In industry, there are leading indicators and lagging indicators. We’re seeing a few leading indicators to which it’s worthy of paying attention – economic and democratic – telling us which way the wind is blowing.

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Working Backwards

There’s a great book by former Amazon executives, Colin Bryar and Bill Carr, on how the company used data and information to help provide better service to customers and grow Amazon into the company it is today. From the book’s overview: [1]

Working Backwards is an insider's breakdown of Amazon's approach to culture, leadership, and best practices from two long-time Amazon executives―with lessons and techniques you can apply to your own company, and career, right now.

In Working Backwards, two long-serving Amazon executives reveal the principles and practices that have driven the success of one of the most extraordinary companies the world has ever known. With twenty-seven years of Amazon experience between them―much of it during the period of unmatched innovation that created products and services including Kindle, Amazon Prime, Amazon Studios, and Amazon Web Services―Bryar and Carr offer unprecedented access to the Amazon way as it was developed and proven to be repeatable, scalable, and adaptable.

Bryar and Carr do a great job in describing how important leading and lagging indicators can be in understanding the effects of our decisions and in what may be coming down the road. Here’s how they describe these in their book: [2]

Input metrics are the drivers that, when managed well, can lead to the desired outputs: profitable growth in revenue and customers. The right choice of input metrics will deliver clear, actionable guidance. A poor choice will result in a statement of the obvious, a non-specific presentation of everything your company is doing. Donald Wheeler, in his book, Understanding Variation: The Key to Managing Chaos, explains:
“Before improving any system…you must understand how the inputs affect the system’s outputs. You must be able to change the inputs (and possibly the system) to achieve the desired results. This will require a sustained effort, constancy of purpose, and an environment where continual improvement is the operating philosophy.”
Amazon takes this philosophy to heart, focusing most of its effort on leading indicators (we call these “controllable input metrics”) rather than lagging indicators (“output metrics”). Input metrics track things like selection, price, or convenience – factors that Amazon can control through actions such as adding items to the catalog, lowering cost so prices can be lowered, or positioning inventory to facilitate faster delivery to customer. Output metrics – things like order, revenue, and profit – are important, but they generally can’t be directly manipulated in a sustainable manner over the long term. Input metrics measure things that, done right, bring about the desire results in our output metrics.

Leading indicators are metrics which have a causal relationship with other output metrics. For example, if the leading indicators to which we pay attention trend in a positive direction, we can anticipate the output metrics we care about to move that way at a later time. Of course, if the leading indicators trend badly, we may want to take action to correct things or brace for the impacts.

Early Warning Systems

Those of us in the Southern California region are familiar with earthquakes, but we’ve recently become exposed to the concept of leading indicators, driving a technology that can make the whole region safer and potentially save lives.

A 5.2 magnitude earthquake on April 14 centered in San Diego County set off alerts on our cell phones, powered by technology that leverages the physics of earthquakes. In fact, I happened to be on a Zoom call at work, and a caller taking the train to San Diego reported the earthquake in real time, then someone in Irvine felt the quake, and then someone in Los Angeles. We were all witness to how the waves generated by the earthquake, whose epicenter was in San Diego County, travelled north into and through the greater Los Angeles area.

“Earthquake Early Warning Basics,” U.S. Geological Survey, retrieved May 3, 2025, https://www.usgs.gov/media/images/earthquake-early-warning-basics-0

As described by the U.S Geological Survey, the technology behind the earthquake early warning system, ShakeAlert®, works because: [3]

an alert can be transmitted almost instantaneously, whereas the shaking waves from the earthquake travel through the shallow layers of the Earth at speeds of one to a few kilometers per second (0.5 to 3 miles per second). This diagram shows how such a system would operate. When an earthquake occurs, both compressional (P) waves and transverse (S) waves radiate outward from the epicenter. The P wave, which travels fastest, trips sensors placed in the landscape, transmitting data to a ShakeAlert® processing center where the location, size, and estimated shaking of the earthquake are determined. If the earthquake fits the right profile a ShakeAlert® message is issued by the USGS.

