Who Creates New Jobs?

Question: Which entity below creates new jobs?

A. Government
B. Large corporations
C. Small businesses

The answer is--they all create new jobs. But, small businesses do it best.

In fact, small businesses created some 60-80% of net new jobs during the past decade. Companies with 500 or fewer people employ over half the country's private sector employees.

Small businesses create more new jobs faster and more effectively. As we look for ways to improve the economy, we overlook the importance of small businesses at our peril.

Quick Vue: Note what highly successful entrepreneur Richard Branson has to say in this very brief video.



To be sure, governments create new jobs too. But is that what we want to emphasize? New Jersey, for example, added some 58,000 employees to its payroll since 2001. The U.S. Department of Labor says that the state added about 15 new jobs for every new private sector job. Imagine if the ratio were just one new state job for every 15 new private sector jobs.

When a small business, or any business, adds a job, it is because there is an expected return on investment. In other words, the job will help the business grow and create wealth. That's not necessarily the case when governments create new jobs.

What does it cost to create a new job? Critics of the Obama administration's stimulus plan say that the federal government will spend $275,000 to create each new job. Nobel prize winning economist Paul Krugman disputes that number, saying that the cost will more likely be closer to $100,000. Even if he's right, how cost-effective is that?

Perhaps we should all be asking: How can we make it possible for small businesses to create more new jobs than ever before?

Sources for this post include The Wall Street Journal (including article by Timothy Aeppel), The New York Times (article by Paul Krugman) and The Plain Dealer .

SPECIAL BULLETIN...What's in the Stimulus?

The Wall Street Journal reported today that it has completed its first in-depth look at the proposed $825 billion stimulus legislation--647 pages. Among items found are these:

• Approximately $30 billion is to be invested in fixing bridges or other highway projects.
• $40 billion is for broadband and electric grid development, airports and clean water projects.
• An estimated $20 billion is allocated for business tax cuts.

The Journal says that the above three items, totaling $90 billion, can be considered a growth stimulus. This amount equates to 12% of the total package.

The Journal maintains that other planned expenditures do not constitute a growth stimulus. As an example it cites the $252 billion allocated to help pay for Medicaid, unemployment benefits, food stamps and the earned income credit. The amount represents about 30% of the total.

Say Thanks When Giving to Charity

Quick—take this true/false quiz!

1. Slightly fewer than half of all Americans give to charity.

2. Donations to charities rise and fall with changes in the economy.

3. Most wealthy individuals donate to gain recognition.

4. Liberals tend to give more generously than conservatives.

Based on recent studies by Gallup, Charity Navigator and the Center for Philanthropy at Indiana University, the answer to each question is...

False!

Here are some notable findings from the recent studies:

· Americans are very generous. Between 69 and 72% make charitable donations.

· Donations tend to keep rising each year. They increased in each of 39 out of 40 consecutive years. That’s through 2007, the most recent data available. The one down year was 1987.

· Most wealthy persons donate in order to give back to the community. Public recognition is essentially a “non-factor.”

· People who describe themselves as “conservative” or “very conservative” tend to give more than those who see themselves as “liberal” or “very liberal.”

Many people find the last point politically sensitive. So, just for fun, see how you compare to the levels of giving below identified in one of the studies.

Percentage of income donated by persons who described themselves as:

• Very conservative – 4.5%
• Conservative – 3.6%
• Moderate – 3%
• Liberal – 1.5%
• Very Liberal – 1.2%

Some pundits point out that conservatives often give to churches (i.e., the religious right) which accounts for the higher percentages. They make a distinction between churches and charities.

Consider this interesting finding from a study conducted by the Center on Philanthropy at Indiana University for Bank of America:

“Donors believe charitable contributions have a greater impact on their personal fulfillment than on the organizations they support.”

This sentiment is consistent with the concept of Zakah, an Islamic term for paying alms (charity). Zakah means purification. By giving alms, one becomes purified. Take a look at the very brief Quick Vue video below. (It's only 1 minute and 30 seconds in length.) Note at the end how the speaker says that donors should show gratitude toward those they help.

Then think again about the above findings. Perhaps you'll see charitable donations a little differently.


Sources for this post included Gallup, Charity Navigator, The Center for Philanthropy at Indiana University, The Wall Street Journal, Islamic Research Foundation International, Inc.

An American Success Story to the Fore!

