life

Lloyd Chapman: Pentagon to Review 21 Year Old Test Program

November 17, 2010

After it was recently announced that several members of Congress requested that the Government Accountability Office (GAO) investigate the Pentagon’s Comprehensive Subcontracting Plan Test Program (CSPTP), the Department of Defense (DoD) stated that it would be conducting its own evaluation and study of the program, which should be concluded within approximately a year. To date, this 21 year old “test program” has never been evaluated by the Pentagon to determine if the program is working or meeting any of its intended goals. The original, and continually stated, purpose of the program is to increase subcontracting opportunities available to small businesses under federal contracts awarded to 14 large prime contractors. In reality, the CSPTP has dramatically reduced the amount of subcontracting opportunities available to small businesses while at the same time eradicating accountability and oversight measures. This has been achieved by abolishing specific subcontracting reports prime contractors must normally submit, regarding the volume of subcontracting dollars awarded to small businesses. The CSPTP has also been harmful by eliminating penalties for non-compliance with mandated small business subcontracting goals. The GAO may launch an investigation into the program in the near future. The American Small Business League (ASBL) believes that the GAO will find that over the last 21 years, the nation’s largest prime defense contractors have been allowed to circumvent federal law that requires a minimum of 23 percent of all federal contracting and subcontracting dollars be spent with small businesses. The ASBL believes the real purpose of the CSPTP is to allow large contractors to avoid paying liquidated damages for non-compliance with their small business subcontracting goals, as required under subpart 11.5 of the Federal Acquisition Regulation (FAR) . In order to help place the CSPTP, and the money involved into context, defense spending alone accounts for approximately 70 percent of the federal government’s entire acquisition budget, as it is officially reported, which does not include funding for “black” projects and intelligence operations. For fiscal year (FY) 2009, DoD spent over $311 billion, officially, contracting out for goods and services. Out of that $311 billion, the 14 large defense contractors that participate in the CSPTP received over $55 billion in contracts from DoD. This means that one of every six dollars spent by DoD during FY 2009 was spent with one of the participants of in the CSPTP. I find it laughable that this program has been in place for 21 years, and now the Pentagon has finally decided to evaluate this “test program,” only after it was announced that Congress has requested the GAO to conduct an independent evaluation of the program. The program is up for renewal for another 4 years in the National Defense Authorization Act for Fiscal Year 2011 currently in the Senate. If it is renewed, the program will have been in place for a quarter-century without ever being evaluated. The ASBL estimates that over the life of the CSPTP, small businesses have been cheated out of more than $1 trillion dollars in missed subcontracting opportunities as a direct result of the program. The ASBL is also preparing to file an injunction against the Pentagon to force a halt to the continuation of the program.

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Stacie Nevadomski Berdan: Living Abroad Has Its Challenges

November 16, 2010

Living in a foreign country excites the imagination, ignites the adventurous spirit, and inspires you to explore. It can also scare the pants off you. Learning to live in another country is more than simply learning to get to the office, making yourself understood in a local language, and eating different food. You have to learn how to do many new things while unlearning old that have become second nature. You must accept your new home on its terms — not yours. Living abroad successfully also involves a subtle but important change in your expectations of yourself and others. More importantly, you have to cope with the loss of identity and familiarity and get along without some of the personal perks in your life that provide encouragement, meaning and fun ! And so every now and then when I read a piece about an expat sent abroad who discovers that “it’s not what I expected” or the spouse gives an ultimatum “me or the job” as noted in this article on ” What To Do When Relocating Abroad ” in Forbes , I’m baffled. Was it the allure of Paris? Didn’t anyone tell the spouse that although there may be opportunities to ride in Paris — similar to those in New York City — but that it’s not the wide open grasslands of Texas? With the sheer cost involved, both financial and human capital, why are companies still making mistakes in choosing employees and not working with both the employee and spouse/partner to make sure it’s not a career buster? Most of the large corporations I consult with on global relocation and cross-cultural management issues have wised up to the importance of preparing professionals. So, too, are employees. Although a stint abroad can do wonders for fast-tracking your career as I wrote in my book Get Ahead By Going Abroad , it can also be a career buster if you turn down an assignment, leave early, or don’t adapt or adjust to deliver for the company. According to HR professionals I’ve worked with, a spouse’s reaction to the relocation is the number one reason such international transfers are successful or not; a spouse’s happiness is critical to your ability to do your job. I know. My husband was a “trailing spouse” — a terrible term — when we moved to Hong Kong years ago. He left a job as a researcher/writer at Washington, D.C.-based environmental think tank to follow me and my career. He had rough ride at first, trying to find a job working on environmental issues (no green movement in sight at the time) and so he reinvented himself as a travel writer. It was a great gig that took him all over Asia spending time in the Kingdom of Brunei, watching the orangutans in the forests of Borneo, and biking through most major cities in China. But he had to make it work. He did it for me and, when my three years was up, he asked that I not extend or move on to Tokyo or Kuala Lumpur. I agreed despite my desire to continue globetrotting. I grew to appreciate that because we had left our network of family and friends behind, the two of us became everything to each other, which was a bit overwhelming. Moreover, it’s usually even harder on the spouse because the employee has work, colleagues, activities — an instant culture into which to assimilate. A partner has to begin everything from scratch — that’s tough enough with an in-country relocation and even harder in another culture, possibly even a second language. But we can learn from others. In Get Ahead By Going Abroad , I interviewed more than 200 professionals who moved abroad, soliciting common advice on issues critical to a successful stint working abroad. One of these is to make sure that you and your spouse take a look-see trip if at all possible. Imagine yourself living there, how would your life fit into your new home city. What would be different, perhaps the same. And then, once you move, another critical piece of advice involves how to handle your first week on the ground because many times this first week sets the tone for the overall experience, kind of like first impressions; they’re hard to get over. To enhance a great first impression, make sure you do the following six important things the first week on the ground without going into the office, if at all possible: Nail down your personal must haves , be it a gym, a massage therapist or a particular brand of coffee, appreciate the importance of those “little things.” Make contact with at least one other international contact , who can be an on-the-ground source of information and assistance. Make sure you have at least one local contact because sometimes only local help will do. Familiarize yourself with the transportation system be it your own car, the subway or a system of commuter trains. Set up house with the clothes you have, photos and stock the fridge to begin to make it like home. Explore your new home , get a feel for the place, stroll the streets, be a tourist. But it doesn’t stop here. There’s practical advice on the first month, the first year and so on — even practical and tried-and-true tips on ensuring a successful return. Others have done it and successfully. Why not profit from their experiences to ensure the best outcome for your international assignment. It could be the difference between fast-tracking your career and fast-talking to save it.

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Melanie Benjamin: For the Love of Writing — Not Publication

November 16, 2010

The other day, a friend of a friend emailed asking for some publishing advice. I sighed, muttered something under my breath about deadlines that have to be met, but finally replied that I’d be happy to help. (It was one of those days when I was looking for any excuse not to actually write.) So I composed a lengthy reply, going through the whole drill, including my own rather uneven road to publication — all the books written before I found an agent, the books then written that didn’t sell, the books that did sell but not very well, the option dropped, more books written that didn’t sell, finally ending up where I am now. Which is, I am the first to admit, in a very good, very unbelievably lucky, place. I emphasized the hardships; I emphasized how important it is to learn the business end of publishing. I detailed what a query letter is, how to write it, how to research agents, the amount of time it usually takes — all that. Above all, I emphasized the rejection. I shared how important it is to understand that the ability to absorb rejection and somehow soldier on is a job description, really; I pointed out how much rejection I had received in my career, even after my first book was published. (And when I looked back at it all, I had to tell my husband it was a wonder I hadn’t been on medication. He then confessed there were times he thought I should have been.) I was about to hit “send” when suddenly I took another look at the original email. It was only then that I realized this advice was being sought by a mother of a 14-year-old girl who had written a book that she, her mother, just knew should be published. Well. Suddenly all my advice seemed pointless. Not only because it was unlikely this 14-year-old, no matter how talented, had really written a book that should be published. But I was reluctant to send my rather lengthy piece on the perils of publishing for one major reason. And that was because at 14, this girl should still be experiencing the pure joy of writing. Without any thought to publication. Why are we all in such a rush to be published? With NaNoWriMo currently going on, it’s a question I ask myself a lot. Just when did writing for the pure pleasure of it fade away? Does every artist sit down to paint a beautiful sunset thinking, “Oh, boy, I just can’t wait until this thing sells and is hanging on some cafeteria wall”? Somehow, I don’t think so — although perhaps I’m being naïve. Yet so many writers these days, it seems to me, write joylessly; they join writers groups, participate in NaNoWriMo, all with the goal of writing quickly . Finishing that book ASAP so it can be published. Publication is the goal, the one and only point when a writer can sit back and allow himself a sense of accomplishment. But is that necessary? Is that even right? I finally told the mother of this girl the plain truth: That at 14, she needs much more time to write, to learn, and most of all — to experience the pure pleasure of creativity. To learn to love her craft. Because it’s that love that’s going to see her through the inevitable rejection. And at 14, she doesn’t need to start experiencing that rejection yet. She needs simply to enjoy herself. As a writer, as a story teller, as a creative person. I love writing; I love writing now, when I know I have a contract and a deadline and people eager to read what I write next. I loved writing before, when I didn’t know that. But it was harder then, that’s for sure; it was difficult to separate the business part — the buying and selling and being told that there wasn’t a market for what I was writing — from the creative, pleasurable part. I did separate the two, but it wasn’t always easy. The truth is, once you send off your first query letter to an agent or publisher, you’ll never experience the pure joy of writing for yourself, ever again. I sometimes look back on the first novel I ever wrote. It was terrible, of course. But I didn’t know that then; I wrote because I was excited to do it, it was new and wonderful and I was understanding this was what I had been missing in my life. I didn’t write because someone told me to; I wrote because I wanted to — only blue skies ahead, happiness, a feeling of belonging. I didn’t know, then, the many frustrations of publishing that awaited me. And I miss that. A 14-year-old should hang on to that for as long as she can. We all should. I worry about all those NaNoWriMo writers out there; are they really, truly, loving the writing? Are they luxuriating in it, deliciously weighing word choices, reading out loud passages that delight them? Or are they simply spilling out words like joyless automatons, publication, publication, publication the only thought in their heads? I don’t know the answer, of course. All I know is that perhaps I allowed one teenager, hopefully, to hang on to the pure joy of writing without thinking of publication. At least, for a little while longer.

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Donna Flagg: When a Bad Boss Becomes a Creature Feature

November 16, 2010

I’ve long been befuddled by Jekyll and Hyde routines of people, especially at work. But my all-time worst experience was with a boss I had early in my career who made the Tasmanian devil look like a tame soul. She was pretty in a scary way, kind of like Elvira. She was also cunning, witty and mean. I, in the meantime, was confused. The fact that she didn’t realize how she siphoned the life from the people who worked for her utterly escaped me. Initially I was her favorite, a position that brought with it special attention and favors like taking time to teach me the same things that she fired my coworkers for not knowing. Her behavior was blatantly contradictory, yet she considered herself fair. I should have seen through her bias and anticipated her about-face much like Dorothy heeded the warning from the Wicked Witch of the West who screeched, ” Just you wait my pretty. ” Yup, you guessed it. She loved me one day and hated me the next. My coworkers and I were mystified that no one seemed to notice or care that a crazy woman worked for the same company we did. So when the CEO shipped us off to some high-end commune in the Catskills for a sales meeting, we thought wishfully that someone had caught on. It was late one Sunday evening when we boarded the kind of dark chartered bus that childhood field trips are made of. The next morning two consultants stood before us on either side of a flip chart; an upbeat school teacher with a strawberry blond bun secured at the nape of her neck, and an overly tanned, hairy-chested psychiatrist sporting a loud button-down shirt that, by the way, should have buttoned up. In my professional opinion it was one or two shy of necessarily concealing his nipples. We spent two days doing team building and problem solving exercises. We had ropes and mazes and bricks. Everyone seemed equally as effected and responded with the same enthusiasm I did. Even my barbarian boss seemed transformed. So naturally, we headed home expecting some sane and civilized behavior from our superiors once we were back in the trenches. But instead of going from good to better, things went from bad to worse. It took only about a week for my boss to turn inside out again in a fit of rage. What happened? What could have gone so wrong? What had been the point to take us from our jobs and spend all that money? Was it not to make us a better team, more productive and profitable as a company? Apparently not. Later, when my boss asked me to write up a report while my father was in intensive care AND I was on vacation, stressing that neither of those would be acceptable reasons to say, “No can do,” I quit. Remarkably, she insisted that she was not administering a multiple choice test and that quitting was not an option either. I quickly realized that her tyranny was slightly more complicated than a mere matter of her being bonkers. But having that experience left me with the distinct conviction that a paycheck is neither synonymous with a license to bully people, nor should a title permit someone to exhibit a total lack of alignment between his or her words and actions. That was many years ago. I often think about what I could have done differently as my mother’s words ring true in my ears. “You can’t rationalize with a crazy person.” Now, I know I did all I could — which was nothing. Find Donna on Facebook

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Alex Hibbert: What I Got From ‘The Social Network’

November 16, 2010

“The Social Network” got me thinking. I’m sure that it got most people who watched it thinking, possibly far beyond the fact that it is a well-made and well-acted film. It was one line in particular, and one that caem from a section of the film that did not involve the main characters who created Facebook. As the Winklevoss twins beg the Harvard president for sanctions against Zuckerberg, the president, Larry Summers, makes an observation of Harvard graduates as a group. I’m paraphrasing here as I don’t exactly recall the line, but it went something like this: “Harvard students believe it’s better to invent a job than to find a job.” This concept of being creative in terms of your life direction is undeniably inspiring, but I was not sure exactly what message the actor was trying to convey. On the one hand, it might have been an observation that the top U.S. university creates leaders and innovators (something admirable), but on the other hand, it might have been a criticism that the same group of talented individuals never wants to fit into an existing framework that the rest of society complies with and fits into. It must be true that the privilege of being able to do what Zuckerberg did with Facebook requires one or more of the following: wealth (as was required for Facebook to exist), intellect, creativity, boredom, ambition and the confidence that accompanies it. I am extremely fortunate to have the freedom to pursue a career that similarly does not fit into a standard career framework. I wake up each (or almost each!) day looking forward to what I’m going to be doing. Many people do not have the opportunities or the self-belief to do this. I suppose this fact is what sparked my uncertainty about the double-edge of the Harvard president’s comments in the film. How do you approach work and careers? Do you think that the approach of “invent a job, don’t find one” is what drives our society forward or a selfish privilege afforded by the few? There might be the feeling that anyone can go from humble beginnings to greatness or prominence, but in truth this is helped enormously by education and opportunity.

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Dr. Jim Taylor: Prime Business Credo: Roadmap to Success

November 10, 2010

A credo is a “system of principles and beliefs” that provides direction and impetus to your career and life. It acts to guide your attitudes, decisions, and actions in everything you think, feel, and do. You can think of a credo as a manifesto for your career and life; it espouses what you most profoundly believe. To have a credo means to go through your career and life with a defined purpose, clear focus, or identifiable direction. Because of the powerful influence that a credo has, you should develop a credo that accurately reflects the principles and beliefs that guide your professional life. To assist you in this process, I have provided below the Prime Business Credo that I have developed through my work with business leaders that can form the “superstructure” of your professional life and from which you can build the business career that you want. Values There is nothing more important in your life and career than your values. They establish priorities, guide the choices you make, and affect everything and everyone in your life. Your values act as the road map for the direction in which you take your life. I have given deliberate thought to and chosen the values that guide my life . Gaining clarity on my values ensures that I know what my values are, why I hold them, and how they direct my life. I live in accordance with my values . The ultimate governor of my behavior are my values (i.e., integrity, trust) and my ability to choose and act on positive values when faced with conflicting values (i.e., ambition, the bottom line) in my professional life. Living a value-driven life gives my life meaning, satisfaction, and joy . A professional life that is based on my deepest values will be one filled with a deep sense of purpose, fulfillment, and contentment. Perspective You can think of perspective as a lens through which you see yourself and the world in which you live and work . Your perspective impacts what you think, how you feel, and how you act toward whatever life presents to you. I take a long-term view of my career . Business success is a marathon, not a sprint. Short-term results are less important than doing what I need to do in the present to get where I want to go in the future. My career is important to me, but it’s not life or death . Seeing my work as a part of life, not life itself means I feel less stress, am more productive, gain more satisfaction, and make better decisions that will lead me toward my professional goals. I maintain balance in my life . Though I am committed to my professional success, I also understand the value of having other sources of gratification in my life, including family and friends, physical health, and spiritual and cultural activities. Self-understanding To perform at your highest level and achieve your goals, you must have a complete appreciation for everything that impacts your efforts. A careful analysis of your own capabilities and the demands of your current and future career paths will help you gain this knowledge. I know myself, strengths and weaknesses alike . My willingness to gain a deep understanding of myself will provide me with the self-knowledge necessary to grow and achieve my professional goals. I know what it takes to reach my long-term goals . I have a clear understanding of everything I need to do to attain my career objectives, including my education, knowledge, experience, skill sets, and resources. I am open to learning new things that will help me achieve my goals . The only way to become successful is explore all avenues of my work life and continue to grow and develop new skills. Priorities The priorities you establish in your life act as the foundation for the direction your career takes, the quality of your work, and the level that you attain. When you give thought to your priorities, you help to ensure that your career path is one of your own choosing. Performing my best in my work is a high priority in my life . I have chosen to make my career a central part of my life and one that takes precedence over most other avenues I might take. My lifestyle supports my goals . Because my career is important to me, my personal life buttresses my professional efforts by living a healthy lifestyle. I make decisions in my life that will help me achieve my goals . Though I value many aspects of my life, I make deliberate decisions about how I devote my time and energy that further my career goals. Responsibility Responsibility is two sides of the same coin; you can’t take responsibility for your achievements and successes unless you are also willing to take responsibility for your mistakes and failures. I have ownership of my career and my life . I have chosen the career path I am on and, as a result, am highly invested in my professional success. I take responsibility for all of my actions in my work . Only by holding myself accountable for both my successes and failures can I be assured of achieving my career goals. I take control of anything that impacts my business performance . I know what affects my professional efforts and make sure that I have the power to influence those efforts. Commitment Perhaps the single most important predictor of success in the business world is the commitment made and motivation directed toward your goals. I have an unwavering commitment to be my best . I know how difficult it is to become successful in business and I am willing to give everything I have to reach my goals. I give my best effort in all aspects of my work . Only my full and consistent effort will enable me to realize my professional goals. Every day I focus on areas in which I can improve . By directing efforts into my weaknesses, I know I can overcome them and raise my level of performance. Challenges The road to business success is a bumpy one and those who traverse that road successfully are able to, when faced with challenges, stay clear of mind and calm of body, and find solutions that enable them to continue down that roa I expect obstacles, setbacks, and down periods in the pursuit of my goals . I anticipate that I will have difficulties as I pursue business success, so these roadblocks will not surprise me and I will be better able to continue down my chosen road. Every experience I have, positive or negative, is an opportunity and a lesson . Though setbacks and failures are never enjoyable, if I view them as experiences to make me better, then I will be better equipped to overcome them. Whenever I am faced with adversity, I respond positively to it . Only by staying motivated, confident, and focused, will I be able master the many challenges I will inevitably face in pursuit of my goals. Support The road to the top of the corporate ladder is also not one that you can take alone. There are many people in both your personal and professional lives that contribute significantly to your success. I show respect and gratitude for the people who help me achieve my goals . I realize that any success that I achieve, in addition to my own efforts, is borne on the backs of others who helped me get there. I listen to and learn from my mentors, peers, and support team . I am thankful for the opportunity to gain experience and knowledge from the people who came before and those who joined me along my journey toward success. I never lose sight of the importance of my family and friends in my career and life . Whatever success I attain, I always remember those people who care about me most and were willing to make sacrifices so I could get where I wanted to go. Objectives Those who have a clear vision and specific objectives of what they want to accomplish are more likely to fulfill their goals. I endeavor to have a career and a life that is of my own design . Though luck and happenstance do play a role in career development, I strive to be captain of my life’s ship and direct it where I choose. I strive to achieve professional success and personal well-being . I believe that success without well-being is not success at all. Instead, I strive to weave success and well-being into the fabric of my life. I aim to succeed while making a meaningful contribution to the world . Personal success, no matter what level I achieve, isn’t truly meaningful unless I also make a significant contribution that leaves the world a better place. Design Your Own Credo A business credo is a personal statement that will come from your most deeply held beliefs about your career and life. I would suggest that you give yourself time to develop your credo, allowing the ideas to take root and grow until you have created a business credo that truly reflects your professional vision and objectives. Use the following to help shape your credo: What areas do you want to include in your credo (you can use those I identified above and create others that also have meaning for you)? What values, attitudes, beliefs, and actions do you want to include in your credo? Once you have developed your business credo, read it, think about it, internalize it, and live by it until it becomes the guiding force in your professional life.

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Fred Whelan and Gladys Stone: Condoleezza Rice – What a Procrastinator!

November 5, 2010

Former Secretary of State Condoleezza Rice reveals in her new book, “A Memoir of My Extraordinary, Ordinary Family and Me” that she has battled with procrastination for most of her life. She says in her book, “Procrastination remains a problem for me to this day.” The obvious question is: How can someone so successful be a procrastinator? Successful people aren’t perfect; they almost always have some part of their makeup that needs work. Some people are charismatic in front of a live audience, yet struggle with speech writing. Others are amazingly productive despite their lack of organization. What many of these people do is find ways to compensate for the areas where they are weakest. For example, CEO’s who are habitually late and who counteract this by setting their watches ahead. Procrastination is another area that plagues a lot of accomplished people, yet they are able to pull the proverbial rabbit out of a hat and complete the project every time. They do this by building in an adequate buffer to meet the deadline. Similar to “cramming” the night before a big exam, except they don’t cut it that close. There’s the “should due-date” and the “gotta due-date” and they don’t go beyond the latter. Their crunch time doesn’t ever put them in jeopardy of missing the deadline. Charles Schwab , John Chambers and Richard Branson all have dyslexia. None of them have let this hold them back evidenced by the fact that each has been a CEO of a Fortune 500 Company. Prominent attorney, David Boies , known for being a star litigator (represented the Government in Microsoft anti-trust case) also has dyslexia. Because of this, he has to commit more to memory than most lawyers because his dyslexia hinders him for glancing at note cards in the courtroom. The comedian and star of “Deal or No Deal,” Howie Mandel , has obsessive compulsive disorder and avoids at all costs shaking hands for fear of picking up germs. On his TV show he compensates for this by doing a fist bump with the contestants. David Neeleman , founder of JetBlue Airways, has Attention Deficit Hyperactivity Disorder (ADHD). Unfortunately, ADHD prevents him from being detail-oriented and completing daily tasks, “I have an easier time planning a 20-aircraft fleet than I do paying the light bill.” Neeleman looks at the glass as “half-full”, saying that with his disorder comes greater creativity and he credits the success of his airline with his ability to think outside the box. Whatever you are personally struggling with in your life and career, there are ways to overcome it by working around it. Some people make the mistake of using these issues as a crutch, “I’ve never been a good writer” or “My organizational skills are bad,” or “I have don’t have the ability to focus,” and give themselves permission to be held back. Successful people have a mindset geared towards getting the results they want despite the obstacles. We look up to them and appreciate what they have achieved without realizing what they have to overcome on a daily basis. These people can give us the motivation to deal with whatever is currently holding us back and unleash our full potential. Fred & Gladys Whelan Stone Executive Search and Coaching Authors of GOAL! Your 30 Day Career Plan for Business & Career Success

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Don Hutson: The Massive Price of ‘Negotiaphobia’

November 1, 2010

Our research and experience have convinced us that “negotiaphobes” in America have left enough money on the table to pay off our National Debt! Why is it that today so many people are reluctant to engage in negotiations? Working with business professionals on six continents has shown that this reluctance to engage in negotiations in both our professional and personal lives is due to a desire to avoid confrontation, a lack of skill in the negotiation process, and a willingness to be a victim and simply live with an (often dysfunctional) status quo. Negotiaphobia is a disease that can be treated. This treatment is simple and it involves learning the various negotiation strategies and the skills to deploy them. Our book, ” The One Minute Negotiator ,” shares an E-A-S-Y three-step process which will get you on the road to fighting back your fears as you become mentally ready to engage and succeed in negotiating for your desired outcomes. We examine this simple yet innovative process below. The E in E-A-S-Y stands for engage … asking yourself “Is this an encounter where a negotiation is possible?” Many people miss these opportunities, as the people they deal with mask them by saying things like, “Of course there is a $20 dollar set up fee.” We all see the big negotiations like tax and health care reform, but we miss the ones such as a drop fee on a rental car. These “small” ones are the exchanges we can do something about and they do impact our discretionary income, and thus our quality of life. Once there appears to be the opportunity to negotiate, the second aspect of this initial step is to quickly review the four viable negotiation strategies presented in a clear 2X2 matrix form in the book. These strategies are avoidance (reactive and low cooperation), accommodation (reactive and high cooperation), competition (proactive and low cooperation) and collaboration – sometimes called win-win (proactive and high cooperation). Each of these four strategies has its place in the various negotiations we face on a daily basis. The “A” in E-A-S-Y prompts negotiators to assess their natural tendencies to use each of the four strategies, as well as the probable tendencies of the party they are negotiating with to follow one of the paths. To assist readers in assessing their own tendencies, The One Minute Negotiator includes a 20-Question self-assessment scale in its fifth chapter. This easy and fun tool can also be downloaded for no charge at www.theoneminutenegotiator.com. We propose that the best read on what strategy someone will use in negotiating with you is how they have negotiated with you in the past. This is the other dimension of negotiaphobia; lack of adaptability. Most people are one-trick ponies as they use the same approach every time. For people we have not negotiated with in the past one of the best reads on behavior is their interaction style. Drivers tend to come out in a very competitive stance, but do not overlook the possibility of winning them over to a collaborative approach. Expressives embrace the idea of win-win collaboration, but they rarely have the attention span to do so. “Strategize” is the third-step in the E-A-S-Y treatment process. Based on the significance of the situation, one’s own tendencies, and the expected strategy to be deployed by the other side or sides, a person now carefully selects their opening and fall-back strategies. The fall-back strategy is a lot like having an umbrella with you. If you have an umbrella in your brief case or your golf bag it rarely ever rains, but leave it in the trunk of your car and prepare to get drenched. On the issue of significance, you should not just look at this one encounter, but look for long-term potential. Some deals, like buying a car, are usually one-offs that push you toward competition. There are other instances where a small opportunity today, if handled collaboratively, could lead to a much larger and recurring deal into the future. Engage, Assess, and Strategize combine to form the “Y” in our acronym… “Your one minute drill.” This is where on a regular basis you automatically cycle through the first three steps as you face any negotiation. This one-minute reflection should become an automatic and very powerful tool to make you a more effective negotiator. We recognize that many negotiations take longer than a minute; some hours, months and even decades. The EASY process, however, will be your guide to get your head in the game for each negotiation encounter. Our personal and coaching experiences clearly show that most negotiations are won or lost before the first words of communication between parties even take place. We know that if you follow the E-A-S-Y process you will have more success and less stress in all areas of your life!

