Hey Millennials: Here’s the Truth About Socialism, Kim Jong-un, and Nicolás Maduro

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A recent story in the New York Times discussed the increasing willingness of political candidates in the United States to run as socialists. Times reporter Farah Stockman wrote that the Democratic Socialists of America (DSA) is surging, even in conservative-leaning states. “Since November 2016, DSA’s membership has increased from about 5,000 to 35,000 nationwide,” Stockman wrote. “The number of local groups has grown from 40 to 181, including 10 in Texas. Houston’s once-dormant chapter now has nearly 300 members.”

Franklin Bynum, a 34-year-old attorney, avowed socialist, and DSA member, won the Democratic nomination for criminal court judge in Houston. At least 16 other socialists appeared on the ballot in primary races across Texas.

Many of the candidates and much of the support come from millennials, the largest generation of Americans in history. In part, millennials’ attraction to socialism can be traced back to Occupy Wall Street and the 2016 presidential campaign of Senator Bernie Sanders, a self-described socialist. These well-publicized movements emphasized inequalities in income, access to capital, criminal justice, healthcare, childcare, access to education, and housing affordability. Amy Zachmeyer, a 34-year-old union organizer who helped restart the Houston DSA chapter said that socialism “resonates with millennials who are making less money than their parents did, are less able to buy a home, and drowning in student debt.” Millennials’ attraction to socialism is reflected in surveys.

A 2016 survey of 18- to 29-year-olds by Harvard’s Institute of Politics found that 16 percent self-identified as socialists, while 33 percent supported socialism. Only 42 percent supported capitalism, while 51 percent did not. Another survey in 2017 found that 51 percent of millennials identified socialism or communism as their favored socioeconomic system. Only 42 percent favored capitalism. Jorge Roman-Romero, 24, who leads a new DSA chapter in Tulsa, Oklahoma, said, “It’s not a liability to say that anymore,” referring to calling oneself a socialist candidate.

Frances Reade, 37, is vice chairwoman of the East Bay DSA chapter in the San Francisco Bay Area, which has about 1,000 members. She enjoys the free evening classes, known as “socialist school,” where they read and discuss political texts including Karl Marx. But it is doubtful that this Marxist night school is reading about the true history of socialism and communism in practice, which has brought more human suffering and death to the world than any other socioeconomic system.

For example, DSA chapters should read “Can There Be an ‘After Socialism’?” by University of Pennsylvania history professor Alan Charles Kors, which tells the story of socialism that Bernie Sanders and the Democratic Socialists of America won’t tell and that millennials don’t hear. Here is an extended excerpt:

The goal of socialism was to reap the cultural, scientific, creative, and communal rewards of abolishing private property and free markets, and to end human tyranny. Using the command of the state, Communism sought to create this socialist society. What in fact occurred was the achievement of power by a group of inhumane despots: Lenin, Stalin, Mao Tse-tung, Kim Il Sung, Ho Chi Minh, Pol Pot, Castro, Mengistu, Ceausescu, Hoxha, and so on, and so on . . .

No cause, ever, in the history of all mankind, has produced more cold-blooded tyrants, more slaughtered innocents, and more orphans than socialism with power. It surpassed, exponentially, all other systems of production in turning out the dead. The bodies are all around us. And here is the problem: No one talks about them. No one honors them. No one does penance for them. No one has committed suicide for having been an apologist for those who did this to them. No one pays for them. No one is hunted down to account for them. It is exactly what Solzhenitsyn foresaw in The Gulag Archipelago: “No, no one would have to answer. No one would be looked into.” Until that happens, there is no “after socialism.”

The West accepts an epochal, monstrous, unforgivable double standard. We rehearse the crimes of Nazism almost daily, we teach them to our children as ultimate historical and moral lessons, and we bear witness to every victim. We are, with so few exceptions, almost silent on the crimes of Communism. So the bodies lie among us, unnoticed, everywhere. We insisted upon “de-Nazification,” and we excoriate those who tempered it in the name of new or emerging political realities. There never has been and never will be a similar “de-Communization,” although the slaughter of innocents was exponentially greater, and although those who signed the orders and ran the camps remain. In the case of Nazism, we hunt down ninety-year-old men because “the bones cry out” for justice. In the case of Communism, we insisted on “no witch hunts”—let the dead bury the living. But the dead can bury no one.

Therefore the dead lie among us, ignored, and anyone with moral eyes sees them, by their absence from our moral consciousness, spilling naked out of the television and movie screens, frozen in pain in our classrooms, and sprawled, unburied, across our politics and our culture. They sit next to us at our conferences. There could not have been an “after Nazism” without the recognition, the accounting, the justice, and the remembrance. Until we deal with the Communist dead, there is no “after socialism.”

To be moral beings, we must acknowledge these awful things appropriately and bear witness to the responsibilities of these most murderous times. Until socialism—like Nazism or fascism confronted by the death camps and the slaughter of innocents—is confronted with its lived reality, the greatest atrocities of all recorded human life, we will not live “after socialism.”

It will not happen. The pathology of Western intellectuals has committed them to an adversarial relationship with the culture—free markets and individual rights—that has produced the greatest alleviation of suffering; the greatest liberation from want, ignorance, and superstition; and the greatest increase of bounty and opportunity in the history of all human life.

This pathology allows Western intellectuals to step around the Everest of bodies of the victims of Communism without a tear, a scruple, a regret, an act of contrition, or a reevaluation of self, soul, and mind....

The bodies demand an accounting, an apology, and repentance. Without such things, there is no “after socialism.”

In a 1989 interview, Sanders said: “Socialism has a lot of different messages to different people. I think the issue of socialist ideology and what that meant or means is not terribly important.” Perhaps it’s not important to Sanders, but it was to the tens of millions of people who died at the hands of socialists or who currently toil under such regimes in Kim Jong-un’s North Korea and Nicolás Maduro’s Venezuela.

A 2014 United Nations report on North Korea listed the conditions that ordinary citizens face in North Korea: “extermination, murder, enslavement, torture, imprisonment, rape, forced abortions and other sexual violence, persecution on political, religious, racial, and gender grounds, the forcible transfer of populations, the enforced disappearance of persons and the inhumane act of knowingly causing prolonged starvation” (p. 14). Two million to three million people are believed to have starved to death in North Korea in the 1990s, including “deliberate starvation” of political prisoners.

