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AT&T Gears Up For Rare Antitrust Fight With DOJ

by AP on September 1, 2011

Huffington Post…

SAN FRANCISCO — The Justice Department’s rejection of AT&T’s proposed purchase of T-Mobile USA will test new federal guidelines on challenging mergers and the companies’ resolve in forming the nation’s largest wireless carrier. A courtroom battle is likely and could wring out information that the companies would prefer to keep private. Still, AT&T Inc. has a big incentive to fight: If the deal is called off, the company has to pay a $3 billion breakup fee and surrender some of its unused spectrum for wireless communications. AT&T is promising to fight the Justice Department’s decision. The department filed a lawsuit Wednesday to block the $39 billion deal, saying it would reduce competition and lead to price increases for customers. If AT&T follows through on that, it could produce the biggest antitrust showdown since business software maker Oracle Corp. squared off with the federal government seven years ago. That dispute, triggered by the government’s decision to block Oracle’s proposed purchase of rival PeopleSoft Inc., exposed several well-kept corporate secrets and required Oracle CEO Larry Ellison to testify before a packed courtroom. In the end, Oracle pulled off something few companies have done in the past 30 years: It persuaded a federal judge that the Justice Department didn’t have grounds to block its PeopleSoft deal. Oracle closed its $11.1 billion takeover four months after getting the favorable court ruling. Usually, not even the most powerful companies bother to fight government regulators in an antitrust dispute. Google Inc., for example, backed off in 2008 when the Justice Department threatened to sue to block a proposed Internet search partnership with Yahoo Inc. Microsoft Corp., the world’s largest software maker, pulled out of a deal to buy Intuit Corp. in 1995 after the Justice Department objected. The Justice Department filed 138 antitrust cases in federal courts from 1999 to 2008 and lost just four of them, according to the latest breakdown from the agency. One reason that the Justice Department has such a good track record is because it rarely challenges a deal unless it’s very confident it can win, said Joseph Bauer, a University of Notre Dame law professor and antitrust expert. Knowing AT&T would probably go to court, the Justice Department may have wanted to signal that it intends to get tougher on corporate marriages between rivals in markets with few other competitors. A union between AT&T and T-Mobile USA would leave Verizon and Sprint as the only other major cellphone carriers in the U.S. T-Mobile, a subsidiary of German telecom company Deutsche Telekom AG, is currently the No. 4 wireless carrier, while AT&T is second. Combined, AT&T would be the largest. In a sign of its confidence, the Justice Department decided to strike down the deal even though it could have taken about three more months to study the pros and cons. The timing stunned AT&T, which said it didn’t get any advance warning. “It was an aggressive and impressive move by the DOJ to take the battle right at AT&T,” said Daniel Wall, a San Francisco attorney who represented Oracle in its 2004 fight to win the right to buy PeopleSoft. “It sent a statement that the DOJ intends to fight this one all the way to the finish line.” Wall said AT&T may have a tougher time proving its case than Oracle did against the Justice Department. In the PeopleSoft deal, Wall said, antitrust enforcers seemed to be manipulating the definition of the business software market. “This time, it looks to me that they have a pretty solid market definition,” Wall said. “They don’t appear to be playing games.” University of Iowa law professor Herbert Hovenkamp said the Justice Department is being guided by a set of new guidelines, issued late last year, which make it clearer when mergers should be challenged on antitrust grounds. “I don’t think they are overreaching here,” Hovenkamp said. “If there is a broader message here, it’s that the government intends to enforce these new guidelines.” Besides being forced to divulge potentially damaging information, AT&T will face other risks if it doesn’t settle with the Justice Department. Going to trial will take months, or even years, leaving the company in a legal limbo that could depress its stock price and cause customers and key employees to defect. There’s another risk to going to trial: as they try to prove their case, antitrust lawyers sometimes obtain confidential e-mails that contain embarrassing snippets and present other evidence that can make companies look bad. Those are some of the reasons why AT&T mayl try to reach some kind of settlement with the government. If AT&T persists, antitrust experts said that it’s better off going up against the Justice Department than the Federal Trade Commission, which also handles antitrust reviews. That’s mainly because lawsuits with the Justice Department are contested in federal courts. By contrast, the threshold for the FTC to block deals is generally lower, and the ensuing legal skirmishes occur in administrative law proceedings that drag on longer. “The merging parties usually have a better shot when they are going up against the DOJ than the FTC,” said D. Daniel Sokol, a University of Florida professor specializing in antitrust law.

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AT&T Gears Up For Rare Antitrust Fight With DOJ

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Nuts, soy, avocado beat low-fat diet

by on August 24, 2011

menafn.com…

(MENAFN – Arab Times) People who ate a diet rich in foods that lower cholesterol, such as nuts, soy, avocado, olive oil and oats, saw a bigger drop in cholesterol than people on a low-fat diet, said …

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Nuts, soy, avocado beat low-fat diet

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Job Seekers React To Dismal Jobs Report

June 4, 2011

This story was reported in collaboration with our partners at Patch.com. For the past three months, the millions of Americans who’ve been getting by on savings and unemployment checks could at least take some comfort in the job reports that the Bureau of Labor Statistics releases on the first Friday of every month. Almost 200,000 new jobs in February, about as many as that in March, and 232,000 in April. Even people who hadn’t worked since the recession began had reason to believe that things were looking up. Yet there were signs all along that things could get worse, and then last month they did. According to Friday’s bombshell jobs report, the U.S. economy added only 54,000 jobs in May, far fewer than expected or needed. Meanwhile, the unemployment rate actually worsened by a tenth of a percentage point. For some job-seekers, this news was just too bleak to contemplate. “The numbers are just so discouraging that after a while there’s no reason for me to look at them,” said a battle-weary Stephen Brown, a 31-year-old business school graduate from Morristown, N.J. Brown is among the millions of people for whom today’s news landed with an especially heavy thud -– the unemployed, the temps, the part-time contractors. A couple days ago, some of those job-seekers gathered at a workshop in the suburbs of Chicago . Sherri Gould, a resident of the town of Wilmette, was there. Gould said she worked for a decade in client services at Quest Diagnostics, the company that sends out those metal boxes labeled “Blood and urine specimens only.” When the economy crashed, the metal-box traffic slowed, she said. “Someone who is unemployed and has just lost their health insurance is not going to go to the doctor,” Gould explained. Soon she was among the unemployed herself. Sixty miles away, in Yorkville, Ill., a man named Robert Castro took his job search to the side of the road . He could be seen standing alongside Route 47 Friday, a cardboard sign in metal frame propped up beside him: “Any Work Wanted.” Castro, 47, said he spent more than a decade at a food distribution company, working his way up from a general worker to a supervisor. The upward trajectory ended when he was laid off a little over a year ago. His unemployment benefits ended about a year after that. Castro says he’s tried the traditional route to employment, the route that doesn’t involve standing alongside an actual road. “It’s a dead end,” he said. “I’ve had job offers, and they say overqualified. I’ll take a pay cut, whatever.” He said this is the first time he’s been unemployed since he started washing pans in a bakery when he was 14. In the past, when people in Danvers, Mass., lost their jobs, they could go to Gia Page for help. Page is a manager at CoWorx Staffing Services, a company that places people in clerical and manufacturing jobs. But her own job’s gotten tougher recently, thanks to the lack of opportunities awaiting the people who walk into her office. “I thought we would have more at this point,” she said, ” so that’s disappointing .” Nearby, in North Andover, Mass., someone else in the job-hunt business actually sounded a note of optimism today. Jori Blumsack, an accountant at a company that provides job-seekers with video resumes (it’s called The Vesume Group), said she’s seen a “very strong demand” for the people who come to her firm for work. Her reaction to the job report: “Wage levels have come down. People that are out of work are not going to go back to making what they made when they lost their job.” While it might be true that people are simply holding out for better pay, it isn’t true for everyone. Certainly not Stephen Brown, the business-school grad from New Jersey. For the past few months, Brown’s been holding down a temporary job in consumer-goods marketing that pays almost as much as his old job, which he lost in January 2010. What he wants is a permanent, full-time position, and he’s applied for about 500 of them. He says he’s had 75 to 80 interviews. “I started to count,” he said, “until I got a little too depressed.” Just yesterday, Brown was rejected from a job that he’d applied for back in October. The company had called him for the first time in January, interviewed him in April and again in May. Recounting the story, he was surprisingly even-toned. Brown said he’s trying not to dwell on his frustrations. “What can I do?” he said. “There’s not much I can do, I just gotta keep moving.”

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CoStar’s People of Note (May 29-June 3)

June 3, 2011

This week’s People of Note includes the following markets: Charlotte, Chicago, Houston, Los Angeles and Raleigh/Durham. LOS ANGELES Colliers Hires Algermissen as EVP Steve Algermissen joined the downtown Los Angeles office of Colliers International as executive vice president. The 28-year commercial real estate broker specializes in the sale and joint venture of retail, office and ground up development in Southern California. Algermissen…

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Indian Call Centers Begin Outsourcing Jobs To U.S.

May 22, 2011

New York — Ray Capuana paces the rows of cubicles in a haggard high-rise a stone’s throw from Wall Street as his people hustle the phones and hope for a bonus check. His employees are not bond traders, though. They are call center workers. Many are African Americans without college degrees. Some lack high school diplomas. They work for a Mumbai-based company called Aegis Communications.

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Dave Johnson: Actually, "The Rich" Don’t "Create Jobs," We Do.

May 13, 2011

You hear it again and again, variation after variation on a core message: if you tax rich people it kills jobs. You hear about “job-killing tax hikes,” or that “taxing the rich hurts jobs,” “taxes kill jobs,” “taxes take money out of the economy, “if you tax the rich they won’t be able to provide jobs.” … on and on it goes. So do we really depend on “the rich” to “create” jobs? Or do jobs get created when they fill a need? Here is a recent typical example, Obama Touts Job-Killing Tax Plan , written by a “senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth,” Some people, in their pursuit of profit, benefit their fellow humans by creating new or better goods and services, and then by employing others. We call such people entrepreneurs and productive workers. Others are parasites who suck the blood and energy away from the productive. Such people are most often found in government. Perhaps the most vivid description of what happens to a society where the parasites become so numerous and powerful that they destroy their productive hosts is Ayn Rand’s classic novel “Atlas Shrugged.” … Producers and Parasites The idea that there are producers and parasites as expressed in the example above has become a core philosophy of conservatives. They claim that wealthy people “produce” and are rich because they “produce.” The rest of us are “parasites” who suck blood and energy from the productive rich, by taxing them. In this belief system, We, the People are basically just “the help” who are otherwise in the way, and taxing the producers to pay for our “entitlements.” We “take money” from the producers through taxes, which are “redistributed” to the parasites. They repeat the slogan, “Taxes are theft,” and take the “money we earned” by “force” (i.e. government.) Republican Speaker of the House John Boehner echoes this core philosophy of “producers” and “parasites,” saying yesterday , I believe raising taxes on the very people that we expect to reinvest in our economy and to hire people is the wrong idea,” he said. “For those people to give that money to the government…means it wont get reinvested in our economy at a time when we’re trying to create jobs.” “The very people” who “hire people” shouldn’t have to pay taxes because that money is then taken out of the productive economy and just given to the parasites — “the help” — meaning you and me… So is it true? Do “they” create jobs? Do we “depend on” the wealthy to “create jobs?” Demand Creates Jobs I used to own a business and have been in senior positions at other businesses, and I know many others who have started and operated businesses of all sizes. I can tell you from direct experience that I tried very hard to employ the right number of people . What I mean by this is that when there were lots of customers I would add people to meet the demand. And when demand slacked off I had to let people go. If I had extra money I wouldn’t just hire people to sit around and read the paper. And if I had more customers than I could handle that — the revenue generated by meeting the additional demand from the extra customers — is what would pay for employing more people to meet the demand. It is a pretty simple equation: you employ the right number of people to meet the demand your business has. If you ask around you will find that every business tries to employ the right number of people to meet the demand . Any business owner or manager will tell you that they hire based on need , not on how much they have in the bank. (Read more here, in last year’s Businesses Do Not Create Jobs .) Taxes make absolutely no difference in the hiring equation. In fact, paying taxes means you are already making money, which means you have already hired the right number of people. Taxes are based on subtracting your costs from your revenue, and if you have profits after you cover your costs, then you might be taxed. You don’t even calculate your taxes until well after the hiring decision has been made. You don;t lay people off to “cover” your taxes. And even if you did lay people off to “cover’ taxes it would lower your costs and you would have more profit, which means you would have more taxes… except that laying someone off when you had demand would cause you to have less revenue, … and you see how ridiculous it is to associate taxes with hiring at all! People coming in the door and buying things is what creates jobs. The Rich Do Not Create Jobs Lots of regular people having money to spend is what creates jobs and businesses. That is the basic idea of demand-side economics and it works. In a consumer-driven economy designed to serve people , regular people with money in their pockets is what keeps everything going. And the equal opportunity of democracy with its reinvestment in infrastructure and education and the other fruits of democracy is fundamental to keeping a demand-side economy functioning. When all the money goes to a few at the top everything breaks down. Taxing the people at the top and reinvesting the money into the democratic society is fundamental to keeping things going. Democracy Creates Jobs This idea that a few wealthy people — the “producers” — hand everything down to the rest of us — “the parasites” — is fundamentally at odds with the concept of democracy. In a democracy we all have an equal voice and an equal stake in how our society and our economy does. We do not “depend” on the good graces of a favored few for our livelihoods. We all are supposed to have an equal opportunity, and equal rights. And there are things we are all entitled to — “entitlements” — that we get just because we were born here . But we all share in the responsibility to cover the costs of democracy — with the rich having a greater responsibility than the rest of us because they receive the most benefit from it. This is why we have “progressive taxes” where the rates are supposed to go up as the income does. Taxes Are The Lifeblood Of Democracy And The Prosperity That Democracy Produces In a democracy the rich are supposed to pay more to cover things like building and maintaining the roads and schools because these are the things that enable their wealth. They actually do use the roads and schools more because the roads enable their businesses to prosper and the schools provide educated employees. But it isn’t just that the rich use roads more, it is that everyone has a right to use roads and a right to transportation because we are a democracy and everyone has the same rights. And as a citizen in a democracy you have an obligation to pay your share for that. A democracy is supposed have a progressive tax structure that is in proportion to the means to pay . We do this because those who get more from the system do so because the democratic system offers them that ability . Their wealth is because of our system and therefore they owe back to the system in proportion. (Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections.) The conservative “producer and parasite” anti-tax philosophy is fundamentally at odds with the concepts of democracy (which they proudly acknowledge – see more here , and here ) and should be understood and criticized as such. Taxes do not “take money out of the economy” they enable the economy. The rich do not “create jobs, We, the People create jobs . This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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Dave Johnson: Sarah Palin and Boeing CEO Tell Government Who the Boss Is

May 13, 2011

What can a democracy like ours do when giant companies say, “Rules? We don’t need no stinkin’ rules! We don’t got to pay you no taxes!” and “We will just move out of your puny country if you try to tell us what to do.” Government is beginning to enforce labor laws again , with the National Labor Relations Board (NLRB) filing a complaint against Boeing for retaliating against employees for legitimate union activities. In response Boeing’s CEO questions government’s “authority” to tell big businesses like Boeing what to do, saying companies like his can just move “overseas.” Sarah Palin echoes the complaint, saying businesses can just move to “more business-friendly countries.” These are direct challenges to the democracy we fought to build. Boeing Threatens “Overseas Flight” Boeing chairman, president and CEO Jim McNerney has an op-ed in the Wall Street Journal in which he challenges the “authority” of our democracy to regulate giant multinational corporations. “The NLRB is wrong and has far overreached its authority. Its action is a fundamental assault on the capitalist principles that have sustained America’s competitiveness since it became the world’s largest economy nearly 140 years ago. We’ve made a rational, legal business decision about the allocation of our capital and the placement of new work within the U.S.” McNerney essentialy confirms that it was union activity that led Boeing to decide to open a plant in anti-union North Carolina, “Among the considerations we sought were a long-term “no-strike clause” that would ensure production stability for our customers, and a wage and benefit growth trajectory that would help in our cost battle against Airbus and other state-sponsored competitors. … Union leaders couldn’t meet expectations on our key issues, and we couldn’t accept their demands that we remain neutral in all union-organizing campaigns…” Like the movie stereotype, poking his finger in your chest, “You got a problem with that?” McNerney goes on to call the NLRB enforcement “brazen regulatory activism” that “could accelerate the overseas flight of good, middle-class American jobs.” There it is, the threat, basically, “We will just move out of your puny country if you try to tell us what to do, and we will take your jobs with us.” Boots On Necks Sarah Palin, in her Facebook post, Removing the Boot from the Throat of American Businesses , blasts President Obama’s “appointees at the National Labor Relations Board (NLRB) who have their boots on The Boeing Company’s neck.” Palin explains that business is the boss now, not We-the-People democracy, writing, Does the President realize the real concern here is not that businesses will choose to locate in one state over another? It’s that businesses will choose to locate in other countries because thanks to the Obama administration’s job killing policies and over-reaching regulatory boards the business climate in the United States is growing toxic. Basically, she says government ought to just get out of the way of the plutocrats, because big, multinational businesses have so much power over democracy that, … eventually every state will suffer when businesses declare “enough is enough” with these tactics and decide to relocate in more business-friendly countries. Once again, the threat: Mess with us and we will leave and take your jobs with us. Whose Boot Is On Whose Neck? To be clear, Palin does not mean this as a call to strengthen democracy and get these companies and their threats under control. She is not complaining that these companies do not want to follow our rules and pay decent wages, offer benefits, protect worker safety and protect the environment. She is saying the United States should change and become more “business-friendly” — like the non-democracies that suppress labor rights, pay low wages, and lock you up if you complain. “Free Trade” has allowed businesses to cross borders to “business friendly” non-democracies to escape the protections democracy offers us. It pits exploited workers in these “business-friendly” countries against our own democracy-protected workers, forcing a race to the bottom in wages, working standards and living standards. And it lets them avoid taxation, defunding our democracy’s ability to enforce regulations and laws If we don’t do what these giant, powerful companies tell us to do, and abandon the protections of democracy that we fought so hard to achieve, they will just pack up and leave and take our jobs with them. Just whose boot is on whose neck? The question is why do we let them do this, and what can we do about it? The following is adapted from April’s post on the NLRB actions, Does Government Know Who The Boss Is? Who Is Boss? Do We, the People have the ability to enforce our laws? Do we have the power to tax corporations and the wealthy? Do we have the power to keep the protections and opportunities our democracy had provided? Democracy provides us with safety protections and fair wages. We fought so hard to build and maintain this democratic society so that We, the People could share the benefits. We passed laws allowing union organizing, as a balance to the immense power of corporations and wealth. We passed laws prohibiting companies from telling workers, “Work for what we give you or don’t eat.” And for a time this built our prosperity. But we let the protections slip , and allowed companies to cross borders to escape the protections democracy offers — to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens. The Threat Against Us Won’t companies just move out of the state/country if we try to enforce labor laws or tax them? Won’t China just stop selling to us or dump our bonds if we apply a tariff to protect democracy, or try to enforce trade laws? Won’t the rich just pack up and move or stop working if we don’t just give them everything they want? Won’t they move even more factories out of the city/state/country if We, the People try to demand our rights? We Still Have The Power Here’s the thing. We, the People still have some power left in our hands. For one thing we still offer a huge, prosperous market to sell into. We still have the power to make demands on those who would like to sell things to us. We can apply a “democracy tariff” to goods made by exploited workers so these goods do not have a price advantage over goods made here. And we can choose to enforce tax laws, and wage laws, and tariffs, and labor laws, and trade laws to protect and strengthen what remains of our democracy. But we can only do this if we decide to stand up for ourselves and do something about what is happening. We have to put our foot down, and demand that our politicians listen to We, the People and do what we say . It is time to get organized, to talk to neighbors and relatives, to show up at town hall meetings and protests. We can demand that news media begin to cover more than just the corporate/conservative viewpoint. We can go out and register others to vote, and get them to the polls, and demand that votes be counted accurately. We can take back our democracy and put We, the People back in charge. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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Jeffrey Rubin: A Recession Is Coming But Not Yet

May 11, 2011

There will be many dress rehearsals in commodity markets before the next global recession. An example is last week’s dramatic and broad-based sell off that took oil prices for over a $10/barrel tumble. And there is no doubt that despite the scarcity of the resource, the price of oil will crash the next time the global economy sewers. But is that time already upon us? If the monetary authorities in China and India continue to hike interest rates at the pace they have set recently, the next global recession may not be that far off. After all, these economies are today’s global economic growth engines. But when push comes to shove, the political masters of those central banks may soon temper their enthusiasm so they can battle inflation. If the money-printing U.S. Federal Reserve Board doesn’t care about inflation why should the People’s Bank of China ? Compare income per capita between the U.S. and China and it is not too difficult to figure out which one should be more desperate for economic growth and, as a result, more willing to seek trade-offs against inflation. In the meantime, there are several tactical paths China can take that at least give the appearance of holding inflation in check. Reducing the weighting of food and energy prices in China’s consumer price index would be one way. As long as the country’s headline inflation rate stays below 5 percent, markets won’t get too upset about what it is really measuring. Having the People’s Bank of China step away from the U.S. treasury auction could be another way of keeping reported inflation at bay. A soaring Yuan, and hence tumbling import prices would provide a partial offset to building domestic price pressures, such as what led to the recent truckers strike in Shanghai. Of course, there could be other reasons for commodity market sells-offs in the future. But let us not lose sight of the forest for the trees. No matter how much oil prices and other key commodities such as copper and grain fall, look at the parameters in which they now move. Even land-locked oil prices like West Texas Intermediate barely dipped below $100 per barrel. And Brent, the world oil price never made it below the triple digit price threshold. How the goals posts have moved. Five years ago, those prices would have been all time highs. Last week, they generated headlines of plunging oil prices. What hasn’t changed however is the intrinsic relationship between oil and economic growth. Ratchet down expectations for economic growth and quite naturally you lower expectations for future oil prices. But that’s only because without burning more oil, there is no economic growth.

