Analysis: Trump’s Vision to Fix Trade Deficit, Create Jobs



Admittedly, the trade imbalance with China wasn’t the sole catalyst determining the outcome of the 2016 presidential election. But the election was a lesson in common sense — a complete repudiation of the country’s direction.

Unlike the erroneous and disingenuous claims by the media that the uneducated and uninformed elected Donald Trump or Hillary Clinton’s post-election assertion that FBI Director James Comey killed her chances, Mr. Trump won the Presidency because of several factors.

For instance, his election had to do with Hillary Clinton’s long pattern of alleged corruption and the insular arrogance of her campaign and most in her party who want to expand their Democrat power base – even if it’s at the expense of America’s future.

The group-think mentality of the liberal news media also played into Mr. Trump’s hands. His supporters have been and still are angry at the overt media bias.

id-100102805Mr. Trump’s victory stemmed from his marketing slogan, “Make America Great Again,” and from his solutions for critical issues that influenced 60-million voters.

Creating hope

For them, his business background and philosophy created an environment of hope. That includes former supporters of Mr. Obama because they never realized benefits from the hope and change he promised in 2008.

Essentially, Mr. Trump’s core supporters – in the Rust Belt and other economically soft regions lacking in family wage jobs – wanted Mr. Trump to win for three reasons.

Common-sense Americans are sick and tired of the Democrats’ reign of politically correct terror, the movement for income redistribution, and the massive loss of good-paying jobs.

What they want is not to be treated as though they’re invisible. They’re inspired by Mr. Trump’s success.

His supporters also want level-headed strategies for economic growth and jobs instead of the left-wing no-growth mantra for income equality leading Americans to covet their neighbors’ cars, electronic gadgets, money, and prestige.

Yes, Mr. Trump campaigned on eliminating the onerous business regulations, cutting taxes, and increasing energy production.

But none will help the economy more than creating jobs by repairing America’s trade policies.

As a free-enterprise advocate, my sense has always been that it’s best to keep tariffs low and to break down all barriers to global commerce. And, yes, American consumers do benefit from less-expensive foreign products.

Unfortunately, U.S. exports simply do not equal imports.

Ironically, American workers are more productive than their foreign counterparts.

$500-billion trade deficit

But America has a $500-billion trade deficit. In 2015, American exports were $2.3 trillion while imports totaled $2.8 trillion.

The nation’s gross domestic product is decreased by $260 billion as a result of the reduced demand for American products and services.

Admittedly, advances in robotic technology are a factor. But essentially the trade deficit translated to a loss of 4-million American jobs.

GDP is additionally decimated by dormant companies and the laid-off workers to the tune of $130 billion.

Oil imports and the other trade deficits with China are the primary culprits.

To make America energy-independent, it would help to expand drilling in energy-producing states. (But decades of drilling in Oklahoma might explain the rash of earthquakes, which might be problematic.)

Solutions for Chinese obstacles

Mr. Trump is correct in opposing the Chinese currency manipulation and their restriction of American investment and goods.

China’s devaluation of the yuan undercuts global competitors in making its exports cheaper. Part of China’s restriction of American goods stems from its high tariffs.

Strangely, Wall Street CEOs and Democrats have ridiculed Mr. Trump’s call for a 45-percent tariff on Chinese products.

Their lack of vision is perplexing. America’s GDP under the Obama Administration is the most anemic in history.

Mr. Trump knows the importance of renegotiating trade policies. His two strategies for China will not cost any taxpayer money.

Short-term, tax revenue will skyrocket and would offset his proposed tax cuts. This will lead to a dramatic improvement in the nation’s GDP and will create millions of jobs by the end of Mr. Trump’s term in office.

Long-term, the prospective economic benefits are eye-opening.

Sustained economic strength

American productivity, global leadership and innovation have all been influenced by businesses that invest in research and development.

R&D will again be a factor in turbo-charging the economy as Mr. Trump erases the trade deficit.

Firstly, he will deal with China’s average 9.6 percent tariff on American products. The U.S. average tariff on imports is 3.5 percent.

Secondly, unlike Presidents Obama and Bush, Mr. Trump will penalize China over its currency manipulation.

Mr. Trump is not advocating economic isolationism. He doesn’t want economic stagnation. Nor does he want to stifle competition and consumer choices.

He’s merely calling for economic common sense for America’s future. Democrats would be better off pursuing the principles of growth, not income redistribution.

From the Coach’s Corner, here are relevant public-policy articles:

‘Dirty Little Secrets’ Trump Hasn’t Told You about Economy — Donald Trump has pushed the envelope to say the least. Many businesspeople get it. So do entrepreneurs, and millions of different demographics of voters who are angry at the economic decline of America.

