Who Should Start A Business

Volume II

Who Should Start A Business?

Now that we know why one should start a business, the next question that should be asked is: Who should do so? As discussed in the previous posting (Volume I), not everybody is cut out to be his own boss. It takes more than simple ambition. The demands, on a business starter are great, numerous and costly and not just on the financial level. The toll on health and on family relations is even greater than the financial risk. The ideal Entrepreneur needs to wear several hats, (S)he needs to be the consummate paradox; both visionary and  practical; a great leader and a greater follower; a Jack of All trades and an expert. Most importantly, the new entrepreneur must be steadfast, intrepid and laser focused on reaching his/her goal.

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It takes a certain type of person to be able to see a need for a product and service and then visualize the extent of its potential market. From there S(he) must also be able to envision the entire process from conception to delivery to that market. It seems simple, doesn't it? Just look around you and observe people go about their day-to-day lives at work, home or during leisure time. There's always something missing, a process that can be shorten a step or two to speed it up. A concept that can be simplified so access to larger amount of users can be opened further. An existing tool that is on the verge of being obsolete because the way of using it have changed and it is no longer as adequate as it was originally conceived. That tool can be tweaked a little bit to adapt it to the new materials or way of doing things and, just like that a brand new tool perfectly relevant to today's way of doing things is born. Yes, most of us, with a little observation and patient thought process can come up with a few new ideas. Then why don't we see, new business popping out every minute out of every day all over this great nation and over the entire world? Well, they probably do. But it is not always news worthy and therefore not always reported or even talked about in the very preliminary stages. But that is not the point I'd like to make. Everyone can have the vision, everyone can even see the entire path of the step by step process from conception to realization. The difficulty lies in what happens after the Euphoria of discovery has passed. The impediments on the road to success show up before the first step is event taken. It rears its ugly head from the second the visionary speaks of the idea to his family and friends. His/her "Idea" becomes a huge target for everyone to shoot  flaming arrows. That's were conviction and steadfastness is needed. One must be able to see the general terms of what is to come in all aspects. One must be able to see in his mind where the future business could be 1 year from then, 5 years, 10 years and 20 years. One must be able to plan in his mind what will be the oppositions the traps, the pits in the road to the successful acquisition of a solid market share. It takes creativity, mental fortitude, the ability to dream with eyes wide open  and shut off the background humdrum of the Naysayers. 90% of the great ideas are mentally aborted before they have a chance to be birthed.

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Businesses, however, are not built in the clouds in Utopia, they are created in the harsh reality of the present world. The business starter besides being a visionary and a fruitful dreamer, must also have both feet firmly planted on solid ground. He must be more Cartesian than Descartes. He must be pragmatic and take care of the nitty-gritty details that end up crashing the company right after the take off, if neglected. Little things, as intellectual property protection, proper licensing, legal and fiscal representation can kill a project before it has a chance to reach the very first step. Those details can not be delegated by the Business starter to anyone. S(he) must seek professional counsel, but must be on task personally particularly on the conceptual and planning phase. S(he) must know every single detail of what, how, where and when and most importantly How Much. S(he) must know his/her business plan better than the back of his/her hand and S(he) must be able to understand it so well that S(he) could explain it to a 5 year old in 10 words or less. The Entrepreneur, must know exactly what it will take to produce the product/service, what means will be required to do so, with projection of 1 year, 5 year and 10 years. Who will supply the necessary parts, ingredients, materials or whatever is required for the fabrication of the product or the delivery of the service? What will be the overall cost of production of such product or service? What are the logistical details for receiving the necessary goods and delivery the  end-product or service to the client base? What unit profit margin can be expected? What is the breakeven point below which one cannot afford to remain long particularly in the launching phase? All those pesky little details must be taken under careful consideration. Being able to see the Big Picture is important, but one must also realize that the level of resolution and definition of the Picture is proportionate to the amount of tiny little pixels per square each. Each Pixel is a very important pesky little detail. See the forest and not just the trees is good, but one must understand that there wouldn't be a forest if not for the trees.

 

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Just like it takes a village to raise a child, it takes an entire professional community to start a business successfully. No matter how talented the Entrepreneur, s(he) can't do it all alone. Finding the right team is not limited to finding the right business partners, who will each bring the proper amount of funds and/or knowledge, to complete the Executive team, although it is very important. It is not just about finding the right employees, who would espouse the new company's philosophy and believe in the same goal, although that is also very critical. It is about going beyond the inner circle of Employees and Management/ownership.It is about being able to finding the right suppliers and creating a real relationship with them, not just, based on a "I buy you sell, you charge I pay, You deliver I receive, platonic relationship. There needs to be a symbiotic relationship between the suppliers and the company. They need to be involved at a deeper level. The suppliers financial well being needs to be improved by doing business and by seeing you succeed and jeopardized to some degree, if you are doing poorly. This can not be done by sheer will. It takes careful planning in the selection of your supplier. Not necessarily the cheapest, nor the leader in the market, but someone who can be relied upon, who gives you a fair price/quality ration coupled with a good delivery lead time and overall someone who needs to grow as much as you do. That, however is not the only important aspect of the relationship.