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Kathlyn and Gay Hendricks: How Your Life Experience Can Give You An Entrepreneurial Advantage

May 10, 2011

How Your Own Life Experience Reveals Your Genius And Provides Your Ultimate Market Advantage In preparing to teach our “Conscious Entrepreneurs” program, I (GH) made a little video that shows how your own story has a magic power embedded in it. Here’s the key point: Not only does your own story contain the seeds of your genius, but it will also help you discover what I call your Transformational Magic Power. Your TMP determines your ability to create a space in which others can move rapidly toward fulfilling their true potential. Your TMP is the sum total of the creative possibilities you’re broadcasting to others, even when your mouth is closed. What is it about you that does or doesn’t inspire transformation in others? That’s a question I asked myself once upon a time, and it led to a discovery that helped me build several thriving businesses. Thirty years ago, when Kathlyn and I were setting up our own transformation business, I discovered a secret. Here it is: You already have your Transformational Magic Power in your possession. You may not be able to define it or articulate it yet, but I haven’t met anyone yet who didn’t have a Transformational Magic Power worth cultivating. You may not yet know how to harness its full power to help you create life-satisfaction and financial well-being, but I’m convinced you have that capability. Not only that, I’m confident you can do whatever miracles you want to accomplish in your life with it. I used its power to create an abundance of life satisfaction while also creating several multi-million dollar businesses that have thrived steadily through all the ups and downs of the economy since the early ’80s. Now, here’s an even more valuable secret, one that becomes a source of great market advantage in business: There’s only one of you. You are unique, and anything there’s “only one of” is perfectly positioned to create a thriving business and a happy life. If you understand your story and feel your way deeply into the very essence of it, there you will find a Transformation Magic Power that you can extend to other people. In my experience, there is no greater life satisfaction than giving the gift of your magic power to other people. If you so choose, you can offer that magic power to others through your consulting, your teaching and your other callings in the world. If you want to create a thriving business, you can also turn your Transformational Magic Power into a tremendous source of abundance. Even though I’ve thrived from that discovery for many years, it still thrills me every day and inspires me to share it with others. I invite you to ask yourself: What’s my story? What have I learned from it that can change the lives of others? How can my story serve me in my quest for love, abundance and life-satisfaction? I made a little video that explains more about your Transformational Magic Power and how to access it. You can view it here . Let us know if you resonate with this principle. We’d love to hear from other conscious entrepreneurs who’ve turned the power of their own story into magic. * * * * * More information on Kathlyn and Gay Hendricks’ Conscious Entrepreneurs Program at www.hendricks.com/entrepreneurs.

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Video: Goodhart Says Spain Has Done `Remarkable Job’ in Crisis

May 6, 2011

May 6 (Bloomberg) — Charles Goodhart, a professor at the London School of Economics and a former Bank of England policy maker, talks about Europe’s sovereign debt crisis. Goodhart also discusses People’s Bank of China monetary policy and the commodities market. He speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

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Michele Bachmann Invokes Holocaust In Railing Against Taxes

May 1, 2011

(AP) MANCHESTER, N.H. — Minnesota Rep. Michele Bachmann on Saturday described the loss of “economic liberty” that young Americans face today as a “flash point of history” in which the younger generation will ask what their elders did to stop it. In a speech to New Hampshire Republicans, Bachmann recounted learning about a horrific time in history as a child – the Holocaust – and wondering if her mother did anything to stop it. She said she was shocked to hear that many Americans weren’t aware that millions of Jews had died until after World War II ended. Bachmann said the next generation will ask similar questions about what their elders did to prevent them from facing a huge tax burden. “I tell you this story because I think in our day and time, there is no analogy to that horrific action,” she said, referring to the Holocaust. “But only to say, we are seeing eclipsed in front of our eyes a similar death and a similar taking away. It is this disenfranchisement that I think we have to answer to.” The generation of Americans just entering the work force now could eventually see 75 percent of their earnings sucked up by income taxes, Social Security and Medicare, Bachmann said. Those young workers are going to wonder what people were doing while “watching quite literally our economic liberty pulled out from under us.” “The question comes down to this: what will you say to that next generation about what you did to make sure that wouldn’t be their fate?” she said. Bachmann, along with fellow potential presidential hopefuls Rick Santorum and Tim Pawlenty, spoke at a forum organized by “We the People,” a conservative organization created by former congressional candidate Jennifer Horn.

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CoStar’s People of Note (April 17-23)

April 22, 2011

This week’s People of Note includes the following markets: Atlanta, Dallas/Fort Worth, Houston, Los Angeles, South Florida, New York City, and Washington, DC. WASHINGTON, DC Avison Young Taps Almquist as a Principal Twenty-four-year industry veteran Marty Almquist joined Avison Young in Tysons Corner, VA, as a principal. The broker will focus on agency leasing and tenant representation in Northern Virginia. She will collaborate with top leasing…

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Jeffrey Rubin: When Will We See Demand Destruction for Oil?

April 21, 2011

How high must oil prices go before they start killing the very demand that feeds them? Everybody from the International Monetary Fund to the International Energy Agency (IEA) are warning of dire economic consequences if today’s triple digit oil prices persist. Curiously though, the IEA , which is warning of a potential global recession due to today’s oil prices, is also predicting an almost 1.5 million barrel a day increase in world demand this year. And judging by their recent track record, this forecast, like the one it made early last year for 2010, will once again be on the light side. Somber warnings from leading world institutions aside, there is no evidence yet of demand destruction in the places that have been pushing world consumption for over the better part of the past decade. Preliminary data on apparent fuel consumption show Chinese oil demand, already closing in on 10 million barrels a day, continued to grow at a double digit rate in March for the sixth consecutive month. That doesn’t sound like demand destruction to me. Of course, that is not to say there won’t be demand destruction in the future as oil prices continue to rise. All past oil shocks have resulted in recessions and falling crude prices, and there is no reason to expect the coming one will be any different. Given how high oil prices will likely rise ($200/barrel?) and the likely lack of fiscal counter measures from deficit ridden governments when the economy does finally keel over, there is potentially even more room for demand destruction than during the last recession. Keep in mind, the last recession was severe enough to register the first annual drop in world oil consumption since 1983. But what is still lacking for demand destruction to happen is the huge round of monetary tightening that always attenuates oil shocks. It’s no doubt coming. Just look how interest rates are already chasing runaway energy and food inflation in the world economy’s new growth areas, China and India. Facing 5.5 percent inflation, the People’s Bank of China has already increased interest rates four times over the past six months, and inflation will soon force other central banks around the world to follow their lead. Just as they did last time, those rate hikes, along with the burden of skyrocketing fuel bills, will eventually knock the economy back into recession. But until then, it is a little too early to focus on demand destruction. In the meantime, a fuel-hungry world economy will push oil prices to new record highs.

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Dave Johnson: Why Trump Gets Traction From Trade

April 20, 2011

Donald Trump is getting traction. He is talking about trade, jobs, China, manufacturing, China, jobs, China and China — and it is resonating with a public sick of being told to ignore what they can see in front of their faces. “Nobody, other than OPEC, is ripping off the United States like China,” he says. And he climbs in the polls. Why is blowhard Donald Trump getting such traction from talking about trade problems with China? Self-funded, Trump doesn’t require the support of the multi-national corporate/financial elite to be heard. He is able to use his own money to push his way into the conversation. So unlike politicians captured by the cabal that runs our politics, who have to get past the corporate-journalism gatekeepers to raise money and be heard, he is able to give voice to things that are right in front of our faces. Poll After Poll After Poll Shows Public Wants… Trump can read polls and poll after poll after poll shows that Americans are concerned about jobs, and are especially concerned about how our economy is sending the good jobs and factories out of the country. They are asking why they can’t buy things here that are made here. Whether Trump believes what he is saying or not is irrelevant, he understands what the people are thinking, and is giving voice to those sentiments. Polls show the public wants tax increases on the rich, a focus on jobs not deficits, and more investment in infrastructure, education, transportation and alternatives to oil. A recent Alliance for American Manufacturing poll found that “We have lost too many manufacturing jobs” is the top concern among independents and working-class voters. Other highlights from the poll include: A majority believe the U.S. no longer has the world’s strongest economy — a title they want to regain Voters are anxious about the economy — specifically China debt, spending and loss of manufacturing 86 percent of voters want Washington to focus on manufacturing, and 63 percent feel working people who make things are being forgotten while Wall Street and banks get bailouts Two-thirds of voters believe manufacturing is central to our economic strength, and 57 percent believe manufacturing is more central to our economic strength than high-tech, knowledge or financial service sectors Across all demographics, voters’ economic solutions center on trade enforcement, clean energy, tax credits for U.S. manufacturing and replacing aging infrastructure using American materials, a surprising overlap between Tea Party supporters, independents, non-union households and union households. People are sick of their factories being packed up and sent out of the country to places where people and the environment are exploited . They understand this is done to pit them against workers with no right, in order to lower wages, benefits and rights. They want something done about it. Trump is giving voice to these sentiments. He is saying what people are thinking. Trump says, “We tell China, that if you don’t stop manipulating your currency, we’re going to put a 25 percent tax on your products that come into the United States.” But Turn on Your TV And… But turn on your TV or open a newspaper and you get pundit after pundit saying we need to cut taxes on the rich even more, and cut the resulting deficit by cutting back on the things We, the People (government) do for each other and for our economy. The Elite Are Threatened Here is a typical elite-media response to Trump’s message: CNN Money: ” How ‘The Donald’ could incite a trade war ” Donald Trump’s call for a 25% tariff on Chinese goods is winning him a lot of attention as he weighs a presidential run in 2012. “They have manipulated their currency so violently towards this country, it is almost impossible for our companies to compete with Chinese companies,” Trump told CNNMoney in January, during which he laid out plans for his 25% tariff. Trade wars could arise : Imposing a tariff on China would do little more than irritate the world’s second largest economy, economists say. … China could also respond by closing its increasingly important market to U.S. exporters, which would be a major blow to American jobs and manufacturing. China has become the No. 3 market for U.S. exporters, with sales jumping 31% from the previous year. And that doesn’t even count the goods being made in China by U.S. companies. General Motors sells more cars in China today than it does in the United States, for example. “The sad story is we don’t have much leverage,” said Lardy. “But a tariff certainly would not advance our interests.” This response to Trump shows why Trump is resonating. In a piece that appears to be an ad for the Chinese Exporters Assn, CNN worries that responding to China’s manipulations could “irritate” them, which could lead to a trade war, and says there is nothing we can do to get our jobs back so we should just accept anything China does. We have already in a trade war with China for some time and everyone can see that we are losing. But this story takes the pro-China position typical of Wall Street and DC insiders. Filling the Vacuum The media gatekeepers won’t allow the voice of working people, and working people respond when they finally hear a voice speaking up for them. When the corporate/media elites ignore issues like China and trade, you get blowhards like Trump moving up in the polls. The corporate/financial gatekeepers have engineered the information channels to such an extent that blowhards like Trump can gain traction by filling the vacuum and voicing what the polls say the public is thinking. Examples Here are a few more examples of Trump on China and trade: Dire Warning From Donald Trump – China Will Destroy Our Country Conservative News Media on YouTube : “The Obama administration isn’t equipped to negotiate with and handle the Chinese. … Donald Trump said the Chinese are ripping us off and the Chinese can’t deal with it. … Donald Trump says the Chinese aren’t playing fair. … We need to trade with everybody but we need to be sure it is fair.” And, finally, Frank Sobotka: This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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Srinivasan Pillay: Capitalism Revisited: Why Society Matters

April 18, 2011

What does it mean to be a successful capitalist? Until recently, capitalism simply referred to “for-profit” businesses that were privately owned. Conscious capitalism, a recent extension of this idea, is a movement that recognizes that this profit can create value for stakeholders and customers alike, and in the process, also creates long-term value for investors. (1) These value propositions are based on the notion that businesses can invest in a higher purpose and in so doing create economic, psychological and spiritual wealth for customers. When business owners are faced with how to inject their approaches with these societal considerations, the immediate response is usually one of inertia because the “Pollyanna” approach of catering to society seems to be a luxury, in a world where tightening economies threaten the survival of any business. But recent studies have shown that there may in fact be a business case for catering to societal needs such that both the buyer and the seller emerge as winners. “Doing good” is not simply a matter of philanthropy, but also a way of building customer loyalty and building a reputation. (2) From a brain perspective, there are several reasons why this may be the case. Even when customers do not overtly register a service that takes their needs into account, the brain may register this intention outside of consciousness. This purpose that may trickle down from the business owner to the sales person is potentially detectable by customers at an unconscious level. Studies imply that “mirror neurons” in customers may in fact be able to read the intentions of sales people automatically through a brain mechanism involving the frontal and parietal lobes. (3, 4) It may be that based on the way we ourselves act, our brains can read the intentions of others. (5) At an unconscious level, trust may also encourage approach-related behaviors. Our brains are wired to approach people in whom we trust since trust deactivates the fear center of the brain — the amygdala — thereby encouraging a potential customer to engage more. (6) Any marketer would know that the more you can capture the attention of customers, the greater your chance of selling the goods you offer. If you, for example, provide some but not all information pertinent to a food product that you are selling, studies imply that the brain may detect this uncertainty, and without explicit knowledge, may activate the fear center in response to hidden ambiguities. (7) Being more explicit so that the customer has a better idea of risk may have less of an aversive effect. If one person reacts to this ambiguity by avoiding this product or business, other people may “pick up” this attitude and potential “herd behavior” could drive people away from a product or business. A recent study showed that “herd behavior” in stock-picking for example, occurs because part of the brain’s reward center (the ventral striatum) participates in what we call social decision-making. (8) Other people’s decisions can influence our own. Given these brain-based findings, what can businesses do to optimize customer loyalty and adherence to potentially increase sales? Firstly, building businesses that customers can trust will disengage the brain’s fear center. Thus, when businesses are composing heir mission statements, asking how the purpose of the business will truly serve people is critical. Secondly, since mirror neurons may be able to pick up intentions, CEOs should ensure that the sales force is aligned with the higher purpose of the business. Thirdly, businesses should avoid “double messages” and seek to represent the purpose in a way in which it dos not engage the fear brain. And last but not least, businesses should seek to correct early oversights that could eventually drive people away in herds due to the way the brain’s reward system is wired. While further brain-imaging studies would lend more weight to these preliminary findings, the issue of conscious capitalism has a growing case in favor of it. In fact, I am honored to be part of a thoughtful and distinguished group of people who will contemplate this very question from multiple standpoints. At the Third Annual International Conference on Conscious Capitalism in Waltham, MA, researchers from a variety of fields will ask whether we can not only make a brain-based case, but a business-based case for such conscious capitalism. My prediction is that aligning our brains with business will help to achieve this goal. And understanding this more deeply will likely lead to more ideas to improve business outcomes. References 1. Frazee S. Integral Leadership Review. Catalyzing Conscious Capitalism Conference. Vol 9. 3 ed: Russ Volckmann, LeadCoach; 2011:1-5. 2. Agarwal PK, Tyagi AK, Kumar P, Swati G. Cause Related Marketing in India: A Conceptual Paradigm. Advances in Management. 2011;3(12):24-31. 3. Rizzolatti G, Sinigaglia C. The functional role of the parieto-frontal mirror circuit: interpretations and misinterpretations. Nat Rev Neurosci. Apr 2010;11(4):264-274. 4. Bonini L, Rozzi S, Serventi FU, Simone L, Ferrari PF, Fogassi L. Ventral premotor and inferior parietal cortices make distinct contribution to action organization and intention understanding. Cereb Cortex. Jun 2009;20(6):1372-1385. 5. Kaplan JT, Iacoboni M. Getting a grip on other minds: mirror neurons, intention understanding, and cognitive empathy. Soc Neurosci. 2006;1(3-4):175-183. 6. Todorov A, Baron SG, Oosterhof NN. Evaluating face trustworthiness: a model based approach. Soc Cogn Affect Neurosci. Jun 2008;3(2):119-127. 7. Schultz W, Preuschoff K, Camerer C, et al. Explicit neural signals reflecting reward uncertainty. Philos Trans R Soc Lond B Biol Sci. Dec 12 2008;363(1511):3801-3811. 8. Burke CJ, Tobler PN, Schultz W, Baddeley M. Striatal BOLD Response Reflects the Impact of Herd Information on Financial Decisions. Front Hum Neurosci. 2010;4:48.

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Richard (RJ) Eskow: Bachmann/Ryan Overdrive: A High-Speed Escape From Economic Reality

April 14, 2011

Remember all those mini-movies that summarized a broad topic in two minutes? Whether the subject was the Civil War, the magical things that happen when you multiply by ten, or the complete history of Western Civilization, these little films covered it all in one rapid-fire shot after another, giving you a whole lot of information — and a splitting headache — in a very short period of time. The first couple minutes of this Michelle Bachmann Today show interview are like that. She runs through the entire litany of conservatism’s disproven economic cliches in 100 seconds or less. without even getting short of breath. If someone ever wants to make one of those two-minute movies and call it The Ideas That Crushed the American Dream , Rep. Bachmann’s already written the script. Fire it up and watch her go! We’ll sound the bell every time she floats a discredited idea. Ready? Raising taxes for the wealthy shouldn’t be “on the table,” says Bachmann, because “tax rates are high enough (ding!), and history shows (ding!) that when we raise taxes, particularly on job creators (ding!) we actually bring in less revenue (ding! ding! ding!) rather than more.” Forget what I said about two-minute movies. Michelle Bachmann could cover Western Civilization in ten seconds . I was on a talk radio show from St. Louis yesterday with a guy from the Heritage Foundation who used the same “history shows us” line. What history actually shows us is that we lost jobs after the Bush tax cuts, even before deregulation brought down the economy. History also shows us that our periods of greatest economic prosperity occurred when taxes were higher than they are now. The history of the Great Depression shows that it took a lot of government investment to get people working and the economy growing — and that this investment paid off handsomely. FDR listened to the Bachmannites of his time in the late 1930′s, and that’s when everything started falling apart again. So history shows us that we need government investment to reduce persistent unemployment. And “job creators”? Oh, please. Wall Street financiers have regained their pre-crash parasitical economic stranglehold, seizing nearly 40% of corporate profits. They’re getting rich by not creating jobs, and sometimes by destroying them through destructive hedging. Corporate profits are at historic highs and taxes for the wealthy are at historic lows, yet people in the real world are still taking the world’s longest unemployment gut-punch. Which raises the question: If these guys are “job creators,” where are the jobs ? “Do we want more revenue or more taxes?” Bachmann asks rhetorically. Because the two don’t go together.” As the young people say (picture a finger snap here): Oh no she didn’t! Did she cite the Laffer Curve ? Yes, she did. Michelle Bachmann just brought out the most discredited theory in modern economic history: the notion that people will stop making money if taxes are too high, so overall government income will fall and not rise. There’s only one thing that contradicts that theory: The economic history of every single nation on the planet. The Laffer curve argument goes like this: if you taxed everybody 100% of everything they earned, nobody would ever bother to make money. So it must be bad to increase taxes. That sort of reasoning cuts both ways: If you paid everybody zero for their work, nobody would bother working. But they never use that logic to fight for a higher minimum wage. Economists like the name “Laffer curve” because this theory is always good for a laugh. “You could actually confiscate (ding!) all the wealth that people make at $200,000 or more,” says Bachmann, “and that would only yield about six or seven months of revenue to run the government.” Hey, that’s half the whole cost of government! She’s selling the idea pretty well! Conservatives love that word “confiscate.” They’re the same ones who say they’d lay down their lives for their country. But pay four pennies on the dollar on six-figure income? Forget it. That’s dictatorship! Think of it: Our highest tax bracket under Dwight D. Eisenhower was 91% percent. He must be the greatest dictator of all time! This is the type of person who loves to sing along when they play that song about sacrificing everything for this country — you know the one . All the Democrats are proposing is a four-and-a-half percent increase on income over $250,000. “There ain’t no doubt I love this land” — but not enough to chip in for it. Here’s the song they should really be singing. Know what’s funny? Bachmann and her colleagues are the same people people who think we can’t afford to pay thirty million dollars per year to predict coastal storms and floods and plan for disasters. These floods create an average of $11 billion in damage every year , along with loss of life — and they think we can’t spare a few million to lower that cost and save some lives. Yet they’ll give away hundreds of billions in tax expenditures like it was peanut butter in a smoke-filled college dorm. For the Representative from Minnesota it’s “confiscate” this and “take 100 percent” of that… on and on and on… until all of the ridiculous rhetorical tricks that got us into this mess begin to flicker stroboscopically and the rational listener is in danger of having a seizure, like those cartoon-watching kids from a few years back. Bachmann goes on in this vein for what seems like forever, but which in reality is only four minutes or so. This alteration in subjective temporal experience is produced by something physicists call the “Mind Dilation Effect,” in which time appears to be moving more slowly as the flow of bullsh*t approaches the speed of light. We see every single conservative cliche simultaneously, as if … Well, almost all. She left out one of their favorites, the one that says “If you could go back in time one day for every dollar the government spends, you’d be face to face with Jesus.” Just as well. With all their cuts to life-saving health care and law enforcement programs, it looks like a lot of other people are gonna wind up face-to-face with Jesus too. “Already again,” she says later, “the top 1% of income earners pay about 40% of all taxes.” (That’s not the right number, because it leaves out other forms of taxes, but whatever.) Why do the top 1% pay a large share of taxes? Because the top 400 families in America are richer than the bottom fifty percent of the entire country! So of course they pay a big chunk of income tax, even after they’re coddled with tax breaks galore. Rep. Bachmann sure has a lot of talking points, but here’s an odd thing: When Matt Lauer asked about the CBO’s report on, which documents the devastating financial impact their Medicare cuts would have on seniors, suddenly she tells us she “hasn’t had a chance to look at the study.” “But it’s important for us to understand,” Bachmann continues, “that individualism (ding!) and personal responsibility (ding!) have always been a bedrock of this country.” When it comes to the whole “devastating financial impact” question, I’ll take that as a “yes.” There’s more, but you get the gist. Some people think she’s a little nuts, and they’ll even get a little personal by mentioning that Children of the Damned-ish glint in her eyes. Actually she’s very polished and effective here. Somebody’s been coaching her, both on presentation and on talking points. Still, her ideas are as radical and as detached from reality as ever. But as Dave Johnson points out, Rep. Paul Ryan’s proposed budget is too extreme even for her. And that’s how it is on the Right these days. You can always tell that a movement’s degenerating into extremism when the radicals start attacking each other. Think Stalin vs. Trotsky, or that big squabble among birthers a couple of years back. And don’t forget the Judean People’s Front vs. the People’s Front of Judaea. (“Splitters!”) Now we’re in Bachmann/Ryan Overdrive time. These Representatives and other members of the Right are in a high-speed race to see who can outbid the other to win the extreme vote. I’m not against radicalism — it’s can be a laboratory for new ideas — but they’ve seen that responsible members of the far Right like Ron Paul are suddenly at risk of being thrown over by the Tea Party. That means that the Ryans and Bachmanns are going to keep upping the ante as long as they can. It’s like the game of chicken in Rebel Without a Cause where neither driver will take his foot off the accelerator until somebody goes over the cliff. Hope it’s not us. Cross-posted at Crooks and Liars . __________________________________________ 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 Curbing Wall Street project and 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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Starbucks CEO Offers Advice to LA’s Entrepreneurs: ‘You Can’t Be A Bystander’

