Style & the Street

Interview with Kim Ruhl

I asked NYU Stern professor and economist about what he thinks of the American consumer polls, and here's what he had to say...

RUHL: These polls are tricky. 

Expectations are important, particularly when it comes to consumer spending.  A major factor in the sudden drop in consumer spending undoubtedly has to be the expectation that many consumers expect to be poorer in the future.  This may be driven by the loss of value -- and with it equity -- in their homes, from uncertainty about their employment status, or from the declining value of investment portfolios.  Consumer expectations tend to be good predictors of future output and spending growth.  Economists usually view this as the "wisdom of the masses:" people are responding to the things they see, so if we ask enough people, we get a pretty good sense of what is happening in the economy.

It is harder to see, though, why the polls are reacting to Obama's presidency.  Very little has changed, substantively, since Obama has taken office.  The government continues to spend money in an attempt to 'fix' the economy -- which it had been doing before Obama came into office.  What has changed?  The way in which the money is spent is changing, but none of it has had a noticeable impact yet.  It could be that people are looking at the plans that are being announced by the administration and feel that these are the 'right' plans and that the economy is on the road to recovery.  It could also be that Obama is doing what pundits have claimed he is best at: inspiring hope.

ENDS

Beg, Borrow, Steal: Remy Holwick Launches Line

THE REAL DEAL

Remy Holwick, former Calvin Klein model, artist and designer, is launching her own line: Beg, Borrow, Steal. She just finished an interview with the website FunnyandInteresting.com...

Remy: Launching my new clothing line, Beg Borrow Steal, this June at Urban Outfitters. Actually I’m answering these questions from the Joshua Tree Inn, where we’re shooting photographs for the campaign. I’m  also working on launching a second line of clothing featuring the work of my amazingly talented artist friends… once those launch, I think I’ll be heading into the studio for a while. I’d like to finally do a solo show somewhere in Los Angeles. I was, for a long time, afraid of the idea because my dad did it, and it was so important to maintain my own identity that I shunned the part of myself that wanted what he had. As I’ve gotten older, I’ve learned that it is possible to be a part of my family, and honor and acknowledge the work my parents did, and still be my own person.

 My mother tells me occasionally when I show her my work that her best friend, Rocky, used to call us all “the real deal” because we lived the things that mattered to us, and it showed through in our day-to-day actions. She tells me that this applies to my work, and I couldn’t say it better. Art has to be “about” something, and I think that the more you can work around the things you understand in life, the more clearly your work will reflect and communicate that understanding, so I think it is crucial that artists live the life they want to communicate as fully as they can—I think my work is best when it is honest to the life that I’ve lived, and I think/hope/pray that if it resonates with people, it’s because they can feel that it is the “real deal”

Comments from readers...

“[Socialists] promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office.”” –Ludwig Von Mises predicting what the Kauffman Foundation would become after seven years of tryannical, corporate-CEO, personal-profiteering, anti-intellectual, anti-entrepreneurial Schrammenomics.

I sit on a man’s back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back. –Tolstoy Writings on Civil Disobedience and Nonviolence (1886)

Entrepreneurs Encouraged, but Where are the Fashionistas?

Bloomberg Announces Economic Stimulus Initiatives for NYC, with Entrepreneurs at the Center of the Campaign

 By Joan R. Magee

 Mayor Bloomberg announced various initiatives today to help kickstart the slumping New York City economy. One such program is FastTrac, an entrepreneurial training program from the Ewing Marion Kauffman Foundation.

 Carl Schramm, Kaufmann Foundation president and CEO revealed a $1 million push to offer a program called FastTrac to those in New York who’ve been displaced by the financial crisis. The company’s new program will distill a typically six-week training program into two weeks.  For 15 years, nearly 300,000 budding entrepreneurs have worked with them.

 One such entrepreneur is Amanda Jones, who owns Brooklyn Fudge, a confectionary company that employed her grandmother’s fudge recipe to distinguish her from the pack. Jones said that she makes a couple thousand dollars in profits each month as the owner, and has leads to take her brand global. Jones said that the instructors at FastTrac have withstood recessions before, and will be able to impart knowledge and build esteem of beginner entrepreneurs.

 “My anticipation is that there’ll be a lot of ex-Wall Streeters,” says Schramm.  “Many have a substantial amount of knowledge, but need to learn how to start a business in the most basic sense.  A lot are clueless about how firms get started. If you had to price a product at Lehman, you had someone who handled that.”

 Consequently, FastTrac is offering those basic skills, and offers tutelage on the opportunities and pitfalls of running one’s own business, including those in the aching fashion industry. 

 This isn’t the first time they’ve worked with Wall Street in the wake of crisis or disaster.

 After September 11, the Kaufmann Foundation offered FastTrac for free to those affected by the World Trade Center attacks. Schramm said that six months after 9/11, the economy bounced back basically to normal, but anticipates this slump to last longer and force more people into business for themselves. It could also lead to a paradigm shift in the industry.

 “Fifteen years ago people said that it was the end of community banks, but now look at what’s happening,” says Schramm. “I think that we could easily go back to independent stock brokers linked by common markets rather than the giant brokerage firms.”