Like Nobility in the Age of Kings, Ruling Class Gets Trumped — Throughout history, there have been ruling classes in every region of the world. Noteworthy in Europe were the Dark Ages in which the ruling classes dominated ordinary, hardworking folks. That’s true for 21st century America. But like the Age of Enlightenment in the 1700s, America’s ruling class in 2016 is getting trumped by a voter revolt.

Ideas to Accelerate Slowest Economic Recovery in Decades — Most voters are likely to vote their pocketbooks. So for them the positive spin on the economy by Hillary Clinton and President Barack Obama doesn’t reflect reality.

Avoiding Taxes, Apple’s Irish Strategy Apparently Backfires — The most nonsensical irony in corporate America involves Apple CEO Tim Cook’s tax strategy which has drawn fire from the European Commission. Why? It’s apparently backfiring, and is unpatriotic and shortsighted.

Scary Reasons Not to Get Giddy over the Monthly Jobs Reports — Curiously, the news media conveys optimistic stories, and Wall Street investors and others are jubilant over the 4.9 percent unemployment rate. Why? Countless Americans can’t find family wage jobs. But misleading news headlines trumpeted the meager creation of jobs instead of the sad reasons for the mediocre report.

“A conservative is a liberal who got mugged the night before.”

-Frank Rizzo


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy Michael Elliott at www.freedigitalphotos.net


The Link: Artificial 4.9% Jobless Rate, Obama’s Firing of His Jobs Council


Updated July 30, 2016

Economic growth is an oxymoron under the Obama Administration.

The broadest measure of the economy is the nation’s gross domestic product (GDP). But it only grew at 1.2 percent from April to June this year – far short of the 2.6 percent forecast by most economists.

Even the 1.2 percent might be wrong – in Q1 GDP was 1.1 percent but the government revised it downward to .8 percent. That’s three consecutive quarters of pathetic growth.

So no surprise why countless Americans are stuck in low-wage or part-time jobs, which means the unemployment rate is at an artificial 4.9 percent — a phony statistic.

It’s worth remembering President Obama fired his jobs council — comprised of CEOs at major companies. Ostensibly, he didn’t like their advice.

A noted economist has been expressing the same concerns for years.

ID-10043269 xedos4“The jobless rate may be down from its recession peak of 10 percent, but much of this results from adults, discouraged by the lack of decent job openings, have quit altogether. They are neither employed nor looking for work,” explained economist Peter Morici, Ph.D., in his analysis on August 1, 2014.

“Only about half of the drop in the adult participation rate may be attributed to the Baby Boom generation reaching retirement age. Lacking adequate resources to retire, a larger percentage of adults over 65 are working than before the recession,” he wrote.

“Many Americans who would like full time jobs are stuck in part-time positions, because businesses can hire desirable part-time workers to supplement a core of permanent, full-time employees, but at lower wages,” Dr. Morici added.

“The economy needs to add about 360,000 jobs each month to push unemployment down to about 6 percent and provide employment for those frustrated adults,” explained Dr. Morici. “That would require GDP growth in the range of 4 to 5 percent.”

But under Obama, the nation’s GDP growth rate has been comparatively tepid.

President Reagan’s Administration inherited a worse economy from President Carter than Obama from Bush. But the Reagan White House performed at a much higher level than Obama. Millions of legitimate jobs were created and the GDP was 4.8 percent.

Sadly, the mainstream news media has largely failed to report such facts, as well as two other economic developments:

1. There’s a connection between the president ignoring his own Council on Jobs and Competitiveness a year, and the artificial unemployment rate.

Mr. Obama recruited business leaders to join his jobs council in January 2011. This was to demonstrate leadership in solving the nation’s anemic jobs situation, and to fix his impaired relationships with employers.

But not since Jan. 17, 2012, has Mr. Obama convened his own jobs council, which is supposed to be chaired by General Electric CEO Jeffrey Immelt.

“There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.”
-Will Rogers

Some 23 million Americans are out-of-work or are under-employed because they can only find part-time work — so the average American workweek is only 34.6 hours. And the president has not bothered to convene his jobs council?

So neither of Mr. Obama’s jobs-council goals has been attained — by default. That’s unacceptable for the nation’s economy and workers.

2. Former Intel CEO Paul Otellini, a member of the Obama jobs council, joined the ranks of high-profile business leaders who opposed Mr. Obama’s re-election.

Mr. Otellini is ostensibly disappointed by Mr. Obama’s lack of commitment to creating private-sector jobs.

