Technology Can Drive Us Out of This Fog

Driverless cars, don’t worry there’s a BMW and Audi, too.

“Driverless cars,” what better message to tell government to get out of the way!

“This fog” being the deficit.  In fact we are in a fog and missing the “byte”when we as a country, look towards investing more in asphalt highways, in roads and rail and less towards technology, the information highway to invest in our future competitiveness in the global marketplace.

The future is technology and “smart or driverless cars” Yes, cars that drive themselves. 

Admittedly they have to “learn the course.”  Like on HWY 5 in LA bumper to bumper smart cars will drive at 80 mph during rush hour.  Think about navigating your iPad or reading your Kindle while your smart car drives itself.  Your commute can be cut in half because your car’s the ass who tailgate the car in front of you without getting flipped “the bird” or into a “fender bender.”  Who needs more infrastructure?

Currently we are chasing four economies in global competitiveness, including Number One, Switzerland.  Number Two is Singapore?  Number Three is Sweden and Number Four is Finland.  We’re Number Five.  Number Five!

Read my Blog post India Gets IT! Information Technology that is….  The message should be clear.  Most ground breaking technology (IT)  is spawned by small business.  I know.  I am the founder and CEO of an IT business who has spawned new products that include all the ingredients of a successful small business that can compete globally.

I consider myself a grinder, maybe a lone wolf.  Prideful.  A do-it-yourselfer.  Is that the definition of an entrepreneur?  It depends on who you ask.  Is that the definition of a small business owner?  More than likely the answer would be “yes.”  The difference between an entrepreneur and a small business owner?  None, until the entrepreneur, who is an idea capitalist who chooses outside angel or VC investors.

Everybody has heard of the IPO bubble in the early 2000’s where billions of investment dollars were squandered on ideas.  I pride myself by coining the phrase, “An idea is only worth it’s execution.”  The idea capitalist who decides to  forego outside investors, the grinder, the small business person, is more likely to sustain upticks and downturns in the economy.

We have a 14B deficit.  We have  over 9% unemployment,  We can argue how we might cut entitlements or raise taxes on the rich all day long.  The bottom line is all we want is our cake and eat it too. So I’ll let the experts argue what we need to do to stimulate the economy, reduce the deficit and add jobs.  Afterall they have all the answers, don’t they?

Unfortunately the answer is “no.”  Instead of idea capitalists, we have intellectual genocide where MSNBC pundits who have never had an original idea in their lives, interview (bait) Herman Cain about his 9.9.9 proposal and dismiss it with the age old adage that assumes “poor people” spend more of their  income? on consumer goods than rich people therefore a national sales tax is a burden on the poor.  Since poor people have little or no income how does this equate?  Herman Cain is an idea capitalist.  He is a grinder.  Given the opportunity, he will be successful in helping the US create jobs, lower the deficit and increase our global competitiveness.

The real answer is to increase small business competitiveness in a global economy.  The Obama administration wants to spend billions more on infrastructure.  All I can think of are traffic cones and hard hats standing in our way and in the way of the progress we are making in new technology.  Technology that solves the infrastructure problems and creates jobs.

“It makes little sense for the United States to turn away highly educated immigrants who seek to come here. It makes equally little sense to train talented foreign students in our universities but then fail to integrate them into our economy. Nearly 300,000 foreign students are enrolled in advanced degrees programs here, but the great majority will return home. We are casting away the fruits of our own investment. As has long been our American tradition, we should encourage the world’s innovators, inventors, and pioneers to immigrate to the United States and we should encourage those we train to settle and create jobs here.”  Romney for President (2011-09-01). Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth

 Visa Caps for Highly Skilled Workers

As president, Mitt Romney will also work to establish a policy that staples a green card to the diploma of every eligible student visa holder who graduates from one of our universities with an advanced degree in math, science, or engineering. These graduates are highly skilled, motivated, English-speaking, and integrated into their American communities. Permanent residency would offer them the certainty required to start businesses and drive American innovation.  Romney for President (2011-09-01). Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth.

