Category: Economics

A Christmas Present for the Banks from the Omnibus Bill

Posted on December 16, 2014 in Economics, Industries, Strategy

Go Lean Commentary

What do you get for $5.3 Billion? There must be some return on that investment.

The book Go Lean … Caribbean asserts that the US Federal Election-Campaign system is not the model that the Caribbean should want to emulate.  This book relates that $5.3 Billion was spent for the 2008 Federal Elections (Page 116), a lot of it contributed by corporations, resulting in a lot of influence peddling. This drama was vividly demonstrated this Saturday evening when the “lame-duck” Congress (the Senate in particular), delayed the required Omnibus Spending Bill – just in time – to extort favorable legislation that would roll back some of the federal regulations enacted after the Great Recession of 2008 to protect against banking systemic risks.

Senate Minority Leader Mitch McConnell speaks to reporters on upcoming budget battle in Washington

The Shadow Influences spearheading these changes are known to adhere to the principle that “a crisis is a terrible thing to waste” – a quotation credited to famed American Economist Paul Romer. While others will think that this drama was just politics as usual, the following article depicts the more strategic nature of the new legislation, to foster the environment and industry for financial derivative trading – this is too specific for any life-long politician (the US Senate) to advocate on the sly. No, this has the fingerprints of Wall Street Shadow Influences all over it. (See Appendix below for encyclopedic references on derivatives and swaps). See the news article here:

Title: A Christmas Present For The Banks From The Omnibus Bill
Forbes Magazine Investing Online Blog (Posted 12/13/2014; retrieved 12/15/2014) –
http://www.forbes.com/sites/robertlenzner/2014/12/13/wall-street-reverses-ban-on-trading-derivatives-backed-by-uncle-sam/
By: Robert Lenzner, Contributor

Wall Street banks like Citigroup and JP Morgan Chase have flexed the power of their influence to pressure Congress and the White House into a key change in the law that will allow the trading of risky financial derivatives in bank operations that are insured by the Federal Deposit Insurance Corp. This means the nation’s largest banks used the deadline for passing the Omnibus spending bill as pressure to reverse a key section of the Dodd-Frank bill of 2010 that was meant to prohibit a federal government bailout of swaps entities.

It was the existence of over $500 billion of Credit Default Swaps on the balance sheet of AIG in 2008 that threatened to bankrupt the largest insurance company in the world. So, in effect, six years later, the same Wall Street banks that were bailed out by federal largesse, are being given a legislative gift that will enable them to freely trade the securities that brought Lehman Bros down in 2008 — and obtain access to the benefit of insurance and loans from the federal government.

Behind the scenes, unbenownst to the media or the public, the nation’s Too Big To Fail banks used the Omnibus spending bill that is necessary to finance federal spending in 2015 to undo this little-known Dodd Frank provision that might have restricted the volume of trading in financial derivatives that have been a major source of profits as well as controversy since the 2008 financial crisis. Most financial derivatives will be able to be traded in entities holding deposits guaranteed by the Federal Deposit Insurance Corp. and subject to borrowing at the Federal Reserve’s discount window. This is a key advantage for the banks that will enable them to increase their activity in these securities.

Former Rep. Barney Frank, who was a key sponsor of the Wall Street reform legislation, attacked the change in Dodd-Frank as “a road map for further attacks on our protection against financial instability.” Frank was incensed that the last-minute procedure was “inserted with no hearings, no chance for further modification, and no chance for debate into a mammoth bill in the last days of a lame-duck Congress.”

If President Obama signs the Omnibus spending bill, he will have effectively rewarded Wall Street by reversing a provision that prohibits any federal assistance from being provided to “swaps entities,” including registered swaps dealers, security-based swap dealers, major swap participants and major security-based swap participants, according to information obtained by Forbes. This measure required banks to remove their swaps dealing from the bank itself and do its trading in non-bank affiliates not eligible for deposit insurance. Access to the Fed’s discount window would also be denied in case of a financial crisis in the markets.

The net effect of the changes in the Omnibus spending bill would be to expand permissible swaps activities within a bank and to only exclude swaps based on asset-backed securities that are unregulated and not of a credit quality.

All very technical, but the net result is to allow Citigroup, JP Morgan Chase and others to use the Fed’s discount window to borrow money in case of a crisis that roiled the derivative market for credit swaps again as took place in September 2008. In effect, it means the major banks need not limit their trading of financial derivatives to non-bank operations that the market will never be fooled into thinking some future risk of danger has just been avoided. It is a complex holiday present for Wall Street. And it is a warning sign that other sections of the Dodd-Frank Wall Street reform may also be vulnerable to political rollback.

An additionally relevant blog by Robert Lenzer: http://www.forbes.com/sites/robertlenzner/2014/12/08/the-ten-reasons-why-there-will-be-another-systemic-financial-crisis/

The crisis of the 2008 Great Recession was the lynchpin for the Go Lean movement, (book and blogs). This book, serving as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), posits that the effects of the 2008 Great Recession continue to linger in the Caribbean. Therefore the book advocates learning lessons from 2008 and to turn-around, reform, and reboot the region’s economic, security and governing engines to ensure that “never again” will our society be so vulnerable to the financial misgivings of our American neighbors; or the “plutocratic” elements there-in.

The field of economics is not always solutions-oriented; sometimes, they have been responsible for the problem. Consider this VIDEO snippet here:

Documentary Film “Inside Job” – http://youtu.be/CaXNqGgIc-g

Published on Apr 19, 2012 – Since the repeal of Glass-Steagall in 1999, the total notional value of derivatives has grown by over 700% for holdings companies and 674% for commercial banks. Even more alarming, since the third quarter of 2008 when the cracks in the financial system were clearly evident, derivatives at the commercial banks have grown from $175 TRILLION to $234 TRILLION ” a $59 TRILLION increase. To put this in perspective, the cumulative Gross Domestic Product in the United States over that same time frame (Q3 2008 through Q3 2010) was approximately $32 TRILLION.

