Saturday, June 28, 2008

Video # 5

Wheee!

http://it.youtube.com/watch?v=IfCkaXFRM8E


Busted Part Two

Starting a business is a radical act, to go against all that is taught and encouraged, all cautions and advisements, and still go on your own. You not only challenge the general view that one should strive for a good job with a good company, but that you intend to offer what is right now not available. You starting a business may necessarily mean someone doing less well must do better, or worse. You intend on shaking things up.

Certainly you are shaking things up for yourself as well. Earlier I condemned the welfare state, and you may agree. You may be a refugee from the welfare state, which is not a bad analogy. If you propose to be self-employed, like a immigrant, you have come to a new land, where everything is different. The language, culture, religion are all different. As different as say a fundamental difference in Christianity and Islam, that is orthodoxy versus orthopraxy.

Indeed, I speak with many Americans who live primarily in the welfare state-sponsored business and industry, or government, all successful people, who see the gathering storm, and ask me to which country should they flee. I answer, “Try USA.“ With the right attitude, the USA is a perfectly good country.

But you will discover a new country, a rather alien country if you pursue self-employment in USA. As self-employed you’ll feel at first a stranger in a strange land. You will be one with the immigrant, feel what your ancestors felt. And build this country the way your ancestors did.

Of course, even with our wildest success we will be insignificant to the world as we are at the small business level. But collectively, if enough people start businesses, the status quo is under constant tension. In aggregate, small business can, and does, transform the world. For those in the commanding heights, who are being challenged from below, this is unacceptable.

You are too insignificant for anyone to set out to destroy you, and there are too many examples of dragon-slayers, the small businesses that destroy large businesses, to believe there is any personal concerted effort to harm a small business.

There is of course the stated United States government policy of “get big or get out,” that is business must get big in cooperation with the government, or the business should fold.

The political/economic philosophy of a unified business/government has a strong pedigree, going back to the first emergence of ‘states” (as opposed to nations). As a technical matter it is called fascism, from “fasces” the roman symbol of a bundle of sticks surrounding an axe. As our country experiences the results of foolish policies, the calls for closer cooperation between business and government get ever more insistent.
When those in the commanding heights abrogate their responsibility, things get worse all over. People are forced to make changes. Unhappily, those changes usually mean a demand for more control on the part of those who caused the problems to begin with. We see this today with the calls for more controls over the economy by the Federal Reserve Bank.

Indeed, the Federal Reserve Bank and its system, less than 100 years old, failed miserably when first instituted, causing the great depression and the boom that preceded it. It is behind the present economic distress.

A recent quote from Chairman of the Fed Bernanke captures the wrong thinking: “...An excessive preference for liquid assets reduces society’s ability to fund longer-term investments that carry a high return but cannot be liquidated quickly.” The problem here, of course, is how would he know? How would he know if there is “excessive preference for liquid assets?” Or if that it “reduces society’s ability to fund longer-term investments?” And he is talking of political spending, not free market. And in any event, how can he see that any given investment would “carry a high return?” By definition, any investment that carries a high return has a high risk of failure, he can replace his view for the markets? Further, “but cannot be liquidated quickly.” High return and cannot be liquidated? Then the return needs to be higher, not a taxpayer bailout needs to be higher.

The heart of the Federal Reserve System is an artery that carries un-oxygenated income from the productive sector of society to the government and the vein that carries oxygenated income from the productive sector of society to the banks.

That UN-oxygenated income is the targeted inflation rate set by the Fed. Inflation is theft of savings, a tax no one really notices. The government monetises the inflation by printing currency that is traded for Treasury bills (bonds). Now this newly printed money hits the streets, benefitting the first to receive it, the banks, and through the magic of compounded interest, destroys savings and paychecks of the last in line.(Especially hard hit are the foreign workers who supply goods and services exported to USA).

This system allows the government to fund its earmarks to our detriment, with bad ideas crowding out the market preferences. You may look around and say, “This is the best system mankind has ever produced. Look at the advances in medicine, telecommunications, defense, access to information, free movement, the cornucopia ini every store, the wonderful housing, options in energy, clothing so specialized, insurance, astonishing leisure time. It is so wonderful people are breaking laws and risking their lives to get here. All true. When experts say the dollar has lost 95% of its value since 1913 (the year the Fed was instituted), who cares? We have so much more than our ancestors had in 1913, obviously our dollar buys more, because we have more.

