Mike Kueber's Blog

December 2, 2016

The three-legged stool

Filed under: Business,Education,Parenting,Self-improvement — Mike Kueber @ 2:17 pm

When I started work 35 years ago, there was a retirement concept called the three-legged stool. Essentially, it meant that a person could achieve retirement security by combining Social Security, a pension, and a 401k. That concept still applies today, except that most companies don’t provide a pension.

Employers back then similarly applied the concept of the three-legged stool to achieve company success. According to this thinking, a company would succeed if it took care of its customers, its employees, and its owners. That concept still applies today, except the components are called stakeholders.

Recently, I was thinking about giving some words of wisdom to my fourth son, who will graduate from college this spring and enter the work force. As I reflected on what to tell him about achieving career success, I realized that the concept of the three-legged stool was again appropriate.

Career success, in my opinion, depends on personal skills, hard work, and smarts. Depending on your job, any one of these three qualities might carry you, but success is much more likely if a person develop at least two and maybe even all three of the qualities.

So, even though kids often have successful pre-work lives based mostly on personal skills, having a successful career will probably require an adult to start focusing more on hard work and being smart – i.e., critical-thinking.

That’s what I’m going to tell Jimmy.

December 30, 2014

Does the Silicon Valley need affirmative action?

Filed under: Business,Law/justice — Mike Kueber @ 1:23 pm
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USA Today is known for superficial reporting and splashy graphics, but today the paper contained an article that seems more suited for the NY Times or Washington Post. In an article titled, “Few minorities in non-tech jobs in Silicon Valley, USA TODAY finds,” the newspaper did extensive research to determine that African-Americans and Hispanics are underrepresented at three dominant companies in the Silicon Valley – Google, Facebook, and Yahoo – and that this underrepresentation extends not only to technical white-collar jobs, but also to non-technical white-collar jobs.  The article indicated that concomitant over-representation inured to the benefit of whites and Asian-Americans, but failed to provide separate statistics for those two groups, apparently considering them to be a single behemoth for purposes of this article. The article also suggested that women were being shortchanged, but provided no statistics to support this.

After providing statistics, the article quoted several affirmative-action proponents, starting with Jesse Jackson. One of the proponents admitted that their objective was “the dismantling of this myth of meritocracy” and “Ultimately, changing these numbers will be critical to the continued success of the American tech sector, which in turn helps power the national economy.”

All of this suggests the catchphrase made popular in the Lost in Space TV show in 1965 – “That does not compute.” The affirmative action proponents are suggesting that three of the most successful companies in America (and the world) need to fundamentally change so that they better reflect the more bureaucratic, underperforming sectors of the economy. It also calls to mind two comments made by two conservative icons from the 80s:

  • Margaret Thatcher – Socialists are happy until they run out of other people’s money to spend.
  • Ronald Reagan – If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

November 11, 2014

Veterans’ Day

Filed under: Business,Facebook,Military — Mike Kueber @ 8:53 pm
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A few days ago there was a poster on a friend’s Facebook wall suggesting that a veteran should never be homeless, hungry, unemployed, in need of medical care, etc. My initial reaction was that America wouldn’t be doing our veterans any favor by treating them like it treats American Indians – i.e., as helpless dependents who must be taken care of – but I wasn’t in the mood for arguing or defending that position, so I let it pass.

Today, on Veteran’s Day, Facebook as well as various other media outlets are filled with similar sentiments. In a USA Today article, the CEO of Starbucks suggests that America should honor vets by giving them jobs, his company will give vets 10,000 jobs in the next five years.   But CEO Howard Schultz provides additional insights into why this hiring priority is appropriate:

  • “Schultz… says service in Iraq and Afghanistan has becomeahurdlerather than an asset for many veterans seeking civilian employment. It’s one reason the unemployment rate for vets is higher than that among those who haven’t served in the armed forces.
    • ‘The irony there is that there is a stigma attached to many of them about either PTS (post-traumatic stress) or brain trauma or things of that nature when in fact I can personally demonstrate through the hiring of people at Starbucks who have been veterans that they have done extraordinary things.’
  • “Employers are sometimes skeptical, and veterans often have little experience with such basic job-seeking skills as writing a résumé and going on an interview.”