Like Barack Obama, William Powell had to overcome racism to achieve his dream. He turned an Ohio dairy farm into a nationally acclaimed golf course. This American success story will make you say "Wow!"

William J. Powell built the first nine holes of his Clearview Golf Club mostly by hand starting in 1946. The course opened in 1948. Today it is on the National Register of Historic Places. Of some 16,000 golf courses in the U.S., only about 15 have that distinction. Mr. Powell posed for this photo in 2007 for a story in the Pittsburgh Post-Gazette.

Here’s what you should know about William Powell’s inspiring story:

• He is 91 years old, the great-grandson of an Alabama slave. He discovered golf at age nine when he became captivated by a beautiful golf course near his hometown of Minerva, Ohio. He became a caddy and learned to play the game.

• Notable quote in the Wall Street Journal: “Nobody under 70 years old has any inkling how racist this country was."

• In his youth golf courses routinely refused to let African Americans play, except for high school and college teams. Mr. Powell was a team leader. He helped form the golf team at Wilberforce University.

• During World War II he served in the Army and was stationed in England. Golf courses there, which he played occasionally, did not discriminate and his love of the game increased. But racism was still a hurdle. For example, an English woman once offered him a pillow to sit on because she had heard that African Americans have tails!

• In 1946, with financial backing from two physicians (no bank would agree to a GI loan for him), he bought an old 78 acre dairy farm near Canton, Ohio, on US Route 30 (part of the Lincoln Highway).

• For two years he worked a day job at Timken Company in Canton while at night and on weekends he and his family built the first nine holes of his course—by hand. He was self-taught in course architecture, landscaping, etc.

• In 1948, Clearview Golf Club opened to the public—to everyone. Nine more holes were added decades later. Mr. Powell thus became the only African American to design, build, own and operate a golf course. In 2001, Clearview was placed on the National Register of Historic Places.

• His daughter, Renee, served as captain of the women’s golf team at Ohio State. She joined the LPGA Tour in 1967.

• Mr. Powell and Clearview have received numerous awards including The National Golf Foundation’s Jack Nicklaus Golf Family of the Year (1992). He has a lifetime PGA membership. The Tiger Woods Foundation maintains a scholarship in the name of William and Marcella Powell.

Key message: What motivated him?

It wasn’t because he felt he could eliminate racism. His motivation was intensely personal. He once told Golf Digest:

• “Who wants to fight a racist, apartheid society all the time?”

• “I had golf in me. And I had to bring it out.”

That sentiment reminds us of what it takes for anyone to overcome obstacles and become an American success story. Wow!

Sources for the post included Golf Digest, Pittsburgh Post-Gazette and The Wall Street Journal.
+++++++++++++++++++++++++++++++++++++++++++++++
This Story Helped Me See More Clearly the Racism William Powell Had to Confront

When Mr. Powell was 16 he played in a golf tournament that did not discriminate--at least not formally. But officials nevertheless tried to intimidate him.

First, they delayed the start of the qualifying round for two hours while trying to find a reason to legally ban him. They couldn't find one. He won the round.

Then, for the first round of tournament play they changed the format so that he would not play with the tournament favorites. He won that round too.

Then officials repeated the move for the second round. “Hands visibly shaking from the stress, he finished third,” wrote John Paul Newport in the Wall Street Journal.

“There should never be that much pressure on any kid to prove that he is the best,” Mr. Powell told Mr. Newport.

It's In the Bag

At a time like this it's helpful to recall how inventors help grow the economy. Even if the invention is something mundane that we take for granted. Margaret Knight (1838-1914) showed us how to do it in 1871 by inventing a machine that creates the square, flat-bottomed paper bag. Her invention revolutionized the retail industry.

Cover of the book entitled Marvelous Mattie: How Margaret E. Knight Became an Inventor written and illustrated by Emily Arnold McCully. (Farrar, Straus, & Giroux, 2006--available from Amazon.com

Margaret Knight is credited with more than 90 inventions and more than 20 patents. She came to be known as "Lady Edison," the inventor of a wide range of devices including a:

• Numbering machine,
• Barbecue spit,
• Window frame,
• Sole-cutting machine used in making shoes, and
• Compound rotary engine.

Her first invention came at age 12 (12!) while working in a textile mill in New Hampshire. It was a life-saving, stop-motion device that made looms safer to operate. Sharp steel-tipped shuttles could abruptly be sent flying, turning them into deadly missiles. Her invention stopped that from happening. She came up with the idea after witnessing such a missile kill a worker.

