Some information for this post is taken from the Concord Coalition

Business, corporate, government or individual fiscal year calendars and planners for the US fiscal year 2018 as defined by the US Federal Government, starting on October 1, 2017 and ending on September 30, 2018. The calendars cover a twelve-month period and are divided into four quarters. With that being the case, once again the clock begins ticking elevating our national debt.  As of 2 October 2018, at 0900 hours our national debt was about $21.5 trillion dollars.

As you can see, a trillion is a one with twelve (12) zeros behind it.  We have twenty-one of these to deal with.  The chart below was “shot” at sixteen (16) hundred hours (4:00 for you civilians) on 2 October 2018.  If that debt is allocated for each citizen and each taxpayer, the debt becomes $65,447 or $176,475 respectively. We all had better have a really really good year.

Right now, our debt is approximately ninety-four percent (%) of our gross domestic product (GDP).  In 2050 that debt is estimated to be one hundred and fifty percent (150%) our GDP, which is considered to be unsustainable.   The chart below will give you some idea as to how quickly our debt has risen.

Well, if misery loves company, we are not alone with issues of national debt.  The following chart give debt of the top twenty (20) countries with significant debt.  Not a pretty picture.

WHAT IS THE CURE FOR US NATIONAL DEBT?

Entitlement Programs – When social security was first enacted the life expectancy in the country was sixty-three (63) years old.  Today that life expectancy is in the late seventies (70’s).  If we’re to get our entitlement programs back into line, we should think about changing the eligibility age for social security and Medicare to at least the early seventies (70’s).

We should also change social security disability and loosen the eligibility for those who are over sixty-two (62) years old.  Those who can’t continue to do hard labor (construction) type of jobs would be eligible to collect earlier.  We would also have to make sure that medical insurance companies use community rating so those older Americans could get medical insurance at a “reasonable” price until they reached the age of eligibility for Medicare.

The Military – It makes no sense that the United States should spend more than the next ten countries combined for national defense.  We have significantly more firepower than we need and as a result we tend to trot this ability out to other parts of the world and work towards “nation building”.  It’s time that we go back to the levels of military spending we had under previous administrations and even make larger cuts.  We just can’t afford the size military we have and the interventionists policies that we’ve developed.  We really cannot protect the entire world endlessly.

Tax policy – It’s not only the rich.  We do need to change tax policy on the richest Americans.  They do need to pay more, but so does everyone else.  Right now, we have close to fifty percent (50%) of Americans not paying any income taxes.  This just isn’t fair.  If we’re all to participate in the good things that our country has to offer, then we all need to participate in paying a “fair” level of taxes to support those activities.  Everyone should have “skin in the game”.

Public workers compensation packages – Thirty years ago people went to work for the government knowing they were going to make less money, but their job security was going to be very strong.  Today according to John Mauldin, we have a situation where government workers are paid on average forth percent (40%) more than their private sector counterparts.  This is more than unsustainable.  There is no reason government workers should have this sort of bonus and it needs to be brought under control if we’re to reign in our government debt issues

CONCLUSIONS:

The above suggestions and possible solutions are only the tip of the ice burg.  The problem is: WE NEED TO DO SOMETHING and do it quickly—like this year, right now.

 

 

 

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MOST HATED COMPANIES

February 3, 2018


The list of the “most hated American companies” was provided by KATE GIBSON in the MONEYWATCH web site, February 1, 2018, 2:20 PM.  The text and narrative is this author’s.

Corporate America is sometimes, but not always, blamed for a number of misdeeds, swindles, “let’s bash the little guy”, etc. behavior.  Many times, those charges are warranted.   You get the picture.   Given below, is a very quick list of the twenty (20) most hated U.S. companies.  This list is according to 24/7 Wall St., which took customer surveys, employee reviews and news events into account in devising its list: ( I might mention the list is in descending order so the most-egregious offender is at the bottom.