The Los Angeles Times reported in the positive response for the system resulting from how it worked with this recent quake: [4]

One of the fastest ways people can get earthquake early warnings is by downloading MyShake, a free app developed by UC Berkeley that provides alerts in partnership with the USGS and the California Governor’s Office of Emergency Services.
Monday’s magnitude 5.2 temblor marked another success for California’s earthquake early warning system, with users in some areas saying they received alerts on their phones before they felt shaking.
The alerts in some cases provided pivotal seconds of lead time — a heads-up that could be crucial in the event of a major earthquake.
“That was awesome! GREAT EARLY WARNING!!!” a resident told the USGS’ ShakeAlert social media account on X. “I got the alert on my phone near downtown San Diego several seconds before the primary [shaking] wave hit. WELL DONE!”

During an earthquake, a rupturing fault produces these different kinds of waves, emanating from the epicenter like ripples from a rock thrown into a pond.

There are, of course, other systems where such leading indicators can be helpful in knowing what’s to come in the future.

Early Economic Warnings

This past week, total nonfarm payroll employment increased by 177,000 in April, and the unemployment rate was unchanged at 4.2 percent, according to the U.S. Bureau of Labor Statistics this week. [5]

This report was stronger than expected, but jobs reports tend to be lagging, not leading, indicators of economic health. The impacts of decisions made on tariffs in April have not yet affected these job numbers. [6]

“We can push recession concerns to another month,” Seema Shah, chief global strategist at Principal Asset Management, said in commentary issued Friday. “Job numbers remain very strong, suggesting there was an impressive degree of resilience in the economy in play before the tariff shock.”

In contrast to the lagging indicator of job numbers, shipping activity has slowed at ports, and these are the negative leading indicators we should likely be worried about. Here is an interview with Gene Seroka, Executive Director of the Port of Los Angeles, the busiest container port in North America, about what he’s seeing and what this could mean for the U.S. economy: [7]

Host: How much volume has dropped off in the last few weeks?
Gene Seroka: About one-third of the import volume, which means, give or take 50,000 20-foot equivalent units – gone off the arrivals coming in next week.
Host: So, next week is when you expect to see this hit?
Seroka: That is correct, and that matches up with the announcements on April 2, then April 8 – a little bit of a change on everybody – China, Mexico, Canada – and those arrivals are coming at us this weekend.
Host: We will of course dedicate time to your port, but I’m wondering how you are anticipating this rolls and ripples through the economy from here. How it hits trucking? When this turns up on the shelf? What’s the distance, the time from when you see a drop off in volume and we as consumers see the shortages?
Seroka: CEOs are telling me “hit the pause button.” I’m not going to import anymore at these kind of prices – let’s wait and see. I don’t know if it’s going to be two hours, two days, or two weeks until I get some clarity. Then, hiring, off the table for right now. Capital investment – pause. Retailers are telling me that, realistically, even with the 10% [across the board tariffs], I’m going to have to pass it on to the consumers.
Host: How much of this is coming from all over? It’s not just about China. This is about global trade coming to a standstill until there is a much greater degree of certainty and a much lower tariff rate than even the baseline that has been put out there.
Seroka: When I was last with you all, I said global trade is going to slow, economies will follow, and that’s exactly what we’re seeing. Back in November, so many of us were wringing our hands about 4% inflation. We’ve just added 10 percentage points on imports coming out of southeast Asia for our port, and these unbelievable numbers out of China.
Host: How much are you going to see a real decline in dock workers if this goes on?
Seroka: The trucker hauling four or five containers today – next week, she probably hauls two or three. Dock workers are no longer going to see overtime and double shifts; they are probably going to work less than a traditional workweek, starting right off the bat. Every four containers need a job. When we start dialing this back, it’s less job opportunities.
Host: What happens if we get a deal?
Seroka: If we get a deal, it’s going to take a month – let me walk you through that real quick - about two weeks to get the ships repositioned around these major ports [around China], load up all those containers, and another two weeks to steam across the Pacific to get to us. This is important, because now we are talking about Spring and Summer fashion. We are kind of at a crux here where we’ve got to have something pretty quick.
Host: And back-to-school, which is very critical when it comes to political pushback for this administration. We have a story out and there is anecdotal reporting as well – we’ve heard about China quietly starting to exempt about a quarter of U.S. imports. Are any U.S. importers exempting China’s tariffs? Is there a way to get around the 145% [U.S. tariffs on goods from China]?
Seroka: Not really. There may be some exceptions, going north or south of us [Canada / Mexico], but realistically speaking, nobody is out there talking a lot about “hey, I got a better deal coming out of China right now.”
Host: The Flexport CEO joined us earlier in the week and said ocean freight is down 60% from China. When do we see 100%?
Seroka: Good question. It depends on how long this goes. We heard the reports overnight through Bloomberg that the folks in China are thinking about talking. What does that mean? OK great, but we’ve got to get a move on here. The other thing is retailers are saying we’ve got about five to seven weeks of normal inventory in the country right now. Then, we start to see spot shortages if it goes on much beyond this.