Venezuela’s government has practiced socialism since 1998. The result is an annual inflation rate today of 9,000 percent, an economy that shrinks 15 percent annually, empty shelves, crushing poverty, a fleeing population (10 percent of the population has emigrated), 12 percent of children under five suffer from malnutrition and a socialist president who prohibits outside aid, even from the Vatican. At the recent FEEcon 2018 conference in Atlanta, a young violinist from Venezuela, Wuilly Arteaga, talked about being beaten by government agents for publicly opposing his country’s despotic government.

So millennials, this is what socialism looks like in practice and where concentrated government power inevitably leads. As the old adage warns: A government powerful enough to give you everything you want is powerful enough to take away everything you have. That includes life itself.

Bernie Sanders and members of the Democratic Socialists of America choose to “step around the Everest of bodies . . . without a tear, a scruple, a regret, an act of contrition, or a reevaluation of self, soul, and mind.” By giving socialism and communism intellectual cover and acceptability, Sanders and the DSA help to hide the bodies and hide the truth from millennials, who have few memories of the atrocities and are likely unaware of socialism’s full record. Rather than being a Utopia, socialism and communism in practice create a hell on earth.

***

Lawrence J. McQuillan is a Senior Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute. He is the author of the book California Dreaming: Lessons on How to Resolve America’s Public Pension Crisis.



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What's the Minimum Number of People for a Generational Ship to Proxima Centauri?

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Humanity has long dreamed about sending humans to other planets, even before crewed spaceflight became a reality. And with the discovery of thousands exoplanets in recent decades, particularly those that orbit within neighboring star systems (like Proxima b), that dream seems closer than ever to becoming a reality. But of course, a lot of technical challenges need to be overcome before we can hope to mount such a mission.

In addition, a lot of questions need to be answered. For example, what kind of ship shoould we send to Proxima b or other nearby exoplanets? And how many people would we need to place aboard that ship? The latter question was the subject of a recent paper written by a team of French researchers who calculated the minimal number of people that would be needed in order to ensure that a healthy multi-generational crew could make the journey to Proxima b.

The study, titled “Computing the minimal crew for a multi-generational space travel towards Proxima Centauri b“, recently appeared online and will soon be published in the Journal of the British Interplanetary Society. It was conducted by Dr. Frederic Marin, an astrophysicist from the Astronomical Observatory of Strasbourg, and Dr. Camille Beluffi, a particle physicist working with the scientific start-up Casc4de.

The Project Orion concept for a nuclear-powered spacecraft. Credit: silodrome.co

Their study was the second in a series of papers that attempt to evaluate the viability of an interstellar voyage to Proxima b. The first study, titled “HERITAGE: a Monte Carlo code to evaluate the viability of interstellar travels using a multi-generational crew“, was also published in the August 2017 issue of the Journal of the British Interplanetary Society.

Dr. Marin and Dr. Beluffi begin their latest study by considering the various concepts that have been proposed for making an interstellar journey – many of which were explored in a previous UT article, “How Long Would it Take to Get to the Nearest Star?“. These include the more traditional approaches, like Nuclear Pulse Propulsion (i.e. the Orion Project) and fusion rockets (i.e. the Daedalus Project), and also the more modern concept of Breakthrough Starshot.

However, such missions are still a long way off and/or do not involve crewed spaceflight (which is the case with Starshot). As such, Dr. Marin and Dr. Beluffi also took into account missions that will be launching in the coming years like NASA’s  Parker Solar Probe. This probe will reach record-breaking orbital velocities of up to 724,205 km/h, which works out to about 200 km/s (or 0.067% the speed of light).

As Dr. Marin told Universe Today via email:

“This purely and entirely rely on the technology available at the time of the mission. If we would create a spacecraft right now, we could only reach about 200 km/s, which translates into 6300 years of travel. Of course technology is getting better with time and by the time a real interstellar project will be created, we can expect to have improved the duration by one order of magnitude, i.e. 630 years. This is speculative as technology as yet to be invented.”

Weighing in at 60,000 tons when fully fuelled, Daedalus would dwarf even the Saturn V rocket. Credit: Adrian Mann

With their baseline for speed and travel time established – 200 km/s and 6300 years – Dr. Marin and Dr. Beluffi then set out to determine the minimum number of people needed to ensure that a healthy crew arrived at Proxima b. To do this, the pair conducted a series of Monte Carlo simulations using a new code created by Dr. Marin himself. This mathematical technique takes into account chance events in decision making to produce distributions of possible outcomes.

“We are using a new numerical software that I have created,” said Dr. Marin. “It is named HERITAGE, see the first paper of the series. It is a stochastic Monte Carlo code that accounts for all possible outcomes of space simulations by testing every randomized scenario for procreation, life and death. By looping the simulation thousands of times, we get statistical values that are representative of a real space travel for a multi-generational crew. The code accounts for as many biological factors as possible and is currently being developed to include more and more physics.”

These biological factors include things like the number of women vs. men, their respective ages, life expectancy, fertility rates, birth rates, and how long the crew would have to reproduce. It also took into account some extreme possibilities, which included accidents, disasters, catastrophic events, and the number of crew members likely to be effected by them.

They then averaged the results of these simulations over 100 interstellar journeys based on these various factors and different values to determine the size of the minimum crew. In the end, Dr. Marin and Dr. Beluffi concluded that under conservative conditions, a minimum of 98 crew members would be needed to sustain a multi-generational voyage to the nearest star system with a potentially-habitable exoplanet.

Illustration of the Parker Solar Probe spacecraft approaching the Sun. Credits: Johns Hopkins University Applied Physics Laboratory

Any less than that, and the likelihood of success would drop off considerably. For instance, with an initial crew of 32, their simulations indicated that the chances for success would reach 0%, largely because such a small community would make inbreeding inevitable. While this crew might eventually arrive at Proxima b, they would not be a genetically healthy crew, and therefore not a very good way to start a colony! As Dr. Marin explained:

“Our simulations allows us to predict with great precision the minimum size of the initial crew that will leave for centuries-long space travels. By allowing the crew to evolve under a list of adaptive social engineering principles (namely, yearly evaluations of the vessel population, offspring restrictions and breeding constraints), we show in this paper that it is possible to create and maintain a healthy population virtually indefinitely.”

While the technology and resources needed to make an interstellar voyage is still generations away, studies of this kind could be of profound significance for those missions – if and when they occur. Knowing in advance the likelihood that such a mission will succeed, and what will increase that likelihood to the point that success is virtually guaranteed, will also increase the likelihood that such missions are mounted.

