Is Economy Marginalizing Thanksgiving as a Holiday?
Nov. 21, 2011
As I work on my gratitude list this week, I’m mindful of a poll in a Seattle newspaper – and the reasons for the Thanksgiving holiday.
Grateful for their religious freedom, 53 pilgrims enjoyed the first Thanksgiving 391 years ago in Plymouth, Mass. They were survivors of the original 100 separatists from their arduous Atlantic Ocean journey aboard the Mayflower from Southampton, England.
Originally, their destination was Virginia, but they disembarked in Mass. It was a severe winter. But they survived with the help of Native Americans, who taught them valuable lessons – how to live off the land.
A year later in 1621, for three days, the pilgrims and Indians were able to celebrate their good fortune. Initially, it was a religious Thanksgiving.
Over the years Thanksgiving became an American tradition as an opportunity for gratitude – enjoying a plentiful meal with family and friends – all while giving thanks.
President Lincoln declared it a holiday in 1863 on the third Thursday of Nov. It was switched to the fourth Thursday in Nov. during the 1940s.
So with the exception of some professions such as journalism, airlines, first responders and healthcare, it’s been a holiday.
But in the quest for profits that’s changed. Initially, it was just workers in retailing have to work Thanksgiving to prepare for Black Friday. That’s the day retailers start earning green in the holiday shopping season.
It’s one thing to be altruistic to serve Americans who need prescriptions for their illnesses. But this year, the nation’s largest retailer, Walgreen, is open Thanksgiving for what it calls one-day-only deals to jumpstart its Q4 sales. For similar reasons, its competitor Rite Aid will be open, too.
There are indicators many people can’t take advantage of such sales.
Consider, a Seattle Times poll that tells a bleak story. It’s entitled, Vote: How is the job market for you?
At this writing, here are the responses:
- I recently found a job 7.59 percent
- Still looking 19.39 percent
- Recently lost my job 3.83 percent
- I have a job 45.59 percent
- Given up looking for now 11.42 percent
- Underemployed, part-time, low pay 12.18 percent
We’re turning into a nation of haves and have nots.
My sense is that many fortunate Americans are missing some other important signs – they’re reminiscent of the Great Depression:
- We seem to have forgotten about America’s Hoovervilles. In pointing a finger at President Hoover for his inability to prevent economic chaos, Hooverville was a term coined by Democrats to describe the shanty towns of unemployed Americans. Old newspapers that were used to keep unemployed people warm were referred to as Hoover blankets. Worn out shoes were lined with cardboard and called Hoover leather.
- In 1932, World War I veterans marched on the nation’s capital. Twenty-five percent of the nation’s budget had been swallowed by veteran benefits, but many veterans were destitute from unemployment. They demanded early payment for their benefit promised for 1945.
- Economic hardship exacerbated by a drought, forced thousands of Oklahomans to seek a better future – dignity, jobs and land – by migrating to California.
For poignant visual reminders, see this photo essay.
Fast forward to 2011 – the Occupy Wall Street movement. Why is it pervasive?
Some 100 million Americans are either in poverty or close to it, according to the U.S. Census Bureau. We’re not talking about new immigrants. We’re talking about nearly 33 percent of Americans – most have high school or college educations.
As the Seattle Times poll indicates, many can’t get a job or they’re under-employed. Many are baby boomers whose jobs disappeared in the new service economy. Others have suffered from deteriorating living standards and moribund wages.
It’s true many have not prepared for globalization and the digital age (Study: Unemployment Stems Partly from Deficient Worker Skills, Education).
But there are other reasons. Unlike the New Deal policies of Franklin Roosevelt, the federal government is a hindrance.
Only two headlines are needed as examples: Deficit Panel Folds Its Tent and House says no to mandating balanced federal budget .
The deficit panel is unable to compromise? The U.S. House of Representatives refuse to balance the budget?
Additionally, consider federal regulations. Cabbage, for example, is a commodity many will enjoy on Thanksgiving – however, the U.S. government bureaucracy uses 26,911 words to regulate it.
Compare the cabbage example with the Declaration of Independence: A mere 1,300 words.
Or how about the U.S. Constitution and its amendments: 7,818 words.
Consider, too, Healthcare Reform – New Red Flags for Business, Workers. Where are our core values including stewardship of our assets?
But the federal government won’t balance the budget. Politics – an infinite pursuit for power – stands in the way.
The divergence of the poor and affluent is a huge threat. It’s a menace to our nation’s core values as expressed in our Declaration of Independence – because we’re failing to honor a legacy.
The pilgrims of 1621 showed us the way. They didn’t let politics and poor public policy disillusion them. They found a way to exist harmoniously with their Native American neighbors, worked hard, practiced stewardship of their assets and reaped a bountiful harvest. That’s why they had reasons to celebrate for a Happy Thanksgiving.