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Beth Weissenberger: Owning Your Negative Traits

October 30, 2010

What is wrong with corporate culture today? There’s a lot of niceness and fakeness going on, and people are scared to death to say anything. If you walk into any company and look around, everyone wants to focus on their strengths, not their weaknesses, and this can be very limiting for a team and a company as a whole. I have never been to an office small or large where the culture in the office isn’t deeply affected by personalities. One of the first things we do at the Handel Group when we begin coaching an executive is to help dismantle this aspect of corporate culture and work on discovering what the individual’s negative traits are. We look at personality, habits, and behaviors and determine what doesn’t work in the corporate environment and diminishes his or her ability to lead and get the best out of employees. (These same traits are very often similar to what doesn’t work in their personal lives, but here we will stick to business — mostly.) A few examples of negative traits may be micromanaging employees who don’t need it; not trusting people; being harsh, impatient, not taking the time to acknowledge and appreciate people; being late to meetings. When working with a company, I love to get the most senior person to own their own crap first — it can shift the entire energy in the office and produce positive results both in company morale and in profitability. We continually see when a boss acknowledges that it’s OK to have bad traits and tell the truth about them, it profoundly alters the culture in the company for the better. How to Acknowledge Negative Traits to Be a Better Leader Before you start getting frustrated or feeling bad about yourself, remember that everyone has negative traits, even the most successful people. But you can’t fix what you don’t know — or acknowledge — to be a problem. You’ll see many benefits, both personal and professional, to doing this kind of work. Five Steps to Owning Your Bad Traits and Taking Them Down 1) Find Out Your Negative Traits Reach out to people you both trust and feel comfortable with, and explain to them that you genuinely want to hear about your less-than-positive traits because you are sincere about changing your behavior. These could be siblings, friends, colleagues, even your kids — anyone who you know will tell you the truth. Another way to do this is to make a list of situations that didn’t work out the way you wanted or that made you unhappy, and figure out your role in it. Did your lack of trust sour a work relationship? Have you had to apologize to employees because of your bad temper? The third way — and something we do with clients — is to ask you to list all your parents’ traits, positive and negative. Before you roll your eyes and decide that this isn’t for you, let me make it clear that we aren’t getting into therapy here (though it may end up being a therapeutic process), but we believe that understanding all the people in your life, all your life’s big events, directly opens a window to understanding the themes in your life. Your personality is made up of everything you ever experienced — everything you ever heard, witnessed, learned, mimicked, etc. To understand your personality, you have to know what you are reacting to, believing in, and reliving. The mission is to uncover unresolved themes — and resolve them. Here’s how it might work: You look back and realize that your mother was a control freak, and how that plays out for you at work is that you micromanage people. Maybe your father withheld praise, and you never think to congratulate employees on small victories. 2) Write Up Your Version of the Trait Once you’ve identified all your bad traits, choose one and write up your version of it. Don’t be easy on yourself. Tell the truth, and be blunt. How does it look to others when you’re doing it? Own the trait. It’s how you will ultimately take it down and change. 3) How Does the Trait Affect You and the People Around You? Look at how the trait affects you and the people in your life — watch and see how it affects others. How do you feel after doing it? Are you left feeling proud of yourself? Does it upset your spouse or your children? It’s important to understand the impact that the bad trait has on you and your life. 4) Watch the Trait and Keep a Log of It Spend a week and keep a log on your phone of whenever you do the trait. How did you do it? Document every place you see it. Don’t try and change it, just become present to it. 5) Get the Trait on a Leash A bad trait doesn’t disappear right away — it’s a bad habit. It’s probably been in your lineage for generations. You need to get it “on a leash” to evolve it and change it forever. Changing a bad trait is easiest when you use a system of consequences. System of Consequences There are a few methods we use at the Handel Group, and one of the simplest but most effective is the use of promises and consequences. This starts the process of making you aware of your trait. Having the people in your life participate helps you identify and modify the behavior that’s not working, and also lets the people who are most affected know you are sincere about changing and are inviting their help. For instance, my big thing was that I could get really mean with people — I could be sarcastic and say really debilitating things to them. I was committed to changing that trait. I promised that if I was mean to anyone, I had 15 minutes to realize it and then go back to the person and apologize. If I didn’t catch myself or if someone else caught me, and if it took me longer than 15 minutes to figure it out or if I didn’t want to apologize, I paid the consequence, which was throwing $10 on the street. (Yes, I literally threw money on the street. It made me nuts to do that, but the whole point of the consequence is that it has to be incredibly annoying. Giving money to a good cause isn’t annoying!) After two months of catching myself and apologizing, and $100 to the street in increments of 10, I started to notice that I didn’t get mean anymore. I started to let people know in a respectful way that something they did just didn’t work for me, and we resolved it. At first, most people don’t want to acknowledge their negative traits, but by the time the process of discovery and change is complete, an amazing feeling of freedom enters the workplace. The entire environment shifts, allowing for creativity, productivity, and effective teamwork. So I dare you, tell on yourself to your team. Tell them that you know you can be harsh, or that you are late to meetings, that you can get impatient and bite people’s heads off, or whatever your trait is — then tell them that you are taking on the task of ending these traits. You can even ask your team whether there are any other traits that they would like you to take on this year. Then set up your consequences, let them in on the game, and have fun with it. You’ll be amazed at what happens.

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Phil Trupp: Seven Tips for Investors to Avoid Scams

October 27, 2010

I have been inundated by questions from investors who read my column after viewing the gut-wrenching movie, Inside Job . Their main concern: avoiding scams. The Dow has gained some 6,000 points since the bottom in 2008 — up 7.1 percent this year — encouraging a more positive mood. But many investors remain on the sidelines, shaken, rattled and rolled by the multi-trillion dollar plunge two years ago. My best selling book, Ruthless: How Enraged Investors Reclaimed Their Investments and Beat Wall Street , gives investors insight to one of the biggest money market scams in history. Our team of “economic commandos” reclaimed $200 billion and are clawing back $136 billion still frozen by banks and brokerages such as Oppenheimer & Company, Raymond James, TD Ameritrade, Pimco, Blackrock, and Charles Schwab, among others. These weasels claim they, not their clients, are victims of a money fund sold as completely safe, liquid, better than Treasury bonds — the next best thing to being in heaven. Yet the fund turned out to be one of the most deceptive ploys ever invented by Wall Street. It was — and remains — a financial wrecking ball that continues to decimate lives, charities and churches, municipal projects; it has savaged the jobs market and forced the shuttering of hospital wings, museums, and a host of other cultural and social entities. Not long ago, I received a phone call from a man who spent his life building a business. He has been reduced to living in a tent! Count one for the scammers. So to all investors who are righteously furious and gun shy, I offer the following tips on how to avoid being conned by your broker: 1. Your broker calls to sell a hot new financial product: Don’t jump in with an enthusiastic, “Okay! Count me in!” Do investigate. Go online. Use “Yahoo Finance” or other reputable sites to check out the product. Get back to your broker with hard questions. Test the broker’s actual knowledge of the product. Follow this “hot new item” online for at least a week before making a decision. One of the biggest mistakes investors make is to trust but not verify. When it comes to financial services and Wall Street, trust no one. 2. You are told in advance about a new company coming into the market. These are usually “Initial Public Offerings,” (IPO). Your broker invites you to buy in ahead of the offering, the incentive being you don’t have to pay a commission. Don’t think you’re saving big bucks avoiding a commission. This is a typical ploy to “make a market” in the IPO. Your broker has already made money by running the offering. IPO prices often drop within 24-48 hours after they’ve hit the market. Do check the stock after it’s up and running. Watch price movements for at least five days. Remember: No one does you a “favor” by selling you stock. The broker makes his numbers and you walk away with the risk. 3. You get a hot tip from a friend about the next “Big Thing.” Don’t buy it. If your friend knows about a new stock, most of the profit has already been pocketed by insiders. Do exercise skepticism. That hot new item may be a total scam or part of a bubble. Watch price fluctuations. Caution is your friend. If the product appears for real, buy little bites at a time. Incremental buying is a way to test profit and limit downside. 4. Your broker calls pushing a complex “structured” product. Don’t fall for the hype. Nine times out of 10 that’s exactly what you’re hearing. Do remember: If it’s “structured” it’s a derivative — junk! 5. Your broker has “special knowledge” about a product and you’re being let in on it. Don’t bite. Selling insider knowledge is against the law. Do call the bluff and consider switching brokers. 6. The market is on a tear and you’re feeling bullet-proof. Don’t let greed overrule common sense. You are never bullet-proof. Do ask yourself: “How much do I stand to lose?” This is question number one. Your quest for profit is an aphrodisiac. Your chances of losing are highest at this point of passionate certainty. 7. A broker promises consistent high returns. “This baby never loses money,” is the typical cliché. Don’t fall for it. Do remember Bernie Madoff. He never lost a dime — until he lost it all! Keep in mind an old Wall Street saying: “Bulls make money, bears make money — pigs get slaughtered!”

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Robert Naiman: Remembering Nestor Kirchner, South American Hero Who Defied the IMF

October 27, 2010

The past president of Argentina, Nestor Kirchner, has died unexpectedly of a heart attack. U.S. media aren’t likely to give us much coverage indicating what Kirchner meant to many people in South America. This is a pretty safe bet, in part because to understand what Kirchner meant, you have to understand Kirchner’s role in a story that the U.S. media have never told properly: how, in the last 15 years, South America has been breaking free of Washington-prescribed economic and security policies. Since the US media never told this story, they’d be hard put to explain Kirchner’s role in it. The Christian Science Monitor runs an AP story that gives a little taste of what lies underneath, ” Nestor Kirchner remembered as Latin American statesman “: The leader of the human rights group Grandmothers of the Plaza de Mayo, Estela de Carlotto, said Kirchner “gave his life for his country.” “Our country needed this man so much. He was indispensable,” she told radio Continental. Kirchner served as president from 2003-2007, bringing Argentina out of severe economic crisis and encouraging judicial changes that set in motion dozens of human rights trials involving hundreds of dictatorship-era figures who had previously benefited from an amnesty. As secretary general of the Union of South American Republics, or Unasur, Kirchner mediated one of the many recent disputes between Venezuela and Colombia. Both countries’ leaders mourned his loss on Wednesday. It’s true, as AP says, that Kirchner brought Argentina out of severe economic crisis, and that would be enough for many Argentines to remember him fondly. But part of how he did that was defying Washington and the International Monetary Fund, putting the need to revive Argentina’s domestic economy ahead of the demands of foreign creditors. And that’s why you shouldn’t be surprised if the U.S. financial press, for example, has a slightly different take on things. Oliver Stone’s recent documentary ” South of the Border ,” in which he interviews several South American leaders, has an extended interview with Kirchner, during which he relates that former President Bush told him that the best way to grow the U.S. economy was by waging war: South of the Border has just been released on DVD this week. If you want to see former President Kirchner as many South Americans see him, and as you are unlikely to see him in the U.S. media, you can get the DVD here .

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Former CVS Caremark Executive William Spalding Rejoins King & Spalding

October 26, 2010

ATLANTA, GA–(Marketwire – October 26, 2010) –  King & Spalding announced today that William R. Spalding, a former executive vice president of CVS Caremark, has rejoined the firm as a partner in the corporate practice. He will focus primarily on developing new clients and expanding existing business in the healthcare services, branded pharmaceuticals and healthcare information technology sectors, and providing advice in governance, internal investigations and disclosure matters to corporate boards of directors and audit committees. Spalding also will be active in King & Spalding’s industry initiatives on healthcare and the life sciences (pharmaceuticals, biotechnology and medical devices). 

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Inder Sidhu: Clicks and Mortar Integration: Where Retail Excellence and Relevance Come Together

October 25, 2010

No time to shop for tonight’s dinner? It’s not a problem if you live in the Mid-Atlantic or Southeastern part of the United States. Now you can order groceries online at harrristeeter.com and pick them up curbside at dozens of Harris Teeter stores. With the time you save there, you could swing by Nordstrom and indulge yourself in the shoe department. Can’t find your size? No worries. Just go online to Nordstrom.com and search more than 100 company store warehouses with a single click. Isn’t this what shopping convenience is supposed to be? Harris Teeter and Nordstrom think so. And so do a growing number of other companies that are working to make your life easier by integrating their online and on-site shopping experiences. They are investing in new software systems and changing internal policies to reduce any barriers between their “clicks” operations and “mortar” stores. This is something many have tried before but few have mastered until recently. Even at some of the nation’s most successful retailers, a truly integrated experience is still a work in progress. At Best Buy, for example, items purchased online can be returned for store credit. Exchanges, however, are not yet possible. Why the hitch? Blame it on the current gap between business excellence and customer relevance in retail. Like many companies, retailers understand that in order to succeed, they have to produce both year-in and year-out. But they are challenged by ongoing technology changes, economic pressures and evolving customer demands. In recent years, retailers have made great strides improving their business excellence by optimizing their supply chains and rationalizing their store counts, among other things. While these efforts have steadied retailers during the recession, they haven’t yielded much in the way of improved customer relevance. But integrating online and on-site stores is. Unlike other initiatives, this work directly benefits customers, whose demands are constantly evolving. Today, consumers want to shop both online and in person when it suits their needs. Regardless of where they buy things, they want to return them wherever it is most convenient. The only way retailers can provide this type of convenience is by integrating their online and on-site operations. This often requires a software overhaul and an organizational realignment. Any retailer that fails to get this is apt to fall behind. But those who make the effort can benefit handsomely. Take Nordstrom again. In August, Nordstrom Direct President Jamie Nordstrom told The New York Times that integrating the company’s online and on-site warehouses translated into “some pretty meaningful results.” In the 11 months after the integration was complete, same-stores sales jumped 8 percent. Other factors contributed to the increase, but Nordstrom singles out the inventory change as having a significant impact. “We can sell more without having to buy more inventory,” he said. “That plays through to margins and, ultimately, earnings.” Other retailers are making changes with the hopes of achieving similar gains. At Kohl’s stores, for example, shoppers who can’t find items in their size or preferred color can now browse an in-store kiosk and take a peek at what’s inside the warehouse. Instead of leaving disappointed, more and more are walking out satisfied. In a bid to increase customer relevancy, many companies are now taking clicks and mortar integration a step further. Gap, J. Crew and other retailers now rely on Facebook, Twitter and other forms of social media to communicate news about store sales and to distribute retail discounts. Then there’s cosmetics retailer Sephora, the division of luxury products giant LVMH. In September, the company released an iPhone app that shoppers can download and use to read product information and consumer reviews while shopping inside its stores. As of late October, nearly half the people who reviewed the app on the Apple iTunes store gave it a five-star rating. “I love how you can scan any product or QR code to see reviews and videos,” said one customer. “Today’s obsession is fresh and fun. Way to go Sephora!” Becoming your customer’s obsession? It’s hard to get more relevant than that. Or more excellent. By increasing both among its customers, Sephora has out-performed its rivals throughout 2010. And so have other retailers who have committed to doing both. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

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Arthur Nadel, Florida’s ‘Mini-Madoff,’ Gets Big Sentence For $168 Million Scam

October 22, 2010

src=”http://i.huffpost.com/gen/211216/REUTERS-LOGO.jpg”> NEW YORK (Reuters, By Grant McCool) – Arthur Nadel, a fund manager whose $168 million fraud was one of several that collapsed in the declining economy and left hundreds of investors without their money, was sentenced to 14 years in prison on Thursday. Nadel, 77, dubbed “mini-Madoff” in his home state of Florida after epic swindler Bernard Madoff, was excoriated as “evil” and “a loser” by one of his victims during the sentencing proceeding in U.S. District Court in New York. “Arthur, you are an evil person,” said businessman Michael Sullivan of Barrington Hills, Illinois. “I assume you are a narcissistic psychopath” and “just a weak child seething with anger and loathing” who had “little success in life until you founded your fraudulent funds.” Judge John Koeltl rejected as too long U.S. prosecutors’ requested sentence of between 19-1/2 years and 24 years, citing Nadel’s age and a heart ailment. But Koeltl said Nadel orchestrated a “massive fraud” on investors, “many elderly and who lost the fruits of their lives,” adding that “it caused financial difficulties to the victims and those close to them.” The Sarasota-based fund manager obtained more than $300 million from investors across the United States in managing six different funds, stealing about $168 million between January 1999 and January 2009. Nadel pleaded guilty in February to running a Ponzi scheme, one in which early investors are paid with money from new clients. Looking thin and frail with one of his sons present in the back of the court, Nadel stood in prison garb and told the judge that he had read letters submitted to Koeltl by many of his 390 victims. “Their anger and outrage became mine at myself,” Nadel said. “I blame only myself for my acts.” His court-appointed lawyer had asked the judge to imprison Nadel for just five years, given his life expectancy, so that he would not die in prison. The scheme crashed with the declining economy in 2008 when more investors demanded redemptions, similar to the fate of New York financier Madoff’s unprecedented multibillion-dollar investment fraud. Nadel disappeared for two weeks after his fraud was revealed in January 2009. He has been jailed since then and denied bail. Madoff, 72, who also had many investors in Florida, was arrested in December 2008 and is serving a 150-year prison term after pleading guilty in March of 2009. The case is USA v Nadel, U.S. District Court for the Southern District of New York, No. 09-433. (Reporting by Grant McCool; Editing by Tim Dobbyn, Gary Hill) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Unemployed Entrepreneurs: In The Absence of Jobs, Some People Create Their Own

October 21, 2010

When Harold Brown, 49, was laid off from his job as an interior design drafter in December 2008, he knew that the prospects for reemployment were grim. The economy in his hometown of Las Vegas, Nevada, was one of the worst in the country and he worked in an industry that was entirely dependent on new building projects staying afloat. Instead of sitting around waiting to hear back from employers who would probably never call, Brown decided in early 2009 that he was going to have to think outside the box. “I was sitting in my kitchen one day thinking, there’s gotta be a better way in life than to work for somebody else,” Brown told HuffPost. “And then I just started looking at my clock, thinking, what if I changed the numbers and did it this way or that way? I got my sketchpad out and started drawing stuff and writing notes down, and my business idea developed from there.” A few months later, with a couple thousand dollars Brown had saved up over his years of working, he launched Rev’lution, a line of innovative clocks that he hopes will show people an alternative way to look at time. So far, Brown says he’s only sold about five clocks for up to $59.98 apiece, but he’s confident that his business will eventually take off. “The name, Rev’lution, it signifies the change in the clock and the time, of course, but also also a change that’s hopefully gonna come in my life,” said Brown. “My unemployment benefits run out next month, so I’m hoping I can make a living off of this. You know, I’m hoping I’ve created a new job for myself.” In this dismal U.S. job market, many of the longterm unemployed who have lost hope in the possibility of finding a new job are learning to be creative and proactive with their free time in order to eke out a living and keep their resumés fresh for potential employers. When Nicole Porter, 30, lost her job and her relationship in the same week, she decided it was time to channel her frustrations into something productive. “I was unemployed for about ten days, and I thought, there must be some reason why I keep getting hired for projects that are essentially free,” said Porter, who previously worked as a production manager in Los Angeles. “Why not work for me instead?” Porter said she moved to New York, took a part-time job folding clothes at a retail store, and began to compile some of her favorite comfort food recipes into a book she called ” The Breakup Cookbook .” Now, every Saturday and Sunday, she sits out in Union Square selling copies of her book and handing out promotional recipes at the local Whole Foods. She has already sold about 500 books this month. “I asked myself a question: are you more prepared to be embarrassed or hungry?” she said. “Embarrassed was it. The break-up cookbook now makes up about 50% of my income, and I’m getting closer to what I was making before the recession.” Even young, fresh-out-of college people are having to tap into their entrepreneurial skills to make themselves competitive in today’s job market. Jason Boeckman, 25, had zero job prospects after graduating from college in December 2008 with a degree in public relations and he has struggled for the past two years to find an entry-level opportunity related in any way to his degree. Fearing a gaping hole in his resumé, he decided to put himself to work. “Since I couldn’t find a job, I decided that I was going to have to invent one,” he told HuffPost. “To keep my resumé fresh and make new contacts, I have spent the last year and a half volunteering my communications services to a couple non-profit organizations in my hometown of Cincinnati. I wanted to build a portfolio of writing samples so I could continue applying for jobs with fresh material — it was the most advantageous approach I could take to a bad situation.” The portfolio Boeckman created during his self-made internship recently helped him to land a temporary paid copywriting position in Naples, Florida. “The position didn’t come with a retirement plan or health insurance, and it’s very temporary, but I guess nobody has a hold on any job right now,” he said. “I live as frugally as possible and save the majority of my earnings should I find myself in a pinch without a job again.” Boeckman may be young, but he feels the stress of the recession as acutely as anyone, despite having done everything right. “It’s extremely distressing to think that the ability to enjoy gainful employment may be a luxury for only the most lucky or well-connected among us,” he said. “Too many people will be hanging around wondering what they did wrong. But the majority of them, like me, probably did everything they were advised to do to become successful and functional members of adult society. Could it be that it just doesn’t work out for everyone?” Has your life been significantly affected by the recession? Please send stories and comments to LBassett@huffingtonpost.com .

