Economic Heroes and the Power of Persistence

It’s the little guys and gals that are the unsung heroes in these depressing economic times. They are the small business owners…the ones who keep others employed, oft times at their own personal expense and well-being.

These economic champions borrow on their own lines of credit to keep the economy going and their shops open, most with no end in sight until their borrowing options run out. They maximize their business lines of credit. They raid what savings and retirement funds they have and endure horrific credit card interest rates to keep their neighbors, and America, at work.

Many struggle to avoid downsizing their businesses as they stare into the dark, unable to sleep night after night and searching for answers. Some put off cutting their staff and salaries as long as  possible because they understand the impact on real lives that will result by slashing and laying off. Each pay period, against overwhelming odds including cash flow impediments,  they sacrifice and keep things going, hoping for signs of  sparks that will promote increased business and result in enhanced revenue. Now some 13 plus months into this “recession” (which the government just recognized in December) these individuals are the real warriors of main street who put the Wall Street egos to shame. These protagonists make the cogs of our economy run even in the toughest of times and will continue to do so.

These owners and opeators of private corporations, partnerships and other business entities put off paying some of their own bills to support those that work for them. They refuse to utter the words “bankruptcy,”  “defeat” and “quit.”  They steadfastly toil to avert economic Armageddon every hour.  And each pay period that passes with obligations met, they pause, reflect with a sigh and a whisper of relief…as they start the whole process again to keep their workers and businesses afloat for another day.

When times were good, these business leaders (millions of them) got by and sometimes flourished. Now that the pendulum has swung toward a new economic reality, these economic heros need help. President Obama gets it and says help is on the way for small business…but as of today, no one knows even the slightest about the details or what that promise means or how it will materialize.  The need for “economic change” grows not by the month but by the day for these business denizens, who operate on solid good faith and an ingrained sense of optimism that they, and those employed by them, will survive and enter a new and better reality.

For them, failure is not an option.

The tolls of stress and survival effect them physically and mentally. Meeting payrolls is not an easy task.  The distraction of simply staying in business eats away at productivity due the need to concentrate on survivial. The pressure is almost overwhelming to those who run small businesses. They make it up by getting through the day, reaching for tangible and creative methods to survive and keeping their doors open. Each paycheck they hand out is a singular accomplishment.

These people have pride. They have fortitude. They will not give up. Some are finding inner resources of financial creativity they never knew they had. Business owners exercise to maintain their sanity, they vent…and so far, the vast majority have kept it all together, while increasingly worried about tomorrow’s headlines and the psyche of those who are supposed to understand the complex economy of this new century.

There are business heroes in all sectors of the economy. They build homes and products, they provide essential services as professionals, they run the stores grease the economic engine of our nation. They keep American productivity flowing through the stream of commerce, even in tiny and almost imperceptible ways. And with all that is happening, they keep on persisting…believing…and working.

Those at the forefront of small business need genuine recognition from Congress. “Push the pork aside and lead” is their mantra. It’s not all about huge corporations that need help.  It’s about the shop owners, the small manufacturuers, the people who provide essential services through unnoticed business enterprises. America’s economic heroes need a “bailout” much more than banks who seek to put their names on stadiums or who hand out billions of taxpayer dollars in bonuses while the rest of us look on in disbelief and disdain.

We will get out of this. And when the financial history of this period is committed to the books, the small business operators will get their credit…much more than they are getting right now.

Update: MSNBC.com, citing the 2006 Census, reports approximately 70 million people work in small businesses that have less than 500 employees. That is “about half the total U.S. workforce” which is paid by 12 million companies nationwide.

–Mitch Chester

Urgent: A White House Conference on Affordable Housing

The Obama Administration can elevate Affordable Housing strategies to the national spotlight to help turn the economy around.

Needed: An invigorated and fresh federal focus on affordable and workforce housing strategies.

The time is ripe for a White House Conference to set a new high-priority national agenda on an increasingly daunting issue that requires high-visibility advocacy from the new President and his Housing and Urban Development Secretary, Shaun Donovan.

As foreclosures increase and Americans lose their homes, the demand and need for truly affordable housing (owned and rented) exponentially expands. Just because home values are resulting in lower prices in most real estate markets does not mean those with limited or no credit can afford to move into, fix up and sustain, over the long-term, a new residence without federal, state and local governmental assistance.