Imagine what it was like to shop before the paper and plastic bags we enjoy using today. Basically, merchants would wrap your purchases in paper and tie the bundle with string, or use flour sacks and metal containers to hold your merchandise. Department stores like Macy's and Lord & Taylor's were quick to use the flat-bottomed paper bags. Clerks could package a customer's purchases and move on rapidly to help the next customer.

Credit for Ms. Knight's invention was almost lost to a man who saw her prototype machine and stole her idea. She sued and fought a long, costly but successful legal battle, finally being awarded the patent. A woman couldn't understand such mechanical complexities, the thief is said to have asserted in his defense.

Prior to her invention, flat-bottomed paper bags were made by hand and supplies were limited. Her invention enhanced production and cut costs. One machine could do the work of 30 people. So, yes, her invention put people out of work. But overall its impact on the economy was hugely beneficial.

It's timely for us to think about Ms. Knight. Her story reminds us that:

• Ingenuity matters to our economy. You may never know when or where a new invention will appear that has the power to transform.


• It's true that "necessity is the mother of invention." Inventors do what they do usually because they're trying to solve a problem, cut costs or improve a process.


• Inventors sometimes have to overcome great adversity.


• Bottom line: Inventors help grow the economy.

There's much talk these days about the Great Depression. Are we about to relive it? No one can say for sure. But while we're looking backwards let's hope that we DO relive the days when the Margaret Knights and Thomas Edisons were busy finding opportunities and creating many new inventions that helped grow the world's economy.

That's a focus that is optimistic.

Given our nation's great history of innovation, I think our chances are excellent of finding a solution to the current economic difficulty. In fact, I think it's in the bag.

Quick Vue: This is a film made by Thomas Edison called "What Happened on Twenty-third Street, New York City." It's dated August 21, 1901. The video lasts just 1 minute and 21 seconds but it provides a rich view of everyday life over 100 years ago. Take a look and notice what inventions you don't see--such as no pedestrians with a Starbucks latte, cellphone or iPod, and of course no automobiles. Also notice how some things never change, such as the woman pedestrian crossing the street who picks up her pace to "beat out" an approaching street car. Also, note the older man in white hat at the end of the film who looks over with interest at the woman (an actress hired by Mr. Edison?) whose skirts were just blown about by a passing subway train (pre-Marilyn Monroe).

I've watched this several times but have not found anyone holding a flat-bottomed paper bag. Perhaps you can spot someone.

Sources for the post include The Wall Street Journal, Inventor Hall of Fame, Paper Industry Hall of Fame, Ohio State University, Engineerguy.com.

Nuts Anyone?

We can use some optimism right now. Retired Lt. Gen. Harry Kinnard, who passed away January 5, is an example. He helped engineer a burst of optimism at a crucial moment during World War II. He suggested that Brig. Gen. Anthony McAuliffe answer a German ultimatum at Bastogne with one word: "Nuts!"

Retired Lt. Gen. Harry Kinnard passed away January 5, 2009 at age 93.

Picture the following:

• It's December 22, 1944. The German Army has shocked everyone with a surprise counter-offensive (the Battle of the Bulge).
• The town of Bastogne, Belgium, sits strategically at the crossroads of several routes, much like Gettysburg of Civil War fame. German military leaders intend to take the town as part of a strategy to push to the coastal port of Antwerp, splitting the Allies in two.
• Gen. Eisenhower orders Bastogne held at all costs. 17,000 U.S. soldiers are positioned in and around the town. One of them is Colonel Harry Kinnard, a 29 year-old decorated paratrooper, member of the 101st Airborne.
• Bastogne is surrounded by 40,000 soldiers of the German Army. It is very cold and snowy and many American soldiers lack winter gear. Foul weather has made it impossible to drop supplies from the air. Ammunition and supplies are precariously low.
• German couriers appear at the U.S. lines under a white flag with a message for the American commander, Gen. McAuliffe. Surrender in two hours or be annihilated.
• "Us surrender? Aw, nuts!" McAuliffe says to his staff which includes Kinnard. He asks for ideas on how to word a response. Kinnard answers, "That first remark of yours would be hard to beat." "What do you mean?" McAuliffe answered. "Sir, you said 'Nuts.'" Other members of McAuliffe's staff approve of Kinnard's idea.
• McAuliffe then writes this: "To the German commander: Nuts! A. C. McAuliffe, American Commander."