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Robert Teitelman: Transactions: Oct. 18, 2010

October 18, 2010

Is finance too mighty? Is finance a leech upon the real economy or a Keynesian magneto? Did finance balloon after the ’70s for good reasons, like the need to drive an advanced, post-industrial, capital-intensive economy? Or was it all about greed? Were there other, practical options beside steroidal finance to generate that growth? Three years after the crisis began with a burp in the subprime subbasement, these questions elicit scant consensus. Instead, sides have formed, trenches dug, mortar rounds flung at each other, followed by name-calling. Of course, Wall Street is excessively large. Of course, Fat-Cat City sucked the life from Main Street. Look how we prospered in the ’50s and ’60s without securitization, derivatives, firms the size of planets. Contemplate the speculatin’ rich! Bailout babies! Then, of course, chest-high in mud, huddle the we-can’t-break-up-the-banks-and-shrink-Wall-Street rump. They fire back: Only a large, complex, innovative financial sector can provide the liquidity to drive a mature economy in a take-no-prisoners world. The ’80s and ’90s were swell. Ponder the rise of China and India. Got any better ideas to generate growth? The big vs. small finance debate feeds other matters, like who’s to blame. Alas, think deeply about it and you end up with a mash-up of free will and determinism. How much human agency went into designing the system that blew up so spectacularly? What were the articles of faith in the ’70s and ’80s? (What, in fact, does “wrong” mean — over short term or long?) Policymakers clearly believed big was better than small, deep markets better than thin, free better than constrained, complexity better than simplicity. Were they wrong? Regulatory decisions to liberalize markets were justified by competitiveness, efficiency, productivity. Heavily regulated commercial banks struggled in an increasingly market-dominated world, so the Federal Reserve freed them, loophole by loophole, to compete. Conventional wisdom saw size as a necessity. And so barriers fell, creating a purportedly more efficient banking system (and many believed right up to 2008, a safer one). Did many profit from those decisions? Did the structure of finance grow simpler as institutions became more complex? Did decisions spawn unintended consequences and trigger further lockstep change? Say you were in charge in 1975. What would you have done differently? It’s a tribute to the relative paucity of alternative economic ideas, particularly in America, that it’s hard to imagine a different outcome. The ’70s were a grim decade, arguably as bleak as today. Market liberalization was a path to reviving prosperity; the competitiveness debate was about combating decline. Meanwhile, down in the basement, something was happening, and it wasn’t just rising oil prices and Islamic agitators. Industrial profits were shrinking. As trade barriers fell, lower-cost nations, beginning with Japan, proved more efficient at producing manufactured goods; others, in waves, followed. Should we have turned inward? Could we have preserved the postwar boom in amber, like ’50s-era Chevys in Havana? The Cold War still rumbled. The economy was being rewired with digital technology. Services (like finance) were booming. Women went to work — by choice and necessity. Job mobility soared, corporate loyalty fell. Companies, suddenly interested in shareholders, dumped retirement planning onto workers. Credit fueled consumer spending. Could anyone be elected in America who promised, in the slogan of that era, “limits to growth?” In the early ’90s, Paul Krugman still despaired of American debility, rooted in lousy productivity. Mistakes were subsequently made, regulatory capture occurred and self-interest deepened. But we rose from the slough of ’70s despond. True, by the ’90s complexity fueled greater complexity; bureaucracy spawned more bureaucracy; ideas went from fresh to dogmatic to imprisoning. The efficient-market hypothesis was once a fertile idea, only to morph into policy, then ideology. Necessity ruled. The gospel of consumption, competitiveness and opportunity was, and is, powerful. Growth was a winning issue for Ronald Reagan and Bill Clinton. In the late ’80s, as fears over Japan raged, Larry Summers proposed a Tobin tax to reduce financial transactions — an idea that went nowhere and one he dropped. That was the last time a Tobin tax got any play (it wasn’t much) until U.K. financial regulator Adair Turner revived it last year. In 2007, even a liberal critic such as Robert Reich could write admiringly in “Supercapitalism” about our economic machine; he worried that it was so successful at feeding consumer desires that democracy was threatened. Inequality was troublesome, but who could foresee breakdown? All this is not to argue for passivity in the face of perceived necessity. It is an attempt to understand how our wise men proved so fallible and to wonder what ideas we’re becoming enslaved to today. See the complete archives of the Editor’s Note Robert Teitelman is Editor In Chief of The Deal

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Arianna Huffington: Can-Do Entrepreneurs Move Beyond Our Can’t-Do Government

October 12, 2010

The latest jobs report came out on Friday. Overall, another 95,000 jobs were lost in September. Maybe they should start calling it the no-jobs report. Ezra Klein crunches the numbers to explain why the addition of 64,000 private sector jobs is pitifully inadequate: That’s about 35,000 less than the 100,000 or so jobs needed to keep up with population growth. It’s about 180,000 less than the number of jobs needed to get back to 5 percent unemployment in the next 10 years. It’s about 257,000 less than the 320,000 jobs needed to get back to 5 percent unemployment in five years. In other words, the economy is not bouncing back any time soon. Even worse, it’s clear that Washington is not up to the task of creating the conditions for the job growth the country so desperately needs. And as we find ourselves in the silliest stretch of the electoral silly season, it doesn’t inspire confidence that the government that emerges on November 2nd will do any better. A deep-seated cynicism is not an unreasonable response. But I’m pleased to report that hundreds of thousands of Americans across the country are choosing to react by taking action. As a result, a parallel economy is being created by people who, finding there are no jobs, have decided to create their own. Of course, this burgeoning parallel economy doesn’t mean the government is off the hook. But while millions of Americans are waiting for the government to do the right thing in terms of bold infrastructure spending, a payroll tax holiday, etc, etc, many have decided to stop waiting. Through the creative use of technology, social media, and a focus on community, this new wave of small businesses is making its mark in a true convergence of left and right. At the moment, our government may be can’t-do, but more and more of our citizens are solidly can-do — and irrepressibly American. To turn a spotlight on this nascent movement and encourage its continued growth, HuffPost is launching Small Business America , a new blog sponsored by FedEx where entrepreneurs can exchange ideas, get advice, and keep up with the latest small business news. Small Business America’s contributors will run the gamut from CEOs to mom-and-pop business owners to policy-makers, business writers, professors, and social media experts. Some of those we’ll be featuring in our first week include: Aaron Patzer, founder of the online personal finance site Mint . William Aulet, Managing Director of the MIT Entrepreneurship Center. Karen Mills, Administrator of the Small Business Administration. Tim Westergren, Founder of the online radio site Pandora . Christopher Hytry Derrington, whose company helps firms outsource their work to rural America instead of overseas. Small Business America will also feature the first-person accounts of people who have already jumped in and started their own business — as well as those thinking of taking the leap. One of those forced by circumstances into creating her own business is Brenda Carter, whose story is featured in Third World America. A grandmother living in Marietta, Georgia, Carter had worked as a manager of information systems at the same company for thirteen years. Then, in 2007, she was suddenly laid off. “Imagine getting up every day for 13 years and suddenly that part of your life just ceased,” she wrote. “I cried and cried and cried. I just could not believe it.” She didn’t know what she was going to do, but then had an idea. Her mother, to help pay the bills as a single mother in New Orleans, had sold pralines door-to-door. “People would knock on our doors at all times of night asking to purchase these pralines,” she said . “So as I was sitting at home I thought ‘Hey I can do this too! This is something I can do and am comfortable doing.’” And now she’s the proud operator of a growing praline operation — except instead of selling door-to-door, she’s doing it computer-to-computer. Her online store can be found here . “Times are changing and so must we,” Carter says. “We need to be supporters of ourselves, otherwise we will not survive.” Americans have a lot of passion and ingenuity, and there is a clear market in helping bring them to market. Enter Etsy.com and Cafe Press , which have now grown large enough to have a multiplier effect rippling across the country. Etsy was founded in 2005 by Robert Kalin. Then 25, he was an aspiring furniture designer feeling frustrated by his attempts to sell his work online. So he created a streamlined platform for handmade goods of all kinds, and launched it from his apartment. The site’s mission? “To enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice.” Which is exactly what Etsy.com is doing. And along with creating jobs, this new economy is creating connections, and caring, and community. As Kalin said in a 2009 interview : One of the most important things anyone can do right now is create jobs. What’s important is to empower people to make a living, and I support renting and running a 9,000-square-foot workspace in Red Hook, Brooklyn, that provides other small businesses with affordable studio space. And we have big community dinners there once a week for networking and sharing our ideas. Etsy’s effect is being felt far beyond Brooklyn. Colleen Fields, 54, lives in a remote town in the mountains of North Carolina. Two years ago, she was laid off from her job as a newspaper subscriptions manager. “I must have sent out a thousand or more resumés and applications,” she told The Huffington Post . “I applied for a job at a convenience store, and they said they had over 200 applicants. It’s just crazy. There are no jobs around this area.” A friend suggested she look into Etsy. Not exactly computer literate, she nevertheless gave it a try. In December 2009 she opened her online store, Gemstones and Wire , selling necklaces, earrings and handmade clay vases. She wrote about how some women pay all their family bills with small businesses started through Etsy. “I’m just not one of them yet. I would love to be one of them,” she added. Several other successful sites have followed in Etsy’s footsteps. Among them is Bonanza , which, with its “friendliest social community online,” aims to put the human element back into e-commerce, “making people relevant again.” Then there is ArtFire , which started two years ago in Tucson, Arizona. It provides a platform for “handmade goods, fine art, vintage, designed items, supplies and media,” and aims to “celebrate the unique individuality of artists and crafters around the globe.” Cafe Press was started in 1999. Based in San Mateo, California, the company provides on-demand printing for mugs, t-shirts and products designed by users, “uniting and rewarding self-expression.” It now gets 11 million unique visits a month and, with its 6.5 million users, adds around 2,000 new, independent shops and 45,000 new products every day. Another great example of making a business out of helping people make a business is Recession Wire . Begun in February 2009 by Sara Clemence and Lynn Parramore, who were laid off when Portfolio magazine folded, and partner Laura Rich, the site aims to “chronicle the ‘upside of the downturn’ through personal stories, helpful advice and reportage on the changes underway in these hard times.” In its small business section , the site features articles like: “How to Bootstrap Your New Business Wisely,” “Don’t Close Your Business, Change It,” and “A Cool, Free Way to Figure Out a Business Idea’s Potential.” At Inc.com , the website of Inc. Magazine , the editors aim to provide “advice, tools, and services, to help business owners and CEOs start, run, and grow their businesses more successfully.” Its start-up section includes advice on writing a business plan, running a home-based business, naming a business, how to incorporate, and financing. StartupNation bills itself as a “free service founded by entrepreneurs for entrepreneurs.” Headed by Jeff and Rich Sloan, two experienced entrepreneurs, who started the site to share their “years of in-the-trenches experience,” the site features blogs, forums, advice, and networking tools. Micro-financing, another entrepreneurship model greatly enhanced by the web, has been around for awhile. But the founders of InVenture Fund wanted to take the model to the next step. It was launched in October 2009 because, as the site says, “traditional microfinance models weren’t doing enough to lift communities out of poverty.” The problem was that the 75 million or so borrowers around the world were locked into loans they had to repay, sometimes at interest rates of 30 percent. InVenture finds microloan recipients who have good track records and gives them the financing to expand, with no fixed repayment schedule. “Give entrepreneurs an opportunity for real financial and social growth,” the site says , “and they’ll lift not just themselves but their communities out of poverty.” A portion of the site’s profits is then invested in responsible community programs, like clean water and education. Indeed, one of the hallmarks of this entrepreneurial movement is community — including an emphasis on local food, local agriculture, and sustainable business practices. One of the ironies of this new wave of small businesses is how the global reach of the web has been so pivotal in connecting people to their own communities. Judy Wicks, the owner of the famed White Dog Cafe in Philadelphia, founded the Business Alliance for Local Living Economies (BALLE), which now has 80 local chapters in the U.S. and Canada. To spread the local food gospel of the White Dog, Wicks also founded Fair Food , which connects local family farms with city dwellers. In Lexington, Kentucky, Fresh Stop is an attempt to bring the benefits of community-supported agriculture to those who couldn’t normally afford it. Forming partnerships with churches, Fresh Stop asks those who can afford it to pay a bit more for what they buy, which subsidizes those for whom the fresh — and healthy — food would otherwise be out of reach. Whether you’re directly involved in a small business or not, I hope you’ll check out Small Business America . After all, we’re all affected by the well-being of the communities we live in. At least for the time being, real solutions are less likely to come from politicians than from the thousands of people in thousands of communities taking the initiative to connect, share, and create. I love how human this movement is. It’s fueled by technology, but at its core is a real person connecting to another real person. As Twitter founder Biz Stone said of his company: “Twitter is not a triumph of tech. It’s a triumph of humanity.” Technology is what will allow this very American movement to scale up and begin to have a real impact. But it’s in our backyards and basements that it begins. “To be attached to the subdivision, to love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections,” wrote Edmund Burke. “It is the first link in the series by which we proceed towards a love to our country, and to mankind.” Click here to check out Small Business America… and let us know what you think.

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Debra Villegas, Ex-Legal Exec, Sentenced For Role In Ponzi Scheme

October 9, 2010

FORT LAUDERDALE, Fla. — The former chief operating officer at the law firm run by convicted Ponzi scheme operator Scott Rothstein was sentenced Friday to the maximum 10 years in federal prison for her role in the $1.2 billion fraud. But Debra Villegas, 43, will probably serve far less time because of her extensive cooperation with prosecutors, who said it was likely they would seek a sentence reduction later. U.S. District Judge William Zloch also took the unusual step of allowing Villegas to remain free until June 24, 2011, so she can assist in the ongoing investigation of the now-defunct Rothstein Rosenfeldt Adler firm. “One by one, the dominoes in this billion-dollar Ponzi scheme are falling,” said U.S. Attorney Willy Ferrer. “This is not the last to fall.” Villegas admitted when she pleaded guilty in June to a money laundering conspiracy charge that she helped Rothstein forge signatures on fake legal settlements, which were used to lure investors with false promises of fat profits. But she insisted she only did so because Rothstein told her he was being threatened by Mafia figures if the fraudulent deals didn’t get done. Villegas attorney Robert Stickney described how Rothstein had helped Villegas and her two teenage sons escape an abusive marriage, eventually giving her a $407,000 house in a gated suburb and a $130,000 Maserati car. Both have since been forfeited to the government and will be sold. Psychologist Lori Butts, who has been treating Villegas since the Ponzi scheme’s collapse in fall 2009, said Villegas knew she was committing a crime but was loyal to Rothstein – who employed her for 17 years. “She felt like Mr. Rothstein saved her life and the lives of her children,” Butts testified. Assistant U.S. Attorney Jeffrey Kaplan, however, said Villegas was key to a fraud that affected hundreds of people who lost some $430 million, most of which is gone forever. “She really seemed to be the one who was really a central player,” Kaplan said. In brief remarks to the judge, Villegas expressed remorse and asked for mercy on behalf of her two children. But Zloch was unimpressed. “Where was the concern for your children when you were engaging in this criminal activity?” he asked. “My mind was not where it should have been,” Villegas replied. More arrests are expected in the case, one of the largest fraud schemes ever in South Florida. Rothstein, who is serving a 50-year prison sentence, is also cooperating with investigators. More than $363 million in restitution is owed by Rothstein, Villegas and possibly others. Villegas’ ex-husband, Tony Villegas, is jailed awaiting trial in the March 2008 slaying of a former Rothstein Rosenfeldt Adler attorney, Melissa Britt Lewis. Prosecutors say Tony Villegas, who has pleaded not guilty, killed Lewis because she was helping Debra Villegas escape their relationship.

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HuffPost TV: Arianna On Good Day Atlanta: Brenda Carter’s Is ‘A Story That Sums It All Up’

October 8, 2010

Arianna appeared on Fox 5′s Good Day Atlanta this morning with Brenda Carter , whose story was featured in Third World America . Carter shared her experience of re-inventing herself after an unexpected layoff from an office job. Carter, a grandmother, went on to launch a praline business online. “What was great about Brenda is that after she cried and was upset…she started trying to rebuild her life. It’s important for everyone out there to know that we can rebuild our lives,” Arianna said. Carter says the praline business idea came from her mother, a hard-working single mother in New Orleans who also made and sold homemade pralines door-to-door to help make ends meet. “People would knock on our doors at all times of night asking to purchase these pralines,” she recalled. “So as I was sitting at home I thought ‘Hey I can do this too! This is something I can do and am comfortable doing.’” WATCH the video here:

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Christopher Hytry Derrington: Building A Bulwark Against Job Loss In America

October 7, 2010

Entrepreneurs thrive in an environment of high risk. Face it, failure rates are high. Half of new technology-oriented firms die within five years. Launching a company capable of meeting a market need is an ongoing process of observation, inspiration, aspiration, determination, glued together with lots and lots of perspiration. I would know. I love building startups; it’s a constant learning thrill ride adventure. As a serial entrepreneur currently co-located in Cincinnati, OH and Two Rivers, WI, I’ve been involved with 13 startups/turnarounds during the past 18 years. I’ve had wonderful successes and crushing setbacks. Such is the nature of my career choice. My current endeavor is Rural America Onshore Outsourcing . The idea behind Rural America did not come to me overnight. As a matter of fact, my business partner Sunny Dronawat and I bounced the idea back and forth for ten months before we opened our doors. During 2006 through 2007, I was building a company that created online charitable mutual fund software to be used by nonprofits. Development costs were triple the projected budget. Thus, I was forced to try outsourcing development work to India. I stupidly had fallen in love with the lure of having IT work performed at $13.57/hour instead of the normal urban USA $75/hour. Trust me, if you are a small- or medium-sized company, offshoring your projects usually will not turn out well. Ours was not a unique story: dismal results … poor quality, missed deadlines, cost overruns, etc. On a personal trip to rural Wisconsin, I discovered that I could hire rural American programmers beginning at $17/hour. I returned to Cincinnati convinced that I should hire this rural talent for my software company — but I was thinking too small. The decision to launch Rural America finally occurred when Sunny convinced me that we could offer services to urban customers worldwide by utilizing these rural professionals at rates that were competitive with offshoring. We opened our doors in August, 2008 and quickly obtained our first customer: a British firm who found us on LinkedIn. (LinkedIn is a great marketing tool!) Two years later, business is booming. This is by far the “funnest” startup I’ve ever been involved with. We are providing a great service to our happy customers; our shareholders are pleased with the results, and best of all, we are making an impact on people’s lives by enabling rural Americans to live where they want to live rather having to move to urban areas to find employment. Yes, we’ve had to zigzag various aspects of our business model to better meet customer needs. But that is an essential part of making a startup stick around. Rural America is not only bringing work back to rural USA (our menu of services includes IT, BPO, Creative Design, Marketing and the list is growing daily), but using technology (both off-the-shelf and proprietary tools and processes) to allow over 90 percent of our workforce to work from home and to connect seamlessly with others located elsewhere. We form effective and smoothly-run virtual teams. Thanks to technology, we are able to give each of our clients the people best suited for the job at hand, regardless of where they are based. Currently, we are recruiting Talent in 45 states with plans to expand to all 50 by the end of 2010. Every time my wonderful wife, a senior executive at a large corporation, asks me how my day went, I almost always give the same two answers: “Good and Bad” or “The Dragons won today” (very rarely does everything go perfectly.) She admits she doesn’t understand why entrepreneurs enjoy taking the risks, headaches, setbacks, and failures. I’ve shared with her that we entrepreneurs want to control our own destinies. We have to create and build, so that others may follow. Such is the life of an entrepreneur. If you have dreams of being one, come join our ranks. If you are one, keep fighting the Dragons. You’ll eventually win.

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Richard Laermer: It’s October; Let’s Work!

October 7, 2010

Here we are, in one of two months where we are actually supposed to work. Funny, right? No. Not really. This is the true month of our discontent. We have nothing getting in the way of us accomplishing all the goals we have set in front of our faces. Think about this: All the other months (except June, strangely) have something that gets in the way of actually getting something done. You have a holiday here (January, February, March, April, May…), a slowdown here (July, late November to January 1) an urgently “deserved” week away (August) and then the malaise of September when Labor Day seems to be an excuse to wonder whether labor makes sense at all. We used to call that daydreaming. But October, ah the sweet smell of October. That wonderful odor is sweat! It’s what happens when “workers” (me and you) start to buckle down… Hey, who came up with that buckle down saying? What an ass! But I can’t digress per usual because I actually have some work to do and this essay is getting in the way. Remember to accomplish a ton during these 31 days because there are no reasons for us to be anything but working, all the time, every single day, with all our might and with no excuse to stop, no whining, no away days, not a single solitary day of the week that will get in our way. While I have your attention can I have a second to discuss inherent laziness? Lazy is not when you don’t show up for work and instead hang on the couch watching Jeffersons reruns. It’s also found in the language (“Sounds good” is simply stupid) that we use sparingly. After nearly 20 years of cell phone tech I am headshakingly bewildered by a growing number of people who still use speakerphones to have complete and information-filled conversations while standing on line at Coffee Beans, Peets or Starbucks. Is a headset really expensive? Or have we all turned into exhibitionists? I’m back. Let’s remember you now have six-and-a-half glorious weeks until the next four day weekend! Time to work! Have you noticed how much people do little (yes, I see the bad grammar) when what looks like a vacation rears its fabulous head…. I know I sure slow down. I want to take this opportunity to remind those of us who actually work for a living that there is no time like the present to stop volleying the emails back and forth–yes you are popular, fine–and live your life in the style of Comcast NBC Universal GE Microwave’s Brian Roberts. Here’s a conversation he had with a confused colleague who just wanted to know…. Friend: “How come you are so successful?” Roberts: “Ah. My secret? On those days when I am not into work, and I could just respond to emails all day long, that’s when I make myself get on the phone.” Lovely. We do a lot of emailing that accomplishes nothing and a ton of IM-ing that doesn’t say anything that we should have just said to ourselves. Don’t even start with the constant stream of bubbles rising up on our phones –texting–that was what Orwell was sure would crop up to stop us from getting anything done! If we texted one third of the time we’d all be Einsteins. Life is about ATD. Attention to detail is the way to make it in the gibberish-filled marketing industries. That’s why months like October are crucial! You get a whole month to do something without interruption. Start, then finish. Ahhh. Surely someone once said what my Dad told me when I was a whiny kid: “You are where the work ends. Don’t believe anyone will take the time to cover up your mistakes or make it better for you.” Meaning, the work has to be yours and you need to take responsibility for all of it. That’s why I love October, discontentment and all. Work, work, work. You get to spend a full month completing tasks, not depending on grammar check or a supervisor or the guy in the next cube who is nice enough to not tell you how you are making the same mistake over and over. Wonderful, wonderful October. Wait a minute Hold on. I just realized something super fantastic! Monday is Columbus Day–and didn’t he “discover the new world” and shouldn’t we give him a day off to consider what he did for us? I won’t be here Monday the 11th. Maybe Friday the 8th too! I’m exhausted this rant got to me. I need a rest. So don’t forget. October is about work and getting it done. Please update me with your results. Suckers!

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Bill Singer: Two Con Artists Sentenced in Federal Reserve Note Investment Plan Scam

October 5, 2010

Beginning in 2005, Robert Ingram held himself out as the director of an investment program that would enable investors to share in the proceeds of an alleged $23 billion “note” underwritten by the Federal Reserve. My, you say, that sounds impressive — you know, the Federal Reserve is a pretty august body and when you’re talking about a multi-billion dollar note that the Fed has underwritten, well, geez, that’s pretty sophisticated stuff. This Ingram fellow must be a pretty savvy guy to be the director of a multi-billion dollar Federal Reserve Note investment program — maybe they refer to that as the FRNIP? I mean, you know, they always have acronyms for such important things. So — Robert Ingram was the Director of a FRNIP. Or so you would think. Or so you were supposed to think. Next — enter one Olivia Jeanne Bowen. Bowen was a facilitator for Ingram’s FRNIP. What’s a FRNIP facilitator? Well, if you’re going to show your ignorance by asking such a stupid question, then maybe this just isn’t the right investment opportunity for you. After all, everyone who wants to invest in a FRNIP gains entry to the program via the good offices of a professional facilitator. Waddya, some kinda idiot? Imagine wasting my valuable time with such a question. Okay, now let’s recap. Ingram is the Director of a FRNIP. Bowen is the facilitator of Ingram’s FRNIP. You got that? Anyway, starting in 2005, Ingram and Bowen told potential FRNIP investors that they would realize huge returns within a few weeks. Wow, sign me up! Of course, 2005 became 2006, which became 2007, and those promised huge returns began to seem a tad — how shall I put it? — a tad “delayed?” Year after year, Ingram, Bowen, and various affiliates persuaded additional investors to give them money. Money as in thousands and hundreds of thousands of dollars. And just exactly where were these investors’ funds going? Well, according to Ingram and Bowen, the money would be used to pay the final fees or expenses associated with gaining access to the proceeds of the alleged $23 billion note. It’s all part of this very sophisticated FRNIP. Fewer questions, please. Apparently, the only thing standing in the way of the investors’ windfall was raising the bucks necessary to gain access to the note. You understand that, right? Sure you do. It’s oh so simple. Ingram and Bowen just needed a few more dollars in order to get the proceeds of the billions underwritten by the Fed. Couldn’t be a more simple proposition. You’d have to be a fool not to see the beauty and simplicity of the FRNIP. In reality, we need to edit some of the words that I used above. When I referenced “investors,” I probably should have said “victims.” When I spoke about various affiliates working with Ingram and Bowen, I probably should have said criminal co-conspirators. When I described the multi-billion dollar note, I probably should have informed you that it was a fabricated product — no such Fed note existed. Which compels the question: What the hell did these con artists do with all the money that they raised to supposedly grease the wheels to unlock the proceeds from the note? According to federal indictments, Ingram and Bowen used their victims’ so-called investments to spend lavishly on themselves and to distribute the victims’ money to other co-conspirators. For example, Ingram spent his victims’ money on cosmetic surgery, stays at luxury hotels, and extravagant purchases at retailers such as Christian Dior, among other things. Perhaps you’re shaking your head — yet another Wall Street scam, you curse. However, it gets worse. As a result of the fraud committed by Ingram, Bowen, and their co-conspirators, some victims lost their life savings and their homes. On April 8, 2010, Ingram plead guilty to one count of conspiracy to commit wire fraud. On April 13, 2010, Bowen plead guilty to two counts of conspiracy to commit wire fraud on April 13, 2010. On September 28, 2010, Ingram and Bowen were sentenced in Manhattan federal court to 144 months and 63 months in prison, respectively, for their participation in the fraudulent advance-fee scheme involving the alleged $23 billion Federal Reserve “note” that spanned years and defrauded victims across the country of millions of dollars. In addition to the prison terms, the defendants were each sentenced to a term of three years of supervised release. Also, Preliminary Orders of Forfeiture were entered against Bowen in the amount of $12 million, and against Ingram in the amount of $7 million. See, ” Two Perpetrators of Advance-Fee Scheme Sentenced in Manhattan Criminal Court to Lengthy Prison Terms .”