April 7, 2011

On Tuesday evening, members of the Entrepreneurs’ Organization’s LA chapter gathered to honor Starbucks CEO Howard Schultz with the Entrepreneur of the Year Award at Hollywood’s Roosevelt Hotel. In town to promote his new book, Onward: How Starbucks Fought for Its Life Without Losing Its Soul , Schultz sat down for a Q&A with Huffpost’s Willow Bay. The Entrepreneur’s Organization describes itself as a “global network of more than 7,500 business owners in 38 countries,” with over 300 members in the Los Angeles chapter. Membership is by invitation only and members must make over 1 million dollars in profit per year. Amir Tehrani, EOLA’s Learning Chair, told Huffpost/LA that events like Tuesday’s Q&A with Howard Schultz are designed to provide members with an opportunity not only to network but to learn from some of the world’s most influential and successful entrepreneurs. Willow Bay: The title of your book is called Onward. I know it’s a word that’s layered in history and meaning for you. What does the word “onward” mean to you today? Howard Schultz: The word actually goes back to the past. I actually wrote an original kind of manifesto in 1986 and I can’t tell you with specificity why I closed the memo with the word “onward,” other than it’s a word about the future and a word about progress. And from that point on every written piece of material I’ve written for the company is closed with that word, and in many ways it’s a linkage to the past but its also about the future of the company. I think the last year and a half we’ve really tried to create a vision and aspiration for the future. I think “onward” connotes the words ‘progress’ and ‘future,’ and most importantly for me, preserves the relationship we have with the customers and our people with regards to the values of the company. WB: Why did you come back on as CEO of Starbucks in 2008? HS: I use a word to describe my relationship with this company, and it’s a word generally not used in business, and it’s Love. I love this company. I love what it represents, and I feel a deep level of responsibility to 200,000 families. There isn’t anything I will not do to preserve and enhance the culture and values of Starbucks. And when I speak in front of my people as I did two hours ago [in a company meeting], one of the things I say is when you are part of a company you have to have a voice, and what that means to me is you can’t be a bystander, and no matter where you are in the company—a twenty hour part-time barista or a manager of the state of California—If you see something that is inconsistent with the values of the company and you don’t speak up, you become a part of the problem. In a sense, I was the bystander for a while and I just couldn’t allow myself to drift through a sea of mediocrity. I had to do something and I was faced with a difficult challenge because I wasn’t the CEO, but I was torn between not having responsibility and at the same time watching something I love so much go awry. WB: Whose advise, whether its positive or constructively critical, do you seek, do you follow, do you embrace? HS: Well first of all I was willing and actively pursuing anyone who could give me advice during the [2008 financial] crisis, and I think very few people actually had answers. The issue of managing through a crisis is you have to be decisive even if you don’t have perfect information. But I got great advice from Michael Dell, and he was very helpful. He shared with me something when I came back [in 2008 as Starbucks’ CEO] that he loosely described as a ‘transformational agenda.’ When I saw that, I realized that I would have sixty days to prepare myself before coming back, so I had a data plan already in place. The transformational agenda is essentially one single piece of paper that [helped]–whether you were a part-time barista or president of a division–you understand exactly what company was going to try and do and you also knew, relatively speaking your role and responsibility and you could see yourself in it. Jim Sinegal, the founder of Costco, gave me fantastic advice because we were going down the wrong track. We brought him in to look at our plan and he said “you know, I don’t want to be rude but this is exactly the wrong thing to do.” This was my idea, and he was right. His advice was the cost of losing your core customers and trying to get them back post-recession would be much greater than trying to find new customers, so we completely shifted and focused specifically on recognizing and rewarding our core customers. That was fantastic advice. And that evolved into the Starbucks Rewards program, which is a big, big idea today. Twenty-two, twenty-three percent of all transactions happen on that Starbucks card. Just in the last 90 days we launched mobile payment at Starbucks, and we became the number one company in all of America in terms of mobile payment frequency of dollars spent. WB: Starbucks is one of the biggest brands on Facebook and Twitter. You’ve also told Charlie Rose that you have a unique ability to communicate with your customers in that space. Can you share what you know about social media with us? HS: In its early stages, I think companies believed [social media] is an opportunity to sell more stuff, and that’s a dangerous road. And I think one of the reasons we’ve been more successful on facebook specifically is we don’t use or view that as a channel for commerce. We use that channel as an opportunity to share what it is we do, how we do it, why we do it. These channels are a viable opportunity to lower cost of traditional communication, but these are also a reservoir of trust. Every time you try to sell something [on social media], which we do from time to time, you are taking a withdrawal out of that reservoir. I think we’ve succeeded because we view social media as an opportunity to make a deposit to the equity of the brand, rather than a withdrawal. This is a channel to build authenticity and communicate effectively, but you have to be honest with your intent… It’s a new day and the rules of engagement have changed, and we can’t hold onto the past. That’s the bottom line. WB: You’ve started companies, you’ve been a manager of a massive global brand, and you’ve been a turnaround specialist. Did you need a different skill set for each one of those three different roles? HS: I never took classic business classes in college, so I don’t have the background that any of the people running large companies have. So what do I have? I feel like sometimes I can smell something or have an intuitive sense. At my best I’m a merchant. I think turning around a company during a crisis—there’s no blueprint, there are no rules. I think so much of it is intuition and being decisive and trying to find your footing…I don’t have any secret sauce and I’m no smarter than anyone else. I will say I have surrounded myself with unbelievable talent that has made my job easier. WB: You wrote “I have come to think of myself as at my best as a leader when Starbucks is being challenged or fighting for survival. I am comfortale and enjoy a rugged, steep ascent.” Times are not as challenging right now [as they were in 2008], so where does that leave you right now as a leader? HS: The challenge I have right now is not allowing human behavior and the human condition to relax. The stock price is two and a half dollars away from the all-time high at Starbucks. And everyone looks at that and says ‘well, everything’s fantastic.’ Bullshit. No, this is a fragile issue, and I think the challenge we all have as leaders is maintaining that intensity. And that is a challenge, but also I’m incredibly excited about what it is in the future and what’s behind the curtain. I also think it’s my job to think about the future and about succession. I think succession from Starbucks in the future has to come from within. Also, I think I have a responsibility to my wife. She has sacrificed a tremendous amount over the last two and a half years to allow me to do this, and I made certain promises to her. WB: Any that you’d like to share? HS: Uh, no. Audience Member: How does an entrepreneur starting out find balance between following your dream to success and risking everything, especially with a family? HS: That is the most critical question because you’re trying to balance your own dream and aspiration with the responsibility you have to your family. In the beginning I didn’t have a salary for almost a year and a half. My wife was eight months pregnant with our first child. She’s from Ohio. Her father came to Seattle to talk to me, and he literally said to me “my daughter’s eight months pregnant, she’s still working, you’ve got to stop.” We had two stores open but we kept losing money, and I went back into the house and I told my wife and she said “no. We’ve got to see this through.” If she would have blinked on any level, I think it would’ve been over. So I think you have to have a partner that’s willing to see this through with you. What I want to say is the following: sometimes the difference between seeing your dreams through is not following strong enough or long enough, and the worst thing that can happen is you get to an age where you get bitter because you gave up too early or you keep looking back. And what I tell young people is don’t let anyone, even your parents, tell you your dreams can’t come true. If I took you to where I grew up, you couldn’t believe that I could get here. And I got here because, and I know this sounds kind of trite, because the American Dream is still alive and well.

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Bill Cheney: Debit Interchange: Those Who Can Least Afford It Will Be Hurt Most

March 29, 2011

It’s easy and popular to demonize the big banks of Wall Street. In many cases, they deserve it. But the attempt by retailers, big and small, to cast the current political battle over debit card interchange as a fight between Wall Street and Main Street (with merchants, of course, claiming the Main Street mantle), is grossly inaccurate and misleading. When smaller card issuers — like the credit unions my association represents — express their deep concern about the impact of interchange, we are painted by proponents of the new law restricting interchange fees as fronting for the big Wall Street banks that they say are the true targets of the legislation and related rules proposed by the Federal Reserve Board. Credit unions are cooperatives, locally based and owned by their 93 million members — the people who do the saving and borrowing. Many are teachers, firefighters, police officers, members of the military. That’s as Main Street as you can get. Our industry has no allegiance to the banks, which have a history of opposing pretty much everything credit unions try to do. We are only aligned with the banks on interchange because in this case our members will be harmed by the effects of the legislation and pending Fed proposal. What’s the concern? Well, you’ve heard the old line about the businessman who is selling a product for less than it cost him to produce it, and when asked what he plans to do, responds: “Don’t worry, we’ll make it up on volume.” That encapsulates what’s going to happen if the Fed’s interchange proposal is allowed to take effect. Credit unions receive on average about 44 cents per debit card transaction as interchange revenue. The Fed proposal would chop that to 12 cents, a figure that doesn’t begin to account for the actual debit card service costs, such as those related to fraud and systems support. The 12-cent rate puts us in the same boat as that businessman trying to make up his losses on volume. We estimate that up to two out of every three credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenue by 40 percent. Remember, credit unions are member-owned cooperatives. Their business model is all about passing savings onto their consumer-members. Last year, for example, consumers saved $6.5 billion using credit unions rather than banks. In this case, however, credit unions will have absolutely no choice but to pass the higher interchange costs on to their members, most likely by adding fees to debit cards or other services. And the people who can afford it least are the ones likely to be hurt most. “No worries!” say the merchants and their supporter on Capitol Hill. “The interchange law exempts most community banks and credit unions” (those with assets under $10 billion). But the exemption is fatally flawed. Larger institutions account for the majority of debit transactions. Over time, smaller institutions will lose out, too. Market pressures will force the interchange price that smaller institutions receive toward the lower, 12-cent rate. Influential regulators like Fed Chairman Ben Bernanke and FDIC Chairman Sheila Bair have voiced doubts about the efficacy of the small institution exemption. The need to address the inherent flaws in the exemption is why Sen. Jon Tester (D-MT) and Rep. Shelley Moore Capito (R-WV) have introduced legislation to delay and further study the Fed’s implementation of interchange. And the call for delay, further study or both is coming from other quarters, too: The National Community Reinvestment Coalition, the Hispanic Chamber of Commerce, the NAACP, and most recently, the National Education Association. All share a concern that the ones who can least afford it — low- and moderate-income consumers — will be hurt the most by added fees. Those of us working to help Sen. Tester and Rep. Capito to delay and study this troubling issue are admittedly, as the Wall Street Journal terms us , a “collection of strange bedfellows.” But it is a grouping brought together by shared concern about the unintended yet potentially harmful consequences of the interchange restrictions. And this unlikely conglomeration demonstrates that attempting to narrowly cast interchange as some type of deserved comeuppance for Wall Street banks misses a much broader and consumer-oriented picture. Put another way: In the zeal to reform interchange, don’t hurt consumers and the financial institutions that they own in the process.

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Don McNay: The Person We Should Be Moving Our Money to

March 28, 2011

Over 4 million people moved their money from Wall Street Banks in 2010, according to Sara Ackerman, project coordinator for Move Your Money. I bought into the “Move Your Money” movement the day that Arianna Huffington and some associates founded the concept. I had already been doing it for years. My money is in non-Wall Street banks that have branches, or headquartered, in my home city of Richmond, Kentucky. Long ago, I learned the importance of having a personal relationship with my banker. I don’t want to call an 800 number and talk to a “customer service” representative in India. I want my money to circulate back into the community I live in. I don’t want it being shipped off to fund “funny money” games on Wall Street and I really don’t want it spent on multi-million dollar bonuses. A familiar brand is why some people remain with the Wall Street banks. You see celebrities like Alec Baldwin touting Wall Street banks in countless commercials. People have a comfort level with products they recognize. Capital One got $3.56 billion in bailout money from taxpayers. They used some of that money to hire a Baldwin, a supposedly liberal actor, to encourage us to run up big debts on a credit card. I don’t want bailout banks to be “what’s in my wallet.” It took me awhile to find the perfect role model of who we should be “moving our money” to. Pete Mahurin in Bowling Green Kentucky. Mahurin is the Executive Vice President of Hilliard Lyons, a regional investment firm. He has been one of their top brokers for many years. He owns, or is a board member, several Kentucky banks, in places like Cecilia, Albany and Mayfield. He and his wife Dixie completed a million dollar gift to their alma mater, Western Kentucky University, and fund many other charities. He started life in Short Creek Kentucky with hopes, dreams and an incredible work ethic. “I grew up on a little scrub farm,” said Mahurin. “My brother thought we were broke. I just thought we were temporarily out of money.” Over seventy years later, he made his fortune but still maintains his enthusiasm for high achievement and hard work. He is an unabashed Democrat, living in a conservative city that serves as the home of Tea Party icon, (and possible presidential candidate) Rand Paul. There is a perception that Democrats are rare in the financial world but Pete noted that “the people who own companies tend to be Democrats but the people that do the work for them tend to be Republicans.” There are Wall Street types, like Lloyd Blankfein at Goldman Sachs, who have a similar bio to Mahurin. They grew up poor, became rich and give money to Democrats. It’s easy to see how the Wall Street types screwed up. They all went to the same Ivy League schools, live in the same suburbs, talk to the same people and developed a lifestyle that never allows them to interact with ordinary people. Mahurin is all about ordinary people. He’s grew up on Short Creek in Grayson County Kentucky, and then graduated with a degree in Physics from nearby Western Kentucky University. He taught high school physics before joining the investment world and has spent most of his life in Bowling Green. Legendary Kentucky journalist Al Smith noted Mahurin is “not a stereotypical slick salesman then, nor now. He is slow talking, behind a toothy smile, and continues to drive a beat up car.” Both wealthy and working class Americans, seek Pete’s advice. One on the wealthy side is Lexington Kentucky’s Mayor Jim Gray, who asked Mahurin to sit on the board of the successful Gray Construction Company. Gray said that Pete “represents patience to the point of painfulness. After he talks, often everyone will nod quietly in agreement, as if divine wisdom has been spoken.” I don’t expect divine wisdom from my banker but I would like some Main Street wisdom and common sense. When you compare the values, insights and world view of Pete Mahurin to the greed and hubris that has plagued Wall Street for decades, there is only one conclusion: Pete Mahurin is the kind of person I want to ‘move my money” to. Don McNay, CLU, ChFC, MSFS, CSSC of Richmond, Kentucky, is an award-winning columnist, structured settlement consultant and Huffington Post Contributor. He is the author of the book, Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery. He has appeared on the CBS Evening News With Katie Couric along with numerous other television and radio programs. You can read more about Don at www.donmcnay.com McNay has Master’s Degrees from Vanderbilt and the American College and is in the Hall of Distinguished Alumni of Eastern Kentucky University. McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field

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Video: Citi’s Parsons Succeeds With His Mastery of the Schmooze

March 25, 2011

March 25 (Bloomberg) — Richard D. Parsons, the 62-year-old chairman of Citigroup Inc., has mastered his people skills and political connections, and they have powered his career to the top of some of America’s most prominent, and troubled, companies, Bloomberg Businessweek reports in its March 28 edition. Erik Schatzker reports in today’s Movers & Shakers. (Source: Bloomberg)

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Fred Teng: Why China Won’t Be the Next Egypt

March 21, 2011

The recent eruption of protests and violence in Egypt and the resignation of its president, Hosni Mubarak, lead some pundits to predict that the same movement will happen in China. However, China’s circumstances are entirely different and a similar outcome is unlikely. Along with India and Greece, Egypt and China are two of the oldest civilizations in the world. However, both the Arab Republic of Egypt and the People’s Republic of China only established their current governments about 60 years ago. How did these two governments conduct their affairs? Why are the events that caused the collapse of the Mubarak regime not likely to happen in China? The main issues that surrounded the downfall of the Mubarak regime appear to be the leadership and the economy. In Egypt, Hosni Mubarak served as the only President of Egypt for over 30 years; yet in China, since Deng Xiaoping’s launch of the Open and Reform Policy in 1978, China has made orderly transitions through three generations of leaders. Starting with Deng Xiaoping leading the second generation from 1976 to 1992; then Jiang Zemin leading the third generation from 1992 to 2003; and from 2003 the fourth generation with Hu Jintao as the core figure (General Secretary), along with prominent leaders including Wu Bangguo, Wen Jiabao, Jia Qinglin, Zeng Qinghong and Li Changchun. By 2012, the fifth generation of leaders will emerge, and the sixth generation of leaders is already being prepared. In Egypt, the last three presidents — Nasser, Sadat and Mubarak — all came from military backgrounds. By contrast, Chinese leaders are mostly from civilian backgrounds, and many of them are in fact engineers. While many historical great leaders have come from military backgrounds, civilian leaders tend to seek non-military solutions, and they also have a broader vision for science, business, and society as a whole. One of the rumors was that President Mubarak was plotting to let his son inherit his presidency, which upset a lot of people in Egypt, including the military council, and resulted in a forced resignation. When we look at the history of the People’s Republic of China, no leader has ever been succeeded by their offspring. The orderly transition of leadership, a well-planned succession, and a merit based leadership selection process has resulted in maintaining China’s stability and progress. On the economy, both Egypt and China face a daunting task to deal with a vast number of people that need education and employment. In the last 30 years, the Egyptian government has reformed the highly centralized economy it inherited from President Nasser. The pace of structural reforms, including fiscal and monetary policies, privatization and new business legislations, helped Egypt to move towards a more market-oriented economy and prompted increased foreign investment. The reforms and policies have strengthened macroeconomic annual growth results which averaged 5% annually, but the government largely failed to curb the growing problem of unemployment and underemployment among youth under the age of 30 years. In this period China has followed its own socialist market economy and become the world’s fastest-growing developing country, with average growth rates of 10% for the past 30 years. China has lifted 300 million people, about four times the size of Egypt’s entire population, out of poverty. Certainly, China still has a lot of work to do, but its amazing accomplishment is clear. China’s success is largely due to its long-term planning strategy — the Five Year Plans . Moreover, China is committed to stay on the course of its Five Year Plans and not by piecemeal legislation. One of the example is China’s overall economic construction objectives were clearly stated in the Three Step Strategy set out in 1978: Step One — double the 1980 GNP and to ensure that the people have enough food and clothing. This was attained by the end of the 1980s; Step Two — quadruple the 1980 GNP by the end of the 20th century. This was achieved in 1995 ahead of schedule; Step Three — increase per-capita GNP to the level of medium-developed countries by 2050, at which point the Chinese people will be fairly well-off and modernization will be basically realized. The 12th Five Year Plan that was adopted in March 2011. Those who are interested in having a deeper understanding of China’s future direction should study the plan and watch the events unfold. China will stick to its plan. In most democracies, the citizen’s trust and satisfaction with their own government is critical to the success of the nation, and China is no exception. Let us take a look at how most Chinese people view their government. According to 2010 Pew Survey: China is clearly the most self-satisfied country. Nearly nine-in-ten Chinese are happy with the direction of their country (87%), feel good about the current state of their economy (91%) and are optimistic about China’s economic future (87%). Moreover, 64% of Chinese have a very favorable view of their own country, a self regard that exceeds that among Americans (48%), Russians (43%), Germans (12%) and Brazilians (31%). Citizen confidence leads to productivity, investments and stability. When the citizens are satisfied, the government can conduct its functions; business can produce goods and services, and people can work and provide for their family. While there might be some similarities between Egypt and China in their long civilization, and the moving from a centralized economy to a market economy in the last 30 years, the difference is that China has maintained an orderly transition of leadership, and an economic planning process that is producing results. Most importantly, China’s people are satisfied with their own government. This article was originally published in CHINA US Focus (www.chinausfocus.com)

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Ann Pettifor: If Japan Can Address Her Crises, Then the U.S. Can Address Job and Energy Insecurity

March 21, 2011

The disaster in Japan is almost beyond comprehension. Without minimizing the scale of the humanitarian tragedy, it is already possible to discern the emerging economic debate. Stock markets immediately anticipated the potential benefits to Japan’s construction industries and their suppliers. Policy makers in the U.K. and Europe, who are busy implementing austerity measures to curb budget deficits, should take note. The valuable argument coming from the ashes of this crisis is simple: Japan can afford to rebuild. The Bank of Japan is clear about this. In asserting this point, and calming markets with massive liquidity injections, the central bank is basing its Keynesian policy on a wholly different analysis from that of economists and politicians promoting austerity measures in Europe and the U.S. The economic possibilities of nations don’t depend on financial resources, but rather on human, technological and organizational power. The banking industry relies on these productive resources. The stability of banks hinges on lending for projects that will generate revenue streams for their own repayment. Power of Banking Japan is replete with all the human ingenuity and dedication that reconstruction and rebirth demands. The power of modern banking can enable Japanese society to deploy all of these resources, irrespective of the condition of Japanese public finances. The domestic banking system can circumvent the naysayers of international finance in a manner that should be understood by all financial authorities and economists. Japan can address this natural and man-made disaster without handing a begging bowl around to other nations. The same logic that enables Japan to solve its multiple crises defies European Union and American politicians who have reacted to the 2007-09 financial crisis with austerity policies. Their doctrine holds that because public finances are in disrepair we can’t address the energy or food insecurity threatening our economies, or to reduce the unemployment that jeopardizes economic, social and political stability. This diagnosis puts the cart before the horse: There is an energy and jobs crisis, not a public-finance one. Affordable Work The state of public finances is primarily a consequence of the financial crisis, the increase in insolvencies and unemployment, and the resultant decline in revenue. If there is reconstruction work that can be done by the people of Japan — and there are people to do it — it is affordable. The marvel of the domestic-banking systems that have existed since the 18th century is to permit this economic process to be stimulated. New work will generate all the public revenue necessary to repay any loans from the banking industry. The nuclear tragedy unfolding in Japan has its roots in faulty logic applied by international financiers and their “hired guns”‘ in the economics profession. Society has been convinced that nuclear power is necessary because it is the only affordable option. But all energy technologies are affordable. The real test of affordability isn’t cheapness but the most effective use of the real resources of society, taking into account threats like climate change and the risks associated with particular technology choices. Man-Made Hazard To have built nuclear power plants in the so-called Ring of Fire was to create an entirely unnecessary, man-made hazard. Decisions as to whether nuclear power is the most appropriate response to energy shortages and the threat of climate change is a question for society — not for business or finance. This is most clearly illustrated in the demonstrations and debates surrounding the forthcoming elections in Germany’s Christian-Democrat-dominated state of Baden-Wuerttemberg. It is our tragedy that policy makers permit a glimpse of these lessons only in times of war. Unemployment in peacetime, combined with risky and reckless investment, is imposed on nations by ignorance, greed and special interests. May the legacy of this appalling and destructive crisis in Japan be the abandonment of such faulty and brutal doctrines, so that the people of Japan and of the world may now turn to the possibilities of what can be achieved to restore financial stability as well as energy and job security.