Despite our region’s small size (42 million people in 30 member-states), we do have some control over our own destiny. We want to be a protégé, not a parasite.

The CU’s prime directives, elevating the Caribbean’s economic-security-governing engines, recognize that the changes the region needs must start first with the adoption of new community ethos and controls. Early in the book, the need for this shift is pronounced (Declaration of Interdependence – Page 13) with these statements:

xxiv.      Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv.      Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean book, and previous blog/commentaries, stressed the key community ethos, strategies, tactics, implementation and advocacies necessary to effect change in the region ourselves, to improve the stewardship over the economy. They are detailed as follows:

Who We Are – 2008 Internal Experiences Page 8
Community Ethos – Economic Principles Page 21
Community Ethos – Security Principles – Private Interest –vs- Public Protection Page 23
Community Ethos – Security Principles – “Light Up Dark Place” Page 23
Community Ethos – Governing Principles – Lean Operations Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Impact Research and Development Page 30
Community Ethos – Ways to Improve Negotiations Page 32
Community Ethos – Ways to Impact Turn-around – 2008 Crisis Page 33
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Mission – Fortify   the Stability of the Securities Markets Page 47
Strategy – CU Stakeholders to Protect – Banks & Depositors Page 47
Tactical – Growing the Economy – Minimizing Bubbles Page 69
Tactical – Separation-of-Powers – Depository Insurance & Regulatory Agency Page 73
Anecdote – Turning Around CARICOM – Effects of 2008 Financial Crisis Page 92
Implementation – Assemble Caribbean Central Bank as Cooperative Page 96
Implementation – Assemble Constitutional Convention Page 97
Implementation – Ways to Better Manage Debt – Optimizing Wall Street Role Page 114
Implementation – Ways to Impact Elections Page 116
Planning – 10 Big Ideas – Single Market / Currency Union Page 127
Planning – Lessons Learned from 2008 Page 136
Planning – Ways to Measure Progress Page 147
Advocacy – Ways to Grow the Economy – Case Study of $5.3 Billion Influence Page 151
Advocacy – Ways to Improve Credit Ratings – 2008 Lessons Page 155
Advocacy – Ways to Improve Housing – 2008 Mortgage Crisis Lessons Page 161
Advocacy – Ways to Impact Labor Unions – 2008 Effects on Main Street Jobs Page 164
Anecdote – Caribbean Industrialist – Growing without Shadow Influence Page 189
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Impact Wall Street Page 200
Appendix – Whitepaper: The 2008 Financial Crisis and Its Aftermath Page 276
Appendix – Currency Capital Controls Page 325

The points of effective, technocratic regional stewardship, especially in response to the 2008 Great Recession / Financial Crisis, were further elaborated upon in these previous blog/commentaries:

https://goleancaribbean.com/blog/?p=3311 Detroit to exit historic bankruptcy – Finally recovering from 2008
https://goleancaribbean.com/blog/?p=3164 Michigan Unemployment – Then (2008/2009) and Now
https://goleancaribbean.com/blog/?p=3090 Lessons Learned – Europe Sovereign Debt Crisis of 2009
https://goleancaribbean.com/blog/?p=3028 Why India is doing better than most emerging markets since the crisis
https://goleancaribbean.com/blog/?p=2930 ‘Too Big To Fail’ – Caribbean Version
https://goleancaribbean.com/blog/?p=2448 ‘Consumer Reports’ Survey Finds the American Consumer is Back
https://goleancaribbean.com/blog/?p=2435 Korea’s Protégé Model – A Dream for Latin America / Caribbean
https://goleancaribbean.com/blog/?p=2338 Lesson Learned – How Best to Welcome the Dreaded ‘Plutocracy’
https://goleancaribbean.com/blog/?p=2259 The Criminalization of American Business – Big Banks Let Loose
https://goleancaribbean.com/blog/?p=2105 Recessions and Public Health – Lessons from the 2008 Crisis
https://goleancaribbean.com/blog/?p=2090 The Depth & Breadth of Remediating 2008
https://goleancaribbean.com/blog/?p=1896 The Crisis in Black Homeownership since 2008
https://goleancaribbean.com/blog/?p=1309 5 Steps of a Bubble
https://goleancaribbean.com/blog/?p=841 Post 2008 – Having Less Babies is Bad for the Economy?
https://goleancaribbean.com/blog/?p=782 Open/Review the Time Capsule: The Great Recession of 2008
https://goleancaribbean.com/blog/?p=709 Post 2008 – Student debt holds back home buyers
https://goleancaribbean.com/blog/?p=522 Financial Crisis Jokes – Reflecting the cultural impact on society
https://goleancaribbean.com/blog/?p=518 Post 2008 – What Banks learn about financial risks
https://goleancaribbean.com/blog/?p=378 Fed Releases Transcripts from 2008 Meetings
https://goleancaribbean.com/blog/?p=242 Post 2008 – The Erosion of the Middle Class

The 2008 Great Recession brought major upheaval to American and Caribbean societies, plus the rest of the world. Much of the world is interconnected; this is even more acute in our region. Our economy is structured as parasites on the US economy. According to the foregoing news article, our parasitic host is not worthy of our devotion. What qualifies the Go Lean promoters to make these assessments? Principals of this publishing foundation were also there in 2008, engaged with major stakeholders of the Global Financial crisis: Lehman Brothers, JPMorganChase, Citigroup, etc. They were on the inside looking out, not the outside looking in. They were equipped to discern the Shadow Influence.