When will we? At the least, if our issues aren’t solved, the pilgrims would be aghast.
From the Coach’s Corner, here are places to start:
Federal Reserve Typifies What’s Wrong with Economy
Biography: Will President Obama Listen to Steve Jobs on the Economy?
How CEOs, Taxes and Policymakers Fail the U.S.
“Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition.”
-Thomas Jefferson
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
What Do Small Business Owners Need from Washington State Policymakers?
Updated Feb. 1, 2012
Washington state legislators are getting an earful from small-business owners. But will lawmakers listen in the 2012 legislative session?
Washington state’s small-business owners have voiced their concerns over six major public-policy issues, as a result of a Seattle-area conference held by respected think-tank Washington Policy Center (WPC). Their economic-related issues range from workers’ compensation to mandatory paid sick leave.
A detailed analysis was presented in a report to the Legislature.
“Nearly half of Washington’s work force is employed by small businesses,” said WPC President Daniel Mead Smith.
“These are the businesses struggling for survival right now, and they came to us with practical recommendations for how policymakers can make it easier for them to not only survive but grow and create jobs,” added Mr. Smith.
The conference held breakout sessions at Bellevue College.
“The result is a list of priority solutions, selected by small business owners, for solving the major problems with the state’s business climate and moving towards economic recovery,” wrote WPC Communication Director John Barnes.
Here’s the list of small-business owners’ issues:
Workers’ Compensation
- Revisit voluntary settlement agreement, as passed in the state Senate in 2011
- Do not raise rates for 2012 since L&I funds are in the black
- Increase the fraud prevention and investigation efforts
Unemployment Insurance
- Reform the displaced worker retraining program
- Implement a web-based portal to allow employers to access current claims data, including current contact information for unemployed workers (similar to the system used by the Department of Labor and Industries)
- Educate small business owners about the “shared work program”
Regulatory Reform
- Review environmental regulations to ensure that Washington rules don’t exceed federal regulations
- Legislature should not grant general rule making authority to agencies, but rather be specific about rules to be put in place
- Legislature should listen to and follow up on State Auditor Office reports on regulatory reform (tie)
- Sunset provisions for regulations (tie)
Health Care
- Tort reform
- Limit the number of state-required health mandates
- Repeal federal health care law
Transportation
- Do no harm — don’t reduce lane capacity
- Protect highway tolls and taxes for highway purposes
- Make congestion relief a policy goal (tie)
- Performance-based spending on transportation (tie)
Mandatory Paid Sick Leave
- Legislature should not follow Seattle and should not enact statewide paid sick leave
- State should pre-empt local government regulations on labor laws
- Business impact statements on laws like mandatory paid sick leave should be required
“The conference was co-sponsored by Verizon, Regence, Wells Fargo, Walmart, the Puget Sound Business Journal, Berntson Porter and Co., Columbia Bank, the Washington Health Foundation, NCM, Associated Builders and Contractors of Western Washington, Baldwin Resource Group, and Noteworld Servicing Center,” Mr. Barnes indicated.
”More than 30 chambers of commerce and trade associations from around the state co-presented the conference,” he added.
This was WPC’s fifth conference hosted since 2003. Rarely has the majority of the legislators listened to small business. Let’s hope they start now for economic development and the creation of jobs.
From the Coach’s Corner, in the past I’ve written about the results of the WPC conferences. I’ve also voiced similar concerns in this portal’s Public Policy section.
“People try to live within their income so they can afford to pay taxes to a government that can’t live within its income.”
-Robert Half
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
President Obama Misses Mark Again, More of the Same
Sept. 9, 2011
President Obama is proposing superficial bandaids from political motivations that would accomplish little to solve the structural economic challenges afflicting the U.S.
America’s economy is barely holding together by pins and needles. It could tear completely apart with one more catastrophe. With its $447 billion plan, the Obama Administration has proven again it does not know how to stimulate growth in jobs. If the administration gets its way, a double-dip recession is inevitable — not economic recovery.
Yes, I’m all for roads and education. But I’m troubled. Why? My sense is that the administration is making recommendations for political reasons, and not economic patriotism. More on that later.
U.S. business has too little domestic demand for products. The list of concerns is long. America is no longer a manufacturing center. Television sets and computers are made in Asia. Cars and trucks aren’t selling.
Many big companies like General Motors are investing abroad and making more money there. Yes, ask GM about cars sales in China.
All of this means a stalemate in domestic job creation.
Extend unemployment insurance?
OK, 14 million Americans are jobless. Not to sound unsympathetic, but many workers are partly to blame by not adapting to the new digital age with new skills. There are countless unfilled jobs.