Companies know that tariff costs will be passed onto American consumers, yet Amazon recently got bullied by the Trump administration into not making the tariff costs transparent to customers. A division of Amazon considered surfacing the Trump tariffs imposed on goods from China. [8] The company said its smaller Haul division, which competes for low-cost buyers with Temu and Shein, had mulled displaying import levies.

White House Press Secretary Karoline Leavitt denounced the transparency proposal as a “hostile and political act” and attacked the company, suggesting it had “partnered with a Chinese propaganda arm.” But Amazon reversed course after President Trump called Amazon founder Jeff Bezos to complain. [9] “The team that runs our ultra low cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and (is) not going to happen,” a company spokesperson said, adding that “teams discuss ideas all the time.” [10]

More signs: U.S. economic growth slowed sharply in the first quarter of 2025 as businesses rushed to stockpile goods ahead of President Trump's sweeping tariff policies. [11]

The nation's gross domestic product — the total value of products and services — shrank at a 0.3% annual rate, down from growth of 2.4% in the final three months of 2024, the Commerce Department reported Wednesday in its initial GDP estimate. It's the worst quarterly performance for the U.S. economy since early 2022, when the economy was in recovery after cratering during the COVID pandemic.

From Chris Hayes, “How ‘Little Marco’ found Trump’s favor and became the ‘Secretary of Everything’ with four jobs,” *MSNBC*, May 2, 2025, https://www.msnbc.com/top-stories/latest/trump-michael-waltz-out-consolidate-power-rcna204474

We may start to feel the economic shock waves this summer and into the fall. It’s been said that some people need to work more than one job to make ends meet - looks like Secretary of State Marco Rubio is leading by example by taking on three more jobs: the acting administrator of the U.S. Agency for International Development, the acting archivist for the National Archives and Records Administration, and, now, Trump’s interim national security adviser. [12][13]

Stiffening Backbones

In last week’s newsletter, [14] I highlighted how the prominent law firm Perkins Coie and the state of Maine stood up to the Trump administration. Well, their stances paid off this week.

A federal judge on Friday struck down President Trump’s executive order targeting Perkins Coie, finding it unconstitutional and declaring it an attack on the foundational principles of the American legal system. [15]

Judge Beryl Howell declared that “that Executive Order 14230, 90 Fed. Reg. 11781 (Mar. 11, 2025), issued by the President on March 6, 2025, entitled “Addressing Risks from Perkins Coie LLP,” is unlawful because it violates the First, Fifth, and Sixth Amendments to the U.S. Constitution and is therefore null and void.” [16]

Judge Howell’s opinion is worth reading, where she begins: [17]