The Go Lean movement advocates the role of protégé, not parasite. We must diversify our economy and additionally cater to other markets, other countries and other industries. This is the purpose of the Go Lean roadmap, to provide a turn-by-turn direction to accomplish this diversification.

If we want to make our homeland a better place to live, work and play then we cannot depend on the stewards of the US economy to shepherd the Caribbean. Look! Despite the cruel and harsh lessons from 2008, it appears – from the foregoing article and the Appendix below – that the Wall Street Shadow Influence wants to repeat the “Bubble” that lead up to 2008. When they succeed, they profit; but when they fail, the “low man” on Main Street – and parasite economies like the Caribbean – has to endure the pain, not Wall Street.

The Go Lean roadmap does not seek to change America, (though we lobby against these arbitrary “Derivative” rule changes in the Omnibus Budget Bill); only teach the lessons to the Caribbean. We can do so much better.

Download the free e-Book of Go Lean … Caribbean – now!

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Appendix – Derivatives:
(Source: http://en.wikipedia.org/wiki/Derivative_(finance) )

In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often called the “underlying”.[1][2] Derivatives can be used for a number of purposes – including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard to trade assets or markets.[3]

Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as collateralized debt obligations, credit default swaps, and mortgage backed securities. Most derivatives are traded over-the-counter (off-exchange) or on an exchange such as the Chicago Mercantile Exchange, while most insurance contracts have developed into a separate industry. Derivatives are one of the three main categories of financial instruments, the other two being equities (i.e. stocks or shares) and debt (i.e. bonds and mortgages).

Speculation
Derivatives can be used to acquire risk, rather than to hedge against risk. Thus, some individuals and institutions will enter into a derivative contract to speculate on the value of the underlying asset, betting that the party seeking insurance will be wrong about the future value of the underlying asset. Speculators look to buy an asset in the future at a low price according to a derivative contract when the future market price is high, or to sell an asset in the future at a high price according to a derivative contract when the future market price is less.

Risks
The use of derivatives can result in large losses because of the use of leverage, or borrowing; (see VIDEO below). Derivatives allow investors to earn large returns from small movements in the underlying asset’s price. However, investors could lose large amounts if the price of the underlying moves against them significantly. There have been several instances of massive losses in derivative markets, such as the following:

  • American International Group (AIG) lost more than US$18 billion through a subsidiary over the preceding three quarters on credit default swaps (CDSs).[42] The United States Federal Reserve Bank announced the creation of a secured credit facility of up to US$85 billion, to prevent the company’s collapse by enabling AIG to meet its obligations to deliver additional collateral to its credit default swap trading partners.[43]
  • The loss of US$7.2 Billion by Société Générale in January 2008 through mis-use of futures contracts.
  • The loss of US$6.4 billion in the failed fund Amaranth Advisors, which was long natural gas in September 2006 when the price plummeted.
  • The loss of US$4.6 billion in the failed fund Long-Term Capital Management in 1998.
  • The loss of US$1.3 billion equivalent in oil derivatives in 1993 and 1994 by Metallgesellschaft AG.[44]
  • The loss of US$1.2 billion equivalent in equity derivatives in 1995 by Barings Bank.[45]
  • UBS AG, Switzerland’s biggest bank, suffered a $2 billion loss through unauthorized trading discovered in September 2011.[46]

This comes to a staggering $39.5 billion; the majority in the last decade after the Commodity Futures Modernization Act of 2000 was passed.

Financial Reform and Government Regulation
Under US law and the laws of most other developed countries, derivatives have special legal exemptions that make them a particularly attractive legal form to extend credit.[47] The strong creditor protections afforded to derivatives counterparties, in combination with their complexity and lack of transparency however, can cause capital markets to underprice credit risk. This can contribute to credit booms, and increase systemic risks.[47] Indeed, the use of derivatives to conceal credit risk from third parties while protecting derivative counterparties contributed to the financial crisis of 2008 in the United States.[47][48]

CU Blog - A Christmas Present for The Banks From The Omnibus Bill - Photo 2

In November 2012, the SEC and regulators from Australia, Brazil, the European Union, Hong Kong, Japan, Ontario, Quebec, Singapore, and Switzerland met to discuss reforming the OTC derivatives market, as had been agreed by leaders at the 2009 G-20 Pittsburgh summit (see Photo) in September 2009.[54] In December 2012, they released a joint statement to the effect that they recognized that the market is a global one and “firmly support the adoption and enforcement of robust and consistent standards in and across jurisdictions”, with the goals of mitigating risk, improving transparency, protecting against market abuse, preventing regulatory gaps, reducing the potential for arbitrage opportunities, and fostering a level playing field for market participants.[54] They also agreed on the need to reduce regulatory uncertainty and provide market participants with sufficient clarity on laws and regulations by avoiding, to the extent possible, the application of conflicting rules to the same entities and transactions, and minimizing the application of inconsistent and duplicative rules.[54] At the same time, they noted that “complete harmonization – perfect alignment of rules across jurisdictions” would be difficult, because of jurisdictions’ differences in law, policy, markets, implementation timing, and legislative and regulatory processes.[54]

VIDEO: Leverage Explained – https://youtu.be/GESzfA9odgE
When things turn out good, big risk means big return; but if it turns out bad, you lose everything and left with a debt.