A few months ago, the San Antonio City Council revised its non-discrimination ordinance to protect not only the GLTB community, but also the military veterans. At the time, I thought the proponents of the ordinance were unnecessarily including veterans in the ordinance only because of crass political motives. Really, who would discriminate against veterans?  But based on this argument put forward by CEO Shultz, perhaps there is merit to creating legal protection for vets. And there is also reason for companies to go out of their way to give vets an opportunity. Eventually, however, vets need to be responsible for themselves. Service should not create a comprehensive set of lifetime entitlements.  (Incidentally, the staggering percentage of vets who file for disability based on PTS and brain trauma might be connected to this lifetime-entitlement mentality.)

One final note on thanking vets for their service. My oldest son is a captain in the Army and has served in Iraq. He tells me about being often embarrassed by all the people who treat his service like he is Mother Teresa. Yes, he is patriotic, but he also considers military service to be a challenging, enjoyable, and rewarding career. And he believes that most soldiers are in the service for the same reason.

The military may be a calling, like doctors, lawyers, teachers, and preachers, and most of those people are doing well while doing good.

May 30, 2014

Diversity at Google

Filed under: Business,Culture,Law/justice — Mike Kueber @ 2:21 pm
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The big story in the technology world this week is that Google released its diversity numbers.  (Facebook to follow.)  The release was in response to pressure from the cottage liberals, like Jesse Jackson, who are concerned that the technology world is an exclusive club for white males.

What did the numbers show?  Well, Google’s tech employees are mostly men, and they are mostly white if you consider Asians to be white and Hispanics to be not-white:

  • American workforce – 47% women, 16% Hispanic, 12% black, and 12% Asian
  • Google techies – 17% women, 2% Hispanic, 1% black, and 34% Asian

So, what is causing this situation that is so distressful to cottage liberals?  Well, according to an article in USA Today:

  1. “At its heart, there are two reasons for the mismatch, experts say. The first is pipeline. White and Asian men are much more likely to have access and take advantage of technical schooling that leads to jobs at tech firms than historically disadvantaged minorities.”
  2. “Finally, high tech isn’t a very welcoming place if you don’t fit in.”

Aside from racial and sexual balancing, why should diversity be an objective for Google?  As explained in the USA Today article:

  • “By putting its numbers out there, Google is taking the steps necessary to bring change. Doing so isn’t about window dressing. It actually makes it a better and more profitable company, says Ed Lazowska, a professor of computer science and engineering at the University of Washington-Seattle. ‘Engineering (particularly of software) is a hugely creative endeavor. Greater diversity — more points of view — yields a better result.’”

I don’t know about you, but I think Google as presently staffed has been highly creative in software engineering, and if I were a stockholder, I wouldn’t want the company to start focusing on social engineering.

A remarkably similar article in the NY Times provided additional support for the proposition that the demographics of the Google workforce are a result of the demographics of the pipeline that provides those workers:

  • Tech companies have often blamed the lack of diverse workforces on the pipeline — they can only hire the people who apply for jobs, and those tend to be white and Asian men, they say. That is partly true. For instance, only 18.5 percent of high school students who took the Advanced Placement exam in computer science last year were girls. In eight states, no Hispanic students took the test and in 12 states, no black students took it. The problems start as early as childhood, when girls are discouraged by parents and teachers from pursuing technical pursuits.

Of course, the liberal agenda of the NY Times will not be blocked by mere statistics:

  • “Yet some of the blame also falls on tech companies. There can be a sexist culture that turns away women, as evidenced by the high attrition rate among technical women as compared to men. And women who try to start tech companies face exclusion by a venture capital network dominated by a chummy fraternity of men. This is all despite the fact that the data — which in Silicon Valley usually reigns supreme — shows that diversity on groups benefits research, development, innovation and profit.”

To sum up two liberal newspapers – (1) the tech pipeline is not turning out sufficient numbers of women, Hispanics, and blacks; (2) tech companies discriminate against women, Hispanics, and blacks, and (3) although tech companies are perhaps America’s premiere industry, it would function much better if it were forced to hire a workforce that “looks like America.”

Call me skeptical.

May 18, 2014

Modern management

Filed under: Business — Mike Kueber @ 12:21 pm

One of my longest-held business-management beliefs, in addition to the Peter Principle (i.e., employees rise until they reach their level of incompetence) is that managers are evaluated more on their ability to be managerially correct than on their actual effectiveness.  By managerially correct, I mean things like social graces, an upper-middle-class feeling of entitlement, or what Dilbert referred to as “managerial hair.”  By contrast, professional coaches may be able to skate by for a while by smooth talking and good manners (e.g., Cowboy Coach Jason Garrett), but eventually they have to produce on the scoreboard.