This study and the one that preceded it are also significant in that they are the first to take into account key biological factors (like procreation) and how they will affect a multi-generational crew. As Dr. Marin concluded:

“Our project aims to provide realistic simulations of multi-generational space ships in order to prepare future space exploration, in a multidisciplinary project that utilizes the expertise of physicists, astronomers, anthropologists, rocket engineers, sociologists and many others. HERITAGE is the first ever dedicated Monte Carlo code to compute the probabilistic evolution of a kin-based crew aboard an interstellar ship, which allows one to explore whether a crew of a proposed size could survive for multiple generations without any artificial stocks of additional genetic material. Determining the minimum size of the crew is an essential step in the preparation of any multi-generational mission, affecting the resources and budget required for such an endeavor but also with implications for sociological, ethical and political factors. Furthermore, these elements are essential in examining the creation of any self-sustaining colony – not only humans establishing planetary settlements, but also with more immediate impacts: for example, managing the genetic health of endangered species or resource allocation in restrictive environments.”

Project Starshot, an initiative sponsored by the Breakthrough Foundation, is intended to be humanity’s first interstellar voyage. Credit: breakthroughinitiatives.org

Dr. Marin was also quoted recently in an article in The Conversation about the goals of his and Dr. Beluffi’s project, which is all about determining what is needed to ensure the health and safety of future interstellar voyagers. As he said in the article:

“Of the 3757 exoplanets that have been detected, the closest Earth-like planet lies at 40 trillion kilometers from us. At 1% of the speed of light, which is far superior to the highest velocities achieved by state-of-the-art spacecraft, it would still take 422 years for ships to reach their destination. One of the immediate consequences of this is that interstellar voyages cannot be achieved within a human lifespan. It requires a long-duration space mission, which necessitates finding a solution whereby the crew survive hundreds of years in deep space. This is the goal of our project: to establish the minimum size of a self-sustaining, long duration space mission, in terms of both hardware and population. By doing so, we intend to obtain scientifically-accurate estimates of the requirements for multi-generational interstellar travel, unlocking the future of human space exploration, migration and habitation.”

In the coming decades, next-generation telescopes are expected to discover thousands more exoplanets. But more importantly, these high-resolution instruments are also expected to reveal things about exoplanets that will allow us to characterize them. These will include spectra from their atmospheres that will let scientists know with greater certainty if they are actually habitable.

With more candidates to choose from, we will be all the more prepared for the day when interstellar voyages can be launched. When that time comes, our scientists will be armed with the necessary information for ensuring that the people that arrive will be hail, hearty, and prepared to tackle the challenges of exploring a new world!

VIDEO

Further Reading: arXiv, arXiv (2), The Conversation

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Thursday assorted links

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The Children's Place Is A Steal - If Management Is Right

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Right now, the market basically is saying that it doesn't believe The Children's Place (PLCE) management. That's true from a short-term standpoint: before recovering a bit over the past three sessions, PLCE fell 10%+ after a Q1 earnings miss, though PLCE (mostly) reaffirmed FY18 (ending January 2019) guidance and chalked the weakness up to a nearly unprecedented impact from bad weather.

It's true from a long-term standpoint as well: PLCE has announced a target of $12 in EPS by 2020. Assuming that target were hit, a 15x multiple plus net cash - in line with PLCE's current valuation relative to the midpoint of FY18 guidance, even with the stock near a six-month low - would value PLCE at about $180, or ~$149 discounted back two years even at 10%. Essentially, the market is saying either that The Children's Place will miss its targets - or that growth will come to an end pretty much immediately come FY21.

As a longtime (and continuing) retail bear, I certainly understand the skepticism. But as I wrote back in January, I also think very highly of PLCE CEO Jane Elfers. The performance of The Children's Place under Elfers suggests it makes some sense to give the company a pass for Q1 - and to accept its explanations at face value.

As far as the long-term target goes, this isn't the all-too-common case of management picking a round number for EPS that would be a nice level to reach. Most of the projected operating margin expansion - 330-350 bps from a guided 8.5-8.7% in FY18 to 12% two years later - is coming from two fairly certain and logical areas. And the company has been earlier than most in recognizing the pitfalls of brick-and-mortar retailing (Elfers' commentary on the Q2 FY17 conference call is required reading for anyone interested in the sector) and in moving aggressively to set itself up to succeed in the new environment.

All told, from here, PLCE now looks like an attractive buy - even to a retail bear. The current valuation should hold barring an outright collapse. And if management is right - and I think they should be given the benefit of the doubt - there's a reasonable case for 50% upside over the next two years.

Q1 Earnings

There's no doubt that PLCE's Q1 report was ugly. Comps declined 1.8%, which looks to be about 2 points below the Street, and much worse than post-Q4 guidance for a "low single digit" increase.

Adjusted EPS of $1.87 doesn't seem that bad, dropping 4% year-over-year. The figure was well below guidance of $2.12-$2.22 and consensus of $2.21, but given the disappointing comps and quarter-end inventory clearance, a modest decline Y/Y hardly appears to be dramatically out of line.

But PLCE also received a huge benefit from taxes on share-based compensation. Adjusted operating income fell by nearly half, with adjusted gross margin falling 220 bps to 37% and adjusted SG&A climbing 11% on flat sales. This looks exactly like the type of quarter that sent so many retail stocks tumbling over the past few years: deleveraging from disappointing comps echoing down the P&L and sending earnings down much more sharply than a 'small' top-line miss might suggest.

The question is to what extent Q1 was just a one-off stumble, particularly due to weather. In the Q&A of the Q1 call, Elfers said that in 33 quarters with the company,

I certainly have never experienced the weather quarter [sic] that even approaches what we just went through in Q1...We are not just talking about having a bad snow pattern in the Northeast for a few weeks; we are talking about 12 weeks of weather impact mostly all of our major markets, one way or the other...

And on the call, PLCE broke its practice of not giving monthly results in pointing out that March comps were +11% (thanks in large part to an Easter shift), while April was -23% through the first three weeks - and plus 24% in the last week, when the weather finally cleared up. Quarter to date (16 days as of the call), the +24% figure had held, with what Elfers called "a significant increase in pent-up demand for our seasonal product."

PLCE now is guiding for "high single digit" comps in Q2 - and actually raised its full-year comp guidance by a point (3.5-4.5% versus 2.5-3.5% previously) coming out of the quarter. Operating margin for the year has been pulled down, as has the tax rate, which nets out on the EPS line, leaving full-year guidance unchanged.