At what point does a helping hand become a handout?
Recessions weren’t kind to me. Long ago, my personal situation helped coin the phrase, corporate downsizing – 14 times. Yes, 14 layoffs. Yet, I always found ways for a sustainable income. It wasn’t always in my preferred industry. Sometimes, I turned to other sectors and got a sales job and worked my way back into management.
As a former mentor, famed broadcaster Del Sharbutt, once bluntly told me: “Every experience is a learning experience.” Reading between the lines, he was also telling me mental toughness was in order. What I eventually learned was that I needed an entrepreneurial spirit. Despite all the jobs, not to be gauche, but a CBS executive referred to my resume as a “rich background.” His comment spurred an even more intense entrepreneurial conviction.
That’s what America, American workers and the Obama Administration need.
The straw that stirs job creation – small business – can’t get credit and enough customers. Studies show most is not hiring nor will they for at least 18 months. Why? Again, there’s too-little domestic consumption.
Family budgets are strained. U.S. consumers are spending more but it’s more precious dollars on food and gas. Both are heavily imported. There isn’t any new drilling for oil and natural gas. So much of domestic consumer money is going abroad but it isn’t returning as a result of exports. The trade imbalance is still way out of whack.
Disingenuous spending
President Obama is calling for more stimulus spending. He apparently thinks spending another $140 billion on roads and schools will work. But my sense is that his proposal is aimed at benefiting the unions for political donations (see this EDITORIAL: How labor unions spend dues money).
Mr. Obama is showing he does not have Bobby Kennedy-like qualities (note this revelation: Dirty work between Obama, Teamsters). Do you recall the administration of John F. Kennedy when his brother, Attorney General Robert Kennedy, had his principled legal fight with the Teamsters in the 1960s?
Meantime, the president proposes to finance his proposed new stimulus with cutbacks in Medicare and Medicaid. It’s fallacious reasoning to think it’s best to spend more for union construction jobs while healthcare workers will lose theirs.
We already know about the devastation caused by his healthcare law. The majority of small businesses are apprehensive. Their workers and all patients face higher costs in their copayments and coverage.
Launching an infrastructure bank to lend money to local and state governments and financed privately?
Please. Government budgets at all levels are stretched too thin, as it is. Government credit ratings are backsliding. Doesn’t anyone remember the U.S. downgrade?
To expect these governments to repay the money isn’t productive, just as businesses fail when they borrow money just to stay in business. At some point, they have to repay the money, or else.
President Obama wants more business regulation – more government bureaucracy. Again, talk to the majority of businesses. You’ll get an earful.
He wants to tax the wealthy at higher rates. So how will they invest and hire workers? What’s their incentive to spend? The hospitality industry – from hotels to restaurants – is barely making it now. Sticking to the wealthy might make some people feel better, but it’s not a solution.
Payroll tax cuts won’t stimulate job growth and are a threat to future Social Security recipients for their retirement. The short-term benefit would be catastrophic for the long term.
There are more red flags, but you get the idea.
We waited weeks for President Obama to outline a new public-policy approach for economic recovery and job creation – in vain.
What we need is common-sense leadership and change from the White House, not politics. Remember the campaign promise? But nearly three years later, are we getting it? No, it’s more of the same politics. There’s no infrastructure being proposed for short-term or lasting recovery.
From the Coach’s Corner, instead of just complaining, this portal’s Public Policy section is filled with solutions.
“The problem with the federal government is that common sense is not necessarily common.”
- Terry Detrick
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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
How CEOs, Taxes and Policymakers Fail the U.S.
Updated Feb. 1, 2012
Like it or not, stagnant growth increases the possibility of a double-dip recession. We’re in a precarious position, largely, because businesspeople and consumers lack confidence in the economy – for good reasons.
Fourteen million Americans are out of work. For many available jobs, Americans lack education and skills to meet the specific needs of employers.
Still, many big businesses are slow to hire until uncertainty is alleviated. They have healthy balance sheets after paying down debt, and they’re hoarding cash.
Most small businesses don’t have adequate credit and can’t expand. They’re also angry about the healthcare law, which threatens their ability to stay in business.
Consumers are stunned by high food and gasoline prices. Mortgage debt stresses many homeowners. And they’re angry because of gluttonous Wall Street chicanery, and Congress can’t balance the budget.
Voters want lawmakers to tackle urgent economic problems. Instead, only a minority of policymakers has an adequate understanding of economic-growth principles, and they have the image of acting like a ruling class at the public trough.
After three years, the Obama Administration has produced any sound solutions.
Did I leave anything out? It’s no wonder the stock market is near bear-market levels.