The Entrepreneur must, as soon as s(he) can, establish credit with the suppliers. It is primordial for the company's cash flow. To be able to receive the goods, go through the process of fabrication/delivery of final good/service to the company's clients and collect on such before any disbursement is made to the suppliers is ideal. Cash-receivables before Cash-payables is always preferable to the opposite whenever possible. To be able to do so in the very first months or even the first couple of years is very difficult. That is why it should be planned from the very beginning in the conceptual phase. Obtaining such an advantage doesn't depend only on the agreement between the Entrepreneur and his/her suppliers, after all, the suppliers are businesses also, subject to the same logical rules of arithmetic. The Entrepreneur must provide a way to assuage the fears of the supplier running the risk of not collecting on his goods if the new enterprise fails prematurely. That's why the Entrepreneur must also work with his financial institutions, so they can take the responsibility of payment for the Entrepreneur towards the supplier, in case of default on the payments on the Entrepreneur's part. This brings us to the Bankers. The Entrepreneur has to convince the Bankers to go along with his company and afford him the financial fortitude that will calm the fears of non payment of his suppliers. Again, Banks are businesses too and they cannot take on such a risky responsibility without getting something in exchange. That's why, in the conceptual phase, the capital projected must include, not just enough funds to cover the launching phase, but sufficient additional funds to cover at least 6 months, preferably 1 year of a full budget. The additional funds can be safely held at the Entrepreneurs bank and earn interest in a relatively liquid investment vehicle, thus providing the bank benefiting from such safekeeping with a valuable collateral to cover their own risk in this endeavor. They are several financial instruments that can be used to that effect but I will not stray into a description of such details, as it is not the subject of this dissertation.

Every thing mentioned above are basic business management 101. However, even if all the Entrepreneur's "Ducks" are all in a row on the planning and financial side, there is no guarantee that everyone will follow his wishes. S(he) must be able to convince the suppliers/creditors to follow his/her plan. S(he) must convince the bankers to follow his/her financial strategy and most likely put up a collateral. S(he) must LEAD so they can FOLLOW. S(he) must know the business plan like his/her own first name, s(he) must be able to communicate and project his/her vision clearly enough and with sufficient confidence to convince everyone to take a chance on the new Enterprise. Projections and planning are just the first part of the equation. It must be solidly realistic, it must show that the Entrepreneur is agile of mind, and extremely aware that nothing, no matter how minutely planned it is, ever goes perfectly as expected. The Entrepreneur must convince everyone that the company is nimble enough, flexible enough to regroup, analyze and adapt at neck-breaking speed, each time an impediment surges on its path.

However, as difficult as this seems, it is not enough. Creditors, suppliers and bankers are not the only groups the Entrepreneur must lead. S(he) must also reach out to the community of his client base. Develop a relationship with its market. Be close, in all the sense of the term, to its clients/customers, so it can keep the finger on the pulse of the market. The Entrepreneur must also reach out to the authorities within the local market to ensure that a lack of communication and compliance does not hinder the launch of an important project. Too many successful companies have neglected that very important aspect and as a result have become over extended financially when a major investment has been blocked by some local government for some reason and ensuing litigation have dragged the company under.As the former Mayor of New York City, Rudy Giuliani, famously said: "Don't mess with City Hall". The Entrepreneur must LEAD the entire community into following along with his objective in order to have a better chance at success.

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If there is a Market for a particular good or service, chances are there is one if not two major market leaders. Even in the smallest niche markets, there is most likely an established company dominating that market, if not locally, at least abroad. The new Entrepreneur should be able to identify these leaders and study them. They are not only the competitors, (if sharing the local market), they are the single most valuable source of data for the budding entrepreneur about his client base. One should learn from these leaders, learn from their successes and most importantly learn from their early mistakes. The reason for their success should be discovered. Their success is the evidence that they know what makes the clients of that market tick. The Entrepreneur must be able to follow the blue print drafted by his/her peers in that market, adapting is as s(he) progresses to its own strategy. Follow their path like a road map where the treasure troves and the pitfalls are clearly marked. The Entrepreneur should also listen to the advice of his team of experts, that is the reason why s(he) has contracted or hired them. Ignoring their input is not only foolish, but a waste of human and financial resources. Following sound advice with a wary mind, eyes and ears wide open is an additional trait the enterprising mind must have. Knowing how and when to follow is just as important as knowing how and when to lead.

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Just like everything in the Universe, everything that has grown to great dimension, did so from a humbler beginning. The mustard seed may be one of the smallest seeds but it produces one of the tallest tree. Most start up business, begins small in terms of capital resources, but also in human resources. The "Skeleton Crew" is usually what gets things started until better days further down the road, affords the business to get some Human resource "Flesh" on its metaphorical bones. Thus the starting Entrepreneur must have enough general knowledge about each and every position required for the enterprise to function and s(he) must wear several hats for as long as necessary. "Jack of All Trades" is usually a fitting moniker for the new Entrepreneur. That general knowledge is necessary because the "Boss" needs to fill the positions himself until s(he) can afford to hire the staff to fill the different positions starting with the most critical after the 'Boss". It is also very critical to have the knowledge so the new staff can be trained by the boss to his/her specific requirements and company philosophy. Not to mention, being sufficiently knowledgeable to enable proper supervising, goal setting and performance evaluating for each position. A ship Captain must know how to navigate, even if he has a chief navigator on staff.

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That being said, there is one expertise, the Entrepreneur must have in the absolute. S(he) must be the ultimate expert in his/her own market before the company is even launched. S(he) must know all that is possible to know about the client base, what makes it tick, what were the past trends, what were the successful products/services of the past, which are enduring till today, what are the clues in the client base's behavior that may herald the upcoming trends. The Entrepreneur must be a super absorbing sponge, soaking all the information about his/her industry and the targeted market. Nothing can be left to chance, chance is already a very large factor one must contend with, there is no need to allocate it a larger space than absolutely necessary. The Entrepreneur must come to know his/her clients better than they know themselves. That is the only way to stay ahead of the game. The only way to recognize rising opportunities and forecast future fasting periods soon enough to prepare for it, reassess the direction and adapt to the new situation as it presents itself. That is the only way to be pro-active. The alternative is to have to react to every single upset and jump from one problem to another, always one step behind at best, eventually losing complete control and ultimately failing. I hate to cite such and overused phrase but the Entrepreneur must Eat, Sleep and breathe his business, his industry, his client base. That may be an all consuming proposition, too overwhelming for most, but that is what separates the successful Entrepreneur from the rest. As the business grows, this task doesn't diminish, but it does get easier because, as the financial and human means grow, the Entrepreneur is no longer required to wear all the hats. S(he) will be able to shed hats, one at the time, until s(he) can focus solely on the navigating of the Enterprise and ensure the team s(he) put together, work to the best of their abilities in their own field of expertise and, most importantly, with each other for the best interest of the company.

