lhowell

Archive for the ‘economy’ Category

Small is the New Big in Politics…

In economy, mindset 3.0, politicians on June 7, 2008 at 4:55 am

Clinton Donor Base Need Not Apply.

The country witnessed history Tuesday evening, with Senator Barack Obama winning the nomination to represent the Democrat’s in the fall.  It is obvious why this is such an historic moment.  But I want to take a short detour to highlight three articles written in the New York Times June 4, 2008 that are seemingly unrelated on the surface but how they support the small-donor approach of Obama to fundraising as opposed to the large donor route that Senator Clinton seems to favor.

The first article Start-Up Releases Smaller Version of Camcorder describes their new product called Mino that will sell for $179.  The Mino is a pocket size camcorder that is the first cousin of the Flip and Flip Ultra developed by Pure Digital.  I have the Ultra and use it all the time.   What is striking is the strategy behind the company’s products.  Small, simple to use with minimal features.  The result is an experience for a consumer that is easy to use, fun and the ability to share videos quickly across the Internet.

The second piece, G.M. Shifts Focus to Small Cars in Sign of Sport Utility Demise is about GM’s shuttering plants to shift to building smaller cars.  At first, my response was duh?  That’s a no-brainer with gas at $4 dollars a gallon.  Then I thought to myself, smaller cars, fuel-efficiency, less expensive.  GM’s CEO, Robert Waggoner “ said $4-a-gallon gas prices had forced a “structural shift” by American consumers away from large vehicles into more fuel-efficient cars”.  You think?

And finally, the article entitled, Clinton Donor Base Is Obama’s Next Prize describes how Obama may involve the big money fund-raising machine for which the Clinton campaign is famous.  Most notable for me is, if the existing base of donors gives an average of $200 the Obama campaign will have over $300 million dollars for the general election sans the Clinton donor base.  The small donors are the defacto reason why Senator Obama’s ascendency as the Presidential nominee is so extraordinary, and well, so special for all Americans.  While Clinton donors boast their deep, and well endowed wallets, it is virtually impossible to build the kind of support and “active donor base” established by the Obama campaign— 1.5 million strong and growing.  If these hard-working women and men, were supplemented with a bevy of 300-400 heavy hitters as the article suggests, this could well take an incorrigible turn against Obama’s bid for President in the fall.

See the theme here?  Small.  Yes, small is having a huge impact on how we live, drive, capture memories, listen to music, earn a living, and of course raise money in Presidential campaigns.  What’s important to keep in mind is how successful companies that keep it simple and small are thriving.  Apple’s iPod for example.  The Flip Ultra camcorder and of course we can’t’ forget the Toyota Prius and its legendary 40 plus MPGs of fuel economy compared to 13 MPGs for your average SUV.

So, the strategic question for Obama, and his campaign strategist David Axelrod is this: Should we continue the small donor strategy through the general election and forego the Hillary Clinton donor network?

If you believe in the success of Small, which sure seems to be working, not to mention GM’s shift in strategy to building smaller, more fuel efficient cars, then sticking with small just might be the way to go.  If you apply this thinking to the large donor approach, how much does it take to “feed” the large donors in terms of expectation?   It’s all about “their” collective egos and what “they” want?  As Eckhart Tolle writes in his book, A New Earth, “Recognize the ego for what it is: a collective dysfunction, the insanity of the human mind.”

What would they want in return to feed this massive collective ego?  By contrast, small donors simply want a government that works, and does what politicians say they will do.  Small donors have no need to feed their ego, they are more concerned with feeding their families.  This is the conundrum for the Obama campaign?  The leadership of Pure Digital adamantly stays away from “feature creep” to give consumers what they want—a camcorder that fits in their vest pocket and works with the push of one button.  Again, small is good!

So, here’s what we have: big SUVs, hefty $800 camcorders, and large donors with the ability to write six-figure checks.  All are hard to work with, require lots of resources, have high expectations and simply consume more energy and thought that could be used for more prudent pursuits.