As for the margin pressures in the quarter, they're easily explainable. SG&A jumped due to previously communicated investments in the company's "transformation" initiatives, such as improving digital capabilities and implementing free everyday shipping through the company's website. Gross margin was weak because PLCE had to clear inventory toward the end of the quarter.

There's a pretty solid case here that Q1 really shouldn't have led to much of a sell-off at all - if management is to be believed. Admittedly, there's also a case that it's dangerous, particularly in retail, to accept weather excuses on face value. (I'd note that Tractor Supply (TSCO) management had similar trust - and that company started talking up weather as comps began to decelerate in 2016. TSCO would lose almost half its value, though it's since rebounded.) And at least until last week, it looked like the investors decided not to take that risk.

An Improved - And Attractive - Business

Still, at this point, after the performance of late (particularly given exposure to the struggling mall space), I'd argue Elfers and PLCE management deserve at least some benefit of the doubt. Comp growth has inflected, turning positive in FY14 (ending the following January) and accelerating to 4.9% and 5.8% the past two years after back-to-back 0.4% prints. PLCE actually has guided rather conservatively, particular in terms of same-store sales, beating initial targets in three of the four years (and handily the last two).

Admittedly, there's been some help to the numbers, particularly of late. The company re-launched its loyalty program in Q3 FY16, adding a private label credit card as well. Store closures have benefited comps, as some of those foregone sales have been recaptured by other stores and/or online. And last year's bankruptcy of Gymboree provided as much as a 2-point push to comps (with the impact being lapped over the next two quarters). Even considering those tailwinds, however, PLCE seems to be performing well particularly relative to the space.

Carter's (CRI) is growing overall sales faster, but mostly through new stores: its comps have lagged PLCE the last two years. Ascena Retail Group's (ASNA) 'tween' business Justice is hemorrhaging sales, with revenue down 20% over the past two fiscal years before stabilizing through the first two quarters of FY18. PLCE seems to be outperforming: a notable reversal from the market share erosion Nitin Gulati highlighted on this site back in 2015. Back then, PLCE was in the middle of a tough activist battle (it eventually settled, giving up two board seats) - and the dissidents had quite a bit of ammunition:

Source: Shareholders For Change at The Children's Place

But the turnaround has taken hold - with much of the credit going to Elfers, as Retail Dive pointed out in March. Margins have expanded (though gross margin of 38.1%, adjusted, is still below FY10 levels - though that's not a huge surprise or disappointment in the retail space right now, and is due in part to higher e-commerce penetration), and sales trends have improved. PLCE has significantly upgraded its technology, driven sharp e-commerce gains: the digital business now accounts for 26% of total revenue, per the Q1 conference call.

This now looks like an attractive business. A 100% foreign (and directly) sourced business might raise trade war risks - but one wonders whether politically, a tariff on children's clothing seems likely. PLCE also has a diversified supply chain, with five different countries accounting for at least 11% of purchases, per the 10-K. (China is the largest, at 19%.) Those relationships are valuable - and difficult to replicate - in a space with low price points where products generally are bought for need, not necessarily for fashion. Children's clothes don't last long - and PLCE's website currently is advertising $5 polos and $2.99 graphic tees.

Low birth rates do pose a concern, but Elfers has talked up her company's success with core millennial customers. And there should be room for some continued market share gains from Justice, Gymboree, department stores like Kohl's (KSS) and JC Penney (JCP), and potentially even Walmart (WMT). (Target's (TGT) Cat & Jack line could provide some pressure.)

All told, The Children's Place looks solidly positioned. The numbers are moving in the right direction. Low price points and the need to source overseas provide some protection against the smaller, private competition hitting so many large consumer companies of late. Mall exposure is a risk, but growing digital penetration and a store closure plan (more on that later) should minimize that impact. It's a well-run business with a good brand serving a decent, if not spectacular, end market. Comps are solid, earnings are growing - and more help is on the way.

The 2020 Target

All told, I think PLCE deserves some trust from investors, the same is true when it comes to the company's reaffirmed targets for FY2020. Obviously, if an investor doesn't trust that Q1 truly was a weather issue, it's tough to trust the company's forecasting 7-plus quarters from now. But if Q1 was a blip, the path to $12 in EPS and 12% operating margins really isn't as audacious as it sounds against guidance for FY18 EPS around $8 with margins in the mid-8% range.

That's particularly true because most of the expansion is coming rather easily. Again, PLCE is spending up on SG&A this year - with an incremental $30 million budgeted for FY18. That figure drops to $15 million next year, and just $5 million in FY20. On the call, Elfers detailed a number of initiatives planned for that period, ranging from a new content management system to mobile improvements to an improved loyalty system coming in Q3.

PLCE is also closing a ton of stores - an estimated 300 in total, with ~130 coming between FY18 and FY20 (including 12 closed in Q1). That effort already has boosted margins by about 100 bps, per the call, and given recapture rates PLCE expects another 100 bps over the next two-plus years.

Against projected net sales of $2.1 billion in FY20, the diminishing incremental spend on transformation initiatives should provide 120 bps of margin improvements. Store closures add another 100 bps. That's two-thirds, or close to it, of the margin expansion being targeted here.

That's an important point. Over the past few years, a myriad retailers have set out long-term targets of their own - and most have missed, for a number of reasons. The shift to e-commerce generally is margin-dilutive overall. In many cases, weak comps across the board (particularly for mall-heavy retailers) have led to SG&A deleverage which has offset cost savings efforts. And going back to 2014-2015, in particular, many of these multi-year plans were based on some version of "we're going to do what we've been doing, only better". (Vera Bradley (VRA) is a perfect example; Pier 1 Imports (PIR) another, though its strategy seemed more plausible.)

In contrast, this is a real plan, with concrete and easily achievable goals (at least for ~two-thirds of the EBIT margin expansion). PLCE has a highly flexible lease base, with an average term of 2.5 years. It can close underperforming stores - or receive rent reductions to make those stores viable (as is already happening). It's already out in front on digital, with penetration at 26% and targeted at 35% in FY20 (in part because of those brick-and-mortar store closures).

There's more good news on the revenue front as well. International distribution points are going to rise 150% simply from a recent partnership in China, which is expected to generate $125-$150 million in new revenue by year five (an incremental 6-8% in sales). And the growing wholesale business should benefit from the partnership with Amazon.com (AMZN), including participation in the launch of Amazon Prime Wardrobe.

That's not to say the plan is guaranteed to work. Elfers emphasized on the call that the company wasn't as mall-heavy as some observers believed, given outlet and digital sales, and between digital growth and store closures its reliance on that struggling channel will only diminish (to a targeted ~30% by FY20). But mall exposure still looks dangerous from here, and like nearly all of its peers PLCE still is dealing with declining traffic.