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Obama: I’m Going To Latin America To Discuss Jobs

March 18, 2011

In recent weeks, we’ve seen how turmoil and tragedy around the globe can affect our own prosperity and security; how events abroad often have implications for everything from markets on Wall Street to families’ wallets on Main Street. And as a nation, we will continue to do everything we can both to promote stability and democracy in the Middle East and help the people of Japan recover from the devastating earthquake and tsunami.

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Tagged Taps Hewlett-Packard HR Executive for Newly Created Role of Vice President of People Operations to Support Company Growth

March 14, 2011

SAN FRANCISCO, CA–(Marketwire – March 14, 2011) – Tagged, the world’s leader in social discovery, today announced the addition of James Takazawa as its first Vice President of People Operations.

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With Lockout Looming, NFL Owners Downplay Economic Benefits Of Football

March 1, 2011

WASHINGTON — In the past two decades, National Football League owners have received at least $5 billion from local governments to build and maintain football stadiums for their lucrative franchises. The argument was almost always the same: With a little taxpayer investment, the city would get a big boost in economic activity. With no investment, the team would up and leave. With three days until the owners lock out the players for refusing to give up their claims to $1 billion of the sport’s $9 billion in annual revenues, local officials and players are raising concerns that a canceled season could deprive cities of needed economic activity — as much as $160 million per city, according to the NFL Players Association — at the worst time possible. But now that the argument is working against it, the NFL calls such concerns “fairy tales.” Economists have debunked claims that a shutdown would devastate a stadium’s host city, or that a new stadium offers the kind of windfall that would justify significant public contributions. But NFL Commissioner Roger Goodell had a different take in 1997, when he was a league executive. “A new stadium provides more than just a new place to watch a game,” Goodell said at the time. “It can revitalize and stabilize both a team and a city.” “For them to be dismissive of the NFLPA’s claims now is sort of ironic,” said Dennis Howard, a business professor at the Lundquist College of Business in Oregon. “Many of them have used the economic benefit argument as a way of extracting significant public support for new stadiums.” Twenty-eight of the league’s 31 stadiums (the Jets and the Giants share the New Meadowlands Stadium) have been built with some amount of public financing, according to the National Sports Law Institute at Marquette University’s law school. Eleven have been 100 percent publicly financed. Taxpayers have put up more than $5 billion since 1990. In Indiana in 2004, the president of the Marion County Capital Improvement Board argued that a new publicly-funded multi-use venue would keep the NFL’s Indianapolis Colts from leaving town, which would “create 1,500 full- and part-time jobs and annually produce $104 million in economic benefit.” The $750 million Lucas Oil stadium went up in 2008, with the public bearing 50 percent of the cost. In Ohio in 1995, a Hamilton County commissioner argued that a study showed the Cincinnati Reds and Bengals were worth $160 million a year to the city’s economy, according to the Pittsburgh Post-Gazette, and that the town should pony up. Paul Brown Stadium was built in 2000 as a $453 million gift from taxpayers. The Maryland Stadium Authority, which successfully poached the Cleveland Browns and renamed them the Baltimore Ravens in the mid-1990s, estimated that a football stadium inhabited by Cleveland’s team would add 1,400 jobs and $123 million annually to the city’s economy. The state of Maryland coughed up $200 million for a stadium, built in 1998. The city of Cleveland, meanwhile, ponied up 76.5 percent of the $315 million used to build a new stadium for a new Browns team in 1999. Now, the NFL’s owners are threatening to scrap the coming season if the players, who currently receive 50 percent of the $9 billion revenue pie, don’t cede $1 billion of that revenue. The owners say they need the money for stadiums, but the players union is skeptical because the owners have refused to open their books to show how they spend the cut of revenue they already receive. Owners also want limits on rookie pay and two additional regular season games. The players, for their part, have been happy with the status quo, and say more regular season games will lead to more players with grievous injuries. The NFL owners’ threats of abandoning host cities or a whole season are probably more trustworthy than the economic arguments in favor of public financing for stadiums or the players’ claims of an economic calamity precipitated by a work stoppage, both of which have been deemed false by academics. Analyzing economic data from local Florida economies during professional sports strikes and lockouts — like the one that may be at hand for the NFL — economists Robert A. Baade, Robert Baumann and Victor A. Matheson concluded in a 2006 paper ( PDF ), that a team’s presence or absence does not have a measurable impact on the surrounding local economy, despite the estimates by “sports leagues, franchises, and civic boosters” using “league and industry-sponsored studies.” “An analysis of taxable sales in Florida cities demonstrates that none of the 6 new franchises or 8 new stadiums and arenas in the state since 1980 have resulted in a statistically significant increase in taxable sales in the host metropolitan area,” they wrote. “In addition, using the numerous work stoppages in professional sports as test cases, again no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.” Mark Rosentraub, a sports management professor at the University of Michigan, told HuffPost that the NFLPA overreached with its $160 million estimate of the economic impact of a lost season. “It fails to account for the fact that people spend money anyway,” Rosentraub said, noting that people will spend their disposable income at places like movies theaters and restaurants if not football stadiums. Rosentraub said, however, that while a canceled game won’t have a big effect on a region as a whole, it could have big effects within that region. And smaller cities would suffer more without a season, he said, than larger cities would. “It’s gonna matter a whole lot to the city of Cleveland,” he said. “It won’t even be perceivable in San Diego.” It could also matter a lot to some of the individual people who work at or near stadiums. John Marler is a beer vendor at professional hockey, baseball and football games, as well as special events, in Detroit. Marler, 25, told HuffPost that if there’s no football season, he’d lose about 15 percent of his income. “Basically, you’re just taking money, you’re taking revenue away from businesses that provide jobs,” said Marler, a member of the AFL-CIO-affiliated union Unite Here, which has partnered with the players’ union to fight the lockout. “The people that lose — it’s the businesses, it’s the people that work in casinos, the people that work in stadiums. Those are the people that lose out.” And Jerry Watson, owner of a bar near Lambeau Field in Green Bay, Wis., told HuffPost that without an NFL season, his business would lose a third of its income. “It’s going to hurt the state of Wisconsin,” he said. The Baltimore Business Journal estimated that the state of Maryland stands to lose $3.8 million in revenues just from ticket sales. When HuffPost first asked the NFL to respond to various mayors’ complaints that a lockout would hurt their cities, a league spokesman sent a link to a story in the Atlanta Journal-Constitution that rate the $160 million claim “false.” The story suggested Baade’s more modest estimate of a $16 million impact would be more accurate. Nevertheless, several experts seemed to find the NFL’s “fairy tales” position deeply ironic in light of the arguments used to win taxpayer dollars for new stadiums. “This is a classic case of the NFL talking out of both sides of its mouth,” Tim Chapin, an associate professor in the department of urban and regional planning at Florida State University, wrote in an email. “The economic benefits are HUGE when the NFL needs a stadium built, but the benefits are minuscule when the numbers don’t reflect well on the league. The truth is that the economic benefits are relatively small, but they are almost certainly in the millions.”

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Dave Johnson: Crappy Jobs Caused by Plutocracy and Austerity

February 28, 2011

There are good jobs and there are crappy jobs. There are burger-flipping jobs and there are skilled trades and professions. There are jobs that pay well and have benefits and jobs that don’t. There is even the job you had, now paying less, with no benefits. Much of the post-recession job growth is at low end. Many “better” jobs not at the low end pay less and offer fewer benefits than they used to. So the middle class continues to fall. The “economic divide” — the gap between the top few percent and the rest of us — continues to accelerate, pushed by the recent continuation of tax cuts for the wealthy, stock bubble-pumping from the Fed, and ongoing attacks on labor. And now, in particular by “austerity” budgets in the states and the pullback of stimulus and other programs from the federal government. If you are desperate you’ll take any job, and the “austerity” idea — cutting taxes for the rich and using the resulting deficits to force cuts in unemployment, services, things government does for We, the People — forces people to be desperate enough to do just that. At the same time, it is cutting the number of jobs and the possibility that the economy will ever create more. Why Crappy Jobs? Plutocracy and Austerity Why isn’t the economy rebounding and producing lots of good jobs? The answer has two parts: plutocracy and austerity. Plutocracy forces the money and power to the top, and that power forces austerity measures on us to remove even more money and power from the rest. Plutocracy : Fundamental changes brought in by the Reagan Revolution have come home to roost , shifting almost all of our economy’s income growth to a few at the top, while pitting working people around the world against each other. The forced decline of labor unions has left people on their own against giant corporations. This video shows what it is like to negotiate on your own, up against companies with billions in resources: Austerity : The second part of the crappy-jobs, slow-growth equation is austerity. Tax cuts for the wealthy have resulted in huge budget deficits, defunding government’s power to protect regular people. The plutocracy uses these deficits as an excuse to force budget cuts, “spending down” our infrastructure by deferring maintenance and modernization, cutting back on education, cutting back on basic scientific research and cutting back in many other areas thereby reducing our economic competitiveness. But they’re doing fine today, so they don’t care about how this hurts the rest of us tomorrow. Austerity cuts back economic growth. This week a Goldman Sachs report says that the proposed budget cuts passed by the House shave a couple percent off of economic growth. A Goldman Sachs economist has warned that the $60 billion package of spending cuts proposed by the Republicans to counter President Obama’s proposal could slow economic growth. The cutbacks will also hurt employment. Center for American Progress this week, in Cuts In House GOP’s Continuing Resolution Could Drive The Unemployment Rate Up One Full Point , Earlier this month, the Economic Policy Institute released a report finding that the $100 billion in discretionary spending cuts that the House GOP passed last weekend would result in the loss of nearly one million jobs. “Cuts of this magnitude will undermine gross domestic product performance at a time when the economy is seeing anemic post-recession growth,” wrote EPI’s Rebecca Theiss. Another report this week shows how state and local cuts are also shaving growth. And who can be surprised by that? When you lay off thousands of teachers and other government workers, this causes a ripple effect to grocery, clothing and other stores. It causes even more foreclosures. AP: State spending cuts slow US economic growth in Q4 , The government’s new estimate for the October-December quarter illustrates how growing state budget crises could hold back the economic recovery. The Commerce Department reported Friday that economic growth increased at an annual rate of 2.8 percent in the final quarter of last year. That was down from the initial estimate of 3.2 percent. . . . State and local governments, wrestling with budget shortfalls, cut spending at a 2.4 percent pace. That was much deeper than the 0.9 percent annualized cut first estimated and was the most since the start of 2010. The Effect On People This “austerity” craze — cutting taxes for the rich to force cuts in the things government does for We, the People — is threatening to destroy even the small amount of job creation we are getting. And what is the human effect? A report from the Coalition on Human Needs titled A Better Budget for All: Saving Our Economy and Helping Those in Need shows that millions of Americans would suffer from the proposed budget cuts: At a time when 14 million people are out of work, the House approach to the federal budget fails those who are struggling most, according to a new report by the Coalition on Human Needs for the SAVE for All campaign. The report draws a sharp contrast between the president’s budget for next fiscal year and the House plan for the remainder of this year, although it also notes serious concerns with elements of the president’s budget. It shows how the proposed budget cuts would both harm individuals and damage the country’s fragile economic recovery. The House plan includes the largest cuts, on an annualized basis, in domestic appropriations funding in history. An Expanding Economy Fixes This Cutbacks shrink the economy. And expanding economy provides good jobs with good pay and benefits and fixes budget deficits. We want an expanding economy for We, the People, not tax cuts for the rich and cutbacks on the things government does for We, the People. Tax cuts and austerity provide an opportunity for a few to cash out and take off, but does not provide for the rest of us . March 10 Summit on Jobs and America’s Future On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis — and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy. Free. $15 with lunch. Register here. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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CoStar’s People of Note (Feb. 20-26)

February 25, 2011

This week’s People of Note includes the following markets: Austin, Cincinnati, Detroit, Houston, Indianapolis, Inland Empire, National, New York City, Northern New Jersey, Washington, DC and Westchester/South Connecticut. NATIONAL Colliers Appoints Dahlstrom Head of Investment Services Group Twenty-five year commercial real estate industry veteran Warren Dahlstrom joined Colliers International’s Investment Services Group as president. Dahlstrom…

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Dean Baker: Greenspan’s Incompetence Badgers Wisconsin’s Workers

February 21, 2011

Alan Greenspan has been strangely missing from the fierce battle over the future of public sector unions in Wisconsin and other states. His absence is strange because he bears more responsibility for the current conflict than anyone else alive. The reason is simple. Mr. Greenspan’s incredible incompetence in allowing the $8 trillion housing bubble to grow unchecked created the fiscal crisis that is gripping Wisconsin and most other states. To be clear, states always face financial stress in economic downturns. Most states had to struggle to balance their budgets in 2001-2002 and earlier in the earlier 1990-1991 recession. During a recession tax revenues fall. Consumers buy less, which means less sales tax revenue. Workers earn less money, which means less income tax. And property values fall, leading to less property tax revenue. At the same time the need for state programs increases. Unemployed and underemployed workers are more likely to need public benefits like unemployment insurance, Medicaid, Temporary Assistance for Needy Families (TANF) and other public support programs. Recessions are part of capitalism and responsible leaders prepare for cyclical downturns. However this recession is no ordinary downturn. The recession officially began in December of 2007, so it is now 37 months since the start of the downturn. At this point following the 2001 recession, the economy was down 1.5 million jobs from the pre-recession level. Thirty-seven months after the start of the 1990-1991 recession the economy had generated 1.1 million more jobs than the pre-recession level. At this point following the 1981-82 recession, the worst prior recession of the post-war period, the economy had 5.5 million more jobs than before the recession. By comparison the number of jobs now stands 7,700,000 below its pre-recession level. Furthermore, no one is projecting that this gap is about to be closed in the next several years. There should be zero doubt: this downturn is the reason that Wisconsin has a budget crisis. Perhaps Wisconsin’s leaders can be blamed for not recognizing that the economy was being managed by complete incompetents – and planning accordingly – but this is the story of the state budget crisis. According to the Congressional Budget Office , the economy is operating at more than 6.4 percentage points below its potential level of output. If Wisconsin’s state economy was 6.4 percent larger, and its revenues increased accordingly, it would have more than $4 billion in additional revenue in its coffers over the next two years. This increase in revenue would easily cover the projected deficit. This is even before we add in the savings from lower payouts for unemployment insurance and other benefits that would follow from a return to normal levels of unemployment. In short, there can be little dispute that Wisconsin’s budget crisis is Alan Greenspan’s work. The allegations of the union bashers can easily be shown to be nonsense. Wisconsin’s public sector workers are paid no more than their private sector counterparts. They tend to get somewhat better pensions and health care coverage, but this is offset by lower pay for comparably skilled workers. Nor has there been an explosion of public sector employment under the period in which Democrats governed the state. The last budget prepared by former governor Jim Doyle projected 69,038 full-time equivalent (FTE) positions for the state in 2011, an increase of 1.4 percent from the 68,092 FTE number in 2003, the year when Doyle took office. It takes some very inventive arithmetic to make a 1.4 percent increase in employment over 8 years into a bloated state workforce. How does it change anything if we know that Greenspan (last seen being feted at the Brookings Institution) is the real villain in the Wisconsin budget crisis? First, it should turn the heat where it belongs: Washington. The problem of the downturn is a lack of demand. A lack of demand is solved by spending money. We have to get our elected representatives to ignore the shrill whining of the Wall Street deficit hawks. We need sufficient stimulus from the public sector to overcome the falloff of more than $1.2 trillion in spending from the private sector that resulted from the collapse of the housing bubble. If members of Congress are too intimidated to do what is needed to fix the economy, then Wisconsin’s legislators should do what common sense dictates: follow the money. Rather than taking pay and benefits from schoolteachers and firefighters, it makes sense to take money from the people who have it. This means taxing Wisconsin’s wealthy and its corporations. The tax increase only needs to be temporary; since the state budget should be fine once the economy recovers. Of course the wealthy and the corporations will claim that they will leave the state and stop hiring, but these are not people who are known for their truthfulness. They are known for their money. If these big winners in the downturn are forced to share more of their wealth until the economy recovers then maybe they will put more pressure on Congress to support the sort of stimulus needed to get the economy back on track. This would be a real win-win for just about everyone.

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Marty Zwilling: When, Where, and How to Raise Venture Capital

February 19, 2011

By Dave Lavinsky, President and Co-Founder of Growthink At one point or another, most entrepreneurs find themselves in a place where they could use money. And oftentimes, they could use a lot of money. These entrepreneurs often dream about how much they could accomplish if they had millions in the bank. All the people they could hire. All the products they could develop. All the marketing they could do. And as they sit and dream, most entrepreneurs think about venture capitalists. Venture capitalists, or VCs, are the folks with millions upon millions of dollars to invest in companies such as theirs. This includes the folks that funded Google and Yahoo and Netflix and Ebay, and many of the great recent companies which were able to start and grow to massive scale in just a short period of time. And for a select few entrepreneurs, they are able to go out and raise the venture capital they need and make their dreams a reality. So, what it is about these select few entrepreneurs, and what do they do that makes them successful in raising venture capital? Below are the three core things they do: They go after venture capital at the right time. Venture capitalists generally are not interested in funding companies at the idea stage. They want to see that you have taken some of the risk out of the venture by developing prototypes, gaining beta customers, and possibly already generating initial revenues. If you haven’t accomplished any of these things, you might want to raise funding from angel investors and other sources to achieve them. And then go back to venture capitalists later. They make sure they are a proper fit for venture capital. Venture capitalists swing for the fences. They aren’t interested in getting a 1X or 100% return on their investments. Rather they seek a 10X or 1,000% return on every investment they make. VCs aren’t naïve, and understand that the majority of their investments won’t pan out. And so they need the ones that do pan out to have enormous returns, which can give them a high return across all of their investments. Now, not only does your company need to have the potential to give a VC a 10X return, but it has to meet two other key criteria. First, it needs to be able to grow quickly. Venture capitalists generally want to see a return on their investment within 5 to 7 years. As such, you need to be able to grow quickly and get acquired or go public within just a few years. A second criteria is that the investment size and return has to be big enough. No matter how exciting your company is, no venture capital firm wants to invest only $100,000 in it. Rather, VCs generally invest no less than $1 million in any one company. And for some VCs, that barrier is considerably higher. Consider that some venture capitalists have billion-dollar funds; these VCs can’t possibly invest the time to fund and manage thousands of small investments. So, to sum up, your company must have the potential to grow very rapidly, provide a massive return on investment, and be worthy of a multi-million dollar investment (which typically means that you will be able to sell for $50 million, $100 million or more within a few years). They go after the right VCs. All VCs aren’t created equally. Some prefer to fund healthcare companies. Others prefer software. Most only invest within 200 miles of their offices. Some will only invest very large amounts of capital. And even when you target the right VCs, chances are that they’ll say “no”. The fact is that VCs are bombarded with potential deals to fund. And even if you’re the best deal, you won’t always win (just like the prettiest and most talented woman generally doesn’t win the pageants since a certain degree of luck and noise typically kicks in). So, raising venture capital is a numbers game. You need to create a large list of investors that are a fit (e.g., based on your geography, sector, amount of funding you are seeking). And then you need to methodically contact and meet with them. Importantly, the best thing you can do to get a venture capitalist to invest is to let them know that other VCs have shown genuine interest. It’s all too easy for a VC to play the waiting game with you….to say that they’re interested but want to see your company progress (and minimize their risk further) before they invest in you. But once a VC sees that they might lose the opportunity to invest in you, they often get more aggressive in taking the next steps to fund your company. Raising venture capital is possible. And it is often the most important step an entrepreneur makes in building a highly successful venture. So follow these steps and make it happen! ##### Today’s guest post is by Dave Lavinsky, who has taught thousands of entrepreneurs how to raise venture capital. Learn more about Dave’s Venture Capital Pitch Formula from his Growthink blog , or contact him directly at davel@growthink.com .