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In conclusion, a person with great vision but practical enough to pay attention to details. Who can can inspire people to follow his/her vision and who knows how to follow great examples of success in his/her chosen field, should start a business. S(he) needs to be the Skeleton Key that opens all the doors of the company to be started. All rests on the shoulders of the Start Up Entrepreneur. For that reason, s(he) must be the most knowledgeable, the most dedicated, the most diplomatic, the most decisive, the most fearless and the most confident of all the staff members. Because S(he) is above all, a member of the staff, the most important member of the staff, but a staffer nonetheless. It is a grave error for a business leader to put him/herself above his/her staff, no matter the size of the organization s(he) leads. If the company rules do not apply to the Leader, chances are, s(he) either won't remain in that leadership position long, or there won't be much of a company, much less staff, to lead very soon. Someone who is prepared, ready, willing and able to be at all times the MODEL FOR THE BEST EMPLOYEE OF THE COMPANY and has all the qualities described above is WHO SHOULD START A BUSINESS. Any body else will just waste their time with a an exorbitantly costly and hopefully not lengthy exercise in futility.

 

Why go into business for Yourself?

In this section, labeled "Starting a Business", we will address all the questions one should ask before making the decision to go into business. These are fundamental questions whose answers one must be absolutely certain to have firmly in mind before taking the necessary Leap of Faith that is required before starting a risky adventure. Faith that all the planning, all the efforts will yield the expected results at the end of the journey.

There will be a series of Posts addressing each question separately. This will allow you the readers, to interact on the subject by either adding your professional expertise on the matter being discussed, ask questions, argue a point you'd like to make or contest one that I made. It will also allow some of you to share their personal experience on the subject to illustrate this posting with real life testimony on a specific example.

"Why go into Business for Yourself?" is the very first of the series. There will be 10 Postings in the series for the moment. I may add others as this section evolves with your interaction and as per your suggestions, queries and recommendations. Here' s the Series preliminary Index:

1. Why Go Into Business For Yourself?
2. Who Should Start His/her Own Business?
3. What Do You Need Before You Start Your Own Business?
4. With Whom Should You Go Into Business?
5. What's The Best Size for a Business Start Up?
6. When Should You Go Into Business For Yourself?
7. Where Should You Establish Yourself?
8. Who Do You Need?
9. How Much Do You Need?
10. What Should Be The Annual Objective of the Business?

Volume One

WHY GO INTO BUSINESS FOR YOURSELF?

Everyone has a personal reason to do anything. Just taking a simple single step requires a personal reason to do so. I will not speak here of motivation, since that relates to the choices each and everyone of us make every single instant of our entire life. Motivation, while very important is irrelevant to this discussion. I will, however, speak of rational reasons to go into business.Whether we do it consciously or not, we are always aiming higher than our current condition. We are in a perpetual quest to better ourselves on all levels. We strive to provide better for our family and for ourselves, and if possible something more meaningful, more rewarding on an intellectual level, not just mind-numbingly trading hours for dollars while doing meaningless tasks indefinitely. Many pathways are available to us from the time we hit the job market. Whether we have been fortunate enough to receive an education or not, that constant in our lives remains true for all of us. 

There are two major phases in an individual's life; the "Training" phase and the "Survival" phase. The former consists of the years where the individual just learns to interact with society under the protection of his parents, within the family unit, or lacking a family environment, within the community itself as well as possible, and with limited responsibility or consequences. The latter consists of taking that theoretical knowledge and putting it into practice by getting into the job market and starting to take on one's own shoulders the burdens of life, such as starting to pay one's own bills. It also means taking responsibility for one's own actions and face up to the consequences of one's own choices.

Most of us will seek and hopefully find a position within a private or public organization and start trading our time, knowledge, conscientiousness and will to a good job  for on the job training, real work experience, hopefully a sense of fulfillment for doing something that matters to us and that we like doing, and certainly for money. That path is pretty stereotypical, simplistic and of course idealistic. But for the sake of this particular argument, I will dispense with the aleatoric details of a given individual's life path. As we apply our theoretical knowledge, gained in the Training Phase and acquire skills by practicing our duties on the job, we become better performers, acquire experience and therefore qualify for a "better" job in terms of remuneration, quality of work environment, relationship with clients/co-worker/superiors...etc.

As one keeps traveling down that path, "working for someone else", fully engrossed in the day to day obligations of the "Survival Phase", an individual will from time to time reach a point in his career where his skills, experience and knowledge, surpass the requirements for his current position. There are only two choices available to that individual then:

•  One is to keep going down the same road, not rocking the boat, hoping to be recognized for the true asset he is and simply playing it safe. This will of course, will lead him to become an overqualified and underpaid statistic, which eventually leads to loss of motivation, stress, frustration and feelings of not being appreciated at one's just value.
•  The other will require taking a chance, coming out of one's comfort zone and either ask for a better position within the same organization or go out and look for a better position in a different organization, consequently risking the current position or realizing after the fact that the new position is not what one expected. 

The risks in this scenario are easily manageable. Time is not a factor since the current position for this overqualified individual is secure for the moment, the upside is therefore greater than the down side so the decision is not too difficult to make.