Morale-busting headline
Consumers and small business owners were angered by a Bloomberg headline: “CEOs Earned More Than U.S. Companies’ Tax Bills, Study Finds.” Incredibly, the Institute for Policy Studies issued a report divulging that 25 chief executives were paid more in 2010 than their companies actually paid in federal taxes.
The report showed such companies averaged $1.9 billion in global profits. They include Boeing, Ebay, Cablevision Systems, and Verizon. What’s worse, while their CEOs were paid in the seven figures, some companies received government tax refunds.
The Institute for Policy Studies’ examples:
- Cablevision CEO James Dolan was paid $13.2 million, but the company had a $3 million corporate income tax benefit.
- EBay CEO John J. Donahoe received $12.4 million while his firm got $131 million in tax write-offs.
- Verizon CEO Ivan Seidenberg was compensated $18.1 million but his company netted $705 million in tax benefits.
The Bloomberg article also reported a study by another nonprofit group, Citizens for Tax Justice. It claimed 11 companies received $62 billion in domestic profits, but only paid a “negative 3.6 percent tax rate in 2010.”
True, the U.S. has a high corporate tax rate, but it’s negated by countless loopholes.
Job stimulus is anything but
Another disturbing headline: “Study: Half of Hired Stimulus Workers Were Already Employed.”
The federal jobs stimulus is not well-designed when the stimulus only results in job shifting. But that’s what’s happening, according to the study by George Mason University.
Even though workers have jobs, they’re hired by other firms – with the help of stimulus funds. The government would lead us to believe new jobs are being created, but 47.3 percent of the workers already had jobs.
How can new consumers’ money enter and circulate in the economy, if we’re merely moving workers around?
As a Biz Coach, these are frustrating developments.
Clearly, what needs to occur is widespread economic patriotism:
- The tax code has to be rewritten and simplified to eliminate the unpatriotic tax write-offs.
- Public policy has to become productive – money for jobs and has to be invested for economic development, not wasted.
- Voters have to elect representatives who understand basic economics and who will work for the common welfare of this great nation.
- Parents should encourage their children to take advantage of educational opportunities when they first start school.
- Workers should understand inertia doesn’t work – they need to adapt so that their skills match employers’ needs.
When progress is made in these areas, confidence in the free-enterprise economy will return.
From the Coach’s Corner, here’s more:
Federal Reserve Typifies What’s Wrong with Economy
Does the Federal Reserve Understand Small Business?
Only Fiscal Sobriety Will Prevent Further Fiscal Chaos
“You can always count on Americans to do the right thing — after they’ve tried everything else.”
- Winston Churchill
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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
After Taking Us for a Ride, A Vacation Is Warranted for Obama
Aug. 20, 2011
Frankly, I don’t understand the brouhaha over the Obama family’s vacation, decadent or otherwise. Critics who called on President Obama to cancel his Martha Vineyard vacation have been misguided.
Aren’t they over-reacting?
True, the timing of his vacation could have been better. Much of the country is suffering. World markets are in chaos. A check of history does reveal other presidents have canceled vacations during similar crises.
The well-to-do location also raised eyebrows of consternation. For one thing, Martha’s Vineyard does not have racial diversity. Even the Tea Party has more racial diversity. More noteworthy, nor does Martha’s Vineyard have economic diversity. The average American cannot afford the $50,000 per week price tag of Mr. Obama’s favorite vacation retreat – not to mention the huge amounts of money paid for security.
In contrast, President Clinton went camping in Wyoming, President Reagan went home to split firewood, and President Roosevelt served hot dogs to the Queen of England. Those symbols of leadership inspired Americans during critical times.
The feeling of President Obama’s critics is that he advocates certain principles, but his actions speak differently. I concur.
By now, you realize the headline and lead paragraphs in this piece are facetious.
No, I’m not a Republican. Nor am I a Democrat. As a Biz Coach columnist, count me also as an average American with a Cherokee Indian heritage, an Independent and a champion of the underdog — someone who is deeply worried about the direction of this country.
The spending is out of control. The risk of a double-dip recession is quite high. So what do we get now? We get an ill-advised bus-PR gimmick with only hints about a new jobs plan.
Yes, Mr. Obama’s bus tour has really taken us Americans for a ride — an abysmal, bumpy ride. As a former columnist at Belo Web sites and one who supported his small-business platfom during his campaign — a Biz Coach column followed by a press release — I feel betrayed.
Incompetent economic policies
Actually, since his inauguration, President Obama has been leading us astray. Instead of focusing on the faltering economy, he gave us a dysfunctional health law, which has been one of the reasons small business has not hired workers. He advocated a plan to confiscate your retirement funds. And don’t forget about his unproductive environmental policy in Cap and Trade.