But the love of money is the root of all evil, and what is missed is the evil of omission.

Inflation causes market distortions. As government picks and chooses winners and losers, in the measure the government is wrong we have malinvestment. One form of malinvestment is over investment. such as the San Jose, California airport, which was expanded to handle the traffic generated by during the dotcom boom, and is now overbuilt for the local economy (aside from a lovely airport becoming a mess).

That is the problem that is seen. The problem that is unseen is, with governments inflating away savings, and taxing away profits to build airports, the money to build cheap, efficient, clean magnetic levitation systems of transport, such as are operating in China and coming to Las Vegas/ Los Angeles, are crowded out and in this case, delayed by about 75 years.

There is no field that has not seen disastrous omissions in development. Think of the areas where crisis exist, and you’ll see the highest government intervention. Banking. Education. Medicine. Transportation. Housing. All fields are impacted, all fields would experience more better cheaper faster if left to the free market, or if even deregulated lightly, in that measure there would bering more better cheaper faster.

(I had developed that phrase while studying Austrian/free market economics. I was astonished to learn it was also Chairman Mao’s goal for China, with the expectation communism would deliver it. hence Mao’s various campaigns to achieve his goal. Under Deng Xiaoping leadership, the Chinese Communist Party has in fact delivered the greatest economic growth in the history of mankind, largely by adopting de facto free market economics. Go figure.)

Between government interference and the yield from empire, it is impossible to calculate the damage done to what we have, and what we do not have. if we refused to accept the governments programmed looting of our savings, would we have instead directed our savings into investments that may have funded a cure for cancer? Would we have transportation that was clean, efficient and comfortable? Would charities be properly funded? Would education put even the meanest intellect in touch with the good the true and the beautiful? Would our religions attend to higher things, instead of promoting blasphemous traps?

War, befouled environment, Jim Crow laws, brutal medicine and risible education are all pursuant to government interference. Without it, would all that we have be better, plus would we have more, at a lower price, and faster?

The answer of course is yes, but there is no knowing in advance what life would look like in a free market. No one envisioned the internet when litely deregulating telecommunications was permitted. No one anticipated the astonishing variety of beer, with its undeniable concomitant health benefits, that we now see due to the lite deregulation of that beverage. When I was a child eyeglasses were a major expense, and many people were unable to read for want of glasses; now you can serve yourself at any grocery store and pick up a pair for five bucks.
Of course, the eyeglass industry fought the change, demonizing the free marketers. And so it goes: you may find pollution abhorrent, and may have a workable free market solution, but if it is not the government approved solution, you will be painted as anti-environmental.

Education is a mess in USA, except in continuing education, which is a free market category. I meet serious scholars who bemoan the fact their chances of tenure are nil, for whatever reason, and thus they cannot earn a living by teaching. I share I earn a minimum of $100 an hour teaching where I want, when I want, have standing offers to teach at countless colleges, and I have a textbook that is required reading in over 25 schools in USA and Canada, and it has 29 out of 30 five star ratings on Amazon. Teachers would kill for that accomplishment, but they would not teach in continuing education. It has no tenure.

Cosmetic surgery is largely unregulated, since it is largely elective. Nonethless, there is more better cheaper faster in this one segment of medicine. When it comes to payment, cosmetic surgeons will dicker. At the same time, many of them spend vacations visiting countries where government intervention hampers freedom, to correct the cleft palates of unfortunate children, free of charge.

And I’ve met countless authors who await a publisher to accept their book. I am neither a scholar nor a author. I am merely a merchant, and probably third rate at that. I teach what others taught me, I wrote it down too. But I worked outside the system they find prohibitive.

Of course, as Commodore Hopper, the highest ranking woman in the US Navy once advised, “It is easier to apologize than get permission.” We are free, for the time being, to maker things better. Once we step out of the status quo, and enter the new land of free markets, the possibilities re endless, the opportunities abound, more so where the interventions have caused the worst distortions,

Indeed, this land is not really new. It is in the DNA of all Americans, in particular those recent immigrants who perceived it from afar and came home to USA. The Jeffersonian ethic is what makes America wonderful, but a counterrevolution by the Hamiltonians, with their centerpiece, the federal reserve bank, currently causes the problems we face.