This situation will repeat itself throughout the traditional career path of any given individual until retirement. The Qualification/position requirement ratio should remain slightly overbalanced (Top heavy as it should be), but not overly so. Everyone should be very well qualified to execute the duties required by his position, so the task is done smoothly, faultlessly, with effort but not difficulty. This breeds self-confidence in the individual holding the position, and confidence in whoever is at the receiving end of the product or the service being produced by said individual. When the upper side of the ratio becomes much greater than what is required by the position, it  will prompt the person to move forward on the career path. He will eventually obtain a position at, or slightly above, his qualification level and the Ratio will be slightly bottom heavy, challenging the right individual to strive to acquire the knowledge and skills in order to right the balance of the ratio. This phenomenon will continue until either retirement age or... until, for one reason or another, there are no  better positions available, whichever comes first.When there are no more positions available, where an individual can better himself by accepting the intellectual challenge of rising to the occasion of a more complex task and rip the intellectual, social and material rewards that comes from achieving it, not to mention the satisfaction of exploiting ones full potential, what then? 

When someone reaches that crossroads in his/her career, the decision of which way to go depends on the financial situation the person is at that point in his/her life. I am not writing about how much money or assets have been amassed, but how much passive income one can expect from that day forward to offset the cost of current standard of living. The timorous individual, if the passive income is either insufficient or nonexistent, that individual will either forge on until retirement age and collect his/her pension and social security or until s(he) has set up sufficient investments to secure enough passive revenue to retire early, that's when motivation comes into play. The confident, bright and ambitious person, on the other hand, might arrive at that crossroads on his/her career path, much earlier in life. What then? What should someone do when there is no more upside possible on a career path and the person is overwhelmingly overqualified for the position s(he) is currently holding? The character of such a person would not be able, and should not be able to clip his/her wings and remain gloomily grounded waiting for the ripe old age to be put to pasture without having ever reached his/her full intellectual potential. As the United Negro College Fund's Slogan says: "A mind is a terrible thing to waste". It is indeed, and more so when it has already reached its full potential. The only solution to such a conundrum is for the individual to create that position himself by taking, his skills, his experience and his vast knowledge on his given field and go into business for himself. 

That is the only logical reason why one should go into business for himself at any given time. Going into business is the riskiest career path. The upside, while unlimited during and beyond the growth phase (Year 6 to year 15  in my book) is incredibly limited from the inception of the business concept to the end of the growth phase (first 6 years of existence). The downside, on the other end is tremendously high during the same period. The risk is potentially the total loss of capital, time, effort and family's financial stability. To embark on such a venture, one must have no better alternative available. Going into business should be because no better option is available to someone who has reached the professional crossroads where one can only do better working for himself than for "The Man". In spite of all the risks involved, it should be better that any position that could be offered for the set of skills, experience and knowledge one has. THAT should be the only reason WHY. Any other reason is just foolishness of an oversize ego and delusions of grandeur. Of course, not everyone is motivated enough to undertake such a risky proposition. Who should do so is what will be discussed in Volume II.

Is comparing ourselves to others healthy or even necessary?

Doug, a good friend of mind, a Man of deep thought, who I admire and respect deeply, recently gave me some appetizing  food for thought which I gladly share with you folks of Enterprising Minds. He said the following:"When we compare ourselves to others we confine ourselves to one of two destructive attitudes, superiority or envy".

I responded by asking: "where does Respect, Admiration and consequently emulation come in then?"

Doug replied that he was thinking of the kind of comparison that is based on what the other has, and not on who they are.

I asked that because Doug said "Comparing ourselves to others"... and not comparing what we have to what others have or comparing our possessions, our professions or our family situations (marriage, kids, single, divorced....etc). Even then, are we not but the sum of all we have worked hard to obtain? Whether it is material possession, social status, professional position, knowledge, enlightenment or whatever it is we strive to obtain? Why limit the result of a comparison, any comparison to those 2 negative end results: the "destructive attitudes of Superiority or Envy"? There is room for so much more.

There's always room for improvement. Comparing ourselves to others is a natural process. It underlines our perpetual quest for betterment. One could deduct from this statement that we are never satisfied with what we have, that Greed is inferred by that very desire to constantly get more. Will we ever be happy with what we have, with who we have become? The problem lies within that very question. Happiness should not be defined as a line in the sand we have crossed over.

Happiness is not a goal or a destination, it is a state of mind. You either are or you are not. If you are not happy during the journey how can you expect to be happy once you've reached your destination? if you have to compare yourself to anyone, there are a multitude of "feelings" you should have, most of them positive, and if there is any negative feeling, it should only be a sense of frustration, for lagging behind your own sense of where you should be on your journey. In my opinion the only healthy and true competition in life is the one we have with ourselves. Just like an athlete truly competes against his own stats, not anyone else.

The information one gleans from the achievement of others should only be notches on one's own measuring stick. Better your own score, use someone who has achieved more as a goal for you to meet on your road to bettering yourself. Bring your score to par with that other person ahead of you. Do not compare yourself to him/her but to the mile post they have reached on their journey and compare it with where you are now on your own journey. That is the true measure of a HUMAN BEING. The measure against one's own accomplishment, using the performances of others to remind one that since other humans have done it, it is therefore possible for one to do it too. Unless we truly don't believe that all men are born equal, despite physical differences.

All is possible. Some adaptation will always apply because we can only run our own race. We cannot run anybody else race just like we can never walk in another man's shoes, not for a mile, not for a single step. We can only step with our own feet. Once we understand that, the only feelings we should have when comparing ourselves with others is either, satisfaction with distance we have covered so far or frustration born of impatience to reach one's goal.

Other people's achievements are just sign posts on the side of the road to our goal. The runner cannot feel superior to the finish line just because he crossed it. Just like he cannot feel envy to the sign post that says "25 miles to Finish line" on a 26 mile marathon. Those are just indicators on the dashboard of our life as we navigate through it on this wonderful journey. In Life, the Journey is the destination. What else is there but the journey? Death.