He has good reason. Mr. Otellini joined the president’s jobs council to lend his expertise even after voicing his concerns about ineffective administration policies for job creation. (See: Job Creation: Will Public Officials Listen to Intel’s CEO?)

Other business leaders who were forced to actively campaign in the 2012 presidential election for Mitt Romney: Charles Schwab, Cisco CEO John Chambers, and Bernie Marcus, the co-founder of Home Depot.

The results speak for themselves. Mr. Obama has not kept his promises – from his commitment to reduce the unemployment rate to 5.2 percent – to his pledge to balance the federal budget.

You might recall in 2008 he called President Bush “unpatriotic” for his handling of the economy and heavy spending, but the national debt increased 52 percent under President Obama.

Here we have a president who campaigned on “hope and change.” But he hasn’t delivered — understandably because he doesn’t have any job-creation credentials — his experience as a community activist explain his economic failures and focus. There’s been no hope under Mr. Obama — only harm to the nation’s economy.

Even Steve Jobs criticized the ineffective Obama approach. (See: Biography: Will President Obama Listen to Steve Jobs on the Economy?)

Business leaders understandably chortled at Mr. Obama’s announcement that he wants to add a new cabinet position, a “secretary of business.” I concur.

“I don’t think adding a new chair in his Cabinet will help add millions of jobs on Main Street,” said Mr. Romney in the 2012 campaign. “We don’t need a secretary of business to understand business. We need a president who understands business.”

Agreed. It’s time for realistic hope and positive change.

From the Coach’s Corner, the media also failed to report another noteworthy development in 2012, about which I wrote: 6 Nobel Laureates Among 673 Economists Back Romney’s Economic and Jobs Plan.

The economists signed a statement — the benefits of Mr. Romney’s plan — and multiple reasons why Mr. Obama’s economic approach is a failure.

“There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.”

-Will Rogers

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of xedos4 at www.freedigitalphotos.net

Alarming Trend — Why Startups No Longer Lead in Job Creation


Startup businesses have long been the king and queen of job creation. But that’s no longer true, according to a review of data from the U.S. Department of Commerce. Among startups in their first year of operation, jobs have decreased to an all-time low.

The disturbing conclusion comes from a 2012 study, “The Collapse of Startups in Job Creation,” by the nonpartisan policy-research organization, the Hudson Institute.

“Entrepreneurship is down by a third these last four years,” says Hudson’s Chief Economist Tim Kane. “And the decline continued in 2010 and 2011, even after the economy started growing.”

Beginning in 1977 for more than three decades, startups annually created 3 million jobs. But starting two years into the Obama Administration, in 2010, the number of newly created jobs – 2.34 million – plummeted 22 percent.

David Castillo Dominici investigationEconomist Kane lists the reasons:

— Occupational licensing regime

— Higher taxes

— Labor regulation

— General economic uncertainty

In other words, government is the culprit.

Worse, on further review, the study indicates the job-creation figures are actually worse when factoring in the nation’s population increase.

During the presidential administrations of George H.W. Bush and Bill Clinton, 11.3 Americans per thousand were employed at startups. However, during the Obama administration, the number plunged to 7.8 per thousand.

The obvious conclusions:

“Without startup job growth, there simply won’t be overall job growth in the United States,” adds the economist.

The free-enterprise spirit is suffering in America.

Hudson Institute, www.hudson.org, describes its work as innovative research and analysis promoting security, prosperity, and freedom.

From the Coach’s Corner, sadly the economy hasn’t improved enough to create jobs. Twenty-three million Americans are unemployed or can only find part-times jobs.

Here more informative articles:

Government Spending Causes Companies to Cut Back, Harvard Study — the Hudson Institute study coincides with troubling research at Harvard University.

The Link – Local TV Journalism, Bad Government Policy, Wall Street Banks and Poor Economy — Do you ever wonder why the economic climate is still questionable? Why the unemployment rate is dubious and why the average American workweek is only 34.6 hours? Or why government policies aren’t conducive to economic growth and the creation of jobs?

7 Steps to Wealth and High Net Worth — Creating wealth and enjoying high net worth doesn’t result from pure luck. It takes a certain mindset and strong action. Here are seven proven steps.

Monopoly in Health Insurance Hurts Employers, Consumers and Doctors — How do you feel about your health insurance? Fasten your seat belt. More problems have unveiled in America’s healthcare system. Patients, physicians and employers have been in the same boat – skyrocketing health insurance costs exacerbated by a lack of competition caused by ObamaCare. Now comes an eye-opening study by the American Medical Association (AMA).

