11.11.08
Posted in General Management, Political, Small Business at 23:24 by lnxwalt
Starting, growing, and operating a small business is an all-encompassing job. It includes many tasks that we do not always associate with business. For example, if you are in business, you are affected by (and in turn have some minimal effect upon) the economy. You are affected by taxation. You are affected by education. You are affected by policy decisions made by pointy-headed bureaucrats, decisions that benefit LOOACs at the expense of SLOBs.
This means that any small business forum or discussion must admit that questions of faith, politics, societal improvement, and economics are germane to any competent business discussion. After all, if your faith does not influence or govern the way you run your business, you don’t really have a faith. If your voice is not allowed in a political or social discussion, then whose voice will be? If you, the provider of jobs, are not included in talks about jobs in the inner cities or jobs for ex-convicts, how can these problems be addressed? When talk turns to taxation, you, the payer of taxes, need to be the first and foremost part of the discussion.
Zoning issues, environmental regulations, safety regulations, all affect you, and not just negatively. Safety regulations, for example, reduce your insurance costs by reducing accidents and reducing the damage caused by those that do occur. Zoning can prevent “Big Blue” from opening a superstore across the street from your little grocery, or it can keep you from opening in the part of town you desire to serve. Even economic empowerment initiatives, which often involve tax subsidies for businesses that open / move into certain areas and hire local residents, affect you. This is especially true if you are already in the area and your taxes are being used to subsidize competitors who move into your market area.
Small business is an everything job. Everything you are, everything you do, everything you believe is all wrapped up in that enterprise. And if it is not, you should be thinking about how you’re going to replace your business, because you have certainly lost your hunger and desire.
Therefore, do not feel that you cannot or should not be involved in the debate around any issue, whether schools, the economy, taxes, or foreign imports. You will be among the first affected by any decision that is made, so get involved. Attend your town’s board and council meetings. You cannot hit them all, but pick one or two and hit those (school board, water district, sewer district, cemetery district, irrigation district, public power district, resource conservation district, park district, fire protection district, et cetera). If we are going to make this country run right, it is going to be small business owners that make it happen.
small business
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08.11.08
Posted in Political, Society at 5:02 by lnxwalt
The Poverty Business
In recent years, a range of businesses have made financing more readily available to even the riskiest of borrowers. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side: Innovative and zealous firms have lured unsophisticated shoppers by the hundreds of thousands into a thicket of debt from which many never emerge.
Federal Reserve data show that in relative terms, that debt is getting more expensive. In 1989 households earning $30,000 or less a year paid an average annual interest rate on auto loans that was 16.8% higher than what households earning more than $90,000 a year paid. By 2004 the discrepancy had soared to 56.1%. Roughly the same thing happened with mortgage loans: a leap from a 6.4% gap to one of 25.5%. “It’s not only that the poor are paying more; the poor are paying a lot more,” says Sheila C. Bair, chairman of the Federal Deposit Insurance Corp.
In college classes on finance, we learned that reward follows risk. In one particular class, FIN 432: Financial Institutions and Capital Formation, we discussed in great depth the thrift crisis of the 1980s. One of the primary causes was the removal of the interest caps that limited the amount of interest that banks and other consumer finance institutions could charge and collect. Overnight, rates went up and most of their assets consisted of long-term fixed rate real estate loans.
In today’s economy, one of the chief problems is that those caps are not low enough and any enforcement is long after the fact. It does not take much looking around to realize that there is an imbalance. People, like the woman in the article, are placed at a disadvantage versus lending corporations, who control the contracts to prevent individual consumers from having any legal refuge or remedy. Even the extreme remedy, bankruptcy, has been stripped of some of its restorative power, as some debts may survive bankruptcy.
I call upon Congress and our regulatory agencies to immediately act to contain and restrain the actions of all consumer finance lenders. The next US Attorney General should set a goal of marching fifty financial industry CEOs into courtrooms in orange jumpsuits and leg irons in the first eighteen months of the next administration. Already, many people do not vote because they do not see their voices as being heard. They feel that their votes have no effect on the course of this nation or their day to day lives. But fifty no-bail arrest warrants, complete with heavy TV coverage, will do a lot to restore confidence in our system of governance. I suggest that the fifty CEOs be accompanied by 25 CFOs and 25 regulatory agency heads (or employees, where applicable) who stonewalled action against the misbehavior.
