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The Not So Predictable Future By Jack Carter, Principal, Wealth Generation 13889 62nd Avenue North, Maple Grove, MN 55311 Phone: 763-559-7425, fax: 763-559-0664,

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Presentation on theme: "The Not So Predictable Future By Jack Carter, Principal, Wealth Generation 13889 62nd Avenue North, Maple Grove, MN 55311 Phone: 763-559-7425, fax: 763-559-0664,"— Presentation transcript:

1 The Not So Predictable Future By Jack Carter, Principal, Wealth Generation nd Avenue North, Maple Grove, MN Phone: , fax: , website:

2 © 2007 Wealth Generation. All rights reserved. 2 Key Points This presentation is a counterpoint to most articles you read from state or federal economists. The official view is always bright and predictable, but America’s future is anything but predictable. You will see how the official view compares with those of media, political, and economic experts. You decide. I believe that once past a tipping point when firms take more than they give socially, employers have to cultivate moral behavior to sustain growth and profit.

3 © 2007 Wealth Generation. All rights reserved. 3 Typical Points of Concern Housing Inflation Interest Rates Dollar Value

4 © 2007 Wealth Generation. All rights reserved. 4 Housing starts lowest in 10 yrs, but The official word is no big deal because housing is only a $750B industry in a $12.5 T economy (6%). How can this be true when housing & automobiles have always been our biggest economic drivers? –Construction labor and materials, real estate sales, banking, insurance, utilities, appliances, home and yard supplies, commuting expenses to and from work. –Home equity loans greatly increased consumer spending Fact: Housing is by far our biggest economic driver

5 © 2007 Wealth Generation. All rights reserved. 5 Stability? How stable are we? Inflation under control? Everything except the index is rising. Essentials like housing, healthcare, education, energy, insurance, property taxes… are all rising faster than the inflation index. America’s dependence on foreign investment from Japan, South Korea, and China ($5B of new debt every day), means that our interest rates and dollar value could dramatically change overnight.

6 © 2007 Wealth Generation. All rights reserved. 6 What about other factors? Our “jobless” economy could also become a crisis: –Automation: enterprise-wide software, embedded services that run operations like at McDonalds, supply-chain management, dotcoms that transform purchasing & distribution… What else? –Outsourcing; off-shoring; mergers and buyouts; record high levels of immigration (legal and illegal); H-1B visas for better paying jobs… –Glutted domestic markets for automobiles, newspapers, magazines, 100s of TV stations, radio, CDs, and DVDs decrease opportunities and increase sales costs. –All the above reduce jobs, wages, benefits, and opportunities in type and variety of work, which in turn undermines consumption, ability to pay taxes, and quality of life. Growth markets: pornography, gambling, talk show demagoguery, lobbying, PR/dist., buying and selling Annual trade deficit approaching $1T means what?

7 © 2007 Wealth Generation. All rights reserved. 7 Freedom of Deception How many other deceptions affect our under-standing and shape our lives? Free trade? NAFTA consists of 1,700 pages of regulations; The WTO has 23,000 pages of regulations. Free markets? What about monopolies, conflicts of interest, subsidies, and government contracts? “Pay-to-play” economics… Whose democracy? Ours or special interests? Organizations like the WTO bypass our democratic process, yet define our reality. Check out the “fast-track” legislation now in process. History? Was America founded on religion or science? Media intended to inform, entertain, or shape opinion? ABC docudrama “Path to 9/11” claimed that Clinton passed on a surefire chance to get bin Laden. Not at all true. Are women really better off? 51% of Women Are Now Living Without Spouse51% of Women Are Now Living Without Spouse Homeland Security? As Terrorism plots evolve, FBI relies on Agent John Q. Public 6 Men Arrested in a Terror Plot Against Fort DixAs Terrorism plots evolve, FBI relies on Agent John Q. Public6 Men Arrested in a Terror Plot Against Fort Dix

8 © 2007 Wealth Generation. All rights reserved. 8 Let’s open our perspective We know that people, organizations, and nations create economies and lifestyles. So let’s look to what some of America’s “best and brightest,” most proactive, knowledgeable, and experienced people have to say.

9 © 2007 Wealth Generation. All rights reserved. 9 America is in big trouble, according to: Paul O’Neill, The Price of Loyalty, 2004 Arthur Levitt, Take on the Street, 2003 Frontline “Bigger than Enron” Peter G. Peterson, Running on Empty, 2004 Henry Kissinger, Does America Need a foreign policy?, 2001 David Brock, The Republican Noise Machine, 2004 Tom Fenton, Bad News, 2005 Thomas Friedman, The World Is Flat, 2005

10 © 2007 Wealth Generation. All rights reserved. 10 Paul O’Neill, Sec. of Treasury Ready to retire with $60M in the bank, when his old friend Dick Cheney called him Conservative Republican, born in a wooden shack, succeeded at everything he tried to do. O’Neill was deputy director of Nixon’s OBM. Allen Greenspan recruited O’Neill to Alcoa where, as CEO, O’Neill transformed the industrial-age company into a very successful knowledge-based organization. After he turned the job down in 1987, O’Neill recommended Cheney for Bush 41’s Sec. of Defense.