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Don McNay: Eat, Pray, Love and the Economic Crisis

October 3, 2010

When the moon hits you eye like a big pizza pie that’s amore -Dean Martin I could be the last person in America to read Eat, Pray, Love but the movie got me interested in the book. There is a segment in the book that keep running through my mind. The author, Elizabeth Gilbert, references Luigi Barzini’s book The Italians when explaining why a country that has “produced the greatest artistic, political and scientific minds of the ages” has not become a world power. Barzini’s conclusion is that after hundreds of years of corruption and exploitation by foreign domination, Italians don’t trust political leaders or big institutions. Gilbert said the prevailing thought is that “because the world is so corrupted, misspoken, unstable, exaggerated and unfair, one should only trust what one can experience with one’s own senses.” She added, “In a world of disorder and disaster and fraud, only artistic excellence is incorruptible. Pleasure cannot be bargained down.” I have pondered Gilbert’s insight for weeks. I keep asking myself the essential question. Is the United States headed the way of Italy? Survey after survey shows that Americans do not trust their elected officials and don’t trust the people on Wall Street. My parents grew up in a society where people trusted big companies to provide secure, long term jobs, excellent benefits and solid retirement plans. They trusted Wall Street to invest in those big companies and fuel America’s economy growth. They trusted political leaders to pass legislation that made the nation better, like the Civil Rights Act, even when the vote wasn’t politically expedient. We trusted our leaders to do the right thing. My children are growing up in a society where none of that is happening. Corporations dump loyal employees, cut benefits and wiggle out of paying for pensions. Wall Street rewards them for it. Wall Street has been based on a system of paying employees huge bonuses for gambling in silly trading games, rather than helping the economy produce growth. Washington seems more focused on the latest opinion poll or their lobbyist buddies than what is good for the average citizen. Long term thinking seems to occur around the “24 hour news cycle.” If the American people are following the path of the Italians, you can’t really blame them. On the other hand, I don’t want to see the United States become the next Italy. Three recently released books, Arianna Huffington’s Third World Nation, Charlie Gasperino’s Bought and Paid For , and Zac Bissonnette’s Debt Free U are different in philosophy but trace back to a central theme. You can’t trust what the powerful are telling us. Arianna writes that politicians have sold out the middle class. Zac punctures the myth that people have to rack up big student debt and Charlie makes the case that President Obama is in the pocket of Wall Street. I’ve been developing my own set of ideas on creating Wealth Without Wall Street and most of them stem from self preservation. Turning money and my life over to Washington and Wall Street seems to be a road to the poor house. Arianna has been pushing the concept of Move Your Money , where you stop doing business with Wall Street banks and start doing business with community banks and credit unions. Zac pushes the principals of no debt, just as I have been doing for a long time. Younger Americans are coping with an insane amount of debt in student loans that will be the flash point for our next economic crisis. I want to trust big institutions but that trust has to be earned. I trust many life insurance companies because they are heavily regulated and oriented towards safety. I’ve been in an associated industry for all my adult life, know the people who run the companies and believe in the concepts they sell. The culture is very different from Goldman Sachs. I want to trust government. I voted for President Obama in 2008 because I thought he would bring change to the economic system. Instead he gave us Geithner, Bernanke, Dr. Lawrence Summers and all the people who got us in this mess to begin with. Gasperino makes a well documented claim that there was never a plan to bring change and that Obama was in Wall Street’s pocket before he took office. I pray that Charlie is wrong but suspect he is not. There is a way to turn things around but the window is short. Arianna promotes public financing for elections. I’d like to see economic incentives for people who save and invest as opposed to bailouts for those who lack self control. America could completely become the Italian model, where we retreat to our own worlds and focus on immediate pleasure. Although there are a lot of downfalls, as Gilbert notes, the Italians can make one heck of a pizza. In the big scheme of life, that’s amore . Don McNay, CLU, ChFC, MSFS, CSSC of Richmond Kentucky is an award-winning financial columnist and Huffington Post Contributor.

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Larry Summers Optimistic About Middle Class

September 28, 2010

Top presidential economic adviser Larry Summers declared on Tuesday that the future of the American economy depends on a robust middle class. Speaking to a well-heeled crowd in a ballroom of the Ritz Carlton Hotel, Summers also blamed the nation’s increased income inequality in part of what he called a “breaking down in social norms by people in a position to take.” There were certainly a few sops to the audience, which included senior business leaders gathered by the global management consulting company McKinsey & Company and the Harvard Business Review. “Let no one who dedicates their life to helping a company succeed… doubt that they are engaged in public service, are engaged in a task that addresses our most fundamental national challenge,” Summers said. But his comments about the middle class were unequivocal. “We are very likely to succeed as a nation if we produce steadily rising incomes from a growing middle class over the next generation — almost regardless of whatever else happens,” he said. “We are unlikely to succeed as a nation if we do not provide steadily rising incomes from the middle class — almost regardless whatever else happens.” Summers, who announced last week that he would step down as director of the White House’s National Economic Council by the end of the year, said what Americans want from the economy is pretty simple. “The vast majority of us are parents, and the vast majority of us want nothing more or less than for our children to have the ability to live better than we do.” Polls show that many Americans now harbor doubts that the American Dream is still attainable. As Summers put it: “We are not at a moment where confidence in either the short run or the long run is at an apex.” But, he said: “I am much more optimistic than the American public. Much more optimistic than many of my friends.” Summers spoke of reigniting a healthy economic cycle, and put in a pitch for a series of economic measures proposed by the White House “that should be anything but controversial.” They include major tax incentives for investment and a commitment to research and development. “If we can make the right choices, our best days as competitors and prosperous citizens lie in the future,” he said. Asked about new Census data showing that the income gap between the richest and poorest Americans grew last year to its widest amount on record, Summers said one factor is that “we have a more ruthless economy. There’s breaking down in social norms by people in a position to take.” He noted that income inequality has been getting worse for a while. “All was not well before we had a recession,” he said. “Incomes did not grow from 2000 to 2007, even as the economy was said to be booming.” The fraction of income going to [the] lowest 95 percent of the population was steadily falling, he said. “We can do better as a country.” It was Summers’s second speech of the day. Earlier, he said that the economy will eventually improve and that “people aren’t going to live with their parents forever.”

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Halsey Minor: FDIC: The Government’s Job-Killer

September 28, 2010

What agency is systematically destroying American jobs? The mantra this election season is jobs, jobs, jobs, as both parties claim that putting people back to work is their top priority. But what if I told you that in the midst of the worst downturn since the Great Depression, one federal agency is throwing people out of work — and that neither the Democrats nor the Republicans are lifting a finger to prevent it? Forget “shovel-ready projects,” the Federal Deposit Insurance Corporation under Chairwoman Sheila Bair is literally taking the working shovels out of the hands of hard-working Americans as it hijacks — and then mothballs — construction projects across the country. This is what “recovery” looks like in too many American towns: half-built projects rotting behind chain-link fences as desperate workers sit idle and politicians search for new shovels to fill with pork. One of those projects is mine. For more than a year, a boutique hotel in my hometown of Charlottesville, VA has sat rusting within sight of Thomas Jefferson’s Monticello. Other projects in places such as Los Angeles, Albuquerque and Milwaukee have met similar fates as Bair’s FDIC refuses even to answer the phone calls of entrepreneurs who had the grave misfortune of being financed by banks that failed and were subsequently taken over by the FDIC. Turns out, those bank failures were just the beginning of the cataclysm, as I and others learned. Many lost their life savings because of the FDIC’s ineptitude and proclivity for cutting sweetheart deals with vultures like Barry Sternlicht’s Starwood Capital — a guy who notoriously told The York Times that his company is positioned to be “like the Saudis” in some real estate markets. Others, like me, have spent millions of dollars just to force the FDIC to the table in an effort to get our projects finished. Meantime, Chandrakant Patel, 67, has been ruined. In the 1970s, he fled the anti-business repressive regime of Idi Amin in Uganda and built a thriving business in the United States. He has spent the past several months working as a security guard on the site of the Albuquerque hotel project he started and invested his life savings to build. The project was so close to completion that shipping containers had already arrived with the fixtures and furnishings. But then his bank failed. The federal government then failed Mr. Patel. Earlier this month, the FDIC foreclosed after months of foot-dragging, misinformation and running Mr. Patel out of money. Instead of putting ordinary Americans back to work, the FDIC is presiding over one of the greatest wealth transfers in American history. Many of the same unaccountable banks and financiers who wrecked the global economy out of sheer personal greed are now scooping up projects for pennies on the dollar — with the help and blessing of the FDIC. One in seven American now live in poverty, but the super-rich are fast becoming the mega-rich and the mythical American path to prosperity is being blocked, compliments of an agency whose original mission of safeguarding the deposits of ordinary citizens has mutated into protecting the banks at all costs. The FDIC claims it’s all for the greater good, but as Bloomberg’s Jonathan Weil recently noted : “The banks were saved by the American people. Now who will save the people from the banks?” To understand how fiercely the FDIC protects the interests of banks over ordinary citizens, consider that it took me over a year and around $500K dollars in lawyer bills to just get the names of the eight syndicate banks that held the loan on my project after my original lender, Specialty Finance Group, collapsed in the largest bank failure in Georgia history. That’s right: the FDIC didn’t believe I had a right to know the names of the banks that stopped funding my project. It’s all part of an accounting scam. While the banks later claimed I defaulted, they never foreclosed on the project, which should have been the natural and expected course of action. As a result of fancy accounting, eight banks show my loan as good on their books. But as the people of Charlottesville know all too well, the hotel is just a half-finished skeleton of concrete and steel looming over downtown. If you think Enron was bad, get this: these banks also show interest payments from me as revenue and profits! I assure you, I have not paid these banks one single red cent of interest since they stopped funding. But they continue booking this imaginary interest income and phantom profits and report it to shareholders and customers alike. Mission accomplished: hundreds of jobs destroyed and accounting fictions created, all in one tight package. If I was a customer of or investor in these banks, I’d want to know what I just told you, particularly since the “value” my loan makes up a significant portion of some of these bank’s so-called “assets.” According to iBanknet.com, the eight syndicate banks have an average of $33 million in equity; my original loan was supposed to be for more than $23 million. (Remember, bank customers, you are own on deposits over $250,000 when it comes to deposit insurance.) The banks, complete with the person in charge, are: River Community Bank in Martinsville, VA; Ronald Haley, President Pioneer Bank in Stanley, VA; Thomas Rosazza, President & CEO Old Dominion National Bank in North Garden, VA; Charles Darnell, President & CEO HomeTown Bank in Roanoke, VA; Susan K. Still, President & CEO Harrison County Bank in Lost Creek, WV; David Griffith, President Guaranty Bank & Trust Co. in Huntington, WV; Marc Sprouse, President First United Bank & Trust in Oakland, MD; William B. Grant, Chairman of the Board, President & CEO SuffolkFirst Bank in Suffolk, VA; T. Gaylon Layfield III, President & CEO Most people who fall victim to the FDIC never learn the names of the banks that help do them in, in large part because the FDIC throws the full weight of the federal government behind its efforts to protect the banks. Simply by warning people I am violating a court order. That’s how oppressive the FDIC is in protecting its banks. Few people have the resources or perseverance to fight that kind of obstruction from an army of government lawyers paid with taxpayer money and backed by taxpayer-funded threats. Chandrakant Patel tried for eight months just to get through to the right person at the FDIC after it took over his lender – coincidentally also part of Silverton Bank, which was being run for the FDIC by a former Ameriquest Mortgage executive named Claire Cotter. Ameriquest, you may recall, was fined $298 million for illegal lending practices before it went belly up. (I was able to get through to Claire Cotter in less than eight months, but she repeatedly hung up on me. Then the FDIC sought an injunction to prevent me from calling Cotter and other public officials at their government offices.) Mr. Patel and his family were told by Claire Cotter that the agency would help them renegotiate the loan and then backpedaled. The FDIC told Patel one of the syndicate banks holding his note refused to renegotiate the terms so Patel could finish the final 15% of his project. When Patel asked to see the paperwork, he was denied. The only alternative the FDIC offered Mr. Patel was to find someone else to buy his loan out. Keep in mind that this was during the height of the credit crisis. At a time when government officials from President Obama on down were telling the country that taxpayers were injecting money into the banks to enable lending, the government agency overseeing a big piece of that process was basically telling the Patels they were on their own. More than 75 people lost their jobs when Mr. Patel’s project stopped — not counting the ongoing jobs the hotel would have created. Now he is facing foreclosure and bankruptcy. In Los Angeles, developer Sonny Astani was well on his way to completing the first phase of his Concerto high-rise project, planned to include 629 residential units in twin 30-story towers. Then in the fall of 2009, his lender, Corus Bank, failed and was seized by the FDIC, which subsequently sold his loan and 100 others to a consortium of hedge funds led by Starwood Capital. Buoyed by the FDIC’s sweetheart deal of 0% financing, Starwood began squeezing Astani out by turning off the spigot of construction funds needed to complete Concerto, costing hundreds of jobs and millions in tax revenue. Astani is now fighting desperately to keep Starwood from seizing his property and making it part of a portfolio of 50 other high-end properties wrested from other developers. As for me, I had to put my hotel company into Chapter 11 bankruptcy to defend against what would have been a ridiculously expensive legal fight on multiple fronts. The FDIC wants to fight me in multiple venues in multiple states over the same set of facts; I’m trying to consolidate them in one venue. It’s another absurdity in a case that has collectively cost me and taxpayers like you more than $12 million. For the record, my loan balance was only $10.3 million when the bank stopped funding and threw 100 people out work. Do the math. There are likely thousands or even tens of thousands of stories like these all across the country, but the FDIC doesn’t want people to hear them or to know what’s being done with taxpayer money in the name of economic recovery. But if no one speaks up, the FDIC will continue to take what entrepreneurs like Mr. Patel, Mr. Astani and myself built and hand it off to for pennies on the dollar to international bankers. Tomorrow, I am scheduled to begin a mediation hearing with the FDIC. My sole original goal was to end Charlottesville’s nightmare and finish my project. But as I have learned the plight of Mr. Patel and many others, I now know that something more must be done to help entrepreneurial small business people protect themselves from rapacious banks seizing wealth and then killing jobs. We have given hundreds of billions of dollars to banks that don’t lend. Banks don’t create jobs, the small businesses and entrepreneurs of America do. Yet banks won’t even loan money that they are given expressly for that purpose. They just pay bonuses to themselves for taking no risks. Hard working entrepreneurs and small business people like Mr. Patel created the engine of American commerce and power our world-renowned willingness to invest and take risks. Somehow Washington has been seduced by the banks into thinking it is they who are the key to job growth. How can politicians confuse those who got us into this mess with those who will lead us out? Don’t get me wrong: banks play a function in economic growth, but only if they lend. In that way, a bank is like gasoline. Entrepreneurs are the engines that power our economy, but they need the gasoline of credit. When banks think they can exist on their own without the engine of small business, they are — like gasoline — nothing more than a highly combustible substance. We saw that when the banking “industry” threw a match on the global economy it now controls. Entrepreneurs like me, Mr. Astani, Mr. Patel and many others are still waiting for the flames to die, but the FDIC seems intent on stoking the fire as long as it can.

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Don Tapscott: Macrowikinomics: The Choice Between Atrophy or Renaissance

September 28, 2010

Today an important new book is being released in the United States and Canada. Macrowikinomics: Rebooting Business and the World , written by Don Tapscott and Anthony D. Williams is the sequel to their best selling work Wikinomics . The Economist says Macrowikinomics is “a Schumpeterian story of creative Destruction.” Mark Parker CEO of Nike calls it, “A masterpiece. An iconic and defining book for our time.” Google CEO Eric Schmidt says the book, “inspires, pointing the way forward for all of us.” Tapscott, author of 14 widely read books about technology in business and society teamed up with Williams a few years ago and the result — Wikinomics — was the best selling management book in the United States in 2007. Macrowikinomics offers nothing less than a game plan for all of us to fix a broken world. Drawing on an entirely new set of original research conducted with countless collaborators the authors explain how the world’s most dynamic innovators are using the Internet and new business models to transform industries ranging from manufacturing and transportation to global problem solving. Technology, Health and the Environment are three axes of transformation, each inextricably intertwined. They argue that this is a time of peril as old approaches collapse, but a time of great promise and opportunity as we stand on the threshold of a new age. Now the onus is now on each person to lead the transformation in our workplaces and communities. **** The global economic crisis should be a wakeup call to the world. We need to rethink and rebuild many of the organizations and institutions that have served us well for decades, but now have come to the end of their life cycle. This is more than a recession or the aftermath of a financial crisis. We are at a turning point in history. Let’s face it. The world is broken and the industrial economy and many of its industries and organizations have finally run out of gas, from newspapers and old models of financial services to our energy grid, transportation systems and institutions for global cooperation and problem solving. At the same time the contours of a new kind of civilization are becoming clear as millions of connected citizens begin to forge alternative institutions using the Web as a platform for innovation and value creation. From education and science and to new approaches to citizen engagement and democracy, powerful new initiatives are underway, embracing a new set of principles for the 21st century — collaboration, openness, sharing, interdependence and integrity. Indeed, with the proliferation of social media and social networks, we believe society has at its disposal the most powerful platform ever for bringing together the people, skills and knowledge we need to ensure growth, social development and a just and sustainable world. Of course, the sparkling possibilities described above contrast sharply with the stagnation and inertia that grips so many contemporary institutions. The harsh reality is that it will take years and probably decades to undo some the damage done by misguided policies and approaches. When the economy crashed in 2008, for example, it cost American taxpayers trillions of dollars. Faced with a historic market meltdown, the worst recession in three generations, plus government guarantees that exceed the cost of every war the U.S. has ever fought, American taxpayers are understandably still furious. It is pretty much the same story around the world. Many people are reviving calls for updated regulations, more government intervention and even the breakup or nationalization of the big banks. In the meantime, the lingering effects of the financial meltdown threaten to engulf not just companies but entire countries in a sovereign debt crisis. Greece, Spain, and Portugal may have rocked the financial markets, but the U.S. arguably looms largest, with Congress contemplating a budget that by 2020 would nearly double America’s national debt, to $22 trillion — twice the size of the U.S. economy. Clearly we need to rethink the old approaches to governing the global economy. But rebuilding public finances and restoring long-term confidence in the financial services industry will require more than government intervention and new rules; it’s becoming clearer that what’s needed is a new modus operandi based on new principles like transparency, integrity and collaboration. Clearly the financial system is not the only institution that’s in desperate need of a makeover. A string of recent events suggests that many of the institutions that have served us well for decades — even centuries — are frozen and unable to move forward. The failure to reach a meaningful agreement on climate change in Copenhagen has further undermined confidence in the ability of international institutions to provide effective leadership in dealing with a growing list of global challenges. The disastrous oil spill in the Gulf of Mexico provided yet another reminder that the world is grossly under-investing in green energy alternatives that could at last break our perilous addiction to fossil fuels. And despite Obama’s historic reforms, the government’s own projections suggest that the world’s richest nation will still struggle to rein-in the spiraling health care costs that threaten to cripple government budgets in the years to come. Sure, one could argue that the industrial economy and industrial-age institutions brought us centuries of unprecedented productivity, knowledge accumulation and innovation that resulted in undreamt-of wealth and prosperity. But that prosperity has come at a cost to society and the planet and it is clear that the wealth and security enjoyed in advanced economies may not be sustainable as billions of citizens in emerging markets aspire to join the global middle class. Indeed, as the world’s main economic engines continue to sputter, there is growing consensus that we are finally entering a very different kind of economy. Economist Robert Reich asks, “What will it look like? Nobody knows. All we know is the current economy can’t ‘recover’ because it can’t go back to where it was before the crash.” Is there a way forward? We think so. But don’t look to big government or big corporations to supply the answers. The most promising catalysts for reinvention today can be found in a powerful new form of economic and social innovation that is sweeping across all sectors and turning the old models on their head. After all, political leaders may have failed in Copenhagen, but ordinary people everywhere are connecting to create a mass movement that is bringing greater awareness and sense of community to the process of making household and business decisions that can reduce our carbon footprints. Carbonrally.org is a good example. Some 40,000 environmental enthusiasts propose great ideas for saving energy and reducing emissions and the community chooses the best ideas to pursue as a team. Carbonrally tracks the collective impacts and shows the power of many people getting the job done together. On PatientsLikeMe.com , one of the Web’s most vibrant health care communities, some 60,000 members believe that sharing their health care experiences and outcomes is good, and perhaps even integral, to speeding up the pace of research and fixing a broken health care system. Why? Because when patients share real-world data, collaboration on a global scale becomes possible. The health care system becomes more open and this in turn improves outcomes for patients, doctors and drug makers. New treatments can be evaluated and brought to market more quickly. Patients can learn about what’s working for other patients like them and, in consultation with their doctors, make adjustments to their own treatment plans. All considered, communities such as PatientsLikeMe are leading the way toward a health care system that is cheaper, safer and better than what we have today. Even governments are taking baby steps toward using the Web to generate more productive, transparent and equitable public services. Indeed, where most governments build mainframes and buy expensive software, U.S. federal Chief Information Officer Vivek Kundra is encouraging federal agencies to use free Google services and open-source wikis for everything from word processing to performance measurement, to service improvement. He calls it the government cloud, but think “app store for government” — a place where employees can access a vast ecosystem of secure applications and data sets for doing their jobs. Put it all together and it becomes increasingly clear that we can rethink and rebuild many industries and sectors of society around the principles of wikinomics. Indeed, we’re convinced that the world now has nothing less than an historic choice: reboot the old models, approaches and structures or risk institutional paralysis or even collapse. It’s a question of stagnation versus renewal. Atrophy versus renaissance. Peril versus promise. Fortunately, for the first time in history, people everywhere can participate fully in creating a sustainable future. This is not just a theory — it’s happening. Adapted from MACROWIKINOMICS: REBOOTING BUSINESS AND THE WORLD by Don Tapscott and Anthony D. Williams by arrangement with Portfolio, a member of Penguin Group (USA), Inc., Copyright (c) Don Tapscott and Anthony D. Williams, 2010.

