Little has not already been said about what is needed to fix the US economy. The Right is advocating for federal debt reduction, loosening up of regulations and the lowering of all sorts of taxes. The left is going with mainstream economic theory like using government spending to stimulate the economy, and some unusual (for democrats) ideas like targeted tax incentives that will hopefully lead to more hiring.
Reducing government spending in the face of a recession is flat out wrong and doesn’t warrant discussion unless basic economic theory has recently shifted. Government spending will help but it surely will not solve the unemployment problem that the US now faces.
The point is that far from being the disease, the high unemployment is but a symptom. The problem is far bigger. Its structural. First, if you listen to business leaders (who by the way have billions of dollars sitting on their balance sheets) you will hear the word “demand” a few dozen times. Businesses are not hiring because of high taxes, high interest rates or high seas. The problem is demand. Demand for the goods and services that these businesses are bringing to market just isn’t growing. There are three main agents that have led to this state of affairs.
The first is a problem that has been building for a few decades. Wage stagnation. While executive pay at US corporations has skyrocketed, the pay for all the lower level employees has remained at early 1990s levels when adjusted for inflation. Workers overcame this wage stagnation through debt (insert credit cards and home equity lines) but all that changed with the housing bubble. When the bills figuratively came due, cash to pay off that debt was found to be insufficient and demand for ‘everything’ fell off a cliff.
The second cause is globalization itself. As technology has continued to disrupt all manner of business models, good paying US jobs have gone offshore in pursuit of cost savings. The rapid advancement of computing power without a matching increase in cost has enabled emerging countries like China and Brazil to undercut US prices for manufactured goods and increasingly services. Conventional wisdom is that as the US loses these previously high tech jobs, the market will begin to produce even higher tech US-made goods and services. What is surprising is how hard that move up the tech food chain has proven to be. Jobs in information technology such as computer programming which were expected to be somewhat safe from outsourcing are increasingly being lost to India and China. Once lost, it is not easy find replacements for them. It will take a while to train the workforce for these new set of high skills that will be required to thrive in the changed landscape. As an example, the fastest growing internet companies looking for very specific skills that few workers currently possess. The pace of change in the technology space also happens to be so rapid that what in high demand today could be obsolete in less than five years.
The final agent is government. In the past decades, the Federal Government spent significant sums of money to spur innovation. Think the space race with Russia which led to a multitude of technological advancements including the unheralded microwave oven. Then there is the big one. The internet. The internet of course came courtesy of the Department of Defense. Not Al Gore as you might have heard. Recently, the Fed has cut back on spending to support research and development.
It is not all doom and gloom though. There are still great opportunities for the US. The US is still the most exciting place for private sector innovations, largely driven by the great universities. There is also the inevitable economic tit for tat. As the Chinas and Indias of today cash in the so called low cost hanging fruit, the pickings will get slimmer and they too will face the same outsourcing conundrum. But lest we forget, as this emerging countries advance, the world becomes a richer place. This prosperity will bring additional demand for US goods which are still highly desired.
Wednesday, September 14, 2011
Tuesday, January 18, 2011
How to be ‘Super Rich’ according to Russell Simmons
In his most recent book, Russell Simmons (Hip Hop mogul for the uninitiated) doles out practical advice on how to be rich. Because the man is worth at least a quarter billion, he has earned the right to be listened to. There is also something about Russell that is impatient and looks to get to the point and get on with it. In almost all the interviews I’ve seen him give he does not get into rambling, filler fluff. I like that. It’s the same with this book. It begins, rightfully with a warning that the book will not be about how to make a million dollars in the quickest way possible – not in those words. Instead you get very practical advice given with a heavy dose of yoga and meditation. While Russell warns there is nothing ‘new to the world’ that he reveals in the book, there are plenty of useful principles that he lives by that I found to be useful. I will discuss the few I found that I think hit home the best.
Give away your talent. Like most successful people, Russell advocates for doing what you love and believe in. Since you are hearing this for the three thousandth time, I won’t bore you with it. He adds a twist to this simple but hard to do idea. Assuming you have a ‘legal’ talent that the world also happens to value, Russell advices that give this talent away to the world. For free! Whatever talent you have just give it away for nothing in return. Don’t wait for the right record deal, right amount of compensation or any other consideration to get into your chosen field. He gives as an example himself when he was a small time party promoter in Harlem, NY. He landed the job of promoting early rapper Kurtis Blow in the 80s. At the time artists like Prince and Lionel Richie ‘owned’, if you know what that means. Now, instead of shopping Kurtis Blows rap song ‘Christmas Rappin’ from record label to record label, he used his ‘give it away’ principle. He gave away the record to all the local club and radio DJs to first create a buzz. He went a step farther by printing a phone number on the records he gave away so potential buyers could call to place orders (these were the 80s). Only the number happened to be Polygram Record’s and at the time had never even heard of Kurtis Blow, Russell Simmons or his partners. When record stores starting calling Polygram Records to place orders, they could not ignore the buzz created by this cat Kurtis Blow. The rest is history as Kurtis became the first rapper signed by a major record label. The rapper 50 Cent came up the same way by flooding the streets with ‘mixtapes’ after two records deals fell apart. It was through these mixtapes that Eminem crossed paths with 50 and subsequently Dr. Dre and the rest really is history. Like Russell says “Give it, until they can’t live without it”.
