Tag Archives: economy

On China and American Moral Leadership: Video Essay for February 4, 2012

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On Observations Around China: Video Essay for January 21, 2012

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On Observations Around China: Essay for January 21, 2012

My recent trip to China gave me an interesting perspective on how the world’s fastest growing economy, the People’s Republic of China, views the economic heavyweight champion of the world, the United States of America. It is a perspective gained over lunch. Multiple lunches in fact.

Our hosts were eager to entertain us in a manner that they have come to equate with successful American businesses. On successive noontimes, out came meals from Subway, Kentucky Fried Chicken and Papa John’s Pizza. We swilled this down with Starbucks coffee, of course. That part was my idea.

Has fast food suddenly become a leading economic indicator? Not in the classic sense. What it does indicate is an emulation of an American lifestyle. It is the impact of Western television and Western advertizing in a context of doing business in ways that have proven successful in America for a century.

I toured industrial parks that measured two hundred square miles. The government leveled rice paddies and poured concrete without looking back. I toured factories in excess of 600,000 square feet. That’s a big factory under one roof. And there is not just one of these factories or one of these industrial parks. The fact is that there are scores of these facilities in China. They are brimming with work. My tour took me to factories that manufactured medical devices, printed circuit boards, electronics, cable assemblies and sophisticated semi-conductor test equipment.

What I saw went beyond what I had previously seen outsourced to China. There is a growing level of co-development taking place. Engineers are working together to develop next generation products sourced in low cost countries. Once those seeds are planted it grows increasingly difficult to uproot that business. Supply chains grow out of assembly operations and special process clusters spring from those supply chains to support them. The same is true in reverse. As products leave America, so leave their supply chains.

When it comes to manufacturing, China is not a Paper Tiger nor is it omnipotent. China may looks invincible on paper but in actual practice it will be difficult to maintain the momentum necessary to eclipse and distance itself from the US economy. China is a difficult place to navigate. Language and infrastructure conspire against success. For every high speed train there is a congested highway; for every coastal city with unfettered access to distribution networks there is an inland city with difficult access. The largest manufacturing centers need to import workers from the interior. They dwell in company dormitories and live in circumstances that Americans cannot comprehend. Huge contract manufacturers like Foxcon have experienced worker suicides and just last week, a suicide pact among 300 of its workers over wages and conditions.

Chinese New Year is a two week celebration in China. Workers begin multi-day trips back to their homes only to turn around and repeat the sojourn in reverse. So tedious a lifestyle it is that as workers depart for the Chinese New Year, they are offered bonuses to ensure return, such is the lure of staying back at home.

So what did I learn from my quick trip to China. What lessons are there for America in all of this?

Lesson one: China acts first and asks permission later. Our dithering on the Keystone XL Pipeline project would never happen in China. There is no compromise on economic progress, no compromise with the environment. Economic stimulation is all that matters and the Chinese have a long range vision for their economy. Can that be said of America?

Lesson two: The Chinese worker will eventually revolt. They will demand better wages and better working conditions that will translate into decreased operating margins. The effects of inflation will begin to erode the labor advantage that China enjoys today. Chinese workers will need to organize in protest short of threatening mass suicide. Workers rights in China ought to be where the AFL-CIO and Teamsters should focus their growth opportunities. Really.

And lesson three: Time is running short for American dominance in manufacturing. Remember that the US is still the largest manufacturer in the world. Innovation and new product introduction are the hallmarks of the American factory. The role of government in America ought to be to ensure the success of that factory just as the government of China ensures the success of theirs. Our challenge is to do that within the context of a democratic society. The People’s Republic of China is not bound by such constraints.

Competitive taxes, judicious regulation and coordinated planning are missing in the American economy. We already have enough KFC’s and Papa John’s Pizza.

Press on.

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On a New Dawn: Essay for December 10, 2011

I met some interesting people in Washington this week. Some were Democrats and some Republicans. Different in philosophy, to be sure, but each cut from the same cloth. They were all veterans, older and younger, who share one common goal: to continue in service to a nation they love. Their common goal was to put into office people of good character who view obstacles a little bit differently than the average politician. After all, these are not average people. They are warriors all. Many have served in combat and know the terrible price that lack of teamwork or focus can exact from the uncommitted. In short, they are leaders all who are itching to lead again.

Before they can get a chance to lead they must pass through the unforgiving crucible of the electoral process. That is where the Veterans National Security Foundation and Veterans Campaign come in. They are non-profit organizations who have just one goal: to increase the number of veterans in Congress. Period. They are non-partisan. I found a collection of veterans and seasoned political operatives who provide coaching and campaign training to aspiring candidates or campaign enablers without regard for party affiliation. Their allegiance was to a higher common denominator: The United States of America. It always has been.

Before there is breakthrough in Congress with these fine potential candidates, there is much blocking and tackling. There is the development of the message; the selection of key campaign positions such as treasurer, finance chairman, and campaign manager. Of course, there is “dialing for dollars.” These are the phone calls to donors who provide the essential element that begins the incessant drive to collect enough money to provide the grease to lubricate the gears of the early campaign. This is the stark reality of a modern campaign. It costs a lot to get the message out. A single postcard mailing in a Congressional District can cost a quarter of a million dollars or more. You do the math. A million dollar campaign for Congress is merely “jacks or better.”