Source References:
1.       Derivatives (Report). Office of the Comptroller of the Currency, U.S. Department of Treasury. http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/index-derivatives.html. Retrieved February 2013. “A derivative is a financial contract whose value is derived from the performance of some underlying market factors, such as interest rates, currency exchange rates, and commodity, credit, or equity prices. Derivative transactions include an assortment of financial contracts, including structured debt obligations and deposits, swaps, futures, options, caps, floors, collars, forwards, and various combinations thereof.”
2.       Derivative Definition Investopedia
3.       Koehler, Christian. “The Relationship between the Complexity of Financial Derivatives and Systemic Risk”. Working Paper: 10–11.
——
42.   Kelleher, James B. (September 18, 2008). “”Buffett’s Time Bomb Goes Off on Wall Street” by James B. Kelleher of Reuters”. Reuters.com. Retrieved August 29, 2010.
43.   “Fed’s $85 billion Loan Rescues Insurer”
44.   Edwards, Franklin (1995). “Derivatives Can Be Hazardous To Your Health: The Case of Metallgesellschaft”. Derivatives Quarterly (Spring 1995): 8–17
45.   Whaley, Robert (2006). Derivatives: markets, valuation, and risk management. John Wiley and Sons. p. 506. ISBN 0-471-78632-2.
46.   “UBS Loss Shows Banks Fail to Learn From Kerviel, Leeson”. Businessweek. September 15, 2011. Retrieved March 5, 2013.
47.   “Michael Simkovic, Secret Liens and the Financial Crisis of 2008.”. American Bankruptcy Law Journal, Vol. 83, p. 253. 2009. Retrieved March 5, 2013.
48.   Michael Simkovic (January 11, 2011). “Bankruptcy Immunities, Transparency, and Capital Structure, Presentation at the World Bank”. Ssrn.com. doi:10.2139/ssrn.1738539. Retrieved March 5, 2013.
——
54.   “Joint Press Statement of Leaders on Operating Principles and Areas of Exploration in the Regulation of the Cross-Border OTC Derivatives Market; 2012-251”. Sec.gov. December 4, 2012. Retrieved March 5, 2013.

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Detroit to exit historic bankruptcy

Posted on December 10, 2014 in Economics, Ethos, Government

Go Lean Commentary

The publishers of the book Go Lean…Caribbean are here to “observe and report” the turn-around and rebirth of the once-great but now distressed City of Detroit. The book posits that the Caribbean can learn a lot from the strategies, tactics and implementations to mitigate this community’s “failed-state” status.

The quest starts now, as Detroit is now emerging from the Bankruptcy Court’s oversight, according to the following article and VIDEO:

By: Serena Maria Daniels
CU Blog - Detroit to exit historic bankruptcy - Photo 1DETROIT (Reuters) – Detroit will officially exit the biggest-ever U.S. municipal bankruptcy later on Wednesday, officials said, allowing Michigan’s largest city to start a new chapter with a lighter debt load.

The city, which filed for bankruptcy in July 2013, will shed about $7 billion of its $18 billion of debt and obligations.

“We’re going to start fresh tomorrow and do the best we can to deliver the kind of services people deserve,” said Mayor Mike Duggan.

Once a symbol of U.S. industrial might, Detroit fell on hard times after decades of population loss, rampant debt and financial mismanagement left it struggling to provide basic services to residents.

Later on Wednesday, payments to city creditors will be triggered under a debt adjustment plan confirmed by a U.S. Bankruptcy Court judge last month.

Most of the settlements with major creditors, including Detroit’s pension funds and bondholders, will be paid with a distribution of about $720 million of bonds. The city will also reissue $287 million of existing bonds and borrow about $275 million from Barclays Capital to finance its exit from bankruptcy.

Along with the debt, the exit plan relies heavily on the “Grand Bargain,” where foundations, the state and the Detroit Institute of Art will contribute $816 million over time to ease pension cuts and protect city-owned art work from sale. The plan also aims to provide Detroit with $1.7 billion through June 30, 2023, to improve city services and infrastructure.

Wednesday also marks the end of Kevyn Orr’s 21-month term as Detroit’s state-appointed emergency manager. He told reporters that the city was wrapping up wire transfers, disbursements and other matters to end the historic bankruptcy.

“There may be some other administrative things the court may have to handle but the city will have emerged from bankruptcy,” Orr said. “12:01 a.m. tomorrow morning the city will be out of bankruptcy. I will no longer be the emergency manager. I will be unemployed.”

Orr’s departure returns complete control of Detroit to Duggan and the nine-member city council. However, the city will have a nine-member, state-created oversight board in place to approve financial matters.

In confirming the bankruptcy plan, Judge Steven Rhodes raised questions about possible conflicts of interest from having Duggan and a city council member sit on the board.

“The city is running the city, with some financial oversight on budgetary matters,” said Michigan Governor Rick Snyder about the financial review commission. “My goal is probably to have (the commission) be as least active as possible.”

The Republican governor told Reuters in an interview that the commission will help ensure Detroit does not slip back into bankruptcy. He also ruled out direct financial aid to the city in the future.

“We’re not really aiming to be there as a backup to the city in terms of financial resources,” Snyder said. “We’re there to be a supportive partner.”

He added that many of the other 16 local governments and school districts under state oversight in Michigan are “transitioning out of their problems” without the aid of bankruptcy.

“People should not be aspiring to go into bankruptcy to solve your problems. It’s tough process and it’s a last resort.”

Orr said court-ordered mediation on fees paid to consultants during the bankruptcy process was continuing on Wednesday. Outside lawyers and consultants charged the city more than $140 million, sparking protests from Duggan. Orr said some of the issues were “resolved last week.”

With the exit, “all of the consultants are being phased out pretty quickly,” Duggan said.