Senator Obama has shown that if you have a good story to tell and you stick to your principles, people will vote for you.  I would be willing to bet that Republicans and the big money Clinton fund raising network prefer fuel-efficient, smaller cars, easy to use camcorders that don’t cost much and they would love to have the machine that is Obama’s small donor network all giving in unison on average $200 dollars a pop for the general election.  So, here’s the deal.  The Obama campaign generates $300 million dollars for this fall and Mr. Obama “lives” the message that Senator McCain continues to promote by doing away with special interest money.  Therefore, Small equals winning products to stimulate the economy built by U.S. companies.  And, just as important as this moment in history, small donor amounts equal big things for the American people in November.   Now, that is a fund raising strategy we can all believe in.

Gas Prices May Reach $5.00 per Gallon Sooner than We Think

In economy, marketing, mindset 3.0 on May 22, 2008 at 7:57 pm

The high cost of gas is likely to be a topic of discussion unless you ride a bike, been living in the “Enchanted Forest” or you earn over $1 million dollars per year. So, it’s safe to assume, this post is relevant to 95% of the people who may stumble across this blog. Because of the gas prices, I am looking for a new car or rather a more fuel efficient automobile. During my research, I came across the list you see below. If you live in Detroit, there should be good reason to worry.

And if you trade stocks, sell the US auto stocks short. This list is useful if you want to begin the search for a way to save gas. I didn’t stop there, I went a bit further and polled a few people on how much it costs to operate their automobile for a month.

You ready? People are paying between $550 and $800 per month for gas. So, assuming the average American car payment is $400 per month, the total cost is between $950 and $1,200 per month. Let’s take this a step further, what if you are married and have TWO car payments? You would approach $2,400 per month for the privilege of paying yourself to drive to work, sit in traffic and listen to the radio. If the Detroit automakers were playing Texas Hold’em Poker, and the Japanese said, “all-in” and Detroit “called”, they (Detroit automakers) would be wiped out.  Can you say: “government bail-out” again.

On the serious side of this discussion, is we are close to this scenario now. Just imagine the ripple effect? Nobody will purchase large SUVs and trucks. Thousand of Jobs will be lost. Bankruptcy for both GM and Ford. Government bail-out. And now gas is $6.00 per gallon and the special interest groups continue to lobby against more fuel efficient automobiles and commerce slows to a crawl. Can you say “Depression“?


African-Americans Can’t Save the Country from Recession

In conservation, economy, mindset 3.0, political analysis on January 21, 2008 at 2:38 am

The recession that continues to be discussed is real and there’s nothing the Stimulus Package can do about it. It’s really quite simple: consumers are tapped out. There is not enough money to pay all the bills. Just look at the proliferation of pay day advance stores that litter inner-city and even suburban areas. The fact is, consumers don’t need more stuff.

Now, after taking a peek at the video, the actor talks about “planned obsolescence”. This means that the stuff we buy has a finite life span. So, if you use credit to buy something that costs $250 bucks against your $1,000 credit card limit, and the item lasts 3 months before it breaks, you have to buy another one. So, you buy another one and now you have $500 remaining on your credit card. So, now let’s assume, you need new tires, which costs you $400; now you have $100 on your credit limit.

For African-Americans it is now time to revisit those trips to the mall, and perhaps consider doing one’s hair at home rather than spending 4-5 hours on the weekend to look pretty. So, the leading democratic candidates Obama and Clinton will be forced to get real creative if they want to create lasting economic change to change things. This next clip highlights why the democratic candidates need to seriously rethink their approach to getting the economy back on track.

After viewing these clips, I realized that going out to shop, is NOT the answer. Despite what the pundits say, and George Bush’s attempt to “stimulate” the economy, buying more stuff that we actually don’t need is simply not the answer. So, what is the answer?