  • The Weinstein Company. I think we can all understand this one but I strongly believe most of the employees of The Weinstein Company are honest hard-working individuals who do their job on a daily basis.  One big problem—you CANNOT tell me the word did not get around relative to Weinstein’s activities.  Those who knew are definitely complicit and should be ashamed of themselves.  This includes those holier-than-thou- actresses and actors pretending not-to-know.
  • United Airlines. The Chicago-based carrier is still in the dog housewith customers after a video of a passenger being forcibly removed from his seat on an overbooked flight went viral last year. You simply do NOT treat individuals, much less customers, in the manner in which this guy was treated.  I wonder how much money United has lost due to the video?
  • Fake news, deceptive ads, invasion of privacy.  You get the picture and YET millions subscribe.  This post will be hyperlinked to Facebook to improve readership.  That’s about the only reason I use the website.
  • I don’t really know these birds but apparently the telecom, one of the nation’s biggest internet and telephone service providers, reportedly gets poor reviews from customers and employees alike. I think that just might be said for many of the telecoms.
  • This one baffles me to a great extent but the chemical company has drawn public ire at a lengthy list of harmful products, including DDT, PCBs and Agent Orange. Most recently, it’s accused of causing cancer in hundreds exposed to its weed killer, Roundup.
  • I’m a Comcast subscriber and let me tell you their customer service is the WORST. They are terrible.  Enough said.
  • I have taken Uber multiple times with great success but there are individuals who have been harassed.  Hit by complaints of sexual harassment at the company and a video of its then-CEO Travis Kalanick arguing with an Uber driver, the company last year faced a slew of lawsuit and saw 13 executives resign, including Kalanick.
  • Sears Holdings. Sears plans to close more than one hundred (100) additional stores through the spring of 2018, with the count of Sears and Kmart stores already down to under 1,300 from 3,467 in 2007. Apparently, customer satisfaction is a huge problem also.  The retail giant needs a facelift and considerable management help to stay viable in this digital on-line-ordering world.
  • Trump Organization.  At this point in time, Donald Trumpis the least popular president in U.S. history, with a thirty-five (35) percent approval rating at the end of December. That disapproval extends to the Trump brand, which includes golf courses, a hotel chain and real estate holdings around the globe. One again, I suspect that most of the employees working for “the Donald” are honest hard-working individuals.
  • Wells Fargo. At one time, I had a Wells Fargo business account. NEVER AGAIN. I won’t go into detail.
  • The insurance industry is not exactly beloved, and allegations of fraud have not helped Cigna’s case. Multiple lawsuits allege the company inflated medical costs and overcharged customers.
  • Spirit Airlines. I’ve flown Spirit Airlines and you get what you pay for. I do not know why customers do not know that but it is always the case.  You want to be treated fairly, fly with other carriers.
  • Vice Media The media organization has lately been roiled by allegations of systemic sexual harassment, dating back to 2003. One of these day some bright individual in the corporate offices will understand you must value your employees.
  • The telecom gets knocked for poor customer experiences that could in part be due to service, with Sprint getting low grades for speed and data, as well as calling, texting and overall reliability.
  • Foxconn Technology Group. Once again, I’m not that familiar with Foxconn Technology Group. The company makes and assembles consumer electronics for entities including Apple and Nintendo. It’s also caught attention for poor working and living conditions after a series of employee suicides at a compound in China. It recently drew negative press for a planned complex in Wisconsin.
  • Electronic Arts. The video-game maker known for its successful franchises is also viewed poorly by gamers for buying smaller studios or operations for a specific game and then taking away its originality.
  • University of Phoenix. I would expect every potential student wishing to go on-line for training courses do their homework relative to the most-desirable provider. The University of Phoenix does a commendable job in advertising but apparently there are multiple complaints concerning the quality of services.
  • I’m a little burned out with the NFL right now. My Falcons and Titans have had a rough year and I’m ready to move on to baseball. Each club sets their own spring training reporting dates each year, though all camps open the same week. Pitchers and catchers always arrive first. The position players don’t have to show up until a few days later. Here are this year’s reporting dates for the 15 Cactus League teams, the teams that hold spring training in Arizona.
  • Fox Entertainment Group. If you do not like the channel—do something else.  I bounce back and forth across the various schedules to find something I really obtain value-added from.  The Food Network, the History Channel, SEC Network.  You choose.  There are hundreds of channels to take a look at.
  • The consumer credit reporting was hit by a massive hack last year, exposing the personal data of more than 145 million Americans and putting them at risk of identity theft. Arguably worse, the company sat on the information for a month before letting the public know.

