The Great American Business Incubator

As America and the rest of the world work through the current recessionary period, reflection back on the methods of development which created our strongest economic base is necessary. Contrary to some positions communicated on TV talk shows, the government has historically always been involved with the vast expansion of economic developments beneficial to our society. If the government is not considered one of the initial “investors” in the technological development with infrastructure, funding the university system, and providing grants for research, then it is the creator of the evolving American marketplace. Alexander Graham Bell and Thomas Edison are credited for the telephone and electricity, respectively. However, it was the national installation of the wire line and electric grid that provided for the product application with benefits of immense growth to society. Aside from the current struggles in Detroit, the highway and interstate infrastructure really contributed to the success of the automobile industry. The same argument can be made for the railways and aircraft industry with airports.

The necessary market developments that induce mass adoption of a new technology or invention do not always compute in the financial analysis from business (ROI, ROA, Payback, and Cash Flow). It is the forward looking recognition and contribution of the government that make the difference. This is why it matters where and how the government spends its money. Wise investments for one industry’s infrastructure could possibly spawn two or three other industries. When industry will not spend money and invest during times of declining employment levels, it appears to me that two options are available: 1) Government makes the investment [possibly creating and developing the business with unemployed business people for later sale to other investors] or 2) Change industry rules and standards for the current businesses to invest in change to adopt.

Many good ideas have been published on where best to spend stimulus to create jobs. I do not intend to duplicate so any repeat is coincidental with similar thinking. The following is just a personal list of items of where I think the country should focus for development and I will attempt to place in the order I believe to have the most immediate impact:

1. Construction, repair, and inspection of the nation’s bridges and roadways.

2. Small Business Lending institutions for grants to business creation by entrepreneurs not served by the current banking system (An addendum to the SBA activities and agenda).

3. Sponsorship of the razing of abandoned buildings throughout the country not suitable for future usage. Although not the same emotional value as constructing a new building, it will reduce despair by passersby and remove the negative image. Maybe Hollywood would be interested in the destruction of some buildings and could offset costs [referring to abandoned industrial buildings no longer in use].

4. Sponsorship for the installation of electric charging stations for current and upcoming hybrid automobiles. Hotels and motels appear to be obvious locations but maybe there are other ideas to consider.

5. Introduce regulations and standards for safe, efficient, and universal maintenance of medical records with patient portability.

6. Adopt the standards conducive to the development of a “green” infrastructure:
a) Increase vehicle fleet mileage standards;
b) Improve fuel efficiency and gasoline octane standards;
c) Pollution limits, adopt "cleaner" coal standards, improve electricity generation efficiencies (similar to average fleet mileage standards – reduce average generation costs including cost of pollution).

7. Continue investment in university and college research toward targeted fields such as “green” energy, non-biodegradable plastics alternative, targeted biomedical projects, and new uses for the future abandoned telephone wire lines.

I am sure there will be other opinions because not many want to change the current way business is conducted until the model does not earn as expected. However, when the model stops earning as expected it is usually a sign of the end and is often too late to avoid dissolution or restructuring. I also realize that financial measures such as return are not totally applicable to management of government affairs, but another way to look at the arguments against government involvement is to question whether or not industry has returned in taxes the equivalent to expected return on investment/equity for its benefit from infrastructure development and maintenance.

Retaliation and Hackers

reference update 5/7/2013: Statements are a reference to digital telelcommunications connectivity internet technology.

Not everything I say is popular in this part of the country. I am certain that I have recently been hacked because information and spellings in some documents and emails have changed. For some reason(s) to be revealed, someone has devised a strategy of discredit through spelling/grammar. It reminds me of a line in the John Mayer song "Waiting on the World to Change."

When you own the content and distribution (personal modification) of information
They can bend it all they want.

Corporate Structure and Governance

Reflecting on recent corporate failures, Banking and other industry, the charges of accounting fraud make me think of the current environment and how improvements in management structure could help mitigate some occurrences. Considering the enormity of the impact that finance has on the economy within all industries, there appears to be more tolerance for ethical lapses and sole autonomous leaders. Current incentives have encouraged immediate results at almost any cost. The end result in these cases has been the enrichment of the executive class in the short-term, growing societal inequality, and corporate failures endured by the rest of the employees in the longer-term.