As States such as Florida try to reduce the amount of monies available for workforce housing initiatives (The Florida Legislature seeks to cut $190 million from an already raided state housing trust fund to help balance the budget), and as workers face layoffs, lost savings and retirement funds, President Obama needs to infuse this issue to the top of the new American Agenda.

A conference comprised of affordable housing advocates, officials from all levels of government, academic leaders, bankers, finance guru’s, entrepreneurs, construction and home building representatives and people affected by the housing crisis should be called with all deliberate speed. Executive Branch and Congressional leaders should herald a “National Affordable Housing Month” to focus on the need to resuscitate the economy by promoting home ownership and rental infrastructure incentives that will allow people to secure the fabric of their communities by getting and keeping people in housing they can afford, while at the same time promoting policies that encourage affordable housing near transportation hubs to help reduce neighborhood carbon footprints.

A “National Housing Month” initiative would further the White House urban agenda to increase the supply of attainable housing in Metropolitan Regions and the formation of a federal Affordable Housing Trust Fund.

In keeping with the President’s new media strategies, the results of an intensified look at low to middle income housing strategies can be posted on-line on the HUD.gov website, including 24/7 citizen access to financial literacy tools to keep, maintain and purchase attainable housing. The Department of Education could urge local school boards to hold a one day focus in social studies and civics classes which alert young minds to the issue and raise the national consciousness through academics.

An articulate dialogue, starting from 1600 Pennsylvania Avenue, is the way to kick-start this effort. For when people move into homes, the economy begins to receive the electric shocks that produce progress, and we have another way to recover from these difficult times.

–Mitchell A. Chester, Esq.

Economic Recovery and Volunteer Sweat Equity

The bailout is not dependent just on throwing dollars at problems...citizen activists offer another form of capital to get us back on solid ground.

Johnathan Alter is right. The need for a commitment to national service by volunteers is a key strategy in getting our nation back to economic health. Writing in the January 12 of Newsweek, Alter talks about investing in human capital, not just throwing money out in the typical “bailout” spending spree.  One way to get things done is to effectively use AmeriCorps, the U.S. program which works with public agencies and non-profits to make a difference in important initiatives such as education and the environment.  Other resources are ramping up opportunities. The President-elect is marshalling his vast army of campaign supporters into volunteer efforts that will help in the struggle to improve America and get us back on solid ground.

There are hundreds of thousands of people, young and old, who are ready to tackle our various national problems. Citizen activists who invest a few hours a week can produce incredible tangible accomplishments and should not be overlooked as an economic solution at the local and state levels.Even with the estimated one million charitable organizations across the fifty states, there remains vast untapped human power can be put to achievable tasks…and they are ready to go to work. Each offers the “gift of time” President Bill Clinton wrote about in his 2007 book “Giving, How Each Of Us Can Change The World.”

There are practical applications for volunteerism that need not be ignored. I chair an affordable housing advisory committee where I live. In a recent report issued to our Town Council, we stressed the need for additional staffers in our Housing and Community Development Department. But with budget deficits and the inability of government to spend more money on municipal jobs, we recommended an AmeriCorps member be used to help supplement the Department staff in the herculean effort to tackle our workforce housing crisis. Just one set of additional hands put to good use may make the difference to our community and its efforts to fend off homelessness for hundreds.

By one measure, more than 70,000 people join AmeriCorps annually. With the new call to activist action by the White House, that number will certainly swell. That’s a lot of brain power to put to beneficial use. The bailout, therefore, which seems to morph into something new each day, must also incorporate organizations like AmeriCorps to harness the unlimited power of people who just plain want to help others solve problems. “Bailout,” future generations will read, means more than just throwing dollars at different sectors of the economy…it means using all available hands and recognizing sweat equity as a key tool for recovery.This was proven in the Great Depression. The same truth holds promise today.

–Mitch Chester

High Marks For Stressing Performance

Fighting entrenched government waste will not be an easy task, even with the strong support of the President. The federal Chief Performance Officer will embark on an exciting but vital journey that could be a model for state and local governments.