11 © 2007 Wealth Generation. All rights reserved. 11 Arthur Levitt, Chairman of the S.E.C. from 1992 to 2001 Presided over a $7T loss in the stock market Says he left Wall Street a better place, but there’s much more to do See PBS Frontline: “Bigger than Enron,” “Wall Street Fix,” “Tax me if you can.” Provides an inside story of markets, corruption, and rampant abuse of power along with other useful info. His conviction: In a democracy, you have to get the truth out to the people. He took his story to hundreds of investors in 43 meetings across the country. Then he wrote Take on the Street… Who has read it? Who has seen “Bigger than Enron?” or “Wall Street Fix?”

12 © 2007 Wealth Generation. All rights reserved. 12 Abuse of power is not limited to the accounting industry Energy companies invested $850M over 4 years to buy access. Repaid well with $26B in subsidies. Energy “cartel” beats auditors and courts Blowing the Whistle on Big Oil, Bobby Maxwell sues Kerr McGee after being fired. Blowing the Whistle on Big Oil Prescription Drug cartel, $100M/yr, $900M since 1998 Media cartel: Copyright Extension Act, prolongs ownership to life of owner, plus 70 yrs, from plus 50 years Bank cartel: Merrill Lynch, Credit Suisse, and Barclays win ruling against class-action suits Court Rejects Class Action Against BanksHolding Accomplices Accountable Court Rejects Class Action Against BanksHolding Accomplices Accountable

13 © 2007 Wealth Generation. All rights reserved. 13 Pete Peterson, co-founder Blackstone Group, Chm. Federal Reserve Bank NYC America is headed for a financial meltdown 60 Minutes: U.S. headed for Financial Trouble? David Walker, Comptroller GAO of 3,000 employees 60 Minutes: U.S. headed for Financial Trouble? 2 choices: act now on our terms; or let it crash and let chance determine our future How Democrats got us into this mess; and how Republicans made it worse (over 30 yrs.) 5 myths about entitlements / 5 myths about tax cuts –Most entitlements go middleclass to middleclass –U.S. citizens pay less tax than any other country except Japan

14 © 2007 Wealth Generation. All rights reserved. 14 Henry Kissinger Washington gave up on foreign policy at the end of the Cold War and corporate America took over. 3 groups in Washington reveal deep dysfunction 1.Veterans who know foreign policy and why it’s needed 2.The Clinton generation who apologize for Cold Warriors 3.Our newest generation, our “best and brightest,” have little knowledge or interest in world history/culture (the electorate too) Corporate diplomats in pursuit of profit don’t know who’s manipulating them or to what end. China, e.g., isn’t as reported in the news… Opposite of us: They focus on process; we focus on results.

15 © 2007 Wealth Generation. All rights reserved. 15 Quiz Question #1 Who is Larry King’s 1 st choice to succeed him when his contract runs out in mid- 2009? Source: NY Times, “Who’s Talking about Retirement,” April 5, 2007.Who’s Talking about Retirement

16 © 2007 Wealth Generation. All rights reserved. 16 David Brock, media expert and political author Brock’s expose of the neo-con movement starts with The News Twisters in 1971, a book that Nixon made a best seller using campaign funds. The neo-con “big idea” was to organize for power, rather than innovative policy or ideas. Organized think tanks, publishers, television and radio talk shows, and web sites, to advance their agendas and to ruthlessly attack any opposition. After 30 yrs and 10s of millions of dollars, the Big Lie took hold: our media is widely distrusted. U.S. media like Russia’s? See 50% Good News Is the Bad News in Russian Radio See 50% Good News Is the Bad News in Russian Radio

17 © 2007 Wealth Generation. All rights reserved. 17 Quiz Question #2 Who is the godfather of the neo-conservatism? Source: The Republican Noise Machine, David Brock, page 19, 45-46

18 © 2007 Wealth Generation. All rights reserved. 18 Tom Fenton, CBS journalist and foreign correspondent for 40 yrs. What we don’t know can kill us! 4 months before 9-11, Mohammed Atta applied for a loan from the Dept. of Agriculture in Florida… Foreign correspondents know what’s going on. Fenton followed everything from the Shah of Iran to the movements of al Qaeda in Europe, but media bosses won’t print “depressing” or “obscure” stories anymore The less real news we have, the easier we’re controlled. E.g. without a big picture of what happened in Tora Bora, politicians can spin the story any way they want.