The CEO also addressed the company's quickly growing private label credit card penetration, which she said was "not some short-term play to drive results". (This appears to be a response to a Bank of America (BAC) report that cut PLCE to "Underperform", due in part to the card, by the analyst's estimate, driving 140% of revenue growth and as much as 45% of the increase in operating income last year.) But PLCE has had a huge acceleration in penetration, and as that growth slows, there's the risk that comps will follow.

Store closures might seem bearish - it's not good news to close stores - but it's not as if those stores are disaster areas. The 119 stores left currently are running comps in the negative low single digits, per the Q1 call - and that's the bottom decile of the business, with benefits to the digital businesses and other stores from their closures. And it does appear that PLCE overexpanded in the past (that was one of the activists' criticisms back in 2014), meaning a more rationalized footprint isn't necessarily a bad thing.

The broad point overall, to emphasize, is that this is a real plan. It's a logical plan (and that honestly has not always been the case in retail the past few years). All of the efforts may not work. Mid-single-digit comp expectations for both FY19 and FY20, even with store closure help (as some of the lost sales are redirected to existing stores), are awfully aggressive for any retailer these days. Online sales are supposed to be accretive to overall margins - but the aggressive free shipping policy may limit or even reverse some of those benefits. BofA could have a point on credit card penetration.

But what makes PLCE attractive at $130 is that it doesn't need everything to work to drive solid upside through FY20 - and beyond. There's 200+ bps in margin expansion coming from store closures and pulling back on incremental SG&A. That alone gets pretty close to supporting the current price.

Valuation

Even if PLCE doesn't hit its targets, I'm not sure there's a ton of downside here. Even assuming zero organic profit growth in FY21 - just the $5 million in incremental 2020 SG&A coming off the books - EPS should get near $12 or so that year from EBIT margin expansion and buybacks, presumably with some offset from a slightly higher tax rate relatively to FY18. Even a ~zero-growth 12x forward multiple values the stock at $148 in two years, or $122 discounted back at 10%.

Put another way, PLCE already is trading at a basically no-growth valuation. As the Q1 presentation pointed out, EPS before the incremental SG&A spend is guided to $9.62-$9.87:

source: PLCE Q1 presentation

Even at the low end of that range, PLCE is trading at about 14x EPS. If net income simply holds steady (no help from closures, no growth in the business), and even if those SG&A initiatives have zero ROI, FY21 EPS still is easily in the double digits (likely $11+) thanks to a lower share count. With a 1.6% dividend yield, and a 12-13x out-year multiple, total returns over that period would be in the 4% range annually - hardly torrid, but not bad considering that the scenario suggests rather disappointing underlying performance.

Meanwhile, if PLCE hits its targets, there's the potential for huge upside. Reasonable assumptions suggest an enormous bounce. CRI currently trades at a bit over 18x the midpoint of FY18 guidance, and 10x+ implied EBITDA. At $12, PLCE would get to $220 by 2020 at an 18x P/E. Assuming the 12% operating margin and ~$2.1 billion in revenue, EBITDA would clear $300 million - which at 10x similarly gets the stock over $200.

The argument isn't necessarily "heads I win a lot, tails I don't lose much (or maybe win a little)," because I don't think that argument exists in retail at the moment. (I'd also point out, as I have elsewhere, that often forgotten in the debates about Amazon, e-commerce, and the collapse of the mall, is that retail is a cyclical business and we're in year nine of an economic expansion.) But right now, PLCE trades at just over 15x the midpoint of FY18 EPS guidance (backing out a couple bucks per share in net cash) just above $8. There's $1.67 - about 20% growth - coming from the $25 million in incremental SG&A spend this year coming off the books. There's ~$16 million in net income - about $1 per share - if store closures add 100 bps of EBIT margin expansion on a ~$2 billion revenue base (~5% below the current FY20 target).

Pro forma EPS for FY18 is over $10, even assuming a tax rate that normalizes from a guided ~16%-17% this year. That doesn't even include another buck or two per share coming from the $500 million in buybacks (though if they are executed in the next three years as planned, it looks like PLCE would have to raise some debt and thus pay some interest; capex is spiking over these three years as well). PLCE is trading at about 12x that pro forma EPS.

Even in retail, that's a cheap number (though pro forma EV/EBITDA is a still-healthy ~7x+). And so any downside in PLCE - and any win for the traders still shorting almost 18% of the float - requires that the business actually turn downward from an organic standpoint.

It's possible. Again, this is retail. A lighter tailwind from credit card signups could hurt. PLCE will lap the benefit of the Gymboree bankruptcy this year, and Elfers said on the Q1 call that the closures of Babies "R" Us would have a much smaller impact. More digital revenue could hurt margins; so could an Amazon partnership. Any macro stumble could add to the pressure from declining mall traffic.

But this also is a company that's been one of the best retailers in the country over the past few years. Comps grew 4.9% in FY16 and 5.8% in FY17. PLCE has a solid niche and a committed customer base. Competitors have fallen by the wayside. Undercutting the company on pricing is pretty tough, given an assortment that is heavily priced under $10, and that low pricing point and the need to replace children's clothing mitigates cyclical risk. (Comps actually rose nearly 5% in FY08 before dropping 2%+ the next three years - but as noted, there were some execution issues in there as well. Carter's grew revenue nicely right through the recession.)

PLCE already is seeing a good deal of success in omnichannel. It's investing $50 million over the next three years in SG&A, and another ~$100 million in additional capex. Even some level of ROI from those initiatives could offset organic weakness, should it come. Post-FY20, there's still some help from lower SG&A and high-margin revenue in China, along with other potential international opportunities.

When I last covered PLCE in January, at $148, I wrote that the stock looked like an argument over the future of retail. The question at those levels looked to be: can a brick-and-mortar retailer reinvent itself as an online leader without seeing margins compress substantially, and while continuing to drive positive comps?

The question now is: is PLCE on the verge of a significant organic decline? Q2 results are the biggest risk here, because they would undercut the 'weather' narrative coming out of Q1 and perhaps support fears about the fading Gymboree tailwind and/or the reliance on the credit card business.

But again, I'm willing to trust management. More importantly, the benefits simply from store closures and the tapering of investments suggest the stock should provide positive returns even if underlying performance weakens noticeably. Even if comps flatten, there's still enough between buybacks and ongoing lease flexibility to keep pro forma profit pretty much stable - and that's enough to keep PLCE at current levels, if not modestly higher.