Describing the newly created position of Chief Performance Officer (CPO), President-elect Obama characterized the new federal job as one of the most important in his upcoming administration. Now we have it…creativity has arrived in the form of real change to attack the pressing American problem of improper federal spending.

It’s a brilliant move, emphasizing the timely need for what Time Magazine calls a “waste watchdog” at the federal level. But why stop in Washington?  Perhaps Governors and their respective legislatures who are tasked with doing more with less resources should consider appointing a CPO at the state level.For that matter, there are many counties and large municipalities that could use their own money watchdogs to spot fiscal hot spots, analyze them and recommend greater efficiencies and control of public programs that don’t measure up and which recklessly squander the our taxes.

By naming management consultant Nancy Killefer to the high-level post, the new President has the opportunity to shape a powerful office and enhance bureaucratic performance. Exactly what influence the CPO will hold depends upon her consistent accessibility to the Oval Office and the willingness of Capitol Hill to work toward a common purpose. That’s not an easy order. In creating the new position, however, Mr. Obama has the opportunity to mold a more constructive government, for other elected officials to emulate in their local domains. Clearly, then, with hundreds of intricate and perplexing federal programs to scrutinize, the opportunity given to Ms. Killefer is unparalleled. She, and the new Chief Executive, can set the standard for a true public fiscal ombudsperson. The job must be done right, given the proper tools and taken seriously. Congress needs to work in good faith with the CPO, and the bureaucrats will resist. They will be exceedingly anti-change every step of the way. From all accounts, however, the first CPO is up to the job.

“Efficiency” will now be more than just a slogan in the coming four years. This, then, is exciting stuff. Here is how you re-invent government to serve the public trust and set the standard for other governments. We await results. But for now…Bravo.

–Mitch Chester

The Demand For Really Affordable Housing Has Not Evaporated

The need for super affordable housing will always exist.

With home prices falling through the roof, cheap auctions and foreclosure sales by the hundreds of thousands offering rock bottom price opportunities, some housing pundits across the nation are claiming “there is no longer an affordable housing crisis.”

Dead Wrong. Those who claim there is too much affordable housing ignore the needs of the very low income segment of our aging population. In fact, such housing skeptics are ignoring the needs of the average middle income Americans as well. While home prices may be lower than anyone can remember in certain locales, the concept of sustainable housing is being ignored.

Will the hundreds of thousands of families across the nation who need to purchase a house on the cheap be able to obtain credit to purchase the “American Dream?” Will underfunded, restricted and budget- threatened government finance programs be too tough for those with negative credit and income histories to qualify? Once in the homes, will the new owners be able to afford consistent monthly payments and maintain their homes? Just because prices are lower does not mean the need for work force housing has evaporated with the financial climate change. Lower prices does not mean the average income earner in 2009 can pay the deposits and fees to secure a roof over their head. Just factor in insurance, taxes, energy costs and…you get the picture.

One of the most drastic ideas currently being floated is to eliminate current requirements that builders provide “affordable” units in new developments. Not only is the definition of “affordable” ambiguous, but so is such a policy. It is short-sighted. When the real estate market recovers, what is termed “obtainable” today may be most unobtainable in future years.

Quite simply, claiming there is no further need, given current economic circumstances, to encourage work force housing through governmental incentives is a threat to the fabric of each community. If you don’t believe that, ask the retired teacher with little or no savings, the aged veteran with limited income, or the disabled who cannot work on a steady basis how they can afford the “median price” of homes even in today’s market. Median prices across the nation are still out of reach for millions. Ask the young couple just getting started who owe staggering amounts for educational loans.  Ask mobile home dwellers who are being displaced and cannot scratch together enough to rent a modest apartment to prevent homelessness. Ask the local nurse or store clerk who can’t save any money for the future. They can’t qualify for homeownership…even now.

Listen up. Inclusionary housing policies that provide for all segments of our society must be consistent, and not tossed out with myopic and trendy views of the new economy.

Our Palette of Ideas…the Opportunity For Stunning Results From Washington

"Colours" by Charlie McCarthy

“What is about to happen in Washington is the rare opportunity to mix ideas…to blend together our best work for the good of our troubled nation. Few times offer such promise as the first months of a new American Administration. This moment merits a few minutes to dream, to reflect and to envision how harmonious working together can actually be. Imagine, if the best Executive and Congressional intentions and ideas were blended together for a stunning result in laws and programs. Just visualize your idea to improve the nation is one of the colors in the short beautiful video which follows, and that your neighbor’s idea can work with your thoughts, seamlessly. The end product would be amazing. We should expect nothing less from Washington in the first one hundred days and beyond.”

