Swickard: Being smart in college football programs

© 2016 Michael Swickard, Ph.D.  “I find that the three major administrative problems on a campus are sex for the students, athletics for the alumni and parking for the faculty.” Clark Kerr, 1958
          There is a gloom over some New Mexico State University Aggies due to their football team falling on hard times these last fifty years. If the administrators wanted to get a good look at whom it was than precipitated the crisis, they only need to find a mirror.
            The NMSU Aggie motto might even be to blame: nobody tells an Aggie what to do. That’s the Aggies I have known since I started watching Aggie Football during coach Warren Woodson’s last season in 1967. He found success while none of the following coaches even came close.
            Woodson had a great quote: “The perfect record is seven and four because the fans are happy with the winning season, the Alumni are sullen but not mutinous and the NCAA won’t come and look at your program.”
            In the last thirty years of writing columns the number one topic has been Aggie Football. More than anything else I have protested one policy: selling loses to big programs for cash.
            NMSU has been harvesting cash with loses for most of forty years and each year their fortunes get worse because all football programs are judged by their win/loss record. I have made no progress with the leaders of the university. One said to me, “We know what we are doing!”
            My reply was that they were ignoring research and available data. This same person said that I just did not understand university administrative issues. Friends, I have a Ph.D. in educational administration from NMSU and pointed this out to that administrator. To no avail, they kept selling losses and the program gets weaker and weaker with their abysmal win/loss record.
            Finally, NMSU was thrown out of the good football league that included some great teams. Our college was dragging the rest of the league down because we sold losses. Currently NMSU finds that there is not a league that wants NMSU because NMSU sells losses but NMSU next year is going to continue selling losses.
            Fine, but don’t look surprised when your Football Program ends. That is the fate of Football Programs that continually sell losses.
            From the Clark Kerr quote to start the column, parking is a big problem at colleges. I asked a professor at NMSU about the parking some thirty years ago. He said, “It’s going to get a lot worse before it gets better.” So I immediately asked, “Do you think it will get better?” He shook his head, “No.”
            Many colleges had declining enrollments and act surprised. Why should less students coming be a surprise? College doesn’t hold the magic key of prosperity like was once the case. Now to even get a job students have to be savvy enough to select an employable major.
            The colleges won’t help because their administrative fiduciary relationship is with the professors so they will try to keep everyone employed rather than pare off majors where few jobs are available. With the football program and the majors at the university, NMSU is a contrast in roles.
            Does NMSU have the best interests of the students in mind or are those administrators feathering their nests? Why sell losses when it only weakens the program. Why keep majors where there are few if any jobs? Those questions need to be answered.
            Remember that the motto of NMSU is: nobody tells an Aggie what to do. So I doubt that there will be any changes. In fact, each time I point out the lunacy of selling losses the leaders double-down on their stupidity and amaze me even more with bad leadership.
            Ultimately, it is easy to see that these failures are my fault. I always buy season tickets to the Football Program and I went to NMSU for my Ph.D. So I guess I have no complaints. While I talk bad about the management they know I still support their decisions with my money.
            The customer is not always right but the customer always is the one with the money. This customer would like NMSU to be smarter.

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Warren Buffett - A Study in Contradictions and Hypocrisy

© 2016 Jim Spence - When you read Warren Buffett’s letters to shareholders as many times as I have you note that he repeats himself, which is fine. I wouldn’t want that tendency to be a crime. And many of the points of emphasis he prefers are principles that every professional investor should internalize and internalize deeply.

The most recent Buffett letter to shareholders follows another recent trend with his communications. Increasingly, Buffett contradicts himself. Not on fundamental business principles but on the danger of bureaucracy, the value of thrift, the importance of efficiency, and fundamental nature of productivity.

Always a cheerleader for the U.S. Warren Buffett has been even more vehement about the wonders of the U.S. economy over the last seven years, despite the fact we have experienced the slowest pace of economic growth in many decades.

While nobody wants to be a pessimist, I am pretty sure that America does not want to point to Europe which seems irreparably stagnant, or Japan, which is in a 25 year recession, and reach the conclusion that because the U.S. is not Europe nor Japan, we are doing just fine.

Buffett talks about how lucky anyone is to be born in America, which is certainly still true. But he consistently supports people who try to advance policies that would make it more likely that American born people will have the same experiences as those born in Europe. It is puzzling.