You can challenge all of that and do good while doing well. Where?

Most people make the error of thinking as they did in the “old country” that hamiltonian wasteland from which they escaped. They consider what they know, that is what they learned in their “school to work” government program. “Well, I am an engineer, so I’ll...” The world has lost countless outstanding interior decorators because of this thinking. “My family has a garment factory, so I’ll sell clothes.” There goes a cure for cancer! We must forget who we know and what we have as we approach what we ought to do.

The question should be: “Where are you gifted? A problem with this question is people begin by thinking, “What have others said? “ I ask, How would they know?”

The question is addressed to you: “Where are YOU gifted?” Your gifts are normally closely allied with your passions... where are you passionate? Passion comes from the Greek “to suffer.” Compassion, is to suffer with. It is related to love in this sense, love for others. You are passionate about what you love. Where do you see things other do not?

When Sylvester Stewart, an Oakland radio DJ played music that pained him for its lack, he started his own band called Sly and the Family Stone. Pop music improved that summer.

At any given time, and any given place, given the status quo, there are problems we each encounter. There are fields we do not care about, we leave the problem to others. But there are problems in fields we love, and we can apply what we were given to the problem to arrive at a solution. Drucker says “products (and services, of course) are solutions to problems.”

And further, “There is no solution that cannot be improved upon.”

In self-employment, we fix a problem here and now, and the process is called “business.” We get there by trial and error, the customer being the most important part, but getting the product or service right being the hardest part. Love of the product, passion, is what drives us to thrive in the business. The very work is our lifestyle, making “money and acquisitions” less important than the means by which we ever improve our offering. Those means become our infrastructure, and how all of that looks, what it consists of, is up to us. Walk through any small business, visit the owner at home, what you see is an array that reflects the owner. It is all lifestyle, it is all the work.

If our offering becomes ever more popular, the paradox is competitors come in and offer alternatives, and then we begin to see our margins slip. We find we are no longer enjoying the profits which support our work and lifestyle. Happily, at the same time, our customers are feeding us new design ideas, which, once introduced, restore our necessary profits.

At the same time, years into this process, the conservator companies see our innovative item, vastly improved over many iterations, and study it for eligibility as a commodity item, to be offered at a low price through mass production and distribution. if it makes the grade, at no cost to you, the conservators lower the cost and widen the access to your innovative item, offering a version of your item to customers you could never have served, making the world an ever better place. The free market is a wonderful system. it is all so Zen: by eliminating controls, we gain far better results than any controls might offer.

Yes, but, where to start? A better place to start is, with passion.. pain... “I get ill with anxiety when i see the NGO’s taking the lead in genocide when they pass out USA foodstuffs after a disaster.” It can be anything.

So what is the solution? All those businesses you see thriving at the small business level solve a problem not otherwise addressed. But this I cover in depth in my book and classes. Let’s move ahead to the point of this article. What to do if we are busted?

So what if you try, and you fail?

The fact that you are busted is rather proof you are naive or inexperienced. Sorting it out is the corrective you need before you move onward and upward. So the rent is due, your kids need dental work, and your garage is full of junk no one will buy. You are busted. What to do? You are busted either because you are underperforming in your business, or you are a refugee from the welfare state? Well, take it from an expert, This is what you do.


Friday, June 27, 2008

22 Tricks

You may not be running your warehouse, but these tips might help you become a good consumer of warehouse services... and if you like this, click through on this website, they have plenty of biz & trade magazines they send out gratis...


Korea and China Warm up

China and Korea make friends, USA not at the tble...


Video #4

Here ya go!

http://it.youtube.com/watch?v=qiMCmhFnvkE


Thursday, June 26, 2008

Video No. 3

Here is installment #3 in the youtube video series...


Wednesday, June 25, 2008

Importing News Editing

orange County Register will outsource newspaper editing. OK... but may I share some headlines? (If you have to design the product here, what is the point?)

Tyre godowns in Delhi: Storehouse of Dengue

Azad announces all-party meet on land row

5.67 lakhs children enrolled in 3-day drive in Gujarat

Parents most effective source of knowledge on sex: study

With five films already in hand, Harman is nervous

Now, the level of sophistication on this list is such that no doubt we can all translate that English in American English. But will the editors have to do it too?


