The USA's Rebuilding Year

I was working in Boston during the glory years of Boston sports: the Patriots won three titles, the Red Sox broke the 'curse', and the Celtics finally got back on track after a two-decade detour. While I felt happiest about the Red Sox winning it all, I was probably most invested in the Celtics' turnaround and win. I had been attending a lot of games for a few years, and in the two years before their championship they were terrible. The turnaround was dramatic, a result of GM Danny Ainge having a vision for how to turn the team around and fearlessly executing it.

For a lot of sports fans, the term 'rebuilding year' has a bad connotation: it is usually uttered when a team has no chance of winning and so is under-spending on cheap young talent. Often, the rebuilding goes nowhere, and the team stays terrible. But sometimes, a smart leader like Ainge actually does use a rebuilding year (or a few) to make dramatic changes for the better, changes which would have been impossible if they had tried to compromise in those off-years and have a decent, but not great, team.

I allowed myself to reminisce about my glory days as a Boston sports fan because I believe Barack Obama was elected in part because people sensed the need for a rebuilding year (or maybe rebuilding decade) for the country as a whole. What are "Hope and Change" but promises to change direction and do something dramatically different to move us forward? Yet I think he was incapable of truly instituting a rebuilding plan for the USA, because he's too tied to some of the old players that need to go. (One analogy driven into the ground? Check.)

Those 'players' include the public unions that are currently protesting in Wisconsin (more on that in a moment), but also the big, bulky, expensive programs like Medicare, Medicaid, and Social Security that are threatening to bankrupt the country. E.J. Dionne makes the case that these programs aren't really the problem, arguing that there's plenty of money to fund the existing safety net if only we have the will to take it:

Only a body dominated by millionaires could define "shared sacrifice" as telling nurses' aides and coal miners they have to work until age 69 while sharply cutting tax rates on wealthy people. I see why conservative Republicans like this. I honestly don't get why Democrats - "the party of the people," I've heard - would come near such an idea.

I agree that cutting tax rates is a risky proposition when the deficit is so high, but raising the retirement age--for workers nowhere near retirement--is a simple acknowledgment that people now routinely live into their eighties, and we simply can't afford to have the government on the hook for providing an income and healthcare to citizens for a fifth of their lives or more. Especially if we continue to insist on inefficient government-run programs as the way to deliver those benefits.

Walter Russell Mead, my favorite blogger, has been advocating the 'rebuilding year' approach (though he's way to smart to call it that) for some time, deftly depicting the 'Blue Social Model' that has defined American government and politics for most of the last century, and why it now has to give way to a new model. He looks at the clashes in Wisconsin and sees that new model struggling to be born, while the reactionary forces of the public employee unions try to beat it back:

In the heart of Blue State America, we are seeing a challenge to some of the fundamental assumptions behind the progressive state, and we could conceivably be watching both the birth pangs of a new social model and the first big step in America’s transformation into a true 21st century economy. And ironically, while Democrats are not, to put it mildly, happy with Governor Walker’s anti-public union bill, in the medium term the Democratic Party (and others who want to see government taking on more responsibilities) will be one of the biggest beneficiaries of the bill.

Why will getting rid of public employee unions ultimately help those who want a more active government? Because a more flexible, streamlined government will be able to take on the new challenges we face today, rather than repeatedly trying the same approaches that defined 'big government' in the 20th Century, and which have largely either served their purpose or failed.

I agree with Mead that the current events in Wisconsin could help usher in a new, better model, but I believe we need a leader who will boldly call for some shared sacrifice from all Americans as we construct that new model, and deal with the damage that dismantling the old model will cause. Rebuilding years are never fun while they're happening, but when they lead to victory you can look back and see that it was worth it.

What Soccer Can Teach Us About the Value of "The Best"

Word came recently that my beloved Red Sox are close to buying Liverpool, one of the soccer (I should say football, especially since I'm in Europe) clubs in the English Premier League (EPL). While I would prefer that the Sox owners put the money into acquiring a few stronger players, I understand the business motivation: after the last World Cup, there is (again) talk that soccer is finally catching on in America, and investing in a premium franchise, and in an English-speaking country, makes sense as a long-term play.

Well, so I thought, to the extent I thought about it at all. The essential logic is that the EPL represents the best in soccer, and that those franchises will only continue to increase in prominence and importance. Numerous books on business and branding have noted the phenomenon that the rich get richer, that there are many industries where winner increasingly takes all, and the most successful, the most powerful, the most well-known increasingly get more money and fame while second-best fades.

However, this column by Theodore Dalyrimple, ostensibly about the World Cup, caused me to reconsider. The key point:

There is also an interesting contrast between the way the professional sport is practiced in Germany and in England.

The English football league generates far more money than the German, and most observers deem it the best in the world, at least in terms of attracting hundreds of millions of television viewers. Players in the English league are much better paid than those in the German league (though the Germans are hardly impoverished). However, most of the players in the top echelon of the English league are foreign. Many of the best clubs have only two or three English players, and some have none. English clubs import players; German clubs foster and train German players. English clubs are largely owned by foreigners, such as Russian oligarchs of the most dubious reputation; German clubs are owned by Germans. English clubs lose money and are highly indebted; German clubs make a profit and have monetary reserves. And as I have already mentioned, the German national team plays incomparably better than the English national team.

As a marketer, I have to think that the German teams (and German soccer) as brands, are in the stronger long-term position. They are authentic, local, and sustainable, all modern branding buzzwords for a reason. One could imagine a future in which the EPL fans grow disenchanted with their crazy owners (who aren't English) and pampered players (who aren't English) and see their league as fatally compromised. One could also see a future in which the unsustainable financial practices of these teams cause a paring back, with the best talent going to other leagues, including the German ones, and cutting into the EPL's talent advantage.

If John Henry and the other Red Sox owners wanted my advice (which of course they don't) I would tell them not to invest in a bubble inflated by foreign money chasing "the best". They should try to be a part of building something (which is what they've done with the Sox) rather than buying at the peak of a sports bubble. They might even think about using some of that money to build soccer in the US. But I think they'll find the value of owning the Liverpool 'brand' will be much less than they think.