Economic Analysis — Op-Ed:   By Peter Morici, Ph.D., an economist and professor at the University of Maryland, and five-time winner of the MarketWatch best forecaster award.

Economic Forecasts – for key data updated weekly by Peter Morici, Ph.D., an economist and professor at the University of Maryland, and five-time winner of the MarketWatch best forecaster award.

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

-George Washington

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy David Castillo Dominici at www.freedigitalphotos.net

Private ESOPs Are Where the Action Is – in Economic Value, Job Growth



Private employment stock ownership plans (ESOPs) are thriving. That’s according to a study by a former advisor to the Simpson-Bowles bipartisan deficit reduction commission and a fellow at the American Enterprise Institute.

Economist Alex Brill, who conducted 2012 study, found that ESOPs as S corporations grew their jobs by 60 percent over this past decade. Of course, such a rate of growth is really an anomaly.

Other private-sector employment rolls have been stagnant.

ID-10066167 Ambro“The unique strengths of employee ownership drove company gains and jobs in the past decade, while helping insulate S-ESOP businesses from the adverse effects of the recent recession,” wrote Mr. Brill in the study.

It’s entitled, “An Analysis of the Benefits S-ESOPs Provide to the U.S. Economy and Workforce.”

ESOPs are tax-exempt retirement plans that consist of company stock held on behalf of the company’s employees.

They are company-funded retirement plans that do not require any contribution from workers.

Congress first changed U.S. tax rules to allow S corporation businesses to be ESOP-owned in 1998. There are more than 11,000 ESOPs in the U.S.

Mr. Brill studied a decade’s worth of data from 56 ESOPs, and Labor Department figures from 2002 to 2009.

The study’s salient results:

  1. S-ESOP companies showed substantially more employment growth in the pre-2008 recession period than private businesses.
  2. S-ESOP companies regained momentum faster than other private firms after the recession.
  3. S-ESOP companies in the manufacturing sector particularly benefited from the S-ESOP business structure, which buffered manufacturers through especially challenging recent economic times.

It’s generally believed that ESOP workers are substantially more invested in the success of their workplaces. They know it will affect their own economic well-being.

A University of Pennsylvania study earlier showed that S-ESOP companies generate about $14 billion in retirement savings for their workers that otherwise wouldn’t have been possible.

If a company has a positive workplace culture, an ESOP is worth considering as a good exit-strategy for a retiring business owner.

From the Coach’s Corner, one of the nation’s most publicized ESOPs, United Airlines (UAL), was an exception to the success of the other 11,000 ESOP success stories.

UAL became an employee-owned public company, 55 percent of the shares, in 1994. Employees gave up some $700 million in wages and conceded some work rules. In exchange, the workers bought out the boss and stockholders.

But clearly since then, UAL has had a turbulent history. It’s been unprofitable with passenger-service issues and an unhappy workforce. In essence, UAL has taught us several lessons in strategic planning. (See Strategic Planning Lessons: Why United Airlines Was Forced to Merge with Continental.) 

“If you mean to profit, learn to please.”

-Winston Churchill 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy of Ambro at www.freedigitalphotos.net

Can Immigrants Help Jumpstart U.S. Economy? Senators and Study Say Yes



Can the U.S. tepid economy get healthy? Absolutely, if the right policies are put in place. But the performance of many members in Congress is questionable.

Before explaining why, let’s consider some good news: Some Democrats and Republicans in the U.S. Senate have worked together and introduced a bill in 2012 designed to help the economy.

Now, the bad news: The bill has died.

Yes, members of the Senate introduced bipartisan legislation, Startup Act 2.0, which would make it easy for tech-minded immigrants to stay in the U.S. after they launch new businesses. It’s co-sponsored by U.S. Sens. Marco Rubio (R-Fla.); Chris Coons (D-Del.); Jerry Moran (R-Kan.); and Mark Warner (D-Va.).

akeeris at www.freedigitalphotos.netImmigrant stays are typically limited to six years.

In 2011, immigration policy was eased to allow immigrants to launch companies that would sponsor their own H-1B visas. So, the lawmakers wanted to take another step in immigration reform.

However, detractors of the bill worried what to do with the immigrants if their enterprises fail – a common worry about any new business.

Meantime, immigration reform would have led to significant benefits for the U.S. economy, according to a group of business leaders and bipartisan mayors. The group, Partnership for a New American Economy, released a study 2012 concluding that in 2011 foreign-born inventors were responsible for 76 percent of patents at the top 10 universities that spawn patents.

The obvious conclusion: The new companies that evolve from such patents create jobs and enhance the nation’s economic climate. Patents include metals that can be molded like plastic and better ways to purify seawater.

