Tuesday, September 30, 2008

McCain: Time for Fireside Chats on Wall St Crisis

Today McCain appeared behind empty shelves talking about the economy. Neither his words (or imagery) were strong enough. Frank Luntz says voters want McCain to be more passionate...here is his chance to really move the needle.

FDR spoke to people's hearts in the Depression.before he advocated policy recommendations. What do we STILL recall from his fireside chats: "We have nothing to fear but fear itself." He united the nation with his inner strength.

Under the anger on Main Street is fear and confusion...fear about "what will happen to me" and confusion about why this all is happening. The candidate who speaks courageously to this fear will own this issue.

This FIRESIDE CHAT format fits McCain's strengths. It takes his war hero resilience and spiritual stature and applies it to the economy.

These talks should be short. One topic per segment. A series of at least 10, each covering an aspect of the situation. ((I am actually working on such a list, I'm starting an internet radio show to explore this crisis. It's a great idea but MUCH MORE POWERFUL IF MCCAIN DOES IT.))

For each topic, he should picture in his mind an actual person who will lose his job, life savings, and way of life. Today's talk missed hitting voters right in the gut. He can do it and he must do it to win.

If this is of interest, I give it away freely. This is the most important crisis of my lifetime and if I can help in any way, I am honored to do so.

I will write my heart out for McCain -- that is what I do. I'm a Rust Belt survivor who never wants others to go through the economic pain that comes with business falling apart all around us.

These angry folks opposing the bailout just haven't a clue. And those who think the statist, leftist Obama knows about economic leadership...see the next post.

Obama Now Backs McCain's "Economy is Sound"

Last week, Obama economic adviser Jason Furman Washington Posttold the Washington Post: "This [bailout] is a major fiscal problem in the short run, but it doesn't alter the long-term fiscal picture."
Furman comes across as tone deaf to the larger economic concerns of voters, focusing on the fact that the government won't go broke doing the bailout. I don't think anyone thinks it will. It's not the FISCAL (government) problem that the candidates need to address.....

it's getting across to the American people that this bailout isn;t going to bankrupt them through higher taxes. That this bailout is about restoring the financial system that we all depend on everyday. That not doing the bailout makes about as much sense as stopping running the subway in New York...the cure is a lot worse than the disease.

The Democratic Congress, and Democratic economists such as Furman just don't seem to get it.

The context of Furman's remarks is this remark from Obama:

"After this immediate problem, we've got the long-term fundamentals that will really make sure this economy grows."

Obama mocked McCain for saying the same thing in January of this year. His top economic advisers agree with McCain. And his political advisers seem to be letting the candidate pick up McCain's message.


Friday, September 26, 2008

Shift Bailout Risk to the Banks - A Great New Idea!

Washington Post business columnist Steven Pearlstein has a fantastic idea to let the very US banks causing the financial meltdown -- not US taxpayers -- to shoulder most of the risk of the urgently needed bailout.

His insight: Instead of paying cash to those banks in exchange for their bad investments -- the government would take them off the books of those banks by ISSUING PREFERRED SHARES IN A NEW GOVERNMENT-OWNED RESCUE CORPORATION.

The government would capitalize that corporation with $100 billion in cash (taxpayer funds). It would buy and hold troubled securities until the market restabilized. It would then sell the securities those banks holding them would reap the gains. The government could go ahead and redeem (buy back) the shares at any time. Banks could count the shares as part of the capital they need to hold. Credit crunch solved.

I quote :
The beauty of this arrangement is that, rather than protecting taaxpayers by having the government take an ownership stake in hundreds privately owned banks, it would be the banks that would own a stake of the government's rescue vehicle. The government would suffer the first $100 billion in losses from buying and selling the asset-backed securities, but any further losses would be borne by the other shareholders.
And lest this become fodder for high stakes debate, Pearlstein reminds us of what is at stake:

...all it would take is one more hit to trigger the modern-day equivalent of a nationwide bank run. Financial institutions would fail, part of your savings would be wiped out, jobs would be lost, and a lot of economic activity would grind to a halt. Such a debacle would cost us a lot more than $700 billion.

Who is going to step up and save us from that scenario -- George Bush? Harry Reid? Nancy Pelosi? John McCain? BarackObama? Barney Frank (grrrr....more on him later)? The Democratic-controlled House and Senate? The dissident Republicans?

Pearlstein's plan is pure genius and it gets around the tough politcal obstaclesd that have the nation tied in knots. Let's spread the word -- this plan is the best idea I have seen to put the risk of calamity far behind us.