Never needy. You might already be familiar with this one but its not always obvious. People are naturally attracted by the smell of success. Nothing will chase away success faster than zeroing in on the money. Appearing needy won’t help either. Instead put your best foot forward and focus on doing the best you can and everything else will fall into place. While this might sound obvious now, put yourself in the 80s. At the time, there were no guarantees that hip hop would ever make anybody any money. Russell believes that had he not so believed in this new sound and style, he would probably never have made it. He might have maybe put out a few mediocre New Jack Swing records. (No disrespect to the form)
Sweetness. (Russell’s word not mine). Not to sound like Oprah here but Russell believes in the power of having a great attitude and enthusiasm for whatever it you do. Its fitting on MLK day that he quotes one his better known lines.
“If it falls to you to be a street sweeper, Sweep streets like Michelangelo painted pictures……….Sweep streets like Shakespeare wrote poetry. Sweep streets so well that all the hosts of Heaven and Earth will have to pause and say: Here lived a great street sweeper who swept his job well.”
If you are familiar with Steve Rattner then here is a dose of what can happen by being sweet, and enthusiastic about your job. Before Steve directed Rush Hour or X-Men: The Last Stand, a young fresh-out-of-film-school Steve had approached Russell for a music video gig. Instead, Russell offered him an unpaid internship as his personal assistant. Rather than reject the offer as ‘beneath him’, Steve tore into the job with the eagerness of a puppy. That led to Russell giving more and more jobs, and eventually Steve caught the eye of Chuck D of Public Enemy. He directed a public service announcement for Public Enemy which led to directing their music videos and on to major motion pictures. Had Steve not taken that internship who knows?
If you are an aspiring Yogi you will also find a lot to love in the book. Highly recommend the book. Most of all, Russell just cuts to the chase. The book is not full of fluff. If you do get rich as a result of this free post. Be sure to at least post a thank you comment below. That might open my own door too. Stay sweet?
Give away your talent. Like most successful people, Russell advocates for doing what you love and believe in. Since you are hearing this for the three thousandth time, I won’t bore you with it. He adds a twist to this simple but hard to do idea. Assuming you have a ‘legal’ talent that the world also happens to value, Russell advices that give this talent away to the world. For free! Whatever talent you have just give it away for nothing in return. Don’t wait for the right record deal, right amount of compensation or any other consideration to get into your chosen field. He gives as an example himself when he was a small time party promoter in Harlem, NY. He landed the job of promoting early rapper Kurtis Blow in the 80s. At the time artists like Prince and Lionel Richie ‘owned’, if you know what that means. Now, instead of shopping Kurtis Blows rap song ‘Christmas Rappin’ from record label to record label, he used his ‘give it away’ principle. He gave away the record to all the local club and radio DJs to first create a buzz. He went a step farther by printing a phone number on the records he gave away so potential buyers could call to place orders (these were the 80s). Only the number happened to be Polygram Record’s and at the time had never even heard of Kurtis Blow, Russell Simmons or his partners. When record stores starting calling Polygram Records to place orders, they could not ignore the buzz created by this cat Kurtis Blow. The rest is history as Kurtis became the first rapper signed by a major record label. The rapper 50 Cent came up the same way by flooding the streets with ‘mixtapes’ after two records deals fell apart. It was through these mixtapes that Eminem crossed paths with 50 and subsequently Dr. Dre and the rest really is history. Like Russell says “Give it, until they can’t live without it”.
Never needy. You might already be familiar with this one but its not always obvious. People are naturally attracted by the smell of success. Nothing will chase away success faster than zeroing in on the money. Appearing needy won’t help either. Instead put your best foot forward and focus on doing the best you can and everything else will fall into place. While this might sound obvious now, put yourself in the 80s. At the time, there were no guarantees that hip hop would ever make anybody any money. Russell believes that had he not so believed in this new sound and style, he would probably never have made it. He might have maybe put out a few mediocre New Jack Swing records. (No disrespect to the form)
Sweetness. (Russell’s word not mine). Not to sound like Oprah here but Russell believes in the power of having a great attitude and enthusiasm for whatever it you do. Its fitting on MLK day that he quotes one his better known lines.
“If it falls to you to be a street sweeper, Sweep streets like Michelangelo painted pictures……….Sweep streets like Shakespeare wrote poetry. Sweep streets so well that all the hosts of Heaven and Earth will have to pause and say: Here lived a great street sweeper who swept his job well.”