Although part of a coach’s job requires technical competence (e.g., Xs and Os), the major requirement is the ability to motivate others to perform.  That is why the best practices of successful coaches should be emulated by business managers, but my experience is that they are not.

For example, just this week I was visiting with a friend who works as a salesperson.  He and a large group of co-workers are introducing a new product and are under tremendous pressure because the initial results have been disastrous.  Their manager responded to this pressure by sending them a rah-rah cheerleader email filled with hackneyed platitudes.  And this is not an anomaly; I’ve seen it throughout my working life.

As I reflected on the email, I wondered if this was something Coach Pop of the Spurs would say to motivate his troops.  I can’t imagine he would.  In fact, if it were suggested, I suspect Pop would say that his players are intelligent adults who know what they have to do and that rah-rah pep-rally stuff would be insulting and counter-productive.  Instead, he would speak to them as professionals who know what they need to do and then let them individually motivate themselves.

So, sports motivation has joined the 21st century; I wonder why business motivation remains fixated on mid-20th century techniques.

Incidentally, a little over a year ago, I reviewed a book on business motivation called Drive by Daniel Pink.  In Drive, Pink argues that too many companies continue to use a motivational technique that came out of the Industrial Age – the carrot-and-stick approach.    He suggests that a better technique for the 21st century would have three components:

  1. Autonomy – an off-shoot of autonomy is a results-only work environment (ROWE).
  2. Mastery – an important part of mastery is what Pink calls “flow.” This occurs when a person is challenged with something not too easy, yet not too hard. Sounds like an athlete in a “zone.”
  3. Purpose – attaching your efforts to a cause larger than yourself.

According to my friend, his company clearly remains ensconced in the 20th century.  That’s not good for the company’s long-term prospects, but I hope Darwin finds lower-hanging fruit for a few years.

 

May 17, 2014

Sunk costs

Filed under: Business — Mike Kueber @ 1:00 pm
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Earlier this week, one of my sons told me that the renters in his rental house said they loved the house so much that, instead of extending the lease another twelve months, they would like to buy the property.   My son rejected that possibility out-of-hand, not only because the rental activity has been profitable, but also because he is interested in expanding his inventory of rental properties.

During our conversation, my son mentioned that one of his considerations against selling the house was that he had recently gone through the expensive process of refinancing the house to secure a more favorable interest rate.  That consideration initially made sense, but upon further reflection, I concluded that it did not, and I sent him the following email to point this out:

  • During our conversation about your rental house, we lapsed into flawed thinking that I didn’t realize until I was on a bike ride later in the day. Although the flawed thinking doesn’t necessarily change your decision to rent your SA house instead of selling it, it is something that we should keep in mind.
  • The flaw – We both agreed that there is a general guideline that refinancing is not a smart decision unless you can lower your interest rate by a couple of percentage points and that you don’t sell the house for about five years. Based on that guideline, we concluded that it made sense to keep renting your house for at least another four years to offset the cost of the refinancing. Upon further reflection, I believe that thinking is wrong. Actually, the costs of refinancing are so-called sunk costs, and, although they made economic sense based on your expectations at the time you spent them, they should not play any role in future decisions on selling vs. renting. An analogy would be me making decisions on the fate of Jimmy’s pickup based on the money that I have spent recently fixing it up. I shouldn’t decide to keep it just because I want to get my money’s worth for tuning up the engine or fixing the suspension or repairing the A/C. Similarly, deciding whether to sell a stock shouldn’t depend on whether I would be selling at a profit or a loss; instead, I should sell the stock whenever I think it is overpriced and is going to drop.
  • So, deciding to rent your SA house probably makes economic sense to you for a variety of reasons, but one of them shouldn’t be the money you have already spent on refinancing the house 12 months ago. You are renting the house because it provides you a monthly cash flow and along with an increasing equity interest. The only reasons to sell would be to eliminate the business risk, which we believe is not great, or if the offered price was too generous to turn down.”

My son didn’t necessarily agree:

  • “Good point but I think you are still looking at it a little off. You compared the house to Jimmy’s truck but that is not quite a good comparison since Jimmy’s truck is a complete liability in that it only will decrease in value and does not generate any income. My house is an asset that generates income in part due to the money that I invested to refinance it. A better comparison would be to compare it to a rental car. The rental company would not want to sell its rental cars until at least the cash it had generated and its sale price were greater than the money that the company paid to purchase and maintain the car. You could keep Jimmy’s truck forever and it would never make back the money you spent to tune it up.”

