Saturday Cup of Joe from Detroit

230.

Welcome to Fall in Detroit. Though it’s an unusual week of debate shouting, Presidential diagnosis, and more IPOs, the weather acted as a reminder that we’re marching forward no matter what. It sounds silly because I’ve written about trying to avoid “talking about the weather” as small talk; but the weather as a prompt for remaining grounded can be no small thing.

Hope you have a wonderful weekend and a productive week next week.

Image for post
Image for post
@DailyDetroit on Instagram

Earlier this week I found an op-ed in tracing some of the Supreme Court’s controversial social policy decisions as well as the subsequent decisions that either supported or reversed the law. This is a great example of the type of article that should challenge your thinking regardless of your political persuasion or legal experience.

Don’t let the title fool you, it’s click-bait, the article is worth reading and not (actually) about elimination the Supreme Court.

Racial discrimination, like gender discrimination, is not just one step forward and two steps back, but more like one step forward and twenty steps back. A entire generation back in many cases.

Throughout the timeline of cases, several stood out as important background for 2020.

For instance, Presidents weighing in on the Court’s decisions establish themes that last for years after the decision.

In 1952, the Truman Administration submitted an amicus brief to the Supreme Court encouraging it to rule against segregation. As the brief noted, “The United States is trying to prove to the people of the world of every nationality, race and color, that a free democracy is the most civilized and most secure form of government yet devised by man. . . . The existence of discrimination against minority groups in the United States has an adverse effect upon our relations with other countries. Racial discrimination furnishes grist for the Communist propaganda mills.

This struck me beyond the moment in time because it underscores the way racial discrimination acts as grist, as fuel, for rhetoric and propaganda. Communism then.

Now, racial discrimination is less grist and more wedge used to divide. Sadly, it is not foreign propaganda but our own political parties and social media accounts to blame.

I wrote a few weeks ago about the President’s tweet celebrating the big, beautiful suburbs and upending fair lending regulation. Rings of President Nixon’s comment (curious how President Nixon would have engaged Twitter) when he described fair housing as “forced integration.” In 1971, Justice Burger, writing for the majority in , claimed that racial segregation in Detroit was “caused by unknown and perhaps unknowable factors,” and concluded that there was no evidence that “governmental activity” had played any role in the “residential patterns within Detroit.”

Yes, the court has moved culture forward and just as often, quickly, took some big steps back. There’s a lot more here to consider. I cannot do it justice in a few sentences. I wanted to present the article and some of the interesting parallels to today’s intersection of social justice, the Supreme Court, and politics. Hopefully it’s thought-provoking and starts a dialogue on the role of the Court. I have gotten at least one if not both feet solidly on a soapbox this week about Article 1 power, Congressional power, and how it’s been given away, gleefully given away, by Congress for, like, the last 25 years or so.

I want to take a step back and think more about how social issues and social policy that so divide the Court, not to mention the country. I’m not naïve enough to think the Court is (or ever was) above politics. The so-called politicizing of the Court is not my fundamental problem. That’s just reality of people and politics. I think my fundamental problem is the inconsistency with which the politics of the Court are treated by those with Article 1 power.

The question I’ve been asking all week is why Democrats think criticizing Trump for nominating Amy Coney Barrett is either a). helpful or, more importantly, b). accurate. Trump was running for President at the time and not responsible for the nonsense and hypocrisy of Mitch McConnell. I suppose the “all GOPers are hypocrites” trope is an attempt to paint Trump as guilty by association, but that seems like an odd gamble because someone finds 1 time yesterday or 60 years ago when someone in the Party wasn’t a hypocrite and you appear to lose the entire argument. Seems like weak politics by the Left, per usual.

This one is not Trump’s fault or Trump’s problem. That said, Trump is also aware that his nominee is going to be up against every political tool and tactic in the book based on how the Senate has orchestrated these battles. The Right blames Harry Reid over lower level federal judges years ago. The Left blames Mitch McConnell over the nomination of Merrick Garland in 2016. Both are right.