(Writing and additional reporting by Karen Pierog in Chicago and Lisa Lambert in Washington; editing by Matthew Lewis)
Reuters News Service (Posted and retrieved 12-10-2014) –
http://news.yahoo.com/detroit-exit-historic-bankruptcy-later-wednesday-162728907.html;_ylt=AwrBEiEC54hUwgYAliTQtDMD

The Go Lean book relates that economic empowerment can be heightened to alleviate distressed communities by exercising mastery of destruction arts and sciences – salvage, removal, recycle, redevelopment, rebirth and reboot – activities that can greatly benefit a city by “right-sizing” the infrastructure to the population.

This impacts the Greater Good.

The Go Lean book serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU) to elevate Caribbean society. While Detroit is not in scope for this effort, an examination of the details of Detroit – fall and rebound – can be productive for the Caribbean effort. The CU/Go Lean roadmap therefore has these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion GDP and create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

Early in the Go Lean book, the point of lessons from Detroit is pronounced in the opening Declaration of Interdependence (Page 14), with this opening statement:

xxxiii.   Whereas lessons can be learned and applied from the study of the recent history of other societies, the Federation must formalize statutes and organizational dimensions to avoid the pitfalls of communities like … Detroit…

According to the foregoing article and VIDEO below, the City of Detroit is now emerging from the Bankruptcy (BK) protection commenced in July 2013. Though the BK proceedings are over, the crisis continues. The city still has to create opportunities for their citizens, present and future, or risk further abandonment by its population. The possibility is very real that Detroit will invest heavily in the education of their youth, only to watch them leave and prosper in other communities. This is a disposition (brain drain, unemployment, urban blight and acute hopelessness) that is too familiar for Caribbean communities. This is why the study of Detroit is such an ideal model for the Caribbean region.

The foregoing article relates that the financial crisis was not just a problem for the one City of Detroit but also “16 local governments and school districts[1] under state oversight in Michigan”. This was a Michigan/regional challenge; all exacerbated by the 2008 Great Recession financial crisis.

Previous Go Lean blogs highlighted Michigan, Detroit and other failed-state-city dynamics; as detailed here:

Michigan Unemployment – Then and Now
Making a Great Place to Work® – Model of a Michigan Company
Where the Jobs Are – Entrepreneurism in Turn-around
A Lesson in History: Lessons of the Failed East Berlin
Urban Crisis – The Geography of Joblessness
A Lesson in History: Community Ethos of Once Great Detroit During WW II
JP Morgan Chase $100 million Detroit investment not just for Public Relations

The foregoing news article also relates the financing options for Detroit’s recovery, which are heavy focused on municipal bonds in the securities market. The Go Lean roadmap likewise presents a plan, beyond banking, to generate funding to Pay for Change (Page 101). This CU/Go Lean effort is focused on forging change in the region; this does not start with BK proceedings (which are not available in the Caribbean), rather it must start with attitudes and motivations to reject the status quo. This positive attitude is defined in the book as a community ethos. One such ethos is “turn-around”, defined as having a collective vision, demand for change and appropriate steps and actions.

The book details other ethos to adopt, plus the executions of the following strategies, tactics, implementations and advocacies to impact the rebirths, reboots and turn-around of Caribbean communities:

Community Ethos – Deferred Gratification Page 21
Community Ethos – People Respond to Incentives Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Light Up the Dark Places Page 23
Community Ethos – “Crap” Happens Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments (ROI) Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Impact a Turn-Around Page 33
Community Ethos – Impact the Greater Good Page 37
Strategy – Customers – Foreign Direct Investors Page 48
Tactical – Fostering a Technocracy Page 64
Tactical – Modeling Post WW II Germany – Marshall Plan Page 68
Tactical – Modeling Post WW II Japan – with no Marshall Plan Page 69
Separation of Powers – Public Works & Infrastructure Page 82
Separation of Powers – Housing and Urban Authority Page 83
Separation of Powers – Exclusive Federal   Bankruptcy Courts Page 90
Implementation – Ways to Pay for Change Page 101
Implementation – Ways to Re-boot Freeport – Sample Failed City Page 112
Planning – Ways to Improve Failed-State Indices Page 132
Planning – Lessons Learned from 2008 Page 136
Planning – Lessons from Detroit Page 140
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Improve Local Government Page 169
Advocacy – Ways to Better Manage the Social Contract Page 170
Advocacy – Ways to Improve Leadership Page 171
Advocacy – Ways to Preserve Caribbean Heritage Page 218

The foregoing news article aligns with the publishers of the Go Lean book, the SFE Foundation, a community development foundation chartered for the purpose of empowering and re-booting economic engines. The foundation does the heavy-lifting of working with individuals, families, communities and nation-states to turn-around financial viability.

Bankruptcy is not an option for the failing Caribbean member-states, yet the region can still explore formal reboots. The Go Lean roadmap provides a complete plan to reboot Caribbean economic-security-governing engines. The region is hereby urged to lean-in to this roadmap, to make the homeland a better place to live, work and play. 🙂

Download the book Go Lean…Caribbean now!

————

APPENDICES:
1. Source References
Michigan municipalities under Emergency Management oversight: Allen Park, Benton Harbor, Detroit, Ecorse, Flint, Hamtramck City, Highland Park, Pontiac, Three Oaks Village, Detroit Public School District, Muskegon Heights Public School District, and Highland Park School District. Retrieved December 10, 2014 from: http://en.wikipedia.org/wiki/Financial_emergency_in_Michigan.

2. VIDEO – Detroit emerges from bankruptcy – http://www.clickondetroit.com/consumer/detroit-exits-historic-bankruptcy/30165290

The City of Detroit will officially emerge from bankruptcy on Wednesday. Emergency Manager Kevyn Orr said the city no longer will be in a financial emergency when it officially exits bankruptcy. The governor, emergency manager and Mayor Mike Duggan joined to make the official announcement Wednesday morning.

