Editing the Fed

I’ve been so bold as to edit Prince Charles and the pope, so why not the Cleveland Federal Reserve Bank?

Consider the Fed’s analysis of Canadian vs. American housing and lending trends.

Why Canada might be “a country that got things right”

The report led off well enough:

Housing markets in the United States and Canada are similar in many respects, but each has fared quite differently since the onset of the financial crisis. A comparison of the two markets suggests that relaxed lending standards likely played a critical role in the U.S. housing bust.

It’s written in easily-understood prose and comes to a succinct conclusion. But if you read the report (and re-read once or twice), you’ll agree that my re-write would have been a better approach, not just by virtue of the writing, but also by virtue of the more comprehensive (and candid) conclusion:

Unlike the U.S., Canada has not experienced a dramatic increase in mortgage defaults, nor has any Canadian bank required a government bailout. This article explores the differences between the two countries’ monetary policies, financial services structure and regulation, and the kinds of mortgage products offered. While the primary culprit behind the American financial services crisis was the rise in subprime loans,  those products, and indeed the housing bubble itself, were enabled by monetary policy and financial services regulation.

Conclusions drive structure

An introduction like this would have led to an entirely different STRUCTURE of the paper, as well.  As written, the Fed meandered through data on housing prices, loan-to-value stats, delinquency rates, central bank target rates, and benchmark mortgage interest rates before getting around to contextualizing them. Most readers’ eyes were glazed over by then.

I would have taken the inverse approach, noting the differences in subprime booms between the countries (and the American bust) and then comparing and contrasting the factors that DROVE those differences, including monetary policy and regulation.  I would also have quoted sociologists on the differences in risk tolerance between us and our “neighbors to the north” as we so often call them.

The Fed is not apolitical, so I guess I should give a nod to the possibility that it was motivated to obfuscate.  Alas, these are the times in which we live.

Papal White Paper

Papal  encyclicals don’t normally hit my radar.  But this summer, when the Vatican released what some called a papal white paper on globalization and ethics, I took note for two reasons.  First, the subject is one of my favorites, and second, because so many people ask me “What’s a white paper?”

Since so few white papers garner any publicity, I’m commenting on this one, timed perfectly to coincide with the G8 meeting in Italy.

Please note that my comments intend no disrespect to the church — centuries of papal correspondence dictate the form this encyclical takes.  My intent is educating business communicators on the places where a business white paper will align and diverge from the style perpetuated by Pope Benedict XVI.

Telegraph with a great title

The official title of the work is Latin, CARITAS IN VERITATE (“Charity in Truth”).  I can’t criticize the church for using its official language, but I can advise business communicators to go with something catchier.

Define the audience and focus on its needs

The pope addressed this message to “the bishops, priests and deacons, men and women religious, the lay faithful and all people of good will.”

Business communicators, don’t ever try to write this broadly.  If you want to reach everyone from Bible scholars to faithful illiterates, do so with different versions for each audience.

State your objective and stick to it

Straightaway, the pope diffuses any notions or potential criticisms of interfering in politics while staking a claim in perpetuating the “mission of truth.”  I’d grade this objective a solid C+:

The Church does not have technical solutions to offer and does not claim “to interfere in any way in the politics of States.”  She does, however, have a mission of truth to accomplish, in every time and circumstance, for a society that is attuned to man, to his dignity, to his vocation.

More clearly stated, I might suggest: The Church maintains its distance from the politics of States (“Render unto Caesar that which is Caesar’s).  At the same time, She speaks directly to individuals in all walks of life,  including statecraft, to apply Christ’s teachings to their daily lives and decisions in all matters, including business, economics and the proper use of modern technologies.

Follow a logical outline

In Chapter One we learn that CARITAS IN VERITATE is an update of a forty-year-old encyclical by Pope Paul VI and we get a recap of that earlier work .