Thus was created one of the most inspiring and succinct communications in World War II. The next day the skies cleared permitting air retaliation and parachute drops. On December 26 General Patton's army broke through to Bastogne and the battle ended three weeks later.

What this story tells us today is:

• When "surrounded," i.e., faced with economic hard times, don't despair.
• Maintain a can-do attitude.
• Speak hopefully.
• Find inspiration in the examples of those who lived through much harder times.

For more perspective, that of a soldier in a foxhole during the battle, go to http://kclibrary.lonestar.edu/peniche.html. Eduardo Peniche, retired professor of Spanish at Lone Star College in Texas, provides an excellent account that made me feel I was there. Included are compelling images of things he did, some quite simple. For example:

• Lining the bottom of his foxhole with straw.
• Observing how water was freezing in his canteen.
• Attending church service on Christmas Eve.
• Hearing German prisoners of war singing Silent Night ("Stille Nacht").

Quick Vue: This video provides an overview of the Battle of Bastogne. Lt. Gen. Kinnard appears at 1:40 into the video.


Sources for this post include The New York Post and Leatherneck.com.

Is a Trillion Enough?

Is an economic stimulus of about a trillion dollars enough? No, says Paul Krugman, last year's winner of the Nobel Prize in Economics. Here's how to think about a trillion dollars. For starters, it looks like this expressed as a dollar number.

$1,000,000,000,000

It's a big number. Too big to comprehend, really. So here is how you can put it in context. Below is a list of six major, and notable, U.S. expenditures from the past. The cost for each is expressed in 2008 dollars.

• World War II - 16 million troops; 4 years - $4 trillion
• Interstate Highway System - 35 years of construction - $800 billion
• New Deal - public expenditures during the Great Depression - $500 billion
• Space Program - Projects Mercury through Apollo (Moon landings) - $140 billion
• Panama Canal - construction cost; opened in 1914 - $7 billion
• Louisiana Purchase - 1803 - $261 million

But it's not enough to convert costs to 2008 dollars. Economists also look at how the expenditures compare to GDP (Gross Domestic Product - the total market value of goods and services produced each year). When viewed this way, the above expenditures are much, much higher. The cost of World War II, for example, equates to $17 trillion when taking GDP into account. The Louisiana Purchase, which looks relatively inexpensive in 2008 dollars, actually equates to over $400 billion when viewed in the context of its share of GDP.

So, Mr. Krugman may have had a case when he recently wrote in The New York Times that President-elect Obama's "...prescription doesn't live up to his diagnosis. The economic plan he's offering isn't as strong as his language about the economic threat. In fact, it falls well short of what's needed."

Perhaps so. We'll have to see. In the meantime, we'll all have to get used to thinking about what a trillion dollars looks like.

Quik Vue: Here are more ideas for how to think about a trillion dollars.

Sources for this post include The New York Times, Plain Dealer and Wall Street Journal.

What's In YOUR Salt?

What if you had to name the top 10 inventions or discoveries that benefit your life every day? Would iodized salt be on your list? It should!

Morton Salt Company's label when it introduced iodized salt in 1924.

It has been estimated that one-third to one-half of the world's people do not get enough iodine, an essential mineral, from food and water. Perhaps you learned in school that iodine helps prevent goiters. But iodine (a Greek term originally meaning "violet") provides many other benefits. It can combat:

• Bacteria


• Viruses


• Parasites


• And even some cancers.

It can also prevent mental slowness. One report suggests that iodine deficiency causes an unnecessary loss of over 1 billion IQ points worldwide. Even in the U.S., many pregnant women are iodine deficient.

Iodine deficiency is a significant issue throughout the world. It can cause or contribute to:

• Mental retardation
  
• Infertility


• Infections


• Muscle constriction


• Fatigue


• Chronic sinus infection

In the U.S., iodine became a major part of our diet in the mid 1920s. That's when iodized salt became commonly available thanks to pioneering work by two physicians, one in Michigan and one in Ohio (location of a large salt mine--Cleveland). Morton Salt Company and Diamond Crystal Salt Company (now part of Cargill) endorsed their work. Now we rarely hear about people getting goiters. But we often overlook iodine's other benefits.

