THE ENTERPRISE--A BLIP AND A DIP ... AND THEN WHAT?

THE ENTERPRISE--A BLIP AND A DIP ... AND THEN WHAT?

TO READ MY LATEST AMERICAN EXPRESS OPEN FORUM "COLUMN" ON INNOVATION--CLICK HERE.
http://www.openforum.com/idea-hub/topics/innovation/article/looking-for-innovation-in-the-wrong-places-john-mariotti?cid=email_weeklydigest_insights

WHAT SHALL WE COVER THIS WEEK?
The election is now only 3 weeks away. Do not relax.  Keep after everyone you know to get out and vote--and encourage them to vote for the "right" candidates.  We must re-take as much of our government as possible. 

A RECOVERY WILL COME--SOMEDAY--WATCH FOR LITTLE BITS OF GOOD NEWS
Some good news--optimism on Wall Street as it breaks 11,000 on the Dow.  Wall Street is considered by many to be a leading indicator of investors confidence that the economy is coming back--sooner rather than later.  My view is in the title of this week's edition.  4Q sales and consumer spending will show a "blip" up, for Halloween, Thanksgiving, Christmas, Hanukkah, and Kwanzaa (did I get enough to them to be politically correct?)  Then 1Q 2011 will see a "dip" as consumers stop spending (except gift cards which were bought in the 4Q 2010), and to pay off Christmas bills, winter fuel bills, increased gas bills, etc. After that, a slow climb,  as the recovery begins, but it will be hampered by the clean up needed to repair the mismanagement at State and Federal governments. 

IS THIS A RECOVERY NOW?  I DON'T THINK SO! NOT YET WHEN 17% OF AMERICANS ARE UNEMPLOYED OR UNDEREMPLOYED
17% of Americans are still either unemployed or underemployed and new job growth is not strong enough to even offset the new labor force entrants.  Youths 16-19 are 26% unemployed and black youths in that age group, 49% are unemployed.  The new, higher minimum wage has priced these low-skill, inexperienced workers out of jobs.  So much for "unintended consequences" of a government that simply doesn't understand how business works. In the first half of this year, the US workforce (238MM) grew by 541,000 people but only 344,000 jobs were added.  See the problem?  This continues into the 3Q.  New entrants outpace job creation.  The solution is to get government off the backs of business people and let them invest and grow--and when they make money, tax revenues will go up!  State and local jobs will also need to be cut--a lot--as states and towns are also bloated with too many highly paid people.

ONLY TWO WAYS TO BALANCE A BUDGET:  SPEND LESS AND/OR GROW INCOME--DOING BOTH WORKS FASTER
Nothing less will balance the myriad budgets that are totally out of whack.  The Federal budget leads the pack.  We need about one-fourth less government!  When will the people in DC realize that.  That means a lot of highly paid government employees would be out of work.  But it is no different than what has happened to millions of Americans in private sector jobs.  Time to get the machete out.  Slash spending, which means cutting non-essential programs and services--no matter how loudly the spoiled bleeding hearts cry out.  e.g., in Columbus "free recreation centers" in the city are simply unaffordable, but what an outcry when several of them closed.  It was almost as loud as the whining about no air conditioning in some public buildings.  Consolidate school districts and reduce administrators.  Ditto many other government jobs.  Private sector large companies use "shared services" to pay bills, collect money, administer wages and benefits, handle payroll, etc. for many locations.  Governmental units can easily do the same.  They can also use professional, consolidated, negotiated procurement to stop wasting taxpayers' money. There are many more concepts like this.  How about measuring productivity? How about putting government run work out for bids and let them bid against competitors--and see who will do the work for the best cost?  Radical?  NOPE!   Been that way in private business for a long, long time.  it's called "being competitive!"

