Power has Corrupted of America’s Trade Deficit

Power is the drug that urges America’s elite to enslave America’s workers into borrowing $7 trillion dollars to buy foreign goods during the past decade while our robber barrons have idled our workforce. What corruption is this that is placidly accepted by our downtrodden citizens? Why do we accept the wealthy elite of our country stealing from the poor through trade deficits?

America’s trade policies have amounted to taxing the average family about $100,000 since 2000, reaching into the pockets of every American, pulling out thousands of dollars and giving them to America’s wealthy and their trading partners. That is the definition of power, raw and corrupt. Yet, through this slight of hand, our elite, including America’s federal politicians who bow to their whims, make it seem to the average American that the robbing of the middle and under class through trade deficits has been to our benefit!

Divine law starts with every man earning a living wage. Those with more talents and that can provide more to the community should earn more, yet all in America should start with a job that can feed their family, put a roof over their head, and shoes on their kids feet as they go off to school in safe neighborhoods. Instead, our robber barrons have seen fit to ensure that a third of Americans either do not work or are working poor while forcing our citizens to borrow from foreign governments while buying goods made in foreign countries by their citizens, not ours.

Power has corrupted our economy. Power has idled our workforce. Power has crippled our schools and filled our prisons. Power is the drug that deadens our elite to the plight of our citizens. Its tentacles reach throughout our institutions. Its poison weakens our communities. Its evil threatens the stability of our society. This imbalance of work, this idling of our nation is not a natural occurrence. It is a choice by our elite through the corruption of power, and it is an abomination of divine law.

To Grow Detroit, Invest in People

To grow a city, one must have a blueprint…one that organizes the resources, that multiplies livability, and that increases the vitality of the city as it is progressively implemented each generation.

Detroit’s original blueprint was one of an iron muscle, people living in close quarters to their factories, with all basic amenities of a roaring blue collar town close by and with the energy of community in the forefront.

The definition of livability continues to adapt to the evolving way we interact with each other. The blueprint for a “New Paris of the Midwest” will be different than Detroit’s original footprint. In a way, the blight that has affected a third of Detroit’s acreage is a silver lining that makes way for a new, more vibrant Detroit.

Now, real, functioning structure must be laid atop the blueprint. The city must have the working infrastructure of commerce and community. Detroit must have functioning roads, trash removal, police, fire, EMS, courts, city planning, administration, and all of the means of governance that allow the city to efficiently grow, minimizing artificial impediments.

For a city to prosper economically, the city’s culture must be amenable to growth, to collaboration and innovation. Its people must want to share in the fruits of their labor so that everyone who contributes to the multiplying wealth of the city prospers as well. And the city must be inviting to all who would venture in with new ideas and capital.

With the rudiments of success in place, the city must commence preparing its people for growth. Each person is an asset that brings value to the city. How each person is molded as they pass through the infrastructure of the city from birth through adulthood will determine the wealth potential of the city.

A child can be nurtured through city’s infrastructure complex and can come out the other side ready to earn $250,000 a year contributing to the city’s growth. That same child can be trampled through the system and come out the other side a negative burden in the city’s welfare. The efficiency and focus of the city’s infrastructure in placing that child on a higher plane of earning potential then determines the ultimate wealth of the city.

Multiply the average preparation value of each child times the number of children exiting the preparation system and you can predict the direction of the city. If the average preparation value falls below a sustainable level, the value of the city will fall. I suggest that allowing a city to graduate only 22% of its students with only 2% ready for college is well below the level to sustain a city’s wealth.

No amount of Downtown facades will correct the deficiency of the city’s engine of growth, its people. Detroit, it is time to set your infrastructure on course with a thriving path.

Is Saving Detroit Worth The Effort? (Yes)

Thus far, I have outlined Detroit school principles and Detroit work responsibility principles, two sets of principles amongst others that will be important to outline as the basis for a holistic solution. Yet already the solution set to accomplish just these two sets of principles might seem extremely difficult to some. To accomplish the two sets of principles that I have outlined thus far, for example, would take a great deal of cooperation between local, state, and potentially federal governments on both sides of the aisle and would force a paradigm shift that would be difficult to accomplish even with both major political parties working in concert. For this reason, many would simply scoff at my principles as unrealistic.