CONCLUSIONS:  In looking at this survey, there are companies that deserve their most-hated-status and, in my opinion, some that do not.  Beauty is in the eye of the beholder.  As always, I welcome your comments.


Portions of this post were taken from Design News Daily publication written by Chris Witz, August 2017.

I generally don’t “do” politics but recent activity relative to the Federal Jobs Initiative program have fallen upon hard times.  President Donald Trump has decided to disband the council of his Manufacturing Jobs Initiative. The announcement came Wednesday morning, after a significant exodus of council membership.  This exodus was in response to the President’s comments regarding a recent white supremacist protest in Charlottesville, VA.  By Tweet, the president said:

Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!

— Donald J. Trump (@realDonaldTrump) August 16, 2017

I personally was very surprised by his reaction to several members pulling out of his committee and wonder if there was not more to ending the activities than meets the eye.

The members counseling President Trump were:

Brian Krzanich—CEO Intel

Ken Frazier—CEO Merk & Company

Kevin Plank—CEO UnderArmour

Elon Musk—CEO of SpaceX and Tesla

Bob Iger—CEO of Disney

Travis Kalanick—Former CEO of Uber

Scott Paul—President, Alliance for American Manufacturing

Richard Trumka—President, AFL-CIO

Inge Thulin—CEO 3M

Jamie Dimon—CEO of JPMorganChase

Steven Schwarzman—CEO of Blackstone

Rich Lesser—CEO of Boston Consulting Group

Doug McMillon—CEO of Walmart

Indra Nooyi—CEO and Chairperson of PepsiCo

Ginni Rometty—President and CEO of IBM

Jack Welch—Former CEO of General Electric Company

Toby Cosgrove—CEO of the Cleveland Clinic

Mary Barra—President and CEO of General Motors

Kevin Warsh—Fellow at the Hoover Institute

Paul Atkins– CEO of Patomak Global Partners LLC

Mark Weinberger– Global chairman and CEO, EY

Jim McNerney– Former chairman, president and CEO, Boeing

Adebayo Ogunlesi– Chairman, managing partner, Global Infrastructure Partners

Phillip Howard– Lawyer, Covington; founder of Common Good

Larry Fink—CEO of BlackRock

Matt Rose– Executive chairman, BNSF Railway

Andrew Liveris– Chairman, CEO, The Dow Chemical Company

Bill Brown—CEO, Harris Corporation

Michael Dell—CEO, Dell Technologies

John Ferriola– Chairman, president, CEO, Nucor Corporation

Jeff Fettig– Chairman, former CEO, Whirlpool Corporation

Alex Gorsky– Chairman, CEO, Johnson & Johnson

Greg Hayes– Chairman, CEO, United Technologies Corp

Marillyn Hewson– Chairman, president, CEO, Lockheed Martin Corporation

Jim Kamsickas– President, CEO, Dana Inc

Rich Kyle– President, CEO, The Timken Company

Jeff Immelt– Chairman, former CEO, General Electric

Denise Morrison– President, CEO, Campbell Soup Company

Dennis Muilenburg– Chairman, president, CEO, Boeing

Michael Polk– CEO, Newell Brands

Mark Sutton– Chairman, CEO, International Paper

Wendell Weeks—CEO, Corning

Mark Fields– Former CEO, Ford Motor Company

Mario Longhi– Former CEO, U.S. Steel

Doug Oberhelman– Former CEO, Caterpillar

Klaus Kleinfeld– Former Chairman, CEO, Arconic

I think we can all agree; this group of individuals are “BIG HITTERS”.  People on top of their game.  In looking at the list, I was very surprised at the diversity of products they represent.

As of Wednesday, members departing the committee are as follows:   Kenneth Frazier, CEO of pharmaceutical company Merck; Under Armour CEO Kevin Plank; Scott Paul, the president of the Alliance for American Manufacturing; Richard Trumka, of the AFL-CIO, along with Thea Lee, the AFL-CIO’s deputy chief of staff; 3M CEO Inge Thulin; and Intel CEO Brian Krzanich.

In a blog post , Intel’s Krzanich explained his departure, saying:

“I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing. Politics and political agendas have sidelined the important mission of rebuilding America’s manufacturing base. … I am not a politician. I am an engineer who has spent most of his career working in factories that manufacture the world’s most advanced devices. Yet, it is clear even to me that nearly every issue is now politicized to the point where significant progress is impossible. Promoting American manufacturing should not be a political issue.”