Mitt Romney, Idea Capitalist

Are jobs coming back to the US?  Case in point.  A big business goes overseas to China  to make an integral component of a product going to market.  The product can be produced at 50% of the cost to produce the part in the US.  The product made overseas requires a delivery timeframe of 12 weeks as opposed to 4 weeks in the US.  The part is produced and delivered but not according to spec.  A US company, TJH Manufacturing, Zion, IL, with a stellar reputation is recruited to re-engineer and deliver the part in time for market.  The big business with the overseas propensity ends up paying four times the originally anticipated product cost.

My vote is for a “driverless government,” but first we have to put Congress and the Administration through the course.  Let’s start by teaching them the constitution.

A Suggestion On How The Government Could Help The Housing Industry

The housing glut has the entire economy in handcuffs!

Here’s a great approach to get the folks who “deserve” the American Dream a chance!  This proposal from Blair Rugh at Trinovus is a government stimulus plan that will work! 

A Suggestion On How The Government Could Help The Housing Industry

by Blair Rugh

I have a suggestion on how government could help the housing industry. I am reasonably confident that neither President Obama, his economic advisors nor members of Congress read this weekly newsletter. But when you write something that has a reasonable circulation you never know where it will wind up, so here goes.

Three facts we know for sure. (1) The U.S. housing market is in the dumper. Some areas are worse than others, but no area has been unaffected. (2) The volume of foreclosures has harmed low- and middle-income borrowers, particularly African- Americans and Hispanics disproportionately. Many of the people foreclosed upon had no significant asset other than their home. (3) The provisions of the Dodd Frank Act relative to underwriting requirements and loans that can be sold in the secondary market, market conditions and enhanced regulator scrutiny and criticism of all lending will make it much more difficult for future borrowers to get a loan. For good, bad or indifferent the actions of the government and the regulators make it significantly more difficult for the housing industry to recover. Until it does, it will be difficult for the economy to recover.

There are a lot of qualified people who still have a job and can afford a reasonable payment on a home but cannot or will not be able to purchase one because they do not have the down payment. In today’s world, for a working class family, it is virtually impossible to save enough for a reasonable down payment. The husband and/or the wife may both have stable jobs and a stable income but saving the $20,000 or $30,000 required to make a down payment that will qualify them for a loan that they can afford is almost out of sight. Today’s housing prices are as low as they have been in the last 10 or 15 years. If we can just get qualified people into the system, it would be a great advantage for them and if we can deplete the nation’s housing inventory at the same time it would be a great boon to an economic recovery.

Let’s lend qualified borrowers a reasonable down payment on a home purchase, say a maximum of $20,000. Were it mine to do, I would make it available only to persons who do not presently own a home. The goal is to deplete the existing housing inventory, which is not accomplished if someone who owns a home is just moving up. Second, I would limit it to homes that were built before a specified date, say June of this year. The purpose of my plan is not to spur new construction directly. That will happen if the existing inventory of vacant housing is depleted. I would not have the federal government do it directly as I am not sure at this point if the federal government can do anything efficiently. I would have the federal government provide block grants to the various states depending on each state’s inventory of vacant homes.

I would grant the homebuyer a loan that would be secured by a junior mortgage on the home. The mortgage would not bear interest in the initial years and then after a reasonable period of time would require interest at some reduced rate. The loan would be payable upon the sale or transfer of the property or at some reasonable time in the future, say 10 years after it was granted. That should provide the homebuyer sufficient time for the housing market to recover its value and to reduce the first mortgage so that refinancing is achievable.

If 100,000 people qualified for the program, the government outlay at the maximum amount of $20,000 per loan would be $2 billion. While that is a lot of money to anyone I know, the federal government seems to treat it as you and I treat pocket change. And more to the point, it is not an expense of that amount as if properly handled the bulk of the money will be eventually repaid. What I suggest has to be refined and better thought out, but I think it is a viable solution to the housing mess. Moreover, it will put qualified people into housing that they can afford. I am generally pretty conservative and against any government assistance programs. I don’t like social security, Medicare, food stamps or anything similar to those programs. I think government should provide everyone an equal opportunity and then let the chips fall where they may. In this instance, however, the government created the problem so I think it takes a government program to hasten the recovery. The purpose of the program is not to provide relief to anyone but to rescue the housing industry. If it has a collateral result of helping people that is even better. I know you can improve on what I suggest. Add your improvements, and if you think it is a good idea make your representative or senator aware of it.

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