By now, everyone knows that Apple had a blowout quarter: Q1FY12 sales of $46.33 billion, profits of $13.1 billion, with gross margins of 45%, translates into EPS of $13.87.

Michael Dell once famously said of APple, when Apple was down thought on its way out: 

“I’d shut it down and give the money back to the shareholders.”

Interestingly, when faced with their own stretch of trouble, Dell decided they needed to cut costs — Amsterdam’s favorite strategy — which according to this Harvard Business Review article is “Dell’s Cost Cutting Is Not a Growth Strategy:

Can you make a growth strategy out of massively slashing costs? No? Are you sure? Better tell Michael Dell then, because reaching Dell’s stated goal of slashing $3 billion in annual expenses over three years seems to be the once-ambitious computer maker’s primary obsession.

Here’s the funny thing: today Apple is worth 13x more than Dell in market cap.

So what’s the lesson: strategy matters and growth matters. Plus a vision, a lot of innovation, risk taking and as always, a bit of good fortune helps too.Apple chose not to cut its way out of its difficulty; it chose a radically different strategy as, like the article said, cost cutting is not an effective strategy.

But don’t tell the demolitionists or the penny-watchers in the 12010 — we just need to cut, cut, cut and raze, raze, raze.

I think I can see how this is going to play out for us.

[Quickly scanning out-of-town real estate listings on his iPhone]

We must also turn our attention to the Esquire property at the Mohasco site.  On account of its advanced state of deterioration, the building has been found unsafe and requires demolition.  The site must serve as a key driver for revitalization of that district.

Now, if you follow local political discourse, you know that the meme goes something like this: the city spends too much; the city needs to cut even the smallest of the  most trivial of expenses — like tulips; and those who claim to have the best interests of the city at heart, make no small clamor on how we need to cut, cut and indeed, we need to look at every expense , no matter how small, in our budget. It is this focus on expenses, on costs, on spending that makes them supremely qualified to lecture us common folk on their financial wisdom and acumen. After all, in their view,  public finance reduces to nothing more than a watchful eye on expenses and their reduction– that is the key to fiscal planning and management.

While this cast never met an expense they like, they also remain wholly disinterested in revenue, indeed, there is never a revenue source for which they care– which brings us back to Esquire and its demolition.

We spend hundreds of thousands of dollars per year, millions of dollars over several years, and likely tens of millions over the decades to demolish stuff. Yet somehow, this expense which sucks life from the city through swiss-cheesing our neighborhoods, paving our neighborhoods with asphalt and ultimately trash, and in return, pressing tax rates higher through the reduction of taxable properties is applauded and heralded. In fact, demolition is viewed as ‘progress’ and no doubt, demolishing Esquire will be seen as ‘progress’.

Here’s how ‘progress’ works in the city: a building is demolished to great fanfare that we can now ‘develop’ it; to ‘develop” it, we turn to AIDA or some other ossified economic development entity or group to ‘market’ it; we then wait , and wait, and wait, and wait, for the ultimate ‘developer’ who will bring ‘industry’ back. Then more waiting, waiting, waiting, until we are distracted by tulips forgetting about how awesome it’s going to be once the site gets redeveloped.

Rinse. Repeat. Year after year.

Meanwhile, the demolition financial kabuki goes unabated because folks truly believe that the city gets a free ride on demolition as a “shared service” from the county or some other mythical accounting technique whereby no adverse effects impact city taxpayers.

The funny thing is that Esquire could possibly have been redeveloped without demolishing it whatsoever so the expense that we now incur could be wholly avoided if we could engage and encourage developers such as Murray Gould who expressed interest in the project until the Chalmers saga hit:

The overall tone and alleged increase in community and city opposition to the Chalmers project is very unsettling to me as the potential developer of the Esquire Novelties Building. It is also very troubling to read the overall tone that I believe is disrespectful of Mr. Kauffman’s efforts.