New York Mayor Michael Bloomberg, the partnership co-chair, asserts the results are “indisputable proof of the enormous contribution of immigrants in developing the new technologies and ideas needed to renew the U.S. economy and create American jobs.”

“American universities are doing their part in attracting and educating the world’s top minds, but our broken immigration laws continue to push them to our competitors,” he added.

The 2012 30-page report is entitled, “Patent Pending: How Immigrants Are Reinventing the American Economy.”

The University of California was No.1 among U.S. universities in generating patents – 369.

The study’s salient conclusions:

  • More than three out of every four patents at the top 10 patent-producing US universities (76 percent) had at least one foreign-born inventor.
  • More than half of all patents (54 percent) were awarded to the group of foreign inventors most likely to face visa hurdles: students, postdoctoral fellows, or staff researchers.
  • Foreign-born inventors played especially large roles in cutting-edge fields like semiconductor device manufacturing (87 percent), information technology (84 percent), pulse or digital communications (83 percent), pharmaceutical drugs or drug compounds (79 percent), and optics (77 percent).
  • The almost 1,500 patents awarded to these universities boasted inventors from 88 different countries.

Previously, the group issued another study showing how other countries have designed immigration-recruitment strategies to benefit their economies. The nations include Australia, Canada, Chile, China, Germany, Ireland, Israel, Singapore and the United Kingdom.

The nine countries admit from 60 to 80 percent of foreign students on economic needs while the U.S. opens its doors to 7 percent for economic reasons.

As part of the advocacy for immigration reform, more than 100 university presidents sent a letter to Congressional leaders and President Obama advocating a bipartisan immigration solution.

The group’s recommendations:

  1. Granting permanent residency (green cards) to foreign students who earn graduate degrees in STEM (science, technology, engineering and math) fields, where 99 percent of the patents naming a foreign-born inventor were issued.
  2. Creating a visa for foreign-born entrepreneurs having U.S. investors and wanting to start companies employing U.S. employees.
  3. Raising or removing the cap on H-1B visas, currently set at 65,000 (the group notes that the 2012 cap was hit in only 10 weeks).

My sense is the group was right. It’s been widely believed for years that America needs more students majoring in science, engineering, mathematics and technology. They’re not being homegrown. In the main, American kids aren’t interested.

In another article, Keys to Economic Development: Managing Ignorance, I wrote:

“America’s expertise in science and technology is fast deteriorating, according to a study by the National Academy of Sciences. The report was written by a group of top corporate executives, educators and scientists and is entitled, “Rising above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.”

In essence, the panel of experts sets four goals:

  • Improve math and science education in grades K-12.
  • A more cordial milieu for science for college and post graduate studies.
  • Increase federal funding for scientific research.
  • Encourage the growth of family-wage jobs in evolving industries with tax incentives and other fiscal tools.

It wasn’t surprising that the report identified two Asian countries, India and China, as among the nations that will surpass the U.S. in job creation and innovation.

From the Coach’s Corner, here are related topics:

“Why don’t they pass a constitutional amendment prohibiting anybody from learning anything? If it works as well as prohibition did, in five years Americans would be the smartest race of people on Earth.”

-Will Rogers 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry. 

Photo courtesy of akeeris at www.freedigitalphotos.net

What and Whom Deserve your Vote Nov. 8, 2016?



If you want a strong economic climate and job creation, and freedom from bad public policy and public officials, obviously it’s time to act.

This is a critical time.

What is decided at the polls will affect us now and our grandchildren, too, when they’re in the business world.

xedos4So this is the most succinct business-coaching article ever published here on this site.

The message is simple.

Please do your homework and discuss these issues with your associates, friends and relatives.

Then vote by Tuesday, Nov. 8.

From the Coach’s Corner, for all the right information about a healthy economic climate in Washington state, visit these Web sites:

— Washington Policy Center (www.washingtonpolicy.org)

— Association of Washington Business (www.awb.org)

This all about knowing and implementing what’s important for economic development and job creation. You’ll be glad you did.

“Democracy is the only system that persists in asking the powers that be whether they are the powers that ought to be.”

 -Sydney J. Harris 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Photo courtesy xedos4 at www.freedigitalphotos.net


WA Election Reminder: Business Issues to Ponder

 

Updated Aug. 17, 2010

Today is Washington state’s Primary Election Day. Be sure to vote.

Meantime, there are valid reasons why Washington state public officials’ pleas of poverty and and justifications for tax increases have fallen on the deaf ears of most businesspeople. The overwhelming majority of companies – large, medium and small – have had to resort to cost savings.  But only recently in mid-2010 have state leaders finally admitted state government needs to be downsized by as much as 7 percent across-the-board in the wake of declining revenue and continuing forecasts of $3 billion deficits.