It would be too much to hope for public hangings. If that woman saw the person who arranged her exploitive auto loan hanged, she would begin to have hope that justice will prevail, and so would numerous others who have experienced similar situations. However, we will have to be content with prison sentences for the scumbags getting rich by targeting lower-income people with take-it-or-leave-it financing contracts. This, even though they risk turning us into one of those third world countries where they change leadership as often as we change our underpants.
I also want to take this opportunity to praise the honestly-run, small locally-owned businesses (SLOBs) in your community. There are plenty of scammers, large and small, but the honest SLOBs deserve your business. They deserve your support. They deserve your advocacy. They are the businesses that will hire your nephew, your brother-in-law, and the kid down the street. While the big guys lay off more people than they hire, smaller businesses are the ones that keep the economy going. Shop the local stores, buy the locally-produced products, hire locally-owned companies for your service needs, do at least some of your banking with a locally-owned bank. Celebrate your small, locally-owned businesses (SLOBs), for they are real American heroes.
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05.26.08
Posted in Economy, Political at 1:14 by lnxwalt
Even while the bad economic news continues, we need to continue to invest in our communities. Instead of giving tax breaks to large corporations that move operations into the area (which are paid for by smaller businesses and families), we need to use a two-fold strategy:
- Invest in building small, locally-owned businesses in the community, particularly those whose product or service is sold to buyers outside of the area. They bring funds into the local economy, and are intimately tied to the local area by the residency of their owners.
We should not be afraid to set goals for hiring of local employees, including both number and compensation levels of those employees. Nor should we be afraid to work out a deal to help with job-skills training for the employees that get hired. Remember that during the heyday of aerospace in Southern California, it was said that each job supported five other jobs in the economy. We may not reach that level, but even 1.5 other local jobs is preferable to giving funding to big box retailers paying minimum wage and costing more jobs than they bring.
- Find an area of town with reasonable land costs and build whole communities of “starter homes”. The idea is that people earning the local median income should easily be able to afford these homes. This helps with stabilizing the economy (homeowners have a reason to participate in making things better, where renters do not) and with helping your local construction, real estate, and financial industries to recover from the recession.
It does not have to be solely funded by taxpayers. A cooperative project with a group like Habitat for Humanity can have a wonderful effect on the area. Habitat often has the buyer help with the construction, which gives them some skills and experience they’ll need during the maintenance phase, and which may even open the door to a new career in construction.
In areas where it is possible, these homes should be heavily-insulated (protects occupants from temperature extremes, reduces utility costs) and maybe even utilize solar and wind generators to augment the power grid. Also, make housing areas as close to business areas as possible. Ideally, employees will be able to walk to work (this means that businesses have to follow strict environmental and safety standards, including regular inspections by regulating agencies).
What we know is this: Washington is too “bought and paid for” by large corporations that have too much at stake to truly be concerned about your little community. Instead, your community needs to take the lead and break its dependency upon outside funding, imported goods, and the now-nonexistent loyalty of corporate America. Let me say it again: most of what your community needs will not come from the feds.
Your small business is intimately tied to your community by the fact that you live and work there. This is even more true if your customers live or work there. It is in your best interest to begin promoting these concepts to your town or city council members and staff. Join your local chamber of commerce or other local business alliances and make sure they also understand and work toward this goal.
We already know from past experience that giving subsidies to large companies to come into your town does not work. Your taxpayers pay up front, and before the company’s contribution matches the benefit it received, it closes up shop and moves to the next town. The large discount retailer nicknamed “Big Blue” is well-known for this strategy, leaving empty stores in town after town. It is time to return to something that works: local community investment in local businesses is a key part of a strategy for preserving your community’s economic future.
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05.15.08
Posted in FLOSS, News and Announcements, Political, Society at 1:01 by lnxwalt
Standards attorney Andy Updegrove announced the creation of the Hague Declaration recently. The Hague Declaration is a statement of human rights on the Internet. But it is more. Without being overly verbose about it, the Declaration also promotes free software, where “free” is not about the price of the software, but about the freedom that the user of that software gains.
I want to encourage you to visit Mr. Updegrove’s blog to read his statement, and then to go to the site to sign the Hague Declaration. As a follow up, write your elected representatives to encourage them to require government agencies to use vendor-neutral, open standard file formats, such as ODF.
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05.11.08
Posted in Political, Small Business at 17:11 by lnxwalt
I have recently made several posts on political subjects.