[snip]

Community and official support from the municipality is an absolute requirement for a developer to consider taking on the risk of’a project like Chalmers or Esquire Novelties. If that support is not clear, then it is simply too risky for the developer to proceed.

[snip]

I am very fortunate that I have choice in where I choose to work on historic rehabilitation projects I am very excited about the promise and challenge that goes with the rehabilitation of the Esquire Novelties property. However. that does not mean that J am wiI1ing to spend yearsofeffort and take a major financial risk if there is not community support. The recent events related to the Chalmers Building are causing me to seriously reconsider my decision. The vote by the City Council opposing the National Register nomination sends a very strong signal to me and others in the development community that the City of Amsterdam does not support this type of project.

At this point I am ceasing any further pre-development work on the Esquire Novelties project.

And there you have it– the loss of potential revenue, the loss of growth, the loss of “buzz” in building some interest in development in the city. Instead of revenue, we now have an expense to demolish the building. But to the financial wizards who watch every penny we spend, the loss of revenue coupled with the expense of demolition simply does not enter the calculation. This is what counts as ‘progress’ in rebuilding the city. I hate to say it but we could buy a lot of tulips, a lot of paper clips and even a Christmas light or two with the opportunity cost around Esquire. But then I’m old school on financials– I look at expenses and revenue.

It’s the mention of ‘revenue’ that makes me a financial pariah and heretic in the 12010.

What’s even funnier is that we turn away credible, successful developers to have AIDA or some other agency pursue developers to develop the site. That’s worked wonderfully to date, no?

Think about it from a business perspective: let’s say there is a restaurant called Cornholios. A customer walks through the door and wants to order the porterhouse steak advertised on the placard outside. The waiter rebukes the customer for their order (“you idiot, you want a porterhouse steak?!”) and, within earshot of the table, mocks the customer to the owner and other waitstaff for requesting the very thing offered by the restaurant.

Indignant, the customer leaves soon to publicize his awful experience in the physical and digital realm. As the owner receives word of the negative reviews of his restaurant, the owner wonders why sales are down and why his restaurant gets such a bad rap. Determined to reverse his fortunes, he takes to the street encouraging passers-by to partake in the delectable porterhouse steak offered on the menu. But customers are scarce until the owner, with minutes to closing time,  spots a small group approaching the restaurant.

Desperate, the owner calls to them to come in for a delicious porterhouse steak–  it’s on the house, a free meal, why not give it a try, he beseeches them. But, alas, fortune turns against him when he recognizes the former customer, so gruffly turned away on his last dining experience, now advising his fellow patrons on his steadfast resolve in avoiding this place and the wisdom in their doing likewise.

So off they stroll to the new eatery down the block, welcome to pay full price for a porterhouse at any place but the once and great Cornholios.

I remember that most constituents are gazing down from the window of an airplane. And after following the state of local politics, I’m heading to the emergency exit, parachute be damned!

The phrase “tough times” comes to mind in relation to the difficult economy, crazy weather, infrastructure problems and at-risk neighborhoods. For me, the phrase “Good Times” comes to mind ala Jimmy Walker as we managed to demolish CHalmers in 2011. Dyn-o-mite! (pun intended) 

Unlike the County and the School District, we have held to a self-imposed 3% tax cap. Of course, the COunty and School District get a free pass on exceeding the tax cap from the local pundits and community leaders, only the city tax cap matters when predicting the ultimate demise of the city.

Demolition of 45 dilapidated and dangerous structures with some participation from Montgomery County. Woo-hoo! Only 4500 more to go and through the magic of shared services with the county, city tax payers pay nothing for demolition– it’s a shared service, hence it’s FREE!!!!. It’s a Christmas miracle every time the demolition ball hits. Just ignore the loss of taxable properties when you wonder why your tax rates are so high.