Unless an investor sees something in Q1 that suggests that performance already is turning south - and I'm inclined to believe management's explanations for the quarter - then PLCE is too cheap at $130. And there's a reasonable path to something like 20-25% returns, including dividends, over the next two years if the underlying business just stays steady. Store closures and lower SG&A alone gets EPS near $11, and a modest 13-15x multiple gets the stock back toward $155. If management is right - and they've been right for most of the past eight years - something closer to 60-80% returns are on the table. Even for a retail bear, that looks like a bet worth taking.

Disclosure: I am/we are long PLCE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.



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Sunday assorted links

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1. What makes a country good at soccer?  (The Economist)

2. The Coasean Koreas.  Important.

3. The language of Mister Rogers.

4. “The 43% of Democrats who say the U.S. benefits from having a class of rich people is down significantly from six years ago, and Democrats remain much more negative than either Republicans or independents about the impact of a rich class.”  Amazing.

5. Does “musical paralysis” set in after age 28? (not for me)

6. The successes of Nigerian-Americans.

The post Sunday assorted links appeared first on Marginal REVOLUTION.



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Jeffrey Wright says his Westworld character is ‘based on a Reddit user’

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Spoilers ahead for Westworld season 1.

HBO’s Westworld is about robots, power, and the nature of humanity, among other things. In season 2 of the show, Westworld park programming head Bernard Lowe (Jeffrey Wright) is a cornerstone character, the audience’s window into understanding what’s going on in a number of plots. As he pieces together his faulty memories, the viewers are putting together clues to understand the larger story. But as season 1 revealed, Bernard is a host — a fully humanoid robot — which complicates both his memory issues and his identity issues. Created as an artificial replica of Westworld co-creator Arnold Weber, Bernard entered the story not knowing he was a host. Last Friday, Wright sat down at New York’s Split Screens Festival to discuss how the craft of playing a robot differs from playing a human.

Photo by Shannon Liao / The Verge

Festival director and moderator Matt Zoller Seitz interviewed Wright about topics ranging from Westworld and Reddit to Wright’s previous roles, including Dr. Martin Luther King in the 2001 film Boycott and Jean Michel Basquiat in the 1996 film Basquiat. The highlights of the night’s conversation seem especially prescient as season 2 approaches its end.

One thing Seitz asked was whether Wright knew his character had been a host all along. “I just knew going in, when we shot the pilot, that he was kind of an everyman. Understated, good old Bernard, just kind of spinning his hamster wheel,” Wright says. “I got the sense that we’d follow him on this journey of discovery as we move through the season.”

Image: HBO

But once HBO picked up the show, executive producer Lisa Joy got back to Wright with feedback. He says she’s normally brilliantly articulate, but she stumbled over how to break the news: “Okay, what I want to tell you — okay, so it’s written — okay, so your character — it’s complicated. Uhh, okay. You’re not — you’re a host.” Wright was shocked at first, but in retrospect, he says, “It was exciting because it added so much obvious new dimension to what we were able to do. And I held it close to my vest because they asked me to.”

“That’s who my character is based on: a Reddit user.”

When shooting season 2, Wright says the writers and producers gave him even less to go on. “They wanted to keep me in the dark. [But] in the first four weeks of this season, I shot scenes from about seven or eight different episodes, so I got clued in.” He elaborates, “I had these little bits and pieces, and I had these little breadcrumbs, and then I get the first script and I go, ‘Oh, okay.’”

He jokes that his character is essentially one of the large community of fans on Reddit who come together online every Sunday during seasons of Westworld to decipher the show’s extremely complicated clues. “That’s what I try to emulate, you know? That’s who my character is based on: a Reddit user.” More seriously, he explains that he’s like Bernard, who’s “trying to feel his way toward his survival” because neither of them have all the pieces of the puzzle yet.

Given the show’s many time-shifts and the way it sets scenes set in the same place but in different periods, Wright says he often has to play Bernard by staring off into the air. But he says that stare has to be purposeful: “You can’t just stare off blankly. You have to have a very specific understanding of what it is you’re looking at and why you’re looking at it. You’re kind of acting and you’re editing and you’re envisioning all at once.”

Image: HBO

That kind of mechanical, almost mathematical calculation extends to the physicality of his performance. Seitz asked an intriguing question about whether the actors playing hosts have any sort of playbook for how they should move and walk. Wright says their movement isn’t uniform by any means, but that he uses Dolores (Evan Rachel Wood) and her father (Louis Herthum) as archetypes. “They were very early bad robots. So they set the parameters.”

To act like a machine, Wright says he thinks of the next action or emotion that’s programmed into his queue, then carries it out. “It’s very much about the moment… I try to be as efficient as possible. Got to be mathematical. What’s the most force I can deliver with the least amount of physical energy exerted? Where’s the jugular?”

But just as Bernard struggles to find his own free will, there are still glimpses of humanity within robots. For the touch of life, Wright says, “In theater, the primary tool for me was voice. On-screen, it’s the eyes. That’s what I play more than anything else... I try to infuse intent through the eyes.”



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Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

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U.S. economic growth could face a challenging slowdown as the Trump Administration’s powerful fiscal stimulus fades after two years, according to former Federal Reserve Chairman Ben Bernanke.

Bernanke said the $1.5 trillion in personal and corporate tax cuts and a $300 billion increase in federal spending signed by President Donald Trump “makes the Fed’s job more difficult all around” because it’s coming at a time of very low U.S. unemployment.

Photographer: Andrew Harrer/Bloomberg

“What you are getting is a stimulus at the very wrong moment,” Bernanke said Thursday during a policy discussion at the American Enterprise Institute, a Washington think tank. “The economy is already at full employment.”

The stimulus “is going to hit the economy in a big way this year and next year, and then in 2020 Wile E. Coyote is going to go off the cliff,” Bernanke said, referring to the hapless character in the Road Runner cartoon series.

Sorry, Mr. President, But Best Economy Was Eisenhower’s (1)

The timing of Bernanke’s possible slowdown would line up badly for Trump, who has called the current economy the best ever and faces reelection in late-2020.

Bernanke, who stepped down from the U.S. central bank in 2014, is a distinguished fellow in residence at the Brookings Institution in Washington.

Growth Slowdown

The Congressional Budget Office forecast in April that the stimulus would lift growth to 3.3 percent this year and 2.4 percent in 2019, compared with 2.6 percent in 2017. GDP growth slows to 1.8 percent in 2020 in the CBO projections. Fed officials predicted 2 percent growth in 2020 in their March median projection.