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Art Basel Miami – A Testament to the Spread of Culture

Posted on December 9, 2014 in Economics, Ethos, Social

Go Lean Commentary

There’s no business like ‘show business’. – Age Old Adage.

There is money in the ‘Arts’. – Go Lean…Caribbean precept.

And now, the subsequent news article posits: “the community rallies around art creating a unique energy. And art ‘dynamises’ the community, in a very unique way”.

The book Go Lean…Caribbean has a simple purpose: enable the Caribbean to be a better place to live, work and play. The book recognizes that the ‘genius qualifier’ is shown in different fields of endeavor, including the arts (fine, visual, performing, music, etc.). While the Go Lean roadmap has a focus on STEM [1] fields, it is accepted that not everyone possesses STEM skills, and yet many others can still contribute to society. Then when these other skills/talents are “gifted” beyond the extraordinary, they can truly impact their community, and maybe even the world.

The book relates that the arts can have a positive influence on the Caribbean. And that one man, or woman, can make a difference in this quest. We want to foster the next generation of “stars” in the arts and other fields of endeavor.

According to the following news article, the arts can truly ‘dynamise’ the community. The article relates to Art Basel, the movement to stage art shows for Modern and Contemporary works, sited annually in Basel (Switzerland), Hong Kong and Miami Beach. The focus of this article is Miami Beach:

Title: 13th Art Basel Miami Beach (December 4 – 7, 2014), a testament to the spread of culture
By: Jane Wooldridge, and contributed Ricardo Mor

CU Blog - Art Basel Miami - a Testament to the Spread of Culture - Photo 1If “more” equals better, the 13th edition of Art Basel Miami Beach and the surrounding art week events may go down as the best ever. More new art fairs and just-to-see shows. More record-breaking sales at Art Basel Miami Beach. More CEOs — from watchmakers Hublot and Omega, luggage brand Rimowa, hotel companies Starwood and Marriott — opening luxury properties. And if not more — who can keep track? — then certainly plenty of celebrities, including actors Leonardo DiCaprio, James Marden and Owen Wilson; musicians Usher, Miley Cyrus, Russell Simmons and Joe Jonas; supermodel Heidi Klum and the world’s fastest man, Usain Bolt.

There was another kind of “more” as well — more spillovers, touch points and art for all manner of South Floridians, from entrepreneurs to pre-teen fashion designers, stretching from Pinecrest to Coconut Grove, Overtown to Fort Lauderdale.

If the aim is “to make art general,” as Knight Foundation President Alberto Ibargüen told attendees Monday at the foundation’s annual announcement of Knight Art Challenge awards, this year’s art week put South Florida well on its way. Proclaimed National Endowment for the Arts chairman Jane Chu on a whiplash art tour to downtown, Miami Beach and Opa-locka, “Art is entwined in Miami’s DNA.”

Even as the Pérez Art Museum Miami celebrated its first year anniversary, a new permanent museum building for the Institute for Contemporary Art Miami was announced for the Design District.

Overtown [historical Black neighborhood] hosted its first Art Africa fair of works created by artists from the African Diaspora. Joining it on the list of first-year events are an impressive exhibition of monumental works in the vast Mana-Miami Wynwood space on NW 23rd Street and Pinta, a fair focusing on Latin American art that moved from New York to Midtown.

The festivities reach far, far beyond the traditional art crowd. On the Mana campus, the Savannah College of Art and Design is presenting “i feel ya,” an exhibition that includes jumpsuits designed by André 3000 for Outkast’s reunion tour. The nearby ArtHaus tent is surrounded by food trucks and a sound program where Beethoven is definitely not on the playlist.

This year, more than a half-dozen student exhibits are on the art agenda. At FusionMIA, student photographs hang near works by masters Rashid Johnson and Al Loving; all were curated by Miami’s N’Namdi Contemporary gallery. A few blocks north, at Wynwood’s House of Art, a dozen students ages 5 to 15 from the DesignLab program showed off their creations at a Friday night “vernissage.”

Among them was 13-year-old Yael Bloom, wearing a flounced party dress she made from shrink wrap. No matter that the first-time event was a little-known spinoff. “Art Basel is pretty hard for adults to get into,” Bloom said. “For kids to get into it is very cool.”

As in years past, free events abound, from performances by Chinese artist Shen Wei at Miami-Dade College and artist Theo Jansen’s Strandbeest demonstrations on the sand to official Art Basel events, including films on the New World Center Wallcast and the Art Public sculptures in Collins Park. New is free Art Week shuttle service between Midtown and Miami Beach — a government cooperative effort — that dovetails with trolley service to art venues on both sides of Biscayne Bay.

In institutional quarters, Art Basel Miami Beach global sponsor UBS announced the creation of a $5 million loan fund for existing Florida small business owners. Sponsor BMW USA announced it would fund an “art journey” open to emerging artists exhibiting at Art Basel Miami Beach. And the City of Miami Beach and Miami-Dade County put out a call to artists, encouraging them to propose projects for the $4.33 million public art program associated with the Miami Beach Convention Center renovation. South Floridians are eligible to apply for all three initiatives.

Clearly, art week isn’t just about aesthetics, personal enrichment and community building. It is also about enterprise — which explains all those luxury CEOs, the ground-breaking of the Zaha Hadid-designed One Thousand Museum, and the announcement at Miami Ironside that designer Ron Arad will create the interiors for the revamped Watergate Hotel in Washington. (And no, there’s no real connection to Miami.)

Said Michael Spring, Miami-Dade’s cultural affairs director, “There’s a certain deepening, a realization not just that the Art Basel event but arts in general have a phenomenal effect on the image and economy of our entire region. We’ve talked about it before, but there seems to be more focus this year. It’s not an interesting footnote anymore; it’s the theme.”