I didn’t agree and responded as follows:

  • “Maybe Jimmy’s truck isn’t a good analogy, but the point is that it is sometimes a mistake to make decisions to stay with a course of action just because it will prevent a previous decision from looking bad. For that reason, perhaps the stock analogy is the best one.”

Upon further reflection, I think my position could be better defended with the following undeniable fundamentals:

  1. Every asset that you own has a price, especially investment assets.
  2. Your selling price for an asset, especially an investment asset, depends on considerations such as its current market value, its likely future market value, its value to you, your need for cash, your alternative investment opportunities, and a property’s cash flow. But the amount that you paid for an asset should have, logically, almost no effect on your selling price for that asset.

I realize that these fundamentals essentially beg the question, but thinking in terms of establishing an asset’s price makes it easier for the evaluator to see the irrelevance of an asset’s prior costs or expenses – i.e. sunk costs.  Wikipedia provides a better explanation of sunk costs:

  • In traditional microeconomic theory, only prospective (future) costs are relevant to an investment decision. Traditional economics proposes that economic actors should not let sunk costs influence their decisions. Doing so would not be rationally assessing a decision exclusively on its own merits.
  • Evidence from behavioral economics suggests this theory fails to predict real-world behavior. Sunk costs do, in fact, influence actors’ decisions because humans are prone to loss aversion and framing effects. In light of such cognitive quirks, it is unsurprising that people frequently fail to behave in ways that economists deem “rational”.

About.com says essentially the same thing:

  • Sunk costs are unrecoverable past expenditures. These should not normally be taken into account when determining whether to continue a project or abandon it, because they cannot be recovered either way. It is a common instinct to count them, however.

Thus, the cost of securing a favorable mortgage is already sunk and should have no effect in a deciding how much money would be enough to entice my son to sell his rental house instead of continuing to rent it.  But loss aversion explains why it does.

 

 

May 14, 2014

Who’s got the money?

Filed under: Business,Media,Politics,Sports — Mike Kueber @ 11:06 pm
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Yesterday, during a discussion of various & sundry subjects, my best friend and I talked about Donald Sterling’s criticism of Magic Johnson.  According to Sterling, Magic is not a good role model for minority kids because of his AIDS status.  The media jumped to defend Johnson and quickly pointed out that Sterling was once again ignorant because Johnson had HIV, but not AIDS.

That point is what is sometimes called a distinction without a difference.  Yes, HIV is not AIDS, but Sterling’s criticism was based, not on Johnson’s particular affliction, but rather on Johnson’s admittedly promiscuous NBA lifestyle while being married and with children.

The media also asserted that Johnson was arguably the most successful black businessman in America.  My friend and I were both dubious about that assertion, with my friend suggesting that Johnson was not super-wealthy and that his ownership interest in the LA Dodgers was nominal, like that of George W. Bush’s previously in the Texas Rangers.  I agreed that Johnson was not super-wealthy, but suggested that both he and W. had invested several million dollars in their teams.  I also volunteered to learn the facts so we could quit speculating.

The facts regarding Magic as the most successful black businessman in America:

  • According to an authoritative website, Magic is #7 on the list of wealthy African-Americans, with $500 million.  Of those with more money – Mariah Carey, Robert Johnson, Sean Combs, Tiger Woods, Michael Jordan, and Oprah Winfrey – only Robert Johnson is a businessman in the traditional sense.  The others are popular entertainers who capitalized on their ability to entertain.  Incidentally, Oprah is the only billionaire in the group and she has $2.6 billion.  There are seven other black billionaires worldwide, with most of them from Nigeria.

Regarding Magic’s interest in the LA Dodgers, according to Yahoo.com, Magic invested $50 million, which amounts to 2.3% of the $2.15 billion purchase price.  The controlling partner is Kirk Walter, CEO of Guggenheim Capital.  By contrast, according to ESPN.com, George W. Bush invested only $600,000 in the Rangers, and this amounted to 1.8% equity.  But he also served as the managing partner who increased the value of the franchise to $250 million when it was sold in 1998, and a bonus clause increased his payout from a little more than $4 million to $14.9 million.

Incidentally, my best friend thought that George H.W. Bush was much richer than W., but that was wrong.  According to Wikipedia, Bush-41 has $23 million while Bush-43 has $20 million.  Career politicians who started poor and end up rich include LBJ at $98 million and Bill Clinton at $55 million.  Hmmm.