If you are familiar with Steve Rattner then here is a dose of what can happen by being sweet, and enthusiastic about your job. Before Steve directed Rush Hour or X-Men: The Last Stand, a young fresh-out-of-film-school Steve had approached Russell for a music video gig. Instead, Russell offered him an unpaid internship as his personal assistant. Rather than reject the offer as ‘beneath him’, Steve tore into the job with the eagerness of a puppy. That led to Russell giving more and more jobs, and eventually Steve caught the eye of Chuck D of Public Enemy. He directed a public service announcement for Public Enemy which led to directing their music videos and on to major motion pictures. Had Steve not taken that internship who knows?
If you are an aspiring Yogi you will also find a lot to love in the book. Highly recommend the book. Most of all, Russell just cuts to the chase. The book is not full of fluff. If you do get rich as a result of this free post. Be sure to at least post a thank you comment below. That might open my own door too. Stay sweet?
Wednesday, January 5, 2011
Gbagbo Won’t Go but It Is Not Too Bad.
I wish I could be proved wrong on this one but I have seen this movie before. The longer Gbagbo stays in place the more likely it is that he will not relinquish power. As it is, all the players are by nature ‘law and order’ folks that would hate see ugly scenes played out all over Abidjan. That is the transformation that happens when one attains power. Even former rebel leaders are instantly transformed into ‘law and order’ folks that prefer a more peaceful (comfortable) style of living.
There is also the ever-present issue of resources for anything involving Africa. Who will fund Ecowas to forcibly remove Gbagbo if it comes to that? The regional economic powerhouse Nigeria’s President Goodluck Jonathan will be running for election this year. I doubt he would welcome the distraction of overseeing a war while campaigning. And by the way nothing good can come of African Union involvement. Only one word comes to mind when I hear about the AU. MUGABE! Being an outsider I am of course not privy to what other powers might be pulling the strings in the shadows. In this post Wiki leaks world I have learned that conspiracy theorists are not as crazy as I once thought.
Surprisingly, there is good news to report. All is not lost. At least Africans are attempting to take control of their own fates. In the past, you would have expected France to be making the most noise while all of Ivory Coast’s neighbors lay low. This time Ecowas was out front in condemning Gbagbo and recognizing Ouattara as the legitimately elected president. Also this time, Ivory Coast’s electoral commission declared Ouattara, an opposition candidate the winner. Both of these outcomes would have been a lot less likely only a few years ago.
So what is the end game in all of this? I suspect a Kenya-style coalition government will be hashed out sooner than later. The African Union’s chosen representative Raila Odinga of Kenya is indicative of what that union prefers. Pay no attention to the tough talk. It pains me to say it but that may not be too bad. It might not be too bad not because of democracy’s sake but because of where the continent has been. While the flames are being fanned on both sides, a power-sharing deal might do well to blunt the emotional edges on both sides. That unsatisfying Kenya precedent seems to be the new trend among Africa’s diminishing breed of strongmen. In a continent that has seen way too many wars, that is not the worst thing that could happen. Perhaps it is getting harder for African dictators to rig elections. That would be a wonderful thing. Therefore, this brand of ‘boring’ and faulty politics in Africa is a welcome thing in lieu of revolutions for which the price is usually too dear and the winners too few.
There is also the ever-present issue of resources for anything involving Africa. Who will fund Ecowas to forcibly remove Gbagbo if it comes to that? The regional economic powerhouse Nigeria’s President Goodluck Jonathan will be running for election this year. I doubt he would welcome the distraction of overseeing a war while campaigning. And by the way nothing good can come of African Union involvement. Only one word comes to mind when I hear about the AU. MUGABE! Being an outsider I am of course not privy to what other powers might be pulling the strings in the shadows. In this post Wiki leaks world I have learned that conspiracy theorists are not as crazy as I once thought.
Surprisingly, there is good news to report. All is not lost. At least Africans are attempting to take control of their own fates. In the past, you would have expected France to be making the most noise while all of Ivory Coast’s neighbors lay low. This time Ecowas was out front in condemning Gbagbo and recognizing Ouattara as the legitimately elected president. Also this time, Ivory Coast’s electoral commission declared Ouattara, an opposition candidate the winner. Both of these outcomes would have been a lot less likely only a few years ago.
So what is the end game in all of this? I suspect a Kenya-style coalition government will be hashed out sooner than later. The African Union’s chosen representative Raila Odinga of Kenya is indicative of what that union prefers. Pay no attention to the tough talk. It pains me to say it but that may not be too bad. It might not be too bad not because of democracy’s sake but because of where the continent has been. While the flames are being fanned on both sides, a power-sharing deal might do well to blunt the emotional edges on both sides. That unsatisfying Kenya precedent seems to be the new trend among Africa’s diminishing breed of strongmen. In a continent that has seen way too many wars, that is not the worst thing that could happen. Perhaps it is getting harder for African dictators to rig elections. That would be a wonderful thing. Therefore, this brand of ‘boring’ and faulty politics in Africa is a welcome thing in lieu of revolutions for which the price is usually too dear and the winners too few.
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