Chapter Two’s first paragraph tells us why the world needs an update:

The economic development that Paul VI hoped to see was meant to produce real growth, of benefit to everyone and genuinely sustainable. It is true that growth has taken place, and it continues to be a positive factor that has lifted billions of people out of misery — recently it has given many countries the possibility of becoming effective players in international politics. Yet it must be acknowledged that this same economic growth has been and continues to be weighed down by malfunctions and dramatic problems, highlighted even further by the current crisis.

Chapter Three diffuses mis-perceptions about “moral interference” with the economy:

(T)he conviction that the economy must be autonomous, that it must be shielded from “influences” of a moral character, has led man to abuse the economic process in a thoroughly destructive way. In the long term, these convictions have led to economic, social and political systems that trample upon personal and social freedom, and are therefore unable to deliver the justice that they promise.

Chapter Four brings it home to individuals with:

Many people today would claim that they owe nothing to anyone, except to themselves. They are concerned only with their rights, and they often have great difficulty in taking responsibility for their own and other people’s integral development. Hence it is important to call for a renewed reflection on how rights presuppose duties, if they are not to become mere licence.

Chapter Five works its way up from the individual to the family and finally, to the entire race:

The development of peoples depends, above all, on a recognition that the human race is a single family working together in true communion, not simply a group of subjects who happen to live side by side.

Chapter Six discusses the proper use of technology, from financial to communications and bioethics:

By analogy, the development of peoples goes awry if humanity thinks it can re-create itself through the “wonders” of technology, just as economic development is exposed as a destructive sham if it relies on the “wonders” of finance in order to sustain unnatural and consumerist growth.

The Conclusion states:

Development needs Christians with their arms raised towards God in prayer, Christians moved by the knowledge that truth-filled love, caritas in veritate, from which authentic development proceeds, is not produced by us, but given to us.

Grade for following a logical outline: A+.

Research & interviews

White papers are not editorials or essays.  You must back your claims with research and quotes.

In the church’s case, the pope handled that through scripture and footnotes of earlier papal works.

Business writers need to be careful that the sources they cite are credible to the intended audience of the piece.  For example, when I write for financial clients, I won’t include a news story from USAToday when I can find it in the WSJ.

Hone and polish

Again, centuries of custom allow (perhaps even dictate)  using passive voice, but centuries of custom don’t make the papal white paper easy to understand. Business communicators, place your subjects and verbs as close to each other as possible.  Visual cues like bulleted lists and call-out boxes are a godsend (couldn’t resist that).

As I said in another post, good writing requires that you “kill your darlings“  and I have to grade the Vatican harshly on this point.  By including too broad an audience, the encyclical went waaaaay over the heads of most everyone but the scholars faaaaaar too often.

Focus, writers, focus!

Clean Energy and National Security

Cleantech Interest Group Help Needed

I’m in a few LinkedIn groups, as I think all LinkedIn users are by now.  One of them is for Duke alumni and students interested in Solar Energy and Solar startups.  A fellow member posted an interesting request that I decided to help cast a wide net for answers to by posting here and tweeting several of my Twitter followers.   A novel approach for me — let’s see where it goes.

From Ian Thomson, Co-founder of CleanTechies.com

“I’m looking for existing data, contacts, leads or reference material that demonstrate a strong correlation between clean/domestic energy and global security. Any help during this data gathering would be greatly appreciated; probably on both sides – if they are looking for recognition for their perspective I’ll give them ample credit for any data they can provide that supports the thesis.

“I’ve taken on the task of integrating the positive national security implications surrounding energy policy that targets reducing CO2 for a project called “GigaTon Throwdown.” My portion of the project is presenting a compelling national security argument for reducing oil consumption, using distributed generation assets, and increasing the efficacy of our budget through energy efficiency. The bulk of the heavy lifting of the 250 page book is done, it has been written by some serious academics, energy analysts and professionals, but it neglects to address these core concerns that will give it that much more attention when it is launched with support from some congressional leaders from both sides of the political spectrum. Doing my task right will assure broader buy in. “

Any help for the Gigaton Throwdown?