Please (a) comment, (b) forward this blog post to your elected representatives, (c) forward it to your friends, and (d) tweet it if you are on Twitter, and (e) use your other social networking platforms as well. I'm on it right now - please join me!


Thursday, September 25, 2008

Economic Illiteracy and the Need for Action Now

There will be plenty of time for dissection of the $700B bailout, but I am stunned, and more than a bit angry, about self-righteous calls for NOT doing a bailout to keep credit markets functioning.

I'll tell you what such comments are not:

They are not moral clarity.
They are not about fairness.
They are not right.
They are about economic illiteracy.

Like it or not, we have the lifestyles, jobs, and homes we have because of credit markets. If lenders withdraw from the market because their balance sheets skew negative -- our suffering and anxiety today will look like child's play. How about NO mortgage loans? NO small business credit? The economy would shrivel, jobs would disappear. Other policy goals that one would RATHER see $700B spent on will be impossible if the economy tanks.

Government funding can't replace private credit markets.

Let's not confuse matters: Government needs to act and act now to restore confidence in the credit markets.

Remember the Resolution Trust Corporation bailout? 744 savings and loans were liquidated by the government. It took them and then sold the assets -- not at fire sale prices, either. The total cost was $87 Billion, far less than estimated at the start of the crises. We'll get back some of that $700B from asset sales as well -- but only if we stem panic now so credit markets don't freeze up.

Sometimes in business, you have to act fast or face horrific consequences by delaying action. This is one of those times.

Wednesday, September 24, 2008

Booms and Busts

There is a lot of hand wringing about what has caused the current Wall Street meltdown. I think the explanation is very simple:

It's like the old story of the frog and hot water: throw a frog in boiling water and he will jump out immediately. But put him in cold water and slowly turn up the heat...and he will die.

Gradual unhealthy change is below the threshhold of awareness...but it can still kill you.

The US financial markets risk levels increased over the past 15 years....the illusory profits of the dot com boom bolstered by an increase in the money supply....which gradually found its way into mortgage backed securities....and to main street via riskier mortgages....household income and mortgage debt became decoupled....housing equity turned to debt....

Every boom crashes because we run out of buyers of high priced assets. The early participants keep the winnings, and the latecomers can't sell their houses, don't get the appreciation they counted on....

Law of nature, law of financial markets.

Tuesday, September 23, 2008

Why Entrepreneurs Need Professional Marketing Help

A marketing consultant's job is to make money for his or her clients.

What Alex Mandrossian does shows how the game is played at its highest level for those selling professional services and information products.

Everyone can play their own game, but knowing how the pros do it is invaluable, because the pros "build out" every idea to its maximum effectiveness. ..as well as come up with new ideas (such as building in a recording next to every paragraph so someone can listen if they don't have time (or the sight) to read).

Here is an example of a virtual book tour, one of his innovative ideas:
http://www.alexmand ossian.com/ category/ virtual-book- tours/

Saturday, September 13, 2008

Money in Business: The Solution to the Pain is In The Pain

I've been participating in an interesting discussion on the Small Business Trends blog on undercharging for services. John Jantch (Duct Tape Marketing) started it off.

What is so interesting is that there is more inner emotion leaking out on this topic than just about any other one I've seen. Just about no one feels comfortable with money! And the issues aren't really about money -- they are about self-worth. Discomfort with asking for what you want, discomfort in having enough, you name it.

These are normal human emotions! But when you are the business owner, normal human emotions can have unpleasant financial consequences. For most of us, becoming the CEO of our own financial life will require some work on our own selves and beliefs around money.

The great Sufi philosopher and poet Rumi is primarily known for his ecstatic poetry, but he also wrote this line which I woke up thinking about: The answer to the pain is in the pain.

What that says to me is to face into money directly. Changing the focus to a question of self-worth takes the sting out of the question, but also takes away the power of the answer.

What is it about money that makes it so difficult? I think it is because money is so finite. Either you have it or you don't. Either you can pay for the life you want or you can't. Lots of us like to straddle the fence, and work toward the life or business we want. It is terrifying, painful, embarassing, makes us sweat, to really look at how we are doing, to look at numbers that quantify our progress and nail our truth to the wall.

That is the pain Rumi talks about. It's not just about money -- it is about whether we are actually living the life we want. And as long as we skirt this issue, we live in a cloud of potential and possibility while our reality is something else.