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Matt Wilson: Three Steps to Gain a Competitive Advantage

September 27, 2010

We’ve gathered three tips on how to gain a sustainable competitive advantage with your business. Whether you are looking to expand a current business or start an entirely new enterprise, these are three broad business strategies that will push you to the next level. These three secrets appear courtesy of Under30CEO.com the resource for young entrepreneurs Go on a Treasure Hunt and Find an Underserved Niche In the business world, there’s nothing more exciting than finding an underserved niche that represents a lucrative market that everyone else has failed to spot and target. That’s like finding gold bullion at a crowded beach — it was there for everyone else to see, but you were the one who took notice of that golden glint in the sand. That’s what happened to Gary and Diane Heavin, founders of the Curves International fitness franchise system. When the company launched in 1992, the Heavins had just $10,000 in savings to invest in their company. Today, Curves is the world’s largest fitness franchise system, with 10,000 franchise locations in 65 countries. How did Curves soar to the top? Instead of competing head-to-head with fitness giants like 24 Hour Fitness or Bally Total Fitness, the Heavins opted to serve the fitness needs of three underserved niches: middle-age and older women who are eager to get in shape but might feel intimidated by large gyms teeming with young, hard bodies; busy working women whose schedules could more easily accommodate the Curves 30-minute workout; and budget-conscious women who simply couldn’t afford the pricey monthly membership dues charged by the major gym chains. Early on, Curves clearly distinguished itself from the pack of gym competitors; its services and clientele were different. Targeting an underserved niche is a path that small start-ups can take. Even a huge multi-billion-dollar company can’t offer everything for everyone. Targeting the right niche — one that other business owners have neglected or ignored — can help build a strong and loyal customer base while limiting competition. Another entrepreneur who followed this strategy was Liz Lange. She launched a phenomenally successful designer maternity clothing company. Liz Lange Maternity eventually sold for an estimated $50 to $60 million in 2007. She also partnered with Target to launch a secondary, discount version of her line. Like the Heavins, Lange reached the heights of success by targeting an underserved niche. In her case, that meant zeroing in on the needs of pregnant fashionistas — women who refused to let a pregnancy deprive them of their fashion sense. Lange used newly developed stretch fabrics to create chic, fitted and stylish maternity clothes. They were nothing like the tent-like and frumpy maternity clothes widely available in department stores. Buck the Conventional Wisdom Bucking the conventional wisdom means ignoring those who say “It won’t work” or “It’s never been done that way.” When entrepreneurs overly rely on conventional formulas for success, they’re left with a business that’s, well, conventional. The most successful entrepreneurs are willing to veer away from established formulas and ways of thinking. If you’ve launched your own business, don’t just blindly accept the so-called best practices of your industry. Look at them with a hyper-critical eye. Dissect them, slice and dice them, contemplate different “what if” scenarios in your mind. With no capital to speak of — just $700 in cash — John Paul DeJoria, cofounder of hair products giant John Paul Mitchell Systems, bucked the conventional wisdom when he launched the Paul Mitchell line of hair-care products and decided to sell them solely to stylists and salons — never to supermarkets or drug stores. Today, the company boasts more than $900 million in annual salon retail sales. That unique system of distribution nurtured exceptional customer loyalty. The Paul Mitchell brand not only provided quality hair products for use in salons; it also created a new revenue stream for the stylists. Many of their own customers bought the shampoos and conditioners for use at home. Sara Blakely, founder of Spanx, bucked conventional wisdom when she approached hosiery mills with the idea of manufacturing footless pantyhose. The product she envisioned was a body-shaping undergarment that would hide panty lines and firm up a woman’s backside so she could wear her favorite slacks and open toe sandals with confidence. Blakely knew there was a market for such a product. But time and again, she was told footless panty hose was simply a bad idea. The mills were accustomed to making hosiery designed to improve the appearance of a woman’s legs. But Blakely was trying to convince them to manufacture a product that was completely hidden under clothes. She got rejection after rejection. It’s a good thing she persevered, though, until she finally found a willing mill in North Carolina. Today, Spanx’s estimated retail sales are in the neighborhood of $350 million. Spot a New Trend and Pounce Often, a shift in cultural or economic trends will create new entrepreneurial opportunities. Sometimes that shift arises from advances in technology. Geek Squad founder Robert Stephens was paying attention to such trends when the home PC market exploded. He figured out that most PC owners had limited technical knowledge. If their hard drive crashed, they were thrown into a state of panic. But unplugging their PC and hauling it off to a repair shop, where it would stay for a week or so, wasn’t an attractive option. Stephens spotted the trend, pounced and captured an emerging and underserved niche. Geek Squad made house calls. When Stephens launched Geek Squad back in 1994, the cash-strapped college student had just $200 to invest in his business. But that same business eventually fetched millions in 2002 when he sold the business to Best Buy. Andy and Rachel Berliner launched the Amy’s Kitchen brand of organic vegetarian frozen meals because they realized that more and more Americans were trying to eat healthier diets, eschewing processed foods in favor of organic vegetables. Vegetarians themselves, the Berliners were also keenly aware that they’d have no formidable competition. They had personally sampled the frozen vegetarian meals already on the market and they were terrible. The Berliners knew if they used quality ingredients and recipes, their business would thrive. Today, Amy’s Kitchen generates annual revenues of $270 million. All these entrepreneurs are featured in a new book, The Risk Takers: 16 Women and Men Share Their Entrepreneurial Strategies for Success . The book explores in depth how hugely successful entrepreneurs have applied these three strategies — and seven others — to propel their business to the top of the heap. For entrepreneurs, it’s often easy to lose sight of long-term goals when you’re preoccupied with day-to-day business operations. But keeping these three strategies in the forefront of your business planning can help keep you on track to take your company to the next level and beyond. Throughout the life of your business, you can channel your creative energies into finding new and fresh ways to apply these principles to create competitive advantage, expand your product line and customer base, and keep your business vital. Just think of them as your three secret weapons. This article originally appeared on Under30CEO

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Jane White: I Know Firsthand That When Mortgage Banks Compete, You’re Screwed

September 24, 2010

Surprise, Surprise: A recent Wall Street Journal article noted that Elizabeth Warren and Tim Geithner met on September 21st to simplify mortgage document disclosure but things don’t look promising. Past attempts to make these documents more understandable have failed amid fierce opposition from the housing industry and “members of Congress from both parties.” Both parties? Hmm. We already know the Republican party is owned by K Street, despite its phony Tea Party persona. Could we throw out Democrats In Name Only (DINO) in the next election and replace them with real Democrats? I think we should inform the public when members of Congress do not work for the electorate by requiring journalists to note in parenthesis after their names the contributions they get from the “financial disservices industry,” not just the district they allegedly represent. The financial sector is the largest source of campaign contributions to Congress, according to the Center for Responsive Politics, doling out nearly $470 million in the 2008 cycle alone. The top recipient? DINO Senator Chuck Schumer of New York ($4.7 million, 1990-2010). While the article implies that progress has been made regarding reining in irresponsible lending practices, citing the fact that fees for brokers have been banned that enabled them to saddle homeowners with unaffordable mortgages, it’s also the bank that profits when your interest rate goes up, not just the broker. I know this firsthand. When my husband and I bought our first house in 1987, despite making a 10% down payment we were stuck with an adjustable rate mortgage and we could not discern from the documents that the payments could rise to the rate of unaffordability despite my background in finance and the fact that my husband frequently reads fine print in his line of work. No broker was involved. When the interest rate “reset” three years later — NOT as a result of a rising rates but most likely an arbitrary predetermined rate — our mortgage payments rose by 30%. Since we were already both working full time and raising a toddler taking another job was not an option. It was the scariest period of my life. And why should you have to take another job to pay a mortgage? My theory is that while banks used to turn down potential home buyers like my husband and myself who have a limited or poor credit history and insufficient funds to make a 20% down payment, at a certain point they decided they’d rather profit by ripping off people with poor/no credit history (in the same fashion that Unfair Isaac decided to rip off credit card holders with high interest rates instead of turning them down.) The assumption was that since home prices “always went up” borrowers would be able to refinance to a lower rate mortgage, and therefore an affordable monthly payment, based on the increased home equity when the rate reset. Residents in the country of my parents birth aren’t abused by sleazy practices. In 2008 the World Economic Forum ranked the highly regulated Canadian banking system the healthiest in the world compared to the U.S. ranking of 40th. As I pointed out in my book, “America, Welcome to the Poorhouse,” Canadian citizens are also educated about the corrosive influence of mortgage debt; the Financial Consumer Agency of Canada’s website demonstrates to users why it’s more cost-effective to have a shorter loan. The results: nearly 85% of Canadians make weekly or biweekly payments to speed up the loan payoff. Not surprisingly I could find no statistics reflecting the percentage of Americans who do the same. Until we get Democrats in office who work for the electorate, we can’t count on legislation to mandate plain-English disclosure, or better yet, prohibit irresponsible lending so disclosure won’t be necessary. As I said in my last blog, what Warren should do is create a website with vital information that consumers need before they make an important financial decision, rather than attempting to get legislation passed that the banking lobby will either kill, water down or get around.

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Katy Welter: Put Your Money With a Boring Bank

September 23, 2010

Banking is not meant to be exciting. Interest rates, financial statements, title work, and, ugh, regulations won’t raise your pulse. When my dad started working for Indiana National Bank in the early 1970′s, as he tells it, it was painfully boring. In those days, banks were so highly regulated that bankers were administrators of established practices, not financial innovators. Banks weren’t allowed to branch outside of their counties, offer creative products, or, frankly, compete with one another. Credit scores didn’t dictate interest rates and securitized subprime mortgages were but a gleam in Wall Street’s eye. Banks — in those days, much more similar to one another in size — were stable employers, offering moderate pay, rich insurance benefits, and a conservative corporate culture emphasizing loyalty. The bank I grew up with almost never had a lay-off, but it also awarded only modest bonuses, if at all. This was a small bank in the heart of the steel industry, where a fair number of the bank’s employees sought stable pay and health and retire benefits in order to supplement or safety net their spouse’s increasingly unsteady work. It was good work, if not terribly exciting. Even the large banks were once conservative. In the latest journalistic stab at Wall Street, the New York Magazine article, ” The Wail of the 1% ,” reveals, among other things, the transformation of the corporate banking industry. What once was seen as a well-paid, respectable career choice for well-educated individuals — on par with practicing medicine or law — Wall Street banking devolved into a “casino culture operating in the financial-services industry.” This new high-risk, cortisol-infused industry was spurred by the lure of massive profits, made possible by deregulation of the 1990′s. Meanwhile, many community banks remained, well, boring. Walk into a community bank and ask some employee, anyone at all, why he got into banking. You can bet he won’t mention anything about retiring at 40. And if you ask why he stays — you can expect some kind of response about the security, decent benefits, and good people. Community banking is a straightforward business populated by risk-averse people. This is not to say that small banks always toe the line. Small bank loan officers, many of whom worked at least partially on commission, made loans straining borrower credibility, and the booming real estate market swept up their tracks. But community bankers — sensitive to software and compliance costs, but also loyal to old habits — are typically slow to jump on board with new, often risky, trends. My dad recalls without fondness when home equity loans and second mortgages became more popular. More and more banks had begun to offer these products, and customers began to insist upon them, eager to use home equity to purchase cars, pay their kids’ tuition, and deduct the interest from their taxes. But extending the life of a loan tempts life’s uncertainties — recession, illness, and job loss — and the practice can be a bad bet for both parties. Particularly bad for the borrower: if you’ve never looked at an amortization schedule, the bank takes in interest more than 50% of your monthly payment for the first half of the loan term, making it very difficult to earn equity in even a stable real estate market. And each time you increase your debt, that equity is further from reach. As Paul Krugman pointed out last April, we’ve been here before. Banking’s original heyday preceded the Great Depression, fueling massive personal debt and huge profits for the financial sector (yes, our great-grandparents liked their version of the cash-out refi, too). The federal government then took away the bankers’ toys and made banking boring–for the first time. This period of increased regulation didn’t see the downfall of the American economy; rather, it saw an economy growing steadily with far less dependence upon Wall Street. The stock market is up these days, even if employment isn’t, and it’s easy to forget that, just two years ago, the world was gripped by the fear of America’s total economic collapse. Now that was exciting. You don’t have to depend upon — or even want — Congress to take the fun out of banking again. You can promote a sane, stable, and yet still profitable economy, by moving your money to a local bank. Let the big banks spin the casino wheel with someone else’s chips.

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David Isenberg: PSCs on Drugs

September 23, 2010

Over the years all sorts of things have been said and written about Erik Prince , founder, owner, and former head of Xe Services (formerly Blackwater Worldwide). Most of it has been critical. I’ve written before that while some of it, perhaps even lots of it, has been deserved, much of it has not. But thanks to pop culture, some lazy reporters, lots of ignorant online commentary, and people’s inclination to fit people into simplistic frameworks of good and bad, and ignore underlying structural reasons as to why we have private security contractors in the first place, Prince has been subjected to all sorts of unwarranted rhetorical abuse. So one might be inclined to forgive him when he pops off and says something rash. On the other hand, there is a saying that when you find yourself in a hole the first thing you do is stop digging. Remember the proverb; silence is golden. As in Erik should know by know that there are times when he should just keep his mouth shut. The reason he should button it is that you may recall that last month Prince was questioned in Abu Dhabi in connection with a fraud lawsuit filed by former employees that seeks millions of dollars in damages. He was questioned by Susan Burke, the lawyer who represents two former Blackwater employees, Brad and Melan Davis, who filed the lawsuit in a US district court in Virginia in December 2008, alleging that Prince and companies he controlled defrauded the US government. For background see my past Feb. 13, 2010 post “Blackwater Uses the F(raud) Word.” Now it turns out that the defendant Prince is seeking a protective order to seal the court file and to gag extrajudicial statements in the “Davis v. Prince” litigation. As one would expect Ms. Burke s arguing that the plaintiffs would be severely prejudiced “if the Court adopted Defendants‟ proposed Protective Order sealing everything and Defendants‟ proposed Gag Order prohibiting any contact with the media. Relators’ investigative efforts would be severely circumscribed by either Order.” A hearing on this issue will be held tomorrow morning at the federal court in Alexandria, Virginia. Yesterday Burke and her co-counsel filed a motion with new allegations. Note: if you are someone with a subscription to PACER (Public Access to Court Electronic Records) you can download the motion (1:08-cv-01244-TSE -TRJ) Reading it one understands why Prince wants it suppressed. To start with: On August 23, 2010, Relators‟ counsel deposed Defendant Erik Prince. After his deposition concluded, Mr. Prince threatened to “come after” Ms. Burke, as is explained in the appended Burke Decl. Evidently keeping cool under fire is not one of his strong points. True, the appended declaration is still under seal so the precise words exchanged and their context is unknown. Still, the Eastern District Court of Virginia is not Fallujah; there is no need for lock and load rhetoric. As Dr. Evil said to his son, zip it. Moving on, a more provocative point would be this: Media reports regarding the lawsuits prompted a third party named Howard Boardman Lowry to contact Relators‟ Counsel. Mr. Lowry’s sworn testimony is attached in its entirety as Exhibit B. Mr. Lowry testified he purchased steroids, human growth hormones, and testosterone for Blackwater employees and his observation of rampant drug use among Blackwater employees. Initially, Blackwater paid for the steroids from company funds. Later, Blackwater management steered Blackwater personnel to Mr. Lowry. He also testified that Blackwater employees would often shoot at Iraqi pedestrians for no reason and would regularly shoot into adjacent buildings housing Iraqi civilians among other acts of unwarranted violence. In short, Mr. Lowry provides critical and corroborating evidence. See Exhibit B. Critical and corroborating evidence indeed! That doesn’t begin to do justice to Mr. Lowry’s assertions. Consider this excerpt from his videotaped declaration. There were numerous individuals that would come to my hotel room and – and give me money to purchase usually steroids or testosterone, and once I came back to my room, on several occasions. Mr. Chris Fuller, Mr. Madison Webb, and a gentlemen by the name – he was a New Zealand special, SAS, special forces, who went by the name of “Baaz.” It is the only name that I knew him by. He was known companywide by that name. And the three of them on numerous occasions injected themselves with testosterone and steroids in my presence. There were other individuals after. There was a – a gentleman in the room next to me that I had gotten a room for, actually two floors in the Mosafer Hotel for Blackwater at the behest of Mr. Berry at that point because the company was expanding very rapidly, and Jerry was one of the gentlemen who ended up being killed in Fallujah. [This would be Jerry Zovko who was one of four Blackwater contractors ambushed and killed by insurgents in Fallujah, Iraq on March 31, 2004]. Jerry was a good friend of mine and gave – provided me tremendous insight into the company and confirmed that the use of steroids and human growth hormone, testosterone, were pretty much endemic to them and almost companywide. It was – it was a wide-ranging problem, and this included individuals that were on Bremer’s personal detail. I cannot say for the record that I personally witnessed them taking it.; however, on numerous occasions, individuals that did provide me money to make the purchases of the steroids and testosterone did convey that these were going directly to members of Blackwater personnel and Bremer’s – Ambassador Bremer’s personal detail. Why do plaintiffs oppose Prince’s ‟ motion to seal all evidence in this lawsuit and to impose a “gag order” on the plaintiffs and their counsel? First, note that they do not oppose to entry of an appropriate protective order. They had been collaborating with defense counsel and the State Department to prepare such an order. But Burke argues that the defendants have not demonstrated good cause for their proposed protective order. “Plaintiffs and the public would be substantially prejudiced by entry of Defendants‟ overbroad protective order, which seeks to seal everything disclosed in pretrial discovery.” Second, “Defendants repeatedly assert that Relators‟ counsel intends to publicize materials merely to annoy, embarrass, and oppress Defendants. This is false. Relators‟ counsel wants the media to cover the pre-trial proceedings in this action because that media coverage results in fact witnesses such as Mr. Howard Lowry contacting them. These witnesses are going to be helpful in showing the jury that Relators‟ claims of widespread fraud and misconduct have merit.” Third, and this says much about Prince’s inability to do effective public relations: It is absurd to suggest that media attention surrounding Defendant Prince and Blackwater is somehow caused by Relators and their Counsel. Although Relators‟ counsel often shares non-sealed materials with the media to further the Relators‟ interests in finding additional corroborating witnesses, Defendant Prince and his companies create the media stir by their own actions. Indeed, their misconduct has led to a series of indictments (Exhibit D), charging letters from the State Department (Exhibit E), and criminal trials (Exhibit F). Indeed, Defendant Prince seeks publicity that serves his own ends. He voluntarily participated in a Vanity Fair interview, pressing his view that anyone who criticizes his misconduct must have a “political agenda.” Exhibit G. Defendant Prince voluntarily cooperated with a book about his life, called Master of War. Exhibit H. In the book, he voluntarily revealed, among other things, that he fathered a child out of wedlock and cheated on his wife who was dying of cancer.

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America’s 5 Biggest Employers — Then And Now (PHOTOS)

September 23, 2010

By 24/7 Wall Street : Today’s corporate America is dominated by service companies, tech firms, and huge retailers which have thousands of locations and hundreds of thousands of workers. At the end of the decade following WWII, corporate America looked very different from it does now. Fifty five years ago, most of the largest corporations in the US built cars, supplied car parts, or provided fuel for America’s vehicles. What follows is 24/7 Wall St.’s review of how American business has changed, why, and what it looks like today. The employment figures were compiled using the Fortune 500 database from 1955 and 2010. Among the ten largest employers in 1955 were GM, Chrysler, U.S. Steel Standard Oil of New Jersey, Amoco, Goodyear and Firestone. None could have existed or been nearly as large as they were without the insatiable appetite for American-made cars. What caused appetites and businesses to change will continue to be a matter of debate between business historians. Did the Japanese make better products? Did spikes in oil prices in the 1970s, 1980s, and two years ago knock the life out of the car business? Or, did the UAW and other large unions bleed the companies through high wages, rich pensions, and health care funds? Today, four of the ten largest companies by total employees are Walmart, Target, Sears, and Kroger. Americans are drawn in huge numbers to retailers with low prices. The industry is dominated by companies which can source cheap goods, run them though efficient supply chains, and market them at low prices. Two of companies on the list from this year are IBM and Hewlett Packard. They are the tip of an iceberg comprised of dozens of large tech companies with high margins, rapidly growing sales, and well-paid work forces. This group includes Dell, Google, Cisco, and Oracle. With almost no exceptions, these companies did not exist five decades ago. The decades-long movement away from a United States dominated by smoke stacks to one dominated by computers and malls has also caused a shift in the geographic placement of the country’s better-paid workers. In the 1920s, they migrated to the North – places like Pennsylvania, Ohio, and Michigan – where blue-collar jobs were abundant. Eight decades later their descendants are out of work in numbers that total well into the millions. As new industries emerge to replace those which are dominant today, these issues are likely to remain. Check out America’s biggest employers (then and now) and v isit 24/7 Wall Street for more information :

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Obama: Reforms, Economy Are ‘Moving In The Right Direction’

September 20, 2010

In a town hall discussion broadcast live on CNBC Monday, President Barack Obama said the country’s economy is “moving in the right direction” — even if it doesn’t feel that way. Responding to questions from, in addition to the host John Harwood, a student, a Wall Streeter, a small business-owner and a self-described member of the middle class, the president acknowledged that “times are tough for everybody,” but pointed to his record so far as president and asked the audience to trust in his agenda. “We went through the worst recession since the Great Depression,” he said. “Those programs that we put in place worked. So now you’ve got a financial system that is stable. …The challenge is that the hole was so deep.” The tough questions came near the beginning. The chief financial officer for a veterans service organization, who called herself a “middle-class American,” said she was “exhausted of defending you” and “deeply disappointed with where we are right now.” “The life you describe, one of responsibility, looking after your family, contributing to your community, that’s what we want to reward,” Obama said in response. “I understand your frustration.” He proceeded to list his administration’s reforms on student loans, credit cards and “a whole host of things that we’ve put in place that do make your life better.” The president deflected criticism from Wall Street as well. He pushed back against the assertion that he has vilified business, saying the angry response to his reforms has been irrational. His citing of historical examples, such as the creation of Medicare, recalled that passage from a 1933 Time article he read in a speech in April — “Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment…” — which refers to the creation of the Federal Deposit Insurance Corporation. When SkyBridge Capital manager Anthony Scaramucci told Obama, in a question, that Wall Street feels like a “pinata,” the president said, to applause, “There’s a big chunk of the country that thinks that I have been too soft on Wall Street.” WATCH Obama respond to accusations that he’s been too tough on Wall Street: “Me saying you should be taxed more like your secretary, when you’re pulling home a billion dollars or a hundred million dollars a year, I don’t think is me being extremist or anti-business.” Throughout the speech, Obama insisted he was allied with businesses of all sizes. In response to a question from a small business owner who does monogram glass work, Obama pointed to the “eight tax cuts for small businesses so far” that his administration has passed, calling them “pro-business agendas.” He admitted, further, that his own political approach to this legislation hasn’t always been ideal, saying that he will be “setting a better tone so that everybody feels like we can start cooperating again, instead of going at loggerheads all the time.” The president’s argument, ultimately, was that reforms need to continue. Regarding housing, Obama countered the argument that allowing the market to fall naturally would help it more than continuing to prop it up. “We were very successful in keeping the housing market alive at a time when it had completely shut down,” he said. “My job as president is to think about those families that are losing their homes, not as some abstract numbers. I mean, these are real people.” He also touched on the possibility of a payroll tax holiday (“This is something that we’ve examined”) and on China’s capital restrictions. “What we’ve said to them is you need to let your currency rise,” he said about China. “We are going to continue to insist that, on this issue and on all trade issues between us and China, it’s a two-way street.”

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Elizabeth Warren: Fighting to Protect Consumers

September 17, 2010

Over the past several weeks, the president and I have had extensive conversations about the vital importance of consumer financial protection. The president asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started — right now. The president and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done. President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American. The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them — way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices. If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings — there’s a lot of work to be done. When she was 16, my grandmother, Hannie Reed, drove a wagon in the Oklahoma land rush. Her mother had died, so she was up front with her little brothers and sisters bouncing around in the back. When I was growing up, she talked about life on the prairie, about marrying my grandfather and making a living building one-room schoolhouses, about getting wiped out in the Great Depression. She was hit with hard challenges throughout her life, but the moral of her stories was always the same: she would solve her problems one at a time by pulling up her socks and getting to work. It’s time for all of us to pull up our socks and get to work. Cross-posted from WhiteHouse.gov .

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Elizabeth Warren: Fighting to Protect Consumers

September 17, 2010

Over the past several weeks, the president and I have had extensive conversations about the vital importance of consumer financial protection. The president asked me, and I enthusiastically agreed, to serve as an Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. He has also asked me to take on the job to get the new CFPB started — right now. The president and I are committed to the same vision on CFPB, and I am confident that I will have the tools I need to get the job done. President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American. The new consumer bureau is based on a pretty simple idea: People ought to be able to read their credit card and mortgage contracts and know the deal. They shouldn’t learn about an unfair rule or practice only when it bites them — way too late for them to do anything about it. The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices. If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings — there’s a lot of work to be done. When she was 16, my grandmother, Hannie Reed, drove a wagon in the Oklahoma land rush. Her mother had died, so she was up front with her little brothers and sisters bouncing around in the back. When I was growing up, she talked about life on the prairie, about marrying my grandfather and making a living building one-room schoolhouses, about getting wiped out in the Great Depression. She was hit with hard challenges throughout her life, but the moral of her stories was always the same: she would solve her problems one at a time by pulling up her socks and getting to work. It’s time for all of us to pull up our socks and get to work. Cross-posted from WhiteHouse.gov .