As a result, a recent Gallup Poll indicates Mr. Obama has a 26-percent rating for his handling of the economy. Americans aren’t confident about his policies with good reason – the policies and Americans aren’t working.
His rhetoric has suggested he will deliver an effective policy to create jobs and to ease the onerously high unemployment rate. He’s been wrapping himself in the American flag – issuing an ultimatum to opponents to support his secret jobs plan. He implies opponents of his ineffective policies are unpatriotic. Sure.
His bus tour was another indicator of incompetence – the type of economic-policy ilk that Americans suffered under President Carter. To state Mr. Obama is providing leadership is in reality an oxymoron. His so-called leadership is leading us down the wrong road.
The two Darth-Vader looking black buses cost $1.1 million – each – from Prevost, a Quebec-based manufacturer. Reportedly, the Secret Service made the purchase. If I were Canadian, I’d expect my government not to miss a chance to buy Canadian. Likewise, as a U.S. citizen concerned about jobs, I expect this administration to buy American.
Yes, it’s true all White House vehicles are black. However, instead of being a source for optimism, the black-colored buses are a reminder – the black mirrors the economy and morale of most Americans.
Obama behavior fails to match goals
For a president who claims he’s concerned about jobs for American workers, he’s committed a terrible PR gaffe – economically, environmentally and patriotically.
To send a message about job creation, appropriate action is indicated. But it’s not happening. No one will convince me that American bus manufacturers are incompetent. There’s at least one American bus manufacturer that’s able to meet security requirements to protect a U.S. president.
In fact, a cursory search on Google reveals three interesting American bus manufacturers:
- Warren Buffett’s Berkshire Hathaway owns Forest River, a bus builder in Elkhart, Indiana – in business since 1903. Mr. Buffett just might have the resources to build such a bus.
- General Motors Ventures LLC is investing $6 million in Proterra Inc., a well-known manufacturer of zero-emission buses. Locations: Golden, Colorado and Greenville, South Carolina.
- How about American Coach in Decatur, Indiana? Talk about a missed opportunity for PR. American Coach’s line of products: American Revolution, American Eagle, American Tradition and American Heritage. Any of the names would have been a PR coup of epic proportions.
(Note: If you work for a U.S. bus manufacturer excluded in this column, my apologies for my oversight. Please let me know. I’ll gladly add you to this list.)
One final example of Mr. Obama’s tone deafness: Not only did he miss an opportunity to put Americans to work building his buses, he missed another golden opportunity to show the No. 1 symbol of patriotism — the American flag.
There were no American flags anywhere on his buses. None.
So, I disagree with the critics of Mr. Obama’s vacations. I now believe he should enjoy long, decadent respites. When he’s not working, Americans are better off. They have a better chance of getting back to work.
From the Coach’s Corner, here are two resource links: economic analysis and short-term economic forecast.
You might also wish to read Does the Federal Reserve Understand Small Business? Here’s a menu of other public policy columns.
“A major source of objection to a free economy is precisely that group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.”
-Milton Friedman
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Does the Federal Reserve Understand Small Business?
To answer the question, I have a simple one-word answer: No. It appears at least one of the Federal Reserve’s 12 districts does not have a practitioner’s understanding of small business.
Small business is really the straw that stirs the drink in the nation’s ability to increase the number of jobs in this country.
According to Small Business Administration (SBA) figures, small businesses make up more than 99 percent of all employers and employ more than half of all workers. Another SBA stat stands out: Small businesses have created 64 percent of all jobs in the last 15 years.
But small businesses have really suffered during and after the Great Recession.
So why is it that a 2011 study by the Federal Reserve Bank of New York draws the wrong conclusions as to why small business employee rolls dropped a lot more than big-business employment in the recent recession?
The Fed’s study concludes that a drop in consumer demand triggered the cutbacks. Huh?
Fortunately, a blog by Dr. Scott Shane nailed the reason.
“I think two factors – reduced access to credit and the concentration of small businesses in the worst hit sectors of the economy – play a bigger role than the Fed researchers acknowledge,” he wrote.
I like his work, and have quoted him previously (Is the U.S. in Danger of Becoming Second-Rate in High Tech?). Dr. Shane is an entrepreneurial scholar – the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University.
The Fed was right about the loss of small-business employment rolls — 10.4 percent among companies with fewer than 50 employees. And Dr. Shane agreed. As Biz Coach, a business-performance consultant, I see it every day. Small businesses did lose more jobs than their bigger counterparts during the Great Recession. So, we’re in agreement on the job losses.