Tuesday, June 24, 2008

Connie Checks In On Children's Clothes

I found for what it looks like a great supplier in china, to manufacture the children clothing
of my company, the way I found this company was through a trade magazine at an INTL Textile
Show in LA.
they were the only ones who replied among all the people I submitted a request and they seem
very interested in doing business with the USA, (they have not exported to USA or Europe).
their minimums are lower than everybody else I have requested quotes from. They already sent me their
samples (them paying for the shipping, which I heard is unusual).
The problem I have is, I requested references and they said they did some international business
with australia, and they said they did not want to give their name because he/she was an agent,
and because of confidentiality they did not see that appropriate (to give the agent name).
I want to approach them in the right way without offending them about asking references.

what should I do? find an agent to go see this company, if so what's the norm to pay them to do that
or how can I find one reliable?
go myself and visit this company?
would the chinese embassy in the USA would help? but maybe not if they are a small or medium company.
since I am just starting and I am obviously a small business I want to make sure I do it right,
please let me know how it would be the right way to proceed.
connie ozdil

Connie, Here is my reply...


If a name from a trade magazine works, and they are the only ones who reply, then study what you've got...

What this sounds like is people who have no real experience are trying to jump-start their business with an ad in a trade magazine... they hope to get a reply, and then do whatever you ask. And someday they will grow.

If they have never exported to USA or Europe, they will not have the expertise to get the products right and labelling and paperwork right. Sounds like trouble to me.

As far as references, their exports to australia may be just in the form of shipping some tshirts to a cousin who is studying in Sydney. There may be no real references, so it was good you asked.

I would not bother checking them out, since there is probably nothing to learn. Real first class suppliers always brag about who they sell to, so references should never be a problem.

Let me ask, did you do the research to find the best place for children's clothes? Did you then work through the commercial attaches?

If so, what did you find? If not how come?

John



.


Monday, June 23, 2008

Busted, Part One

A while back I asked how come people do not start companies. Inertia and fear were the two main reasons. Inertia comes with a satisfactory situation. Fear has to do with loss. Things have been changing the last year or so, and perhaps will get worse. People may lose their inertia due to their positions becoming unsatisfactory. People may find they’ve lost their jobs anyway, and fear unemployment more than self-employment. In any event, all economic activity starts with dissatisfaction. Your economic activity starts with your dissatisfaction.


I think a small contribution I can make is to address “how to be busted.“ Busted is that temporary place where you cannot cover your financial obligations, a threat to your lifestyle, something any entrepreneur fears. Although the prospect of such a situation may seem dreadful, as one who has been there, let me tell you it is no big deal. In fact it should just be a temporary pause as you take instruction on how the real world works. The fact that you are busted is rather proof you are naive or inexperienced. Sorting it out is the corrective you need before you move onward and upward. You will be busted in the measure you need to learn and grow.

This is addressed to those who will be starting their own companies, and fear failure or are trapped in inertia. But for reasons that will become clear later, I want to take a moment to condemn people on welfare.

Busted is a setback in your life’s work, temporary, and something you fix. Welfare is a lifestyle as well, something one chooses rationally, and weighing the options, accepts it and has no interest in changing it. The attitude is wanting something-for-nothing, and the result is a downward spiral ending in disaster.

Now the classic example of this “something-for-nothing” are the managers of large corporations who ally with the government to protect their businesses, live off of subsidies paid for by workers and empire, and earn their money with cost-plus government contracts or otherwise subsidized or protected in the marketplace. The face of welfare in the United States is the white male CEO, and the corporations they captain. The manufacturers, the bankers, the agribusiness, the military.

Of course there is also the welfare directed at the 17 year old black woman with 2 children, and she too has chosen something for nothing, and suffers for her greed. But the money directed at such people is negligible compared to what is paid to what General Eisenhower called the military-industrial complex, and its educational version, and other such combinations. You might also take into consideration the putative 12 million illegal aliens, but with the taxes they pay, the work they contribute, and social security they will never collect, their impact in welfare transfer payments is probably negligible. But if you add up all of these welfare transfer payments to the poverty queens on the welfare plantations, the illegal aliens, and all such small time indolent, the money is nothing, a mere rounding error, compared to the money and resources and exemptions directed at big business.