Sometimes when we face unpleasantness, it feels like sinking into an abyss. But that is not what Rumi promises -- the answer to the pain can only be found by looking at the pain, as gently as possible. Your answer and my answer and someone else's answers are ours alone.

Emotions tied to money are surprisingly powerful. When you have a job, when someone else determines the financial box in which you live your life, you can skirt taking a look at them. But when you are the CEO -- you create your own parameters. Unexamined emotion about money can keep you boxed in. And looking at those emotions -- just gazing -- often is enough to start opening up a door to whole new financial world.

Tuesday, September 9, 2008

Working with Clients

Being a consultant is being in a helping profession. It's not just about your technical knowledge, its about how much help you can provide to get results for your clients. It's also:

-- not about how much money you make or how successful you are, although if you really can get results for your clients, you will be successful.

-- as much about how people feel when they are with you as your technical skills

-- a lot about how trustworthy, credible you are. Your clients are trusting you to distill your specialty for your benefit.

Doing What You Want to Do

So many of us go into business to do what we want to do. We work long hours happily to be our own boss. But if you are like me, your business can easily take a shape that takes you away from that inner impulse...if you, like me, suffer from a need to look successful at all times.

Doing what you want to do is tender stuff. Often it is covered over with discouragement, cynicism, fear, or just plain forgetfulness. If we probe deeply enough, we find the roots of these emotions that stand between us and doing what we want to do.

Often they are simple enough. I writer friend of mine had a severe attack of fear after finishing the first draft of her first book. She shook with fear. Upon probing (how old are you now? where are you? who else is there?) she recounted a scene in which she was tormented by her older brother because she had written something....she had talent and her brother did not, so he set out to destroyed that of which he was jealous.

Her brother wasn't evil. These are the things that afflict all humans. The trick is, if you want to do what you want to do, you have to be ready to get whacked by these old fears. If you just had a job and followed a script already laid out for you, you wouldn't have to bother. But as a freelancer, solopreneur, whatever, who you are shapes what you do in a very significant way.

You need to grow stronger so you can endure these torments, bat them away, and get at that deep talent within that wants expression through your business. And to be prepared to do this again, and again, and again. It's the price of admission to this creative, wonderful world.

Love and Money

I am newly engaged, somewhat late in life. And it is changing my life at the core.

One way hit me as I was reading a book last night called The Five Love Languages, about how to understand your innate language for feeling loved....one line in the book really got me, about how sharing love in the way each part of a couple need to feel it leads to feeling loved (running on a full tank is the metaphor). And...feeling that security in love is needed so that each spouse feels secure enough to be all she/he is inside, to develop their entire potential.

WOW! That line really stayed with me, the idea that marriage can make you more of a complete person than you were when you were single. My happily married friend Therese told me that she felt more herself with her husband than when they were apart. I felt that with Bill...and hearing it from Therese gave me confidence to keep going when I felt insecure about this radically new direction after a full life as a single woman.

So this book claims that becoming yourself fully is part of the promise of marriage.

I have always been focused on personal growth (I was a psychology major, and avid reader about inner development along with many other interests). I invested money in my own development -- classes, coaching, time and money to pursue interests. But I never invested in loving another person, I would say because my idea of marriage was never that it was about growth....so I was the wrong one here!

Recently, I virtually depleted my savings when we suffered a job loss and other reversals. It was a true emergency for the family. It was very hard to go way below "my comfort level" and it occurred during a time in which I was undergoing active treatment for breast cancer. Reading this book made me realize why it was so hard: I always saw that money as insurance that I could continue to grow as a person, to not be reactive and function at the survival level. I've lived that way for several years, owing to time spent on eldercare, then losing my business during the 9/11 aftermath. So my windfall from selling my house is nearly gone. I feared going back to that kind of living, hand to mouth.

But, do you know what? It's different when you have love in your life. It wasn't the money I was afraid of losing, it was the opportunity to become who I really am. It's not possible to do that when you are afraid all the time. I calm my fears now, not only with money, but also with the message in that book, that love can be rich and deep if you will work at it when the initial infatuation wears off, and that it isn't only money that makes the world go round.

And having said that, I feel more confident that I will regain those funds. And I no longer feel that my very existence is tied to how much money I have in the bank.

Thursday, September 4, 2008

Generational Differences in Entrepreneurial Activity

Are younger people more entrepreneurial than baby boomers?