“Businesses with fewer than 50 employees accounted for 28 percent of the 121 million Americans employed in the private sector in 2008, the latest Small Business Administration figures show,” wrote Dr. Shane. “That’s too much employment in small businesses for policymakers to find a way to fix the job problem without getting the smallest companies to boost hiring.”
He’s right again.
“Small businesses are underrepresented in two sectors that have weathered the downturn relatively well: exporters and those in research-and-development-intensive industries,” he wrote. “And small businesses account for much more of the employment in the sectors hardest hit by the downturn.”
As an example, he cites construction.
“While total employment fell only 4.4 percent from 2007 to 2009, employment in construction dropped a 19.4 percent. With so many small businesses in construction, this has meant heavy job loss,” he explained.
“The Fed researchers also play down the importance of tightened credit markets in accounting for the losses, arguing that most of the decline in borrowing by small businesses during the recession came from a decrease in demand for loans – not a reduction in supply,” he asserted.
He cites figures from the National Federation of Independent Business: “In March 2009, at the depth of the recession, only 29 percent of small business owners reported that their borrowing needs were being met, down from 40 percent back in February 2007.”
Dr. Shane points out home-price declines adversely impacted small business credit.
“A 2007 survey by Barlow Research Associates shows that one-quarter of small business owners use the equity in their homes to fund their businesses,” he wrote. “And research by Kean University professor Samuel Bornstein shows that many of the loans used to tap that equity were the Alt-A, adjustable-rate and interest-only mortgages at the toxic heart of the crisis…”The decline in housing prices sucked a large amount of small business credit out of the system.”
Dr. Shane indicated home equity loans for small businesses decreased $25 billion.
“If policymakers want to counteract the job losses in small business, they need to do more than say that the cause is decreased demand,” he concluded. “Rather, they need to stimulate the small business heavy industries that were badly damaged by the recession and keep credit flowing.”
Amen. Naturally, it follows that new strategies for small business credit are needed. However, now there’s a bigger problem.
My sense is that the small business credit situation – in the aggregate – won’t qualify such firms for loans. The chicanery by big banks led to reduced credit limits and they got away with charging 38 percent interest on business credit cards for dubious reasons.
From the Coach’s Corner, here’s a resource link:
11 Strategies to Keep your Small Business Floating above Water
“Dreams come true if you survive the hard times!”
-George William Curtis
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Only Fiscal Sobriety Will Prevent Further Fiscal Chaos
Updated Feb. 1, 2012
We’re way past the deadline to demonstrate financial leadership. It’s time for economic fundamentals and teamwork focused on economic patriotism.
As the world’s largest-economy, threats for a double-dip recession will only worsen unless the Unites States stops the fiscal dysfunction. In fact, not only is the U.S. economy is danger, so are world markets.
With a $1.6 trillion dollar deficit, investors and average Americans aren’t confident that the Obama Administration and Congress are competent enough in public policy. Voters are sick and tired about the bickering and finger-pointing.
Fourteen million Americans are out of work. The catalysts are the economy, advances in technology and business greed for outsourcing.
Despite what the Obama Administration claims, the S&P downgrade of the U.S. credit rating was justified. If a family or a company’s credit situation is lousy and cash flow is poor, they don’t qualify for loans, period.
All of that stimulus spending hasn’t turbo-charged the economy.
The challenges are many:
- Capital isn’t circulating.
- Consumers have cut spending.
- Businesses aren’t hiring.
- Money isn’t being lent.
- Despite efforts by the Small Business Administration to promote loans, the majority of small companies don’t have the collateral, credit and cash flow to qualify for a loan.
- Don’t forget the obnoxious greed on Wall Street, which helped cause the meltdown.
- Precious little is being manufactured.
- Many investors have more confidence in gold.
- The trade deficit is exacerbated by manipulation of currencies by China, India and Japan.
The selections for the bipartisan debt panel raise more questions. It appears we’re headed for more deadlock. The panel is filled with staunch partisans from both sides – the same politicians who have long failed to recognize problems and deliver results.
The blame game has become onerous, and few politicians – from the White House to Congress – have offered constructive ideas. What we need is balance and compromise. Move to the middle, please.
To Democrats: Cut spending.
To Republicans: Quit attacking Social Security and Medicare as entitlements instead of lifelines, and reconsider the Bush tax cuts for the wealthy. (Note to Republicans, Democrats aren’t the only culpable spenders. Lest I forget, Mr. Bush waited six years before vetoing any pork bills in a GOP-dominated Congress.)
To both parties: Stop the hometown pork to get re-elected, shun unnecessary risk, and simplify the tax code. Consider all options, including the call by Steve Forbes for a 10 percent flat tax.
To the White House: Wake up to realities. Hire bipartisan economists.
Remember why this nation was founded. At-risk are all of our political and economic liberties.