19 © 2007 Wealth Generation. All rights reserved. 19 Quiz Question #3 What President accomplished these objectives? Balanced the budget; steadily reduced the national debt; projected 10-year surplus of $5.6T Sent 60% of Welfare recipients (14M) back to work Reduced child poverty by 25% Doubled the prison population; Reduced violent crime by 50% Created more new jobs every year, setting new employment records year after year

20 © 2007 Wealth Generation. All rights reserved. 20 Thomas Friedman’s flat world Walls coming down in Berlin and China, fiber optics and the Internet everywhere, workflow software, out sourcing, off-shoring, supply-chaining, in-sourcing (UPS), informing… everything on steroids. Conclusion: America is sailing into a “perfect storm.” Billions of new workers will devastate middle-classes Bill Gates gushes over the supply of high IQs in China China has 4x more grads in engineering than U.S. every year; Japan has 2x more. Recently, Citigroup and Circuit City moved 1000s of better paying jobs overseas Citi to Cut 17,000 Jobs in Broad Overhaul Circuit Breaker G.E. Nears a Deal to Sell Plastics Unit to Saudis (11,000 employees in 20 nations)Citi to Cut 17,000 Jobs in Broad OverhaulCircuit Breaker G.E. Nears a Deal to Sell Plastics Unit to Saudis (11,000 employees in 20 nations)

21 © 2007 Wealth Generation. All rights reserved. 21 Quiz Question #4 Craig Barrett, COB of Intel, says that Intel can be totally successful without ever hiring another _________. Source: New York Times, “Book Tour is an education and only some of it is funny,” Thomas Friedman, May 8, 2005

22 © 2007 Wealth Generation. All rights reserved. 22 What’s wrong? We have become an amoral money culture. Winning is everything, facts are unnecessary, everyone lies, or “puffs” on resumes. Ends always justify means. America’s Truth Deficit America’s Truth Deficit We have passed a tipping point where more people exploit than serve (media, insurance, credit card companies, lobbyists, corporate executives, leaders and managers, lenders, authors, talk show hosts, doctors, and lawyers). Many answers… but one is how we confuse culture with entertainment. Classical culture mends human flaws. Starting with the sexual revolution, Rock & Roll, Playboy/Hustler, the Beats, the Hippies, and such. Hollywood has been cultivating our flaws since the 1960s with movies like “Easy Rider,” “Midnight Cowboy,” “Five Easy Pieces.” Now we have Howard Stern, MTV, The Sopranos ; web porn, gambling, & computer games. 60 Minutes: Can a video game lead to murder? 60 Minutes: Can a video game lead to murder? Without moral messages, wrong is as good as right.

23 © 2007 Wealth Generation. All rights reserved. 23 We talk morality, but do whatever Credit card companies charging 30% interest… Tougher bankruptcy laws, even unforeseen medical All kinds of predatory lending from banks, retailers, credit card companies, sub-prime lenders; student loans, payday loans, tax-refund loans, direct marketing schemes, past-due agencies … Insurance rates based on credit history… and refusals to cover individuals who need the coverage the most. When ratings replace social responsibility, we are worshipping Mammon. We cultivate human flaws. Woody Allen both creates and exemplifies our lack of morality (“Hannah and Her Sisters” to “Match Point”). The Game of Life – ditched virtue vs. vice long ago. The Game of Life – ditched virtue vs. vice long ago.

24 © 2007 Wealth Generation. All rights reserved. 24 What Can We Do? What is the intended role of government? How do we eliminate corruption on Wall Street? How can we become a creditor nation again? How can we maintain our global dominance? How do we escape the media’s feel good fantasy? How do we restore trust in the media? How do we respond to billions of new knowledge workers entering the workforce?

25 © 2007 Wealth Generation. All rights reserved. 25 Culture is the glue that holds civilizations together Classical culture always has two dimensions: how to live better socially and individually. –It’s not just about having respect for others… The Golden Rule. –But about understanding one’s depth, how we change over time, and appropriate adjustments to life changes such as marriage, new jobs, and/or career changes, life crises, to name only a few. Moral cultures contain the secrets to performance and longevity like spiritual centering, trust, and honesty. Moral cultures in the workplace would regularly reinforce the differences between culture and entertainment, as they drive performance and employee satisfaction.

26 © 2007 Wealth Generation. All rights reserved. 26 Key Takeaways America’s future is anything but predictable. I’d believe experts who look at pros and cons before I’d believe politicians, sales people, advertisements, or hired guns such as state economists, lawyers, and consultants. Once past a tipping point where more people take than give, my view is that employers need to cultivate appropriate behavior to maintain growth and profit. Common themes from ancient wisdom can fully empower individuals, inspire achievement, excellence, teamwork, and performance. Culture operates in the background of our thoughts and actions, as an operating system controls a computer. America needs an update in the order of DOS to Windows XP.

27 Thank you for your time and interest.


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