Some failures that come to mind include Enron, WorldCom, Lehman, and AIG. While the causes of failure are quite different among various industries, banking has a greater economic impact in terms of asset losses. Moreover, the reasons for failure among the other industries differ dramatically and in a 2004 paper, McKinsey and Company suggested changes that would improve corporate governance. The report is entitled “Investor perspectives on corporate governance – a rapidly evolving story” and lists 6 themes of importance:

1. Rapid extension of worldwide governance codes;

2. Increased focus on board professionalism;

3. Selective redesign of corporate leadership roles;

4. Re-assessment of corporate reporting needs;

5. More intensive external scrutiny of governance; and

6. Increased attention to corporations’ impact on society.

An addendum to the McKinsey list, or even within, I propose a greater check/separation of the CEO-CFO relationship. The CFO would also report to the Board of Directors through the Audit Committee to minimize the possible influence to alter the appropriate reporting of performance results and financial/strategic risks. This organizational structure is no different than the Matrix Management structure used by most large corporations usually at mid- to low-level management and can be applied at the Executive level. The BOD’s Audit Committee would serve as a steering council to ensure effective financial reporting recognition of activity and risks in addition to improved strategic decision making. However, no corporate hierarchical, structural change will matter if no one knows the true value or risk of the assets on the books (mortgage backed securities).

Current State of the Union?

Here are a few excerpts from American Theocracy by Kevin Phillips, a former Republican Strategist, published in 2006. I find his assessments compelling and insightful into the current political protesting and outcries.

In Fundamentalisms Observed, Marty and Appleby had explained the “family resemblances” between the different strong religions around the world. To begin with, “Fundamentalisms arise in times of crisis, real or perceived. The sense of change may be keyed to oppressive and threatening social, economic or political conditions, but the ensuing crisis is perceived as a crisis of identity by those who fear extinction as a people.”

Ch 6, The United States in a Dixie Cup. P205.

Bruce Lawrence emphasized five symptoms of fundamentalism. Among them were a predilection to impose God’s will – the one true faith – on other peoples, an intolerance of dissent, and a central reliance on errant scripture for ideology and authority. These, too, seemed characteristic of the post-September 11 White House.

Charles Kimball identified five principal perverse fundamentalist tendencies: (1) claiming absolute truth (when “people presume to know God, abuse sacred texts and propagate their particular versions”); (2) seizing upon an “ideal time,” as in claims for imminent cataclysms or fast-approaching end times; (3) fostering blind obedience; (4) using ends to justify means (as deaths or acceptance of collateral damage); and (5) pursuing “holy war” as in Crusades (and to some extent the 1991 Gulf War).

Ch 6, The United States in a Dixie Cup. P205.

The Southern Baptist Convention, as we have seen, is regarded by some as more or less the unofficial state church in Dixie… Moreover, since the 1990s the SBC’s moderate-liberal opposition faction has criticized the dominant conservatives for getting too close to Washington and soft-pedaling the church’s historic commitment to separation of church and state.

Ch 6, The United States in a Dixie Cup. P213.

The SBC, Mormon, and Lutheran churches are the three Protestant denominations in the United States with the sort of strong regional preeminence that in itself breeds a powerful clerical closeness to everyday community governance and political authority. It is in their core strongholds … that U.S. churches have their highest ratios of adherence. Community pressure and conformity would be substantial.

Ch 6, The United States in a Dixie Cup. P214.

A cultural adjunct to these ambitions, end-times theory and literature, with its audience of fifty to one hundred million Americans, emerged as a big business in the United States during the 1990s, turning dozens of fundamentalist and charismatic preachers into multimillionaires, thanks to their best selling books, video, televised sermons and Bible hours, TV stations, and broadcast networks. Not surprisingly, most are ardent supporters of tax cuts and reduced economic regulation, as their faithful flocks concentrate on morality, salvation, biblical guidance, a possible rapture, and the countdown to Christ’s return. These believing constituencies, in turn, want more of their “government” – over whatever time may be left – to come from religious institutions…

Ch 6, The United States in a Dixie Cup. P217.