Now, can we get sober fiscally and agree to roll up our sleeves?
From the Coach’s Corner, here are additional resource links on public policy:
Manufacturing Jobs Might Return to U.S. as China’s Labor Costs Rise
Job Creation: Will Public Officials Listen to Intel’s CEO?
“This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer.”
-Will Rogers
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Do We Really Honor the Declaration of Independence?
July 3, 2011
Progressively more every year, many Americans, especially public officials, demonstrate they need to review the reasons for Independence Day and why we celebrate the fourth of July. It is, of course, a national U.S. holiday that commemorates the adoption of our unique Declaration of Independence on July 4, 1776.
Thomas Jefferson was inspired to write it between June 11 and 28, 1776. He eloquently stated the convictions of Americans. They weren’t new ideals expressing the desire for liberty. John Locke and others beat him to it. The Declaration of Independence was written as a list of grievances against the King of England, and has been cited as a list of timeless principles.
It was written and signed amid the American Revolution – the most significant event in our history. The first shots were fired in April, 1775. The war would last eight years.
It inspired the meaning of this phrase, “the shot heard round the world.”
Coincidentally, the fourth of July has other significance. Two signers of the Declaration of Independence who were elected president, Mr. Jefferson and John Adams, passed away on July 4, 1826 — the 50th anniversary of Independence Day. Fifth President James Monroe died July 4, 1831. Thirtieth President Calvin Coolidge was born July 4, 1872.
For most Americans, it’s a fun holiday. Across the nation are barbecues, baseball games, carnivals, ceremonies, concerts, fairs, family reunions, fireworks and political speeches. The holiday is a heavy travel day for many Americans.
Allegedly, as a document, the Declaration of Independence is still cherished as an avowal of freedom from tyranny. Do we honor it? Are we truly independent? No. Those type of events challenging royalty more than two hundred years ago – catalysts for the American Revolution and the Declaration of Independence – are prevalent today.
On a personal note, this month also marks the two-year anniversary of this portal with business-coaching columns on eight topics. Seeming countless assaults on the economic and political liberties of businesspeople prompted dozens of public policy columns.
In the last two years, conditions have worsened. Numerous crises are looming this Independence Day. They include the trade deficit, credit and housing bubbles, high unemployment and an enormous national debt. At the very least, they threaten to financially imprison our children and grandchildren for decades. Worse, they threaten this nation’s future.
Much is prompted by dysfunctional public policies by the “ruling class” – that’s how one of this portal’s frequent readers describes many public servants at the local, state and federal levels. I ageee.
“Now, even the deviancy of the old nobility is becoming more commonplace, as once they were given land by the sovereign, upon which to live well,” the reader wrote in an e-mail. “Now they are given government pensions and benefits.”
He laments we keep electing the same people with the same damaging political, and in many cases, self-serving philosophies.
He’s not alone. Consider the analysis of noted economist Peter Morici, a professor at the University of Maryland, and the former chief economist at the U.S. International Trade Commission in the Clinton Administration.
“…since 2007, government spending has jumped $1.1 trillion but only $200 billion was needed to cover inflation – the $900 billion additional was new programs and benefits and higher pay,” wrote Dr. Morici in an op-ed piece on this portal. “That has increased federal spending’s share of GDP from 19.6 percent to more than 25 percent.”
That goes for the White House, too, with a $39 million payroll (White House discloses wide-ranging staff salaries).
Meantime, there’s little statesman-like behavior in budget talks ( Obama, GOP lob rhetorical fireworks over budget and debt). What’s also disconcerting is that Democrats refused to consider the GOP’s initial recommendations in budget cuts of $2.5 trillion over 10 years.
Ironically, the Republicans were responsible for countless earmark and pork legislation during the Bush Administration. President Bush failed to veto even one pork bill during his first six years in office.
Another indicator of why our liberty is threatened by another recession: April’s deficit on international trade in goods and services skyrocketed to $43.7 billion, according to the Commerce Department.
Dr. Morici points out goods from China and imported petroleum represent the entire U.S. trade deficit. But our track record in encouraging the drilling for oil is dismal.
“The United States produces only 5.6 million barrels a day of oil and imports 9.6 million barrels -gasoline accounts for 8.3 million barrels,” says Dr. Morici. “The United States could easily increase domestic production by 3 or 4 million barrels a day over several years and slice 2 million barrels off fuel consumption by using readily available, more fuel efficient internal combustion engines and plug in hybrids, and further deploying domestic natural gas use.”
On another front, the Federal Register has a compilation of all federal business rules and regulations. A 2010 check revealed it contained 81,405 pages of regulations.
Actually, the abuses of our liberties comprise a much longer list than discussed here.