Last Intern Standing in a Self-Reliant World

LAST INTERN STANDING IN A WORLD OF SELF-RELIANCE
By Joan R. Magee

May 3, 2009

It is easy to see that a greater self-reliance must work a revolution in all the offices and relations of men; in their religion; in their education; in their pursuits; their modes of living; their association; in their property; in their speculative views.
--Ralph Waldo Emerson, Self-Reliance

I am officially one of the last interns ever to work at the now-extinct Conde Nast Portfolio. The signs were coming even before I started working there in January, but accelerated with each passing week. Ninety percent of the online staff was gone the week before I began, including the woman who hired me (she’s now working on a side project and from what I hear, freelancing.) I worked in a room with 12 empty desks, and three occupied ones. The other two people, with whom I worked, Sharon and Joe (not their real names) had gone from full-time employees to part-time independent contractors. They let go of the receptionist, so guests had to call from a phone by the front doors. Joe had put in his resignation a week before the magazine folded, hoping to jump ship from New York and get a full-time job down South. Sharon was constantly talking about the imminent demise of her job, and mentioned this often in hushed but frightened tones. Those people, along with the others still employed by the magazine, are now more bodies dumped into the wilting U.S. and New York City job market.

I hate to wring my hands about job losses in media alone, but it’s what I witnessed first hand. And as a former freelancer, I know what it's like to be a sole proprietor in a world that seems to be set up for corporations. Reading and covering the news about all the layoffs and dismal unemployment rates, I can't help but wonder how the swarms of free agents out there in the market will react. What will the corporate structure look like as more people are either voluntarily or involuntarily leaving the trusty mother ships of large media companies, financial corporations, auto makers, and so on?
Riding the train, the advertisements for The Freelancer's Union are everywhere. In the middle is a hive and a worker bee, and usually some revolutionary, harsh-looking font a la the Communist movements in the Eastern Bloc. Slogans like: "Freelancers Shouldn't Be Taxed Twice," and "The Squeaky Wheel Gets the Grease," appear on ads for the organization. In fact, in 2008, the New York City's Freelancer's Union grew from 65,000 to 100,000 people. They are reporting new membership applications now, and foresee more in the future.

New York City, before and definitely now, seems like the place to cater to those who'd like to live an independent lifestyle -- but with a retirement plan and health benefits. One oft mentioned issue when talking about freelancers or those who work and live outside of the 9:00 to 5:00 superstructure is the question of health insurance. It's been debated and discussed ad nauseam: The American system is terrible, other countries systems are better and we need reform. That all seems to be true from what first hand experience I have, but I also do believe that relying solely on a governmental health plan is never going to satisfy every health need, and economic externalities will create a very expensive mass system indeed.

The only problem is that as work dries up for a lot of freelancers (as full-time employees are laid off and then "re-hired" as independent contractors, like at Portfolio) freelancers are left without as much work and less money, ostensibly and less money to spend on a good insurance plan, even though that's a necessity for most. I know at least a dozen "healthy" twentysomethings without families who work without any form of health insurance and go to emergency rooms if they happen to have a problem that warrants a doctor. Reliance on yourself is one thing; relying on an ER to get what some would consider standard medical procedures is another. This then puts pressure on the whole system and brings us full circle to the question: What can we do for free agents in a non-socialistic society? In a time when companies are being bankrolled by the government, and quasi-governmental agencies like Freddie Mac and Fannie Mae are now wholly governmental agencies, where does this all leave the individual worker? Where's that safe hive after all? Temporary work, short-term jobs and freelance contracts seem like they’re becoming the norm. The uncertainty of the economic turnaround makes it hard for companies to know if it’s safe to hire full-time workers (and the hefty health benefit costs that come along with them.) Workers, then, are left to their own devices. The days of staying with one company for a career seem almost quaint, if not laughable now.

Without the long-term loyalty to anyone but yourself, is it a better end game for a worker? Should we be mobile modern gypsies for hire? Perhaps when you’re faced with that as one of the only viable options, people adjust and will make whatever messy hive they end up in work. Joe and Sharon and the others like them (you, or me, or who knows who else?) will be buzzing around, looking for the next transitory hive.

Campari and Wild Turkey... Strange Bedfellows in NYC

Campari and Wild Turkey: A Mixology Challenge

In what seems like a bizarre move, the Italian beverage company Davide Campari-Milano announced plans to purchase the Wild Turkey brand of Kentucky bourbon from Pernod- Ricard SA for $575 million.

Campari and Wild Turkey: A bartender's worst nightmare? I decided to find out.

My first stop was the Blue Fin in the W Hotel Times square, where bartender Christian Campagne called the liquors, "strange bedfellows." Not surprisingly, he'd never had anyone order anything like it in the five years he's been tending bar. He did add, however, that perhaps a muddled fruit would make the drink bearable.

Next up was barkeep Jose Estevez, an 18-year veteran at the theater district's legendary Sardi's. Estevez was visibly surprised at the mere suggestion of the pairing of the two liquors, and he gently told me that it's not something anyone would want to drink, as if I'd asked for a hemlock and tonic cocktail.

Moving on, I tried the bustling Bond 45, where its general manager, Kenny Silvester, concluded that perhaps Campari bought the lower shelf whiskey for distribution purposes, which in fact they did. In a company statement, Campari said the move was to enhance its presence in the U.S., as well as in Australia and Japan, Wild Turkey's biggest foreign markets. And Campari may not be done yet. Analysts believe it still has room for more acquisitions, according to Bloomberg.

Bond 45's resident bartender, Anthony Venvitto, has been there since it opened four years ago and he said he's never in his life heard of anyone ordering both Campari and Wild Turkey in one drink. He did have the spare time and gumption to attempt to create a palatable libation with fresh-squeezed orange juice, simple syrup, two parts Wild Turkey and one part Campari, shaken and served over ice. He also added in an orange peel flambé, all of which he made in front of me and insisted I try.

Since I'd prompted the whole terrible experiment, I took a sip and concluded: "Not bad."

"But not good, either," Venvitto said.

"But not good either," I agreed.

So why would Campari go for Wild Turkey, since it's considerably more down market than the Italian liquor? "Because in a recession, people still drink. In fact, they drink more," Venvitto said.

by Joan R. Magee