Before Christophe Lemaitre, the French Sprinter, knocked the 10" barrier of the 100 meter dash, no one thought that a White Man could do it. It had never been done. Now that he did it, he is aiming at Usain Bolt's record, he now knows that he belongs to the same species as that seemingly extra terrestrial Man. Just as Bolt keeps breaking records, others follow on his steps.  Yohann Blake never thought he could beat the Fastest man in the world until he actually did it twice. By doing so he brought the Demi-God Usain Bolt back down to earth among us common mortals and it energized a whole bunch of athletes who pushed themselves to keep up with Bolt, now that it has been proven that he can be beaten. Bolt on the other hand, just got the incentive he needed on his road to better himself and remain the fastest man in the world. He will keep breaking records, pushed by the record breakers nipping at his heels. He is truly competing against himself, his own record. THAT is the true and only competition one should have. The others are just examples to either emulate or keep as reminder of what NOT to do.


So when we compare ourselves to a fellow traveler on the road to enlightenment, we should feel compassion if that traveler is struggling, lost in the dark in spite of his wishes and efforts, and, if we can lend a hand, we should particularly since it is part of our trip (why else is that person on your path). If is just a name mentioned in the news or someone we know personally and that person is further ahead than we are, envy should not be what we feel, but a sense of satisfaction, because that person just materialized for you the reality of your goal. What you formulated in your mind as a future milestone to reach on your journey, without truly knowing if it is possible to reach it, that person just made it possible for you simply by reaching it him/herself.

Comparing ourselves to others is destructive if it generates envy, or worse, a sense of inferiority. It that is the case, it also means that you lack confidence, self worth, self motivation and need help.  It is just as destructive if it generates a sense of Superiority since it would indicate that you have a over blown opinion of yourself and that leads to misjudging the size of the impediments lying on the road ahead of you. Over-confidence is just as fatal in Business and Life in general as is the lack of self-confidence. One leads to underestimating the dangers encountered on the way and potentially crash head on to the wall that is REALITY. The other leads to overestimate the level of difficulties to move forward and consequently abandon the current path to success for a safer but less rewarding one and what could possibly be a dead end path.

Taking all of that into consideration, is comparing ourselves to others necessary? if you have a healthy dose of self confidence and  are self motivated,  probably not. Is it healthy? Absolutely, but only if it is done in a positive way. In a way that spurs you ahead and inspires you to keep pushing, keep trying and be an example, a role model for those who come after on their own journey.

French President gets inspiration from his Hero: Mitterrand

France, is following the rest of Europe down the slippery slope of demagoguery and knee jerk reactivity governing.

If you've clicked on the above video, you've had a good laugh at the expense of both Electoral Campaigns and particularly at the Media and the pseudo-journalists who still think their personal opinion is actually factual news. If you are still scratching your head about that "New Flash" video Satire, then... there isn't much I can do to light your lantern or help you in any way. So for those of you who are still following, I'll go on with my rant about the new French Government.

Unemployment is at the highest it has been in decades in most European countries, and so is budget deficit. Greece is the more conspicuous case since it already went over the edge of the cliff and is in free fall. Italy is poised at the edge of the abyss looking down and trying not to tip over with Spain about to slam into its back followed by Portugal, Ireland and England.

France is in trouble also and well on its way down the slope behind England. Until last year it was desperately trying to stay put on top of the hill, firmly lashed to the German Oak tree. French President Francois Hollande, however must have been digging in the attic of the Palais de l'Elysee. He probably found his hero's Diary in an old Rosewood Presidential Desk discarded in the 90's. He is a loyal disciple of Mitterand, you'll have to give him that.

He recently announced that he's proposing to raise the Income taxes for the top echelon earners to 75%. Unfortunately he is not a very good student. He's the kind of student who takes action before he finishes reading the entire lesson and therefore misses the whole point of the exercise. He is a slow reader and is probably still reading the pages of the early 80's and has not yet passed 1983. This is the only plausible explanation I can come up with to explain why Hollande purposefully let go of the German Tree trunk keeping him and his country's economy relatively safe on the hill top. Not only that, but besides letting go, he is actually stepping on the Gas.

You see, by the end of 1983, Francois Mitterand did a complete U turn on the most drastic of his measures [i.e: "Carnet de Change" where every citizen leaving the country, for business or pleasure, had to declare how much funds s(he) was taking abroad. There was a quota per trip and a total per year assigned to each person, and that booklet was to be shown upon exit at the ports and airports and again upon re-entry to ensure that the "Flight of Capital" was kept to a minimum]. There were also new taxes instated, and existing ones raised [Wealth tax]. Needless to say there was a backfire of monumental proportions, economically and consequently politically. Tonton Mitterrand had to walk back a majority of these measures illico presto. That's what his disciple, the Current "Francois-in-charge" didn't get. Had he kept reading he would have avoided the whole headache by actually looking at the bigger picture and see what would actually jump-start the economy. Maybe he thinks there is a prize at the bottom of the precipice and wants to be the first one to get it. Well, if that's his goal, then he'll get it alright.

Didn't Einstein say: Folly is trying the same experiment multiple times expecting a different result? I guess, Hollande is not interested in anything German these days.

Will Election History repeat itself, only 4 years later?

I've always said that History is the most patient of Teachers. It will repeat itself over and over again, for as long as it takes for Mankind to learn the lesson.

Does this mean that what happened leading up to the 2008 Elections, will repeat itself here too? Let's look at what happened and see if it still fits today's scenario. Recent history is supposed to be the easiest to recall, right? Well.... Hind sight is 20/20 as the old saying goes. So let’s see if by looking back we can retrace the steps that brought us here.

Back in 2008, in spite of the economic indicators, we were being told that the economy had been shrinking since December of  2007. We’ll leave it at that since I don’t have any data at hand to back up any contradicting arguments I may oppose to that statement and it is not particularly relevant to the point I am making. The fact is we are in the midst of a world wide economic crisis. Let’s also not discuss the reasons for this current situation, that is the subject of another discussion better left for another day altogether.

With that in mind let’s start retracing our steps from January 2008 till today. What dominated the news all over the US and the world during the very first quarter of 2008?