THE BEHAVIOR REWARDED IS THE BEHAVIOR REPEATED
99 weeks of unemployment rewards staying out of work.  Why does anyone with a low skill/low experience go to work when the government will pay them to stay home (and tax the productive wage earners to pay for them to stay home).  Get a job.  There are jobs.  Some have lousy hours.  Others are hard or unenjoyable work, all of them expect people to show up regularly, on time. Sweep the streets; pick up trash; clean public buildings; take care of the grounds.  What, someone is already doing that?  Sure they are, and being paid handsomely for it. Workfare instead of welfare was a good idea. Oh, but what a sacrifice, getting up and actually working instead of going down to the unemployment office once a week, to stand in line and drink coffee with the crony buddies waiting for the handout.  More people are on food stamps than ever before too.  And they scream when someone propose not allowing food stamps to be used to buy soft drinks, tobacco, and other unhealthy, unnecessary stuff.  What a crock!  We are breeding a nation of dependent bums.

(I know, there are some genuinely good people who are out of work.  But they if keep looking, keep trying, finally they will find "some kind of job" to do while they look for something more in line with their capabilities--or learn new capabilities!)

"I'M A SCORPION--IT'S MY NATURE"
Have you noticed that Barack Obama is turning nasty.  He's in his negative campaign mode, slamming everyone, including his own disloyal party members.  The old story about the turtle and the scorpion seems appropriate. "The scorpion wanted a ride across the pond.  The turtle says, but you'll sting me and we'll both die.  The scorpion swears otherwise, and off they go.  Halfway across, the scorpion stings the turtle, and as they are sinking in the water to drown, the turtle asks him why he did it, knowing they'll both die.  The scorpion says, 'it's my nature, I'm a scorpion'." Watch this positive "Hope & Change" president turn increasing nasty and rancorous.  Why?  It's in his nature.  Read the Interview at the end of this edition--it will shock and scare you.

HOUSING IS THE ECONOMY'S "BOAT ANCHOR"
Why is this recession so much worse than prior ones?   Because thanks to the delusional government officials (Frank, Dodd, Schumer, Obama, et. al) who convinced Fannie May and Freddie Mac to loan to just anybody, the greedy mortgage companies who also got the fever that "everyone deserves to own a home," they lent to everyone.  WRONG!  Not everyone deserves a home.  I grew up with my parents living with my grandparents.  Between the four of them they could afford just one home--not two.  People rent apartments because they can't afford houses.  They should not buy homes they can't afford, no matter how lax the stupid mortgage lenders and government backers are.  When housing is overbuilt and tanks, it not only takes down all the housing jobs for 3-5 years.  It also takes down all the US companies that make all the stuff that goes into a house---and all of it is made in the USA--or not, when it's not needed.  The ripple effect is devastating.  Of all the industries still "Made in the USA" items for housing and "machines of war," and transportation (cars, trucks, planes, trains, ships) products are among the largest employers.  When housing tanks, the economy tanks twice as hard, and jobs go away in so many places.

IT'S ALWAYS DARKEST JUST BEFORE THE DAWN
IF we can reclaim some semblance of sanity in DC (I know, it's a lot to ask) and rein in spending, kill the worse of the new legislation and regulations, business will slowly come back. The best clue to how bad things are is that Foreign Direct Investment in the USA, long a strong indicator of how the US if "valued," dropped by 61% in 2009--to a negative number.  Foreign investors see just how big a mess the US is in, and how business--unfriendly the current political powers are.  In coming weeks I will write about how a "new middle class" can form in America--starting now!  But it will take most of this next decade to return to unemployment levels in the 6% range!

WHEN FIXING A MESS, IT OFTEN GETS WORSE BEFORE IT GETS BETTER
To fix a mess, it is often necessary to make it worse--before it gets better.  Sometimes broken bones that are healing wrong have to be re-broken and reset.  Excessive, unaffordable jobs have to be eliminated until or unless they become sound, practical and necessary--if ever.  Small businesses create half of all new jobs, they are reeling under the pressure from the recession, the lack of lending and the oppressive blitz of regulatory pressures.   One good sign: magazine ad pages are increasing slowly.  That's a sign of optimism on some level. The most recent results from BIGresearch's Consumer Intentions and Actions survey were all starting to show small upward movements.  Still heavy on buying necessities, but a small move upward in those planning to buy.  Advertisers want to be in consumers' minds when they are ready to shop.