Judgments and Character

What was your first impression upon seeing the photo?


Are you uncomfortable seeing this?


Is it considered art or an expression of a taboo worthy of an art museum?


A threat to cultural heritage?


Would it matter if the ethnicities were opposite?


How about two women? Two men?


What do you think about me for posting this?


Would this photo make you more or less inclined to purchase the music?


The photo is of Joss Stone from her CD Introducing Joss Stone.

Many are probably already familiar with her and her work, but for those that are not, do you know who the executive producers on the album are? The world renowned songwriter of one of my favorite songs on the CD? The guitarist on many of the songs?


The answers to any of these questions provide insight into how we see and understand the world around us. The CD was released in 2007 and I am upset that I only just recently purchasing it because, in my opinion, it is her best release yet.

Pictures create powerful images in the brain and can promote powerful symbols. The fact that we now have a bi-racial President of the U.S. strongly identified by the African-American community has impact. Would it have made a difference if the president was not married to another African-American? Much of the perspective on this momentous American occasion is built upon the struggle for inclusion as is the history of the country. It is evidenced in the social and religious structures of the society. Most of all the social organizations of which people spend a big portion of their lives affiliated, particularly Fraternities and Sororities, are based upon ethnicity and self-identification.

Within the African-American community, the election of a Black President has been profoundly inspiring and encouraging for unlimited aspirations. It has also been the rallying point to strengthen the black family to improve the poverty conditions experienced by many. This means the acceptance of responsibility by the black man as the precursor for community improvement. This, however, does not recognize other condition variables impacting outcome nor that adjusting for such other factors, outcomes can be explained across many communities in the U.S.

In the book Before the Mayflower, Lerone Bennett, Jr. states that during slavery in the South, the plantation owners would not allow “poor whites” to be seen by the slaves. They were relocated out of the site of the plantation allowing the psychological indoctrination of the dominance and supremacy of the class of plantation owners. Given this beginning, it is not inconceivable that this structure of separation and exclusion is reinforced through the use of the evolved social organizations. These types of organizational structures also make communication very efficient and secretive. With today’s GPS satellite and telecommunication technologies, messages can be sent to the entire group and supporters with lightning speed identifying those not keeping with the group norms. There is historical evidence of how far some in power will go to reinforce or confirm a belief (The Tuskegee Experiment).

I have no intention to belittle the social and racial progress that has been made in this country. In fact, I intend to promote its continuation in the face of  to contradict those who will use this historical achievement as political fodder to end policies beneficial to the excluded and underrepresented. Some may use the historical event as confirmation of the separate group structure and as a basis for career success. However, until we can see the photo and think of it as history and it reflects images of representative government, corporate structure, and a global society, we are not there yet.

Conservatism, Innovation, and Diversity: Management Lexicon Oxymoron

I have throughout my career been exposed to many companies that have defined the organization as a conservative company. This designation at times has perplexed me for those are some of the same companies that depend upon new ideas to stay ahead of the competition. Merriam-Webster defines conservative and conservatism as follows:

con•ser•va•tive - \kən-ˈsər-və-tiv\ adj.
1: PRESERVATIVE 2 a: of or relating to a philosophy of conservatism
3 a: tending or disposed to maintain existing views, conditions, or institutions: TRADITIONAL b: marked by moderation or caution (a conservative estimate) c: marked by or relating to traditional norms of taste, elegance, style, or manners.

con•ser•va•tism - \kən-ˈsər-və-ˌti-zəm\ noun
2 a: disposition in politics to preserve what is established b: a political philosophy based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change ; specifically : such a philosophy calling for lower taxes, limited government regulation of business and investing, a strong national defense, and individual financial responsibility for personal needs (as retirement income or health-care coverage)3: the tendency to prefer an existing or traditional situation to change.