–Mitch Chester

To experience the video, click the link below.
 
Colours from Charlie McCarthy on Vimeo.

Greening Up Closed Auto Factories

Lithium-ion battery...the future of Electric Cars? Manufacture them in closed American auto plants. (Photo courtesy Wikipedia and Varta...Museum Autovision Altlußheim, Germany and Claus Ableiter).

New age battery makers are about to ask the new Congress for at least $1 billion, and maybe double that amount, to promote manufacturing of lithium-ion batteries, according to an article on December 26, 2008 in the New York Times. These highly efficient batteries, the article states, “are three times as efficient as internal combustion engines in typical cars.” 

One hurdle that has to be overcome, however, is the lack of factories to manufacture the batteries. The National Alliance for Advanced Transportation Battery Cell Manufacture (AATBCM), which is a collection of lithium-ion business interests, claims there is not enough money to build factories since no major U.S. auto company is yet using the batteries for vehicles which run on electric.

Meanwhile, as we encounter depression conditions in areas where car manufacturers have closed production plants, maybe this push from AATBCM offers an opporunity to put people back to work and revitalize the towns that made us mobile.

Take, for example, Moraine, Ohio, outside of Dayton, where General Motors is scheduled to eliminate the facility that assembles the GMC Envoy and Chevrolet Trailblazer before mid 2010. The closure will affect an estimated 2,400 people, according to the Associated Press on June 4, 2008. If shuttered factories can be re-tolled to produce new battery technology, America can save jobs and set the course for green production facilities.

As we move through this economic time warp, the map is dotted with auto and steel plants that have or will soon lock their doors. The rusting buildings are silent witness to the memorable era of American manufacturing, which was unparalleled in vitality. With the right kind of charge from a newly energized Washington, we can, and will, re-gain our lost manufacturing gusto and become competitive again. Lithium-ion technology provides an opportunity for the United Auto Workers to work hand-in-hand with an emerging industry, fix up aged and idle plants and start moving the nation on a serious path of vehicular carbon reduction. 

With bailout monies supplied by the Treasury Department to GM and Chrysler, there should be a quid pro quo…old and unused brick and mortar assets such as decaying and silent factories should be earmarked for emerging enterprises to produce products like litium-ion batteries and reduce the spreading cancer of auto worker unemployment. Simply put, let’s retool the factories, and by so doing, address unemployment, promote vehicle efficiency, reduce carbon emissions and stimulate economic revitalization for future decades.

Why We Must Re-Examine Our Priorities In Space

As a forward to the opinion piece which follows, entitled “A Priority for the New NASA Administrator,” view this 1997 National Geographic documentary to see why scientists are so concerned about research and development in methods to avert near-earth objects.  Could an asteroid impact happen again? The answer is yes. Can we avert such a disaster? The answer is also in the affirmative.

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A Priority for the New NASA Administrator

Editor’s Note: As the Obama Administration commences its quest to shape its space policy and the direction of NASA, it is important to consider a priority not usually discussed on the campaign trail. What follows is an opinion piece written on April 26, 2007 by Mitch Chester.

John F. Kennedy may not have realized it, but his goal of putting humans in space may one day help save the planet. It was Presidential leadership in the 1960’s that invigorated America to invest billions in man’s quest to move beyond the atmosphere. His vision set the tone for improving human life in the decades which followed. Research and development in space science produced amazing by-products. Our lives are enriched by Kennedy’s decisive actions. Years later, a new President, George W. Bush, told the nation America will return to the moon, and eventually land our species on Mars. As the Chinese push for a moon base in the coming years, it is not surprising that the administration feels compelled to establish a permanent foothold on the moon. Untold billions will be spent in this quest over the next decades. From a scientific, military and economic perspective, the President’s plan makes sense. But should this newly announced goal be NASA’s top priority in 2007 and 2008?

Absolutely not. Here’s why.