THE SOLUTION, LIKE IN SAILING THROUGH A STORMY SEA, IS TO FACE RIGHT INTO IT AND BE STEADY ON THE TILLER
When times are tough, there is often now faster or shorter path through it than to "sail right into the teeth of the storm."  That takes a steady, experienced hand on the tiller--something there are precious few of around the White House.  Obama's theoretical, professorial speechifying belies an abject lack of real world experience and in depth understanding of how business grows and prospers.  And with adviser and acolytes--Keynesians like Paul Krugman--they will certainly make it worse in their misguided efforts to make it better.  They are not "bad people."  They are just well-intentioned people who don't know, what they don't know, and where much of what they do know, is wrong.

WHEN THE CAPTAIN IS A ROOKIE, HIS INSTINCTS ARE NOT DEVELOPED
Need more revenue?  How about a Value Added Tax--the darling of near socialistic governments everywhere.  Make "creating value" which leads to "creating wealth" a "taxable event."  That's a sure way to demotivate value creators.  I already pay over 50 cents of every dollar in taxes of some kind.  Why should I work harder to pay more?  Left to its own devices, the economy in a free enterprise will recover.  But when government meddling is involved--it might not--ever recover.  Unemployment is now destined to be above 9% for a long, long time, thanks to the Obama/Democratic Congressional spending spree and regulatory avalanche. It will take 3+/- years to just get back down to 8%, the figure unemployment was never supposed to exceed according to Obama and his Keynesian advisors.

WHEN TOO MANY RESOURCES ARE SPENT ON THE WRONG THINGS, TOO FEW ARE LEFT FOR TRUE OPPORTUNITIES WHICH BRING GROWTH
I've seen this problem time and again in businesses.  The management fails to realize the importance of conserving valued resources (usually money, but also it can happen with time and talent).  They spend, spend, spend, and then, when the big opportunity arises, none are left to invest and exploit it.  The biggest trap is overspending on the wrong things,on unimportant things or on things that do not have a chance to yield substantial results, and thus leaving nothing left to spend/invest in the right things!  The USA as a country is dangerously close to that problem right now. The spending spree on a misguided stimulus, on bailouts, on giveaways disguised as growth drivers, etc. have put us in this position as a country--saddled with enormous debt and still spending at a rate much higher than our income.  Experienced executives learn to understand the importance of prioritization and conservation of resources.  Myopic tax & spend liberals don't, and rookie presidents sure don't.  The way to solve big problems is with big actions--but not throwing money at them.  You can't fix big problems with little incremental changes, but the changes must work--be effective--and affordable.    The key point is to make sure you actually fix the problem--and not a symptom of the problem (e.g., Health care is the best example, but many of our government problems are much like this).

ALL THE WRONG REACTIONS--A TYPICAL SET OF MISTAKES
Typical liberal reactions to "outsourcing" is that one is shipping US jobs offshore.  And that is true, but it is only 1/3 of the story.  The real fact is that IF a US company is not competitive, those jobs will go away anyway as competitors from companies located in other places that are more competitive take away the US company's market share.  In this context, shipping some jobs offshore to save others is not such a bad thing to do.  But the other third of the story is that taken over the decade from 1991 to 2001, while 2.8 million jobs were outsourced or moved offshore, those same firms created 5.5 million jobs in the USA.  A 2 for 1 trade is not a bad deal for US workers, compared to letting a foreign competitor come in and completely wipe out an industry (what happened to consumer electronics in the 1980's and 1990's).  Why don't more people understand these simple facts?  Political demagoguery is the reason.  It's lots easier for a candidate to point fingers and hurl abuse for "shipping US jobs to Asia or Mexico" than to take the time to understand what's really going on in a global economy.

I CAN'T AUTHENTICATE THIS "INTERVIEW" (I TRIED) -BUT IT "RINGS TRUE", & IS VERY ALARMING---A PRESIDENT WHO LIKELY REALIZES HE IS "UNFIT" FOR THE JOB
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Truth or fiction or some of both? An Interview with a former White House Insider on Obama:   Published by Ulsterman on September 7, 2010 in
 Opinions (See link at the end)
A longtime Washington D. C. insider, and former advisor to the Obama election campaign and transition team, speaks out on an administration in crisis, and a president increasingly withdrawn from the job of President...   According to him, those were incredibly exciting times, even for one who had been a participant with three previous presidential hopefuls. Barack Obama appeared to move from one city to the next effortlessly, gaining confidence and motivation with each campaign stop.
 