That’s my whole point. The Senate has so lost sight of it’s role and Article 1 power that it interferes with not just balance of power in the Constitution but also reality. Somehow folks on the Right have decided that Merrick Garland somehow wasn’t or isn’t qualified for the Court but Ms. Coney Barrett is. More nonsense.

If Ms. Coney Barrett is such a shoo-in, without even asking her any questions yet, then surely Mr. Garland was too. The point is — ASK the questions, have the vote.

The travesty that Mr. Garland was not able to have a hearing and a vote. Perhaps he still would have lost, but it would have been a much different conversation today. I think some would say that there’s no point in having the hearings and vote if you already know the outcome but that drastically underestimates process and context. There are times when process only is fairness, regardless of outcome.

Yet, the Senate seems gleeful to give away actual authority and power under Article 1 — making law and setting policy — for the mere perception of power. The Presidents (all of them) and the Court are more than happy to step in the void and leverage actual authority and power. It is only though because the Senate has decided to play games rather than do their Constitutional job. The odd part is that many of the culprits are the ones talking most often and at the highest volume about the structure and language of the Constitution.

I have no idea if this nominee will be confirmed or if we’ll even get to hearings. I suspect we will and we’ll get to hear from her. But the Senate won’t be regaining it’s power by forcing the issue to get President Trump’s nominee through a controversial moment. They’ll call it power but it will simply be a further, disappointing transfer (of what little authority the Senate had left) of power to the President and the Supreme Court.

Democrats claim to be scared of what President Trump and Amy Coney Barrett are trying to do. First, the process is to ask her to take an oath and answer questions about what she’s trying to do. Second, regardless of whether Ms. Coney Barrett is qualified or not, address the Article 1 problem. In the intervening 4 years, it is STILL Senate Democrats who are to blame. If I was a Democratic strategist, I’d be looking less at my own standard of conduct or decency and thinking about where the politics, timing, Constitution and Presidency play in my favor. Might be time to get creative.

Image for post
Image for post
Source: @detroit.history on Instgram

Proactive vs. Reactive

Innovation comes with risk. Tech companies, especially in the last ten years or so, have made it a point of pride to “move fast and break things.” The problem is that by growing, scaling and succeeding all at the same time it can be difficult to return back over the ground just covered to reinforce decisions made along the way. Corners cut never get reinforced. Weaknesses are not addressed.

On top security executive, Alex Stamos, worked at Yahoo and Facebook between 2014 and 2018. Stamos says, “When you work at these companies, you are constantly moving from emergency to emergency. There was never not a fire at either Facebook or Yahoo. I cannot think of one point where I could sit down and do something proactive.”

Is your company proactive or reactive? When you make a choice to move past a risk, do you ever find to go back over the area again?

As we think about what big tech is capable of — what is the appropriate risk?

Perhaps the best equivalent of big tech is big pharma.

Here’s how medical research reporting articulating this problem in 1980. “Acceptable-risk problems are decision problems, they require a choice between alternatives. That choice depends upon the alternatives, values, and beliefs that are considered.”

Well said.

Tech like life is a choice between alternatives. This topic is a fascinating one and luckily, tech is one step removed from politics so we can still talk about it. But, I believe that reality is quickly coming to an end.

We’re going to start having larger conversations about how tech and risk interact. Who is to blame and why? There are two real aspects to risk that I see — the actual risk inherent in cyberspace which goes to building and deploying platforms and the unintended consequences of how the platform interacts with the world and changes things.

I’ve always remembered something Dan Gilbert once said about evaluating product-market fit. Too often, the analysis is done without accounting for how the product will change the market once it exists.

Here, I think viewing Big Tech like Big Oil, Big Tobacco or as the author of the linked article above puts it, Big Cotton, is a step too far. That said, I’m bias and I don’t know if the size and scale of employment & usage combined with the potential unknown risks makes it an unfair comparison. Oil has done a lot of good for a lot of people despite what we will or won’t acknowledge about it’s known or unknown risks.