It was the raging battle between Hillary and Barack for their party’s nomination. The economic news were starting to make noise, but it wasn’t carried out as blaringly as it was trumpeted right after B.O cinched his party's nomination. Bush started down the slippery slope of stimulus nonsense, by sending a few dollars to everyone who gets a tax return check and even those who don’t. That was fine and dandy, but as we all knew it amounted to naught. It was just political posturing design to instigate hope, assuage fear and spur consumer confidence that would hopefully translate in consumer spending. Well it was a flash in the pan. It was bright, pretty to look at while it lasted, but if you blinked you missed it.

What happened next?

Well Obama won the Nomination of the DNC, then the conventions came. First the Democrats Convention, with the Greek God Looking Temple and the Hoopla of the media, heralding the historical record of the viewership, rivaling the super-bowl ratings even exceeding it. Well we might as well have declared Obama’s victory right there and then. The media reporters were hard pressed to keep their pants clean, so overcome they were with ecstasy and thrills running up their legs just by listening to the God-sent speaking in public.

Then the RNC came, nobody expected much, I mean how can you top the DNC’s it was such a fantastic example of showmanship and entertainment. To make matters worse for the RNC, the hurricanes that summer forced them to postpone it. Imagine that. The first 2 days were killed….

Then the unthinkable happened, in the last 2 days of that small budget affair, the RNC and their base exploded with the advent of Sarah Palin. She ignited the world with her speech and was able to achieve in 1 hour what took Bush 8 years to do: Transfer the raging Bush-Hate to herself and even (as it that was possible) up it a few notches. The viewership blew away that of the “historical one” of the DNC a few days earlier, (How dare she? LOL!!!).

The Obama campaign wasn’t as certain of its victory anymore, it needed something to drastically change the game. Something scary, something big and something that could be blamed squarely on the past administration and by association on the McCain/Palin Ticket.

That’s when you have to admire the versatility of the Campaign team of Obama. How shrewd and quick they were in taking advantage of the growing world crisis (that was long overdue), after the DNC convention, the stock market tanked, after the RNC convention, it rallied, coincidence? Maybe.  The fact of the matter was that if the economy took a turn for the worse, the republican ticket was done for.  No matter who ran opposite of the McCain/Palin team they would win. The media hyped up the crisis 10 fold, consumer confidence fell, dragging with them the indicators making the whole mess a self fulfilling prophecy.

Then the Genius from Goldman Sachs, then Secretary of the Treasury Paulson came up with the Brilliant “Coup de Grace”. Let’s come up with the stupidest idea we can to bury this economy once and for all and let’s do it in a way that will create such a precedence that it will open the door of Pandora’s box and let all Hell break loose.

I have no idea what went through the Bush administration collective minds to actually push that and pass the TARP stupidity Bill. If you cover a turd with Silk, it’s still a turd and stinks just as much even if you no longer see the reality of it under the layer of silk, it still poisons the air you breathe.

So the first solution to problem not only did not solve it, but it actually made it worse. Back then the reason for the problem was believed (rightfully so), that government involvement in the lending practice of the financial world, forcing the institutions to lower their lending criteria to allow people who could never afford a small mortgage to borrow huge ones, without proof of income, without deposit, without background check, no matter what the credit history was. Then everyone was surprised that greed took over and the feeding frenzy that ensued created 2 Real Estate bubbles in the past 3 decades and the last one landed us where we are now.

I have no idea who Paulson really is or what was his original motive, or even how he was able to drop the "bomb" he did with the original bail out/Stimulus, but it opened the door for what is happening now. Particularly the way he did it.

The alarmist signs started, by coincidence when Obama won the nomination of his party. By then the "hate bush" plan was working so well for the liberals that "victory" was as sure as the bacon flavored bill we just had shoved down our collective throats was going to pass. Why do you think the entire campaign was (as Usual), vote for me, I am young, adorable, new to the game, and most importantly, I am not the guy you hate (W).  It worked for the bloodiest democratic campaign in history. Obama won the day over Hillary, by being the “agent of change”.

Unfortunately, in spite of their attempts to paste [on Mc Cain] W's face, it didn't work so well. People are not as stupid as liberals think they are. Demonizing Mc Cain backfired on them. More over, when he chose Sarah Palin, she stole their "I am new" campaign fire, plus the "I am making history" since she also was breaking barriers in her own right. Plus she had what he didn't : Executive experience. They demonized her too, but it was clear that in spite of the $700 MM bank rolled campaign they were seriously loosing ground.

So what did it for them? They needed something scary, I mean it work for Bush with the 9/11 crisis. So is it serendipity that this financial mess conveniently blew up sometime in September? No matter how Democrat-like the Republicans acted by doling out money, inflating government, creating programs...etc it seemed that nothing would assuage the hate the past administration provoked among liberals. What it did, was alienate their base, the conservative who started to want them out almost as bad as their ideological counterparts. Back then the puzzle was just a jumble of pieces not making any sense. It did however create an atmosphere where the Republicans became more and more centrist trying to save the pubic opinion of themselves and in fact simply dug a bigger hole to bury their political career.

This brings us to today, 4 years later. Within the first few weeks of the current administration's reign, the media drop all the alarm bells about the economy. In fact they even started to talk about "Encouraging signs of Recovery". As if some news writer had just gutted a chicken in some Green room and was reading the auguries. None of the so-called "signs of recovery" were apparent to anyone, but the Media kept inundating us with rosy news of how worse it could have been. New concepts were invented. It didn't matter now  how precise the Jobs figures were, because it all became irrelevant. Yes, irrelevant because of the magic of semantic re-organizing. Yes, many terms deemed "Negative" to the public opinion were banished from the Administration's spokes people, liberal political pundits, and the general media's vocabulary. Job creation were no longer the most important thing in these scary times, no, we had to settle for "Jobs Saved". Why? well because it is easy to advance any number and impossible to disprove. If Obama says he "Created or Saved" 5 Million Jobs, and you don't agree with that figure, the onus is on you to disprove it. How can that be done. If only One Hundred Thousand  net Jobs were created and that fact can easily be verified, the argument advanced by the administration is that, if it not for the action they took, 4.9 Million Jobs would have been lost, therefore they "Created or Saved 5 Million Jobs (100K Jobs + 4.9 M Jobs = 5M Jobs). Convenient and very clever, isn't it? A bit like that Nobel Peace Prize awarded even before he took office, before he got a chance to do anything, just because of the "Hope" he represents and the positive "Change" he can bring to the world. Wow that Scandinavian Committee in charge of the vetting of the Nobel Candidates really buffed their Cristal ball before they made that decision. It must have been crispy clear for them to be so sure. 