The degree of slowdown as stimulus fades is a matter of debate among economists, with some predicting the effects could last beyond two years if the U.S. boosts its capital stock and upgrades its workforce during this period of strong growth. Congress could also write new spending laws to smooth out the program, Bernanke noted.

With the stimulus coming at a time of already-low unemployment -- the jobless rate was 3.8 percent in May, matching the lowest in almost five decades -- Fed officials have projected inflation as likely to overshoot their 2 percent target, resulting in a slightly restrictive monetary policy in the future.

Bernanke was followed at the AEI discussion by former Fed Governor Kevin Warsh. A distinguished fellow at the Hoover Institution in Stanford, California, Warsh said he would speak loosely from his prepared remarks and joked: “I am not going to speak as loosely as Ben did when he made the Wile E. Coyote reference and what happens to the economy in 2020.”



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    Apollo, the Graphic Novel; Scientists on Acid and Other New Science Books

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    Apollo
    by Matt Fitch, Chris Baker and Mike Collins.
    SelfMadeHero, 2018 ($24.99)

    The world waited anxiously during late July of 1969 for news of the first footsteps on the moon. Wives of the astronauts paced, President Richard Nixon in the White House mused on how the success or failure of the mission would play politically, and soldiers in the jungles of Vietnam compared themselves to the heroes in space. Writers Fitch and Baker teamed up with illustrator Collins (no relation to the Michael Collins, who flew with Neil Armstrong and Buzz Aldrin on the mission) to create a graphic novel of the suspense-filled story. They convey surprising depth and emotion, as well as rich historical details of the era. The book explores the political tension around the space program at the time, the nerve-wracking anxiety experienced by the families of the crew, and the heart-stopping moments of the mission that proved to be such a milestone.

    How to Change Your Mind: What the New Science of Psychedelics Teaches Us about Consciousness, Dying, Addiction, Depression, and Transcendence
    by Michael Pollan.
    Penguin Press, 2018 ($28)

    A Swiss chemist took the first documented acid trip in April 1943. The researcher, Albert Hofmann, was synthesizing molecules from ergot—a fungus that commonly infects grains used for bread. He accidentally absorbed one of these compounds—lysergic acid diethylamide, LSD-25 for short—perhaps through his skin while working with it. Since then, psychedelic drugs have had a reputation mostly as a dangerous hippie pastime. Science writer Pollan examines what these chemicals might teach us about consciousness and the brain and even gives them a try himself—taking LSD in a yurt in an unnamed American mountain range under the guidance of a Bavarian ex-con.

    Who Cares about Particle Physics? Making Sense of the Higgs Boson, the Large Hadron Collider and CERN
    by Pauline Gagnon.
    Oxford University Press, 2018 (paperbound, $19.95)

    Many people have heard the term “Higgs boson” and perhaps recall the hubbub when this particle was discovered in 2012. But how many really know what it is? Anyone wishing to bone up on particle physics would benefit from physicist Gagnon's book, which profiles the tiniest stuff in the universe. In addition to offering one of the most thorough yet accessible explanations of the Higgs boson, Gagnon—a former member of the ATLAS experiment at the Large Hadron Collider—gives an insider's account of the powerful accelerator where atoms crash together to create exotic particles. If theorists' hunches are borne out in ongoing experiments, she writes, “We are most likely on the verge of a huge scientific revolution.” —Clara Moskowitz

    She Has Her Mother’s Laugh: The Powers, Perversions, and Potential of Heredity
    by Carl Zimmer.
    Dutton, 2018 ($30)

    Until the 19th-century revelation of heredity from Austrian monk Gregor Mendel, humankind mostly toyed with “genetics” through trial and error and guesswork. Since Mendel, scientists have figured out not only that sequences of DNA called genes encode traits such as eye color and height but that slight mistakes in those sequences can cause debilitating maladies. Science writer Zimmer threads together many intriguing narratives—each a story about how researchers tackled, and often misunderstood, heredity. From the horrors of eugenics to the discovery of a bacterial tool (the CRISPR/Cas9 complex) that snips away problematic DNA, he shows how our advancing knowledge of genetics continues to shape society and our very beings. —Yasemin Saplakoglu



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    Follow live: Final round of the Memorial Tournament

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    Mike Wells ESPN Staff Writer 

    A tough finish ended what had been an impressive third round for Tiger Woods at The Memorial on Saturday. Woods shot a 68 in the third round to put him at 9 under for the tournament, which at the time had him four shots off the lead. Woods hurt himself by closing out the round bogeying two of his final three holes - 16 and 18 - which he three putted on both of those. Woods will enter the final round on Sunday looking for his sixth title at The Memorial.



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    Why Children Aren't Behaving, and What You Can Do About It

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    Text-Only NPR.org (go to full version)

    Home

    Why Children Aren't Behaving, And What You Can Do About It

    By Cory Turner

    NPR.org, June 2, 2018 · Childhood — and parenting — have radically changed in the past few decades, to the point where far more children today struggle to manage their behavior.

    That's the argument Katherine Reynolds Lewis makes in her new parenting book, The Good News About Bad Behavior.

    "We face a crisis of self-regulation," Lewis writes. And by "we," she means parents and teachers who struggle daily with difficult behavior from the children in their lives.

    Lewis, a journalist, certified parent educator and mother of three, asks why so many kids today are having trouble managing their behavior and emotions.

    Three factors, she says, have contributed mightily to this crisis.

    First: Where, how and how much kids are allowed to play has changed. Second, their access to technology and social media has exploded.

    Finally, Lewis suggests, children today are too "unemployed." She doesn't simply mean the occasional summer job for a high school teen. The term is a big tent, and she uses it to include household jobs that can help even toddlers build confidence and a sense of community.

    "They're not asked to do anything to contribute to a neighborhood or family or community," Lewis tells NPR in a recent interview. "And that really erodes their sense of self-worth — just as it would with an adult being unemployed."

    Below is more of that interview, edited for length and clarity.

    What sorts of tasks are children and parents prioritizing instead of household responsibilities?

    To be straight-A students and athletic superstars, gifted musicians and artists — which are all wonderful goals, but they are long-term and pretty narcissistic. They don't have that sense of contribution and belonging in a family the way that a simple household chore does, like helping a parent prepare a meal. Anyone who loves to cook knows it's so satisfying to feed someone you love and to see that gratitude and enjoyment on their faces. And kids today are robbed of that.