However, for years, many of us have warned about the state’s propensity to spend wastefully in the face of multi-billion- dollar unfunded state pensions and $3 billion deficit forecasts. Again this year, the Legislature bypassed voter protections on transparency, and raised taxes by $800 million. In the last decade, there have have numerous Biz Coach columns about court cases and shell games by public officials in violations of state spending limits. But we’ve been ignored by public servants, which infuriates the electorate concerned about economic health and job creation.

Ironically, there have been numerous published reports of fiscal waste, mismanagement and abuse. That means if efficiencies were ever implemented– including the best-practices in fiscal management recommended by the state auditor — there would be enough tax revenue.

For example, the state was overcharged $306,000 for supplies by Office Depot in 2009, according to the state auditor. But the state’s Department of General Administration denies it’s overspending. We have to wonder how badly the other agencies are misbehaving.

The contract with Office Depot is part of a $24-million deal that includes other state agencies, institutions of higher learning and local governments.

The agency is part of a list of other state agencies also in denial, especially the Department of Social and Health Services (DSHS), and the Washington State Department of Transportation (WSDOT) and the ferry system.

As a business-performance consultant who has solved the financial headaches of public and private-sector clients since 1992 – often by not even having to look at numbers – just observing people at work – I have also interviewed State Auditor Brian Sonntag.

As I’ve written before regarding public policy, I’ve witnessed tons of waste at DSHS, WSDOT and the Washington State Department of Personnel.

My sense also is that Mr. Sonntag is a stellar public servant, and I would point a finger at Office Depot for not adhering to the contract rates, as well as at the Department of General Administration for being lazy in due diligence.

This summer, we finally heard about the flawed worked of state employees that caused two freeway projects in Tacoma to be torn down and rebuilt. It resulted in $1.5 million in more waste and no accountability. That wouldn’t fly in the private sector at most companies.

Don’t forget about the KING 5 series on mega millions in waste and inefficiency in the state ferry system.

Also, I’d ignore the disingenuous arguments in the $2 million Initiative 1098 campaign to start a state income tax. An income tax would soak the rich – many of the very people who hire workers and make investments.

A state income tax has not helped two states where I spend a lot of time: Oregon and California.

An income tax here would send a negative message to prospective employers around the globe that might consider establishing a presence in Washington. Why would anyone want to harm our potential to grow the economy and create jobs?

Another thought: Should this income tax pass this year, state officials will find excuses to broaden the income tax to include middle-income taxpayers, too. Have you ever known a tax not to expand or even disappear?

Now comes the disingenuous allegation in two state reports claiming that voters should not privatize liquor sales because they would cause shortages.  That’s bunk. Not only will we put a governor on the unfunded pensions of 1500 state liquor employees, the number of privatized liquor outlets will expand 10-fold. That enhances tax revenue — it doesn’t decrease it.

Please forgive me for being a tad gauche, but you’re best advised to consider all the government waste and mismanagement, as well as the candidates’ philosophies before going to the polls or returning your absentee ballot.

Courtesy of Enterprise Washington, here are two research resources:

May Washingtonians decide on a business-friendly environment on Aug. 17 and in Nov.

From the Coach’s Corner, this Web site has more than 50 national and Washington state public-policy columns regarding the governments’ adverse impacts on the economy and business climate in this section.

Idaho Governor Recruits Washington and Oregon Companies – Thanks to Legislatures

 

March 9, 2010 

Call it brazen. Call it economic development. Whatever your preference, Idaho Governor C.L. “Butch” Otter is an opportunist.

In the wake of out-of-control policies and behavior by public officials in Washington and Oregon, he’s issued a press release to recruit companies to his business friendly Idaho.

That’s right, dated Monday, March 8, 2010, the headline reads:

LOVE LETTER TO OUR NEIGHBORS: IDAHO IS OPEN FOR YOUR BUSINESS.”

No joke. In capital letters complete with the word “YOUR” in italics, I’ve cut and pasted the headline verbatim.

Here’s an excerpt from his combination “love letter” and news release:

“We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon’s lead. We aren’t offering many bells and whistles, but what we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions.”

Here’s his salient comment about the Washington State Legislature:

“Legislators in the state of Washington are talking about even bigger tax increases to tackle a budget deficit that figures to be as big as Idaho’s entire State budget. Businesses in both states are like those in Idaho; they are facing the most challenging times in decades, and even incremental cost increases can mean the difference between surviving and closing up.”