March 30, 2014

Repair or replace

Filed under: Business,Finances — Mike Kueber @ 7:18 am
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I grew up in an era (the 50s and 60s) when products were unreliable and cost a lot and our standard of living was relatively low. The confluence of these factors resulted in a thriving repair industry. It made sense to put a lot of time into fixing something.

Those days are gone. Today, products are relatively cheap and amazingly reliable, and the reasonable labor rate for a repairman (around $100 an hour) makes it prohibitively expensive to repair products like phones, refrigerators, TVs, washers & driers, and laptops. About the only repair business that remains thriving is the auto business, and that brings me to my sad story.

In December, my son Jimmy came back from Ohio with his 2001 gas-guzzling F150. The truck had been in Ohio for more than a year and was in sad shape. There was a slow leak in a tire, the check-engine and ABS lights were on, the steering wheel rested at 2 o’clock, the driver’s leather seat was almost like rags, the driver’s step had been broken off, the CD player had been stolen, and the inspection and registration stickers were expired.

After Jimmy left for Austria in January, I considered selling the vehicle, but decided no one would want to buy an uninspected vehicle with check-engine and ABS lights on and a slow tire leak. So my first order of business was to get those problems fixed.

  • First step – get the slow tire leak repaired at Discount Tires. Unfortunately, they couldn’t repair the tire because there was a nail that was too near the sidewall. Therefore, I had to replace the nearly new tire with another that cost more than $200. Although I hadn’t purchased insurance on the tire, Discount Tire gave me some sort of tread allowance that reduced the cost to a mere $170.
  • Step two – inspection. Before taking it in for an inspection, I replaced the windshield wipers because Jimmy had told me that they were bad. (This is easier said than done.) Then I took the vehicle to a repair shop on Bandera Road that one of my best friends swore was competent and honest. Well, the manager/owner honestly told me that the truck was a mess (spark plugs with 180,000 miles on them will do that) – brake problems, engine computer problems ($600 new, $300 used), plus the seal in the differential was leaking and needed to be replaced. $1,300 later I had my inspection sticker. Plus, they threw in a coupon for a free oil-change.
  • Step three – get a new CD player. First, I went to a couple of stores and got quotes for a simple CD player. Jimmy’s expensive touch screen had been stolen three times, and now was the time to stop that insanity. One independent shop wanted $200 for a non-Sony and a franchise shop (Mother’s) wanted $200 for a Sony. I decided to go with Mother’s, but then noticed that there was another Mother’s franchise closer to my place, and when I called them I learned that they would put in a Sony for $170. Obviously, that’s where I went, and this chapter ended nicely.
  • Step four – get the steering aligned. I had asked the first shop to fix the steering wheel, but they didn’t have alignment capabilities and said I would have to take it to an alignment shop. I called Midas and Brake Check on IH-10 and both assured me that a steering wheel could be aligned with a simple front-wheel alignment – cost $60 at one place and $55 at the other. Then I recalled that I had seen a sign near the Bandera shop advertising an alignment for less than $50, and I decided to take it there because I suspected that a shop in a middle-class neighborhood would be less likely to try to find additional work requirements. Boy, was that a mistake. Ten minutes after the Bandera shop started working on my vehicle, the repairman called me back to show me all the damage to the various wheel-support components. He said it would cost me $1100 to enable me to drive home without the wheel falling off and $2,400 to fix everything. After I pressed him to distinguish between the safety issues and defect issues, he was able to eliminate some overlapping labor and reduce the cost to $1980 if all the work were done at once. When I asked for his best price, sensing it was negotiable, he reduced it to $1,900. I paused for a moment (I should have paused for at least one day), and told him that he could have the job for $1,800. He immediately snapped up my offer, and I immediately thought that was too quick. The repairs were supposed to be completed that day, but due to some hidden problems and some severely rusted out parts, the repairs weren’t completed until the end of the next day. As a freebee, the shop threw in fixing the door step by moving a step from a rear door to replace the broken one on the front door. They also gave me a coupon for a free oil-change. In hindsight, I should have taken my truck back to the first shop to get a 2nd bid. Even though they don’t do alignments, they could have done all of the work except for the alignment and their labor rate was only $70 or $80 compared to $90 at the second shop. More importantly, competitive bids bring out the best in every business and are the best way to avoid unnecessary repairs.

As I was driving home with Jimmy’s truck, I started thinking that a poolside friend said he knew someone who would repair the leather seat for $200 a side, and at that point, the truck would be all set. But I started noticing it was warm in the truck, so I turned on the A/C, but the air wasn’t really cold. So I turned on Max A/C, and the air still wasn’t cold.