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Richard (RJ) Eskow: As the Aging Stoop to Their Labors, Prosperous Pundits Lecture Them About Sacrifice

September 15, 2010

The aging American workforce has been vilified a lot lately, in much the same way the poor were in previous decades. Politicians who once might have spread myths about “welfare queens” are now describing retired people as “greedy geezers.” Not to be outdone, well-paid pundits are rushing to lecture people on their moral failings and urging them to rediscover the nobility of sacrifice. But sacrifice for whom, exactly, and to what end? It doesn’t seem to matter — and that’s the problem. Fortunately, not everyone’s joining the crusade. Today’s shining example is John Leland from the New York Times, who took the time to review the data on aging workers. What’s more, he even went out and talked to some of them. Here’s what Mr. Leland learned. As a new analysis by the Center for Economic and Policy Research demonstrates, “one in three workers over age 58 does a physically demanding job … including hammering nails, bending under sinks, lifting baggage — (a job) can be radically different at age 69 than at age 62. ” Leland also met workers like 58-year-old Jack Hartley, who “works a 12-hour shift assembling tires: pulling piles of rubber and lining over a drum, cutting the material with a hot knife, lifting the half-finished tire, which weighs 10 to 20 pounds, and throwing it onto a rack.” As Leland explains, “Mr. Hartley performs these steps nearly 30 times an hour, or 300 times in a shift.” Says Jack Hartley, “The pain started about the time I was 50. Dessert with lunch is ibuprofen. Your knees start going bad, your lower back, your elbows, your shoulders.” Politicians from both parties — some Democrats and many Republicans — have been contemplating raising the Social Security retirement age for some time, and their efforts are endorsed by analysts like Eugene Steurle of the Urban Institute. According to Leland, Steurle believes Social Security is threatened financially because people are living longer. That’s a doubled-barrelled mistake: Social Security isn’t threatened financially. It can pay full benefits until 2037, and could be made permanently stable just by raising the cap on payroll taxes. And the “living longer” part is a common misconception that’s easily dispelled by looking up some census tables and other data . While I disagree with analysts like Mr. Steurle, at least he’s civil in expressing his views. That stands in sharp contrast to Deficit Commission co-chair Alan Simpson, the Id of the Washington Elite. We won’t re-litigate Simpson’s behavior, except to say that his candid articulation of the elite consensus paved the way for a growing wave of prosperous pundits who are now castigating middle class Americans for clinging to their dreams of retirement. Consider Alison Schrager, a blogger for the The Economist, who wrote this: “I don’t know if it’s ever going to be realistic that everyone saves enough to spend the last third of their life on vacation .” (Emphasis mine.) Or the Atlantic’s Megan McArdle, who exults that Schrager’s “vacation” comment is my favorite line in my newest column for the magazine .” Adds McArdle: “It was nice that a combination of rising life expectancy and broader pension coverage allowed a large segment of American workers to take what amounted to a multi-decade vacation …. But this was never going to be sustainable.” Pop quiz: Which of these two financially comfortable, sedentary writers has written the sentence that best captures the spirit of Scrooge’s “are there no workhouses” speech? Is it the one who thinks retirement from a life of physical labor is a “vacation,” or the one who says that’s her “favorite line” while adding that letting manual laborers retire before their bodies fail completely was “nice” while it lasted? (It was a trick question: They’ve both channeled Scrooge beautifully, and added a more than a pinch of Simon Legree.) So who are these older workers with wild vacation fantasies, these shirkers looking for an all-expenses-paid trip to Margaritaville? Here are the statistics: Among workers 58 and over, 37% of men and 32% of women do physically demanding work. (The figure’s 62% for Hispanic men.) They’re janitors, maids, gardeners, carpenters, cooks, and people who carry out the other physically taxing jobs listed in the study. You can almost picture Megan McArdle and Alison Schrager glowering as these working Americans mow their lawns and mop their floors, looking down on them through golden lorgnettes perched on noses wrinkled in disapproval. Imagine: After paying their payroll taxes for thirty or forty years, these workers actually hope to collect a benefit that averages out to more than $1,100 per month (about $920 for women)! No wonder Schrager and McArdle are tut-tutting over the self-indulgent dreams of the hired help. Then there’s Anne Applebaum. In her latest Slate piece, Applebaum thrills to the descriptions she says have been given to Great Britain’s new leadership and its fiscal policy: “Vicious cuts.” “Savage cuts.” “Swingeing (sic) cuts.” “Axe-wielders.” Never before has a government budget been greeted with such lurid, sado-masochistically charged imagery. Her piece reads like a cross between The Story of O and Milton Friedman’s Capitalism and Freedom. “Articles about the nation’s finances are filled with talk of blood, knives, and amputation,” Applebaum writes. “And the British love it,” she adds enviously. No debt, please, we’re British. Just in case you didn’t get the moral point lying beneath the slasher imagery, Applebaum spells it out: “Austerity is what made Britain great.” (And we thought it was the food.) She contrasts the British population’s posture of enthusiastic submission, at least as she sees it, with the American people’s unwillingness to submit to discipline. We just want “instant gratification,” she says — except, quoting a “quip” from Britain’s Deputy Prime Minister, “it isn’t quick enough for some people.” While Applebaum calls for our country to embrace “savage cuts,” however, she fails to take note of the base from which those cuts would be made. The British have a fully nationalized system of publicly funded healthcare. Their current retirement age is 65 (60 for women born before 1950), where ours is 66 and scheduled to reach 67 by 2022. The British retirement age is scheduled to rise at a much more leisurely pace: to 67 by 2036 and 68 by 2046. But never mind the details: Jack Hartley must start sacrificing now . No more “instant gratification” for you, pal! Applebaum saves her most jaw-dropping statement for the final paragraph: “I don’t hear anyone in America talking about cuts in Medicare, Medicaid, or Social Security,” she writes. Really? She hasn’t heard Simpson’s repeated calls for cuts? Or John Boehner’s suggestion to raise the retirement age to 70 ? Or House Majority Leader Steny Hoyer, who made the same suggestion? Applebaum doesn’t even seem to realize that Obama created a Deficit Commission, or that he specifically (and in my view unwisely) authorized it to look at Social Security and Medicare. Let’s read that sentence again: “I don’t hear anyone in America talking about cuts in Medicare, Medicaid, or Social Security.” Applebaum’s Scrooge moment comes when she contrasts Americans unfavorably with their blade-happy British cousins, and then offers this explanation: “The last period of real national hardship Americans might remember is the 1930s, too long ago for almost everyone alive today.” She might want to run that whole “we can’t remember real hardship” notion by the more than six million Americans who are trapped in long-term unemployment, or the other 10 million who are currently unemployed. She might also want to double-check it with the 45 million Americans living in poverty as of 2009, after the highest single-year increase in the number of poor people since they started tracking their numbers. Or with the one out of five children in this country now living in poverty. The United States now has the third highest poverty rate among developed nations , according to the OECD, behind only Turkey and Mexico. Household participation in the food stamp program passed 41 million for the first time ever in June. A”period of great hardship” is anything but a distant memory for these Americans, who would presumably be among those expected to ‘sacrifice.’ Which gets us to back to our original question: Sacrifice for whom? She doesn’t say. Neither does Tom Friedman, who devotes most of today’s column to scolding children from a lordly height (based on Paul Samuelson’s inability to accurately interpret school test scores — but that’s a topic for another day). Friedman’s displeased with their parents, too. Like Applebaum, Friedman believes our unbalanced budget proves that the nation has a “values problem.” “All solutions must be painless,” he says dismissively of his fellow Americans. “Which drug would you like? A stimulus from Democrats or a tax cut from Republicans?” That’s a false equivalence. The stimulus Friedman dismisses as a “drug” is really an urgently needed cure, but you have to be aware of the suffering around you to know that. Many economists who worry about killing the recovery too soon are urging immediate stimulus spending to get the economy moving again. They say cuts should come later, after the economy is stabilized, and shouldn’t be applied unjustly. Friedman can’t wait. He’s too eager to hear “our generation’s leaders … utter the word ‘sacrifice’.” And he’s not too interested in the specifics, either. Friedman holds up the “Greatest Generation” as an ideal, the apogee of national self-denial in service of a greater cause. Sure, they’re to be honored for their hard work and nobility of spirit. But that same generation enjoyed income equality, retirement security, and prosperity built on the purchasing power of a thriving middle class. Those are the things that are most threatened by Friedman’s rhetoric. Friedman says our elders called for sacrifice “the only way you can, by saying: ‘Follow me’.” But that generation sacrificed so that their children could have a good education that would lead to even greater opportunities than they themselves had. They sacrificed so that they could look forward to a financially secure retirement. They sacrificed to reduce poverty, and to build a society where everyone had the opportunity to work and prosper. What kind of world do Friedman and Applebaum want us to sacrifice for? As we said, that doesn’t even seem to matter to them. They’re making a fetish of austerity, without any greater vision or purpose. That’s fatuous and dangerous, especially when their calls for self-sacrifice are applied with false even-handedness in the face of rising income inequality, unemployment, and poverty. Sacrifice for the greater good is a fine and admirable thing. But sacrifice for sacrifice’s sake, bloodletting for the thrill of seeing a swinging axe, the yearning for a vicarious sense of national nobility at the expense of others — these are the thoughtless expressions of people who prefer symbol over substance. They’re the product of an indulgent form of self-mythologizing that interferes with analytical thinking and anesthetizes the human conscience. And as for McArdle and Schrager, there’s not much more to say. A “vacation”? That’s just horrible. _______________________________________________________________ Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Strengthen Social Security campaign. Richard also blogs at A Night Light . He can be reached at “rjeskow@ourfuture.org.” Website: Eskow and Associates

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Max Fraad Wolff: Somewhere Between the Emerald Isle and the Land of the Rising Sun

September 14, 2010

The great austerity versus spending debate has been growing louder. The crescendo will likely be reached in the final run-up to the 2010 mid-term elections. This debate will rage for the next several years. At some point the sheer size of U.S. government debt issuance and the unsustainably low present interest rates will collide. The U.S. government will sell over $2.2 trillion worth of debt this year and pay $400 billion in interest on this debt. The only reason the interest expense is so “low” is that we are paying an average interest rate of 2.4%. In the three-year period from 2008 to 2011 America will pay and has paid, $847 billion in interest on the national debt. America is now somewhere between the long, slow slide of the Japanese economy — the land of the rising sun — and the austerity drenched emerald isle — Ireland. Ireland has slashed and enabled the market to begin to correct for the excesses of debt and speculative growth. Japan has tried to ease and stimulate its way out of what has become a 20-year soft patch. Ireland’s GDP has fallen more than 7% and her unemployment rate is over 13%. Japan has seen very low growth for nearly 2 decades. However, Japan has managed remarkable social cohesion and low unemployment. Below you will see the three nation’s unemployment charts as measured by the Organization for Economic Co-Operation Development (OECD). Japan has seen an enormous run-up in government debt and Ireland is suffering to prove its bona fides to bond markets and investors. These two nations are vastly different from the U.S. and from one another. However, they might function as bookends to the present debate in the U.S. All graphs display the U.S., Irish and Japanese unemployment rates against the average rate for the 33 developed nations of the OECD. The serious and persistent problems in the U.S. economy have created an environment where policy makers and pundits scream for greater proximity to either the Japanese or the Irish approach. I would argue that the Japanese, American and Irish approaches all involve the same mistake. Obviously, the circumstances and options open to each nation are different. No nation can fix structural problems with cyclical approaches. When the old structure is seriously broken a new structure must be built. The other choice is to attempt to speed up or slow down the adjustment process. This is done by meddling to smooth the business cycle or bracing for impact. Massive doses of government spending can reduce pain and slow adjustment. This has been the Japanese approach. Harsh market medicine will make a shorter more savage correction. The Japanese style approaches risks by staying down longer. The Irish medicine risks mass suffering fueled by political instability and wounds that fester and cripple. The bigger point is that this does not have to be the path that we follow. We can try a third way. We can confront that the structure of the U.S. economy needs to be adjusted and use market intervention to ease and speed the arrival of new and sustainable economic arrangements. This is absolutely not what we have been doing. America needs to spend less, save more and generate jobs. This must be done with decreasing government spending and a shift in the nation’s tax burdens. Labor needs to pay less in taxes — to grow jobs and assist the recovery in middle class households. This means that capital and profit will have to pay more of the total bill. The more growth our structural shifts generates, the less the increase in tax burden and the less the reduction in government spending that will be required. We have to re-invest in education, infrastructure, health care, public goods and reducing national debt. The costs, results and sufferings of our present issues in health, education, infrastructure and transport shorten and lower our life standards. These shortcomings are also crippling our competitiveness. Spending in these areas — more importantly changing how these areas function — is not mutually exclusive with balancing budgets. In fact, we can’t balance the budget without confronting where our first place spending is not generating world-class results. Our economy is structurally unsound. That means we need to change a portion of how the economy functions. Ours is not a simple question of less or more state involvement — although that is what we hear from most folks — left, right and center. We need to shift what gets taxed more and what gets taxed less. We need to slowly shift back to a system where the vast middle class can get jobs that earn enough to live. America will not be as relatively rich as she was for most of the period since WWII. This will still be a rich country. Our middle class will need to spend less on private consumption than what was spent from 2002 to 2007. Our lives can still be better! This means more public goods and more savings. Public transit, parks, health care, education and community development enrich many more lives at much lower cost than private pools dug in behind unaffordable McMansions. It’s time to let go of the notion that all change means decline. It is time to concentrate on facilitating the structural evolution of the U.S. economy. If we don’t, we are in for years of stifling debate in a deep growth valley between the Japanese and Irish paths.

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Mark Miller: How to Cut Expenses in Retirement

September 13, 2010

How much will you need to live on in retirement? You’ll often hear the big financial services companies offer this rule of thumb: Plan to replace 80 percent of your working income in retirement. Ellen Wagner tossed the rule of thumb out the window when she retired in 2008. Instead, she developed a plan to live well on less than half of what she had been making. Executing that plan helped allow Wagner, who’s been widowed since 2008, to retire at age 58. Wagner’s story underscores an important point about retirement planning: Income and assets are just one set of values in the retirement security equation; on the other side sit lifestyle and spending. There’s a growing focus on this side of the equation, thanks to writers like Chris Farrell, a journalist and author of The New Frugality (Bloomsbury Press, 2009) and retirement educator Steve Vernon, who blogs about retirement spending and expenses frequently at CBS Moneywatch. Farrell makes the case for a new frugality based on values that are good for pocketbooks and for the environment at the same time. The core of his argument is that a conservative approach to consumerism leads to green decision-making, such as downsizing your home, using energy-efficient appliances, recycling and using public transportation instead of cars. And from a pocketbook perspective, Farrell’s frugality doesn’t mean pinching pennies; instead, it means spending on quality — buying the best you can afford but no more than you need. Vernon has pointed out other creative ways to slash spending. “[Live] like you did in your college years. Take in a roommate or two. Maybe beg your kids to move back in with you in order to share expenses,” he says. “Grow your own food. Entertain yourself and your friends by renting DVDs and sharing a $5-dollar bottle of wine from your local discount retailer. Many of my contemporaries have fond memories of their college years, partly due to the shared bond of figuring out how to enjoy life on a shoestring. Is it time to go back to the future?” Ellen Wagner thinks so. After a first career as a professional violinist in the New Orleans Symphony, she later completed a Ph.D. in philosophy and taught at the University of North Florida in Jacksonville until 2008, when she decided to make a major change in her life. “My husband was killed in an accident in 2004. I decided to sell our house in Jacksonville, and move back to Boulder, where I’d met my husband when I was in grad school. Selling the house in Jacksonville in which we’d lived was hard but really made all the difference in my retirement.” Here are the key areas where Wager cut spending: Downsized real estate: Wagner sold a 2,000-square-foot house in Jacksonville and bought–for cash–a condo half that size in Boulder. “Jacksonville is actually a much less expensive place to live than Boulder, but my condo costs so much less to maintain that my life here is cheaper,” she says. “I dropped the mortgage payment, alarm company, lawn care, termite spray, bug spray, and pesticide/herbicide spray fees plus costs of fixing the roof, maintaining the irrigation system, paying for water for the lawn and shrubs, and higher utilities costs. “My homeowners’ assessment in the condo is less than I used to pay monthly to have the lawn mowed! And my southwestern exposure provides passive solar heating all winter, when my furnace does not generally get a lot of use. Downsizing drastically in what I own has reduced stuff and clutter to just the right amount. This was the largest cutback in living costs.” Simplicity at home: Wagner stopped worrying about having all the latest and greatest in her home. “I stopped wanting to have newer, upgraded appliances, devices, etc. In the Jacksonville house, I had nice 42-inch cabinets and put in new countertops with an integrated sink and a designer faucet. These were good investments, as the upgrades helped me sell the house before the market had tanked completely. Here in Boulder, I have a 1985 kitchen, complete with Formica countertops and laminate cabinets with the oak strips on the bottom.” Simplicity in diet. “I stopped eating out very often and also doing much shopping. Instead, I cook at home, which I absolutely love to do, and entertain friends here with excellent food and reasonable wines. Also, I use our great public library for books I want to read, as well as the place to donate books I no longer want.” Less driving. “Now that I’m retired and living in a walk-able city with great public transportation I am putting half the miles on my car each year, which saves gas and wear-and-tear. And car insurance is cheaper now since I drive less.” Along with extending her retirement income, Wagner feels good about the new lifestyle values in her retirement equation. “The general result is that now I can honor my ethical principles,” she comments. “I use less, buy fewer new things, and tread more lightly on the planet in general. Ultimately, my life feels very luxurious because getting rid of the meaningless extra stuff has enabled me to choose what matters most to me and what I most enjoy from day to day.”

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Liz Neumark: Odd Woman Out

September 13, 2010

I have spent the majority of my life surrounded by women. After the birth of my older brother, my parents got it right and had 3 daughters (me in the middle). My teachers have been predominately female. Though I happily discovered the allure and value of boys, my best buddies are girls. My 2 grandmothers had a profound influence in my life, planting the seeds of passion for food, sharing and giving. My mom has always been an inspiring example of an independent woman, gallivanting through life taking no prisoners, trailblazing as she goes. I attended an all girls’ high school and am a Barnard College grad. And as a mother to 3 daughters and 1 son, I am all about supporting and empowering women. Girl Power is in my blood. When I founded Great Performances , it was as a waitress service for women in the arts. Yes, we eventually caved and included men but not for the heavy lifting or morale but rather to assuage the insecure host or hostess who had to have a guy behind the bar. But we have remained female dominated in spirit and female values and sensibilities infuse our decision-making process and culture. Additionally, we are an officially certified Women/Minority Owned Business though I have never felt discriminated against on the grounds of my gender. In fact, I have always regarded my gender as an asset, wondering how we could somehow ease the path of male burdened industries. (And it seems very clear to me that if it were a world of female political leaders, we might be sending our sons off to war with less frequency.) It is only in the past few years that I have seen what everyone else has known all along. It is a boy’s club/man’s world, in ways that are innocent and others that are more serious. In chatting with a mom of 3 boys (2 in their 20′s, 1 still single digits) she shared that she has never known what is like to have nice soap in the bathroom. Oh, the tyranny of men! A female business associate remarked how she prefers to be served by good-looking men rather than women. While I enjoy male eye candy as much as the next girl (my perfect waiter list would include Robert Pattinson, Robert Downey Jr. and Sam Worthington), as a feminist I cannot select male servers across the board to a gender-balanced team though here, I am immediately going into risky territory. Our high fashion clients are ‘look oriented’ with gender preferences while another category of client might chose a staff that is all female while still another will advocate that a male staff eliminates the possibility of inappropriate (straight) male behavior. But that is not the true hardship we face as women. What I have come to recognize (but not accept) as true is that: 1. In much of the business world, men prefer to do business with other men. (Is it an odd comfort level or communication thing?) 2. Within many of the larger corporate structures I see, gender inequality persists in a serious way. But back to the home front (as I am reluctant to go down the road of evaluating corporate America). This is the line up: 2 daughters are away in college/gap year mode, leaving my husband and I at home with our son. And for the first time within the privacy of my own home, men outnumber me, 2 to 1. The difference is palpable! Often when I get home, the men in my house are sitting watching TV together (which is of course lovely), legs splayed in similar fashion, typically oblivious to anything that might need tending to in the household. They are both carnivores, an eating trait I do no share. The content matter of their TV or on line watching has little, if any, appeal to me. Their sense of humor has a source that is unrecognizable to me. Thankfully, having been surrounded by females for years, means that at the very least, they know how to put the toilet seat down. (Be thankful for small victories.) They are very sweet and often helpless which plays to my desire to assist them. They need to be fed and are extremely appreciative of my efforts, especially if it is steak or salami & eggs (though when I am not home, they manage to eat just fine.) How does it feel to be in a male dominated environment for the first time ever? Odd. And it forces me to think about my own long formed opinions about male/female roles and behavior. As I spend more business time in male dominated environments I wonder if my skills, honed within a feminist culture, have prepared me for what is ahead. At times I wonder how significant the differences between us are or is it just my imagination? I have always thought about the equality issue from the safety and perspective of a female dominated environment. This year, both at home and in the workplace, I face the challenge of championing the cause of women, with a changed backdrop. I will embrace this new experience with curiosity and skepticism, and will report back. PS: My husband comments that while this might be a male populated home now, it is not male dominated. A wise man.

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D. Michael Lindsay, Ph.D.: How America’s Evangelical Leaders Wield Power

September 12, 2010

As explained in my book Faith in the Halls of Power , evangelicals are the most discussed but least understood constituency in American public life, especially when we’re talking about evangelicals in power. In a study just published in the Journal of the American Academy of Religion , Brad Smith (of Princeton University) and I identify four types of evangelical leaders, based on how they make decisions at work. The research emerged out of a massive five-year study in which I interviewed face-to-face nearly 400 evangelical leaders of major organizations . These evangelicals, it turns out, are a lot like other leaders. Some are bold and brash; others second-guess themselves or try to keep a low profile. The people I interviewed are CEOs of big companies such as Walmart, ConocoPhillips, Johnson & Johnson, and Pepsico. They include cabinet secretaries and college presidents, heads of major nonprofits and leading figures in the arts. But they all share major characteristics that distinguish evangelical Christians from other people: they have 1) a very high regard for the Bible; 2) a belief in the importance of a born-again religious experience; and 3) a desire to bear witness to others through what they say and how they act. Ninety-three percent of the leaders I interviewed said that their colleagues at work know about their Christian faith, either because they have talked about it directly or because word has gotten around. One of the most direct ways evangelicals in power bear witness to their faith is through workplace decisions. Should the company change its policy on domestic-partner benefits? Does the organization fire a senior manager who slept with his assistant? Do you restrict celebrity endorsement deals to those known for moral behavior? Leaders I interviewed have wrestled in their roles as executives with these and other tough questions. If the media caricature of evangelicals is to be believed, one would expect to find these leaders using their powerful positions to proselytize and to foist their religion on others. But as I logged 300,000 miles conducting these interviews and visiting the organizations led by a diverse group of men and women, I found very few instances of evangelical triumphalism. Of course, a few cases do stand out. One CEO had a large placard hanging over his desk that quoted Mark 8:36. No one meeting with him in his office could ignore the big red letters: “What good is it for a man to gain the whole world, yet forfeit his soul?” Then there was General William G. Boykin who framed the U.S. military’s involvement in Iraq and Afghanistan as a battle against Satan. Yet these were not the norm. Our study found four common decision-making postures among evangelicals in power: pragmatic, heroic, circumspect, and brazen. The categories emerge from the intersection of two important dynamics: how evangelicals express their faith at work and how it is received . To understand how evangelicals handle power, you have to assess not only their direct actions but also what scholars call the organizational “ecology” where those actions take place. Pragmatic evangelicals are religiously subtle, and most work in environments hostile to outright religious expression. This hostility can come from within their organizations or from outside forces, such as the state or wider cultural pressures. Sometimes their colleagues are uncomfortable with faith expressions in business decisions. In other instances, the offense is reflected in company policies (such as scrapping “Merry Christmas” for “Happy Holidays”). Dr. Neil Clark Warren represents this pragmatic style. Warren, the likable psychologist who first became a celebrity in Christian circles for his best-selling book Finding the Love of Your Life , applied his 30 years’ clinical experience and started eHarmony in 2000. In just a few years, the internet-based matchmaking service became wildly successful, and while the firm did not screen its customers on religious terms, evangelical Christians were some of its biggest boosters. Warren and his company faced a difficult decision when a man filed a complaint with the New Jersey attorney general in 2005. He claimed that eHarmony was illegally discriminating against him by not offering a same-sex matchmaking service. Despite howls of protest from evangelicals (such as Dr. James Dobson of Focus on the Family), Warren and his colleagues opted in 2008 to settle with the attorney general and launch a second matchmaking site for same-sex couples, Compatible Partners . Warren, like many evangelical CEOs who lead large businesses in our increasingly pluralistic society, had to make a pragmatic decision. In the end, he determined that this was not, for eHarmony, a hill worth dying on. Some other evangelicals take what we call a “heroic” approach. Right or wrong, their actions are staunchly evangelical, even if it costs them dearly. When Marriott purchased a controlling stake in Ritz-Carlton in the 1990s, Horst Schulze, longtime head of Ritz-Carlton, was strongly urged by his new superiors to provide “adult” programming through in-room entertainment systems in his hotels. He refused. Pressure continued to mount, and eventually, Schulze threatened his bosses: “I’m gonna call a press conference and … say, ‘Now [Ritz-Carlton is] in the pornography business.’” Marriott backed down. “I’m a loose cannon,” said Schulze. “I say what I want.” Other evangelicals in power are much more circumspect. These leaders operate in workplace environments more amenable to faith expressions than do the pragmatics, but they are not as comfortable as heroics are in taking explicit stands. Mike Duke, CEO of Walmart, told me, “Faith is a sensitive topic, [one that has] more meaning after a relationship [between coworkers] has been established. … The best way to demonstrate one’s faith is in how a person treats other people.” When asked about the many challenges he’s received from religious leaders criticizing some of his company’s policies (such as low wages and poor benefits), Duke is clearly circumspect, even when pressed: “I don’t necessarily think that I could say that we’re a Christ-honoring company … but I often say we certainly have been blessed by God.” Some evangelical leaders encounter virtually no resistance to their faith expressions at work. Professional athletics is the example par excellence . NFL quarterback Kurt Warner declared at the end of Super Bowl XXXIV, “First things first . I’ve got to thank my Lord and Savior up above — thank You, Jesus!” And NBA superstar David Robinson would lead his teammates in prayer before every game. Evangelical athletes are able to be brazen about their faith without much pushback from fans, coaches, or owners. Encompassing about one third of all U.S. adults, American evangelicalism is a broad enough tradition that every approach has its fans and critics. What one evangelical may see as selling out, another regards as prudent. And as mentioned above, organizational ecology must always be considered. Brazen faith might well shrivel when an evangelical’s job in on the line. Or circumspect faith might have its heroic moment once a certain company policy starts to hit too close to home for a leader.