About Oregon, he writes: 

“The problem in Oregon is that folks were convinced that state government was what needed to be shored up rather than the jobs- and revenue-producing private sector for which state government is supposed to work. As a result, they’re chasing some of their cash cows to the border. And I welcome those businesses with open arms.”

People have stopped asking me why I write about public policy so much or why I’ve created an Op-Ed category on this Web site. They know significant action is needed for a strong economic climate and the creation of jobs. 

The record is clear. At all levels, government is hindering economic growth and job creation with unproductive policies and behavior.

My hope for Washington state is that voters wake up and smell the coffee for a revolution in this November’s elections and successfully demand government reform – reminiscent of 1994 after the Washington State Legislature imposed huge tax increases on business in 1993. You might recall countless politicians were swept out of office.

Even the Washington State Association of County Assessors took note of the voters’ angst. In Nov. 1994, the association invited me to advise them on media strategies to lower property taxes. Only then-interim King County Assessor Scott Noble opposed me.  As a result in the ensuing legislative session, lawmakers lowered property taxes by 4.7 percent. (Mr. Noble later became the permanent assessor but was driven from office in 2009 after his drunk-driving accident injured two female motorists.)

The 2010 legislative session has grossly increased taxes and destroyed standards of government transparency instead of implementing efficiencies. As a management consultant who performed services at two state agencies, I’ve witnessed the state of Washington is sorely lacking in best-practices management and performance. And as I’ve often warned, this is resulting in more theft of our economic and political freedoms.

From the Coach’s Corner, see for yourself. Here’s the link to Gov. Otter’s invitation.

My thanks and appreciation go to Jason Mercier of the Washington Policy Center for distributing it.

Why You Can’t Get Work and Small Businesses Can’t Hire Workers


Are you one of the countless baby boomers who is relying on Social Security before you reach retirement age? You’re not alone. The dearth of jobs has prompted many Americans to accept lower Social Security payments at the age of 62. This means Social Security is forecast to start paying out more in benefits than it receives starting in 2017.

The government believes 15 million people are jobless. That’s only an estimate. It doesn’t include the high number of self-employed people desperately taking independent contractor projects because they can’t find jobs, or the under-employed taking temporary jobs.

These numbers also hurt job creation. Higher unemployment rates charged to business by government is a disincentive, too.

After having worked through 6 major economic downturns, my analysis of the data and the trends is that the real unemployment rate is about 25 percent. That’s depression-like, not recession-like numbers.

A study proves it’s getting worse for American workers. The Center for Labor Market Studies at Northeastern University in Boston sums up the problem in its study’s subtitle – “A Truly Great Depression Among the Nation’s Low Income Workers Amidst Full Employment Among the Most Affluent.”

For the nation to catch up, most experts believe 100,000 new jobs need to be created every 30 days. But veteran pragmatists know it won’t happen. Count me as one of those.

The job drought is not a new phenomenon in the sense that it’s been years in the making. The federal government began tracking the number of unemployed in 1948.

Job losses

Many jobs have not and will not return. Not to over-simplify, institutional investors own increasing numbers of companies. Largely, they extract profits by slashing payrolls and encouraging offshoring of jobs in Latin America and Asia where labor is cheaper.

Since 2000, automation is responsible for cutting 5.6 million jobs.

After each recession since 1970, job-growth rates have decreased. Published reports indicate that even before the Great Recession, it was less than one percent a year and was only 2.4 percent in the 1990s and 1980s, according to the Labor Department figures.

Based on trends following recessions, I’m in agreement with economists who forecast it will be at least five years before the unemployment rate returns to more palatable levels – hence, the term, jobless recovery. Even then, I’m not sure it will happen.

Consumer spending

Historically, consumer spending has been a key ingredient for economic recovery. But that won’t happen unless there’s a fundamental economic change.

This also means the tax revenue pie for governments at all levels will remain flat.

For good reason, Americans have returned to 1930’s money values. They’re becoming tight-fisted with their money and are demanding government accountability.

The housing bubble resulted in a high volume of excise taxes, but the high rate of foreclosures alters that scenario.

Big lender behavior

Talk to anyone who checks credit for consumers or small businesses. The aggregate level of bad credit is huge – largely caused by the predatory behavior of big lenders. They’ve nearly destroyed the livelihoods of small businesses with mega interest rate hikes for bogus reasons.

Small business has historically has been the main job-creation engine, but no more.

Small businesses do not have the financial firepower expand and create jobs. New credit card legislation does nothing to correct the injustices.

Instead of focusing on helping business, government at every level, is hindering the economic climate. Economic and political freedoms are being stolen each day by bad government policy (see this portal’s Public Policy section).