Uff da, when is it going to end.

January 16, 2014

Affirmative Action and 8(a) certification by SBA

Filed under: Business,Culture,Law/justice — Mike Kueber @ 2:34 am
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An article in today’s San Antonio Express-News reported on a federal program – so-called 8(a) certification by the SBA – that is designed to help socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society.    That sounds like an unassailable program even for a conservative for me.  I have long argued that affirmative action by colleges in favor of minorities should be replaced by affirmative action for kids who are socially and economically disadvantaged, such as those with parents who are poor or uneducated, and this sounds like a move in the same direction.

But the devil is in the details.  Upon closer examination, I learned that the federal program presumes you to be socially and economically disadvantaged if you have at least 25% membership in one of the following groups:

  • Black Americans
  • Hispanic Americans
  • Native Americans
  • Asian Pacific Americans
  • Subcontinent Asian American

It would have been simpler to designate who is not eligible – i.e., white people.  To ensure broader, self-serving support, the program includes women as potentially disadvantaged, but actually requires women to provide some evidence of personal disadvantage.

As in the dystopian novel Nineteen Eighty-Four, where the government develops a language that is specifically designed to mislead the people, America’s government has determined that affirmative action for minorities is no longer defensible.  But instead of ending affirmative action for minorities, the government simply changes the language.  Minorities become, by definition, social and economically disadvantaged individuals.

The Express-News article quotes an individual who describes the 8(a) certification as a wonderful windfall:

  • The 8(a) is an important certification for a small business.  It’s kind of like getting into Harvard.”

Although 8(a) says nothing about affirmative action or minority set-asides, if it walks like a duck and talks like a duck….

April 8, 2013

Another banner day for the Express-News

Filed under: Business,Culture,Economics,Issues,Politics — Mike Kueber @ 5:06 pm
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As I was reading the San Antonio Express-News on Sunday, I was pleasantly surprised by three informative articles that were relevant to my campaign for the City Council:

  1. San Antonio’s immigration.  This fascinating article by Joe Yerardi describes population growth in Texas’s four largest cities in the past two years.  Although San Antonio has enjoyed robust growth (+91,495), that growth is less robust than Dallas (+274,781), Houston (+256,579), and Austin (+118,017).  And, of the three contributors to growth – natural growth (births), foreign migrants (legal and illegal), and interstate migrants – San Antonio and Austin depend mostly on interstate migrants, while Dallas and Houston depend more on natural growth and foreign migration.  These migration patterns are surprising because San Antonio has by far the largest concentration of Mexican-Americans (59%), so you’d think migrants from Mexico would make San Antonio their destination of choice, but instead they are choosing Dallas and Houston.  Unfortunately, the elephant in the room is the distinction between legal and illegal immigration from Mexico.  Although reporter Yerardi doesn’t discuss it, I have previous read that Dallas and Houston have a much larger percentage of illegal immigrants.
  2. San Antonio – Austin railroad.  The city of San Antonio is currently preoccupied with its effort to develop a downtown streetcar system, so this article served as a reminder that San Antonio has for decades dreamed of a railroad connecting it with Austin.  My position is that this inter-city railroad is just as impractical as the proposed intra-city light rail system that is planned as an extension of the controversial downtown streetcar system. 
  3. San Antonio’s problem with downtown-office vacancies.  This article reports that San Antonio’s downtown office vacancy rate is 33% even though rental rates are lower than outside of downtown.  Explanation – “In the suburbs, the office buildings generally are newer and come with up-to-date amenities and abundant parking….  Despite the higher lease prices, another advantage the suburbs have over downtown is the proximity to housing and ease of access.”  I love the politically-incorrect honesty of Ernest Brown, an EVP at a real estate firm:
  • The downtown San Antonio office market is tough.  Right now, the biggest hurt for downtown is what reason is there to be downtown versus the suburbs?”

Coincidentally, I recently responded to a candidate questionnaire from Current newsweekly, and one of its questions was, “What would you do to address the high vacancy rate in downtown buildings?”  I responded, “As a District 8 Councilman, my major focus will be on the development of District 8, not the downtown vacancy rate.  Of course, the entire City has an interest in downtown San Antonio remaining Texas’s premier tourist attraction.”  If I had read this article prior to responding to the questionnaire, I would have added that the City should not be spending millions of dollars to encourage businesses to move from one part of San Antonio to another part.

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