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, website: www.wealthgen.com
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.
© 2007 Wealth Generation. All rights
reserved.
2
Typical Points of Concern
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Housing
Inflation
Interest Rates
Dollar Value
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3
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
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4
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.
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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?
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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 Spouse
• Homeland Security? As Terrorism plots evolve, FBI relies on Agent John Q. Public
6 Men Arrested in a Terror Plot Against Fort Dix
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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.
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America is in big trouble, according to:
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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
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Paul O’Neill, Sec. of Treasury
• Ready to retire with $60M in the bank, when his old
friend Dick Cheney called him 1999.
• 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.
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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?”
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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.
• 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 Banks
Holding Accomplices Accountable
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Pete Peterson, co-founder Blackstone Group,
Chm. Federal Reserve Bank NYC 2001-2004
• America is headed for a financial meltdown
60 Minutes: U.S. headed for Financial Trouble? David Walker, Comptroller GAO of 3,000 employees
• 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
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Henry Kissinger
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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)
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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.
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Quiz Question #1
• Who is Larry King’s 1st choice to succeed
him when his contract runs out in mid2009?
Source: NY Times, “Who’s Talking about Retirement,” April 5, 2007.
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David Brock, media expert and
political author
• Brock’s exposé 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
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Quiz Question #2
Who is the godfather of the neo-conservatism?
Source: The Republican Noise Machine, David Brock, page 19, 45-46
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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.
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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
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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)
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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
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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
• 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?
• Without moral messages, wrong is as good as right.
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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.
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What Can We Do?
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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?
© 2007 Wealth Generation. All rights
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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.
© 2007 Wealth Generation. All rights
reserved.
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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.
© 2007 Wealth Generation. All rights
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Thank you for your time and
interest.