Literally based upon the definition, these companies are stating that they are committed to the historical authority structure and do not welcome challenges to the established corporate culture and business model. It is not necessary for a company to define itself as conservative based upon its decision-making because the fundamental role of business is to manage risk while ensuring its existence as a going concern. The conservative identification is more about the political affiliation and nature of the leadership than anything else.

For companies in an industry that has not had to change since its initial discovery, I can understand this conservative posture. For example, companies in industries producing commodities and natural resources have had very little incentive to change other than to improve yield and efficiency. The principal methods to remove resources from the earth have not changed. Other industries such as computer technology and consumer goods thrive on new discovery and innovation limited only by the human imagination. Value to these organizations is truly its employee base of creativity and innovation. This is completely opposite of an organization maintaining its existing views or conditions (conservative definition 3a.).

So, at this point my question would be - Does a conservative company value diversity? My idea of diversity goes beyond identity politics of gender and ethnicity although these factors are important and included. I would also add experiences, class, education, and orientation. Many of these companies are directed and managed by men due to the historical early laws of the land excluding others from participating and prospering within this economic structure. In an effort to participate, the excluded groups attempted assimilation by adopting the conservative philosophy to the extent possible for a limited overall prosperity. This conformance is counter to the individual added value of experience and culture to maintain the existing status quo. Ideas, innovation, and value get lost in the conformance.

The premise of Diversity is that all of humanity has value and should be included throughout all levels of society and organizations for enhanced prospective and performance. The oxymoron is a company committed to its conservative traditions touting diversity to prevent being a political outlier. When employees do not feel valued, they can quickly become competitors to those intransigent organizations unwilling to recognize the contributions within its human resources and unable to modify or expand a business model to accommodate a game changing idea.

The Great Debate

During the early days of freedom for Black Americans and the end of slavery after the Civil War, there was an intellectual discussion regarding the path to prosperity. On the one side of the debate was Booker T. Washington arguing greater training in a trade or skill for the newly found free people. This position was supported by the work of George Washington Carver and his multiple scientific discoveries of peanut uses. The other side of the debate was delivered by W.E. B. Du Bois with, in part, the argument of the Talented Tenth to lead the way. The Talented Tenth was defined as the liberally educated, intellectual elite to lead the way to societal change for the benefit of the masses.

Understand that this debate was based upon the segregation and oppression of Black Americans during those early years. As a country we have thankfully passed through this terribly painful history; however, I would like to look at a simplified version of this debate extrapolated and applied to the current, greater U.S. society.

We are experiencing according to some experts the greatest financial and economic collapse in history. So how do we proceed? The current U.S. government planned policies include educating the population to a proportion greater than experienced after WWII to each man/woman according to his/her skill. The plan is to make education available and affordable at all levels (from technical trade to the Ivies). Generally, I wholeheartedly support this initiative. In a speech I gave in New Orleans many years ago I had reached a similar conclusion stating that wherever your position in the linear intellectual spectrum of the debate, contribute! For the progress of us all – Contribute!

The current economic situation in America has enlightened a blind spot in this conversation for the path going forward. The failures can largely be attributed to the collaboration and collusion of the Talented Tenth (Ivy League educated traders, financiers, managers, and think tank rule-makers). When leaders of the country, her assets, and the rules are all working to implement an ideology that has no empathy for those toiling “in the trenches” creating economic value without sharing the benefits, there is a problem. The lesson is that those in power are not always right nor do the right thing.

In a Democratic society empathy must always be taken into consideration in rulemaking. So, how does the public decipher these qualities from candidates asking for support to represent them? Forgoing the “system of riches” and becoming a community organizer is a good place to start along with the personal freedom allowing a person to determine their path no matter the method.

Plantation Economics? [Metaphorical Narrative]

The recent 2008 elections have felt like a turning point in American history for many of us; and, much has been written about the current state of the conservatives and the Republican Party. The mantra of CHANGE unmistakably matched the sentiments of the American majority, but the GOP continues to struggle with its meaning. Most of the published ideas mentioned from Republican politicians have not changed at all.

GOP platform staples include (in simple abbreviated form): 1) Lower Taxes, 2) State’s Rights, 3) Small Government, and 4) Strong Military and a Global Projection of Power.