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Russ Feingold Rallies Protesters In Wisconsin

February 18, 2011

MADISON, WIS. — Russ Feingold may no longer be in elected office, but he can still excite crowds of labor protesters who have rallied at the state’s capitol for days with virtually no appearances by prominent politicians. And he wants other public figures who say they support workers to come out and join him. With momentum and attention building, labor organizers anticipated that Friday’s turnout would be the highest yet. By the time Feingold arrived around 11:00 a.m., thousands of people already swarmed the capitol, with many back from protesting earlier in the week or having even spent the night in the building’s rotunda. The balconies looking down into the rotunda were nearly impassible, and crowds marched around outside readying for the noon rally. Feingold went to the local fire station and brought its firefighters with him to the capitol. When he arrived, protesters cheered and some even broke into chants of “Feingold for Governor.” “I just feel enormous pride in the people of Wisconsin who are coming together — whether union or anti-union — for the rights of workers,” Feingold said in an interview with The Huffington Post. “This state is one of the originators of many of the workers’ rights and protections on child labor, unemployment compensation, and almost all kinds of workers’ rights. The fact that our governor is trying to destroy those rights is something worth fighting against. And I, of course, as a citizen of Wisconsin, somebody who knows the state very well, was proud to just show up and keep my support.” While President Obama has criticized Walker’s proposal, which would strip away the collective bargaining rights of public employees, he has yet to make an appearance. Wisconsin Sen. Herb Kohl, the state’s one remaining Democratic U.S. senator, has put out a cursory statement on the protests but has not taken a visible role. Dawn Schueller, a spokesperson for Kohl, said the senator has received more than 450 phone calls and 1,900 emails regarding the protests and Walker’s proposal. Kohl is traveling to Wisconsin from Washington, D.C. on Friday, although she didn’t yet have details on his schedule for next week. Feingold said he believed any politician who purports to be pro-labor should be out in Madison. “I can’t imagine somebody who has supported labor and has the support of working people in the state wouldn’t want to at least appear at some point,” said Feingold. “It’s a very meaningful and very difficult effort against one of the most mean-spirited things I’ve seen in a long time. I know people are busy, but to me it was gratifying to see everyone working this hard against something that’s really terribly wrong. It’s very inspiring.” This week, Feingold launched Progressives United , a political action committee focused on combating corporate influence in politics . He pointed to the protests as the type of solution Progressives United is all about. “This is the kind of grassroots will overcome the power grab corporate America is now seeking to get,” he said.

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Richard Barrington: Covering Your Assets: 7 Signs Your Bank May Be Failing

February 18, 2011

Even though the banking sector is getting healthier, there were still 157 bank failures in 2010. When a bank fails, FDIC insurance should protect your checking and savings accounts (as long as you don’t exceed the $250,000 deposit limit), but accessing money from a failed institution can be inconvenient. If you’d rather avoid that kind of trouble, you should be alert for signs that your bank is struggling. After all, those 157 bank failures in 2010 exceeded 2009′s figure of 140. The reason 2010 was deemed to be a better year for banks is that there were fewer large bank failures, so fewer customers were affected. Still, bank failures remain a regular part of the banking landscape. Here are seven signs to watch out for if you think your bank is in trouble: Deteriorating financial ratios. You can get detailed financial ratios from the Federal Financial Institutions Examination Council. This information can be extremely complex, but if you call up a Uniform Bank Performance Report, you can see whether the capital ratios of your bank are deteriorating and/or are trailing the bank’s peer group. Deposit migrations. You can look at a year-to-year comparison of total deposits for a bank on the FDIC’s web site. A sharp drop means other people are heading for the exits, and you should be curious about why. Delayed financial reporting. Even if you can’t make heads or tails of the detailed financial reports, if you hear that a bank has delayed releasing earnings or other financial details, it may be a sign they are struggling with extreme changes in valuations. Layoffs. Drastic cuts in employees are a bad sign. Even if the bank isn’t failing, these cuts probably mean you can expect less service than in the past. Branch closures. Look at this as a more extreme version of layoffs. Don’t overreact if your bank steadily reduces the number of branches over time–the trend in banking is towards more electronic banking, with less of a bricks-and-mortar presence. However, a sudden announcement of a drastic reduction of branches is not a sign of an orderly, long-term strategy. Cuts in services. Whether it’s free checking accounts , rewards points, or special savings account rates for large customers, healthy banks make an effort to provide incentives for loyal customers. In a struggling bank, cost-cutting outweighs relationship-building. Sharp hikes in fees. As a general rule, healthy banks are in a mode of actively trying to attract new business–they are advertising regularly, offering competitive savings account rates, and have reasonable fees. Banks that are in trouble tend to go into a defensive posture where they don’t seem interested in new business, and they hike fees to get more out of existing customers. Several banks are adjusting fees because the banking environment overall has changed, but the more extreme the fee hike, the more wary you should be. None of these signs is the definitive kiss of death for a bank, but the more evidence of this kind you see, the more likely it is that your bank is struggling. At the very least, this can mean lousy service and uncompetitive products, and in the worst case, it could mean your bank is heading towards failure. So, if you start to see some of these signs, it may be time to shop for another bank. This post was originally featured on Money-Rates.com

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North Dakota Oil Boom Outpaces Oversight

February 17, 2011

BISMARCK, N.D. — Understaffed and overwhelmed, government oilfield inspectors are struggling to provide adequate oversight amid an explosion of activity in North Dakota’s oil patch, state and federal officials told The Associated Press. Hundreds of oilfield spills and thousands of waste disposal sites are being untended or are infrequently monitored because of a lack of personnel and funding, the officials said. And the staffing limitations come at a time when the industry – and a popular former governor – have pushed for a cut in state oil field taxes that help fund such monitoring programs. “It’s a fire drill every day,” Lynn Helms, director of the state Department of Mineral Resources, said in an interview with the AP. “We need more properly trained enforcement people helping the industry stay on track.” Oil production in North Dakota has boomed with the development of the Bakken and Three Forks formations, but oversight has not kept pace. Helms said the agency’s staffing is designed to handle 100 rigs and about 5,000 wells, whereas a record 169 rigs were drilling on Wednesday and more than 5,300 wells were pumping oil. About 2,000 more new wells are expected by the end of the year, Helms said. Moreover, he said the agency has funding for 13 inspectors though only 12 are on the job at present. Agencies that oversee oil production on federal land face some of the same inspection-staffing woes. The state inspectors, who are geologists or engineers, inspect the construction of new wells, disposal wells that hold waste and abandoned wells. They monitored a record 1,213 new wells last year, visiting each site at least six times during the three-week construction phase, Helms said. The inspectors ensure, among other things, that the steel pipe driven into the ground and cemented into place is done correctly to prevent groundwater contamination. Helms said the oversight of well construction is adequate but other monitoring is lacking. Nearly 900 disposal wells that hold saltwater, a byproduct of oil production, and about 5,200 sites that hold other oil waste are being monitored only twice annually at best, agency records show. They should be visited at least six to 12 times a year “to keep bad things from happening,” Helms said. Records show at least two wells that companies abandoned in the state’s oil patch have gone unplugged. The so-called orphan wells pose some of the biggest threats to groundwater supplies if not plugged correctly, but Helms said the agency doesn’t have the people or the funding to cap the wells at present and that’s dropped down the priority list. “Production has gotten ahead of oversight and without the resources to protect the environment and health, you have a worst-case scenario,” said Wayde Schafer, a North Dakota spokesman for the Sierra Club. “Yikes.” State Health Department records show 614 oil field-related spills were reported by companies last year, up from 478 in 2009. The number of reported spills this year – 127 through Wednesday – appears on pace to set a record. Dave Glatt, director of the state Health Department’s environmental health section, said most spills are minor and are cleaned up quickly. Only 10 have resulted in fines or other sanctions in the past year, he said. Glatt could not say how many oil field spills inspectors personally observed, saying, “we look at as many as one or two people can do.” The agency has had just one field inspector but recently shifted two workers from other duties, Glatt said. Helms’ agency has a two-year, $11.6 million budget for the fiscal cycle that ends June 30. It is asking for a $2.6 million increase in the next budget cycle, which Helms said would allow for about a dozen more oilfield inspectors. Ron Ness, president of the North Dakota Petroleum Council, said his group that represents about 250 companies supports a bigger budget for inspectors. “It is a heavily regulated industry but you’ve got to have enough regulators there to make sure it’s being done right and we support it being done right,” Ness said. Funding for the inspectors comes from the state’s 11.5 oil tax rate, which oil industry officials and former North Dakota Gov. Ed Schafer have pushed lawmakers to cut – though the state House defeated the proposed cut on Tuesday. “Yes, we don’t have enough inspectors . . . but lowering the oil taxes doesn’t affect inspectors and oversight,” the former governor said. “This is a legislative issue. We have not been spending the money properly that’s coming off the resource.” North Dakota is slated to collect about $961 million in oil taxes during its current budget period, and oil tax collections are expected to top $2 billion during the 2011-13 budget cycle. The U.S. Forest Service, which monitors oil and gas drilling and production on North Dakota’s federal grasslands, monitors about 600 active oil wells at present but expects to oversee about 350 more in the next decade. It is keeping pace with activity at present with its 18 inspectors, but would like to add at least three more – though federal budget constraints may keep that from happening, said Larry Melvin, mineral manager for the Forest Service. “We’re in the same pickle as the state,” Melvin said. Keeping pace with the booming oil activity on tribal land also has been a struggle, said Jim Albano, a spokesman for the Bureau of Land Management, which oversees oil development on the Fort Berthold Indian Reservation in western North Dakota. The number of oil-related projects has risen from 13 in 2008 to 113 last year, and another 57 projects have been proposed so far this year. The agency has increased its inspection staff from four to six but would like to even more. About 160 wells have been drilled on the reservation so far and the BLM is forecasting the number to rise to 1,000 by 2018. “It’s a challenge and it’s putting a lot of pressure on our staff,” Albano said. “Certain things are stacking up.”

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Jeffrey Korchek: Are Studios Dead?

February 17, 2011

While it may be true that in the movie business nobody knows anything, although I imagine James Cameron begs to differ, what about other businesses? Steve Jobs seems to know exactly what we want in elegantly styled electronics products, even before we do and even if they aren’t quite perfect. Jeff Bezos knows how to sell us almost everything we want online — and we thought he’d never make it past books. And how about that guy at Groupon who just turned down $6 billion for a company that didn’t exist 3 years ago and has zero barriers to entry in its business plan — he must know something. Of course, you can forget about Jesse Eisenberg/Mark Zuckerberg — he knows, what, about 600 million somethings. So, what does this have to do with movie studios? Well, it’s possible that the General Motors model of a studio — to paraphrase Alfred P. Sloan, “a movie for every person and purpose” — where one studio and its executives try to make a steady stream of comedies, dramas, genre pictures and those $200 million-plus things that hold up tents, is over. With studios’ high overhead and proven inability to control costs on one hand, and the daily onslaught of new technology that takes their product from them in ways they can’t understand and pays them less per viewing on the other, the very model of a modern major studio may just be dead. It’s a mixed up muddled up shook up world if you’re a major studio; everything that should go up is just going down — movie admissions, cable TV subscribers, and most dramatically DVD sales — while the wrong things — motion picture production and distribution costs, Redbox rentals, internet streaming and Netflix’s share price — all keep going up. Only the steady rise in the average price of movie tickets — up 5% in 2010 over the prior year, keeping box office results flat while attendance fell 5.3%, makes the business seem in okay shape. But, it’s not. Especially if you plot rising ticket prices and falling attendance on the same x:y graph and think about where that ends up. In the past, when studios green-lit their movies, theatrical performance was always the variable with video revenue and cable output deals a given, escalating based on box office gross. But now, with DVD sales down 33% over the past four years and cable networks like Showtime less interested in studio output deals, how can a studio even begin to green-light a movie based on historical revenue assumptions that are unlikely to be accurate 12-18 months later when the picture comes out? The existing major studios are all part of very large corporations, so their continued existence is not in jeopardy. Their corporate parents may get tired of owning them, like General Electric, but a bad movie or a few years of them isn’t likely to put them out of business. And while now nearly everybody can make a movie (but not necessarily get it released) the major studios still do something that other movie companies can’t: produce, distribute and market motion pictures on a worldwide basis, in all possible media and, of equal importance, collect the money. What the major studios don’t seem to be able to do, however, is adapt their current business model to the new world. They’re still making a yearly portfolio of unrelated movies with decision-making done on an incremental basis, paying big participations on expensive star-driven pictures in success (maybe less first dollar gross but then it’s just a participation pool with a minimal or no distribution fee and 100% of video income thrown in), while owning all the failure. While studios can say that financing partnerships lessen their risk, they also lessen the upside, which is what you’re in the movie business for in the first place. It’s possible, then, that the better model is the one practiced by Apple, Amazon and yes, Jim Cameron: do what you do, do it better than anybody else in a way or volume that allows you to exact a premium, build brand loyalty and keep your competitors out. Apple, Amazon, Groupon and the Facebook, despite their different businesses — one sells stuff they make, one predominantly sells other peoples’ stuff, one allows other people to sell their stuff to people who otherwise wouldn’t buy it, and one allows everyone to sell themselves — have something very important in common: a direct relationship with their customers and customers’ affinity for their brand. Studios long ago ceded that relationship. Back when, when people actually went to the movies every week, that relationship existed and studios had individual identities. And they controlled all aspects of the motion picture process — the talent, the production, distribution and exhibition of the pictures and the publicity surrounding them. Those days, of course, are long gone for a variety of reasons: crushing overhead, the Justice Department, technology the studios didn’t control and lack of foresight. The world is a different place, and movies may just have a different place in it. For the large corporations that control the 6 remaining major studios, what is the maximum point of leverage, and therefore revenue potential: producing content or controlling its distribution? With the high cost of producing content, a studio wants to maximize distribution of its product to consumers, but some of the alternatives, Redbox rentals for $1 or unlimited streaming on Netflix for $9.99 a month and whatever Amazon may do generate relatively minimal revenue and commoditize the product that the studios spend so much to make. And here the movie business is unique as the cost of making movies is totally separate from the price at which they’re sold, and increased costs cannot be passed on to consumers. So as a studio you’re torn between getting your content out there in the form that consumers demand while trying to retain some control so you’re not, say, merely providing a loss leader to companies who’s main business is something else, like electronic devices. In the future, fortune will favor the content producers with direct access to consumers, especially in the home and through the electronic devices that serve as extensions of the home — News Corp. which controls Fox and Direct-TV, Comcast with its purchase of NBC-Universal and Disney with its network and cable channels and its brand that guarantees access and Apple in its back pocket (actually it’s the other way around). Warner, which recently spun off Time-Warner cable, has the sheer power of its size. Paramount and Sony are riskier; the former with less connection to the home and the later with a foreign parent preventing ownership of a network (Is it odd that we allow foreign governments to own a good part of our country through Treasury bonds and other investments but we won’t let them tell us what to watch?). Now, don’t let me go all Peter Bart on you but here’s a memo: what the movie business needs is a unified plan and someone to lead it. Where is the movie business’ Steve Jobs, the person who knows what people want to see before they do, knows that giving content away for free on the internet isn’t such a good idea and who creates excitement, brand loyalty and an enduring corporate culture? Or is the development and production process for movies just too attenuated so that what once seemed like a good/clever idea isn’t when it finally gets made and released? And, is it unrealistic to expect that the same group of executives can effectively manage a diverse slate of 20 pictures, year in and year out, especially given the cost of all that? Before, even without enlightened leadership we could count on the intersection of self-interest and money to secure a future for the movie business. But now, with so much uncertainty in the economy, turbulence in the distribution of motion pictures, reduced shelf space for DVD’s at Walmart and maybe no shelf space at Blockbuster, and with the stakes so high because of the costs, there is no safe harbor. While change may be a natural cycle of any market economy, the motion picture business has to be careful to not bring it upon itself. Schumpeter would call this “creative self-destruction.” To avoid this, there must be a consensus among studios, talent and their representatives and unions. The unanimity with which the studios generally approach union negotiations should be brought to bear on distribution windows, technical standards and other forms of distribution, as well as talent relationships, just so long as cooperation stops short of collusion. If a secure future for studios is no longer merely controlling a vast library, it must be controlling the destiny, and exploitation, of their product. And in that, what is the defining relationship? It is the one with the consumer. It’s what Apple has mastered with their products, their stores; their community. It’s what Netflix has done by making its streaming service available on over 100 platforms — truly Movies Everywhere. That’s what studios or their corporate parents need to create and if it’s not through their content, it’s through how that content is delivered to the consumer. Consumer products companies create that relationship through brands, reaching through the retail outlets for their product to consumers. But movies aren’t really brands (and neither are stars; they, like Soylent Green, are just people) — brands offer security, status by association and trust, not to mention premium pricing. Movies are individual products that have one weekend to make a first, and lasting, impression on their audiences. Studios risk their future by ceding the relationship with the consumer to all those who sell their product.

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Darrin Redus: Boom In Black-Owned Firms Having Limited Effect On Black Unemployment

February 17, 2011

African-American entrepreneurship is on the rise at rates greater than the general population, according to data from the Census Bureau . The newly-released figures, reflecting the period between 2002 and 2007, show that the number of businesses owned by African Americans rose nearly 61 percent in those five years. By comparison, during the same period the overall number of U.S. businesses increased by just 18 percent. These figures are encouraging, but they are not surprising. Inner cities — where 82 percent of the residents are minorities — experienced job losses throughout the first decade of this century, despite growing job markets in suburbs and outer regions of cities from 2000 through 2008. Many African Americans — like other Americans — have turned to entrepreneurship out of necessity where job growth has slowed or disappeared. This trend is likely to continue for all Americans as we continue to shift to a new, globally competitive economy. The data also reflect the types of companies primarily being created. In 2007, nearly four in ten of these African American startups operated in the healthcare and social-assistance sectors, as well as repair, maintenance, personal and laundry services. Consistent with the type of businesses being started, the majority of the African-American businesses employed between one and four people . Fast forward to 2011, and we now need more than 15 million jobs nationally to get back to 2007 employment levels. For all of the encouraging trends regarding the growth of African-American entrepreneurship reflected in this data, a shift is necessary to start growing the types of companies that can create a much more significant number of jobs. When it comes to job creation, this happens via a very specific type of entrepreneurial company, as opposed to entrepreneurship more generally. According to the Kauffman Foundation: All net new job growth in the United States in the last 30 years has been the result of companies less than five years old. The companies creating the most significant net new job growth are young . The top 1 percent of companies are creating roughly 40 percent of new jobs. The most significant job growth comes from the fastest-growing companies . These companies are using transformative technologies, often accessing that technology from a university or research lab. The companies have a unique product or service. These companies have access to capital. They are able to actually grow because they are able to access funds. And the Census data reflect that most African-American entrepreneurs are not creating these types of businesses. There are numerous reasons for this, including a lack of access to these types of technologies and resources, awareness of how to secure risk-based investor capital, and knowledge of how to move a company from an idea into a job-creating entity. It is equally critical that high-growth entrepreneurship is encouraged and developed among entrepreneurs located in inner city locations, because these entrepreneurs can have a disproportionately positive impact on inner city job creation. The Initiative for a Competitive Inner City (ICIC), a research and strategy non-profit and national expert on inner-city economics, identified that high-growth inner city firms accounted for virtually all of the new inner city jobs created in the ten years prior to 2007 . Perhaps more importantly, they created new jobs for inner city residents at twice the rate of other companies located in “city limits,” and seven times the rate of companies located in the suburbs. And job creation in inner cities — jobs that, in turn, provide living wages and household income to inner city residents — is the first step in addressing many of the other challenges faced by inner cities communities, such as affordable housing, crime reduction and poverty. Glen Johnson and Pete Durette’s story is both an inspiration and an example of this type of high-growth entrepreneurship. Together, the duo had more than 40 years of IT experience, selling and delivering technology solutions to Fortune 100 companies. Glen and Pete wanted to capitalize on the Internet’s impact on the music industry and decided to apply their corporate IT experience to a new digital business model that lets millions of artists share their music with fans around the world on free social networking sites. Dubbed Melody Management , the company’s web-based platform lets artists upload their music, distribute it across dozens of social networking sites, and get paid directly. The unique payment piece is one of Melody Management’s competitive advantages; artists use the software to set song prices, receive 85 cents for every dollar sold, and get paid weekly. Melody Management founders Glen and Pete worked with Ohio-based venture development firm JumpStart to craft their message of differentiation and refine their business plan before going for investment consideration. And ultimately, the two raised $250,000 for their Software as-a-Service (SaaS) company. Although they are not a big company yet, they certainly have big market potential. So, how can we encourage more high-growth entrepreneurship among minority entrepreneurs, including those entrepreneurs located in inner cities? 1) A new dialogue is the first step. A rise in minority entrepreneurship is worth a celebration, but it’s not enough. All entrepreneurs need to be aware of, and consider, the opportunity to use a transformative technology or idea, apply it to a global market, raise funding to support it, and generate thousands of jobs and personal wealth as a result. Minority entrepreneurship must move rapidly into these higher growth markets and larger scale opportunities. 2) Engagement and outreach are the second steps. While there are many programs and initiatives across the country focused on emerging industries and technologies, the participation rate of minority entrepreneurs in these programs is disproportionately low. It takes a consistent, longer-term, and focused effort to engage and reach out to these culturally diverse citizens in order to truly develop a vibrant and inclusive entrepreneurial ecosystem. 3) Intensive preparation and facilitating key connections are the third steps. This isn’t different than what any high-growth entrepreneur needs to ensure the articulation of an idea most successfully, and the right audience of investors or customers to hear that articulation. But these specific services and key industry relationships must be expanded beyond their historical networks to ensure that all entrepreneurs have equitable access to higher growth opportunities. So, while we absolutely celebrate the positive trends in entrepreneurship for African American and other culturally diverse citizens, the country must now work to ensure that future Census reports reflect a much greater number of larger scale, diverse firms that employ by the hundreds versus staff with one to four employees.