Buffett heaps praise on his management team in the Heinz-Kraft partnership because they specialize in reducing “unnecessary” costs. This is Buffett's preferred PC code for laying off unneeded workers. However, Buffett supports candidates who rail against any “corporation” that is dedicated to efficiency in the way that his managers and partners are. Buffett’s favored candidate (Hillary Clinton) constantly calls for central planning that would continue to pile new and entirely “unnecessary costs” on businesses at almost every turn.

Almost every year in his letters Buffett praises de-centralization as the structural hallmark of Berkshire, while also supporting a vast increase in the centralization of power and additional controls over the U.S. economy in bureaucratic laden Washington.

Buffett actually goes so far as to say at Berkshire, “We, too, crave efficiency and detest bureaucracy.” And yet he supports candidates who crave bureaucracy and detest efficiency.

The contradictions embraced by Buffett are seemingly endless these days. He castigates others in business saying, “Some CEOs forget that it is shareholders for whom they should be working, while other managers are woefully inept. In either case, directors may be blind to the problem or simply reluctant to make the change required. That’s when new faces are needed.”

Given that thousands of managers in the federal bureaucracy such as those running the Veterans Healthcare programs are woefully inept and the changes required are never made, one wonders how Buffett can so ardently support Obama, Clinton and putting more power and control in the hands of government.

Buffett actually went so far in this year’s letter, as to quote Barney Frank, calling him, “The most financially savvy member of Congress during the panic.”

I am reminded that Frank praised the operations of Fannie Mae and Freddie Mac and just weeks before they became insolvent he called suggestions that were insolvent untrue. The Barney Frank utterances on Fannie and Freddie are available on Youtube (Click HERE) for anyone who wants to firm up the shocking evidence of Buffett’s contradictions regarding Frank.

When you look at the largest equity holdings at Berkshire you find shares of the two of the largest banks in America, Bank of America and Wells Fargo. When you consider that the biggest critic of these big banks and the candidate that threatens the most punitive action against them is Hillary Clinton (she parrots Bernie Sanders on this), you have to conclude that while Buffett tells countless truths on what defines good business, when it comes to public policies, something is quite amiss.

Buffett also lectures in this year’s letter on the link between prosperity and productivity, but here again he supports candidates who embrace everything except productivity when they describe the links to prosperity.

Consider Buffett’s lampooning of the Efficient Market Theory. He once said, "If Efficient Market Theory is true why am I so rich? Then pair that viewpoint with Buffett’s chastising of non-shareholder oriented managers, and then reconcile it with this paragraph:

“We need shed no tears for the capitalists (whether they be private owners or an army of public shareholders). It’s their job to take care of themselves. When large rewards can flow to investors from good decisions, these parties should not be spared the losses produced by wrong choices. Moreover, investors who diversify widely and simply sit tight with their holdings are certain to prosper: In America, gains from winning investments have always far more than offset the losses from clunkers. (During the 20th Century, the Dow Jones Industrial Average – an index fund of sorts – soared from 66 to 11,497, with its component companies all the while paying ever-increasing dividends.)“

Buffett engages in the strangest sort of double talk on the idea of capitalism itself. He himself prefers to be spared from the losses that come as a result of bad choices by dedicating his entire investing life to mastering the art and science of avoiding bad choices. And as such, his record of doing so is the envy of the world. But somehow we should simply lump all capitalists into the index box and not encourage the preservation of the capitalist system because when you net it all out, the winners offset the losers? Again Buffett's candidate does NOT want Buffett to pick winners, she wants the bureaucracy to pick the winners.

Perhaps Buffett is fine with the federal bureaucracy picking winners just as long as he understands the trends of bureaucracy selection processes better than the market, and he can remain free to eradicate bureaucracy from the Berkshire model.

This man Warren Buffett is an absolute genius when it comes to understanding the utter failings of bureaucracy and the simple beauty and bounty of free enterprise.

On the other hand, Buffett has evolved into a triple A-rated hypocrite as he increasingly rationalizes his calls for less free-enterprise and more bureaucracy in the interest of, “fairness” for society.

There is no doubt the term limousine liberal was coined so that we would all understand how people like Buffett trick themselves into playing the most insidious intellectually dishonest game of class warfare. 

It takes real flexibility to see yourself as being pro-bureaucracy and anti-bureaucracy at the same time. Pro-bureaucracy for the masses and anti-bureaucracy at Berkshire. 

Still, much can be learned from this great business mind, so long as you understand that politically you are dealing with a hypocrite who contradicts himself at every turn.

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