Yet, no other set of principles set forth thus far have been implemented in the past 60 years of Detroit’s decline that have resulted in the city’s turn around. And no principles being presented contemporaneous solve Detroit’s immediate growth problems either. Without a bold set of principles that sets the bar as high as the stars, Detroit cannot expect to even hit the moon. And right now, Detroit’s revival depends on hitting the moon.

I am suggesting that Detroit reach for a difficult task (that is reachable) to avoid a terrible alternative of bankruptcy and further decline. The alternatives thus far presented to Detroit by others show a strong and good future yet without a viable path forward. The thriving path forward requires that the city grow robustly, but the initiatives thus far presented project a slow growth.

Could Detroit achieve slow growth from Downtown and key city centers without a bold jobs initiative? Perhaps, yes, perhaps no….the answer depends on how deeply city services must be cut to balance the city’s budget and how much more crime and blight will be exacerbated by such cuts. The answer also depends on how many city assets will be sold off to forestall bankruptcy or whether bankruptcy will cause the city to lose its ability to borrow for the future.

A seemingly more complex but actually more viable solution is one that aggressively pursues a much higher rate of city growth. If a viable solution can project a realistically higher growth trajectory, it will also project a balanced budget at higher city revenue levels that can put Detroit in a position to borrow, not to pay for further operating deficits, but to create assets for the City’s future prosperity.

Since Coleman Young’s terms in office until now, Detroit has attempted to lure businesses to the city to provide jobs to keep Detroiters from leaving. The city has had some successes but not nearly enough to save Detroit from having to endure the emergency manager’s executions.

A net 1.1 million people have left Detroit since 1950, to find work and to escape Detroit’s growing crime. Now that the rate of exodus has slowed in Detroit, city leaders might be able to bring residents back if they can first bring businesses back. Yet to do so, they must convince business owners to relocate their businesses in Detroit instead of other alternatives. Detroit’s blight and crime rate make the effort formidable.

Even more formidable, the city’s leaders find themselves in two catch 22 dilemmas. First, without reversing its crime rate, Detroit will not bring in new businesses quickly enough to overcome mounting deficits. If the city cannot grow quickly enough, it will resort to selling off assets to pay debts and the sale of those assets could cripple the city. Yet, without bringing in enough businesses to provide good paying jobs, Detroit cannot reverse its crime rate. This is the circular argument that has haunted the city’s mayors for the past four decades, the catch 22.

The second circular argument is even more insidious than the first in that to lower crime, jobs must provide living wages. Yet, the type of jobs that most unemployed Detroiters qualify for pay the lowest wages. Half of working Detroiters aged 25 and under have jobs that pay minimum wage. Minimum wage is already too low to keep a worker out of poverty. Bringing in more jobs that pay minimum wage to hire unemployed Detroiters does not take them out of poverty. Without reducing Detroit’s poverty, crime will not significantly decrease. And if crime is not lowered, even those minimum wage jobs will not come to the city, hence catch 22 squared.

Since jobs could not be lured into the city to decrease crime, city leaders resorted to entertainment businesses like casinos and sports arenas, and gentrification, creating mini-walled off cities within the city, to increase the tax base, yet the pace of growth from these pursuits did not compensate for the losses due to depopulation, and now Detroit faces the impending possibility of bankruptcy.

The principles I have outlined for schools and business development will lower crime but both depend on breaking the circular arguments. If they can be broken, jobs can be brought in that provide current residents with livable wages, and Detroit can significantly lower its crime rate.

With lowered crime, the vision that Detroit is now presenting to the business community of a better Detroit will be viable. Detroit’s vision of the future city, combined with significant incentives for businesses to invest in the city, can then help the city bring in more jobs. More jobs will increase property values, which will in turn create higher city revenues that will lead to reinvestment in the city’s livability and a path toward a thriving Detroit.

To break the circular argument, however, two things must simultaneously occur. First, businesses must be convinced to hire 100,000 employees from the ranks of Detroit’s largely illiterate unemployed. Second, businesses must be convinced to pay new hirees a living wage that is above minimum wage, when half of Detroit workers under the age of 25 are being paid minimum wage. This is the herculean task that has perplexed a good many people without a solution. Therefore, Detroit faces bankruptcy.

