Last night I watched CNN and FoxNews for a while.  Both shows had panelists discussing the recent incident with the Nigerian terrorist on the Northwest/Delta flight to Detroit from Amsterdam.  Panelists discussed the fact that the terrorist’s father reported his concerns about his son’s radical activities to officials from Yemen, the U.S. embassy in Abuja, and the Central Intelligence Agency and yet, he did not land on a “do not fly” list.  I did not watch either of the shows to the end, primarily because the participants became engaged in partisan bickering that destroyed the sensibility of listening to both sides of the debate.  The failure of the intelligence agencies to engage in coordinated reporting for this incident led to the heated, partisan discussion.  Naturally, the discussion disintegrated when Republican participants stated that government workers are not disposed to working processes to perfection and that the same can be expected of the administration’s initiatives in healthcare and the cap and trade bill.  Panelists representing the administration and/or the Democrats resorted to blaming George Bush for the failure of the Department of Homeland Security and the moderators seemed to relish in the chaos rather than trying to rein in the discussion.

I was never a student of public policy, but because of its impact to my employer and myself, I have to be more than a bystander.  From my observations, it appears that healing and conciliation are no more than campaign promises from politicians on both sides of the aisle.  The breakdown appears to be more severe on a national level than a state and local government level, but that might be caused by the fact that state and local governments are required to balance their fiscal budgets and the federal government is the only entity allowed to print money to pay its bills.

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The 20th anniversary of the fall of the Berlin Wall was a week ago on November 9.  I remember it well.  CNN was still in its infancy and yet its coverage of the emotion of the crowd was worth watching long into the night.

Precedents for the fall of the wall were the discussions between the West and Mikhail Gorbachev.  Because of those discussions, President Reagan made one of the most famous speeches of the time at the Brandenburg Gate on June 12, 1987.   The most famous line of President Reagan’s speech was:  “Mr. Gorbachev, tear down this wall.”

I grew up during the Cold War.  In the 1960’s and 1970’s, all public schools held Air Raid drills.  We were taught where the fallout shelters were.  Our enemies were the Russians and Chinese.  As an undergraduate at Duke University, I was fascinated with American diplomacy and followed the policy of containment favored by George Kennan and the policy of arms superiority favored by Paul Nitze.  In the end, Kennan’s policy worked because of Nitze’s interpretation that the Soviets would only respect strength.

Twenty years after the fall of the wall, there’s now a generation of Americans who were born after the end of the Cold War.  Unfortunately, the world is not at peace.  The same technologies that have “flattened” the world (according to author Tom Friedman) have also provided terror groups with access to like-minded members around the world.  Fighting these groups will require a sophisticated alignment between domestic and international intelligence agencies as well as state and local law enforcement departments.  While this is not my area of expertise, I sense that this effort will require unprecedented cooperation and that some of the cooperation will be encumbered with political roadblocks.  Academic institutions can do our part by providing relevant courses and programs ranging from National Security and Diplomacy to Strategic Intelligence and Homeland Security.  I hope the era of terrorism falls sooner than it took for the wall to fall.

In 2003, Michael Silverstein and Neil Fiske published the book Trading Up: Why Consumers Want New Luxury Goods…And How Companies Create Them.  As partners at The Boston Consulting Group, Silverstein, Fiske (now the CEO of Eddie Bauer Holdings, Inc.) and others worked to research the consumer purchasing trends in the United States and overseas.  The phenomenon that they identified was the willingness of consumers to pay a premium for certain goods even in times of economic downturns.  Identified as “trading up,” the researchers also identified that consumers often “trade down” in order to afford the items for which they “trade up.”  In fact, they state that the effect of luxury brands in a market segment is to cause that category to polarize where the growth and profits move to the high and low ends of the spectrum while “companies caught in the middle struggle to succeed and survive.”  The authors provide a historical perspective that the trend to trade up has been around for centuries and that economists from Adam Smith to Thorstein Veblen to John Kenneth Galbraith have observed the trend of consumers to buy goods that cost more than what most others can afford to pay.

Silverstein and Fiske believe that the trading up phenomenon is positive and is driven by middle class consumers who are aware of the price/value ratio of what they are purchasing.  Furthermore, they state that so many middle class consumers are able to afford premium goods that the conventional wisdom of “higher price, lower volume” does not follow the trading up phenomenon.  Instead, the middle class consumers have a stronger emotional attachment with their luxury purchases than with other goods.  That emotional attachment is why they choose to ignore the mid-price product.  Silverstein and Fiske believe that the consumers have no desire to purchase a product that offers “neither a price advantage nor a functional or emotional benefit.”

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