Mark Gilroy

Bringing Books to Life!

Big Government: Pendulum or Runaway Train?

Ever since FDR “saved” the economy – either through his welfare and public works programs if you like his fiscal model or by entering World War II if you believe the country was going to turn around on the basis of a business cycle anyway – despite his inept handling of the Depression – the size and role of the federal government in the business life of America has continued to grow.

Truman was too busy fighting wars and dealing with new international realities with our Soviet allies to leave a huge mark on America Inc., but conservative president, DDE, built the interstate highway system with a heavy dose of liberal spending, a symbolic and tangible symbol of a more federally driven America economy.

JFK we hardly knew you. We’ll never know his spending agenda based on his short tenure, though his activism in other areas might lead us to believe he would have been big government in all ways.

Inspired by political activists like author John Steinbeck – and in a well-documented strategy to secure minority votes, LBJ attempted to build a ‘Great Society’ – a phrase he borrowed from Steinbeck – to further expand the government’s role and responsibility as the provider and protector of the people’s welfare.

Let’s break from this historical free for all for just a second. Everyone, including politicians of all stripes, is concerned with the welfare of “the people” and individual persons. Whether one cares is not what is being debated, though in the political world it is posited by big government proponents that if you don’t want government to take responsibility for people’s welfare you don’t care about people’s welfare. The fiscal conservative or political libertarian will argue that he or she cares just as much about the welfare of individuals, he or she just does not think government does a very good job of supplying it. They want an old school model that limits the role of government to good laws and national defense – and leaves individual welfare up to individual effort, which will be much more productive and efficacious in a free enterprise system the thinking goes.

But what happens when that doesn’t work, big government proponents ask? Some free enterprise advocates agree with having clearly defined and limited temporary aid measures in place – others argue for the “family and friends” need to save you program. But based on what we’ve seen so far in our historical foray, there really haven’t been too may free enterprisers in control, no matter what we might assume from party affiliation.

RMN actually toyed with price controls, which would made him a hero among Marxist ideologues and an enigma to his independent, puritanical forebears, but ultimately, he poured his attention on foreign policy and then shifted his focus to another set of problems that were a little more personal in nature.

JC. We hardly knew you. Stagnation and malaise were the order of the day. The result of bad business or too much government intervention? Carter wasn’t sure there was a possible solution from the government or private sector and suspected we might be headed for leaner days. He spoke about those suspicions a little too forthrightly and the electorate lost as much confidence in JC as in the country’s future.

That ushered in the reign of RWR, who was sure it was the latter, too much government intervention, that was the problem. No one in the media and not even his vice president believed in his “voodoo” economics, but he get elected. He cut capital gains taxes, eliminated and simplified regulations to doing business, and cut income taxes for the middle and upper middle classes. (He would have done the same for the lower and wealthiest classes but it is impossible to cut anything from nothing.) It can be argued that he restored America’s business star, setting the stage for the largest capital growth campaign in history and the rise of Bill Gates. What he didn’t do, however, was cut government spending. And it wasn’t just because he built up the military. Liberals and columnists – I would have said Liberal columnists but why be redundant? – bemoaned all the benefits he cut from the poor. Not true. He did occasionally cut government program increases but never spending.

GHB (W’s dad). We hardly knew you, either. I do recall H was kinder and gentler than Reagan – at least he said he was – and raised taxes to prove it despite the protests of lip readers to the contrary.

WJC got his butt kicked on socialized medicine early in his first term. His solution? Keep Hillary away from Congressional hearings and enjoy Reagan’s promised ‘peace dividend.’ Then he started experiencing the joy of balancing the budget and reducing the federal deficit so much he went out and tweaked some welfare policies so that they became workfare policies. For the first time in 60 years people were involuntarily cut from welfare rolls. Bill might be the last and the only fiscal conservative of the past 100 years. Deep down, I suspect that still bothers him.

GWB. Or just W. A man of principle, faith, and profligate spending habits. He and the man who followed him, BHO, are architects and builders of an expanded role for government through TARP(s) that might have made FDR’s head spin. Even the German socialists are confused. When they throw money at economic problems it is at least to save unnecessary jobs. In America’s iteration of corporate welfare, it is to eliminate jobs and save companies.