Additional improvements to the park include a new band shell, café deck and landscaping. Landscaping?! Why can we simply not pave with asphalt? After all, these are tough times and what better to get you through tough times than the sweet smell of driveway sealer decimating more green space. If the city were like the Target parking lot, think how little we would pay in taxes.

we now understand social networking to be more than a pastime. It is an essential tool of effective communication. Not in the 12010– no one cares about the Web; why does the Mayor hate the elderly? Why does she want to disrupt the way we understand and interact with the world. Doesn’t she know that the local naysayers on the Web and social media as a disruptive technology will ultimately be proven right in a few years as the Web amounts to “nothing”? Especially blogs, eewww.

While community-initiated efforts have begun to transform our image, we have also taken a more direct and professional approach to marketing our community. Not marketing again– the city sucks and will forever suck; we don’t need marketing, we need vilification. After all, “why put lipstick on a corpse”? I could answer why someone would pose the question in that way — clinically, the term would be “psychological projection”. Let’s now move along. And quickly I may add.

Recently, Chinese immigrants have purchased 40 properties. What the hell are they doing here?! Get me Marcus Welby MD and a pitchfork, posthaste! And don’t tell the seniors– they are terrified. It’s like a Buddhist version of Menace2Sociiety.

We are faced with the imposition of a 2% cap on property taxes that will force us to be both brave and creative. And let’s not forget delusional from local taxpayers who expect services to be maintained in light of double digit health care and pension increases in expenses. How do we solve it –”shared services”. Of course.
Traditionally we have only thought to reach out to the County Board of Supervisors as partners. However, this year the Supervisors face unprecedented challenges: which chair do I sit in? why do kids call me poopy-pants? how can I get back at poopy-smarty-face? how can we drive development to anywhere but the city of amsterdam? oops, I let that last one slip

It is time to put political agendas aside, to identify commonalities in our positions, to rally people and resources, and solve the problems that we are charged to overcome. To this end, I have invited the chairmen of the Republican and Democratic City and County Committees, as well as the members of the Common Council, to assist me in this pursuit. This may be tough to do, but it’s time for the factions to move past their differences. Good grief– the rumor is true: Mayor Thane smokes peyote. She is clearly trippin’ by this point in the address. This like asking Homer Simpson to stop drinking, stop eating donuts and elope with the Bouvier sisters.
Tough times dictate that we create a network of like-minded communities. There is no like-minded community to Amsterdam; unfortunately Wikipedia is blacked-out today but I’m pretty sure there is no other city named Nihilism. My assertion stands.

we will complete the demolition of the Chalmers property. We will hold the opponents to Chalmers redevelopment accountable for articulating and developing a plan to make best use of the site. We will demand that it is not enough to simply rail against other prople’s vision of the future; you must also offer a vision of the future of your own. Who will own shaping the redevelopment of Chalmers? What is the best use of Chalmers property? How do we attact investors and developers? What is the optimal way to market the property?

Oh, sorry about that, I lost myself for the moment. Never mind.

We cannot let naysayers and negativism determine our fate.

But, but, what else is there?

Thane needs to remember that she was re-elected in a three-way race with 46 percent of the vote, meaning 54 percent of Amsterdam residents — a majority — who went to the polls voted for the other guys. She enters her second term with little to no political capital to spend, so Thane needs to work extra hard to build a consensus with the council if she hopes to be an effective leader this time around.

Of course, the “bipartisanship” advocated by the editors only works one way — the Mayor should yield to the Council; we should not expect the Council to yield to the Mayor. It’s like national politics — Obama needs to embrace bipartisanship while the House and Senate leaders undermine any notion of bipartisanship.

Funny how that works.

But political parties mean “nothing ” in local politics and that is why the mmost vocal public advocate against the Mayor and Corp Counsel, Diane Hatzenbuhler, gets cited by the Recorder when based upon their very own logic, she garnered not even close a to a majority of votes–  many more voted against her than for her. But that is OK as that supports the meme.

Like I said, this editorial seeks to delegitimize any policy or action, not on its relative merits or demerits, but on the notion that there is no “majority”.