The process of evaluating it is the key for me. Ensuring we don’t resort to a silver bullet mentality or try to claim tech is above scrutiny is the important part. We need to improve (and dramatically expand) our conversation about risk and reward. There are known risks in everything. The point is to do our best to understand as much as we can, make a determination and act — one way or the other.

We can be proactive in our analysis. We can decide to be. We can choose to be. Right now, we’re addicted to the speed of the game and the rate of change in our businesses. Fastest reactor wins.

That’s not a bad thing, it’s a good thing for motivation, understand your customers and team, and constant iteration and improvement.

The question is — improvement of what?

It’s not overall improvement unless you define value and risk at a large enough aperture.

More users, more downloads, more revenue is improvement but only in a narrow sense of the process undercuts the long term viability of the company or the market.

Take a wider of view of both risk and value this week.

Good luck!

Tweet I’m obsessed with this week:

Image for post
Image for post
Can’t stop thinking about this.

NextGen. The NextGen homebuyer is here. Ever since I joined the housing industry, we’ve been talking about the millennial homebuyers. It’s not about wealth creation but it is about commitment to a place. Cultural Outreach published the NextGen Homebuyer Report 2020. Check it out. It’s great work by a great team.

Image for post
Image for post

Down payment remains a primary obstacle to first-time home buyers. At the same time, there are a variety of aspects of homeownership that remain confusing or completely unknown to first time home buyers — earnest money deposit, appraisal, and title insurance.

I was recently working on a first-time homebuyer project around modernization the appraisal process. In some areas of the country today, an appraisal order can take 8 weeks (rural Colorado). For most though it is still 10–14 days.

The appraiser receives the order, schedules a visit to the house, travels to the house, conducts the review and measurements, travels home, prepares the market report, finalizes the data and research, and delivers the report to the lender.

What I found out in the modernization project is that even taking the appraisal process from 10+ days to 1 day does not have the significant impact on first-time home buyers in the market because they don’t know it’s a 2 week process until they’ve already applied. In other words, the lender can advertise saving time on the appraisal but it’s not going to generate all that many new home buyers. It will, however, impress home sellers and sellers’ agents. Real estate agents recognize that many buyers need financing and financing requires the appraisal. So it turns out the modernization remains valuable but to a different audience. One disconnected, slightly, from the customer (i.e. the homebuyer).

This is one reason the mortgage industry remains slow to modernize in many areas. Incentives are not always aligned across the transaction and the process. Or the work that could smooth the home purchase process is not the type of work that will impress potential clients or generate more leads and so it’s delayed or never prioritized.

It seems that “space” and location are two huge unknowns in the future trends of real estate and mortgage. Speculation abounds about renters leaving major cities for suburban or small towns but a lot hinges on remote work and whether it remains beyond COVID-19.

According the Cultural Outreach research, NextGen home buyer prioritized more space and looking to buy a house now as top priorities. In the short term, this is driving demand pushing home prices up and sustaining the housing market.

Long term, the question is whether an alternative ownership options exist or it remains — one family, one house, maybe a yard. Sure, if that’s what exists that’s what consumers what. If, however, alternative options and arrangements existed, do we know what people would choose?

Equity sharing across a network of homes in all 50 states that allow members to select the current house while continuing to earn wealth in the entire portfolio.

Ownership of an entire building, including the street level retail, that shared the profit across the tenants like a tenant-shareholder and hosted common areas, co-working space outside the unit, and a ghost kitchen for prepared meals.

Community land purchase where ownership exists across an entire block or neighborhood and everything from ride share to groceries are available.

Certainly a bet on the future of the real estate and mortgage game includes a theory on whether housing gets more flexible in structure, accessibility and affordability in the coming years.

It’s clear housing remains central to the economy, our financial lives and our futures.

NextGen is here.

Image for post
Image for post
Harvest Moon, October 1, Detroit, MI, USA

Quote: “Don’t talk about your philosophy, embody it.” — Epictetus

Continued success and continue to answer well,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store