The Gigaton Throwdown

The Gigaton Throwdown Study was launched as a Clinton Global Initiative in 2007. It is a project to educate and inspire entrepreneurs, investors, and policy makers to think big about solving the climate crisis. It began as an effort to answer the question, “What does it take to make a difference with clean energy technology?” A unique team of entrepreneurs, investors, and business leaders teamed up with leading academics to answer this question. Specifically, we asked how could any one of nine technologies groupings, “pathways,” scale up so each one could avoid one billion tons – a gigaton — of greenhouse gas emissions per year and do it by 2020. We call this “Gigaton Scale.”

How ’bout it, Readers?  Any help for Ian out there?  Feel free to post a comment below or reach out to me on my Contact page.  I’ll close the feedback loop with Ian.

Royal Whitepaper

When people take the time to read my b-card they’ll sometimes ask “What’s a whitepaper?”  I quote the verbiage on my site, which turns on the lights for about 2% of people.

With Google-driven marketing everyone should know what a white paper is and how they can use one.

Follow treebanker on Twitter

I had an “aha moment” this morning.  I decided to build a repository of white papers I like in different categories for general perusal.   First up, The Prince’s Rainforests Project Report, which I thank my Twitter follower, Dan Tefft for bringing to my attention.

Three-purpose post

This post suggests changes to the paper that would make it more engaging, discusses its core idea of Rainforest Bonds, and then offers writing prompts for professionals in environmental and financial services.

Reading like an editor

Professionally, I prefer minimizing passive voice and maximizing design to help the reader navigate a dense document such as this (52 pages).  Certain professions prefer passive voice (government and academia top the list) so I suppose a report on behalf of  a Cambridge-educated Royal conforms to expectations.

The summary as written: “Reducing tropical deforestation will be vital if the world is to avoid catastrophic climate change and preserve important ecosystem functions. An Emergency Package is needed to provide substantial funding to Rainforest Nations to help them address the drivers of deforestation and embark on alternative economic development paths. Rainforests cool the planet, regulate the water cycle and provide a home to countless species; it is right and essential that the world pays for these services.”

I’d rewrite: Rainforests cool the planet, regulate the water cycle and provide a home to countless species.  To preserve the world’s ecosystem functions and avoid catastrophic climate change, we must reduce tropical deforestation. The world should provide funding to Rainforest nations to help them address the drivers of deforestation and embark on alternative economic development paths.  Since the rainforests provide “services” essential to planetary life, justice dictates that those services be compensated.

Writing Prompts for Environmental, Financial Services

The Prince’s Report outlines a plan for “Rainforest Bonds,” a fixed-income security, issued in private capital markets.  Such bonds typically offer investors a fixed rate of return, normally an annual coupon, together with the repayment of the principal on maturity. Over US$400 billion of Sovereign, Supranational and Agency Bonds were issued in 2008. The Project has held discussions with pension funds and the insurance sector (through The Prince of Wales’ P8 and ClimateWise initiatives) which indicate that there would be significant demand for AAA-rated bonds with long-term maturities.

“Rainforest Bonds could be issued by the World Bank, or by an independent entity with support from the World Bank. The bonds would be guaranteed by developed country governments, which would be responsible for payment of the coupon and repayment of the principal.

“However, it may be possible to mitigate the financial calls on these governments, for example by channelling some of the money into green investments that would generate financial returns – this would have the added benefit of supporting broader clean development goals. Private sector bonds provide a way to raise large amounts of finance for tropical forests in the nearterm, while allowing underwriting governments the time to generate revenues for repayment from clean development investments, domestic carbon permit auctions or other schemes. The Prince’s Rainforests Project is working with the World Bank to develop this bond concept further.”

• Is the World Bank the right entity?  Or the only entity?
• In light of current global financial priorities, how would these bonds perform financially?
• Environmentally, are these bonds a powerful incentive to change economic development and human behavior?
• Any better options on the table?