"He was remarkable to watch. He took the script, elevated it with his oration, left the crowds screaming for more, and then would do it all over again, time after time after time. On the campaign trail, Obama is a machine."

When I asked this insider if the media gave candidate Obama an assist throughout his campaign, it elicits a sly smile.
A:
" Sure – we definitely had people in the media on our side. Absolutely. We went so far as to give them specific ideas for coverage. The ones who took that advice from the campaign were granted better access, and Obama was the biggest story in 2008, so yeah, that gave us a lot of leverage."

Could Obama have succeeded without the media’s help?
A:
 "Yeah, I think so. As I said, on the campaign trail he is very-very good. The opposition didn’t have near the energy, or the celebrity attraction that Obama brings. Plus, the country was burned out after eight years of Bush. We knew that going in. We knew that if we won the Democrat nomination, we were likely going to cruise our way to the White House – and that is exactly what we did.”

But after Obama was sworn in, things began to change?
A:
 "Almost immediately. Obama loved to campaign. He clearly didn’t like the work of being President though, and that attitude was felt by the entire White House staff within weeks after the inauguration. Obama the tireless, hard working candidate became a very tepid personality to us. And the few news stories that did come out against him were the only things he seemed to care about. He absolutely obsesses over Fox News. For being so successful, Barack Obama is incredibly thin-skinned. He takes everything very personally."

And you state he despises Joe Biden?
A:
 "Oh yeah. That is very well known in the White House. Obama chose Biden for one reason – to have an older white guy with some international policy credentials. Period. If Biden has all of this international experience that Obama found so valuable, why has he buried him under the pile of crap that became the stimulus bill? What does Joe Biden know about budgets and economics? Not much – but Obama didn’t care. Give Joe a job and get him the hell out of my hair – that pretty much sums up the president’s feelings toward Joe Biden."

What about Hillary Clinton?
A:
 "Obama is scared to death of Hillary. He doesn’t trust her – obsesses over her almost as much as he does Fox News. He respects her though, which might be why he fears her so much as well. He talks the game, but when it comes down to it, she has played the game on a far tougher level than he has, and Obama knows that."

How about Bill Clinton?
A:
 "I never heard Obama say anything about Bill Clinton personally, though I was told he has cracked a few jokes about the former president since getting into the White House. I have heard that Bill Clinton does not like Barack Obama. That really started when Obama played the race card against him during the primary campaign. Apparently  Clinton was apoplectic over that and still hasn’t gotten over it. If there is one thing I have learned in this town – don’t make an enemy of Bill Clinton."

So if Obama doesn’t appear interested in the job of president, what does he do day after day?
A:
 "Well, he takes his meetings just like any other president would, though even then, he seems to lack a certain focus and on a few occasions, actually leaves with the directive that be given a summary of the meeting at a later date. I hear he plays a lot of golf, and watches a lot of television – ESPN mainly. I’ll tell you this – if you want to see President Obama get excited about a conversation, turn it to sports. That gets him interested. You start talking about Congress, or some policy, and he just kind of turns off. It’s really very strange. I mean, we were all led to believe that this guy was some kind of intellectual giant, right? Ivy League and all that. Well, that is not what I saw. Barack Obama doesn’t have a whole lot of intellectual curiosity. When he is off script, he is what I call a real “slow talker”. Lots of ummms, and lots of time in between answers where you can almost see the little wheel in his head turning very slowly. I am not going to say the president is a dumb man, because he is not, but yeah, there was a definite letdown when you actually hear him talking without the script."

That sounds like you are calling Obama stupid to me.
A:
 "No – I am not going to call him stupid. He just doesn’t strike me as particularly smart. Bill Clinton is a smart guy – he would run intellectual circles around Barack Obama. And Bill Clinton loved the politics of being president. Obama seems to think he shouldn’t have to be bothered, which has created a considerable amount of conflict among his staff."

