year.

Customers fall into a trap of using price as the measurement of quality in a retail transaction. Good value is about more than markdowns and low prices. If you are focused on what you deserve as a customer before you line up on Friday morning you’ll have a better shopping experience this season.

By Tom Demerly.

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Random Notes and Key Things I’ve learned so Far:

1. Life:

  • Friends and community are more important than we realize. Much more.
  • My Mom was right; travel really is the most opulent luxury.
  • I am not like other people. When I try to be, I am sad and look foolish.
  • Be gentle with people- both people who are kind and people who are mean to you.
  • You will have enemies. Don’t let it bother you. If you weren’t trying, you wouldn’t be making some people mad.
  • Most people who don’t like you envy your courage and are afraid themselves.
  • Be understanding of those people, their fears are real to them.
  • Difficulty can make you a better person if you decide to let it.
  • One of the smartest people I ever met, my friend Kim, told me “successful people are usually just the last to give up.” She is right.
  • It’s true. You will fail.
  • Failure sucks.
  • Not trying is worse than failure.
  • Try again.
  • Never stop learning, never lose the “beginner’s mind”.
  • If you know you are right about something and try to convince someone, but their own beliefs prevent them from listening, don’t force it. Let them be.
  • Make good choices but do make choices. Don’t be paralyzed by indecision.
  • You think you are the only person suffering when you suffer. You aren’t.
  • You can learn a lot about a person by how they treat animals and children.
  • Two key quotes:
    • “We each create our own reality” Arthur C. Clarke.
    • “Between stimulus and response is our greatest freedom; choice.” Steven Covey.

2. Love:

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  • You are lucky if you have one true love, you will also likely lose them, but you are always better for having had them.
  • Always treasure the people who have brought true love and beauty into your life. Be a respectful friend to them forever. Revel in their new relationships and happiness. Stay friends with them unless they are cruel to you, in which case, just let them be.
  • When you truly love someone the thing you want most is for her to be happy and safe. You want that more than your selfish desire for them.
  • Have the courage to walk away from a relationship that is bad and never look back. Never be afraid to be alone.
  • It is better to be in a good relationship with yourself than a rotten one with some one else.
  • Great sex is about way more than the physical act.
  • Take a good, close look at her; she is more beautiful than you (and she) realize.
  • Beauty has almost nothing to do with looks.
  • The greatest luxury in a relationship is staying in it simply because you want to be there, no other reason.

3. The Military and Conflict:

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  • Never underestimate the human capacity for cruelty. People are the most dangerous animals.
  • There are three important truisms in the military; 1. Your training will keep you alive. 2. In the military world, your comrades are your first priority. 3. When your enemy is subdued, treat them with dignity and humanity.
  • Train relentlessly and realistically. Your training will save your life and insure the success of your mission.
  • Do not dwell on the awful things you’ve been through. Hold them at arms’ length, let them go, forgive them and yourself.
  • If you live in a safe place, protect that. It is rare on this earth.
  • Learn the skills of war, hold them as precious, but do not flaunt them or revel in them. They are an ugly but necessary set of tools.
  • When an enemy dies, do not celebrate. Instead, pray for them and ask forgiveness.
  • The least painful way to learn is from history. History is a free lesson, a way to learn from the suffering and loss of previous men. Never stop learning, studying and analyzing history; its cost was high but it is free to keep.
  • Be kind and respectful of people who have a disdain for the military.
  • Being a soldier, a guardian of peace, is one of life’s highest honors.
  • Wars fought over money, resources, politics and territory can be resolved. Wars over religion never end until one side is completely annihilated and their history erased.

4. Business and Money:

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  • See: “War and Conflict” above.
  • The Arabic proverb, “Do business as strangers, socialize as brothers” is good.
  • Pride has no place in business.
  • Trust that if you do a good job and devote yourself, you will be successful.
  • Even when (not if) you fail, if you have done the above, you have a basis for a new beginning.
  • Don’t try to bend the rules; it will bite you in the ass.
  • Your ass is going to have some tooth marks.
  • Pay yourself last.
  • Treat your employees well. Pay them first. Protect and honor them.
  • Respecting your employees as important human beings is as important as paying them, sometimes more so.
  • A harsh reality is that money does buy happiness. You can use it to help other people, keep yourself safe and healthy, travel and help animals. In the human world money is security.
  • Don’t trust banks. They are a business, a necessary tool.
  • Don’t be mean to or distrust the government or the IRS. They are people trying to do a difficult and unpopular job with few resources and huge bureaucracy. Be empathetic toward them.
  • The smarter you are the more successful you will be.
  • Learn from your mistakes. You’ll pay for them, you may as well use them.
  • Every dollar has 100 cents in it.
  • Every business is a nickel and dime business. There are no “small” losses.
  • Treat every day as your first day in business, and remember it could also be your last.
  • Failure always arrives before you think it will and is always a surprise.
  • In retrospect, failure and success both seem obvious.
  • Always call your customers “Sir” and “Ma’am”. It sets and maintains the tone of the customer/business relationship. It says you are doing business.
  • Save more money than you think you will ever need. Money is a tool.