Certainly, businesspeople from Bernard Madoff to Enron executives have let us down. But there are a lot hardworking, diligent business folks. However, politicians wonder why such businesspeople feel shackled.
Hence, the question: When are we going to affirm the Declaration of Independence with economic patriotism to validate the principles of Independence Day?
From the Coach’s Corner, actually, all of this fiscal chaos from disingenuous behavior suggests the U.S. Constitutionis under fire, too. It’s worth re-reading.
“Ancient Rome declined because it had a Senate; now what’s going to happen to us with both a Senate and a House?”
-Wll Rogers
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Job Creation: Will Public Officials Listen to Intel’s CEO?
Intel CEO Paul Otellini laments it costs $1 billion more to build a semiconductor factory in America than it does abroad, and he’s calling for regulatory cutbacks and tax cuts – the two quickest ways to stimulate job growth.
Those are the messages he gave in a widely publicized speech to the Council on Foreign Relations in New York on Oct. 5, 2010.
His salvo blames government for the lack of jobs in America.
“…contrary to public opinion, this is not because of labor cost differences,” says Mr. Otellini. “Ninety percent of the cost difference is the result of tax and incentive policies.”
To boost domestic production and technology, he asked for government policy reforms:
- Tax credits or a 5-10 year tax holiday to companies, domestic or foreign, that want to set up or expand a factory in the U.S.”
- Adjusting our tax rate to a level approximately equal to our global competitors for investment.
- Removing regulations that needlessly deter investment…Given the urgency of our situation, we should create a fast track permitting process for companies that want to build new factories here.
Obviously, he’s convinced new tax policies will work.
“This will bring more manufacturing jobs back to the U.S.,” he says. “It will employ our workers and stimulate the economy, all at no cost to us.”
Mr. Otellini says his proposal to reduce the tax rate would “reverse the flow of capital and jobs out of this country.”
Frequent readers of this Web site know that the Intel CEO has Biz Coach support for his public-policy ideas. Countless columns have been published here.
From the Coach’s Corner, here is the text of Mr. Otellini’s speech.
Tech Planning: What If There’s A Double Dip?
Pick any region. Most respected economists and other experts believe economic growth will be tepid, at best. There are continuing concerns about the world’s economy, and it’s important to ask a key question: Are you ready for a possible double-dip recession?
Certainly, many global economic trends are eye-opening. Here in the U.S., job-growth and the consumers’ inability to buy are major concerns.
Moreover, public policy at all levels – federal, state and county, and city government – is hurting the nation.
At the federal level, stimulus spending that totals more than $1 trillion has been inefficient. Relatively few jobs are being created and there are constant calls for more spending. Policies are detrimental. The healthcare reforms are anything but productive. The legislation created 19 new taxes, it lacks cost-controls, and insurance premiums are mounting.
For years, state and local governments have been fiscally dysfunctional, too. They are still increasing taxes and slashing services.
Businesses are disappointed. Many lack an incentive to invest in human resources, marketing and technology.
The aggregate impact: A further deterioration of Americans’ financial and political freedoms.
So, it was not a surprise that technology-research firm Gartner recommends in a study that chief information officers should get ready for another downturn. That requires planning.
Authors of the study, Plan for a Second Recession, Now, wrote: “We urge these CIOs to leverage their recent experiences by preparing their enterprises should another economic downturn occur within the next 12 to 18 months.”
Gartner believes it’s important that CIOs communicate closely with senior company executives on priorities. Which IT projects for the next 18 months could be postponed or even disregarded?
My sense is that very function or project should be comprehensively studied and any spending should be approved. The budget needs to be detailed and every item needs to be justified. That’s called zero-based budgeting.
Just to cover all the bases, your department’s finances need to be constantly reviewed.
If your company is in dire financial straits and is attempting a financial turnaround, it’s also important to understand the perspectives of both the senior executive and the chief financial officer. There must be a daily review in the form of a flash report. A flash report can be designed to monitor indicators on a daily basis and to evaluate your actual performance against the turnaround plan. For more reading, see Step-by-Step Solutions for a Company Turnaround.
If a poor relationships exist between IT and the finance department, which is often the case, it’s important to understand the CFO mindset. You might want to read: Tech Trends: CFO’s the Boss, IT Departments Are Disappearing.
Good luck. Start planning and strap in the proverbial seatbelt if the roller-coaster ride proves to be harrowing.
From the Coach’s Corner, if you’re thinking about getting into business for yourself, I’d recommend reading: Eight Strategies to Consider Before Starting A Tech Business.
Not convinced about economic conditions? Here’s an eye-opening headline: Gartner Trims Worldwide IT Spending Growth Forecast to 3.9 Percent.