Here is a funny thing if you extend the Recorder’s logic– Michael Chiara in the 5th Ward Supervisor race did not garner a majority of votes. In fact, he received 301 total votes while his opponents received a total of 303 votes. 

Do we get an editorial on Mr. Chiara’s need for building political capital? Do we get an editorial on how Mr Chiara does not really represent a majority of 5th Ward voters? Will we get a constant drumbeat on how Mr Chiara did not garner a majority of votes on any policy or action with which the editors disagree?

Funny, I haven’t heard or seen that. Quite the opposite, it seems the editors embrace Mr Chiara’s election even though he does not represent “a majority”.

Why the double standard here on the notion of “majority”?

Here’s another way to look at the numbers– Thane received 1762 and Emanuele received 1712 while Write-Ins received 337. 

That means that a majority of voters by a factor of 10X wanted Thane or Emanuele over a write in candidate. What does that mean in terms of outcomes– absolutely nothing, just like adding the combined votes for opponents for Mr Chiara and Mayor Thane.

I look forward to how the editors will pick a Super Bowl winnner– it won’t be based upon who scores the most points in the Super Bowl, it will actually be based upon which team has their opponents score the least points through the regular season and playoffs.

While national, regional and even local Iowa media printed prominent headlines announcing Mitt Romney the winner of the Iowa Caucuses, the local media market in Amsterdam, NY found itself facing an unprecedented conundrum. Numerous media figures were contacted for this story but no one would go on record to explain their process for selecting a winner of the Iowa Caucus or the methodology involved citing confidentiality and trade secrets.

“We simply can’t make sense of the numbers as no matter how we analyze the results, no candidate exceeds 50% of the vote. Indeed, if we look at the percentage of people voting against Romney, that is nearly 75% so we would argue that Romney in no way can be deemed the winner. We absolutely cannot declare a winner at this point but it is more than clear that Romney has no mandate to proceed with the upcoming primaries.”

The sentiment was also aired on the local airwaves: “I don’t care what the numbers say; I know Romney did not win, he didn’t even get 50% of the vote. Man, did you see Sarah Palin on Fox? She’s hot! I think she actually won along with Rick Perry.”

Meanwhile, a concerned group of community leaders resolved to work together on making sense of the numbers: “THis job is too big and too complex for any one of us to figure out so we’re looking to work with local leaders to help share the cost of an Excel spreadsheet. We expect that we’ll have results right in time for the November Presidential Election”.

When confronted by the myriads of statistics, polls and subsequent primaries –likely to be quite close– in the coming weeks and months of the campaign, a representative candidly but off-the-record admitted that “Wow, that’s a lot of numbers, facts and figures. I’m not sure how we can possibly make sense of that; we’ll probably create a task force with the city, town and county so none of us gets too overwhelmed. I’m not sure we’ll make it for 2012 but we’ll have our winner picked in time for the 2016.”

When pressed on why results would be relevant well after the 2012 campaign decided the Presidential nominee, the consensus view is that “We know the local media market; don’t you dare question us. Blogger“

First, in a wonderful foreshadowing of the efficacy of ‘shared services’ amongst our various municipalities, the County Supervisors kick off the New Year by looking to ‘share’ the same seat only to find that they really can’t share it. I’m disappointed as a satirist when reality renders me irrelevant.

But don’t worry kids– shared services will solve everything.

Second, the meme and propaganda machine is in full force against the reappointment of corporation counsel even though voters in the last election were well aware who Mayor Thane would appoint as counsel. I guess that’s what happens when you don’t have a ‘mandate’. 

Speaking of mandates, I’m curious how the local media will view the Iowa caucuses tonight. Here are the current poll results:

The raw numbers: Romney, 24 percent; Paul, 22 percent; Santorum, 15 percent; Newt Gingrich, 12 percent; Rick Perry, 11 percent; Michele Bachmann, 7 percent.