No American President has ever before issued executive orders like the one at issue in this lawsuit targeting a prominent law firm with adverse actions to be executed by all Executive branch agencies but, in purpose and effect, this action draws from a playbook as old as Shakespeare, who penned the phrase: “The first thing we do, let’s kill all the lawyers.” WILLIAM SHAKESPEARE, HENRY VI, PART 2, act 4, sc. 2, l. 75. When Shakespeare’s character, a rebel leader intent on becoming king, hears this suggestion, he promptly incorporates this tactic as part of his plan to assume power, leading in the same scene to the rebel leader demanding “[a]way with him,” referring to an educated clerk, who “can make obligations and write court hand,” Eliminating lawyers as the guardians of the rule of law removes a major impediment to the path to more power. [selective citations omitted]
…..
By its terms, this Order stigmatizes and penalizes a particular law firm and its employees—from its partners to its associate attorneys, secretaries, and mailroom attendants—due to the Firm’s representation, both in the past and currently, of clients pursuing claims and taking positions with which the current President disagrees, as well as the Firm’s own speech. In a cringe-worthy twist on the theatrical phrase “Let’s kill all the lawyers,” EO 14230 takes the approach of “Let’s kill the lawyers I don’t like,” sending the clear message: lawyers must stick to the party line, or else.

Her opinion noted the differences between those law firms who chose to bend the knee to bullying and those that chose to defend themselves: [18]

This message [“stick to the party line, or else”] has been heard and heeded by some targeted law firms, as reflected in their choice, after reportedly direct dealings with the current White House, to agree to demand terms, perhaps viewing this choice as the best alternative for their clients and employees. Yet, some clients may harbor reservations about the implications of such deals for the vigorous and zealous representation to which they are entitled from ethically responsible counsel, since at least the publicized deal terms appear only to forestall, rather than eliminate, the threat of being targeted in an Executive Order. As amici former and current general counsel caution, a “fundamental premise of the rule of law” is that “when parties challenge the government, their lawyers ‘oppose[] the designated representatives of the State,’ and ‘[t]he system assumes that adversarial testing will ultimately advance the public interest in truth and fairness.’ This safeguard against government overreach fails when attorneys cannot ‘advanc[e] the undivided interests of [their] client[s]’ for fear of reprisal from the government.” Br. of Amici Curiae Former & Current General Counsel Supporting Pl. Perkins Coie, LLP at 9-10, ECF No. 99 (alterations in original; internal citation omitted) (quoting Polk County v. Dodson, 454 U.S. 312, 318-19 (1981)).
Only when lawyers make the choice to challenge rather than back down when confronted with government action raising non-trivial constitutional issues can a case be brought to court for judicial review of the legal merits, as was done in this case by plaintiff Perkins Coie LLP, plaintiff’s counsel Williams & Connolly, and the lawyers, firms, organizations, and individuals who submitted amicus briefs in this case. As one amicus aptly put it, “[o]ur judicial system is under serious threat when determining whether to file an Amicus Curiae brief could be a career ending decision. But, when lawyers are apprehensive about retribution simply for filing a brief adverse to the government, there is no other choice but to do so.” Amicus Curiae Br. of Pickering Legal LLC in Supp. of Pl.’s Request for a Permanent Injunction at 6, ECF No. 93.
If the founding history of this country is any guide, those who stood up in court to vindicate constitutional rights and, by so doing, served to promote the rule of law, will be the models lauded when this period of American history is written.

In the case of Maine, I first wrote [19] about the time when President Trump picked a fight with Maine Governor Janet Mills: [20][21]

President Trump: “You’d better comply. Otherwise, you’re not getting any federal funding.”

Governor Mills: “We’ll see you in court.”

Well, a settlement was reached, where standing up led to the administration backing down: [22]

President Donald Trump’s administration on Friday agreed to halt all efforts to freeze funds intended for a Maine child nutrition program after initially suspending those dollars due to a disagreement between the state and Trump over transgender athletes.
In response, the state will drop its lawsuit that had been filed against the U.S. Department of Agriculture, Maine Attorney General Aaron Frey announced.

And Governor Mills’s sentiment on the matter: [23]

"When confronted by the president of the United States, I told him I'd see him in court, and we did see him in court, and we won," said Governor Mills.