Under Armour’s Plank, echoed Krzanich’s sentiment, expressing a desire to focus on technological innovation over political entanglements. In a statement released by Under Amour, Plank said,

“We remain resolute in our potential and ability to improve American manufacturing. However, Under Armour engages in innovation and sports, not politics …” In the past year Under Armour has gained attention for applying 3D printing techniques to shoe design and manufacturing.

Paul, of the Alliance of American Manufacturing, tweeted about his departure, saying, “… it’s the right thing to do.”

I’m resigning from the Manufacturing Jobs Initiative because it’s the right thing for me to do.

— Scott Paul (@ScottPaulAAM) August 15, 2017

President Trump’s Manufacturing Jobs Initiative, first announced back in January, was supposed to be a think tank, bringing together the most prominent business leaders in American manufacturing to tackle the problem of creating job growth in the manufacturing sector. At its inception the council boasted CEOs from companies including Tesla, Ford, Dow Chemical, Dell, Lockheed-Martin, and General Electric among its 28 members. However, over the course of the year the council had been steadily dwindling, with the largest exodus coming this week.

The first major blow to the council’s membership came in June when Tesla CEO Elon Musk resigned from the council in response to President Trump pulling out of the Paris climate accord. Musk, a known environmentalist , tweeted:

Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world.

— Elon Musk (@elonmusk) June 1, 2017

At that same conference, when asked why he believed CEOs were leaving the manufacturing council, the President accused members of the council of being at odds with his plans to re-shore more jobs back to the US:

“Because [these CEOs] are not taking their job seriously as it pertains to this country. We want jobs, manufacturing in this country. If you look at some of those people that you’re talking about, they’re outside of the country. … We want products made in the country. Now, I have to tell you, some of the folks that will leave, they are leaving out of embarrassment because they make their products outside and I’ve been lecturing them … about you have to bring it back to this country. You can’t do it necessarily in Ireland and all of these other places. You have to bring this work back to this country. That’s what I want. I want manufacturing to be back into the United States so that American workers can benefit.”

Symbolic or Impactful?

It is unclear whether the dissolution of the manufacturing council will have an impact on Trump’s efforts to grow jobs in the US manufacturing sector. Some analysts have called the council little more than a symbolic gesture that was unlikely to have had any long-term impact on American manufacturing to begin with. Other analysts have credit Trump as a driving factor behind a spike in re-shoring in 2017. However other factors including labor costs and lack of skilled workers overseas are also playing a significant role as more advanced technologies in industries such as automotive and electronics hit the market.

CONCLUSIONS:

I personally regret the dissolution of the committee.  I think, given the proper leadership, they could have been very helpful regarding suggestions as to how to create and/or bring back jobs to our country.  In my opinion, President Trump simply did not have the leadership ability to hold the group together.  His actions over the past few months, beginning with leaving the Paris Climate Accord, simply gave them the excuse to leave the committee.  They simply flaked out.

As always, I welcome your comments.

FARADAY FUTURE FFZERO1

January 5, 2017


I certainly had no idea engineers and automobile manufacturers have been working on autonomous or driverless automobiles for years. Experiments have been conducted on automating automobiles since the 1920.  Very promising trials took place in the 1950s and work has proceeded since then. The first self-sufficient and truly autonomous cars appeared in the 1980s, with Carnegie Mellon University‘s Navlab and ALV  projects in 1984 and Mercedes-Benz and Bundeswehr University Munich‘s Eureka Prometheus Projects in 1987. Since then, numerous major companies and research organizations have developed working prototype autonomous vehicles including Mercedes-BenzGeneral MotorsContinental Automotive Systems,  Autoliv Inc., Bosch, Nissan, Toyota, Audi, Volvo, Vislab from the University of Parma, Oxford University, and Google.  In July 2013, Vislab demonstrated the BRAiVE, a vehicle that moved autonomously on a mixed traffic route open to public traffic.  

As of 2013, four U.S. states have passed laws permitting autonomous cars: NevadaFloridaCalifornia, and Michigan.  With the intensity involved, I’m quite sure there will be others to follow.   In Europe, cities in Belgium, France, Italy and the UK are planning to operate transport systems for driverless cars, and Germany, the Netherlands, and Spain have allowed testing robotic cars in traffic.

