THINK STRATEGICALLY: Tikkun Olam
Repair the world
In Judaism, there is a phrase, Tikkun Olam, that means “repair the world”; repairing, at many levels, is what Puerto Rico needs.
Tikkun olam’s roots can be found in the book of Genesis. It is said that when God finished creating the world, he instructed all humans to become protectors of the earth and co-guardians, the physical and spiritual upkeep of the world.
The tikkun olam concept became an integral part of Israel in the late 20thcentury, and thousands are involved in working to achieve Tikkun Olam through what they refer to as “humanitarian startups.”
Israelis have embraced this focus to spread the use of innovative technologies that include solar cells to bring energy, light and water to improve the lives of millions all across Africa. Additionally, the use of advanced agricultural methods to allow other countries to become food self-sufficient. It has also allowed them to perfect water desalination, sewage treatment and wastewater recycling and implement these technologies globally.
Effecting transformational change is often complicated and chaotic, but leaders always act to ambitiously optimize a situation, seeking the best outcome in a highly imperfect world. They recognize good ideas, are actively involved with others, and understand and respect conflicting points of view,. Most importantly, they don’t give up until they do.
I want to talk about implementing “Puerto Rico First Goals.” Implementing such a vision must be achieved and followed regardless of which party or ideology governs Puerto Rico. Right now, the island is one of the few places in the world where initiatives, rather than results, are celebrated, which has resulted in us not making progress in economic and social terms since 2005.
Puerto Rico First Goals:
• Transform Puerto Rico toward a path of robust economic development and sustained 4% growth in the next four years.
• Transform the industrial structure in which manufacturing, research, development and employment activities are focused on the knowledge-based economy representing no less than 25 percent of the gross national product in a period of 10 years.
• Create 300,000 new jobs in the private sector in the next six years.
• Increase our labor-force participation rate to 55% in six years.
• Reduce the unemployment rate to 5% in six years.
• Increase the average per capita income by 30% in six years, from $ 20,873 to $ 27,134.
• Reduce the governmental apparatus by transferring to the private sector any corporation, operation, or service that the private sector can perform more efficiently.
• Transform the educational system from primary to university level into one focused on entrepreneurship, trades and transformation.
• Measure ourselves with all international metrics, particularly using the World Bank’s Ease of Doing Business criteria, to maintain competitiveness.
Implementing these measures would amount to our own tikkun olam; however, in this case, we will attempt to “repair Puerto Rico.” The implementation of these goals can only be by the collective will of critical sectors and then through the government; therefore, our goal is to collaborate and guide this effort to achieve the ultimate goal of Transforming Puerto Rico.
Week in Markets: Rally continues on stimulus, corporate earnings optimism
The U.S stock market continued adding to last week’s rally, as critical economic data, mixed with better than expected corporate earnings and the expected passage of more coronavirus stimulus, has driven investor optimism. This allowed Nasdaq to break another record, closing at 11,010.98.
On economic news, the U.S. Bureau of Labor Statistics reported that unemployment had fallen to 10.2%, from 11.1% the previous month. Also, 1.2 million new unemployment applications were filed, a 17.35% drop. In absolute terms, the economy added 1.76 million jobs in July, beating estimates. While these numbers are promising and on the right track, the economic road to recovery is still a long way ahead.
One instrument benefited from the key jobs data: the U.S. dollar rebounded from several months of retreat after the U.S. economy was doing somewhat better than investors anticipated.
Restaurants and retail stores all over the island are experiencing a shortage of coins amid the pandemic, which has led to a reduction in their circulation due to reduced consumer spending and limited supply. Coins are not the only form of U.S. currency currently under pressure.
Results for the week of Aug. 7
- Dow Jones Industrial Average: Closed at 27,433.48, up 1,004.74 points, or 3.8%.
- Standard & Poor’s 500: Closed at 3,351.28, up 80.09 points, or 2.45%.
- Nasdaq: Closed at 11,010.98, up 265.71, or 2.47%
- Birling Puerto Rico Stock Index: Closed at 1,536.16, down 6.14 points, or 0.4%.
- U.S Treasury 10-year note: Closed at 0.57%, up 1.79%.
- U.S. Treasury 2-year note: Closed at 0.13%, down 18.18%
Berkshire Hathaway delivers 87.63% increase
The corporate earnings season continues with Warren Buffett’s Berkshire Hathaway Inc. (BRK-A) reporting its second-quarter earnings. Berkshire reported revenues of $56.8 billion versus $63.5 billion in 2Q19. In terms of net income it reported $26.4 billion vs. $14.07 billion in 2Q19, an 87.63% increase that offsets a near $10 billion writedown on its Precision Castparts subsidiary and a decrease in operating earnings across the board.
The conglomerate owns Geico, GenRe, NetJets, BNSF railroad, Fruit of the Loom and Dairy Queen. Shares of Apple, its most substantial stock investment, increased 43% in the quarter, the Apple investment was worth $92 billion as of June 30. Berkshire’s stock closed at $314,333.90, an increase of $6,878.93 up 2.24%.
The Final Word: Doing the right thing. It matters for Puerto Rico Voters
Just before I sat down to write the column, like thousands of fellow Puerto Ricans, I attempted in vain to cast my vote in Sunday’s primaries. It became clear that the mixture of the rookie president of the State Elections Commission (CEE by its Spanish initials) and the New Electoral Code have destroyed the confidence Puerto Ricans have when casting their vote.
The New Electoral Code required doing away with the long-term structure of CEE and its most knowledgeable directors. This legislation, spearheaded by Senate President Thomas Rivera-Schatz, should have been implemented outside of the electoral process. The Puerto Rico voting process and the CEE was for most residents the one institution that they could count on in government to work correctly.
I do not know the current CEE president personally, but he obviously has not taken his job very seriously.
In my world, managers do things right, while leaders do the right thing; doing the correct thing is not a matter of being right or following the blueprint; it is often making controversial and hard decisions. More often than not, it signifies being honest about your abilities. However, doing the right things separates leaders from those who do not have the capacity or insight to search for what’s required to solve complex problems. Moreover, I think all leaders are ultimately held accountable for their actions or inactions, achievements or mistakes.
The CEE has one job every four years, and that is making sure Puerto Ricans can safely cast their votes, and the CEE head was not able to achieve the high standard the commission has always set in Puerto Rico. If we lose our confidence in the voting process, we are just a few steps away from anarchy. Leaders are expected to do what is right, and sometimes it involves recognizing one is not capable of doing the job.