Local Democracy in America

As an update on the launch of my new book, Local Democracy in America, I've really been heartened by the response, both in people buying the book on Amazon, reaching:

A #1 New Release in the Two-Hour History Short Reads category
A #1 New Release in the Two-Hour Politics and Social Sciences Short Reads category
A top New Release (#4) in Campaigns & Elections category
A top New Release (#6) in Elections & Political Process category

…and with the truly kind responses from friends and colleagues for these milestones.

A huge thanks to everyone who has supported this journey so far, and I’m looking forward to new milestones along the way.

The Kindle version of Local Democracy in America is available now, and a paperback version of is in the works and will be available soon.

A Little History

Marking the Semiquincentennial of American Independence 250 years ago

May 10, 1775 – The Capture of Fort Ticonderoga

The capture of Fort Ticonderoga occurred during the American Revolutionary War on May 10, 1775, when a small force of Green Mountain Boys led by Ethan Allen and Colonel Benedict Arnold surprised and captured the fort's small British garrison. The cannons and other armaments at Fort Ticonderoga were later transported to Boston by Colonel Henry Knox in the noble train of artillery and used to fortify Dorchester Heights and break the standoff at the siege of Boston.

The capture of the fort marked the beginning of offensive action taken by the Americans against the British and was the first offensive victory for American forces in the Revolutionary War. It secured the strategic passageway north to Canada and netted the patriots an important cache of artillery. [24]

Narratives

The book I’m reading or movie I’m watching

“The Four Seasons” - on Netflix

The Four Seasons is an American comedy miniseries that debuted on Netflix May 1 and is concisely described by Lucy Mangan of The Guardian here: “Like The White Lotus without deaths, this brilliant tale of old college friends holidaying together is Fey’s finest work in years. Steve Carell and Colman Domingo are revelatory.”

And as someone who genuinely loves Tina Fey’s smart and witting writing, I am looking forward to watching this series – Mangan speaks to this in her review: “The eight-episode series is a remake and update of the 1981 Alan Alda film of the same name, by Tina Fey, Tracey Wigfield and Lang Fisher. It’s a creative triumvirate that promises much and – to the delight of Fey fans, who may feel it’s been a long wait since anything approaching the joy and genius of her Unbreakable Kimmy Schmidt series – largely delivers.” [25]

GIF Game

Notes and Sources

[1] Colin Bryar and Bill Carr, Working Backwards: Insights, Stories, and Secrets from Inside Amazon, St. Martin’s Press, New York, 2021, https://www.amazon.com/Working-Backwards-Insights-Stories-Secrets/dp/1250267595

[2] Colin Bryar and Bill Carr, Working Backwards: Insights, Stories, and Secrets from Inside Amazon, St. Martin’s Press, New York, 2021, p 124-125.

[3] “Earthquake Early Warning Basics,” U.S. Geological Survey, retrieved May 3, 2025, https://www.usgs.gov/media/images/earthquake-early-warning-basics-0

[4] Rong-Gong Lin II, “‘That was awesome!’ California’s earthquake early warning system let many know about Monday’s temblor,” Los Angeles Times, April 14, 2025, https://www.latimes.com/california/story/2025-04-14/californias-earthquake-early-warning-system-let-many-know-about-temblor

[5] “The Employment Situation – April 2025,” Bureau of Labor Statistics, U.S. Department of Labor, USDL-25-0658, May 2, 2025, https://www.bls.gov/news.release/pdf/empsit.pdf

[6] Bryan Mena, “The US economy added a stronger-than-expected 177,000 jobs in April,” CNN, May 2, 2025, https://www.cnn.com/2025/05/02/economy/what-to-expect-from-fridays-jobs-report

[7] “Port of Los Angeles Says Imports Are Dropping,” Bloomberg Surveillance, May 2, 2025, https://www.bloomberg.com/news/videos/2025-05-02/port-of-la-says-imports-are-dropping-video

[8] David Shepardson, Greg Bensinger and Andrea Shalal, “Amazon in White House crosshairs over report of displaying tariff costs,” Reuters, April 29, 2025, https://www.reuters.com/business/retail-consumer/white-house-amazon-tariff-price-announcement-is-hostile-2025-04-29/