Yet, the fact that no viable solution has been proposed in 40 years does not mean there isn’t one. The solution requires a paradigm shift. It requires the collaboration of both sides of the political aisle, and of local, state, and possible federal government leaders. Is saving Detroit worth all that effort?

Detroit Should Radically Redesign Learning, Safety, and Socialization of Students

Pre-school:

My oldest daughter is now 24. When she was 2, the very first interactive games were coming out for the computer that featured live action similar to today’s quality, combined with learning games. Being a first time dad with some disposable income, I bought this computer based on the games.

Sarah played the games constantly and interacted with the characters. Of course, her mother and I read her favorite bed time stories to her every night, which I understand is cognitively important. Yet my mother read to me each night as well and I did not do what Sarah did that amazed me.

When she was three, I took her and her little dog down to the park for a walk. For some reason, I wanted to go into the baseball field, perhaps just to expose her to it, I don’t remember now. But as we approached, Sarah saw a sign, and said, “Daddy, we can’t go out onto the field.”

The sign was a list of rules, one of which said – No Pets allowed On the Field-

I asked her why and she read the sign for me. I was flabbergasted. At that point, I knew the power of computer games. Inner city kids come to school the first day with cognitive skills behind those of some that have had more opportunities to learn. Yet at 5 or 6, the mind is a sponge.

Every night, my child would pick from a pile of books her favorite ones for me to read. It was a task for me to put feeling into the same words over and over but memories that parents cherish later in life. In Detroit, 47% of adults are functionally illiterate, meaning they cannot perform that parental task of reading to their children.

Since 1996, the government has provided free cell phones to those that qualify for assistance. This idea would gain the ire of most on the right, but perhaps if cell phone users are footing this bill anyway, the phone could be a smart one, integrating the power of computing into every home.

Loaded on the phone would be 6-10 game apps, all games having to do with entry level reading and math skills, which would be available for both parents and child. nightly bedtime would now not be the avoidance of books but encouragement of the app.

School Principles and Design:

Safety

Principles:
1. Students should not have to fear outside threats
2. Students should not be disrupted by other students who have not yet learned to self regulate

Design
1. All school structures and systems designed to provide safety from outside threats
2. All school structures and systems designed to ensure threatening weapons do not enter school premises
3. All schools provided security personnel
4. Work systems and school systems time and calendar schedules integrated to allow communities to safely
see their kids to and from school.
5. School environments layered to separate disruptive or aggressive children from others but always within
a learning environment.

Socialization:

Principles:
1. Students should not be separated in social environment from others their age
2. Students should be engaged throughout learning years
3. Only students involved in farming should have time allotted for farming
4. Student and parent time should coordinate
5. Students should not be hungry when they attempt to learn

Design:
1. All children mandatorily remain under school authority until they are 18 years of age or pass minimum
required skill attainment
2. All children mandatorily advance grade levels by age.
3. All children remain within school-managed environment during parent’s “first shift” working hours
(eg.8-5, set by community).
4. Students remain under school authority during vacation dates and school supervision is available during
those dates as well. Summer vacation limited to one of two four-week blocks.
5. School breakfast and lunch available

Learning:

Principles:
1. Students should not fall behind for an entire year of school.
2. Students should not be subjected to a teaching method or teacher for too long if learning is not
advancing.
3. Multiple methods of learning material should be tried until student achieves an understanding of the
material.
4. Until adulthood, jobs should be designed to learn work skills and the community should be responsible
for any student that enters the work environment

Design:
1. Student advance by skill block rather than grade level. Skill blocks are designed to be completed in 6-
week increments. Skill blocks must be passed. Many are mandatory and cannot be skipped.
.2. Minimum skill blocks for release from school authority -320 blocks and graduation (or 18 years)
.3. Maximum skill blocks obtainable – 570
.4. Minimum pass is 75% – remedial training required if 85% is not obtained.
.5. Students cannot retake skill block with same teacher
.6. With daily learning hours now increased, students not attaining pass level are provided various levels
of additional instruction and variety of teachers and teaching methods, but learning blocks are not
skipped.
.7. At higher grade levels, learning blocks can include outside paying work assignments involving on-the-job
training and employer acceptance of responsibility for administering block skills.
.8. Learning blocks can include in-home, parental supervised learning assignments