So how bad are things at the White House these days?
A:
" I don’t know about right now, because I have not been there in over a month. But I still hear things, and I know what it was like when I left. It’s not good. As bad as it might look to voters based on what they do know, it’s much worse. The infighting is off the charts. You got a Chief of Staff who despises cabinet members, advisors who despise the Chief of Staff, a President and First Lady having their own issues…"

Come again – what about the First Lady?
A:
 (The insider takes a deep breath) "Ok, look, just like any other marriage, folks have issues. The Obamas are no different, except of course they are very high profile. I was told they were having issues before the campaign, and they have even more issues now. Maybe that is why Obama seems so detached – not so much the stress of the White House, but the stress of personal issues. I can certainly relate to that kind of situation."

Care to clarify some more on the Obama marriage?
A:
 "No. That is all I will say about that. Don’t ask again."

Ok, back to President Obama then. In just a few words, how would you describe him these days?
A:
" Like I said, it’s been a while since I was last at the White House, but I don’t have a problem saying that the president is losing it. I don’t mean he is like losing his mind. I mean to say that he is losing whatever spark he had during the campaign. When you take away the crowds, Obama gets noticeably smaller. He shrinks up inside of himself. He just doesn’t seem to have the confidence to do the job of President, and it’s getting worse and worse. Case in point – just a few days before I left, I saw first hand the President of the United States yelling at a member of his staff. He was yelling like a spoiled child. And then he pouted for several moments after. I wish I was kidding, or exaggerating, but I am not. The President of the  United States threw a temper tantrum. The jobs reports are always setting him off, and he is getting increasingly conspiratorial over the unemployment numbers. I never heard it myself, but was told that Obama thinks the banking system is out to get him now. That they and the big industries are making him pay for trying to regulate them more. That is the frame of mind the President is in these days. And you know what? Maybe he is right, who knows?"

Will Obama run again in 2012?
A:
" I don’t know. That subject was never brought up again after 2008, at least not around me. If he does, I think it would have more to do with allowing him another year and a half of campaigning again. He just loves it so much. He really needs the crowds, the cheering, the support of the people."

Can he win in 2012?
A:
 "Oh – absolutely. Who else campaigns as well as Barack Obama? Nobody. What politician is more loved and supported by the media? Nobody. I don’t see the Republicans offering up a candidate as powerful as Obama. I mean Sarah Palin? Really? Obama would defeat her by a 20 point landslide! Romney? The Republicans will enjoy these midterm elections, but 2012 is Obama’s year if he chooses to run again. As a president, Obama has many flaws, but as a candidate, he is near flawless."

But would another four years of an Obama presidency be the best thing for  America ?
A:
 (Long pause) "Now that is a much more interesting question right there, and a question I think more and more Democrat Party insiders are asking themselves these days, myself included. I am going to come right out and say it – No. Obama is not up to the job of being president. He simply doesn’t seem to care about the work involved. You want to know what? Obama is lazy. He really is. And it is getting worse and worse. Would another four years of Obama be the best thing for  America ? No it would not. What this country needs is a president who is focused on the job more than on themselves. Obama is not that individual. I actually hope he doesn’t run again. Looking back, as much fun as the campaign in 2008 was, Hillary Clinton should have been the nominee. Hillary was ready to be president. Obama was not ready. He had never lost a campaign. Everything was handed to him. He doesn’t really understand the idea of work – real, hard, get your heart and soul into it work. And frankly, that is very disappointing to a whole lot of us."

http://newsflavor.com/opinions/white-house-insider-on-obama-the-president-is-losing-it/
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THANKS TO THIS PRESIDENT AND THE DEMOCRATIC CONGRESS, THIS COUNTRY IS IN CRISIS.  WE MUST START THE PROCESS OF RESTORING IT.
WITH THIS ELECTION, WE MUST RETAKE CONGRESS.  NEXT TIME, IN 2012, THE WHITE HOUSE. 
PLEASE HELP GET OUT THE VOTE!  INFLUENCE EVERYONE YOU CAN.

BEST, JOHN

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John L. Mariotti, President & CEO, The Enterprise Group, Phone 614-840-0959  http://www.mariotti.net   http://mariotti.blogs.com/my_weblog/
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