The largest employer in many communities is government. Public-sector agencies are still growing, while spending and taxing at ever-increasing levels. For the common good of all Americans, change is needed.

Businesses and consumers can no longer afford the status quo in taxes. Government must reform.

From the Coach’s Corner, here is the essence of the 2010 credit card law:

  1. Credit card companies cannot increase the rate in the first year until the introductory rate expires. The banks must give 45 days notice to change the rate.
  2. Unless two months past due, rates can’t be changed.
  3. The original interest rate must be granted once payments are on time for six months.
  4. The fine print will be easier to grasp.
  5. Activation and annual fees can’t exceed 25 percent of the credit limit in the first year; and will be unlimited after 12 months.
  6. Credit card statements must be sent three weeks in advance.
  7. Transactions can’t take place over the credit limit unless the cardholder agrees.
  8. The “universal fault” nonsense (if you were late one day on one payment, the other credit card companies jacked up your rate) is stopped and interest rates on existing balances must stay the same (see No.1).
  9. Companies can’t give students or anyone under 21 a car unless she/he has a co-signer or the autonomous ability to pay statements. Schools have to make public any credit-card marketing deals, and companies cannot stage publicity or giveaway events on or near campuses.

“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

-George Washington

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Sen. Cantwell Is Right to Question Risky Derivative Dangers, Geithner

 

Updated July 15, 2010 – 3 p.m.

An influential U.S. senator, Sen. Maria Cantwell (D-WA), worked to regulate the perilous use of derivatives by Wall Street bankers, and criticized the Obama Administration in the process. But her derivative strategy worked. The sweeping financial reform legislation will regulate the risky, intangible instruments.

This means derivative trading now faces regulation, and financial institutions will have to set up a fire wall by moving their derivative departments elsewhere.

“This isn’t about poking the White House, it’s about getting capital flowing to small businesses,” Sen. Cantwell said in an interview with Les Blumenthal, a reporter for McClatchy’s Washington state newspapers.

She helped lead the fight against investment bankers, who were bailed out by taxpayers only to shell out big bonuses and who are at it again. Instead of extending credit to business, Wall Street is back to the old tricks of playing risky derivative games that helped lead to Wall Street’s meltdown and the global-financial disaster.

She’s also had a testy exchange with Treasury Secretary Timothy Geithner over the failed efforts to bail out community banks and the associated credit issues faced by her Washington state constituents and other American businesses and consumers.

“We are trying to keep the focus on what needs to be done to get credit flowing and avoid another bubble,” Sen. Cantwell also said. “Do I wish the White House team was more attuned to these issues? Yes.”

 Yes is right. It’s commendable that she’s become outspoken about regulating Wall Street’s behavior.

If she’s successful, we’ll see job creation – the only way out of this mess. I’ve been harping about this and asking for answers to questions for an extended period of time starting with this column, “Is it Time to Police Pay at Wall Street Banks?

And she was right about voting against the reappointment of Fed Chair Ben Bernanke. Few in Congress seem to understand Main Street issues and his tardy, tepid handling of the Great Recession at the Fed.

Firewall partnership

Sen. Cantwell partnered with Sen. John McCain (R-AZ), the former GOP presidential candidate, to bring back the commercial/investment banking firewall. This will prevent risk-taking by commercial banks that exacerbated two downturns in the 1930s and the most-recent  financial chaos. The two worked together on the Senate Commerce Committee.

Cash flow and credit are critical for operating a business. With too-few funds available in loans, businesses have been failing or, at least, suffering from bad credit as a result of not having access to capital.

Efforts by the Obama Administration and Small Business Administration to provide more loans are to be commended. However, they are way too-little and too late. Most afflicted small businesses now have poor credit because of the cash cutoffs and they won’t qualify for any the funding.

Credit card regulations were too late, too.

Nothing has been done to help repair the credit of the millions of small businesspeople and consumers who were victimized by the credit card companies – domiciled in a handful of states that permit predatory behavior – their rapacious interest rate hikes for bogus reasons and slashed credit lines.

Sen. Cantwell also indicated her disappointment that the Obama Administration twice reneged on promises for action on the proposed firewall between commercial and investment banks.

“Their economic team is not living up to what they said they would,” she explained to Mr. Blumenthal.

Hmm. Broken promises? That’s not what America needs, but we can appreciate Sen. Cantwell’s candor and successful efforts.

From the Coach’s Corner, on another somber note regarding credit: Customers of the hospitality industry are ostensibly the No. 1 target of hackers, here’s the article.

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Seattle business consultant Terry Corbell provides high-performance management services and strategies.