2018 Seeks to Forget 2016 | Complicit in Consulting for Calamity | Capitalism in Chinese Characters

Daily Pnut will be taking a holiday break starting December 20th, Thursday. We will resume our email on January 2nd, Wednesday. We wish everyone a Happy Holiday season! Hopefully, you are able to celebrate with your loved ones and use the break to reflect on life’s most important things. Here’s to 2019! Onwards!

“Any chief executive who hires a consultant to give them strategy should be fired.”

“The last time McKinsey was influential at Apple Computer was when John Sculley was there, and that’s because he’d had a brand-marketing heritage from Pepsi. And Sculley was a disaster. Did McKinsey do anything to help the great companies of today become what they are? Amazon, Microsoft, Google? In short, no.”

― Duff McDonald, The Firm – The Inside Story of McKinsey, The World’s Most Controversial Management Consultancy (available at your local library)

Complicit in Consulting for Calamity: In the November 5th, 2018 edition of Daily Pnut we highlighted the NYT article uncovering how consulting companies like McKinsey are raking in hundreds of millions of dollars from authoritarian murderers like Saudi Arabia’s Crown Prince MBS. Over the weekend, the NYT reported how McKinsey has become the go-to consulting shop for authoritarian rulers globally from MBS to China to Putin. The Chinese government has detailed thousands of ethnic Uighurs only a few miles away from where McKinsey had a Burning Man-like event in China.

What is fascinating about the NYT’s story is how American companies are undermining American values and supporting autocracies, while companies that are homegrown from Russia, Iran, and China are very much aligned with their governments. The NYT writes: “at a time when democracies and their basic values are increasingly under attack, the iconic American company has helped raise the stature of authoritarian and corrupt governments across the globe, sometimes in ways that counter American interests.” And “inside Russia itself, McKinsey has worked with Kremlin-linked companies that have been placed under sanctions by Western governments — companies that the firm helped build up over the years and, in some cases, continues to advise.”

Is there any doubt that America’s position in the world will decline when its very own companies will not support American values or its best interests? Essentially, American capitalism is enabling American companies (e.g. Facebook & McKinsey) to undermine democracy on the homefront and overseas. In contrast, capitalism as practiced by authoritarian countries is being wielded as a weapon to weaken democracy and cybersecurity globally while strengthening the home countries interests and authoritarian rule domestically.

Additional reads: McKinsey Misdeeds Domestically: “Justice Dept. Says McKinsey Hid Dual Roles to Profit From Bankruptcy.” (NYT)

McKinsey’s Most Famous Alum: “The Rise, Lean, And Fall Of Facebook’s Sheryl Sandberg:

The reality of Silicon Valley is that it’s commerce by any means necessary. And the reality of Sandberg is that she’s excellent at it.” (BuzzFeed News) To think, only a few years ago her name was frequently mentioned as a potential presidential candidate.

Will American companies support American interests?: “The Divide Between Silicon Valley and Washington Is a National-Security Threat: Closing the gap between technology leaders and policy makers will require a radically different approach from the defense establishment.” (Atlantic)

A longform article on the state of foreign affairs and what happens when American companies weaken American interests: “How a World Order Ends: And What Comes in Its Wake.” (Foreign Affairs)

Capitalism in Chinese Characters

– “One African Nation Put the Brakes on Chinese Debt. But Not for Long.” (NYT)

– “Canadian officials visit second citizen detained in China: Ambassador meets Michael Spavor who was arrested last week; he and Michael Kovrig were held following Huawei boss’s arrest in Canada.” (Guardian)

– “China’s Tactic to Catch a Fugitive Official: Hold His Two American Children” (NYT)

– “Jack Ma, China’s Richest Man, Belongs to the Communist Party. Of Course.” (NYT)

– “China Expands Research Funding, Luring U.S. Scientists And Students” (NPR)

– “Report: Dockless bicycles have reduced gridlock and smog in China: As many as 70 million people rode these bikes on a single given day last year, according to research cited by the Canadian Broadcasting Corp.” (WaPo)

Cannabis + Capitalism = Getting High on $$$: Governments around the globe are starting to soften their attitudes toward cannabis. Six years ago Uruguay announced it would be first to legalize recreational cannabis use. In 2012, we also saw voters in two US states, Washington and Colorado, support legislation of the drug for non-medical use. Cannabis is now approved for medical use in 33 of the 50 US states, Canada has legalized its sale, possession, and recreational use this past October, and as of last month, doctors in the UK can now prescribe cannabis products. (BBC)