There is absolutely no way progress could be accomplished without technologies such as GPS, proximity sensors, visual cameras and of course the software necessary to drive each system and integrate each system so success may result.  These technologies will continue to improve over the next few years.  I heard a comment yesterday that indicated if your son or daughter is under ten years old, he or she may never have the need for a driver’s license.  Time will tell.

CLASSIFICATIONS OF DRIVERLESS VEHICLES:

The American Society of Automotive Engineers has developed five stages or classifications of autonomous automobiles.  These stages are as follows:

sae-classifications

FARADAY FUTURE FFZERO1:  THE CAR

I would like to introduce to you now the FARADAY FUTURE FFZERO1.   Future’s 1,000-horsepower concept car should make Tesla very, very nervous.  The media announcement was made just this week and is as follows:

LAS VEGAS — With a thumping bass soundtrack in a lengthy airplane hangar-like building in Vegas, Faraday Future unveiled their new FF 91 electric “super car” on 4 January 2017.

The automaker was criticized at last year’s Consumer Electronics Show (CES) for showing off their FFZERO1 concept car, which turned out to be more style than substance. This year’s unveiling of the FF 91 was different, in that they attempted to show off a real vehicle that consumers will be able to order soon.

Filled with more hyperbole and superlatives than a car show and tech conference combined, Faraday Future promises the fastest acceleration for a production automobile at 0-60mph in 2.39s with a whopping 1050hp. They also laid claim to the most advanced battery technology in the industry, and boldly claimed they would disrupt all aspects of the car industry.

Faraday Future even dared to put themselves on a roadmap of “historical steps in technology,” equating their electric vehicle to the creation of the electric motor by Michael Faraday, alternating current by Nikola Tesla and even the internet by Tim Berners-Lee.  Digital pictures that follow will indicate the overall design of the vehicle. The first JPEG shows the initial rollout and introduction at the CES 2017 this week.

unveiling-and-media-announcement

faraday-concept

faraday-2

faraday-1

DESCRIPTION:

First off, although it’s a concept high-performance one-seater, it rides on FF’s new Variable Platform Architecture (VPA) on which it will base all its future cars. Essentially, it’s a skateboard-style chassis with that allows FF to easily scale up or down the platform for different vehicle types.  Moreover, with this layout, FF can have one, two or three motor setups, making for front-, rear- or all-wheel drive. And, from a safety standpoint, the structure also makes for larger crumple zones. While the variable chassis is all well and good, you won’t spend any time interacting with it, really. You will, however, spend lots of time in the FF cabin. Thankfully, that’s been as well thought out as the platform.

Inside the FFZERO1, just like future FF production cars, the steering column has been fitted with a smartphone. This allows it to become the focal point for the interface between the driver and the car — from sitting behind the wheel or from inside the owner’s home. When commanded by that smartphone, the autonomous FFZERO1 (oh, yeah, it can drive itself, too) can come retrieve the driver.     More of that as we move along.

The driver sits at a perfect 45-degree angle that is most beneficial to circulation in a seat derived from NASA designs. There, the driver can easily view the propeller-shaped, asymmetric instrument panel. Moreover, in this electric race car, the driver wears an unique Halo Safety System with integrated head and neck support, oxygen and water supply — combined into a prototype helmet.

Rethinking where passengers are placed in a vehicle, since all the power components are beneath the driver rather than in front, Faraday Future designers pushed the driver near the front and shaped around the single seat a “perfectly aerodynamic teardrop profile.” This is accented by FF’s soon-to-be signature ‘UFO line’ that runs around the center of the vehicle. This mystical line and is, as FF put it, “intended to give the sense that this vehicle is not completely of this world.”

Combining form and function, FF has created aero tunnels that run through the interior length of the vehicle. These allow air to flow through the car rather than around it. More than accentuating the alien look of the thing, the tunnels also dramatically reduce drag and improve battery cooling. This does away for any need of bulky, space-stealing radiator.  This is truly an innovative design and one that surely will be copied by other manufactures.

