Weekly Bookmarks –
132nd Edition – August 15, 2021
You’re not lucky because more good things are actually happening; you’re lucky because you’re alert to them when they do.Maria Konnikova, The Biggest Bluff
1. Monstrous Infrastructure Spending
This past week, the U.S. Senate passed a version of an infrastructure bill to the tune of $1 trillion. Months down the road, that number will escalate as the House pounds out the final bill for the president to sign.
My political science acumen is poor. I’m just a finance guy who also likes reading history.
Accordingly, this infrastructure spending reminds me of a case study on a much smaller scale when Michigan was just a territory.
2. The Erie Canal and a Teen Political Phenom
A very young Stevens Mason was the governor of Michigan and he noticed what New York’s spending on the Erie Canal meant to their economy.
Mason lobbied hard for infrastructure spending into the millions for railroads, canals, and other projects. Appropriations and spending were easy. The execution was a failure.
On one canal project, the ledger looked like this:
+ 16 miles of digging + $350,000 in expenses + $90.32 in toll receipts + the canal project was abandoned five years after it started
The error, if error there is, was the emancipation of that false spirit of the age, which forced states, as well as individuals, to overaction and extended projects. Now, however, the period has arrived when a corrective should be applied to the dangers which seem to surround her.Stevens Mason final address as governor
After a heavy debt burden, Michigan started privatizing the projects it could no longer run. Other states followed suit.
Incidentally, the above story is from Empire Builders by Burton Folsom, the second chapter.
3. Elon Musk on Failure
Stevens Mason understood failure. I’m sure he would have agreed with Elon Musk’s comments on failing:
Being an entrepreneur is like eating glass and staring into the abyss of death.
4. A Great CFO Reminds Me of Cincinnatus
This week I was interviewed by Geraldine Carter for a future podcast episode. Her show is geared toward small CPA firms.
I gave my pat answer to the question, “What is a CFO?”
That’s easy. It’s any financial leader who can step into the CEO role for one entire year where revenues go up, profits go up, staff morale continues to climb upward as does customer loyalty, and the value of the business even increases. After that year, they are more than happy to go back to their CFO position.
Going back to the CFO position reminds me of the brief tenure of Cincinnatus who was appointed dictator of Rome in order to save an army. Once he succeeded, he gave up his post and went back to farming.
For additional reading, consider Xenophon’s Cyrus the Great.
5. What is the Goal?
Eli Goldratt told his students and readers that the goal in business is to generate cash by increasing throughput while reducing inventory and operating expenses.
I’ve been prepping for an interview with a professional poker player who has earned more than $6,000,000 in winnings since he started playing professionally.
What is the goal of a professional poker player? To win? To know when to fold?
According to Maria Konnikova’s mentor in the book The Biggest Bluff, the goal of the poker player is to make good decisions.
I like that thinking because making good decisions is about following a process, the inputs, not the output or the result.
The CFO Bookshelf Podcast – I’ve been a visual analytics practitioner for more than 20 years. In the early years, my craft was bad. These days, we have hundreds of great teachers to help us get better. One of those is Steve Wexler of Data Revelations. He was my guest on this week’s podcast as we talked about his newest book, The Big Picture.
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Always be learning and growing.