The latest Obama move has been to appoint a ‘Special Master for Compensation’ to oversee executive and employee pay at companies that accepted government bailout money. Any wonder so many are fighting like crazy to give this ‘free’ money back? Any wonder Hugo Chavez, left-wing socialist president of Venezuela, claims he is more right wing than Obama?

So is the size and scope of the federal government cyclical – a pendulum that is simply on a high note of growth? Or is it a runaway train navigating hair-pin turns as adroitly as possible?

If these economic days are tough on your personal welfare and you see a bright shining light ahead, it might mean there is hope at the end of the tunnel for you. Or it might mean you better jump off the track in a hurry if you don’t want to get hit!

Wayman Tisdale – Ain’t No Stoppin’ Us Now

Wayman Lawrence Tisdale

Wayman Tisdale was a star in the NBA and the world of jazz.

Wayman Lawrence Tisdale passed away on May 15, 2009, from cancer.

He was a big man with a bigger smile. Great athlete. Better person. A cool jazz man who was maybe the best slap bass guitarist of his era. A man of faith. Deeply committed to his family.

Having lived a few years in Tulsa, I knew he and his family cast a huge shadow over that city. His father was pastor of the Friendship Church for 28 years. When he passed away in 1997, one of the local expressways was renamed the L.L. Tisdale Parkway. Wayman’s older brother, Weldon, is now senior pastor at Friendship.

A high school basketball star at Booker T. Washington High School in Tulsa, Wayman went on to Oklahoma University where he was the first college basketball player to be named first team All American his freshman, sophomore, and junior years. He still holds the records at OU for points and rebounds. He played with Michael Jordan, Larry Bird, Magic Johnson, and other luminaries on the 1984 US Olympic team that was dubbed the ‘Dream Team.’ The 6′ 9″, 240 pound power forward played 12 seasons in the NBA, averaging more than 15 points per game.

He didn’t grow up with a dream of playing basketball in college or the NBA – music was his first love. His music career began while he was still in the NBA with a Motown record called, appropriately, Power Forward. He recorded seven more albums, including Face to Face, which hit number one in sales for the contemporary jazz chart. His final album was Rebound and reflected his belief that he was not going to be defeated by cancer.

Wayman was diagnosed with cancer on the knee (osteosarcoma) in February 2007, when he fell down the stairs at his house and broke his leg. Chemotherapy that spring didn’t work and in August 2008 he had his right leg amputated. Tisdale kept his strong faith and never lost his trademark smile.

Governor Brad Henry of Oklahoma said of Tisdale:

“Oklahoma has lost one of its most beloved sons. Wayman Tisdale was a hero both on and off the basketball court. Even in the most challenging of times, he had a smile for people, and he had the rare ability to make everyone around him smile. He was one of the most inspirational people I have ever known.”

As a c-jazz lover, I was a bigger fan of Tisdale’s music than I was of him as a basketball player – he never played for ‘my’ team. But most of all I’m a fan of him as a man of persevering faith and and as an example of a resilient joy and hope exhibited and proven under all circumstances.

Anytime someone dies ‘before his time’ it is a sad story. Particularly for his wife, Regina, and their four children, along with a loving extended family. But his music is a joyful reminder of a life well lived and where he is now. Perhaps it’s no coincidence that his number one hit was his take on the standard, Ain’t No Stoppin’ Us Now.

Q: How Well Do Publishers and Booksellers Work Together?

A: Publishers and retailers work together well in some areas – but there is a huge disconnect based on competing self-interests that make it difficult to help each other succeed.

What makes for a successful retailer? More revenue than expenses, of course, but not just a simple profit and loss reckoning, but profitability within a biz model that includes a positive monthly cash flow. Healthy cash flow is achieved through healthy inventory turns. What are turns? For a bookstore that mean ordering copies of a title on payment terms (often 60- and more often 90-days to pay) and then hopefully selling those copies and getting money for them at the cash register before writing a check to the publisher.