But why promote the veteran as candidate at all? Surveys show that there is nobody who you trust more. Veterans rank at the top of all trustworthy professions with an approval rating of over 80%. Compare that with Congress today at less than 10%. Disturbingly, the percentage of Congressmen with veteran credentials has diminished from 75% in 1969 to merely 22% in 2010. Interestingly, Congressional approval had diminished along a similar slope. Could there be a connection?
There is at least one common link between a Congressman and a veteran. Each has taken an oath to support and defend the Constitution of the United States against all enemies, foreign and domestic. It is how each approaches duty to country over the course of a career that makes all the difference.

That civil discourse is lacking in Washington is obvious to the most casual observer. The question is how we turn the page and begin to engage in the real dialogue that actually can move the ball in Washington. Many of the veterans I was with this week have been tested in combat. They engaged the enemy with the resources they had on hand. Often, it was short of what they really needed. Engagements are too often a “come as you are” affair.

Maybe that is the way it is on Capitol Hill today. Could it be that too many people are seeking the “perfect storm” of political alignment before engaging in the real business of getting down to the business of altering the course of this ship of state? We haven’t got time for that. Too many people are content to ride the mystery ship right into November and beyond.
What we need in Congress are more people of integrity. We need people who put service above self. What better recruiting ground for such legislative heroes than our nation’s military? They know how to get tough jobs done under extremely difficult circumstances. They know how to achieve unit cohesion amid the fog of war. They instinctively know how to take care of the least among them for each of them is part of their special band of brothers.

When November comes around again in 2012, I will be looking to cast a ballot for someone whom I trust with my life; someone of proven integrity; someone who, through word and deed, demonstrates that they are leaders in good times and in bad. Don’t forget, in 2012, hire a vet.

Press on.

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On Educated Congressmen: Video Essay for December 3, 2011

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On Educated Congressmen: Essay for December 3, 2011

The monthly jobs report came out this week and it reflects an increase of 140,000 jobs. Sounds like a lot doesn’t it? Well, 140,000 jobs is less than this economy requires every month to offset the new job hunters that enter the marketplace. So, how did the unemployment rate go down then? The sad truth is that 315,000 people decided to stop looking for jobs. By the way, new jobless claims topped 400,000 for the last month but that data is not included in this month’s unemployment figure.

The economy is in a mess and increasingly we turn towards Congress to divine a solution. But who are these people to whom we turn? What are their qualifications to transform an economy? Where are their credentials to lead in business? How have they earned the right to speak with authority on the subject of directing our economy?

Let’s take a look at a few of the Congressmen in Massachusetts who have been self-proclaimed defenders of the economy; the fathers of economic recovery. There is Richard Neal, a 23 year incumbent who made his way to Congress via the City of Springfield as Mayor, as City Councilor and assistant to the Mayor. He has a degree in political science. He has taught some high school courses early in his career but I can’t find any evidence of experience that might provide insight into running a business, even a corner bodega. Verdict: career politician.

Then there is Congressman Jim McGovern. His career has been completely contained within politics. He has a degree in Public Administration. He was active in the Presidential campaign of Senator George McGovern (no relation). He was a Congressional aide to Joe Moakley of Massachusetts and successfully ran and won election to Congress in 1996. I heard Mr. McGovern speak this week before a council of manufacturing executives. He said he originally campaigned as a proponent of manufacturing in the state and the country but admitted that when he actually went to DC, he had no idea what he was talking about. I suspect that he has no better idea today than he did in 1996 or he would not have supported the legislation that has wrought havoc on the economy. I have no evidence that Jim McGovern has sold lemonade from a roadside stand no less understands the complexities of global enterprise. Verdict: career politician.

One more favorite is surely Barney Frank. He earned his degree in law at Harvard but never seems to have used it. He was a political aide then a Massachusetts legislator before ascending to US Congress. That is 40 years of politics and, again, there is not a hint that Mr. Frank has developed even the tiniest bit of business acumen during that time. Verdict: career politician.

Perhaps you are detecting a pattern here in the Commonwealth that we value our elected officials as politicians. And why not? They bring home the bacon, don’t they? Think Big Dig, that pet project of another famous Massachusetts politician, Tip O’Neill. He parlayed a $2.8 billion dollar project into something big and hideous that will cost, according to the Boston Globe, some $22 billion dollars. Tip O’Neill got involved in politics at age 15 when he campaigned for Al Smith. Verdict: career politician.

The Massachusetts democrats have a very long history of grooming its politicians seemingly from political puberty. What it has got us is a group of careerists bent upon advancing themselves politically at any cost and without any business experience. Nor is there is not a veteran among them. They know well how to service constituents with benefits but they know not about service to a higher cause. We don’t need another Big Dig or a highway repaving project to get us out of this mess but that is the usual litany of public works projects proposed to stimulate the economy. It is formulaic of old school politicians; formulaic of ways gone by; formulaic of failure.

So what is the new formula? It must include people who have lived an American Life: a life filled with trial and tribulation with a job that requires them to add value every day. I want them to know what it is like to take a position of financial risk. I want them to have a sense of sacrificial service to country. In short, I want to send a person to Congress who is more like you and me than like Richard Neal, Jim McGovern or Barney Frank.
There is a golden opportunity in Massachusetts to put in a career citizen in the new Fourth Congressional District, a person like you and me. That seat will be open when Barney Frank retires next year. When the New Age of Massachusetts candidate emerges they will require a full court press from people like us to put people like us, career citizens, into Congress from Massachusetts.

Press On.

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On Ordinary People: Radio Essay for November 20, 2010

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