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Naveen Jain: Manage Your Company’s Online Identity — Or The Competition Will Manage It For You

February 15, 2011

Your LinkedIn profile is diligently maintained, your blog is free of comment spam, and you tell your kids to wipe their Facebook pages clean of party photos. You work hard to maintain control of your personal online identity. But do you give the same attention to how your business is portrayed online? The online identity, or “o-dentity,” of your business can help or hinder its bottom line. Yet, too many executives fail to safeguard their company’s online reputation. If you allow disgruntled customers or bloggers with a grudge to speak out unhindered about your company, rest assured your competitors will pounce on this opportunity to spread the (negative) word. Following are the five most common mistakes top executives make regarding the management of their company’s o-dentity, and some advice on taking control to prevent a downward spiral. 1) Delegating o-dentity and holding steadfast to the “it’s not my job” attitude. Many top executives see managing the link between CEO voice and corporate brand as something their PR and marketing firms do, along with managing a blog and the company’s Twitter feed – that’s why you hired them, right? However, control of a company’s online reputation can no longer be outsourced without further thought — or worse, kicked downstairs to IT and the SEO management team. Noise from the online world is too loud, complicated, and fast-moving to delegate this task. CEOs need to proactively communicate with potential customers or investors in social media outlets such as blogs, Twitter, Facebook, and LinkedIn. If you’re not making a connection between your voice and views as a CEO, and your company’s brand, you’ll become a corporate dinosaur. Think of Steve Jobs and Apple Computer, or Jeff Bezos at Amazon, execs who truly live and breathe their brands. The presence and voice of the CEO is now more important to branding than the right logo, tagline or campaign. 2) Clinging to one-way communication with customers. In the old days (that is, before 2003 or so), you talked to your customers and they didn’t talk back – or at least they didn’t talk back in a way that could result in a crisis in a matter of hours. If customers were unhappy, they called customer service, their problem was solved, and the CSR rep closed the file – end of the story. Nowadays, customer communications has morphed from a one-way street into a multi directional super highway, and CEOs who ignore this fact do so at significant peril. Top executives who are engaged with customers and online influencers on a daily basis can rectify problems before they turn into crises. To get a handle on the dialogue surrounding your company, you need to spend time reviewing the top 10 thought-leader blogs and Twitter feeds covering your industry – don’t rely on summaries from assistants or wait until they tell you about the negative buzz. You and your company should be engaged daily in two-way conversation with the top influencers in your industry, whether these are executives of other businesses or vocal customers. Granted, this won’t be an easy transition for executives who aren’t comfortable with such direct (and possibly confrontational) contact with influencers – it’s easier to deliver a speech and be done with it. Nevertheless, you need to ask questions and listen to what influencers are saying. Don’t talk “at” people — talk “with” them. 3) Underestimating the power of insights from unhappy customers. Building on the last point, not all CEOs are willing to accept the fact that today the power of one voice – that is, a customer – can provide valuable insights on products and services. Before social media changed the world, a disappointed consumer could only tell a handful of other people about their experience. Today, one viral posting about lousy service (like the infamous recording of an AOL member’s argument with a customer service rep) can result in thousands of social media posts or even stories in The New York Times or Wall Street Journal . Learn from Dell’s example of retooling customer service: After getting hammered in the blogosphere about poor response to online customer complaints, Dell created a “social media swat team” that monitored blogs for negative posts about Dell’s products. The posts are routed to this team, which can then quickly respond before the negative post gains traction. And be proactive: Don’t wait for complaints to come in through the toll-free number before you do anything about them – contact unhappy customers before they can negatively influence other customers. Airlines, often roundly criticized for poor service, are getting smarter about fast response to customer problems via Twitter and other social networks. Delta Air Lines now has a special team, @DeltaAssist , that monitors Twitter for passenger complaints. 4) Believing that customers understand the difference between The Wall Street Journal and a blogger. Executives think consumers can differentiate between a respected media outlet like The Wall Street Journal or The New York Times – whose staff are governed by a code of ethics, and whose lawyers ensure reportage is fair and accurate – and a blogger with a few readers who could be backed by your competition. Today everyone with a Internet access can be a “journalist,” regardless of whether they have had training and answer to a team of editors, or simply started a blog using free software. Don’t assume consumers can discern the nuances of journalism – if your customers take bloggers or Twitter users seriously, then you should too. When Sean Parker, an entrepreneur and the first president of Facebook, was concerned at how his portrayal in the movie “The Social Network” was damaging his online reputation, he didn’t just sit still. He reached out to Henry Blodget, CEO of the online business publication Business Insider and a Huffington Post columnist, to tell his side of the story . Thanks to Blodget’s posts, as well as tweets to his 24,000+ followers, Parker was able to present an alternate picture of his life and accomplishments. 5) Sending out inconsistent messages to external and internal audiences. Do you tell customers that you pride yourself on exemplary customer service, then fail to offer them a toll-free number for questions so they can speak with a real person? Do you proclaim your company as an innovator, yet tell your employees that you’re pulling back on R&D? You need to represent the company internally in the same way you do to your customers. Two excellent examples come to mind: Nordstrom and Gilt Groupe . Nordstrom is legendary for its in-store customer service, and has successful extended this experience to the web. Likewise, Gilt Groupe, the discount designer fashion website, projects an image of exclusivity and stellar customer service. Both embrace consistent messaging. There’s no disconnect, because the image is reality. When you make a mistake — like shoe retailer Kenneth Cole did recently by tweeting, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” — quickly apologize and communicate that the message is at odds with the company’s image, both inside and out. Cole tweeted : “I apologize to everyone who was offended by my insensitive tweet about the situation in Egypt. I’ve dedicated my life to raising awareness about serious social issues, and in hindsight my attempt at humor regarding a nation liberating themselves against oppression was poorly timed and absolutely inappropriate.” Avoiding the “don’ts” above can help you gain visibility into and control of the online dialogue surrounding your company. Remember, if you don’t take charge of your o-dentity, the competition will be happy to do it for you.

Read the full article →

Naveen Jain: Manage Your Company’s Online Identity — Or The Competition Will Manage It For You

February 15, 2011

Your LinkedIn profile is diligently maintained, your blog is free of comment spam, and you tell your kids to wipe their Facebook pages clean of party photos. You work hard to maintain control of your personal online identity. But do you give the same attention to how your business is portrayed online? The online identity, or “o-dentity,” of your business can help or hinder its bottom line. Yet, too many executives fail to safeguard their company’s online reputation. If you allow disgruntled customers or bloggers with a grudge to speak out unhindered about your company, rest assured your competitors will pounce on this opportunity to spread the (negative) word. Following are the five most common mistakes top executives make regarding the management of their company’s o-dentity, and some advice on taking control to prevent a downward spiral. 1) Delegating o-dentity and holding steadfast to the “it’s not my job” attitude. Many top executives see managing the link between CEO voice and corporate brand as something their PR and marketing firms do, along with managing a blog and the company’s Twitter feed – that’s why you hired them, right? However, control of a company’s online reputation can no longer be outsourced without further thought — or worse, kicked downstairs to IT and the SEO management team. Noise from the online world is too loud, complicated, and fast-moving to delegate this task. CEOs need to proactively communicate with potential customers or investors in social media outlets such as blogs, Twitter, Facebook, and LinkedIn. If you’re not making a connection between your voice and views as a CEO, and your company’s brand, you’ll become a corporate dinosaur. Think of Steve Jobs and Apple Computer, or Jeff Bezos at Amazon, execs who truly live and breathe their brands. The presence and voice of the CEO is now more important to branding than the right logo, tagline or campaign. 2) Clinging to one-way communication with customers. In the old days (that is, before 2003 or so), you talked to your customers and they didn’t talk back – or at least they didn’t talk back in a way that could result in a crisis in a matter of hours. If customers were unhappy, they called customer service, their problem was solved, and the CSR rep closed the file – end of the story. Nowadays, customer communications has morphed from a one-way street into a multi directional super highway, and CEOs who ignore this fact do so at significant peril. Top executives who are engaged with customers and online influencers on a daily basis can rectify problems before they turn into crises. To get a handle on the dialogue surrounding your company, you need to spend time reviewing the top 10 thought-leader blogs and Twitter feeds covering your industry – don’t rely on summaries from assistants or wait until they tell you about the negative buzz. You and your company should be engaged daily in two-way conversation with the top influencers in your industry, whether these are executives of other businesses or vocal customers. Granted, this won’t be an easy transition for executives who aren’t comfortable with such direct (and possibly confrontational) contact with influencers – it’s easier to deliver a speech and be done with it. Nevertheless, you need to ask questions and listen to what influencers are saying. Don’t talk “at” people — talk “with” them. 3) Underestimating the power of insights from unhappy customers. Building on the last point, not all CEOs are willing to accept the fact that today the power of one voice – that is, a customer – can provide valuable insights on products and services. Before social media changed the world, a disappointed consumer could only tell a handful of other people about their experience. Today, one viral posting about lousy service (like the infamous recording of an AOL member’s argument with a customer service rep) can result in thousands of social media posts or even stories in The New York Times or Wall Street Journal . Learn from Dell’s example of retooling customer service: After getting hammered in the blogosphere about poor response to online customer complaints, Dell created a “social media swat team” that monitored blogs for negative posts about Dell’s products. The posts are routed to this team, which can then quickly respond before the negative post gains traction. And be proactive: Don’t wait for complaints to come in through the toll-free number before you do anything about them – contact unhappy customers before they can negatively influence other customers. Airlines, often roundly criticized for poor service, are getting smarter about fast response to customer problems via Twitter and other social networks. Delta Air Lines now has a special team, @DeltaAssist , that monitors Twitter for passenger complaints. 4) Believing that customers understand the difference between The Wall Street Journal and a blogger. Executives think consumers can differentiate between a respected media outlet like The Wall Street Journal or The New York Times – whose staff are governed by a code of ethics, and whose lawyers ensure reportage is fair and accurate – and a blogger with a few readers who could be backed by your competition. Today everyone with a Internet access can be a “journalist,” regardless of whether they have had training and answer to a team of editors, or simply started a blog using free software. Don’t assume consumers can discern the nuances of journalism – if your customers take bloggers or Twitter users seriously, then you should too. When Sean Parker, an entrepreneur and the first president of Facebook, was concerned at how his portrayal in the movie “The Social Network” was damaging his online reputation, he didn’t just sit still. He reached out to Henry Blodget, CEO of the online business publication Business Insider and a Huffington Post columnist, to tell his side of the story . Thanks to Blodget’s posts, as well as tweets to his 24,000+ followers, Parker was able to present an alternate picture of his life and accomplishments. 5) Sending out inconsistent messages to external and internal audiences. Do you tell customers that you pride yourself on exemplary customer service, then fail to offer them a toll-free number for questions so they can speak with a real person? Do you proclaim your company as an innovator, yet tell your employees that you’re pulling back on R&D? You need to represent the company internally in the same way you do to your customers. Two excellent examples come to mind: Nordstrom and Gilt Groupe . Nordstrom is legendary for its in-store customer service, and has successful extended this experience to the web. Likewise, Gilt Groupe, the discount designer fashion website, projects an image of exclusivity and stellar customer service. Both embrace consistent messaging. There’s no disconnect, because the image is reality. When you make a mistake — like shoe retailer Kenneth Cole did recently by tweeting, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” — quickly apologize and communicate that the message is at odds with the company’s image, both inside and out. Cole tweeted : “I apologize to everyone who was offended by my insensitive tweet about the situation in Egypt. I’ve dedicated my life to raising awareness about serious social issues, and in hindsight my attempt at humor regarding a nation liberating themselves against oppression was poorly timed and absolutely inappropriate.” Avoiding the “don’ts” above can help you gain visibility into and control of the online dialogue surrounding your company. Remember, if you don’t take charge of your o-dentity, the competition will be happy to do it for you.

Read the full article →

Naveen Jain: Manage Your Company’s Online Identity — Or The Competition Will Manage It For You

February 15, 2011

Your LinkedIn profile is diligently maintained, your blog is free of comment spam, and you tell your kids to wipe their Facebook pages clean of party photos. You work hard to maintain control of your personal online identity. But do you give the same attention to how your business is portrayed online? The online identity, or “o-dentity,” of your business can help or hinder its bottom line. Yet, too many executives fail to safeguard their company’s online reputation. If you allow disgruntled customers or bloggers with a grudge to speak out unhindered about your company, rest assured your competitors will pounce on this opportunity to spread the (negative) word. Following are the five most common mistakes top executives make regarding the management of their company’s o-dentity, and some advice on taking control to prevent a downward spiral. 1) Delegating o-dentity and holding steadfast to the “it’s not my job” attitude. Many top executives see managing the link between CEO voice and corporate brand as something their PR and marketing firms do, along with managing a blog and the company’s Twitter feed – that’s why you hired them, right? However, control of a company’s online reputation can no longer be outsourced without further thought — or worse, kicked downstairs to IT and the SEO management team. Noise from the online world is too loud, complicated, and fast-moving to delegate this task. CEOs need to proactively communicate with potential customers or investors in social media outlets such as blogs, Twitter, Facebook, and LinkedIn. If you’re not making a connection between your voice and views as a CEO, and your company’s brand, you’ll become a corporate dinosaur. Think of Steve Jobs and Apple Computer, or Jeff Bezos at Amazon, execs who truly live and breathe their brands. The presence and voice of the CEO is now more important to branding than the right logo, tagline or campaign. 2) Clinging to one-way communication with customers. In the old days (that is, before 2003 or so), you talked to your customers and they didn’t talk back – or at least they didn’t talk back in a way that could result in a crisis in a matter of hours. If customers were unhappy, they called customer service, their problem was solved, and the CSR rep closed the file – end of the story. Nowadays, customer communications has morphed from a one-way street into a multi directional super highway, and CEOs who ignore this fact do so at significant peril. Top executives who are engaged with customers and online influencers on a daily basis can rectify problems before they turn into crises. To get a handle on the dialogue surrounding your company, you need to spend time reviewing the top 10 thought-leader blogs and Twitter feeds covering your industry – don’t rely on summaries from assistants or wait until they tell you about the negative buzz. You and your company should be engaged daily in two-way conversation with the top influencers in your industry, whether these are executives of other businesses or vocal customers. Granted, this won’t be an easy transition for executives who aren’t comfortable with such direct (and possibly confrontational) contact with influencers – it’s easier to deliver a speech and be done with it. Nevertheless, you need to ask questions and listen to what influencers are saying. Don’t talk “at” people — talk “with” them. 3) Underestimating the power of insights from unhappy customers. Building on the last point, not all CEOs are willing to accept the fact that today the power of one voice – that is, a customer – can provide valuable insights on products and services. Before social media changed the world, a disappointed consumer could only tell a handful of other people about their experience. Today, one viral posting about lousy service (like the infamous recording of an AOL member’s argument with a customer service rep) can result in thousands of social media posts or even stories in The New York Times or Wall Street Journal . Learn from Dell’s example of retooling customer service: After getting hammered in the blogosphere about poor response to online customer complaints, Dell created a “social media swat team” that monitored blogs for negative posts about Dell’s products. The posts are routed to this team, which can then quickly respond before the negative post gains traction. And be proactive: Don’t wait for complaints to come in through the toll-free number before you do anything about them – contact unhappy customers before they can negatively influence other customers. Airlines, often roundly criticized for poor service, are getting smarter about fast response to customer problems via Twitter and other social networks. Delta Air Lines now has a special team, @DeltaAssist , that monitors Twitter for passenger complaints. 4) Believing that customers understand the difference between The Wall Street Journal and a blogger. Executives think consumers can differentiate between a respected media outlet like The Wall Street Journal or The New York Times – whose staff are governed by a code of ethics, and whose lawyers ensure reportage is fair and accurate – and a blogger with a few readers who could be backed by your competition. Today everyone with a Internet access can be a “journalist,” regardless of whether they have had training and answer to a team of editors, or simply started a blog using free software. Don’t assume consumers can discern the nuances of journalism – if your customers take bloggers or Twitter users seriously, then you should too. When Sean Parker, an entrepreneur and the first president of Facebook, was concerned at how his portrayal in the movie “The Social Network” was damaging his online reputation, he didn’t just sit still. He reached out to Henry Blodget, CEO of the online business publication Business Insider and a Huffington Post columnist, to tell his side of the story . Thanks to Blodget’s posts, as well as tweets to his 24,000+ followers, Parker was able to present an alternate picture of his life and accomplishments. 5) Sending out inconsistent messages to external and internal audiences. Do you tell customers that you pride yourself on exemplary customer service, then fail to offer them a toll-free number for questions so they can speak with a real person? Do you proclaim your company as an innovator, yet tell your employees that you’re pulling back on R&D? You need to represent the company internally in the same way you do to your customers. Two excellent examples come to mind: Nordstrom and Gilt Groupe . Nordstrom is legendary for its in-store customer service, and has successful extended this experience to the web. Likewise, Gilt Groupe, the discount designer fashion website, projects an image of exclusivity and stellar customer service. Both embrace consistent messaging. There’s no disconnect, because the image is reality. When you make a mistake — like shoe retailer Kenneth Cole did recently by tweeting, “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” — quickly apologize and communicate that the message is at odds with the company’s image, both inside and out. Cole tweeted : “I apologize to everyone who was offended by my insensitive tweet about the situation in Egypt. I’ve dedicated my life to raising awareness about serious social issues, and in hindsight my attempt at humor regarding a nation liberating themselves against oppression was poorly timed and absolutely inappropriate.” Avoiding the “don’ts” above can help you gain visibility into and control of the online dialogue surrounding your company. Remember, if you don’t take charge of your o-dentity, the competition will be happy to do it for you.

Read the full article →

Robert Creamer: No Mr. Boehner, America is Not "Broke"

February 15, 2011

Once again on the Sunday news shows, Republican Leader John Boehner declared that “America is broke” — his premise for why we “can’t afford” important investments that are critical to America’s future. In fact, of course, America is far from “broke”. It is the largest economy in the world. After collapsing as a result of the recklessness of the big Wall Street banks — and Republican economic policies in late 2008 — the economy has, in fact, grown for six consecutive quarters. The stock market has almost doubled since the crash — regaining most of its value. Corporate profits are soaring. And American corporations are now sitting on close to two trillion dollars in cash. What’s more, we still have the same highly-skilled, productive labor force and the same stock of plants and equipment that we did before the financial meltdown — the same ability to create the goods and services that are the real measures of economic wealth. The problem isn’t that America is “broke.” The problem is that economic growth is not being shared with most Americans. The problem is that the very rich are wealthier than ever and everyone else is falling behind. Not only does that mean that the massive store of wealth that we create today is not widely shared. It also means that — taken together — we have less wealth as a nation because so many Americans who could be creating goods and services are unemployed, creating nothing. Of course the implication of the “America is broke” mantra is that we have to make massive cuts in programs and services that benefit the middle class and poor because we “can’t afford them” — us being broke and all. Frankly, you have a hard time taking that kind of talk seriously from a guy who just recently demanded that America continue to give massive tax breaks for the wealthy for the next two years — and who wants to flat out abolish the estate tax that, by definition, benefits only the sons and daughters of multimillionaires and billionaires. Is America broke? Have a look at John Paulson. In 2007, as the financial crisis descended, he made $4 billion in personal income betting against subprime mortgages that helped sink the rest of the economy. Last year he made a record $5 billion in personal income as the manager of a hedge fund. By the way, had he somehow managed to make that astronomical sum of money laying bricks or sweeping floors, he would have paid taxes at a rate of 35% on the bulk of that income. Instead, he paid at a rate of only 15%, since he earned his money by speculating as a hedge fund manager instead of making a useful good or service. Makes sense, right? Last year Mr. Paulson made as much as 100,000 of his fellow citizens who earned $50,000 per year. Paulson’s haul may have been a record, but Appaloosa Management’s founder David Tepper and Bridgewater Associates chief Ray Dalio each did pretty well too — between $2 and $3 billion each. And the rest of Wall Street was back in the money as well. Boehner’s attempt to justify massive cuts in investments that will grow the economy in the future — like education and infrastructure; or his insistence on cutting money that is used by the states to pay firefighters and police; or cuts in programs that take food out of the mouths of poor children — are outrageous so long as most of our economic growth goes into the hands of the wealthy few. Let’s remember a few key facts about our current federal deficit: The last time the federal budget was actually in balance was not under the Republicans — but rather under Bill Clinton. The current deficit was caused exclusively by the Bush tax cuts, two unpaid-for wars that cost trillions, and the largest recession in eighty years — caused by the same Republican economic policies Boehner is trying to sell today. Between 2001 and 2008, the Bush Administration and the Republican Congress rolled up more federal debt than all other Administrations in the history of the United States combined. It is entirely possible to deal with the federal deficit without making the middle class and poor pay the bill. My wife, Congresswoman Jan Schakowsky, who was on the President’s Fiscal Commission, outlined precisely such a proposal last fall. It makes many cuts to spending that go for unnecessary tax expenditures like subsidies to Big Oil and it relies on making the wealthiest among us pay their fair share. It makes the people who had the economic party over the last two decades pay the bill — not middle class and low income Americans who didn’t even get an invitation. The deficit is not some inevitable consequence of our being “broke” — or some law of nature. It was caused by human decisions to allow wealthy people to reduce their contribution to our common activities and to use them, instead for themselves. For example, it is entirely possible to raise the same amount that Boehner has proposed cutting in the 2011 (this year’s) federal budget simply by adding a few new tax brackets to the tax code for those who make more than a million dollars. You bump the tax rate up at a million dollars, at ten million, at fifty million — and a billion. You don’t even have to raise them that much. Right now people who make5 billion per year — America’s economic royalty — pay taxes at the same rate as upper middle class professionals who make360,000 — where the current highest tax rate of 35% kicks in. Often, because of tax loopholes — or because they’re hedge fund managers — they actually pay less. The reason why this approach works so well is that all the new income is going to that tiny percentage of the population. To fix the deficit, you have to go where the money is. Yesterday the President proposed his fiscal 2012 budget. It makes major investments in precisely the areas that will help us out-build, out-educate and out-compete the rest of the world in the 21st Century. His budget includes new investments in education, clean energy and infrastructure. Many of these initiatives have already been attacked by Republicans because “we can’t afford them — after all, American is broke.” We may not be broke now, but we really will be broke if we don’t invest in the future. The President also proposed cuts in a number of areas that we truly can’t afford (and really never should have done in the first place) — like subsidies to the oil and gas companies that are making record profits. He also proposes $78 billion cuts in military spending over the next five years. But the President was also forced to propose cuts in important programs that benefit average Americans. He proposed cutting the home-heating program, community block grants that are critical to low-income communities, and even the fund to clean up the Great Lakes. These are important programs that are critical to real people and to our future. The President himself supports these programs. He was not forced to propose the cuts in programs like these because America is broke — he made these proposals because the Republicans insisted on continuing the Bush tax cuts for the wealthy for the next two years and that limits investment in important priorities. Think of it. It is outrageous that we should cut money that assures that people don’t freeze in the winter so that the likes of John Paulson — the $5,000,000,000,000 dollar man — will not have to pay a couple of percentage points more on his income taxes. But that is exactly the consequence of Republican insistence that the Bush tax cuts for the rich continue. And it is just the beginning of the menu of Republican “priorities” that we will see laid out over the next several weeks. All of this “America is broke” — “just stop the spending” — rhetoric sounds very appealing until you start looking at who is hurt by the cuts, and who benefits by not paying their fair share to finance government — the things we do together. Over the next few weeks, the budget debate will shift from the rhetorical and abstract to the personal and concrete. If progressives can make that happen, the Republicans will be forced into a full retreat when it comes to the budget debate. It’s about time. Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on Amazon.com .