And the differences are not just in size but in kind. Yes, Frito Lay and Coca Cola grew with the welfare state, selling subsidized corn and fat and sodium turned into chips that proved popular with the indolent, and contributing to the obesity of USA poor. But the cost difference between good food and bad is not much. The poor would still eat, even if not on welfare. But the corporations trade in things we would otherwise never consume, such as an option arm loan, or the incalculably bad choice to invade Iraq. We may have 3 generations on food stamps, but one candidate promises five generations of war in Iraq. The transportation system in USA is a disaster, and our medicine is brutal. The distortions in the market and consequential malinvestment is incalculable.

The problem with welfare of any sort is it disconnects a human from other humans, it turns the recipient from a contributor to a parasite. We are inclined to assist the halt and the lame and the simple as a matter of course, the charitable impulse will always be with us. But only a government program would transfer wealth and savings from the productive to the able-bodied indolent.

Of course you may say a CEO who pulls down $5 million a year, and has $90 million in stock options,.such as Kerry Killinger at WAMU, is hardly indolent. The welfare mom with 2 kids does not miss a meal, has all the medical care she has time to consume, is denied no entertainments, and pulls her pants on one leg at a time, just like Kerry Killinger. The lifestyle is indolent. Neither is living a productive life, providing a value in the marketplace, and thus living the life their God-given talents would suggest.

But Kerry Killinger is building a 30 million dollar home in Palm Desert, and the welfare mom lives on the tenth floor of a Chicago Housing Authority unit. Again, both have broken with their respective spouses, and chosen to leave their children without an intact family. Both have dubious reputations for their life choices, both are consumed in time and energy with keeping what they’ve got, and hopefully getting more. Even if you disagree with me so far, you can agree the lives of both would be dramatically different without the welfare component.

It may seem tendentious to compare a captain of industry to a welfare mom, but what is the difference between the two? Each has chosen to accept a system in which other peoples wealth is transferred to them. Each makes applications to the government, one for the food stamps, another for a bank charter. Neither would continue without government support. Indeed, presently, what banker is not applying to the government for taxpayer-funded relief?

We may accept that both are in a certain time at a certain place, one the wrong and the other right; the one being a college-educated white male and the other being a school drop-out black female. The one can have a banking charter, the other cannot.

And here is the essential similarity: neither would have what they have without government intervention. Both subscribe to programs.

Without those programs, WAMU would not have gotten huge, Killinger would have done something else, without the leverage to exploit government policy. I understand his reason for leaving his wife was her inability to function in the rarified air of major bank CEO milieu. Without the leverage to enlarge WAMU, he may have stayed a small town banker, without having to dump his wife. He would have known each of his customers. he would be careful with other people’s money.

The welfare gal also has made a bad choice. If she was not offered other peoples’ money, perhaps she would have started a business, and enjoyed the instruction, the education, one necessarily gains from the experience of building ones own business, of serving others rather than being served.

But here is another difference: there are laws that encourage the rich to grow and expand. The laws encourage rich 30 year old whites males to start a bank. At the same time, there are laws to keep poor black women from starting a business braiding hair. The CEO grasps at what is not his, the welfare mom is stymied in her ambitions. The difference is huge.

There is an objective good that results from self-employment, that cannot be had working in the command and control market. The essential harm in welfare is the recipient is not responding to customers, is not using his talents to serve others, to do good while doing well. All welfare recipients deny us the good of their natural contributions, preferring instead to live off of other peoples’ money. Given our time and place in history, we have a contribution to make, and it is our work and our lifestyle.

Even we self-employed are effected by the malinvestment that has permeated every fiber of the lives we live. The difference is given our circumstances, we bring the portion with which we happen to be blest to bear on the situation we find ourselves. And do good while doing well.

Inflation is monetary event, that is printing too much money. The result is the problem of rising prices. The correction is to quit printing too much money.

Welfare is a morality event, that is being greedy. The result is the problem of being busted, failing to contribute, or some combination thereof.. The correction is to quit being greedy. We who find ourselves busted for the same reason, fully intend to change.

With these definitions and premises, I’ll lay out How To Be Busted, and how to get back on track. Perhaps then you will be more encouraged to provide the benefit that only you can offer at this time and place in history.