Younger people start things using technology at the drop of a hat. Just tonight I visited the site of Nate Westheimer, a 20-something who has a simple site that combines video and text to promote his political views. http://wtfpolitics.com Tech expression comes naturally.

But technology is a tool - it is not a business. Entrepreneurship is about creating value for customers such that they will pay for what you offer and return you a profit...thereby making your endeavor self-sustaining. Entrepreneurship primarily requires understanding the needs in the market. That is a synthetic kind of knowledge that comes with "time in" a field or market.

Some boomers are more likely to have the time in, the experience, to create profitable businesses. But not all have the entrepreneurial savvy to carry through their ideas. There is a special kind of support that I think could help those who see needs to convert those needs into businesses.

However, I think younger people, in their 20s and 30s, are pioneering the concept of lifestyle businesses, essentially a portfolio of activities that make a living, activities made possible by technology. Perhaps the most well-known (but highly debated) proponent of this concept is Tim Ferris, author of "The Four Hour Work Week." It's a great concept that boomers can learn a lot from as they consider creating more rewarding work after toiling in a job for years.

Nothing wrong with using technology to create interesting work for yourself! David Birch, a researcher out of MIT, calls that "job substitution." It's just plain not the same as entrepreneurship, which creates wealth for the owner, jobs for others, and fuels this nation's economic growth.

Talented people have always found ways to use their gifts. Now technology makes it easier to express them. It is less and less necessary to compress our identities into a single job when information technology gives us so many tools to express all that we are...whatever our business goals may be.

Wednesday, September 3, 2008

Bootstrapping Knowledge, Not Money

I just became an ebay powerseller! And, based on my customer feedback rankings, I am in the top 10% of all ebay sellers.

I started this business when I was recovering from an illness, when I couldn't really concentrate enough to read or write. It's been interesting to figure it out, the ins and outs of how this works. I got a market research package and learned how to make more money on given listings. I upgraded my listing pages with a funky 1960's "summer of love" theme. I run a slide show of photos for each listing.

But last night I was thinking that just plain buying and selling loses its charm for me after a while. I sell new coach purses and used women's clothing. The new purses are much more fun...they are a good product that people love. I really enjoy selling nice new things.

But just to change things up, I am buying 10-15 used coach bags and reconditioning them for future sale. I'm getting them from individuals on ebay who don't really know how the market works so are selling inexpensively, and bags that have stains that I think can be cleaned up. I'll see how this business works.

I actually like the process of figuring out the business end of things. When I started, I was thinking, wow, how can I sell $500 a month, that would be awesome, I had no idea how to do it. But I gradually figured it out...and now sell about $1100 a month. It feels great to have this tool in hand. I'm about to set up a coach blog (and myspace page) with an ebay widget so people can find my listings from outside of ebay. This I like, gradually figuring things out.

But something is really unsatisfying about the "used" element of all this. It is a familiar and too comfortable space for me...but it is not really satisfying. Instead of wanting to sell these various bags, I keep thinking that I would like to give different ones to different friends and relatives. It just seems too small scale. I never saw myself as the purse lady or an online flea market vendor or yard sale entrepreneur. Yes, we do these things when we have to....but I want more complexity.

Nonetheless -- I now understand the online world in a way that I never could have had I not started small like this. I guess this is bootstrapping knowledge (not money) -- I took what I knew and leveraged it into something I didn't know, but now do know.

My goal was to create an additional income stream for us. I learned that online searches for coach products spike in the fourth quarter (back to school and christmas, no doubt). I also learned that most of the searches originate in Asia; I've had a customer from Malaysia and Singapore, and bidders from Japan. So I am thinking that I can upgrade my presence and see what I can do over the christmas season.

There is something rewarding about simply earning a living like this. But the used, flea market stuff doesn't float my boat so much....I see this becoming a real business.

The Self At Work

One thing my mother always criticized me for was wanting to find meaning in my work, wanting to do something I liked. She was practical, grew up in an orphanage during the depression. "Do what you like on your own time," she said. Your job is how you support yourself.

Well, she happened to have a daughter who has a passion for doing what she likes and earning a living at it. A daughter who needs to feel alive and expressive 24/7. That daughter has a lifelong conflict with that impulse and the practical side which is all about earning money.

I do believe that we are here in large measure to advance the human spirit by taking who we are, and how we are raised, and fusing them into something new. My task as I see it is to take my absolute need for expression, and my absolute need for financial soundness and stability, and fuse them. It is my "bet the ranch" project right now.