The object isn’t primarily political (as in pro or anti this or that candidate), however, but to help mold the agenda to focus on SLOBs as the key to our economy and our society (in conjunction with another small, local unit, the family).
For small towns in far away areas around major cities, SLOBs provide the economic wherewithal to keep the town going when economic swings cause large, out-of-area corporations (LOOACs) to retreat. Because they are locally-owned, their interests are intimately tied to those of the local economy. Because they are small, they are less likely to be able to coerce local governments into sacrificing residents’s interests for the benefit of the business. Certainly SLOBs are not a panacea for every possible ailment, but they are a fundamental piece of bringing about a locally-focused economy where fewer individuals are marginalized.
When the glass factory, the slaughterhouse, and the furniture store leave your town, the only way your community will keep going is to have a strong local economy, based upon smaller, locally-owned businesses, and not upon LOOACs.
The Victor Valley’s cities are currently oriented toward attracting LOOACs, rather than organically growing their economies through backing SLOBs. This must change, if we are to have any chance of adequately employing all or nearly all of our residents. The best thing about backing SLOBs? No tax subsidies! All they really need to do is fund the training and education work of the local college and help with loan guarantees for smaller start-up businesses. Barstow, in a similar state, needs to back its college and help with start-up funding for its local residents. LOOACs ask for all of this and tax subsidies too!
For inner cities, SLOBs, rather than LOOACs, are the key to bring about prosperity. LOOACs hire hundreds or even thousands of people at once, and therefore attract applicants from far-away parts of the city, often leaving nearly as many local area residents unemployed (or underemployed) as there were before the corporation’s arrival. They also use that large number of jobs to extract tax and other concessions from city governments. In essence, your local minimart probably pays extra taxes in order to allow “Big Blue” to bring a few hundred minimum-wage jobs and Chinese goods to the market.
Small, locally-owned businesses cannot exist in isolation, if we want the local community and economy to benefit. There must be a veritable ecosystem of small, locally-owned suppliers, distributors, and retailers to help the community become resilient against the various twists and turns of the wider economy. But there is more: SLOBs are more strongly integrated into the local community, sponsoring Key Clubs and youth sports, ponying up funding to send the local band to a competition in the state capital, hiring your brother-in-law who just got out of jail, and giving a first employment experience to your neighbor’s high school kid. Because SLOBs lack the resources to go it alone, they are more likely to support your local community’s attempt to bring about high-speed Internet access, towers and infrastructure for mobile telephone service, and better lab facilities at your local high school and local college.
In remote farming communities in middle America, SLOBs may be the only things still keeping some towns on the map. When LOOACs leave a farming-based community, or during times of consolidation, where smaller, family-operated farms are gobbled up by large, corporate-operated agricultural businesses, graduates often have no choice but to leave the area.
So it is vitally important that any so-called small business advocate makes his voice heard on political choices that will affect the direction of our national policies toward smaller businesses.
Tags: political, small business
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05.04.08
Posted in Economy, Political at 13:54 by lnxwalt
Higher fuel prices are causing pain for most people in our country. As a consequence, Congress-members are talking about temporarily suspending the tax (about 18 cents per gallon on gasoline) for a few months. The problem is, gas prices are likely to briefly drop later this year, and then start rising again, possibly going until they surpass five dollars per gallon.
The gas tax suspension will slightly reduce present pain, but in the process, will also lead to much greater pain in the future. What we need is to make it financially untenable for most people to operate low-mileage vehicles such as pickups and SUVs. Why? Because we need to make some dramatic changes in our economy and infrastructure, but are not willing to do so as long as we continue to have relatively cheap fuel.
How many of us have lots of single-layer glass in our homes? This is a sure-fire way to waste energy, heating and cooling the great outdoors. How many of us have only minimal insulation? How many of us have city governments that balk at energy-conservation efforts that might not match the look of the rest of the town?
All of that must change. But it won’t change unless the cost of change is lower than the cost of keeping things the way they are. Years ago, during California’s power crisis, a resident of my town wanted to put up a windmill to generate some of his family’s electric power. The town told him that he could only have it if it was forty feet tall, surrounded by trees that were sixty feet tall, because it needed to be invisible to the neighbors. This is the same mentality that causes them to require mobile telephone towers to be disguised as hideous false trees or hidden inside of building attics and fat flagpoles. We then complain because we cannot get reliable service on our phones.