Amazingly, all of this was pulled together in just 18 months when the team of multidisciplinary experts from the technology, automotive, aerospace and digital content came together to create a new line of electric cars. Apparently working nights and weekends, FF was able to take the all-digital FFZERO1 and turn it into the concept model you see today.

The FFZERO1 unveiling comes after news of FF’s plans to invest $1 billion, reportedly backed by the Chinese, in the creation of a 3 million-square-foot manufacturing facility in North Las Vegas. FF plans to break ground on this phase one investment in the next few weeks, ultimately employing 4,500 people.

Now, if you’re anything like me, you’re already wondering how such a team and design happened to come together so quickly and create something that seems not only promising but also industry-changing. Is Faraday Future the cover for the long-rumored Apple Car set to debut in 2019? I guess we’ll have to wait and see.

SELF-DRIVING:

A very impressive demonstration was the self-parking capability of the vehicle itself.

self-parking

The company demonstrated a self-parking capability in the lot outside, showing the car searching the aisles for an empty space and then backing in to it.

COSTS AND AVAILABILITY:

Faraday plans to release the FF91 in 2018. To pre-order, hopefuls will need to provide a refundable $5,000 (£4,080) deposit.  Prospective buyers were told they would be able to connect to the forthcoming car via a virtual “FFID” account.

“For the car to have a 130-kWh battery pack, it would be very heavy, and very expensive – extremely expensive to have a battery that size.”  On stage, Faraday executive Peter Savagian explained that the FF19 would be chargeable from various electrical standards. He added its range would extend to 482 miles (775km) when driven at 55mph. Many analysts expect interest in electric vehicles to continue to rise in coming years. “We estimate around one in 10 vehicles will be electric or hybrid by 2020, at around 8 million vehicles,” said Simon Bryant at analysts Futuresource.  I personally feel this is very optimistic but time will certainly tell.  I do not plan on owning a driverless vehicle in my lifetime but who knows.

As always, I welcome your comments.

CROWDFUNDING

March 20, 2016


If you have an idea you feel will be profitable over the long haul, you will no doubt be very interested in commercializing that idea and turning it into an on-going company or even a not-for-profit company.  At any rate, you will need financing.  Have you tried getting a bank loan for an idea lately?  Ever tried getting an SBA loan?  If so, you know the odds of success are very limited, even for a project or product that is seemingly “bullet-proof”.  You may have credit that is pristine but the odds are still not in your favor.  Money is remarkably tight because banks and other lending institutions have no idea as to where our economy is going or what might be the next “big thing”. Our government, you know the one supposedly on our side, has burdened this country with so many regulations and taxes we are literally stagnating to the point of no real return.   For this reason, banks are remarkably risk-averse at this time in our country’s history.    You better know somebody to get the money and it very well may take forever at that.   This just might be where crowdfunding has a huge advantage.

DEFINITIION:

I think the very best thing we can do is start off with a definition of crowdfunding.  Just what is it?  Then we will discuss how it works:

Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, today often performed via internet-mediated registries, but the concept can also be executed through mail-order subscriptions, benefit events, and other methods.

According to a new survey of one thousand people, only twenty-nine percent (29%) of Americans have heard of this funding method, in which individuals donate cash in exchange for a portion of a company’s ownership. The research was conducted by a third party on behalf of equity crowdfunding company NextGen Crowdfunding.com.  This was after the Securities and Exchange Commission voted to approve Title III equity crowdfunding rules on October 30, 2015.  According to Entrepreneur Magazine:

“The Securities and Exchange Commission voted 3-1 to adopt the next generation rules for equity crowdfunding this morning for entrepreneurs and small-business owners. Equity crowdfunding is the exchange of a piece of a company for cash. Before today’s ruling, entrepreneurs could only sell pieces of their companies to accredited investors, or those individuals who meet sufficient levels of assets and income. With the passing of this new set of rules, entrepreneurs can sell pieces of their companies to anyone who has the interest and cash to do so.”

The JOBS Act, signed into law in April of 2012, made equity crowdfunding for unsophisticated investors legal, but it has taken the SEC more than three and a half years to wrangle a set of rules for how equity crowdfunding should be implemented.  This is how our government works.  I wonder how many members of Congress had to be guaranteed campaign money by special interest groups to get this passed?  At any rate, I do think the possibilities are great and can have beneficial significance.

SUCCESS:

OK, what does it take to be successful?  Let’s look.