I have just finished reading a fantastic book by Malcolm Gladwell called Outliers which I recommend highly to all. In chapter six he tells the story of Harlan, Kentucky of the early eighteenth century and the high level of violence in the town as a result of the family feud between the Howards and the Turners. Gladwell states:

“We want to believe that we are not prisoners of our ethnic histories. But the simple truth is that if you want to understand what happened in those small towns in Kentucky in the nineteenth century, you have to go back into the past.”

Although I use this quote a bit out of context, it also applies to understanding the political platform positions of the current Republican party which is a southern-conservative party as reflected in the 2008 election results.

The GOP platform positions can be linked directly to Pre-civil war economies of the South and the Post-civil war social developments and political positions of the “dixiecrats” and their “southern strategy.” They left the Democratic party over the Civil Rights Act of 1964 and eventually joined the Republican Party.

Plantation owners held strong political influence in the South pre-civil war and ran their operations with tight controls demanding loyalty from all subjects. This plantation narrative provides a model to understand the political dynamics of Southern-Conservative politics. At this point, I think we are all familiar with the history of slavery. This history plays into, I believe, the current southern political perspective of labor. Minimize and eliminate opportunities for collaboration to challenge the authority of the Leader/Ruling Class/Strict Father figure (no labor unions). This authority is reinforced through biblical interpretation that allows dominion over the earth by God and government should not interfere with these activities (re: the Civil War). Labor is a business cost on the income statement that should be managed with all other input costs to increase profitability to the enterprise.

Further elaboration of this narrative provides that the Ruling Class is the source and creator of jobs and should not be taxed at any greater levels than the rest of the population. In fact, the government should invest into the businesses of this group through subsidies for greater economic prosperity. Therefore, eliminate most social programs to reduce the size and scope of the central government to focus on defense of the national interest through an overwhelming military presence.

The only problem with this platform is that it has been proven to not work and is ineffective at accomplishing any of its stated goals to improve, protect, and benefit all of American society.


My understanding of the strict father model is from the writings of George Lakoff from his book Don't Think of an Elephant: Know Your Values and Frame the Debate -- The Essential Guide for Progressives and his essay “Metaphor, Morality, and Politics, Or, Why Conservatives Have Left Liberals In the Dust.”

Could Pensions follow Healthcare?

While reading the lead story in the April 2009 edition of CFO Magazine regarding the evolution of 401k plans in America, I began to wonder about the occurrences behind the shift away from pensions and if their dismal performance could eventually require a government takeover similar to plans for universal healthcare.

Initially, the 401(k) plan was a benefit to the corporations because it allowed for the general shift in financial recognition from the income statement to the balance sheet. The move allowed companies to give employees stock as a benefit where the employees would share in the gains (and losses) of the company stock performance. The pension plans required the company to make-up investment short-comings with cash contributions to ensure the benefit obligations.

With the current state of the economy and corporate equity valuations as measured by stock indices, the gains in stock performance supporting the middle class wealth have disappeared due to the financial crisis. Employees with plans to retire within the next five years will have to reevaluate those plans even if they had managed to alter their portfolio mix prior to the decline. They still took a hit. Those workers in bankrupt companies still covered by defined pensions have some protections provided by the Pension Benefit Guaranty Corporation (PBGC).

This current economic state of the financial crisis is what brought on the pondering. However, I do not think that pension/401(k) retirement plans will go the way of healthcare for a couple of fundamental reasons. The first reason is that there is no current political pressure highlighting the system disparities because all employees are theoretically in the same system. Although contributions vary at different employment levels within any organization, all are subject to the market fluctuations in stock values.

The second reason, and probably the biggest, is that the system is not a structural competitive burden to US corporations such as healthcare. The largest commercial competitors in the US market hail from the EU, Japan, and China which all have some version of Universal Healthcare. This means the burden of managing rising healthcare cost rests with the government and not the corporations. Insurance companies, hospitals, and pharmaceutical companies are not transferring inefficiencies and protecting their own profitability at the expense of manufacturers or other companies competing internationally.