How likely is that to happen if you are stocking 200 thousand inventory items in a big box national chain? Not likely. But hot selling titles will hopefully push overall performance numbers up. But what happens if there’s no new Harry Potter or vampire title to average in with the laggers (and even help them move more briskly because of increased consumer traffic) on the aggregate? What if you are a retailer and your inventory piles up to the point that you don’t have the funds to buy new books (referred to as ‘open to buy dollars’)? Simple. You return slow-moving titles, of course.

Store buyers place their orders with publishers (and/or distributors) based on projections of how many copies of a book his or her stores will sell in the first four to six weeks. How does the buyer come up with those projections? He listens to the publisher’s sales rep give the key selling points, comparable titles, and publicity plans. He then combines the sales rep’s projections with what his reports on the comps and his own gut tells him, and then places his order a couple weeks or months later. With the large chains the buyer will get a personal report card based on how well his titles met those projections. He has the further accountability of a finite dollar number in his corporate check book. Once that number nears zero without being replenished, his ‘open to buy dollars’ are done. So not only will he return books if they are not coming close to meeting forecasts, but he may be forced to return some borderline performing titles in order to have more dollars available to purchase a hot-selling title. To the publisher this feels like the retailer is paying his bills with returns.

The preceding paragraph sums up what is in a book retailer’s best interests – and what their challenges are. What about the publisher?

A publisher feels like she will do well on a single title when she adds up pre-press expenses (cover and interior design and editing), manufacturing expenses, direct marketing expense, overhead, a return reserve (usually an aggregate percentage applied to each title that assumes not every copy printed will actually sell and will have to be disposed of as an overstock or remainer), and royalty expenses (including advance against royalties), and then subtracts that number from sales projections – usually three-month, six-month, and 12-month projections. How does she come up with those projections? She reviews the performance of comparable titles and considers the author’s ability to help promote sales of the title to come up with her own number. She then shares her thinking with sales and marketing teams who will listen and agree or disagree in some measure and come up with their own projections. Different companies settle those differences in different ways. The publisher will do well on a single title in reality when the retail buyer brings in the number of titles projected (sell-in) and consumers buy enough copies of that title off the shelf (sell-through) to generate reorders. The publisher will get her report card on the basis of meeting or exceeding the original projections. She will do particularly well when overall sales pay off any advance against royalties and re-orders are frequent enough to keep inventory levels down (books sitting in a warehouse are like bananas – they can go bad overnite!).

The common success denominator for retailers and publishers is managing inventory levels. The retailer tries not to over order in the first place and is quick to return laggers. Both dynamics hurt the publisher who saves money on higher press runs and gets killed by returns. When publisher and retailer both get too conservative in order to combat this, another negative occurs. Stock outs. What happens when a customer comes to the store and the book he is looking for isn’t there? He forgets about it – or if he is persistent, he orders it online and waits for it. That kills brick and mortar retailers. Another less obvious impact of conservative buying patterns is the lack of merchandising. There was a day when you would walk into a bookstore and there would be numerous titles stacked high to capture attention and send the message that this was a book that just had to be purchased. With a few notable exceptions, like the afore-mentioned Harry Potter example, title emphasis is more subtle – and much easier to miss (or ignore).

Two relatively recent technological developments that are helping publishers more than brick and mortar retailers are print-on-demand and the e-book. Print-on-demand vendors provide a pretty high quality book (and the print quality is getting better all the time) – though without bells and whistles like foil and embossing – overnight and at a reasonable price. Not as good a price as printing 100 thousand books on an offset press, but a good enough price that beats the heck out of an excess inventory fall bonfire! An e-book is never out of print. Add those two dynamics together and any book is technically available within 24-hours to a retailer or individual consumer without the risk of large print runs.

But back to the publisher-retailer relationship. Even print-on-demand can’t totally mitigate the damage to performance numbers that occurs because the two parties have conflicting interests when it comes to inventory management.
Is there a solution? If you follow the financial reports of major publishers and retailers, neither side of the equation is doing well enough to give much in the give and take of business.

The solution for the author who wonders why his or her book isn’t selling like it should is to look in the mirror and ask him or herself what he or she can do to build demand. The book publishing and selling environment isn’t currently emulating the Fields of Dreams. Just because you wrote it doesn’t mean it will sell.