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April Rudin: Welcome to the Wonderful World of the High Net-Worth

September 9, 2010

As the story goes, F. Scott Fitzgerald once remarked to Ernest Hemingway, “The rich are different than you and me.” To which, Hemingway replied, “Yes, they have more money.” Fitzgerald, as you probably know, was obsessed with the rich, how they behaved, what they thought and so on. On the other hand, Hemingway was clearly more of an everyman. As most of us are everyday people, we are unfamiliar with how that elite world operates. What is different about the world of a high net-worth family? How about multi-generational wealthy families? What are some of the problems that having money creates? Typically, high net-worth families rely on “family offices” to manage their complicated day-to-day lives. These family offices may be single family offices, i.e. just for one family, or they may aggregate services among many families, thereby known as an MFO or multi-family office. A dedicated staff usually handles many facets of financial services including investments and complex asset allocation strategies. They also are responsible for associated tax implications, trusts and estate matters (either via in-house expertise or to specialized outsourced firms). Additionally, the staff of an family office may manage multiple residences and domestic staff. For others, it may involve private aircraft and its maintenance, etc. The more assets that belong to the family, the more to track, insure, maintain, etc. Most family offices handle travel arrangements, may create special family events, advise on philanthropic decisions, etc. They handle the routine “paperwork” for wealthy families whose everyday life is complicated. Family offices routinely manage bill pay/reporting as well as more sophisticated transactions such as legal matters, real estate transactions, etc. The family office staff implements controls, reporting and structure to manage expected service levels and reflect certain values for each particular family they support. Multi-generational families need support and guidance on family management, tax planning, governance issues, succession planning, as well as every day accounting. For multi-generational wealthy families, some of the advice sought after may be regarding philanthropic foundations, and how to evaluate outside charitable areas of interest, how to structure the family’s position on environmental matters or a myriad of other things which wealthy individuals may find interesting and worthwhile in addition to managing their family business and other assets. This is the world in which I am working in every day. I am neither wealthy myself nor had the good fortune of being born into a family which has been wealthy for past generations. I must navigate the worlds between the business which I am creating and the life which I am living. Over time, I have developed a keen eye and deep understanding of what motivates HNW (high net-worth) individuals. Marketing products or services to the high HNW client differs tremendously from mass marketing to the “everyman.” The essential difference lies in the relationship and trust — marketing within the HNW space is almost always relationship-based and highly targeted to particular groups of individuals or family offices. Access to the HNW is only available to a handful of “vetted” individuals. Word-of-mouth recommendations rule. If the right person tells you to “take the meeting” you do so. It is a tightly woven community of trust in the HNW world. That was that trust which Bernie Madoff exploited. He based his “marketing” on word-of-mouth from one rich person to another rich person. His word-of-mouth campaign was executed perfectly. It evolved to be an “exclusive club” to which people were even denied access. The more people who were denied access the greater the demand became to “get in.” I have heard of many stories of the “lucky” investors who were turned away by Madoff who claimed that his hedge funds were “closed.” Access to these powerful clients is something which comes with implied trust and secrecy. This is exactly what Madoff took advantage of. Trust and one’s own reputation are essential tenets of becoming service providers to the HNW. How can a service provider penetrate that market without the usual introductions? Here are some basic suggestions: Strategies for prospecting in the High Net Worth Market Go meet the HNW on their turf. Try joining the best country club, play golf 3 times a week at 2 pm and you will likely meet wealthy business owners and retirees or perhaps large shareholders of large companies. Also, target a specific number (limited) and type of client. Its quality of clients vs. quantity of clients in the HNW world. Here is another way to “mingle” with your prospects. Each year, when the opera (for example) has their annual gala, buy a table for and bring your best clients (a nice treat for them!). You will get noticed and meet others in attendance. Follow up with the individuals and then volunteer on one of the opera committees. These committees will be populated with usually wealthy older patrons of the arts, your younger generational wealth or perhaps the emerging affluent. You can make friends, get invited to their events and leverage each contact to the next. Take every meeting and get to know the names and backgrounds of those targeted by your marketing plan. Here is another smart idea: try to dominate an industry. One successful real estate entrepreneur I know believed that hedge fund principals were wealthy individuals. He located events targeting hedge fund managers at which he could give talks on the real estate markets and mingle. He went to their turf. Additionally, he has written articles on investing in real estate for their newsletters specifically addressing the hedge fund bonus situation and planning for opportunistic investments. Next, and this is key : try to focus on “money in motion.” Money is “in motion” during the following life cycle events: Death — do you prospect trust and estate attorneys? Divorce — do you prospect matrimonial attorneys? Sale of a business — do you prospect business brokers? Sale of Real Estate — do you prospect commercial real estate brokers and real estate attorneys? You can work to cultivate relationships with others that can introduce you to their wealthy clients. These are called centers of influence. Find other service providers that may have the type of relationships which you want and exchange contacts and introductions between both of you. Expand your rolodex and your firm’s name will also spread virally. Think beyond CPAs and attorneys to art gallery owners, high-end car dealers and the like. Finally, don’t forget a social/online media strategy, especially if you have set your sights on, for example, hedge fund entrepreneurs. Create a strategy and stick to it. Social media strategy emulates the more traditional word-of-mouth marketing in an online platform. Create, update and utilize LinkedIn to increase your online visibility and to best leverage your existing contacts to meet new ones and learn about similar individuals at other firms and so on. Facebook, while typically used for social rather than business networking, is still a viable tool for an online presence. The goal is to increase the proliferation of your firm and your message. Twitter was initially dismissed by mainstream business as a not “serious” form of social networking. As someone who has recently begun “twittering” my tweets, I think it is a great medium for exchanging ideas, especially for those on the go! Frequently, I will read my incoming tweets when bored. I subscribe across a wide variety of topics including social media/marketing, news feed, women’s issues, parenting, foodies, etc. You can decide to skip a tweet or news bite, open the link and read it, reply to the tweeter privately or reply to all followers of the tweet. You can also forward the link via text message or even email to help spread the viral message. An example of this is following a chef who tweets a seasonal recipe and you forward the link via Twitter to all of your followers. Just some basics on Twitter… Sometimes the HNW arena is an elite world which seems impenetrable and so I enjoy and value teaching others how to network amongst the rich and famous. However, I also confess that during other times, I think of “Miss Jane” the private banker alongside “Mr. Drysdale” on the Beverly Hillbillie s. And, other times, Robin Leach of ” Lifestyles of the Rich and Famous ” theme comes streaming through my head…. The real truth: I am just awaiting the day when I can change my “service provider” Coach Ocelot Print Maggie pocketbook (retail: $298) for a Hermes Birkin Bag (retail: $9,000) I want to change sides from an offensive position to the defensive side.

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Marshall Goldsmith: What Is the Truth About Leadership? (Part 1 of 2)

September 7, 2010

My good friends Jim Kouzes and Barry Posner, best known for the classic, award-winning book, The Leadership Challenge , have written a new book called The Truth About Leadership . Recently I had the opportunity to catch up with Jim about his and Barry’s new book. Following is part one of the fascinating discussion I had with Jim recently during a conference he was giving in San Diego. MG: What will fans of T he Leadership Challenge find in The Truth about Leadership that may surprise them? JK: We’ve been traveling the world for three decades now, constantly researching the practices of exemplary leadership and the qualities people look for and admire in the leaders they would willingly follow. During and after our seminars and presentations, people ask us a lot of different questions, but there’s always one thing that they all want to know: “What’s new?” They want to know how things are different now compared to how they were five, ten, twenty, or thirty years ago. So we tell them. We tell them how the context of leadership has changed dramatically since we first asked people in the early 1980s to tell us about their personal best leadership experiences and about their most admired leaders. For example, we talk about how global terrorism has heightened uncertainty as political landscapes have changed. How global warming and scarcity of natural resources have made regions of the world unstable and created the need for more sustainable products and lifestyles. How the global economy has increased marketplace competition in the neighborhood and around the world and how financial institutions have exploded, imploded, and risen like Phoenixes from the ashes. How the always-on, 24/7, click-away new technologies have both connected and isolated people, as their capacity for speed cranks up the world’s pace. But we also tell our audiences something else, which usually surprises at least a few people. We tell them that as much as the context of leadership has changed, the content of leadership has not changed much at all. The fundamental behaviors, actions, and practices of leaders have remained essentially the same since we first began researching and writing about leadership over three decades ago. Much has changed, but there’s a whole lot more that’s stayed the same. We thought it was as important in these changing times to remind people of what endures as it was to talk about what has been disrupted. This is not idle theorizing on our part. We wanted to make certain that the lessons we included in The Truth about Leadership not only withstood the test of time but also withstood the scrutiny of statistics. So we sifted through the reams of data that had piled up over three decades and isolated those nuggets that were soundly supported by the numbers. This is a collection of the real thing–no fads, no myths, and no trendy responses–just truths that endure. MG: Do you still believe that effective leadership can be taught? JK: Let’s get something straight. Leadership is not preordained. It is not a gene, and it is not a trait. There is no hard evidence to support any assertion that leadership is imprinted in the DNA of only some individuals and that the rest of us missed out and are doomed to be clueless. The truth is that the best leaders are the best learners. Leadership can be learned. It is an observable pattern of practices and behaviors, and a definable set of skills and abilities. Skills can be learned, and when we track the progress of people who participate in leadership development programs, we observe that they improve over time. They learn to be better leaders as long as they engage in activities that help them learn how. Learning is the master skill of leadership, and our studies demonstrate that the more leaders engage in learning the better they become at leading. But here’s the rub. While leadership can be learned, not everyone learns it, and not all those who learn leadership master it. Why? Because to master leadership you have to have a strong desire to excel, you have to believe strongly that you can learn new skills and abilities, and you have to be willing to devote yourself to continuous learning and deliberate practice. No matter how good you are you can always get better. You have to have a passion for learning in order to become the best leader you can be. You have to be willing to put in the hours of daily practice over a period of years–the rest of your life, really. You have to be open to new experiences and open to honestly examining how you and others perform, especially under conditions of uncertainty. You have to be willing to quickly learn from your failures as well as your successes and to find ways to try out new behaviors without hesitation. You won’t always do things perfectly, but you will get the chance to grow. MG: Which of the ten time-tested truths do you personally think is the hardest to follow? JK: The hardest leadership practice to master is also the one that differentiates leaders from individual contributors. The truth is that focusing on the future sets leaders apart. The capacity to imagine and articulate exciting future possibilities is the defining competence of leaders. And, our data tells us that this is the most difficult set of skills to learn. Developing the capacity to envision the future requires you to spend more time in the future–meaning more time reflecting on the future, more time reading about the future, and more time talking to others about the future. It’s not an easy assignment, but it is an absolutely necessary one. It also requires you to reflect back on your past to discover the themes that really engage you and excite you. And it means thinking about the kind of legacy you want to leave and the contributions you want to make. None of this can be done by a pessimist. You must remain optimistic and hopeful about what is yet to come. You must truly believe that the future will be brighter and be confident that we’ll all get there together. A positive difference can only be made by a positive leader. MG: Explain the role of character in leadership? JK: The truth is that credibility is the foundation of leadership. This is the inescapable conclusion we’ve come to after thirty years of asking people around the world what they look for and admire in a leader, someone whose direction they would willingly follow. The key word here is “willingly.” It’s one thing to follow someone because you think you have to “or else,” and it’s another when you follow a leader because you want to. What does it take to be the kind of person, the kind of leader, whom others want to follow, doing so enthusiastically and voluntarily? It turns out that the believability of the leader determines whether people will willingly give more of their time, talent, energy, experience, intelligence, creativity, and support. Only credible leaders earn commitment, and only commitment builds and regenerates great organizations and communities. A leader’s credibility makes the difference between being an effective leader and being an ineffective one. Credibility determines whether others want to follow you or not. It determines how loyal they will be, how committed they will be, how much energy they will put into the cause, and how productive they will be. And the effect of personal integrity of leaders goes far beyond employee attitudes. It also influences customer and investor loyalty. People are just more likely to stick with you when they know they are dealing with a credible person and a credible institution. In business, and in life, if people don’t believe in you, they won’t stand by you.

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Ellen Galinsky: We Need Play-cations, Not Just Vacations

September 6, 2010

It’s Labor Day Weekend–the last weekend of summer before we plunge into fall. Hurricane Earl swept up the East Coast, missing us, but bringing cold biting winds that, even amid the bright sunlight, seemed a signal that summer–vacation season–is ebbing and it is back to work we go. That is, if we ever left work. Work, as we all know, can be all-the-time, every-place. A special study on overwork by the Families and Work Institute (FWI) reveals that that one in three of all U.S. employees can be considered chronically overworked. I know the facts about vacations from the FWI’s nationally representative study, the 2008 National Study of the Changing Workforce, and they tell an interesting story. Fact 1: Not all us have access to a paid vacation: 79% of American employees receive paid vacation time from their employers. Fact 2: On average, we are entitled to a little more than two weeks off (16 paid days). Half of the U.S. workforce receives fewer than 15 days. Fact 3: Even when we are entitled to vacations, not everyone takes all of the days he or she has: 39% of us don’t use our full vacations. Americans use an average of 13.5 days of vacation per year. Fact 4: The longest amount of time we take off at one time averages nine days. One in four of us (24%) takes five days or fewer for his or her longest vacation, while 23% take more than 13 days. Fact 5: Taking a longer vacation (13 consecutive days or more, including weekends or holidays) bodes well for our health. Those employees who take longer vacations are less likely to have minor health problems on a regular basis, depression, sleep problems or to feel stressed. These are the facts, but they don’t tell us much about what happens during vacations. Many of us work while on vacations. It seemed almost standard practice this summer to receive a bounce-message to an email I had sent that read: “I am on vacation and don’t have access to email and voice mail,” only to receive a response from that person within a few hours. Still others of us take work on vacations or plan vacations that can be viewed as an extension of our work. So over this past weekend–a busman’s holiday for me for sure–I asked a number of people: “what makes a vacation renew and re-energize you?” Here are some of their responses: They take us away from our usual lives. I know from my research on children for my book, Mind in the Making, how energizing having new experiences can be for children and adults–they heighten our senses; they stimulate our curiosity; and they make us want to explore. Even when that new place is a familiar place, being away from our daily routines is refreshing. For one woman I spoke with, it was not having to cook, do the dishes, go to work, and go to the gym: “it was permission to have fun.” They give us time to think and see things in new ways. A man took a vacation that was a workshop related to his work, but found that he had the time to learn new things so it felt differently than a similar workshop might have felt during the year. We have freedom to go with the flow: A woman who planned her vacation carefully for her husband and children loved the opportunity to change plans at the last minute and to follow their interests. They are pressure-free or at least pressure-different. Obviously, vacations can have their own pressures–the kids who say “Are we there yet;” the plans to go camping or to the beach that are thwarted by a storm; the schedule of activities that can seem rigid; or the car that breaks down and has to be towed. I have had all of these experiences, but it is a different kind of pressure than the daily pressures we face. One man talked about working very hard on his vacation, but still he felt free of the expectations he usually puts on himself or that others put on him. When my children were little, they always called vacations, “play-cations.” As I was listening to the people talk about what makes vacations renew them, I flashed back to my children’s word. Yes, the best vacations are like the best play of children–they give us an opportunity to explore, to have fun, to learn, to go with the flow, and to be in moment. So we need play-cations, not just vacations! An addendum: As I was writing this, I got an email from a friend. She was in an airport en route home from her vacation, which she said was beautiful. Then she wrote, “I really dread re-entering my life.” Her challenge is the challenge of so many of us. We need to find ways of bringing play-cations back from our vacations and keeping them–to whatever extent we can–in our regular lives at work and at home.

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Larry Beinhart: Recessions & Recoveries, The Real Story

September 2, 2010

There appear to be, roughly, three types of recessions. There are post-war recessions. These are easy to understand. There’s an abrupt decline in military spending, demobilization reintroduces a large number of people into the work force, and businesses supplying the war machine need time to switch to consumer products. We’ve had them after World War One, World War Two, Korea, and Vietnam. They tend to end more or less by themselves as society adjusts to a peacetime economy. There are recessions due to fiscal policy. Either cuts in government spending, as in 1937 and 1973, or a hike in interest rates to tighten the money supply, as was done in 1949, 1958, 1960, 1969, and 1980. Historically, these have been relatively brief and shallow. They end when the deliberate policies that brought them on are reversed. Finally, there is the sequence of boom and crash. The first of these was in 1929, and the collapse that followed was called the Great Depression. The others were 1990, 2000, and 2007, the one we’re in now, starting to be called the Great Recession. Except for 2,000, these also included massive bank failures. Economists, historians, and, as we move into the present, journalists and pundits, offer a mixed multitude of reasons for each of them. But now that we’ve had four of them (including the crash of 2,000), we can see a pattern emerging. Coming out of World War One we had a top marginal tax rate over 70%. From 1921-25 it was cut, in steps, down to 25%. There was a boom, particularly in the fiscal sector. The crash came in 1929. When Ronald Reagan came into office in 1981, the top marginal rate was, once again, 70%. Reagan started cutting in 1982, down to 50%, then to 38.5% in 1987, and 28% in 1988. There was a boom in the fiscal sector. In the mid-eighties the collapse began, and over 1,600 banks failed. There was a huge bailout. It was followed by the recession of 1990. George H.W. Bush raised the rate to 31%. It cost him re-election. Then, under Bill Clinton, the top rate went up to 39.6%. That was followed by the longest sustained period of economic growth in modern times. However, in 1997, the Republican congress pushed Clinton into cutting the capital gains tax from 28% down to 20%. It was called The Taxpayer’s Relief Act. It marks the moment when the dot.com boom turned into the dot.com bubble. It burst in 2,000, and, along with the 9/11 attacks, there was another recession. George W. Bush launched another round of tax cuts. The top rate went down to 35%. Capital gains rates were cut to 5%. This was followed by the Bush boom. There was huge growth in the fiscal sector, but “mysteriously,” it was a jobless recovery. The boom was hollow. It was a bubble. It led to the Crash of 2007, with massive bank failures, followed by our current recession. How does this type of recession end? In 1932, Herbert Hoover raised taxes. He did it to balance the budget. In 1933 the economy changed direction and began moving upward. In 1991, George H.W. Bush, disturbed by the huge deficits that followed Reagan’s cuts, raised taxes. The economy subsequently turned around. After the 2,000 recession there was no tax hike. There were tax cuts. Corporate profits rose, there was a boom in real estate and in the fiscal sector generally. But there was no recovery. The recession continued for normal people. There were no new private sector jobs. Median income went down. Manufacturing continued to decline. The historical record suggests that this recession won’t end until there is a tax increase. Economies are complex. There are always a multitude of factors that effect booms and busts, growth and recessions. It is also a commonplace that conjunction does not necessarily imply causality. Nonetheless, if the same sequence takes place a multitude of times in different circumstances and the sequence takes place four out of five times — tax cut, fiscal sector boom, bubble, crash, bank failures and recession or depression — it makes a very good case for causality. The one exception — the fifth significant tax cut — took place in 1964 and 1965. Tax cut enthusiasts always refer to them as the Kennedy tax cuts, but they took place under Lyndon Johnson. They also always cite them as a great stimulus to the economy. They certainly didn’t improve anything. The economy stayed flat . The Dow Jones stayed flat . It’s possible that the difference between 90% and 70% was not enough to unleash a search for short term profits over long term growth and an ensuing frenzy of speculation. Those cuts do mark the moment when economic improvements in the life of ordinary people began to slow down, then flatten out, and, in the very long term, begin to decline. Our public policy dialogue has little basis in fact or rationality. Much of it, even in universities, is bought and paid for. There is no interest group willing to pay foundations, endow universities, buy radio ads for commentators, who will advocate higher taxes. But there’s lots of money willing to invest in propaganda that calls for lower taxes and claim that they’re good for the economy. So you won’t hear calls for higher taxes. You won’t find politicians who dare to propose higher taxes. Hopefully the expiration of the Bush tax cuts will work as tax hikes. That will mark the beginning of a real recovery. My primary qualification to write about these things is that I am not an economist. Most economists, as Paul Krugman recently observed, are theologians. They put theory first and then look for, or imagine, facts that will fit them. There is a lot of debate at the moment about what will end the recession and what effect tax policy has. Untutored as I am, I was free to look up the history and put historical charts of recessions, GDP, the Dow Jones average, fiscal policy, and tax policy in parallel columns. The historical facts are that high top marginal tax rates correlate with a very healthy economy. That high tax rates on the rich don’t impede growth. For whatever reasons, they promote growth. Low taxes on the rich are unhealthy. Tax cuts for the rich are dangerous.

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Califia Suntree: Credit Where Credit Is Due: Read This Before You Clip That Card

September 2, 2010

I’ll be the first to admit it–as an advocate of thrift I’ve been all too eager to paint credit cards with a broad, tar-black brush. But I can admit when I’m wrong: credit isn’t the enemy. Being broke is. The two, of course, are intertwined in modern-day America. Not only will misuse of credit lead to brokeness, but a new study reports that rampant use of plastic is actually taking money out of the already thin wallets of the poor (generally cash-only consumers) and fattening those of rich credit-card users who rack up perks. Merchants can’t afford to swallow the 3 to 5% per purchase fee that credit card companies charge, so it gets passed along to consumers, and is essentially subsidized by those who pay cash. And the downsides of overdoing it on credit are severe: you end up owing your first born to a credit card company or foreclosing on your house… we all know the end results. So I have been advising against any use of plastic, and was readying myself to hack my own cards to bits, when I spoke with Robert Spich, professor of Global Economics and Management at UCLA’s Anderson School, and he set me straight: “Credit is neither evil nor good. It’s all in the practitioners, whether you are borrower or creditor.” Essentially, if you are thrifty and money-smart, you can still use credit–and keep a clean conscience. Credit isn’t necessarily the enemy of frugality. This doesn’t mean you should rush out and go on a plastic-fueled shopping spree. Living within your means is still the best way to avoid financial disaster, on a micro and macro scale. But there is a right way to use credit and a wrong way. To paraphrase the NRA, credit cards don’t destroy bank accounts, people do. Says Spich, “If you use credit sensibly to make your life better, through smart consumption rather than immediate pleasures, purchases that improve your life into the future, credit can be a very positive thing.” The key phrase there is ” into the future .” If you are using credit to buy something that will keep serving you for years to come–a car, say, or a washing machine–and will save you time, money, and headaches “that’s when you look at credit as investment as opposed to consumption,” says Spich. “There’s a future payoff, a stream of benefits that flows from the purchase. So you don’t mind making a monthly payment.” Investing wisely in your future (think college loans) makes good economic sense, and is a good use of credit. Of course, this doesn’t mean you should buy a Mercedes on credit (no matter how much it might brighten your tomorrows) if your income level is more used Camry. Wise investment means balancing your various needs with your ability to pay–the longer it takes you to pay off the loan, the more you are paying for the purchase. And don’t break out the plastic for that fancy dinner or Disneyland tickets. Once they’re consumed, they’re gone forever…but that monthly payment isn’t. Secondly, if you are a saver, then you depend on borrowers (aka credit users) for that interest rate that makes your savings grow. A bank gives you, say, 2% interest on your savings, but lends it out at, say, 6%. They pocket the 4% and everyone gets something (it’s also why bankers are richer than you ). Credit, along with the bank’s investments, is what makes a savings account a better place to keep your money than under your mattress. Finally, credit is what makes or breaks your financial reputation. A good credit score will get you better loans, lower APRs, and enable you to ingratiate yourself to potential landlords. Want to buy a house someday? Good luck if you have bad or–just as bad–no credit. By definition, explains Spich, credit is “the taking of a risk in another individual by lending them valued assets with the expectation that this lending would lead to increased economic activity and an increased capability of the individual who receives the loan.” Without a credit history, lenders won’t know if you are a good risk or a bad one. The only thing that can give you a good financial reputation is having had debt and managing it well. Granted, most of us have the problem of managing too much debt, not too little. But the solution isn’t abstaining from credit–it’s using it wisely and paying it off. Credit is an essential component of capitalism. We are a long way off from the general store and “I’ll give you two sheep if you’ll lend me your ram,” but the basic idea remains the same. Credit allows our personal and shared economy to expand, and everyone should benefit, not just AmEx Centurion cardholders with 93 million reward points. It’s all about awareness. “By definition,” notes Spich, “the rich are rich because they have better information, and therefore know how to use things in their favor.” Now you know. (You’re welcome.)