India Modernizes Its Airports and Sanitation Systems: 34 airports have opened across India in the past 18 months. The country’s aviation sector has exploded in the wake of massive economic growth, and millions of newly wealthy Indians are taking to the skies for the first time in recent years. India is scrambling to transform colonial-era airstrips into plush airports, and suddenly swamped airlines are investing in new planes and recruiting foreign pilots. The civil aviation minister announced in September that $60 billion had been budgeted for 100 more airports in the next 10 to 15 years. (WaPo) And “The India girl who took her dad to the police over a toilet: A seven-year-old Indian girl went to the police after her father broke his promise to build her a toilet.” (BBC)

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2018 Seeks to Forget 2016: We saw this with the midterm elections and we are also seeing this possibly playout with Brexit. 2016 was the all-night drunken party and 2018 is the hangover. 2019 will either be recovery or recidivism: “2019 is the year the Supreme Court will make or break Trump: The court, with its strong 5-4 conservative majority, is facing requests from an aggressive Trump administration to weigh in early on many of its most controversial policies in areas including immigration, LGBT rights, asylum, and reinstating the citizenship question on the census. And that was before Friday night’s bombshell ruling from a federal judge in Texas declaring the Affordable Care Act unconstitutional, which means that Obamacare will almost certainly return to the Supreme Court.”

America’s Volatility Index (AVIX, a new measurement created by Daily Pnut) has been very high the past two years. In 2019, it will be off the charts: “Giuliani: Trump interview with Mueller would happen ‘over my dead body’: Trump’s personal lawyer says he fears investigators would try to trap the president into lying.” (Guardian) The current acting attorney general is doing a good job of trying to tamp down the AVIX but 2019 will be the real test: “after outcry over appointment, Trump’s top law enforcer treading lightly.” (Reuters)

The AVIX will be especially high given the threat and likelihood of a government shutdown. We forecast a shutdown is very likely: “White House prepares for shutdown as both sides dig in over Trump’s wall.” (WaPo) Another reason why 2019 could be the Trump family’s worst year: “Trump’s Inauguration Paid Trump’s Company — With Ivanka in the Middle: as the inaugural committee planned the landmark celebration, internal concerns were raised about whether Trump’s Washington hotel was overcharging for event space; the spending could be a violation of the law.”

2018 has undone a couple Navy Seals turned politicians: “Ryan Zinke Is Leaving The Interior Department, Trump Tweets.” (NPR) And “The Final Fall of Eric Greitens: Missouri’s Republican governor announced that he will resign rather than face impeachment over allegations of sexual misconduct and violations of campaign-finance law.” (Atlantic)

Hopefully in 2019 we can fix the country’s drug crisis: ‘Nowhere To Go But Up ‘ — A Small Town Confronts Its Addiction Crisis: The 2016 viral photo of a couple passed out in a car while a child sits in the back seat triggered a painful moment of self-reflection in East Liverpool, Ohio, but progress has been spotty. (NPR)

– Anger grows after death of Guatemalan migrant girl held in US: Family of girl disputes the American government’s claim that she had not had food or water for days beforehand (Guardian)

– Johnson & Johnson knew for decades that asbestos lurked in its Baby Powder: Internal documents show that J&J’s powder was sometimes tainted with carcinogenic asbestos and that they kept that information from regulators and the public. (Reuters)

– “GE Powered the American Century—Then It Burned Out: How the company that was once America’s biggest, the maker of power turbines, the seller of insurance, the broadcaster of ‘Seinfeld,’ became a shadow of its former self” (WSJ, $)

– This story went viral over the weekend and justifiably so. It’s our favorite read so far this month and it’s perfect for the holidays as we think about what’s really important: family, health, and perspective. My Dad’s Friendship With Charles Barkley (WBUR)

– “The Great NFL Heist: How Fox Paid for and Changed Football Forever:An oral history of the most important deal in sports TV history, when Rupert Murdoch and Fox stole the NFL and John Madden out from under the Big Three networks, created the modern pregame show, invented a new way to see football, and launched a television empire.” (Ringer)

– A Day With Stephen A. Smith, The Hardest Working Man In Sports Television (UPROXX) Mr. Smith is more entertaining than watching the actual game. He is the face of ESPN.

– We don’t like our robot overlords: People keep attacking Waymo’s autonomous cars: So is it everyday troublemaking, or is this a meaningful protest to automation? (FastCo)

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