If we want to reduce the pain of higher fuel costs, we have to first let the pain get so intense that people refuse to take jobs that involve long commutes or refuse to live long distances from their existing workplaces. I can say this, because where I live, most available jobs are seventy-five miles or more from home. As a result, I do work where I fly outside the area (I’m currently working in Columbus, Ohio). Meanwhile, I’ve got my eyes open for jobs and housing together, preferably outside of California.
In the Inland Empire of California (and the I-15 corridor North of the I.E.), we have made a conscious decision to encourage housing developments and retail developments, without corresponding industrial, mining, and agricultural development. We have lots of homes, we have low-wage retail and service jobs (but even there, not enough to meet the demand), but we sorely lack local jobs that have pay and benefits sufficient to support a family on. Therefore, most of our residents get in their cars and drive fifty, seventy-five, or even one hundred miles one-way to get to work. We could sacrifice and put in high-speed commuter rail systems to make this tenable, or we could refuse to approve housing developments that do not have sufficient employment opportunities within twenty or twenty-five miles. However, hard decisions such as these will never happen until we stop fiddling with the system and let greedy oil companies chase off all their customers.
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04.10.08
Posted in Economy, Political at 2:40 by lnxwalt
The original article will probably be gone in a couple of weeks.
US water pipelines are breaking - Yahoo! News
Essentially, the article describes some major aqueducts that are reaching the end of their expected lives, either because of their age or because of lack of maintenance and repair.
This is actually an example of where short-term focus is harmful in the long run. One place I lived in this town, we had a water pipe that would break a couple of times each week during the Summer (breaks were discovered less frequently during colder weather). The company would come out and use a metal strap to provide a temporary patch. Then a few days later, the pipe would break somewhere else. In the local case, the pipe is only about four feet deep, so it isn’t infeasible to selectively replace the worst pipes in a desert.
It seems to be an America-wide thing, though. Lack of attention to infrastructure is costing us repair costs elsewhere (damage to homes and vehicles, traffic delays, emergency repairs, maybe even lost lives when some spectacular failure happens). We focus on the short-term instead of acting to prevent failure or to replace already-failing pipes and roads. We even neglect to build needed things like a region-wide high-speed rail system in Southern California, where some commuters travel up to 100 miles one-way to work. Or seeing that our current water imports are going to be reduced in the future (due to sharing Colorado River water and restrictions on other water supplies), we still fail to construct an ocean desalinization plant that can help make up the difference.
While we grumble about almost $4 per gallon fuel, we can’t do something that can help insulate us from the effects when fuel costs rise to $5, $6, $7, or even $10 per gallon? I don’t buy it. When I was spending five hours per day sitting in traffic, I was keenly interested in anything that would be faster and cheaper or even the same time and price but less frustrating.
A few years ago, when California was having its power crisis, our town leaders forbade a resident from putting up a windmill generator. The neighboring city decided to promote a power plant fueled by natural gas and cooled by the very water that is in short supply in the area.
This is nothing less than a failure of leadership. As a citizen, I know that I am not averse to higher taxes if they are spent wisely. Where I begin to put my foot down is when taxes rise, but there is no visible effect. Here in California, this must start in Sacramento and in city hall. There will be no improvement while things stay the same there. Local residents need to make it a big issue that their water pipes are bursting, that their roads are crumbling, that their electric rates continue to rise, that their commutes are taking longer, that their city plan spend more time trying to ensure that everyone’s front yards look alike than actually making the city a better place to live.
We live in a great country, but we’ve gotten so used to enjoying the benefits of it that we never face the fact that there are some costs that need to be borne also. A longer-term perspective helps us think about what we can do to make things better and to maintain what we already have. I hope you will join me in contacting your state and local officials to ask that they invest in the future of your community.
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04.04.08
Posted in Economy, Political at 22:48 by lnxwalt
Huge job losses set off recession alarms - Yahoo! News
The latest figures, apparently released today, show that experts are starting to realize what everyone else has known for about six months—that we are in a recession period in the U. S. economy. That it took so long to recognize it shows again just how clueless those in the forefront of government and the financial industry are.
It’s no longer a question of recession or not. Now it’s how deep and how long.
Workers’ pink slips stacked ever higher in March as jittery employers slashed 80,000 jobs, the most in five years, and the national unemployment rate climbed to 5.1 percent. Job losses are nearing the staggering level of a quarter-million this year in just three months.