That, says Miami Commissioner Keon Hardemon, was the thinking behind the city’s $50,000 grant supporting the Art Africa fair. “We need to encourage people to come now to Overtown. The cultural aspect helps them realize they can safely come here now. And then maybe they’ll come back later and spend money in the community, in our restaurants and stores,” he said.

In Miami, with commerce inevitably comes glamor, which is proving as glossy as ever. Hennessey V.S.O.P., Dom Perignon, Paper Magazine, Interview and B.E.T. have staged events all around town, at private “locations,” hotels, restaurants, the 1111 Lincoln Road garage and the ICA temporary space in the Moore Building. Developer Alan Faena threw a breezy beachside asado. Jeffrey Deitch, Tommy Hilfiger and V Magazine hosted a glitzy bash at the Raleigh featuring a performance by Miley Cyrus.

In the Design District, developer Craig Robins hosted a dinner honoring architect Peter Marino at a single, 142-yard candlelit table for 380 guests on a closed-off street amid the district’s luxury brand storefronts. Sculptor Jaume Plensa was the guest of honor at another long candlelit table — this one for 60 — in the Coconut Grove sales offices of Park Grove, which recently installed a series of his works along South Bayshore Drive.

Alas, once again, manners were not de rigueur among the glossy set. At some parties, guests of guests turned up with entirely uninvited guests. For other tony soirees, publicists emailed out “disinvitations” to previously invited guests, obliquely sending the message that someone more glamorous would be taking those seats.

Decorous or not, during art week, the energy all emanates from the week’s namesake fair, said Dennis Scholl, VP/Arts at the Knight Foundation. “The most important thing to remember is why this week exists, and that’s Art Basel in the Convention Center. If that wasn’t the core of what’s going on — if it weren’t a world-class event — nobody else would be interested in being involved. It continues to be the raison d’être of this week.”

In the Convention Center, at what Scholl called “the core of the nuclear reactor,” many gallerists were quite happy, thank you very much.

Veteran Art Basel Miami Beach gallerist Sean Kelly said Wednesday was his best first day ever at the fair. Newcomer Michael Jon Gallery also sold almost all of its available work — by rising stars like Sayre Gomez and JPW3 — on the first day.

For most dealers, sales remained lively, day after day. At Galerie Gmurzynska, co-CEO Mathias Rastorfer proclaimed it “successful indeed … . In terms of reception, it was an overwhelmingly enthusiastic response from collectors and colleagues alike. In terms of sales, we did several over $1 million sales and many within the $100,000 to $500,000 range, with a Picasso’s Venus and Love selling at near the asking price of $1.2 million.

Said Art Basel Director Marc Spiegler on Saturday, “I’ve gotten nothing but positive response from galleries,” not only because of strong sales, but also because new hours for VIPs gave gallerists more time to meet new collectors. “A lot of people were here and buying for the first time. Many galleries said they had their best fair ever.”

But like this week’s weather, the upbeat atmosphere suffered from uncharacteristic clouds. In Wynwood, a police car hit and critically injured a street artist. An $87,000 silver plate crafted by Pablo Picasso was reported stolen from the Art Miami satellite fair in Midtown. A partygoer at PAMM’s first anniversary fête on Thursday accidentally damaged an artwork installed on the floor. And Friday night, would-be art goers were stymied by traffic shutdowns into art-centric areas of Wynwood, Midtown and Miami Beach by protests against nationwide police-involved killings.

Though unfortunate and sometimes tragic, Spring said, the unrelated events were “a product of the incredible level of activity.” At Saturday’s annual brunch at the art-rich Sagamore Hotel in Miami Beach, the theft and damaged artwork uniformly were brushed off as inconsequential. Said one art insider, “s–t happens.”

Miami Art Week’s merry-go-round nature is surely born from Miami’s appreciation of a good time. And increasingly, perhaps from something deeper.

Said Miami gallerist Jumaane N’Namdi, “Art Basel has put art on everyone’s mind. Everyone wants to be involved somehow.”

And that’s not just about the parties, said N’Namdi, who had galleries in Chicago, New York and Detroit before opening in Miami. “I don’t think you could find a city that enjoys really looking at the art the way this city does. I came through the airport, and even the TSA guys were talking about it, asking each other if they got their Art Basel posters. Every level of art you want is here.”

Outsiders agree. “Miami is very special for its link between art and the community,” said Axelle de Buffévent, style director at champagne house Martell Mumm Perrier-Jouët. “It goes both ways. The community rallies around art creating a unique energy. And art dynamises the community, in a very unique way.”
Miami Herald – Daily Newspaper – (Posted December 6, 2014) –
http://www.miamiherald.com/entertainment/visual-arts/art-basel/article4313255.html

VIDEO: Art Basel Miami Beach 2014 – http://youtu.be/StkzLiBtDis

Published on Dec 4, 2014
The international art fair Art Basel returns to Miami Beach for its 13th edition, taking place at the Miami Beach Convention Center from December 4 to December 7, 2014. Art Basel  Miami Beach 2014 features 267 leading international galleries from 31 countries across North and South America, Europe, Asia and Africa, which present artworks ranging from Modern masters to the latest contemporary art pieces. With this edition, the fair debuts Survey, a new sector dedicated to art-historical projects. In this video, we attend the Private View of Art Basel Miami Beach 2014 at the Miami Beach Convention Center on December 3.

This story aligns with the book Go Lean…Caribbean in stressing the economic impact of artistic endeavors. The book pledges that Caribbean society will be elevated by improving the eco-system to live, work and play; and that “play” covers vast areas of culture.