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CoStar’s People of Note (Feb. 6-12)

February 11, 2011

This week’s People of Note includes the following markets: Atlanta, Chicago, Columbus, Boston, Denver, Houston, Los Angeles, New York City, Philadelphia, Phoenix, Sacramento, San Antonio, Tampa/St. Petersburg and Washington, DC. SAN ANTONIO, HOUSTON USAA Real Estate Appoints New President, COO Len O’Donnell (pictured, right) joined USAA Real Estate Co. as president and chief operating officer. He will manage operations for the San Antonio…

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Ron Ashkenas: Why Integrity Is Never Easy

February 10, 2011

Browse through the mission, vision, or value statements that corporations post on their websites, and you’ll notice that almost every company includes a statement about integrity . And if you Google the following examples, you’ll find that many companies use these stock phrases: “We combine integrity with excellence…” “We act with integrity in all we do.” “We hold honesty and integrity as our guiding principles.” “We are proud of the integrity, sincerity and transparency our employees demonstrate every day.” Morally upright statements, right? But have you ever wondered why they are needed in the first place? After all, integrity should be the basic building block for doing business: Nobody wants to get involved with a company that lies, cheats, and tricks its customers ; nor do people want to work for a company (or a manager) that is dishonest and disingenuous with employees. In other words, integrity should be a given , without the need to trumpet its existence. As one senior executive said to me, “Integrity is a threshold characteristic for our people — if they don’t have it, they aren’t here.” Yet it’s not that simple, for two reasons: First, is the innate human ability to rationalize behavior. For example, if you ask high school students whether or not it is right to cheat, most will say that cheating is wrong. Yet research suggests that as many as 95% of such students admit to having engaged in some form of cheating. Most of the time, this involves a specific incident where the students had to make a choice. In hindsight, the students justify the choice as “not really cheating,” “no big deal,” or something that “everyone else does.” In other words, they rationalize their situational behavior, and this way they can still consider themselves to be honest. The reality is that all of us (and not just students) face integrity-based choices on a regular basis. Do we tell customers about all of the warts on our products? Do we reveal everything to a prospective buyer during due diligence? Is it acceptable to hide certain aspects of our background in a résumé? What’s considered a legitimate expense on a business trip? How much of billable time is really devoted to a client? How honest should I be when giving feedback to my boss or subordinate? None of these situations have clear answers — and no corporate policy can cover every contingency. As a result, no matter what choice we make, we can convince ourselves that it was made with integrity. And that leads to the second reason why integrity is so difficult: Everyone defines integrity differently. Falsifying information to one person might be considered an acceptable business practice to another. This is further exacerbated by differences in culture — for example in some business cultures people are expected to openly do favors for each other, while in other cultures those favors would be considered bribes. The power of rationalization and the difficulties of definition reveal integrity as a subject that is neither easy nor simple. That’s why solely relying on compliance functions, policies, rules, and audits — the integrity police — is usually inadequate. These mechanisms guard against gross and clearly illegal violations of integrity standards, but they do not deal with the integrity choices that we face every day. These choices require personal judgment. In some ways the value statements about integrity are meant to remind us that integrity is not just a corporate responsibility, but a personal one as well. If you are a manager, you can apply these values by setting aside time with your team to share integrity dilemmas and choices and discuss the thinking behind individuals’ decisions. Make sure these meetings take place in a “safe” environment, where people can openly share their thoughts. If you hold these discussions regularly, you’ll gradually get beyond the rationalizations and develop more common definitions of what is acceptable and what is not — which is the essence of an integrity culture. What’s your experience with making integrity more than just a word in your company’s mission statement? Cross-posted from Harvard Business Review

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Ron Ashkenas: Why Integrity Is Never Easy

February 10, 2011

Browse through the mission, vision, or value statements that corporations post on their websites, and you’ll notice that almost every company includes a statement about integrity . And if you Google the following examples, you’ll find that many companies use these stock phrases: “We combine integrity with excellence…” “We act with integrity in all we do.” “We hold honesty and integrity as our guiding principles.” “We are proud of the integrity, sincerity and transparency our employees demonstrate every day.” Morally upright statements, right? But have you ever wondered why they are needed in the first place? After all, integrity should be the basic building block for doing business: Nobody wants to get involved with a company that lies, cheats, and tricks its customers ; nor do people want to work for a company (or a manager) that is dishonest and disingenuous with employees. In other words, integrity should be a given , without the need to trumpet its existence. As one senior executive said to me, “Integrity is a threshold characteristic for our people — if they don’t have it, they aren’t here.” Yet it’s not that simple, for two reasons: First, is the innate human ability to rationalize behavior. For example, if you ask high school students whether or not it is right to cheat, most will say that cheating is wrong. Yet research suggests that as many as 95% of such students admit to having engaged in some form of cheating. Most of the time, this involves a specific incident where the students had to make a choice. In hindsight, the students justify the choice as “not really cheating,” “no big deal,” or something that “everyone else does.” In other words, they rationalize their situational behavior, and this way they can still consider themselves to be honest. The reality is that all of us (and not just students) face integrity-based choices on a regular basis. Do we tell customers about all of the warts on our products? Do we reveal everything to a prospective buyer during due diligence? Is it acceptable to hide certain aspects of our background in a résumé? What’s considered a legitimate expense on a business trip? How much of billable time is really devoted to a client? How honest should I be when giving feedback to my boss or subordinate? None of these situations have clear answers — and no corporate policy can cover every contingency. As a result, no matter what choice we make, we can convince ourselves that it was made with integrity. And that leads to the second reason why integrity is so difficult: Everyone defines integrity differently. Falsifying information to one person might be considered an acceptable business practice to another. This is further exacerbated by differences in culture — for example in some business cultures people are expected to openly do favors for each other, while in other cultures those favors would be considered bribes. The power of rationalization and the difficulties of definition reveal integrity as a subject that is neither easy nor simple. That’s why solely relying on compliance functions, policies, rules, and audits — the integrity police — is usually inadequate. These mechanisms guard against gross and clearly illegal violations of integrity standards, but they do not deal with the integrity choices that we face every day. These choices require personal judgment. In some ways the value statements about integrity are meant to remind us that integrity is not just a corporate responsibility, but a personal one as well. If you are a manager, you can apply these values by setting aside time with your team to share integrity dilemmas and choices and discuss the thinking behind individuals’ decisions. Make sure these meetings take place in a “safe” environment, where people can openly share their thoughts. If you hold these discussions regularly, you’ll gradually get beyond the rationalizations and develop more common definitions of what is acceptable and what is not — which is the essence of an integrity culture. What’s your experience with making integrity more than just a word in your company’s mission statement? Cross-posted from Harvard Business Review

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The Big Problem For Young Workers: Getting A Full-Time Job

February 7, 2011

NEW YORK (By Kristina Cooke) – Shanee Greenidge of Boston has been searching for full-time work since she dropped out of high school in 2009 and took a string of part-time jobs to help her mother pay bills. “I’m looking for any type of full-time job. I don’t care what it is, I really need something,” said Greenidge, 20. Her situation is typical of millions of young Americans caught up in the aftermath of the country’s deepest economic crisis since the Great Depression. Greenidge has held a number of part-time jobs in the past two years, including work as a landscaper, but nothing to put her on a permanent career path. Even for part-time retail jobs, she said, she is competing with people with college degrees or years of experience. “There’s a lot of competition. It sometimes feels like I don’t stand a chance,” she said. The number of Americans working part-time because they cannot find a full-time job or because their hours were cut more than doubled from around 4 million in 2007 to more than 9 million in 2009. The number is edging lower, but as of January 2011, 8.4 million were still working part-time because of the weak economy, according to U.S. payrolls data issued on Friday. The U.S. unemployment rate has fallen to 9 percent, but if involuntary part-time workers and people who are not actively looking for work are counted, it stands at 16.1 percent, according to government data. Andrew Sum, an economics professor at Northeastern University in Boston, said past recessions suggest it will take several years to make a significant dent in the number of underemployed Americans. “It takes really strong three or four years of growth until you get a big push down in this number,” he said. “There are a large number of employers who are not sure about future demand. So they want to keep the cost down.” But the cost of being underemployed is “huge,” both for those desperate for more work hours — who tend to be young adults, less-educated and blue-collar workers — and the broader economy, Sum said. Most part-time employees work half the hours of full-time employees and often do not have benefits such as health insurance and pensions, Sum said. That puts a strain on already stretched public services. Underemployed workers tend to get less training at work and earn less in the future than full-time colleagues, he said. These lower earnings hold back their spending on goods and services, which drives the U.S. economy. Part-time workers on low incomes are also more likely to need social services such as food stamps, even as their lower wages and expenditures reduce their tax contributions, adding to U.S. fiscal strains. Neil Sullivan, executive director at the Boston Private Industry Council, said the difficulty young people have getting a firm foothold in the job market is especially worrying. “Disconnected youth are the ones that do the most harm to themselves and the community,” Sullivan said. “You can find them on the street corners all around urban America and there are few prospects for them apart from part-time retail.” NO EXPERIENCE, NO JOB Melissa Rodrigues, 25, who recently graduated with a bachelor degree in sports sciences, works part-time looking after children at an after-school club while she looks for a permanent job. Many peers who graduated with her, she said, are waitressing or going back to school. “I’ve applied to a lot of places, but they want experience. They want two years, for everything,” she said. Even those with more experience can find it tough to regain their footing in the labor market. Beth Tarbell, 46, was laid off from her job writing procedures and safety manuals for the restaurant industry in Austin, Texas, last spring and since then has been working part-time, off and on. “I’m getting a bit nervous now,” she said. “I know people who are sleeping on other people’s couches and I am hoping I don’t become one of them,” she said. “I’ve had a former boss tell me, ‘I wish we could afford to bring you on full-time but we can’t.’” Copyright 2010 Thomson Reuters. Click for Restrictions .

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Caroline Dowd-Higgins: Knowing When It’s Time To Fire Your Boss

February 6, 2011

If I had a dollar for every person who told me they were frustrated with their boss, I would be a very rich woman. In a decade of career coaching, I have learned that people don’t leave jobs, they leave bad bosses. Good Managers Don’t Always Make Good Leaders In many organizations, managers who are given the responsibility to complete predetermined goals or projects are rewarded for their success with an upgraded role in a leadership position. Many managers fail as leaders because they lack the skills and competencies to develop relationships with their employees and build loyalty with their team. They cannot evoke a compelling image of success by empowering and cultivating the talent of their subordinates because they are classic micro-managers and fail to instill buy-in and accountability. These folks are not bad people but they are not gifted leaders, which often translates to being a bad boss. If your boss fits this description then you should consider firing your boss and hooking your star to a talented and dynamic leader. In reality we know this does not mean to literally fire your boss — although that would be gratifying for some during the most frustrating of bad boss moments. But I do encourage you to begin seriously looking for a new work environment that will empower you with a strong leader who in turn will help you grow your career if your boss is zapping your potential at work. Find a Great Boss A really good boss and a great leader can take you upward with them inside or outside of your current organization, if you prove your worth. If you have the trust of the rising star in the company — keep it and maintain it, for this is your insurance policy. If your current boss is not star material, it’s time to look for one that is. If your boss just doesn’t get it and there is no hope of a change in mindset, you need to stealthily devise your exit strategy. Don’t ever leave a job unless you have another to go to, especially in this economy. But if your boss is not a good leader and there is no system in your organization that will help change that, then you deserve to be in an environment where you can grow and develop your career. Even in the most blissful job environment, you should be thinking about your five-year plan and where you see your career going in the future. A great boss will help you on your way but alas, not all of them are so enlightened. Interview Your Future Boss The next time you are interviewing for a position make sure you interview your prospective boss thoughtfully. By asking compelling questions about their leadership style you will be able to ascertain if they are going to grow or diminish your talent on the team. I suggest you read a great book by Liz Wiseman before your next interview. Liz Wiseman, worked at Oracle for 17-plus years and considers herself a genius watcher. She was the VP responsible for the company’s global talent development strategy and ran the Oracle Corporate University. Her book: “Multipliers: How the Best Leaders Make Everyone Smarter” teaches valuable lessons for current and aspiring leaders. During Wiseman’s leadership watching and developing experience at Oracle, she discovered that some leaders drain intelligence and the capabilities of the people around them. Their focus on their own intelligence and their narcissistic need to be the smartest person in the room had a diminishing effect on everyone else around them. For them to look smart other people had to look dumb or incompetent and in turn, the Diminishers created a vacuum suck of all the creative energy in a room. Meeting times were doubled and other people’s ideas suffocated and died in their presence. Coping with a Bad Boss If your boss is not helpful in assessing your strengths, seek outside assistance from a personal Board of Directors that you assemble beyond the walls of your workplace. In reality, we don’t always have the support system in-house that we need but this should not stop you from reaching out to others for mentorship and advice. And, it just might help you get to the next mile marker on your personal career journey that includes a position with a great leader as your boss. While I believe that some leaders are born, most are developed and our current professional marketplace does not place enough emphasis on training effective leaders. This leads to discontent amongst the troops and ultimately low morale and low productivity. Recognizing the Multipliers In an ideal world where you land a dream job with a fabulous boss, you would want a Multiplier at the helm. The Multipliers use their intelligence to amplify the capabilities of others on their team. People get smarter and better in their presence and ideas flow freely and challenges are overcome. When these leaders walk into a room the energy level goes up on the team and difficult problems are solved because every team member has a say and is involved. The Multipliers bring out the intelligence in others by building collective and viral genius in an organization. By extracting people’s full capability, Multipliers get twice the resources from people than do the Diminishers. Wiseman identified five disciplines of Multipliers: The Talent Magnet: Attract and optimize talent The Liberator: Require people’s best thinking The Challenger: Extend challenges The Debate Maker: Debate decisions The Investor: Instill accountability You Deserve a Great Leader This is a difficult lesson for many of today’s unsuccessful leaders who don’t have the professional development resources to learn to become Multipliers. Others don’t have courageous team members to call them out on being ineffective leaders so they continue to diminish and dysfunctional teams plod along. If confronting your diminishing leader is not within your comfort zone, or you fear job security, perhaps a mysterious copy of Liz Wiseman’s great book in an office mailbox will plant the seed anonymously. As you plan your next career move be sure to consider your future boss’s role in your success and happiness in the organization. You deserve a Multiplier! *** Caroline Dowd-Higgins authored the book “This Is Not the Career I Ordered” and maintains the career reinvention blog of the same name ( www.carolinedowdhiggins.com ) She is also the Director of Career & Professional Development at Indiana University Maurer School of Law.

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CoStar’s People of Note (Jan. 30-Feb.5)

February 4, 2011

This week’s People of Note includes the following markets: Atlanta, Baltimore, New York City, Seattle, Portland, Phoenix, Tucson and Washington, DC. ATLANTA Perman Brings Medical Office Team to Grubb & Ellis Todd Perman (pictured, right), the founder and former head of Healthcare Real Estate Advisors in Atlanta, joined Grubb & Ellis Co. in Atlanta. He was appointed senior vice president in the office group to focus on medical buildings, and…

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Diane Dulken: How Long Should Electronics Last? My Calculator, the E-Hero

February 4, 2011

My guest room closet is filled with dead electronics waiting to be recycled, but I marvel at my nearly 30-year-old calculator. It still works, and so do the original batteries. I have yet to find an expert who can explain how this is possible, but every month when I balance my checkbook (do other people still do this?) my calculator gives me the correct answers. My calculator is so old it’s listed on a website called Vintage Calculators. The original AA batteries are so old they are Made in Japan. Yet, they still work. I’ve become emotionally attached to my Sharp EL-505 ELSI Mate. While shiny and new is nice, I hope I’m not alone in appreciating craftsmanship and durability — in electronics too. I bought my first Apple laptop six years ago because a colleague was so happy with his experience, he raved and raved until I jumped from my PC ship. I know this Apple evangelism is not unusual and I’m not holding Apple up as perfect, and neither is Greenpeace’s Guide to Greener Electronics. But it’s worth noting that a company can drive new sales not by planned obsolescence (ensuring that products will have a short life span so customers must buy new ones), but because superior craftsmanship and durability are their own sales tools and have the power to create new customers. “People used to take real pride in longevity,” a man named Jim Puckett told me. “‘Wow, this Rolex is still going strong after 30 years.’ That was a source of pride. Now people are looking for the latest and greatest. The incentive is not there (for products) to last a long time.” This is important to Jim, because as head of the Basel Action Network, he works every day with the dark side of electronics. As B.A.N. and CBS’ 60 Minutes showed in a heartbreaking investigation, our old computers, cell phones and other e-equipment contain many hazardous materials that often end up shipped to countries with weak controls. There, they poison the poor and vulnerable who “recycle” them. There’s a world of reasons for industry and customers to seek new business models and better stewardship over e-production, e-gadgets and e-waste. In the Congo, one of the world’s most brutal wars is financed by the mining of tin, tantalum (coltan), tungsten and gold, some of the rare minerals that power our iPods, cell phones, laptops and other devices. Then there’s the increasing concern over supply. The New York Times recently reported that China is tightening controls on the export of the rare earth minerals that are essential ingredients in everything from smart phones to military applications and new green technology, including electric cars and solar panels. And that control has the potential to disrupt markets. Or as Tech Radar asked: Yes, these ingredients are hazardous to mine and dangerous to manufacture, “But what if they run out?” Puckett told me of the need to develop new business models to improve product durability and stewardship, and of the need for companies to produce products with less hazardous materials as well as to properly recycling them at the end of their life span. Creating newer, faster and cooler electronics is still the focus over creating products that last. But I’ve found small signs in my personal life of the durability of some e-products, and of manufacturers who consider some of the mistakes that I and other consumers make. My cell phone lasted for years, even though I dropped it fairly often. On asphalt sidewalks as well as my living room floor. I appreciated that it was built for my “real world conditions.” The flip phone finally died when I left it in a jacket pocket and did the laundry. Both the wash and dry cycles. My Apple laptop endured years of daily and heavy use for entertainment and work, for music, movies and spreadsheets. I never spilled coffee or anything else on it. But I once got tangled in the power cord and knocked the laptop off the table. It survived. It would have lasted longer than five years if I hadn’t, on one pre-coffee morning, lost my grip walking down the stairs. Then there’s my calculator. I will miss it when the magic eventually fades and the batteries finally fail. After 27 years or so, every time I turn it on, I wonder “How long can this last?” Only recently have I had the flicker of a new idea: Will it outlast me? At midlife, I figure I have a possible 30 or 40 years ahead of me. And my Sharp EL-505 — how many years does it have? How durable can we make our machines?

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Dave Johnson: Jobs Crisis in Real World… Just Not in D.C.