So here we are today. The Economy of the US is not better, it is much worse on all accounts, the financial sector is still shaking and the Real Estate sector is still years away from recovery. Unemployment looks like its resting comfortably above 8%* and poised to remain that way for a long time, the way things are going. So what has changed? Well for the US, nothing much, however, the catastrophic situation here is nothing compared to what is happening in Europe. From Greece to the UK, going through Italy, Spain Portugal and Ireland, the picture is grim to say the least. Banking "malpractice", political pandering and corruption resulted in the explosion of an economic and financial catastrophe that was years in the making. The US is now being blamed  for either not interfering enough, or interfering too much or simply making unrealistic demands and imposing austerity measures on Europe's economy that it was not willing to uphold when its own economy imploded and that the "Printing" of Dollars is a major part of what is going on worldwide in today's Global economy. 

So to summarize, the world still hates the US, for the reasons it did before and for new reasons too. It lost its respect for this country because it is no longer feared and seems to have lost its will or worse, its ability to lead in any way shape or form in all aspects of International policy. The US economy is still extremely dependent on its major European trading partners to purchases its goods (Asian mostly sells to the US) and with their economy failing, the American economy can't count on it to jump-start things here. The rest of the world is now looking for another leader to give them their quick fix to their economic predicament, and thus all eyes are turning towards China. What a Mess!!!!

The situation seems just as Catastrophic as it was in 2008. In fact it is much worse and this time the shoe is on the other foot. The Liberals are in charge now and  the countries to which they've been pointing  as examples to justify their social reform policies are falling apart, and doing so particularly because of those policies that have been in place for the past several decades. So is the bad economy going to work against the current administration's reelection? Most likely yes. No matter how much Obama blames Bush, true or not, people are tired of hearing why we are here. They want to hear how we are going to get out of this mess. 

People want to know who has the best plan moving forward. As things stand, I'd say that unless the conservatives wake up and put out a detailed, step by step plan, clear and simple enough to understand, it's a toss up. On the other hand, if they focus on demonstrating, in a very concise and understandable way, how they are proposing to resolve today's woes, it's their election to lose. Their message must be simple enough so that the Lay-Man can make up its own mind whether it could work or not without relying on some Pundit in the media to put it in words he wants to hear but doesn't trust. Then it will be a landslide for he conservatives. If there are any doubts about how to move forward and if the economy expands ever so slightly and/or unemployment figures drop below 8%, then Obama will most likely be re-elected by the narrowest of margins but re-elected nevertheless. However, if History repeats itself, meaning, if poor economy will work in favor of the "Challenger", then Romney will be elected. Poetic reversal of roles just 4 years later, isn't it?

However, on the world stage, if History were to truly repeat itself, then there is another comparison to be drawn. From my personal point of view, I'll draw the historical comparison between 2 eras in 2 countries: The US and France. In 1976, the US economy was in a recession, just coming out of the Viet Nam War fiasco and the Water Gate Scandal that landed Ford prematurely in the Oval Office. Any one who could fog a mirror could have won a race for the white house against Ford, the animosity against the Republicans and the Hate of Nixon ensured that. So Jimmy Carter (the benevolent but clueless Mr. Magoo as I like to call him) was hoisted on the podium and tried to lead a country, that felt awkward in its own skin, embarassed by its first Military loss in its history, and with a serious identity crisis. American was in full self-pity and self-deprecating mode. Just like a teenager rejecting its strict but loving parents rule, it desperately seeked approval of the rest of the world. America was desperately needing to be seen as the good guy again. Sounds familiar?

In that same period, in France, Valery Giscard d'Estaing was reigning at the Elysee, aloof in his reverie of past Imperial Glory of a France who was no more. Europe was feeling the recession as well and trying to adapt to the new modern post colonial world. The economic boom of the reconstruction resulting from the aftermath of WWII, had waned and the rappatriation en masse of the former colonists of the Former North African French Territorries took a toll on the countries finances, exacerbating further a growing unemployement problem. That exodus had ran its course a few years back already, but the economy had not been able to absorb the cost of the added population. In effect, other European countries such as Greece, Italy, Spain and Portugal were in much worse shape and their people were flooding France, Germany, England and Switzerland with immigrants seeking economic opportunity. The French President couldn't connect with the population, he "inherited" the position after his predecessor, Georges Pompidou, had the misfortune of passing away before the end of his term (7 years). Pompidou was appreciated by the population and considered a "Good" President. His successor, however, was perceived by the masses as a pompous snob with an attitude similar to that of Marie-Antoinette a couple of centuries earlier.

In May of 1981, the Socialist, Francois Mitterrand replaced him at the Elysee Palace without breaking  a sweat, just because he represented change and promised to help the "little guy" and make the "Rich Guy" pay his fair share. Back in the US, the economy was in much worse situation than 4 years earlier, in spite of the promises made by "Mr. Magoo", and the Foreign affairs were a mess with the US Embassy situation in Iran. That same year, after loosing the Republican Primary 4 years Earlier, and a shaking start in the race till that summer, Ronald Reagan, the "Cowboy from Hollywood" was gaining momentum in the polls, nothing drastic, but steady. He performed poorly on his first debate against Jimmy Carter, but turned things around dramatically in the following debates. So much so, that come election day in November 1981, he took over the Oval Office in a Landslide. Only a few month before, most pundits had already written him off altogether. Mr. Magoo's reelection bid had seemed just natural, a "done deal". The elections process, really just a formality to confirm what everyone so evidently knew would happen. Sounds familiar too? So the US gained Ronald Reagan, now viewed by conservatives as the Standard by which Conservative Presidential Candidates measure themselves. France on the other hand, finally rewarded the hard working Socialist Party, who had been trying to take power at the head of the Government since the turn of the century.