  1. Solve a real problem.  You must create a product or process that people want to buy. It must be marketable.  You have to have something of a viable nature to sell.
  2. Do your homework. The success of any crowdfunding effort is inextricably linked to the amount of hard work you put into testing and refining your idea long before launching the campaign. You MUST look at any competition you may have.  Determine what sector of our country might purchase your product.  What is the “staying power” of your product?
  3. Bring money to the table-– Crowdfunding shouldn’t be your first source of money.  You, as the inventor, must have skin in the game.  You have to initially contribute.
  4. Get a smart funding goal—You MUST make a distinction between how much money you would love to have and how much money you need.  Develop a one year, three year and five year business plan as well as a first year cash flow spreadsheet.  If you don’t know how to do this—LEARN. Learn before you make your first presentation asking for financing.
  5. Make an effective presentation relative to your idea—People are drawn to a vision, a dream, a hope.  They are looking for eventual success. If you cannot articulate this vision you are SUNK.
  6. It’s not always about the money—Listen to those individuals who have ideas as well as interest in becoming part owners and contributors to your idea(s). Feedback can drive product design.  The product you start out with may evolve into an eventual offering far better than you first envisioned. This is critical.
  7. Make the campaign your passion--Managing an active crowdfunding campaign is an intense process. “It’s not only full-time for one person, it’s full-time for everyone in the company,” says Gyalokay. Sager agrees. “When we ran our campaign, the entire team was 100% focused on crowdfunding,” he recalls. “We sent out multiple surveys to our backers. I personally answered 3,000 emails in the first week.” Although it can be a nearly overwhelming experience, the campaign offers a valuable opportunity to engage with your backers. “We believe that if we can have a dialogue with the market, we can be successful,” says Fish. “We decided to host a separate forum for our backers, to continue the conversation beyond the crowdfunding campaigns.”

THE BEST CROWDFUNDING SITES:

The best crowd-funding Internet sites are:

  • Chuffed.org
  • Fundly
  • Crowdrise
  • Indiegogo
  • GoFundme
  • Kickstarter
  • Buzzbnk
  • JustGiving/Yimby
  • Pozible
  • Startsomegood
  • NextGen Crowdfunding

Here again, do your homework.  Look at all crowdfunding web sites and determine which one or ones, if any, meet your needs.  Each web site lists the fees, if any required and how they manage your request, so study each as you would prior to taking a university final exam. You may save yourself a great deal of heartache later on.    You also may develop other ideas also and if so, factor those into your business plan.

I am constantly amazed at the resourcefulness of the American people.  Crowdfunding would have never come to fruition if lending institutions were willing to look at people with ideas.  It’s always been tough but in today’s economy, it’s doubly tough.  Maybe this method of raising money is good for you.

DO YOUR HOMEWORK.  WATCH OUT FOR SCAMS.  They are out there.

EXPORT-IMPORT BANK

December 10, 2015


In recent weeks the Export-Import Bank has been in the news—some positive and some negative.  I have never interfaced with the bank or had cause to contact the bank so I was very interested in doing cursory research to see just what services they give.  Here is what I found.

The Export-Import Bank of the United States (EXIM Bank) is an independent, self-sustaining agency with an eighty-one (81) year record of supporting U.S. jobs by financing the export of American goods and services. Established in the wake of World War II, when crippled foreign markets were strong enough to purchase American products, the Export-Import Act of 1945 has been renewed by Congress sixteen (16) times without a political fight.  This year (2015) that fight has been intense due to some feeling the bank is unnecessary and caters to the largest of corporations.  According to some, the bank is unsustainable, and, according to the Congressional Budget Office, is set to cost taxpayers $2 billion over the next ten years.  This figure doesn’t take into account the opportunity cost of diverting these taxpayer dollars, money which could be utilized elsewhere in the economy.  Tax dollars should go toward fixing roads and infrastructure, funding troops and national security, not toward funding private transactions for America’s largest Fortune 100 corporations.  After a five-month hiatus–one that cost businesses billions of dollars worth of credit guarantees and insurance for overseas business opportunities–the 81-year-old agency regained authorization to once again begin supporting the export operations of thousands of its business customers. The bank had been forced to suspend operations following a long campaign by Republican lawmakers, who want to close the financing agency because they see it as an example of “crony capitalism” that assists only the nation’s biggest businesses.