Says one candidate, let’s retrain workers, so they’ll be able to compete for jobs. Says another, let’s boost unemployment benefits and aid to communities, so they can hold on until the recession ends.
Retraining does not hit at the core of the problem: lax oversight of large corporations and financial enterprises has allowed those large enterprises to destabilize the economy. Rather than round up the perpetrators and make them do the perp-walk through phalanxes of TV cameras in their orange jumpsuits, we are trying to bail them out. The result was predictable, even if the timing and the exact sequence of failures was not.
All told, the economy now has lost 232,000 jobs in the first three months of this year.
I would not be surprised if there is a brief recovery in late Summer and early Autumn. We could even get back some of those lost jobs. Make no mistake about it, though. This was not the normal business cycle recession. This was preventable, and since no one is yet dealing with the “wink wink, nudge nudge” regulators who allowed this to happen or the corporate and financial shenanigans that caused it, I would expect that by the end of this year or the beginning of the next, the “double-dip” part of the recession will come, only it is probably going to be much more severe than what we are experiencing today.
I would expect that local communities need to focus on shoring up locally-owned businesses, particularly SLOBs, emphasizing a “buy local” policy. SLOBs, in turn, need to use local sources and locally-produced goods and services as much as possible. If we do this in California’s Victor Valley area, for example, national chains will face the brunt of the effect, while SLOBs will maintain their positions or even grow stronger. Since the area serves primarily as a far-away bedroom community for Los Angeles and Orange counties, this will help to ameliorate the effect of some commuters losing their out-of-area jobs.
Are you a part of your local chamber of commerce? Does your CoC have a “buy local” promotional program? If not, why not? A strong base of SLOBs (small, locally-owned businesses) is the foundation for a strong local economy. Among other things, you need to be involved in advocating that local governments use SLOBs for nearly all of their vendor / supplier and contractor needs. It isn’t just your wallet that is affected—it also affects the wallets of other locally-owned enterprises and the next generation of employees, too.
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04.03.08
Posted in Political at 7:09 by lnxwalt
Just posted on my “Owner-Managed Business” blog.
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03.08.08
Posted in Local News, Political at 6:16 by lnxwalt
I was in another one of our local communities today. It was a bright, sunny day, and I was walking down the street. I saw someone putting up some signage for the city, telling pedestrians not to cross the street at that intersection.
I was not going that way, but if I had been coming from across that street and heading back the way I had come from, I would not cross the street three times to get to a place that was one crossing away. In other words, either they are making it harder and slower for pedestrians to get where they are going, or they are creating more lawbreakers.
In my own town, we have a whole corner shopping center that is now a ghost town, primarily because the town decided to put up median to prevent vehicles from turning into or out of the center and then put up signs telling pedestrians to walk a block out of their way in order to cross the street. This was previously high-traffic location, with a supermarket, fast food restaurant, clothing and shoe stores, an auto parts store, doughnut shop, a discount store and a drug store / pharmacy. In fact, it was the local high school Friday and Saturday night hangout.
What is the problem? If we want our local shopping areas to thrive, we have to make it easy and convenient to pull vehicles into and out of a central parking area, and we have to make it convenient for pedestrians to get to various stores, restaurants, and shops in the local area. We have to make that a priority, even to the extent of slowing the flow of traffic in the area. We then need to make sure that there is also adequate housing nearby, because many of the customers for local businesses will then walk.
In the quest to make things better for SLOBs, we have to make it easier for nearby residents to choose and support those businesses. We have to stop taxing SLOBs in order to give “incentives” to big corporations from outside the area. We have to give locally-owned businesses priority in zoning changes, setting taxes and fees, and even in deciding how to route traffic. We need to make sure that we continue to support and promote the locally-owned businesses that are going to hire many of our local high school graduates and support our local youth sports teams. Our civic leaders need to buy most of our city’s (or town’s) products and services from locally-owned businesses, too.
I hope that someone in our local community is reading this. We are about small, locally-owned businesses, about family-owned businesses (FOBs), and about owner-managed businesses (OMBs). All of these are suffering due to neglect by our local governments, who are busy pursuing the big companies that send their profits outside the community. What is it going to take to wake someone up and get us started with building up our local economy?
Local business: profits stay here, recycled within community. Often smaller, but existing in large numbers.
Out-of-area business: profits exported to another area, resulting in a net export of funds from the community to wherever the company is headquartered.
Let us join together and build our communities.
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