Fast forward 21 years to May 2012. France elects Francois II. Europe Economic woes, seed the fertile ground for Populist Politics and Socialists take the opportunity to pander and promise the return of painless better days. Francois Hollande beats Nicolas Sarkozy who was considered elitists and out of touch with the pain of the common man. So will November 2012 bring  the same to the US, 1981 did? Will Mitt Romney be the Cowboy who wins the House and saves the day? Is Mr. Obama, today's Mr. Magoo, kind but completely clueless, wandering around, flailing blindling through the last days of his presidency? The parallels are numerous, gas prices are through the roof and have been for the past 4 years, unemployment is at the highest it has been in decades, the world still hates America. Benghazi is even worse than the Iran Embassy hostage situation. Obama seems to have fumbled the 2 worse situations of recent history into one: The Benghazi Mess** compiles both of the Iran Hostage fiasco with the Watergate Cover up. Well is that another nail on his Presidential Coffin? We will know for sure by November 6th.
 

Social Safety net for everyone and merit-less entitlement programs have been tried, yes, and proven time and again that it DOES NOT WORK!!! There's no "Social El Dorado", no perfect system and whoever claims to know how to create the perfect society is either a fool or a liar. We are not bees, or ants or termites. Humans are the only Societal Animal that is fiercely individualist. That's the Human Paradox. It is also our strength, what gives us our super adaptability faculty. Adversity forces us to adapt. Take adversity away and we cease to try to adapt and cease to seek to better our condition on our own. We become complacent and if things get uncomfortable, we wait for someone else to act as the agent of change to return us to our sedating comfort. The more things are done for us, the less we attempt to do for ourselves. Without that incentive, we become indolent sheep, more sedated to the stimuli of life and its dangers.

Our independence and thirst for freedom stems from that individuality. It makes us fight for survival against all odds, what gives us the strength to bounce back from the depth of the Abyss of Despair and soar to the limitless sky. This country was founded by Men and Women who came from the bottomless pit of despair from all around the world. People who know that can take comfort in the fact that once they hit rock bottom, they will be able to use that very bottom, to push back on it and launch themselves back up. The lack of Safety net is dangerous, yes, but it is also the greatest motivator to not fail to try harder. However the apogee of Despair is not once you hit rock bottom, but when you are falling and trying to hold on to what you have, to the past as change crumbles it into a new reality. That is when despair is at its most powerful state. It is when your fear of losing what you have, that it is at its apex and when you are the most vulnerable to any deceit. That is when you grasp at straws and refuse to face reality. Once you hit rock bottom, reality hits you in the face whether you wish to acknowledge it or not. You have no choice. That's when Despair looses its power and starts to crumble to ashes and from it rises Hope. When you have nothing left to loose, you have everything to gain...back...and then some. Social justice is a myth, compassion however is real. Philanthropy is also very real. While the former only needs a solid head and a sensitive heart, the latter requires a modicum of financial stability. Even if you donate your time and knowledge, you need to be materially comfortable enough to spare the time, effort and thought. If you are busy barely surviving, you will not spare a second thought to whoever is in a worse predicament you are. It is easier to save a man sinking in "quick sands" when one has both feet firmly planted on solid ground, armed with the necessary rope, perch or other useful tools, than by jumping in the troubled area along side the man.

The forefathers of this country understood that individualistic trait of the Human Character and recognized its strength and its fallacies. That is why they framed the government of this nation the way they did. They gave more power to the Individual over the Politician, more power to the individual States than to the Federal Government and thus assured the power of this Nation and its posterity because that  Power is anchored on the fierce independent, self-sufficient, self relying spirit of each inhabitant of this land, whether he's been here for generations or just got here off the boat, plane or raft. The sooner the Politicians remember that, the sooner this country will get back on track leading the world.  This is, after all, the Cup which overflows to the rest of the world. Whatever it is filled with, always overflows and spills over to the rest of the Nations of the World, Good or Bad.

*(even though "creative reporting" has it at 7.9% by calling people at home in the middle of the day and asking them if they are working, yeah, right, that data beats empirical data based on company reporting and unemployment benefit registration)
** Updated on 11/5/12

Economic Warfare -Book Review-

In "Economic Warfare" Ziad Abdelnour takes a hard look at today's US and Global Economy. He defines its true state, analyses the problem from which this Economy resulted, by dissecting it and digging all the way to its roots. Then he does what any successful businessman does in this situation: Once he understands fully what the Problem is, he sets it aside. Yes, he sets it asides and focuses on the search for the solution.

His analysis of what brought the US Economy and the world along with it to where it stands today, at the brink of the abyss, is both thorough and incredibly clear. He then proceeds to lay out a pathway of simple solutions, broken down in simple steps that anyone can recognize in one's own realm of capabilities, from the Captain of Industry to the home maker managing the  home finances. Solutions that do not come from Politicians or Government but from every single citizen in their day-to-day activities. A clear individual initiative to return to the fundamentals of basic common sense economics, this country was built on.

Look for it in your book store, or like me, get it online at Amazon.com. Whether you agree with Ziad or not (and I do wholeheartedly), you will not regret the journey your mind will take along the pages of his book. The Truths, Facts and Opinions you will find there will be a subject of conversation for many an occasion.

So this is my highest recommendation for : "Economic Warfare" - The Secrets of Wealth Creation in the Age of Welfare Politics - by Ziad K. Abdelnour.