Revitalize Our Inner Cities to Reduce Gun Violence

Why is it that we do not talk about root causes? We instead dabble in cliches and whitewashed sanctimony about gun control and move on hoping not to upset the politically correct balance we have made with all the factions of those that represent the political quadrant of our beliefs. How is it then that we expect to reach any conclusions regarding anything resembling viable solutions that have any reasonable chance of not only passing our Congress but of actually helping to reduce homicide rates?

Let’s instead go bold with multifaceted solutions that go at the root of reducing gun violence like the following:

1. Decriminalize and corporatize drugs, eradicating illegal transportation, distribution and sales and reducing the incentive for gang violence defending their markets.

2. Create a work visa program for illegal immigrants to work in the U.S. legally while going through a legal, normal, citizenship process same as others, while paying taxes and raising their families transparently and stably in safe neighborhoods. The transient nature of youth violence in these communities will diminish.

3. Create viable, inner city enterprise zones that subsidize employers up to the full cost of worker salaries and raise minimum wage to $12 per hour in those zones, creating real opportunities for corporations to bring factories back home, creating real opportunities for inner city jobs that can raise families and stabilize communities, and creating real opportunities that give school kids hope for a better life.

4. Subsidize the full cost of worker training in enterprise zones again subsidizing corporations and equalizing the international cost of American workers while building capable workforces in the inner cities. With higher paying jobs in enterprise zones and with corporations reintroducing factories into these zones, opportunities to earn a decent wage with normal working hours will expand and parents will be more accessible to their children. In addition, with promise of opportunity burgeoning in these communities, the desire to do well in school will increase as students see a future after school.

5. Make high school mandatory for all students through 12th grade or age 18, strengthening the workforce that must entice corporations to invest in them, while dismantling truancy.

6. Eliminate ability of teacher unions to protect teachers from firing. Immediately increase teacher pay and begin to eliminate the bottom 3% of teachers each and every year from the school system. Free up schools to invest in innovative teaching and teachers to give students who must now spend their first 18 years in school the best opportunity at future success.

7. Fully subsidize up to 100% of state college costs based on ability to pay, and all tuition for state colleges. Fully subsidize those degrees most needed for a national workforce strategy intended to maximize the capabilities of every citizen to meet our growing GDP goals. For those students that have the aptitude, free college for inner city school kids represents a real light at the end of the tunnel for both them and their parents, who did not have that opportunity and could not afford it for their kids otherwise. This is a real incentive to a better life than gangs for some.

A bold strategy will not only incredibly decrease gun violence but will also create a new economy in our inner cities that will compare with the opportunity presented by China in 1978.

Similarly to affirmative action, my plan will take years to fully effectuate root changes in society. However, some of the actions will have immediate effect and all will pay for themselves in decreased violence and increased societal productive output. In the end, our cities will be revitalized, our citizens will enjoy full employment, and our nation will be internationally secure.

Do Business Schools Graduate Business Leaders Who Disregard America as A Stakeholder?

In a recent Linkedin group discussion, a business school graduate questioned whether we should be discussing the politics of business on the  site; rather should we be using the group discussion for issues only regarding business development and networking.  I responded that global issues of jobs are the pivotal issues we should be discussing.  My response is below.

In March 1989, a federal grand jury indicted one our most infamous Wharton alumni, Michael Milken, on 98 counts of racketeering and fraud.  In 1993, after being released from prison for serving time on six counts securities and tax violations and paying $1.1 billion to those he abused, Mr. Milken founded the Prostate Cancer Foundation and then Faster Cures, making a difference in medical research processes.   Fortune magazine called him “The Man Who Changed Medicine” in a 2004 cover story on his philanthropy.