What’s interesting in Iowa is that it will be very unlikely that any candidate achieves more than 50% of the vote. Therefore, by our local definition of ‘winning’ as requiring more than 50% of the vote, it appears that no candidate can ‘win’ Iowa. Therefore, by our localized logic, no candidate should be deemed a winner and no candidate has a mandate to the presidency. In other words, the final vote matters not at all as no one will emerge with a mandate. Why, given any candidate, more people voted against said candidate than for!

So how can any candidate have a ‘mandate’?! Impossible!

I sure hope the headlines tomorrow in the political media don’t claim ‘Candidate X Wins Iowa Caucuses’. Let’s hope they get it right with our local flavor of media with something like ‘Iowa Caucuses Confound Logical and Arithmetic Principles With Mass Confusion Over How to Interpret Vote Results: All Candidates Simultaneously Win and Lose With No Quantitative Difference in Outcomes. Candidates to Resolve Caucuses Through Duels to the Death”. 

Let’s hope 2012 gives us more honest headlines than 2011. 

Shhh, be vewy quiet about this lest local media runs some research and analysis: GW Bush, our 43rd president, had no mandate either in the 2000 election. In fact, more people voted for Gore in the popular vote than Bush even without adding in the other candidates. Funny how no local media trumped the lack of mandate from Bush 43 in terms of policy or their ongoing term. But let’s not let the process and rules of engagement get in the way of a good meme. 

And you crazy kids thought it was a ‘New’ Year. 

Not at all, it’s the very same year over and over again. 

Welcome to 2012, the prequel to 3012.

Top 13 of Subjects of the Year (No Particular Order)

1) The Amsterdam Way, Hippies and Conflicts of Interest
here

2) Do As I Say– County Supervisors and Budgets

here

here

here

3) Tulips and Bulbs– The Campaign to Keep Amsterdam Ugly

here

4) Unicorns and Other Mythical Creatures — The Epic Tales of Sharing Services

here

here

here

here

5) Demolitionists and The Race to Build Parking Lots

here

6) What The Hell Are You Doing Here! — Xenophobia, Racism and Other Tales from the Small City with the Big Heart

here

here

here

here

7) Thinking BIG–How to Turn Amsterdam Around

here

8) Excessive Returns and Financial Mavericks — How the City Can Fund $40 million in infrastructure with a $10,000 Budget and By Not Buying Tulips

here

here

here

here

9) Election 2011 — Low Turnout and Why Winning Really Means You Still Have No Mandate

here

10) Existentialism — Why The City Should Exist and Why The City Should not Cede to the Towns and County

here

here

11) And the biggest story of the year — Walking Away from a Game Changing Residential Development Project aka The Dumbest Move of 2011 and likely the 21st Century

here

here

here

here

here

here

12) Burnt and Crispy — The Dissolution of the Business Case for Shuttering Bacon

here

here

13) Nothing to See Here — How the GASD Board Fails to Its Mandate for Governance

here

Top Quips of the Year

If time permits, I’ll recap 2011 in a subsequent post but I think that is less important than what lies ahead. So let me post a key question for the new year:

What are the key milestones to hit for 2012 for the city? 

To be more precise in what I’m trying to ask, let me illustrate it with a popular resolution for the New Year– losing weight. Now it’s one thing to say when the ball drops, “I’m going to get in shape and lose weight in 2012″ versus “I’m going to run a 10K and get back to my high school weight by June, and then run a biathlon by November”.

In the latter resolution, you get measurable outcomes– you either finish the races or not, you either weigh 140 pounds or not. In the former resolution, I suppose a loss of one pound in weight would render the resolution fulfilled. However, the outcomes and processes underlying the resolutions are quite different, radically so.  And the relative health of the person making the resolutions at the end of 2012 will  be markedly different depending upon which resolution.

So back on point on the city: what are the measurable outcomes for 2012 to which we should strive?