With that being the case, on December 4, 2015 President Obama signed legislation reauthorizing the charter of the Export-Import Bank of the United States (“US Ex-Im Bank”) through 2019. The reauthorization is part of a 5 year, US $305 billion transportation funding approved by both houses of the US Congress. As a result, US Ex-Im Bank will begin doing new business again, ending for now a long and well-publicized debate about the future of the US’s official export credit agency.  There still is controversy.

On the plus side, by financing the export of American goods and services, EXIM Bank has supported 1.3 million private-sector, American jobs since 2009, supporting 164,000 jobs in FY 2014 alone.

With nearly sixty (60) other export credit agencies around the world trying to win jobs for their own countries, EXIM Bank helps level the playing field for American businesses. “Made in America” is still the best brand in the world, and EXIM Bank ensures that U.S. companies never lose out on a sale because of attractive financing from foreign governments.

In FY 2014, Export-Import Bank financing supported $27.5 billion worth of U.S. exports. $10.7 billion of that total represents exports from U.S. small businesses, making small business exports the top category for EXIM Bank supported exports last year.

While the Ex-Im Bank projects to save the US government $14 billion over ten ( 10 ) years, an alternative analysis from the Congressional Budget Office found that the program would lose about $2 billion over the same period, partly due to discrepancies how credit risk is accounted for. Both conservative and liberal groups have been critical of the bank, and some continue to call for its closure.  President Barack Obama was critical of the bank during his presidential candidacy, but has since become a supporter of the program. Let’s take a look at where the money goes by  category.

Bank Segments

The three largest beneficiaries of Ex-Im financing are Boeing, General Electric and Caterpillar, not small businesses by any definition of the word.  In fact, those three are multinational conglomerates that can most certainly find private financing elsewhere.  That goes directly against the bank’s own charter, which states that the bank should provide export financing only for “export transactions that are unlikely to proceed without Ex-Im support.”  In 2012, Boeing alone received 83 percent of all loan guarantees, and in 2013, just five corporations received 93 percent of all Ex-Im loan guarantees.

Private lenders, like JP Morgan Chase, and Citibank, benefit as well.  When Ex-Im finances transactions, a private lending institution holds the debt for the transaction and is able to charge an interest rate to the borrower.  Because the transaction is backed by the full faith and credit of the United States, they hold this debt practically risk-free.  These giant lending institutions churn a profit, without housing any of the risk.

Nearly 99 percent of all U.S. exports are financed without the bank’s help. In fact, the bank penalizes those other 99 percent of U.S. exports by distorting the market and putting them in an anti-competitive position, forcing them to compete with companies who do receive federal loan subsidies at more favorable rates.

I’m not a finance “guy” so I can’t pass judgment on the bank and its operations.  I do know much greater “advertising” needs to be accomplished to alert small businesses that financing is available through the bank.  You would think the U.S. Chamber of Commerce would lead this effort and spread the work.   If we consider our trade deficit, we find a huge imbalance. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.9 billion in October, up $1.4 billion from $42.5 billion in September, revised. October exports were $184.1 billion, $2.7 billion less than September exports. October imports were $228.0 billion, $1.3 billion less than September imports. The October increase in the goods and services deficit reflected an increase in the goods deficit of $2.1 billion to $63.1 billion and an increase in the services surplus of $0.6 billion to $19.2 billion. Year-to-date, the goods and services deficit increased $22.2 billion, or 5.3 percent, from the same period in 2014. Exports decreased $84.7 billion or 4.3 percent. Imports decreased $62.5 billion or 2.6 percent.

Exports of goods decreased $3.1 billion to $123.8 billion in October. Exports of goods on a Census basis decreased $3.0 billion.  Industrial supplies and materials decreased $1.6 billion.

  • Fuel oil decreased $0.4 billion.
  • Other petroleum products decreased $0.4 billion.
  • Capital goods decreased $0.9 billion.
  • Industrial engines decreased $0.5 billion.

As you can see, we are losing the trade balance battle.  As I mentioned, maybe greater emphasis should be placed on alerting small businesses that the “bank” is ready and willing to work to enhance exports from small and mid-cap companies.  Just a thought.

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