Mr. Milken had a second chance to atone for classic Wall Street greed that erupted into criminal activity.  Yet, had he not spent time in prison for his misdeeds, would his unethical financial manipulations been acceptable by Wall Street standards?  Many in America judged him as the poster child for the problems with business schools; that schools like Wharton send guys like him to Bear Stearns, Lehman Brothers, Merrill Lynch, Morgan Stanley, and Goldman Sachs without adequately preparing them to deal with the ethics of business. 

My class certainly touched on the ethics issue, going as far as to review “Den of Thieves”, an eye opener account of how a few brilliant business school graduates harmed America.  While we all gained from courses that increased insights into ethical choices and their global effects on business, if the objective of these courses was to inspire the next generation of Wall Streeters to rise above recent activity that will be recorded by history as “Milken crack steroids”, they did not succeed.

I appreciate mutually beneficial Linkedin connections.  However, at this historic fulcrum, when our childrens’ future are being defined by  our nation’s business leaders, I have acted on a purpose beyond my personal business goals by starting a blog, www.jobvoucherplan.com  to advocate for the unemployed in America.  As I write, I sense Wharton grads’ responsibility to help set our country’s path.

Milton Friedman, avowed defender of free markets, said that “the business of business is business”.  Our grads, armed with his quotes have been enlisted by investment banks and multinational corporations to transfer capital and jobs offshore.  Brandishing his philosophy, our grads chide protectionists stating that America must out innovate others to advance our country.  They then use the shield of American property laws to transfer American innovations to offshore subsidiaries, favoring international shareholders without regard for America as a corporate stakeholder.

Michael Porter is now publicly modifying Freidman’s concept with corporate social responsibility, including countries as stakeholders.  Recognizing a stark difference in this business theory from Freidman’s, I am raising issues of corporate responsibility regarding country of origin, increased national security definitions of American innovation, reevaluation of property laws regarding intellectual capital, and defining corporations as U.S. citizens with citizen rights, but equally as important, with citizen responsibilities.

Assuming that the Wharton Alumni group is specifically for professional development, networking and career/business building, if discussing these topics helps us develop deliberated beliefs about these historic issues, does it fit the group intent?  Even if we take Milton’s distilled view of business as the basis of our overarching context for business, I would say emphatically yes.  At a minimum, dismissing these issues as politics, limits our responsibility to examine a greater context for business decisions we make.   More importantly, discussing these issues may assist Wharton business leaders to consider business alternatives that create maximum profits for global shareholders while exercising corporate citizen stewardship for America.

America is Losing the Education Race

In Vivek Wadhwa’s January 12, 2011 Bloomberg Businessweek article entitled “U.S. Schools Are Still Ahead—Way Ahead”, he claimed that America’s alarm about international rankings of students overlooks some critical components of our education system, further stating that “let’s get over our inferiority complex. America is second to none. Rather than in mastery of facts learned by rote and great numbers of accomplished martinets, its strength lies in the diversity and innovation that arise in an open, creative society.” While I trust Dr. Wadhwa’s data and observations, his conclusion does a disservice to America, giving our school system high marks, ie. way ahead.

Yes, it is true that our innovative culture allows the brightest to excel, and that innovation is a critical success factor for our country. Yet, in the end, the innovations of our brightest are fungible and transferable to the highest paying nation. Rather it is the education of the students who will make up the working middle class that is most important if we are to compete globally.

International capital is invested in countries that are best able to support operations with a well educated people, and with investment comes jobs.  China knows this all too well. During the 1970’s, when they formulated their national strategy for global competition, they mandated education for all students, including college prep courses emphasizing globally competitive science and math, and technology courses for those not participating in college. Education at the college level was provided by highly competitive scholarships. China’s focus on education from that point until today has resulted in having a well educated workforce, so well educated that when for the first time mainland China participated in the Program of International Student Assessment (PISA) this year, they placed first among participating nations.

To compensate for our working class demanding among the highest wages globally, and to prepare our country to compete for future investment, America must strive for the best educated working class across the spectrum from the brightest to less bright.  Sadly, in this metric, we have allowed our educational system to collapse. We fail to keep a third of our children from even graduating high school, and among those that do, proficiency is lower than in many other industrialized countries.  In that same Program of International Student Assessment (PISA) in which China placed first, America placed 23rd.  We are losing the race.