There is an effort underway to spread the good word throughout the world about the benefits of iodized salt. It's not a glamorous campaign, so it doesn't inspire many bold headlines. But a panel of global economists, called the Copenhagen Consensus, has studied the most cost-effective solutions to the world's problems. They determined that iodine and other so called micronutrients (vitamin A, iron, zinc and folic acid) should be at the top of foreign aid spending priorities.

Quick Vue: These are two very brief videos (about 1.5 minutes each). The first takes you to Nepal for a look at efforts to educate people about the benefits of iodized salt. In the second video Wener Schultinic, Associate Director of Nutrition at UNICEF, tells how UNICEF's efforts have been very successful particularly since it stopped seeing iodine deficiency as a public health issue. It now sees iodized salt as a developmental opportunity, enabling UNICEF to partner with governments and businesses.











Sources for this article included The New York Times, "Raising the World's IQ," by Nicholas D. Kristof (12/4/2008) and the International Council for the Control of Iodine Deficiency Disorders.

Look Again!

No doubt you've seen many Greek and Roman statues, either in museums or in textbooks. But German archaeologist Vinzenz Brinkmann wants you to take another look. Why? You'll be amazed!


Herr Brinkmann and his spouse, Ulrike Koch-Brinkmann, have created full scale plaster copies of numerous ancient statues. Then, based on painstaking research, they painted them to make the copies resemble how the statues appeared in ancient Greece. That's right. The two maintain that in ancient times statues were painted colorfully. Over time, the hues washed away leaving us today with statues of just white marble.

Some contest their conclusions. But no one can argue that the effect isn't dramatic. Take a look at the example below from an exhibit sponsored by the Glyptothek museum in Munich. What a difference!


The museum put together an international exhibition called Bunte Götter (“Colored Gods”), to showcase the work in 2004. The exhibition appeared in Istanbul in 2006 and in Athens in 2007. Portions have been shown at Harvard University and at the Getty Villa in Malibu, California.

The replica in the picture below is juxtaposed against a display of statues arranged like action figures. The scene is the Glypothek museum which specializes in Greek and Roman statues. (That's the original archer in the background. It dates back to 490 B.C.) The same painted statue appeared in the July 2008 issue of Smithsonian magazine which contained a feature article on this subject by Matthew Gurewitsch. ("True Colors"--go to: http://www.smithsonianmag.com/arts-culture/true-colors.html)

What an amazing new perspective!

Exhibition photos from: http://www.stmwfk.bayern.de/kunst/museen/kalender_2005/kw_42.html

Schools Build Peace Says Entrepreneur

Greg Mortenson believes that new schools in Afghanistan and Pakistan help build peace. The U.S. military agrees and has offered him financial support. He says "No Thanks."

Greg Mortenson has:

• Helped build 78 schools in remote parts of Pakistan and Afghanistan;
• Heads a foundation (Central Asia Institute) that runs 48 other schools in refugee camps in the region;
• Co-written a book--Three Cups of Tea: One Man's Mission to Promote Peace...One School At A Time (Penguin 2007)--which hit #1 on the New York Times book list (General David Petraeus, commander of U.S. forces in Iraq and Afghanistan, has recommended Three Cups of Tea to his staff.);
• Been sought out by the U.S. military for advice on how to work with village elders and tribal leaders in Afghanistan and Iraq; and
• Received offers of financial assistance from the U.S. military which he has declined--saying it's more important that he maintain his independence.

Mr. Mortenson is a remarkable individual. He believes that:

• Ignorance breeds hatred and violence; and
• Education is the best way to limit fanaticism and Islamic extremism.

That's why he has led the effort to build schools that more than 28,000 children (mostly female) in Afghanistan and Iraq have attended. He is sowing seeds of hope.

He believes that education for females is particularly important. On his website you'll find this statement (an Aha!):

"Mortenson advocates girls’ education as the top priority to promote economic development, peace and prosperity, and says,'you can drop bombs, hand out condoms, build roads, or put in electricity, but until the girls are educated a society won’t change.'"

Yet after 9/11 he received hate mail from Americans angry with him for educating Muslim children. He was once kidnapped for eight days by the Taliban.

You really should get to Know Greg Mortenson. Visit his website at http://www.threecupsoftea.com/.

Quick Vue: Take a look at this video. Eli Fosl, a very articulate eighth grader here in the U.S., interviews Mr. Mortenson in excellent fashion--about five minutes in length.

Sources for this entry included The Wall Street Journal, article by Yochi J. Dreazen.

Happy New Year!!!