[9] Wyatte Grantham-Philips and Josh Boak, “Amazon is not planning to break out tariff costs online as White House attacks potential move,” Associated Press, April 29, 2025, https://apnews.com/article/amazon-tariff-prices-trump-white-house-8598569632263872a6c04f7ef330c0fd

[10] “Amazon in White House crosshairs,” Reuters, April 29, 2025

[11] Aimee Picchi, “U.S. economy went into reverse in the first quarter, new GDP data shows,” CBS News/Moneywatch, April 30, 2025, https://www.cbsnews.com/news/gdp-report-today-trump-tariffs-economy-first-quarter-2025/

[12] Alex Woodward, “Rubio's new role is a dangerous step in Trump's effort to consolidate power,” The Independent, May 2, 2025, https://www.the-independent.com/news/world/americas/us-politics/marco-rubio-trump-white-house-jobs-b2743863.html

[13] Chris Hayes, “Rubio's new role is a dangerous step in Trump's effort to consolidate power,” May 2, 2025, https://www.msnbc.com/top-stories/latest/trump-michael-waltz-out-consolidate-power-rcna204474

[14] Mic Farris, “Danger: Intentional and Otherwise,” April 27, 2025, https://www.micfarris.com/articles/danger-intentional-and-otherwise

[15] Ryan Lucas, “Federal judge strikes down Trump order targeting the law firm Perkins Coie,” NPR, May 2, 2025, https://www.npr.org/2025/05/02/nx-s1-5385355/perkins-coie-trump-executive-order-law-firms

[16] Perkins Coie LLP v. U.S. Department of Justice et al, 1:25-cv-00716-BAH, (D.D.C.), 184, May 2, 2025, https://storage.courtlistener.com/recap/gov.uscourts.dcd.278290/gov.uscourts.dcd.278290.184.0.pdf

[17] Perkins Coie LLP v. U.S. Department of Justice et al, 1:25-cv-00716-BAH, (D.D.C.), 185, May 2, 2025, https://storage.courtlistener.com/recap/gov.uscourts.dcd.278290/gov.uscourts.dcd.278290.185.0_1.pdf , p 1

[18] Ibid., p 3-4 (footnote).

[19] Mic Farris, “Upholding Norms. Breaking Norms,” February 23, 2025, https://www.micfarris.com/articles/upholding-breaking-norms

[20] – “WATCH: ‘See you in court,’ Maine’s governor tells Trump on transgender athlete ban,” PBS News, February 21, 2025, https://www.pbs.org/newshour/politics/watch-see-you-in-court-maines-governor-tells-trump-on-transgender-athlete-ban

[21] – “WATCH: 'See you in court,' Maine Gov. Mills tells Trump on trans athletes,” https://www.youtube.com/watch?v=gu30vxluOe4&t=3360s

[22] “Trump administration settles with Maine over funding freeze after dispute over trans athletes,” NBC News via Associated Press, May 2, 2025, https://www.nbcnews.com/nbc-out/out-politics-and-policy/trump-administration-settles-maine-funding-freeze-dispute-trans-athlet-rcna204541

[23] Julia Simone and Brad Rogers, “’We took on Trump and won,’ USDA will unfreeze money meant for Maine,” WGME News, May 2, 2025, https://wgme.com/news/local/we-took-on-trump-and-won-usda-will-unfreeze-money-meant-for-maine

[24] “Fort Ticonderoga | May 10, 1775,” American Battlefield Trust, retrieved May 4, 2025, https://www.battlefields.org/learn/maps/fort-ticonderoga-may-10-1775

[25] Lucy Mangan, “The Four Seasons review – Tina Fey’s midlife comedy is properly funny and heartbreaking,” The Guardian, May 1, 2025, https://www.theguardian.com/tv-and-radio/2025/may/01/the-four-seasons-review-tina-fey-netflix

Decisions with Mic Farris

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Leading Indicators