At a meeting in Washington D.C. during the week of March 5, 2007, leading scientists discussed the chances of asteroids destroying a city or creating a massive tsunami by impacting the ocean. It was determined the risk of an asteroid crashing into our planet and destroying humanity is “minuscule.” Good news, but it was also announced that based on new calculations, the odds of small asteroids hitting Earth and creating a massive wave or destroying a city are not clear. According to those scientists, the chances may be higher than previously thought. As reported in the Washington Post on March 9, 2007, “NASA estimates that there are as many as 100,000 of the smaller asteroids in near-Earth orbit and that about 20 are “potentially hazardous.”

The majority of asteroids circle the sun in an area between Jupiter and Mars, but not all. Some head toward the vicinity of Earth. All it takes is one to create a mega-disaster.

In 1908, a massive explosion took place in Tunguska, Siberia. The cause: an asteroid impact. The resulting explosion was estimated to have the force of a 15-megaton nuclear bomb. The blast area was 62 miles wide. The Director of NASA’s Ames Research Center, Pete Wordon, told the Planetary Defense Conference held at George Washington University during the week of March 4, 2007, that an asteroid the size of the Tunguska disaster could destroy Washington D.C. and most of its suburban area.

According to an Associated Press article on March 7, 2007, “NASA officials say the space agency is capable of finding nearly all the asteroids that might pose a devastating hit to Earth, but there isn’t enough money to pay for the task so it won’t get done.” Inexcusable. The AP states the price tag for finding nearly ninety percent of the “potentially 20,000” hazardous asteroids and comets over the next 13 years is approximately $1 billion. That figure comes from NASA itself. We need to take notice of NASA’s plea.

Like global warming and climate change, the threat from asteroids and comets is not science fiction. It is not the whimsical daydreaming of environmental fanatics. Want proof? The United States Congress took the threat seriously and passed a law in 2005, mandating NASA to develop a plan to find and track dangerous asteroids. It also set the policy of the United States to develop ways to push away the errant pieces of rock that pose imminent threats. Why? It is fact that asteroids, comets and meteorites have hit our planet, despite the protection our thin atmosphere provides. Some believe one such event may have doomed dinosaurs.

Efforts need to be made to prevent such catastrophes. The 2005 Congressional action is fine, but as usual, the devil is in the detail. According to Mr. Wordon, “We know what to do, we just don’t have the money.”

While NASA is tracking large bodies in space, at least 3,300 feet in diameter, funds are needed to locate smaller asteroids, larger than 460 feet in diameter. According to the AP article, that is a size slightly smaller than the Superdome in New Orleans. If one of those hits earth, or even comes close enough, the devastation would be unimaginable. One example of the damage an asteroid of that size could do… an explosion caused by such a body could take out an entire state the size of Maryland.

Since the United States is the only government with an established asteroid tracking program, let’s find the $1 billion and put it to work now. The Associated Press article reports NASA and the White House have called potential solutions to track these threats too expensive. So that begs some questions…what’s the point of going to Mars if we can’t use technology to protect Earth? What sense does it make to establish a moon base if mother Earth is placed as a lower priority? Will astronauts one day view an Earth impact from a Moon base and proclaim the collision was avoidable?

According to the Washington Post on March 9, 2007, the risk of death by asteroid is similar to dying in an airplane crash if a person flies one time a year. Yet, there is major concern about this issue. Sure, there is only a 1 in 45,000 chance that approaching asteroid Apophis will hit our planet in 2036. But why take a risk on those odds? After all, Floridians feel they each have an opportunity to be singled out by betting on a 1 in 14 million chance of winning the lottery.

What we know about asteroids is changing. We have much to learn. For example, in 1999, NASA launched “Stardust,” a mission to a comet named “Wild-2.” It flew by an asteroid named “Annefrank,” and something surprising happened. After coming within 2,050 miles of the asteroid, it was determined that Annefrank was much bigger (twice the size) than previously thought. It is clear we need as much information about asteroids, which are ancient remnants of our solar system, as soon as possible.

The AP article quotes the space policy director at George Washington University. His comment: “You can’t deflect them if you can’t find them.” Why not try. It’s only a billion dollars. If a chunk of Earth is taken out, untold trillions of dollars will be lost, not to mention a potential loss of life on a biblical scale. America’s efforts to return to the moon and Mars should not be eliminated. According to NASA on March 18, 2007, a Gallup poll shows 68% of those surveyed support the new plan to return to the moon, then travel to Mars and beyond. I am one of the strong supporters.