    It's part of the work of the family. We all do it, and when it's more of a social compact than an adult in charge of doling out a reward, that's much more powerful. They can see that everyone around them is doing jobs. So it seems only fair that they should also.

    Kids are so driven by what's fair and what's unfair. And that's why the more power you give kids, the more control you give them, the more they will step up.

    You also argue that play has changed dramatically. How so?

    Two or three decades ago, children were roaming neighborhoods in mixed-age groups, playing pretty unsupervised or lightly supervised. They were able to resolve disputes, which they had a strong motivation to because they wanted to keep playing. They also planned their time and managed their games. They had a lot of autonomy, which also feeds self-esteem and mental health.

    Nowadays, kids, including my own, are in child care pretty much from morning until they fall into bed — or they're under the supervision of their parents. So they aren't taking small risks. They aren't managing their time. They aren't making decisions and resolving disputes with their playmates the way that kids were 20 or 30 years ago. And those are really important social and emotional skills for kids to learn, and play is how all young mammals learn them.

    While we're on the subject of play and the importance of letting kids take risks, even physical risks, you mention a remarkable study out of New Zealand — about phobias. Can you tell us about it?

    This study dates back to when psychologists believed that if you had a phobia as an adult, you must have had some traumatic experience as a child. So they started looking at people who had phobias and what their childhood experiences were like. In fact, they found the opposite relationship.

    People who had a fall from heights were less likely to have an adult phobia of heights. People who had an early experience with near-drowning had zero correlation with a phobia of water, and children who were separated from their parents briefly at an early age actually had less separation anxiety later in life.

    We need to help kids to develop tolerance against anxiety, and the best way to do that, this research suggests, is to take small risks — to have falls and scrapes and tumbles and discover that they're capable and that they can survive being hurt. Let them play with sticks or fall off a tree. And yeah, maybe they break their arm, but that's how they learn how high they can climb.

    You say in the book that "we face a crisis of self-regulation." What does that look like at home and in the classroom?

    It's the behavior in our homes that keeps us from getting out the door in the morning and keeps us from getting our kids to sleep at night.

    In schools, it's kids jumping out of seats because they can't control their behavior or their impulses, getting into shoving matches on the playground, being frozen during tests because they have such high rates of anxiety.

    Really, I lump under this umbrella of self-regulation the increase in anxiety, depression, ADHD, substance addiction and all of these really big challenges that are ways kids are trying to manage their thoughts, behavior and emotions because they don't have the other skills to do it in healthy ways.

    You write a lot about the importance of giving kids a sense of control. My 6-year-old resists our morning schedule, from waking up to putting on his shoes. Where is the middle ground between giving him control over his choices and making sure he's ready when it's time to go?

    It's a really tough balance. We start off, when our kids are babies, being in charge of everything. And our goal by the time they're 18 is to be in charge of nothing — to work ourselves out of the job of being that controlling parent. So we have to constantly be widening the circle of things that they're in charge of, and shrinking our own responsibility.

    It's a bit of a dance for a 6-year-old, really. They love power. So give him as much power as you can stand and really try to save your direction for the things that you don't think he can do.

    He knows how to put on his shoes. So if you walk out the door, he will put on his shoes and follow you. It may not feel like it, but eventually he will. And if you spend five or 10 minutes outside that door waiting for him — not threatening or nagging — he'll be more likely to do it quickly. It's one of these things that takes a leap of faith, but it really works.

    Kids also love to be part of that discussion of, what does the morning look like. Does he want to draw a visual calendar of the things that he wants to get done in the morning? Does he want to set times, or, if he's done by a certain time, does he get to do something fun before you leave the house? All those things that are his ideas will pull him into the routine and make him more willing to cooperate.

    Whether you're trying to get your child to dress, do homework or practice piano, it's tempting to use rewards that we know our kids love, especially sweets and screen time. You argue in the book: Be careful. Why?

    Yes. The research on rewards is pretty powerful, and it suggests that the more we reward behavior, the less desirable that behavior becomes to children and adults alike. If the child is coming up with, "Oh, I'd really like to do this," and it stems from his intrinsic interests and he's more in charge of it, then it becomes less of a bribe and more of a way that he's structuring his own morning.

    The adult doling out rewards is really counterproductive in the long term — even though they may seem to work in the short term. The way parents or teachers discover this is that they stop working. At some point, the kid says, "I don't really care about your reward. I'm going to do what I want." And then we have no tools. Instead, we use strategies that are built on mutual respect and a mutual desire to get through the day smoothly.

    You offer pretty simple guidance for parents when they're confronted with misbehavior and feel they need to dole out consequences. You call them the four R's. Can you walk me through them?

    The four R's will keep a consequence from becoming a punishment. So it's important to avoid power struggles and to win the kid's cooperation. They are: Any consequence should be revealed in advance, respectful, related to the decision the child made, and reasonable in scope.

    Generally, by the time they're 6 or 7 years old, kids know the rules of society and politeness, and we don't need to give them a lecture in that moment of misbehavior to drill it into their heads. In fact, acting in that moment can sometimes be counterproductive if they are amped up, their amygdala's activated, they're in a tantrum or exploited state, and they can't really learn very well because they can't access the problem-solving part of their brain, the prefrontal cortex, where they're really making decisions and thinking rationally. So every misbehavior doesn't need an immediate consequence.

    You even tell parents, in the heat of the moment, it's OK to just mumble and walk away. What do you mean?

    That's when you are looking at your child, they are not doing what you want, and you cannot think of what to do. Instead of jumping in with a bribe or a punishment or yelling, you give yourself some space. Pretend you had something on the stove you need to grab or that you hear something ringing in the other room and walk away. That gives you just a little space to gather your thoughts and maybe calm down a little bit so you can respond to their behavior from the best place in you — from your best intentions as a parent.

    I can imagine skeptics out there, who say, "But kids need to figure out how to live in a world that really doesn't care what they want. You're pampering them!" In fact, you admit your own mother sometimes feels this way. What do you say to that?

    I would never tell someone who's using a discipline strategy that they feel really works that they're wrong. What I say to my mom is, "The tools and strategies that you used and our grandparents used weren't wrong, they just don't work with modern kids." Ultimately, we want to instill self-discipline in our children, which will never happen if we're always controlling them.

    If we respond to our kids' misbehavior instead of reacting, we'll get the results we want. I want to take a little of the pressure off of parenting; each instance is not life or death. We can let our kids struggle a little bit. We can let them fail. In fact, that is the process of childhood when children misbehave. It's not a sign of our failure as parents. It's normal.

    © NPR



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