February 3, 2011

Who is our economy for? Who is our government for? undergoing a transition from “We, the People” democratic government to a plutocracy run by and for the wealthy. One indicator of this transition is the way the D.C. Elite respond to unemployment. 9-10% unemployment used to be a national emergency. Now it’s a yawn. What The Washington Paper Says The Washington Post has a front-page story, ” Why does Fresno have thousands of job openings — and high unemployment? ” that says the problem is really “structural,” a skills gap, and there is little we can do. This is significant because so many people who make policy read the Washington Post while sitting in their nice, expensive restaurants. Stories like this risk that they will think that there really are plenty of jobs out there, but the serfs just aren’t up to taking them, or are too spoiled, but in any event there is no problem that needs solving, and call the lobbyist because this month’s check is late. Meanwhile, anyone in the real world outside of Washington or Wall Street reading about “thousands” of job openings going unfilled immediately knows something is fishy. In fact, if this story ran on the front page outside of DC or Wall Street we might even need to worry about Egypt-style riots. Anyone on the same side of the continent as Fresno knows that there are not “thousands’ of unfilled job openings. There might be thousands of foreclosures, or thousands of people in food lines, or thousands of people whose unemployment has run out but there are not thousands of unfilled job openings. What The Local Paper Says The Fresno Bee has a different story to tell, ” EDITORIAL: President should come see impact of joblessness in Valley “: The economy may be improving, but it would be difficult to persuade the thousands of out-of-work Valley residents that things are looking up. The six Valley communities cited in a U.S. Labor Department report have unemployment rates that run from 16.4% in Hanford-Corcoran to 18.6% in Merced. The other Valley cities on the list are Fresno (16.9%), Visalia-Porterville (16.8%), Modesto (17.2%) and Stockton (17.5%). . . . The nation’s economic recovery will not be complete until Americans go back to work. At every level of government, the goal should be to implement policies that improve consumer confidence and encourage businesses to hire workers. The Fresno Want Ads The Fresno Bee help-wanted ads tell the story. There are 963 “Sales” jobs listed, but the first 519 of those are at the same “company,” called “Work At Home Jobs, Inc.” and are mostly the same “job,” if you can call it that. The next 136 are a different “company” and the “jobs” are calling people from home to sell them wireless cell service — on commission. The next 52 are the same deal but a different “company,” selling internet from home, on commission. The next 46, same story. Etc. The next category after Sales is “Business development”, with 691 jobs, 466 are “work at home” and many of the rest are the same jobs at the same companies as the “sales” jobs. The next two categories are “General Business” and “Other” and, again, list the same “jobs” at the same “companies.” The next category is “Business Opportunity.” I challenge you to guess what “companies” and “jobs” are listed. (Hint: it’s the same ones again.) Supply And Demand Among the few specifics in the story is the example of “Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week.” $15-an-hour is just above the poverty level for a family of four, at about 130%. Dean Baker, writing in ” The Problem of Structrual Unemployment: Really Incompetent Managers ,” makes the point that a company complaining they can’t find skilled workers at $15 an hour needs to think about raising their offer. Baker writes, It presents comments from one employer who complains that he can’t find workers for jobs that pay $15 an hour. This is not a very good wage. It would be difficult for someone to support themselves and their children on a job paying $15 an hour ($30,000 a year). If the company president understand economics, then he would raise wages enough so that the jobs were attractive to workers who have the necessary skills. If they can’t get workers, they should know that they need to bump up the wage offered until they can. That is about as basic as it gets in the supply/demand equation. Can’t Sell The House And Move Part of this problem is the housing market. If Fresno really doesn’t have the skilled workers businesses need, Silicon Valley and Las Vegas certainly do, and have very high unemployment rates, but the people there can’t sell their houses and move! And even if they could sell they are “underwater,” will come out of the sale owing a ton of money that they can’t make up by taking a $15-per-hour job! Externalizing Training Costs Companies expect workers to already be trained, “externalizing” one more cost onto local communities, while shopping for the lowest tax areas to locate. California has a budget crisis and is cutting back on funding for the community colleges and other programs where people are trained for jobs. One reason for the budget crisis is businesses demanding ever-lower taxes, or playing communities and states against each other for tax incentives to relocate, using property tax avoidance schemes and so many other ways to get out of paying something back to the public for the public investment that enabled them to prosper . The Real Problem Out here in the real world the real problem is not “structural,” it is that there just are not enough jobs , they don’t pay enough, “free trade” deals have lowered wages and undermined our manufacturing base, there is not enough demand in the economy and the government is not doing its job of picking up the slack and after 30 years of tax-cutting the infrastructure is crumbling and not supporting competitiveness for our businesses. There are millions of unemployed and millions of infrastructure jobs that need doing. There is a new green energy and manufacturing revolution going on in the world and we do not have an economic/industrial policy to capture our share. There is problem after problem that is not being addressed by a government captured by interests. DC Avoids Dealing With The Problem It seems that the DC Elite will do anything to avoid just seeing what is in front of their faces. Clearly we have lost jobs from trade deals, Wall Street financialization and domination, lack of investment in infrastructure and education, etc. But the DC Elite come up with a thousand reasons not to fix these because the interests that benefit from those deals have influence over them. Our budget deficit is obviously from tax cuts and military spending — but you will never, ever, ever, ever hear that. Instead we hear job-killing “austerity” solutions that avoid asking the wealthy few to pitch in. On one issue after another, the DC Elite provide cover for the wealthy elite interests who now control DC. The transition from We, the People democracy to a plutocracy of, by and for the wealthy few is nearly complete. The real problem is not a breakdown of the structure of the job market and is not a mismatch between the jobs and the skills, it is a lack of jobs because of lack of demand, and a mismatch between who our government and economy are supposed to work for, and the interests that have brought this about. March 10 Summit on Jobs and America’s Future On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis — and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy. It’s free, $15 if you want lunch . Beat that. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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Dave Johnson: Jobs Crisis in Real World… Just Not in D.C.

February 3, 2011

Who is our economy for? Who is our government for? undergoing a transition from “We, the People” democratic government to a plutocracy run by and for the wealthy. One indicator of this transition is the way the D.C. Elite respond to unemployment. 9-10% unemployment used to be a national emergency. Now it’s a yawn. What The Washington Paper Says The Washington Post has a front-page story, ” Why does Fresno have thousands of job openings — and high unemployment? ” that says the problem is really “structural,” a skills gap, and there is little we can do. This is significant because so many people who make policy read the Washington Post while sitting in their nice, expensive restaurants. Stories like this risk that they will think that there really are plenty of jobs out there, but the serfs just aren’t up to taking them, or are too spoiled, but in any event there is no problem that needs solving, and call the lobbyist because this month’s check is late. Meanwhile, anyone in the real world outside of Washington or Wall Street reading about “thousands” of job openings going unfilled immediately knows something is fishy. In fact, if this story ran on the front page outside of DC or Wall Street we might even need to worry about Egypt-style riots. Anyone on the same side of the continent as Fresno knows that there are not “thousands’ of unfilled job openings. There might be thousands of foreclosures, or thousands of people in food lines, or thousands of people whose unemployment has run out but there are not thousands of unfilled job openings. What The Local Paper Says The Fresno Bee has a different story to tell, ” EDITORIAL: President should come see impact of joblessness in Valley “: The economy may be improving, but it would be difficult to persuade the thousands of out-of-work Valley residents that things are looking up. The six Valley communities cited in a U.S. Labor Department report have unemployment rates that run from 16.4% in Hanford-Corcoran to 18.6% in Merced. The other Valley cities on the list are Fresno (16.9%), Visalia-Porterville (16.8%), Modesto (17.2%) and Stockton (17.5%). . . . The nation’s economic recovery will not be complete until Americans go back to work. At every level of government, the goal should be to implement policies that improve consumer confidence and encourage businesses to hire workers. The Fresno Want Ads The Fresno Bee help-wanted ads tell the story. There are 963 “Sales” jobs listed, but the first 519 of those are at the same “company,” called “Work At Home Jobs, Inc.” and are mostly the same “job,” if you can call it that. The next 136 are a different “company” and the “jobs” are calling people from home to sell them wireless cell service — on commission. The next 52 are the same deal but a different “company,” selling internet from home, on commission. The next 46, same story. Etc. The next category after Sales is “Business development”, with 691 jobs, 466 are “work at home” and many of the rest are the same jobs at the same companies as the “sales” jobs. The next two categories are “General Business” and “Other” and, again, list the same “jobs” at the same “companies.” The next category is “Business Opportunity.” I challenge you to guess what “companies” and “jobs” are listed. (Hint: it’s the same ones again.) Supply And Demand Among the few specifics in the story is the example of “Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week.” $15-an-hour is just above the poverty level for a family of four, at about 130%. Dean Baker, writing in ” The Problem of Structrual Unemployment: Really Incompetent Managers ,” makes the point that a company complaining they can’t find skilled workers at $15 an hour needs to think about raising their offer. Baker writes, It presents comments from one employer who complains that he can’t find workers for jobs that pay $15 an hour. This is not a very good wage. It would be difficult for someone to support themselves and their children on a job paying $15 an hour ($30,000 a year). If the company president understand economics, then he would raise wages enough so that the jobs were attractive to workers who have the necessary skills. If they can’t get workers, they should know that they need to bump up the wage offered until they can. That is about as basic as it gets in the supply/demand equation. Can’t Sell The House And Move Part of this problem is the housing market. If Fresno really doesn’t have the skilled workers businesses need, Silicon Valley and Las Vegas certainly do, and have very high unemployment rates, but the people there can’t sell their houses and move! And even if they could sell they are “underwater,” will come out of the sale owing a ton of money that they can’t make up by taking a $15-per-hour job! Externalizing Training Costs Companies expect workers to already be trained, “externalizing” one more cost onto local communities, while shopping for the lowest tax areas to locate. California has a budget crisis and is cutting back on funding for the community colleges and other programs where people are trained for jobs. One reason for the budget crisis is businesses demanding ever-lower taxes, or playing communities and states against each other for tax incentives to relocate, using property tax avoidance schemes and so many other ways to get out of paying something back to the public for the public investment that enabled them to prosper . The Real Problem Out here in the real world the real problem is not “structural,” it is that there just are not enough jobs , they don’t pay enough, “free trade” deals have lowered wages and undermined our manufacturing base, there is not enough demand in the economy and the government is not doing its job of picking up the slack and after 30 years of tax-cutting the infrastructure is crumbling and not supporting competitiveness for our businesses. There are millions of unemployed and millions of infrastructure jobs that need doing. There is a new green energy and manufacturing revolution going on in the world and we do not have an economic/industrial policy to capture our share. There is problem after problem that is not being addressed by a government captured by interests. DC Avoids Dealing With The Problem It seems that the DC Elite will do anything to avoid just seeing what is in front of their faces. Clearly we have lost jobs from trade deals, Wall Street financialization and domination, lack of investment in infrastructure and education, etc. But the DC Elite come up with a thousand reasons not to fix these because the interests that benefit from those deals have influence over them. Our budget deficit is obviously from tax cuts and military spending — but you will never, ever, ever, ever hear that. Instead we hear job-killing “austerity” solutions that avoid asking the wealthy few to pitch in. On one issue after another, the DC Elite provide cover for the wealthy elite interests who now control DC. The transition from We, the People democracy to a plutocracy of, by and for the wealthy few is nearly complete. The real problem is not a breakdown of the structure of the job market and is not a mismatch between the jobs and the skills, it is a lack of jobs because of lack of demand, and a mismatch between who our government and economy are supposed to work for, and the interests that have brought this about. March 10 Summit on Jobs and America’s Future On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis — and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy. It’s free, $15 if you want lunch . Beat that. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

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Charles Gasparino: Does Morgan Stanley’s James "Don’t Call Me Jim" Gorman Have What it Takes?

February 3, 2011

Here’s something you should know about Morgan Stanley’s chief executive officer James Gorman: Never call him “Jim.” I’ve been covering Wall Street now for two decades and never before have I been corrected by a CEOs’ handlers about a first name as much as I have when it comes to Gorman, who took the top job at Morgan about a year ago, and is now struggling to recreate that bank in the aftermath of the 2008 financial crisis, which it barely survived. Of course, Gorman should go by whatever name makes him feel comfortable, but there is something unsettling about someone in charge of so much worrying about something so trivial (it wasn’t like I called him “Jimbo”). And that’s starting to become the general consensus on Wall Street, both among his fellow CEOs, analysts who cover the firm and even people inside Morgan Stanley. Most admit that Gorman is a nice enough fellow, very intelligent, and in person doesn’t come across as the the type of stuck-up jerk who gets crazy when you call him Jim instead of James. But there’s also a worry from these quarters that Gorman and his PR handlers are spending way too much time convincing people he’s a serious CEO to compensate for what some on Wall Street believe is a serious lack of the right kind of experience to run a major investment bank. “The problem with not having a background in the markets is because Wall Street is still a business involving the markets, and Gorman doesn’t have that experience,” said one prominent analyst who spoke on the condition of anonymity because he was afraid of losing access to key executive at the firm. Here’s what this analyst means: Gorman didn’t come to the CEO job the traditional route. He spent many years as a consultant for McKinsey & Co. before going to work for his biggest client, Merrill Lynch to run its brokerage unit, and then to Morgan Stanley to run its brokerage department. In other words, unlike his peers, Gorman has never really worked in a revenue producing job, only as a manager of revenue producers, and before that as a consultant to the managers of revenue producers. Without the more typical banker-trader-broker experience, some analysts worry whether Gorman thinks too much like a micro-managing technocrat, and not enough like a salesman, thus lacking the personal touch needed to run a company that makes its money selling investments to small investors, and finance advice to major corporations. To be sure, there’s a good case to be made that the traditional Wall Street experience of rewarding the people who make the most money and take the most risk set the stage for the 2008 financial crisis in the first place. But Gorman hasn’t really made the case he’s the right guy to be CEO. For all the worry about his image, Gorman’s obsession (and the obsession of his PR staff) with being called James doesn’t help convince investors and analysts he’s a serious executive. “We all call him ‘James don’t call me Jim Gorman,’” said another analyst with a laugh. Then there’s his performance, which on paper is middling at best. Morgan’s earnings jumped 60% during the fourth quarter of 2010, thanks in part to investment banking revenues, but only after other lackluster results. To be sure, the firm’s banking business has had some notable successes, but a chunk of that can be attributed to winning deals from the government’s various corporate bailouts, and the firm’s ties to the Obama administration that was in charge of unwinding those bailouts through various stock sales. One of the firm’s top political players was Tom Nides who recently resigned as chief operating officer to take a job with the administration as Deputy Secretary of State. The stakes for Gorman — and Morgan — are of course huge. Morgan Stanley is one of Wall Street’s most storied franchises (half of the venerable House of Morgan; the other half being JP Morgan). After Morgan Stanley survived the 2008 financial collapse, albeit with taxpayer help, it shifted its business model away from risk taking in the bond and stock markets to giving advice, and some analysts now worry that Morgan’s business model of focusing on clients won’t generate enough money to satisfy investors. As part of its new business model, Morgan acquired Citigroup’s brokerage unit known as Smith Barney. Gorman, first as brokerage chief and now Morgan’s CEO is taking the lead role in the unit’s integration to create the largest brokerage firm on Wall Street, with close to 20,000 salesman selling stocks, bonds and mutual funds to small investors across the country. But that integration hasn’t always gone smoothly; some people at Smith Barney worry about losing their jobs to less qualified people at Morgan, and there have been some layoffs and office closings in order for the firm to squeeze at least $1 billion from the move. My sources tell me that Morgan’s PR staff clearly understand the doubts surrounding Gorman faces and they have begun a carefully orchestrated “charm offensive” making Gorman available to some selective publications where he can explain his strategy in a controlled setting (a profile of him is expected in Fortune as soon as next week), while keeping him away from others. He’s dodged numerous requests to be interviewed by me; indeed the last time I approached him for an interview while at a conference in New York City, I was quickly surrounded by his security detail, who whisked him away. One problem with the PR campaign is that some of those doubts surrounding Gorman can be found inside Morgan Stanley as well, people close to the firm tell me. Before Mack became CEO, Morgan was run by Phil Purcell, another consultant who was widely despised inside the ranks for his sour disposition and because Morgan lost ground to rivals. Morgan executives openly worry that they’re being led by “another Purcell.” Indeed Gorman didn’t make many friends inside Morgan’s investment banking ranks when he publicly attacked Wall Street’s “star system” — or paying people based on how much money they bring into the firm — and asserted he would make cuts compensation even for those who stars who perform. Even worse for Gorman is the continued presence of John Mack, the firm’s long time CEO. Mack relinquished the top job to Gorman in 2010, but remains as its chairman. Such splits between CEO and chairman rare on Wall Street and publicly Morgan says that it’s Gorman’s call on whether Mack stays or goes. Maybe so, but people close to the firm say it’s Morgan’s board of directors who want Mack to stay around because they don’t have the confidence in Gorman’s ability to run the firm by himself. “They’re keeping John Mack around for good reason,” said another analyst. How long does Gorman have to show he’s the right guy to run the firm? Its hard to know. Among investors in bank stocks, patience runs thin. Of course, much depends on the stock price, which is trading at $30 a share — about the same level as when Gorman took over a year ago reflecting an overall indifference with his performance. “Morgan is good firm, but there’s a question: Is Gorman up for the task,” said on executive at a rival bank. “No one knows for sure, not even people inside Morgan Stanley.”

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‘We Couldn’t Cut Enough’: Newark Mayor Cory Booker

February 3, 2011

Since he became mayor of Newark in 2006, Cory Booker has had to make cuts that previously seemed unthinkable. Under his watch, the city closed libraries , imposed furloughs on employees and, late last year, laid off about 13 percent of its police force. While the police department says there are no fewer officers on patrol — thanks to reassignments within the force — a spike in crime in the two months since the layoffs has left some residents worried about safety. Newark isn’t alone. After the worst financial crisis since the Depression, cities across the nation have seen revenue wither . As they struggle to get their books in order, cities are increasingly finding that they don’t have the money to fund even the most basic of services. But while Booker faces a common problem, his strategies for dealing with it are unusual. He spoke with HuffPost about how he navigates the budgeting process, and why he has hope for the city of Newark. HuffPost: A trailer for the new season of Brick City starts with a quote from you, on the screen, where you say, “Squeeze everything else but police and fire.” But late last year, the city laid off 164 officers, about 13 percent of the force. How did it come to that? Booker: Look, budgets across the country — 60 percent of American cities have had reductions in their forces of public safety. And, so, this is not something that’s unique to Newark. In fact, right now it’s plaguing major cities in New Jersey. Camden has had major layoffs. Paterson is facing layoffs. Atlantic City. Jersey City. We’re facing, literally, the worst economy of our lifetimes. So, we have dramatic losses in revenue. And public safety, frankly — police and fire — make up the significant majority of our budget. We were squeezing and starving every other area of our city. Furloughing employees, cutting staff. But it came to a point where we couldn’t cut enough to make up for the tremendous budgetary shortfall. Challenges demand creativity. I’m grateful that the police director and my team really came forward with a substantive plan to make sure that the loss of those police officers didn’t affect the progress we were making in the street. And, look, it’s been a difficult adjustment. We had really some challenges in the month of December. But now, as we’re going through January, things are really getting back on track. And I’m really encouraged. Remember, the first three years in office, we led the nation in percentage reduction of shootings and murders. And I’m really confident that now we’re beginning to get back to that nation-leading pace. HP: I’ve heard that there are the same number of officers patrolling the street. But I also have heard from some of the union officials that in order to accomplish that, older officers have had to be re-deployed: People who were looking at retirement are now on street patrol. Are you concerned about officer safety? CB: I’m always concerned about officer safety. I think when you are the leader of men and women who put their lives on the line — whether it’s firefighters and police, or national guard members in the military — that’s the most horrific thing, I think, for an executive, when guys who put their lives on the line get hurt or injured. That’s a concern that hasn’t changed as a result of the layoffs. But in many ways, we have more experienced officers on the streets. Guys with more years under their belts, not people that are six months out of the academy. It’s a give-and-take in many ways. Look, I’m very happy: We have our chief, who used to be doing other jobs, now in precincts, running our precincts. In many ways, we have the best talent of the agency closer to the street and closer to the ground on a daily basis. HP: The city has also laid off other workers. How deep can the city cut before it just stops to function? CB: Money is a necessary but not sufficient resource with which to get the job done. And I found out when I first came in — we were dialing down our budgets every year that I’ve been in office. What I’ve been finding is, if you are more creative, if you bring more resources to the table from outside your taxpayer base — you know, we’ve raised well over $200 million in private philanthropy for our strategic needs here in the city of Newark — it’s if you bring people together to volunteer, and do things that they weren’t doing before, you can still make tremendous progress. A lot of our best innovations since I’ve been mayor have been public-private partnerships. Whether it’s our ex-offender reentry programs, or even the camera system that we put up all around the city — all paid for by philanthropy — Newark is creating a real good model for government effectiveness and advancement, based on its partnership with non-profits and the private sector. HP: Does that include your own involvement in citizens’ lives? Especially via your Twitter feed? CB: Today’s a great day. We got out early this morning. I’ve been myself inspecting streets, but I’ve got now thousands of more eyes on my streets, and people tweeting me about what’s wrong. In the last month alone, my Twitter feed has helped me get water main breaks addressed before I even knew they existed — to even traffic lights, to even bigger things, like people that are in need of emergency services but can’t get through. Government in the 21st century in America is going to change dramatically. We’ve seen government obligations mushrooming, like pension costs and health care costs. It’s gonna squeeze out a lot of the other things that we expect from government, unless we get more creative and change the way government does business. This is what Newark is trying to do. Under tough circumstances, in the worst economy of a lifetime, we’re actually making strides in areas, from affordable housing, to re-entry services, to grassroots financial empowerment and literacy, to public safety efforts. We’re able to make some strides, even though this is such a tough time, because we’re thinking creatively. We’re bringing in new partnerships, we’re introducing technology. It’s not easy — we’re stumbling and falling, and we’re occasionally being set back. But all in all, if you look at Newark compared to five years ago, our shootings are dramatically down, murders are dramatically down, our population is dramatically up. There’s a lot of hope in Newark. The arena, and the arts culture in Newark, is booming. There’s more basketball games — college and professional — played in Newark right now than any place in America, except for the Staples Center and Madison Square Garden. So much is happening in Newark right now that’s making me downright proud. But every day, every inch of ground you’ve got to earn. It’s tough, it’s hard, but I’ve got great partners helping me in and outside of government. HP: How do you make these budget decisions? How do you determine whether to close libraries, or lay off workers? Or cut toilet paper from the city offices? CB: Well, the toilet paper never got cut. [Laughs.] It is tough decisions. I often joke that the decisions we had to make last year were between awful and godawful. But at the same time, that’s what you’re elected for. I would rather be in a game where you’re 20 points behind than 20 points ahead, because we can rally people together to do what other people don’t think we can do. If we’re willing to make the tough decisions, but at the same time be humble enough to reach out for help and engage others, we can make strides where other people can’t. If you walk around the city of Newark today, you will see at least two dozen new parks all over the city that were built during this worst economic downturn. That’s because we’re bringing people together to do things other people can’t do. Literally, the largest parks expansion our city has had in over a century has happened in the worst economy, because of all the partnerships that we’ve been bringing together. That’s how you have to get things done now. You have to find creative coalitions. We had a horrible spike in car-jackings in December. What we did was we brought together a state, Federal, local coalition, and we beat it back within weeks. It was amazing. The law enforcement community in New Jersey rallied together in a way that left me humbled and inspired.

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