I do advocate that more money be spent by Congress to fund NASA, since in the three years since President Bush proclaimed his “Vision for Space Exploration” plan, funding for this crucial agency has been reduced. However, some of the monies designated for a Mars landing should be re-allocated to the science of asteroid tracking and deflection with all deliberate speed. We need to have a reality check on our space priorities.

We have the concepts, and some actual accomplishments, to deflect asteroids. We have landed on a comet. Japan is about to land on an asteroid. We know how to get to targets in our solar system, and we do it again and again. Scientists believe, according to the Washington Post, that NASA has concluded the most effective way to deflect an asteroid is to explode a nuclear bomb near these chunks of rock and ice. The goal would be to change the course of the asteroid. It is exploring other means, such as launching a satellite to orbit the asteroid and change the path of the object by gravitational pull. The Post article also points out that the European Space Agency has a program called “‘Don Quijote,” which is designed to deflect asteroids. Even Europe is taking this seriously. We need to give NASA the monetary fuel to do the program correctly, and fully fund it. With all the unspent billions waiting for the reconstruction of Iraq years after initial allocation, surely we can find one billion to help NASA fund what may be its most important mission.

From the beginning of space exploration, many have wondered what spending money on NASA does for them. It has been demonstrated time and time again that we all live better lives due to work done on the space program. As our knowledge grows about the universe, those efforts may one day save a state or city from destruction.

Why is this article here? Because you can do something about this funding problem. Make your concerns known to your elected federal representatives. Make Congress aware of your concern. Direct Washington to find the billion dollars. Why not make it the top priority of NASA? There’s no need to eliminate the effort to return to the moon or go to Mars, but those programs should not be higher on the priority list than the asteroid threat. Only one nation has the ability to get tracking done comprehensively…for the good of all nations. One billion dollars. Let’s get started and fund NASA’s program to protect all Earth. If we don’t, it may be one of mankind’s greatest regrets.

The New Administration, Financial Literacy and Economic Security

Without mandatory financial literacy eduction the road to security will be hard to travel

Here’s an opportunity for the Obama Administration to employ a long-term fix to one of the root causes of our current economic quagmire.  The next Secretary of Education should seriously explore the idea that federal educational funding for high schools include a requirement that all graduating students successfully complete a financial literacy course.

Of course, this is not a new idea. Teaching financial literacy on a wide-spread basis has been a subject of discussion for decades. But except in some limited cases, the most advanced economy in the world (or so we thought) failed to actually train young adults about how to balance check accounts, understand the difference between stocks and bonds and navigate the world of credit…including mortgages.  In some small measure, the current mega recession is an unintended consequence of a massive educational failure that turned a blind eye to teaching young Americans about the economy.

While this concept is not new, the opportunity to actually do something about it is fresh as Washington re-thinks its eduction policy. Perhaps the most important thing we can do for future generations is to start educating our young and theirs about how our economy works, on a macro and micro level, starting with personal finance.

When I graduated high school, I could not balance a check book. My eyes glazed over at the sight of a stock table in the local newspaper. I took it on blind faith that whatever that small print was when I signed my first mortgage obligation would be “okay.”  It’s taken a long time to catch up. Today, students who will ultimately be asked to pay down the unthinkable budget deficit with their blood, sweat and tears will need to understand on-line banking and complicated money programs to get into housing and establish and preserve credit.  Some, as entrepreneurs and business owners, will need to comprehend what it means to establish a budget and navigate simple but essential accounting and tax concepts. This is not something to be put off.  Our high schools should assist in this challenge.

While there are resources on the internet that address this deep pocket issue, we need an established educational curriculum across all fifty states that has the discipline of actually engaging students in financial education. This is as important as secondary school math classes and should not be voluntary.

No, not everyone who attends such a course will get it.  But for those that will, the payoff for them and the national economy will be limitless. Smarter financial consumers will equal a more secure economy. Think of where we might be right now if financial literacy was a main staple of our educational system for the past 50 years. You can count on it…we’d be a lot better off.