Well, the first approach is to increase wages. Real wages have not kept pace with inflation and thus it is difficult to continue the torrid pace businesses have come to expect. The second piece of advice is to invest in spending quality time with your family. This might seem odd to some, but by spending quality time reading, sharing, walking and dancing at home, gets people away from the deluge of marketing messages that they get from watching television incessantly. Third, families have to get real about their finances and cut back on unnecessary driving, multiple cell phones and other financial leaks.

Recession means, marketers have done their job. But guess what, the bill is due and no amount of stimulus will help the U.S. economy. When real wages increase, savings increase, education becomes a priority, an economic stimulus package will provide “perceived” relief but in reality, this stimulus package, will simply be, well, much ado about nothing.

Happy New Year!

The Real Wealth Gap is Worse than Imagined

In economy, mindset 3.0, Third World Business on November 15, 2007 at 3:57 am

Forty-five percent of black children whose parents were solidly middle class in 1968 — a stratum with a median income of $55,600 in inflation-adjusted dollars — grew up to be among the lowest fifth of the nation’s earners, with a median family income of $23,100.  Only 16 percent of whites experienced similar downward mobility. At the same time, 48 percent of black children whose parents were in an economic bracket with a median family income of $41,700 sank into the lowest income group.   To read the full story, click here.   Now, you think this is troubling, something even more compelling to consider and even more serious is the map below:

wealth_2015.png

The projected wealth of China in 2015 could mean it producing 27% of all the wealth in the world, if the economic trends established between 1975 and 2002 continue for another 13 years. In year 1 of the current era China produced 26% of the wealth in the world, but very slowly declined to generating only 5% of the world total in 1960.   One might ask, what has this got to with the issues and socio-economic problems here in D.C., Detroit or Houston?  A lot!

We continue to feed the insatiable appetite for more, more, more.  More clothes, purses, shoes, toys, you name it.  But here is the opportunity, and listen carefully especially the young people.  Leave home now.  Go work abroad and get some international experience.  You see it with young people from Asian countries like India, Europe and Africa.  Yet, most African-Americans born in the United States can’t imagine living in Dubai, making $200,000 a year tax free for five years.  Or doing a student exchange in Beijing for a year.  This is how we can close this gap.  We must get out of our comfort zone and Just Do It, instead of just buying it.

Third World Innovation to Help People “See”

In economy, Hot Third World Products, india, marketing, mindset 3.0, Third World Business on July 28, 2007 at 5:02 am

We have an exciting new member in the Spangy community, and her name is Miriam Stone. She works for a truly innovative organization called Scojo. Here are the first two bullets of their mission, which is to create a company that:

scojo.png

  • Creatively balances the financial and human needs of our stakeholders: employees, customers, consumers, suppliers and shareholders;
  • Diligently ensures that our business is sustainable: meeting the needs of our customers and the recipients of our services…

Again, this is what Spangy.com is all about. Free advertising to innovation that meets the needs of the world’s poorest people. We look forward to hearing from you.

Should We Globalize Labor Too?

In economy, mindset 3.0, Tibet on June 11, 2007 at 3:04 am

Adapted from the New York Times Magazine, June 10, 2007.

Outside Africa, no country is poorer than Nepal. Its per capita income looks like a misprint: $270 a year. Sudan’s is more than twice as high. Nearly two-thirds of Nepalis lack electricity. Half the preschoolers are malnourished.

Two years ago, an organizer appeared in the canyon to say that the Nepal government (with money from the World Bank) was making local grants for projects of poor villagers’ choosing. First villagers had to catalog their problems. With Sarki as chairman, Chaurmuni village made its list:

“Not able to eat for the whole year.”

“Not able to send children to school.”

“Lack of proper feed and fodder for the livestock.”

“Landslide and flood.”

“Not able to get the trust of the moneylender.”

“Insecurity and danger.”

The punch line is this, it’s time to really do something beyond writing a check or having some meaningless debate to impress your friends to show how current you are with globally significant social issues. What do you think?

read more | digg story