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West Virginia Mine Explosion Leads To More Enforcement And Disclosure

August 27, 2010

It was back on April 5, right around the afternoon shift change, when methane gas or coal dust or both suddenly ignited in the Upper Big Branch coal mine in West Virginia, sending a massive fireball shooting down its low-ceilinged passageways. Twenty-nine miners working in several different sections of the mine were killed instantly, making it the deadliest mining disaster in 40 years. The conflagration was so intense that federal officials investigating its cause had to wait two months before the risk of fire and the levels of methane in the air were low enough that they could start looking for clues underground. Today, Upper Big Branch remains closed to everyone but those investigators, who are still only partway through their methodical examination. Federal Mine Safety and Health Administration director Joseph A. Main went down into the mine a few weeks ago and all around him, he said, were signs of “a pretty violent explosion.” “You have ventilation controls that are destroyed — your block walls are blown out — you have residue from the heat and fire,” he said in an interview with the Huffington Post. The floors are littered with debris and damaged equipment. There was, Main said, “a vast area that was affected.” MSHA’s operating theory appears to be that something Massey did to the mine’s ventilation system let methane and possibly dust build up to explosive levels. Before the explosion, Upper Big Branch had received more “unwarrantable failure” orders — for safety violations that constitute more than just ordinary negligence — than any other mine in the country, Main said. Civil and criminal investigations are both underway. And federal officials have now disclosed that they found handheld methane monitors deep inside the mine that had maxed out, suggesting explosive quantities of the gas. “Without a doubt, something went wrong with the ventilation,” Main said. “Ventilation is used to render harmless methane in a mine. And that didn’t happen.” (The Charleston (W.Va.) Gazette , the Pittsburgh Post-Gazette and NPR are among the few news outlets that have continued to doggedly follow the story.) Meanwhile, as generally happens in response to a major accident, the regulatory environment is changing. After the explosion, MSHA was hammered for letting mines with alarming safety records exploit loopholes to evade fines and stay open. A June memo from the Department of Labor’s Inspector General found that between 2007 and 2009, MSHA apparently declined to subject some problem mines to closer scrutiny because it was too much work. Since the April explosion, Main has dramatically stepped up MSHA’s enforcement activities. A reform bill making its way through Congress would expand the mine regulator’s authority, but what’s already changed is that inspectors are now using preexisting powers to a much fuller extent — particularly their ability to conduct surprise inspections and pull workers out of mines with serious health hazards until those hazards have been abated. “We’re aggressively using the closure order as a tool of choice” Main said. “I see more withdraw orders than I ever saw in the past,” said Ellen Smith , the managing editor of Mine Safety and Health News . “MSHA’s always had power to issue them,” she said, “they just didn’t use the power that they had to the fullest extent. They’re doing that now. They’ve never done it before, under anyone.” MSHA statistics show 1,287 closure orders between April 5 and August 5 of this year, 285 more than during the same period last year. Smith said she’s even heard of surprise inspections in off hours. “For MSHA to go into a mine on third shift was unheard of,” she said. As the Associated Press reported Thursday , MSHA is cracking down on mine companies that tip off their underground workers before federal officials making surprise inspections can get down there themselves. And although the money hasn’t arrived yet, Congress recently appropriated $18.2 million for MSHA to prosecute appeals of its citations, and $3.8 million to the Federal Mine Safety and Health Review Commission to help reduce a massive backlog of cases. On the Hill, legislation introduced by Rep. George Miller (D-Calif.) has passed by the House Judiciary Committee but not the full House; Sen. Jay Rockefeller (D-W.Va.) has introduced nearly identical legislation in the Senate. The bills would give MSHA more leverage over mine operators with troubling safety records and would further protect workers who speak up about safety concerns. Meanwhile, the mammoth Massey Energy Company and its famously combative CEO, Don Blankenship, remain entirely unapologetic. Late last month, Blankenship lectured a Washington crowd about morals and said that accidents happen. “I believe that the physics of natural law and God trump whatever man tries to do,” he said. “Whether you get earthquakes underground, whether you get broken floors, whether you get gas inundations, whether you get roof falls, oftentimes they are unavoidable just as other accidents are in society.” That same day, his company officially tried to shift blame for the accident to a natural event — a crack in the mine floor that ostensibly created an unusually big and sudden burst of methane. Blankenship has also publicly urged the families of the victims to settle with the company without hiring lawyers or filing lawsuits. And just this week, he got his way with four of the families , who agreed to settle for undisclosed terms. Massey had previously offered families settlements of at least $3 million each. One of the most far-reaching changes to the mining industry since the April explosion may actually end up being the insertion — at the request of Rockefeller and his fellow West Virginia Democrat, the late Sen. Robert Byrd — of an amendment to the recently passed financial reform bill. The amendment, now law, requires publicly-traded mining companies to include serious mine safety violations in their public filings with the Securities and Exchange Commission. Unlike the citations themselves, these SEC filings are closely tracked by shareholders and industry analysts. Indeed, on August 23, Massey filed a notice with the SEC acknowledging that MSHA had, in an enforcement order issued on July 21, accused it of creating an “imminent danger” of death or serious physical injuries. As it turns out , MSHA investigators working their way through the Upper Big Branch mine had discovered a two-by-two-by-three-foot box labeled “explosives” in a conveyor belt tunnel. The explosives had nothing to do with the April 5 explosion, but nevertheless, this was a big deal. And because it was in an SEC filing, the market noticed. Massey Energy stock prices dropped suddenly, eventually falling $4.13, or 13 percent, over the next four days. Similarly, the first 10-Q quarterly reports were filed under the new law earlier this month, allowing stock analysts like SNL Financial to easily compare and contrast various companies’ safety performance. SNL concluded: Massey Energy Co. racked up, by a wide margin, the highest number of mine safety transgressions among U.S. public coal producers during the second quarter, according to data provided by the companies in their latest Form 10-Q filings. The U.S. Mine Safety and Health Administration assessed more than $4 million in proposed fines against Massey during the second quarter, a number that far and away exceeded the performance of other public U.S. coal companies. In fact, no other coal producer reporting safety data to the SEC was fined more than $1 million during the second quarter. “This information is really going to play a huge role in corporate responsibility,” Smith said. Meanwhile, what Main called “enhanced enforcement” continues. “We’re finding some pretty egregious things ,” he said, noting that one mine — Wilcoal Mining Inc.’s Tri-State One Mine in Claiborne County, Tenn. — stayed closed for three weeks while it fixed a series of ventilation-related violations, among others. Main, a former United Mine Workers of America safety official, had already been running MSHA for six months when the Upper Big Branch mine exploded. Some of the changes MSHA has made since the explosion were already in the works before that, he said. But would a more concerted crackdown before April have saved the lives of 29 miners? “I think anyone always looks back to figure out what went wrong. What did you miss? What did you miss? Those are things I’ll think about for the rest of my life,” Main said. “But the other thing is: you find it and fix it. You learn the lessons of the event and you plan the reforms pretty quick.” ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to his RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Robert Fuller: The Dignity of Work: Transforming the One-Size-Fits-All Workhouse Into a Custom-Fit Workplace

August 25, 2010

The inefficiency of slavery is now obvious, but to George Washington it came as a revelation. While on a visit to Philadelphia, Washington noticed that free men there could do in “two or three days what would employ [his slaves] a month or more.” His explanation–that slaves had no chance “to establish a good name [and so were] too regardless of a bad one”–was that of a practical man concerned with the bottom line, not that of a moralizer. Sadly for us, our first president did not draw the full implications of his insight. Had he done so, he might have used his immense prestige to end the indignity of slavery. Today’s employers are not dealing with slaves, though it is often argued that wage-earners are wage-slaves, and that the dignity of salaried employees is only marginally more secure. Since Washington’s time, it has gradually become clear that negative motivation–fear of punishment–is less effective than the positive motivation that comes from being part of a team of trusted, responsible professionals. Once a year, on Labor Day, the dignity of work is extolled from sea to shining sea. In the new book The Custom-Fit Workplace , authors Joan Blades and Nanette Fondas show how to turn that noble ideal into a year-round reality by providing a blueprint for employers intent on creating workplaces that unleash the full potential of employees. The ill-effects of rigid work schedules, inequitable pay, and other demeaning practices are now the subject of a growing body of research documenting the damage done not only to individual employees but to the companies for which they work. It turns out that rankism –the rank-based discrimination and abuse to which most indignities can be traced–is no better for the bottom line than racism, sexism, and homophobia. All the discriminatory “isms” are self-inflicted wounds that drain away the life-blood of enterprises harboring them. The indignities of rankism are not merely unfair, they are inefficient and counterproductive. Fear and humiliation work only so long as people lack options. The young are increasingly unwilling to put up with rankist environments, and soon these vestiges of the workhouse will become untenable throughout the economy. A culture of dignity in the workplace provides a competitive advantage because it means happier, healthier, more creative and productive employees. What does it matter if they work together in lockstep–so long as they get the job done? People who feel recognized as individuals and respected as human beings are more likely to give their best. Much as eliminating malnutrition makes for healthier workers, eliminating malrecognition makes for more reliable ones. Customized workplaces respect employees’ dignity in ways that previous generations would have found astonishing and the next generation will take for granted. Great managers have long known that nothing motivates workers quite so consistently as pride in a job well done. In chapters on flextime, virtual and contract work, job and career lane changes, and childcare at work, Blades and Fondas provide a design for a dignitarian workplace that pays off in performance and profits. Today, slavery has no defenders. As the liberating and empowering practices in this handbook spread through the global marketplace, the institutional indignities of the one-size-fits-all workplace will likewise be revealed as paternalistic, demeaning, and inefficient. When the history of the dignity movement is written, The Custom-Fit Workplace will stand as a beacon that lit the way.

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Chip Conley: Living Downwind from the Flower Shop

August 24, 2010

One of the great mysteries in life is why some of us prefer to be swamp-dwellers. Not literally. I’m not dissing those living in the low country of the Gulf States or, frankly, anyone stuck in less than pristine living conditions. No, what I’m talking about is why some of us choose to be prisoners of our own minds. My grandmother used to tell me, “Some days, you need an escort to take you through that dangerous neighborhood that is your mind.” Ask a thoughtful swamp-dweller why they perennially veer toward the negative and they may tell you that low expectations translate into less disappointment in their lives. In fact, philosopher William James once wrote that self-esteem could be distilled down to an equation: success in life divided by expectations. Recent studies have shown that Asian-American students coming from families with high academic expectations of them tend to have lower self-esteem even when they score very well on their exams, so maybe there’s some truth to this. But, low expectations can also translate into less success when one’s spirit and motivation is poisoned by a lack of hope, meaning, or possibility in one’s life. In the context of business, we’re all aware that some corporate cultures create a momentum of victory while others create a constant feeling of failure. Given that my company often takes over the management of hotels that are in a downward spiral, I know the signs of a troubled culture: passive aggressive communication, lots of finger pointing, and universally low expectations. Yet, there are many companies that have risen from their swamp whether it’s Continental Airlines with a newcomer CEO Gordon Bethune in the 90′s or Apple with returning CEO Steve Jobs at around that same time. In both cases, these execs first had to help all in the organization believe in themselves again and identify a few initial victories that they could point to in order to start building that momentum of victory. My son has just been released from prison after a Federal Judge found that his constitutional rights had been violated (due to mistaken jury instructions). While he was initially ecstatic about being out after being wrongly accused for four and a half years, he started to gravitate back to familiar territory: Will the County District Attorney choose to appeal the Judge’s ruling? Of course, this has enormous implications for his life, but it’s also something he has little influence over and, for the time being, there’s so much life to catch up on and to celebrate that obsessing on the D.A.’s actions can become a no-win game. One of the responsibilities of friends and family is to escort each other through the dark alleys of our minds when there are sunny, open spaces just around the corner. I’ve been fortunate enough to spend the past few days in Montana with Mihaly Csikszentmihalyi (and his wife Isabella), the author of Flow and many other books on how to live an optimal life. One of the basic premises of Flow is that life is at its best when we’re expertly navigating between challenge and skill. Think of a graph with two axes: with challenge on the vertical axis and skill on the horizontal axis. Flow occurs as we move diagonally away from the intersection of these two axes toward the upper right hand corner. But, most of us spend our lives toggling between boredom (low challenge, high skill) and anxiety (high challenge, low skill) living a life that feels too full of inertia or exertion. Mihaly says someone in Flow …concentrates their attention on a limited stimulus field, forgets personal problems, loses their sense of time and of themselves, feels competent and in control, and has a sense of harmony with their surroundings…they cease to worry about whether the activity will be productive or whether it will be rewarded…they have entered a state of flow. This is true of individuals inside and outside of work as well as companies that pursue an organizational predilection toward Flow. Manifesting a good life by just thinking positive thoughts is not enough. There’s no doubt that healthy psycho-hygiene creates a greater likelihood of living a life in flow with the world. But, I prefer to think of this as more like planting yourself “downwind from the flower shop.” Your willingness to build your skills and to accept challenges — emotionally, professionally, intellectually, athletically, spiritually — is your means of placing your destiny at a fortuitous intersection where good things come wafting your way. To understand how to find that flow in your life, read Mihaly’s book of the same name or Finding Flow or Good Business (to understand the context for work) or The Evolving Self (how Flow can make a difference to society).

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Chip Conley: Living Downwind from the Flower Shop

August 24, 2010

One of the great mysteries in life is why some of us prefer to be swamp-dwellers. Not literally. I’m not dissing those living in the low country of the Gulf States or, frankly, anyone stuck in less than pristine living conditions. No, what I’m talking about is why some of us choose to be prisoners of our own minds. My grandmother used to tell me, “Some days, you need an escort to take you through that dangerous neighborhood that is your mind.” Ask a thoughtful swamp-dweller why they perennially veer toward the negative and they may tell you that low expectations translate into less disappointment in their lives. In fact, philosopher William James once wrote that self-esteem could be distilled down to an equation: success in life divided by expectations. Recent studies have shown that Asian-American students coming from families with high academic expectations of them tend to have lower self-esteem even when they score very well on their exams, so maybe there’s some truth to this. But, low expectations can also translate into less success when one’s spirit and motivation is poisoned by a lack of hope, meaning, or possibility in one’s life. In the context of business, we’re all aware that some corporate cultures create a momentum of victory while others create a constant feeling of failure. Given that my company often takes over the management of hotels that are in a downward spiral, I know the signs of a troubled culture: passive aggressive communication, lots of finger pointing, and universally low expectations. Yet, there are many companies that have risen from their swamp whether it’s Continental Airlines with a newcomer CEO Gordon Bethune in the 90′s or Apple with returning CEO Steve Jobs at around that same time. In both cases, these execs first had to help all in the organization believe in themselves again and identify a few initial victories that they could point to in order to start building that momentum of victory. My son has just been released from prison after a Federal Judge found that his constitutional rights had been violated (due to mistaken jury instructions). While he was initially ecstatic about being out after being wrongly accused for four and a half years, he started to gravitate back to familiar territory: Will the County District Attorney choose to appeal the Judge’s ruling? Of course, this has enormous implications for his life, but it’s also something he has little influence over and, for the time being, there’s so much life to catch up on and to celebrate that obsessing on the D.A.’s actions can become a no-win game. One of the responsibilities of friends and family is to escort each other through the dark alleys of our minds when there are sunny, open spaces just around the corner. I’ve been fortunate enough to spend the past few days in Montana with Mihaly Csikszentmihalyi (and his wife Isabella), the author of Flow and many other books on how to live an optimal life. One of the basic premises of Flow is that life is at its best when we’re expertly navigating between challenge and skill. Think of a graph with two axes: with challenge on the vertical axis and skill on the horizontal axis. Flow occurs as we move diagonally away from the intersection of these two axes toward the upper right hand corner. But, most of us spend our lives toggling between boredom (low challenge, high skill) and anxiety (high challenge, low skill) living a life that feels too full of inertia or exertion. Mihaly says someone in Flow …concentrates their attention on a limited stimulus field, forgets personal problems, loses their sense of time and of themselves, feels competent and in control, and has a sense of harmony with their surroundings…they cease to worry about whether the activity will be productive or whether it will be rewarded…they have entered a state of flow. This is true of individuals inside and outside of work as well as companies that pursue an organizational predilection toward Flow. Manifesting a good life by just thinking positive thoughts is not enough. There’s no doubt that healthy psycho-hygiene creates a greater likelihood of living a life in flow with the world. But, I prefer to think of this as more like planting yourself “downwind from the flower shop.” Your willingness to build your skills and to accept challenges — emotionally, professionally, intellectually, athletically, spiritually — is your means of placing your destiny at a fortuitous intersection where good things come wafting your way. To understand how to find that flow in your life, read Mihaly’s book of the same name or Finding Flow or Good Business (to understand the context for work) or The Evolving Self (how Flow can make a difference to society).

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Chip Conley: Living Downwind from the Flower Shop

August 24, 2010

One of the great mysteries in life is why some of us prefer to be swamp-dwellers. Not literally. I’m not dissing those living in the low country of the Gulf States or, frankly, anyone stuck in less than pristine living conditions. No, what I’m talking about is why some of us choose to be prisoners of our own minds. My grandmother used to tell me, “Some days, you need an escort to take you through that dangerous neighborhood that is your mind.” Ask a thoughtful swamp-dweller why they perennially veer toward the negative and they may tell you that low expectations translate into less disappointment in their lives. In fact, philosopher William James once wrote that self-esteem could be distilled down to an equation: success in life divided by expectations. Recent studies have shown that Asian-American students coming from families with high academic expectations of them tend to have lower self-esteem even when they score very well on their exams, so maybe there’s some truth to this. But, low expectations can also translate into less success when one’s spirit and motivation is poisoned by a lack of hope, meaning, or possibility in one’s life. In the context of business, we’re all aware that some corporate cultures create a momentum of victory while others create a constant feeling of failure. Given that my company often takes over the management of hotels that are in a downward spiral, I know the signs of a troubled culture: passive aggressive communication, lots of finger pointing, and universally low expectations. Yet, there are many companies that have risen from their swamp whether it’s Continental Airlines with a newcomer CEO Gordon Bethune in the 90′s or Apple with returning CEO Steve Jobs at around that same time. In both cases, these execs first had to help all in the organization believe in themselves again and identify a few initial victories that they could point to in order to start building that momentum of victory. My son has just been released from prison after a Federal Judge found that his constitutional rights had been violated (due to mistaken jury instructions). While he was initially ecstatic about being out after being wrongly accused for four and a half years, he started to gravitate back to familiar territory: Will the County District Attorney choose to appeal the Judge’s ruling? Of course, this has enormous implications for his life, but it’s also something he has little influence over and, for the time being, there’s so much life to catch up on and to celebrate that obsessing on the D.A.’s actions can become a no-win game. One of the responsibilities of friends and family is to escort each other through the dark alleys of our minds when there are sunny, open spaces just around the corner. I’ve been fortunate enough to spend the past few days in Montana with Mihaly Csikszentmihalyi (and his wife Isabella), the author of Flow and many other books on how to live an optimal life. One of the basic premises of Flow is that life is at its best when we’re expertly navigating between challenge and skill. Think of a graph with two axes: with challenge on the vertical axis and skill on the horizontal axis. Flow occurs as we move diagonally away from the intersection of these two axes toward the upper right hand corner. But, most of us spend our lives toggling between boredom (low challenge, high skill) and anxiety (high challenge, low skill) living a life that feels too full of inertia or exertion. Mihaly says someone in Flow …concentrates their attention on a limited stimulus field, forgets personal problems, loses their sense of time and of themselves, feels competent and in control, and has a sense of harmony with their surroundings…they cease to worry about whether the activity will be productive or whether it will be rewarded…they have entered a state of flow. This is true of individuals inside and outside of work as well as companies that pursue an organizational predilection toward Flow. Manifesting a good life by just thinking positive thoughts is not enough. There’s no doubt that healthy psycho-hygiene creates a greater likelihood of living a life in flow with the world. But, I prefer to think of this as more like planting yourself “downwind from the flower shop.” Your willingness to build your skills and to accept challenges — emotionally, professionally, intellectually, athletically, spiritually — is your means of placing your destiny at a fortuitous intersection where good things come wafting your way. To understand how to find that flow in your life, read Mihaly’s book of the same name or Finding Flow or Good Business (to understand the context for work) or The Evolving Self (how Flow can make a difference to society).

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Andrea Chalupa: Garbage Moguls: God Bless the Eco-Capitalists

August 21, 2010

The BP oil spill has nothing on the hundreds of miles of garbage floating in the Atlantic Ocean , and its bigger sibling, the Great Pacific Garbage Patch , a plastic-soup in the Pacific Ocean estimated to span the size of the continental U.S. Our oceans are our landfills, a fact that nags at me with every take-out container and other piece of trash I dispose of in my kitchen. I’m just one person making all this trash, and my internal-dialogue now sounds like the hitchhiker woman in Five Easy Pieces : “Pretty soon there won’t be room for anyone!” I admit that these three horesemen of the enviornmental apocolypse have me seriously considering the possibility of reincarnation. To hell with future generations, what if we are forced to join them, in the mess that we’re creating? Enter the eco-capitalists, please. Garbage Moguls , a show airing tonight on the National Geographic Channel, follows Tom Szaky, the 28-year-old Princeton University drop-out and founding CEO of TerraCycle , a New Jersey-based company that reincarnates trash into incredibly cool stuff, from messenger bags to kites to lunch boxes and picture frames. Albe Zakes, Tom’s right-hand man and one of the stars of the show that takes you inside TerraCycle as it tries to win-over big corporate clients, sums it up in a press release: With shows like Jersey Shore and The Real Housewives of New Jersey as popular as they are, it seems it was only a matter of time before a New Jersey TV show about ACTUAL trash got made. On Saturday August 21st, National Geographic will air three all-new episodes of Garbage Moguls, an inside look at the zany way TerraCycle, “the coolest little start-up in America” ( Inc. magazine), develops products made completely out of trash. Drama rears its tense head as TerraCycle’s team has two weeks to create an entire line of pet products for Pedigree by making leashes, collars, and pet clothes out of dog food bags. In another episode on tonight, Tom pitches Home Depot a garbage can made of chip wrappers, and in the third also on tonight, the design team has to create a suit jacket made of Target shopping bags and an entire line of new products. All this reality show goodness jump starts the catchphrase, “Why buy new?” If TerraCycle and more companies like it take hold of the mainstream, we won’t have to. There’s a viewing party tonight on Twitter. Just follow @TerraCycle and use #garbagemoguls to interact with the TerraCycle team. Follow it up with trivia questions on the TerraCycle Facebook fan page , to enter to win cool TerraCycle prizes. While these eco-capitalists are pouring their blood, sweat, and presumably some tears into the next great industrial revolution, Colin Beavan has a handy list of tips on how you and I can create less trash , meaning less fights over whose turn it is to take it out. Colin and his wife Michelle Conlin, busy parents, spent a year living “no-impact.” They drastically reduced their carbon footprint and continue to incorproate these strategies into their hectic New York lifestyle. Garbage Moguls premiers tonight 8-11 PM ET/PT. For clips and more info, check out the National Geographic Channel . And for more on living no-impact and greening your life, check out the No Impact Project .

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