“Culture” has emerged as a central concept in anthropology, encompassing the range of human phenomena that cannot be directly attributed to genetic inheritance. Specifically, the term “culture” in North American anthropology has two meanings:

  1. the evolved human capacity to classify and represent experiences with symbols, and to act imaginatively and creatively; and
  2. the distinct ways that people, who live differently, classified and represented their experiences, and acted creatively.[2]

Anthropologist Adamson Hoebel best describes culture as an integrated system of learned behavior patterns which are characteristic of the members of a society and which are not a result of biological inheritance.[3]

The Go Lean book stresses economic benefits from classic cultural expressions and popular cultural productions, including Caribbean music, paintings/art, sketches, sculptures, books, fashion and food. All the “skilled phenomena” that makes Caribbean life unique and appealing.

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). There is a lot involved in this vision; the prime directives are stated as follows:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

CU Blog - Art Basel Miami - a Testament to the Spread of Culture - Photo 2The foregoing article relates the economic impact that the Greater Miami area is enjoying for hosting the Art Basel event, for the 13th year now. At this point the benefits have spread throughout the community, (Art Fairs, museums, scholarships, foundations, etc.) not just one venue on Miami Beach. The spin-off benefit of art is a strong point of the Go Lean book, highlighting benefits as long as we keep the talent at home working in/for the community. This point is pronounced early in the following statements in the book’s opening Declaration of Interdependence (Page 14):

xxi. Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxxii. Whereas the cultural arts and music of the region are germane to the quality of Caribbean life, and the international appreciation of Caribbean life, the Federation must implement the support systems to teach, encourage, incentivize, monetize and promote the related industries for arts and music in domestic and foreign markets. These endeavors will make the Caribbean a better place to live, work and play.

The economic, cultural and image considerations for “show business” on a society have been well-detailed in these previous Go Lean blogs:

Caribbean Role Model – Oscar De La Renta – RIP
How ‘The Lion King’ roared into history
Forging Change – The Fun Theory
Role Model Berry Gordy – No Town Like Motown
Book Review: ‘Chasing Youth Culture and Getting It Right’
The Music, Art, Culture and Legend of Bob Marley lives on!

The Go Lean roadmap posits that change will come to the Caribbean “show business” (Visual and Performing Arts, Music, Film). This is due mostly to the convergence of a Single Market for the Caribbean region. If “size matters”, then the integration of 42 million people (plus the 10 million Diaspora and 80 million visitors) for the 30 member-states will create the consumer markets to promote and foster Caribbean artistic creations for their full appreciation. The first requirement in this goal is the community ethos of valuing intellectual property; to recognize that other people’s creations are valuable. (Then we can enforce on others to value and appreciate our creations).

This would truly be new for the Caribbean.

The CU is designed to do the heavy-lifting of organizing Caribbean society for the new world of art appreciation and “consumerization”. The following list details the ethos, strategies, tactics, implementations and advocacies to foster regional artists and showcase their wares to the world stage:

Community Ethos – Forging Change Page 20
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Help Entrepreneurship Page 28
Community Ethos – Promote Intellectual Property Page 29
Strategy – Caribbean Vision: Single Market Page 45
Separation of Powers – Central Bank – Electronic Payment Deployments Page 73
Tactical – Separation of Powers – Patents – Copyrights Page 78
Separation of Powers – Culture Administration Page 81
Planning – Ways to Make the Caribbean Better Page 131
Planning  – Lessons Learned from   New York City Page 137
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Education – Performing Arts Schools Page 159
Advocacy – Ways to Impact Hollywood Page 203
Advocacy – Ways to Improve the Arts Page 230
Advocacy – Ways to Promote Music Page 231
Advocacy – Impact Urban Living – Art & Theaters Page 234
Appendix – New York / Arts / Theater Jobs Page 277
Appendix – Taos New Mexico Art Colony Page 291
Appendix – Caribbean Music Genres Page 347
Appendix – Protecting Music Copyrights Page 351

There is BIG money in show business and in the world of the Arts. For the 10th edition of Art Basel in Miami in 2011, there was a record number of fifty thousand collectors, artists, dealers, curators, critics and art enthusiasts – including 150 museum and institutions from across the globe – participating in the show.[4]

This event requires a lot of community investments. Every year, Miami’s leading private collections – among them the Rubell Family Collection, Cisneros Fontanals Art Foundation, the De la Cruz Collection Contemporary Art Space, World Class Boxing, the Margulies Collection and the Dacra Collection – open their homes and warehouses to guests of Art Basel. Additionally, the museums of South Florida organize exhibitions including shows at the Miami Art Museum, Bass Museum of Art, Norton Museum, Wolfsonian-FIU and MOCA North Miami.

The community investment has been there for Miami, and so has the returns [5].For 2014, the attendance figures were 75,000, with an increase in hotel occupancy of 30,000 rooms on the days the Art Fair is in progress. The conservative estimates are that the Art Fair brings close to $13 million a year in economic impact to the region. (This figure does not include the purchases of artworks, some of which fetch millions of dollars).

The subject of the Miami Metropolitan area is very relevant for a Caribbean empowerment discussion. A previous blog asserted that Miami’s success, in many regards, is attributable to Caribbean’s failures. Many of our populations (including artists) have fled their homelands and have taken refuge in the Miami area. Where at first this disposition was begrudged, eventually it transformed to tolerance, but now it is even celebrated.

CU Blog - Art Basel Miami - a Testament to the Spread of Culture - Photo 3

Miami has been greatly impacted by both the Caribbean Diaspora and its assimilation of the “Arts”. Whole neighborhoods have been elevated due to this strategy of catering to the arts; (see photo here). This is a great role model for the Caribbean to emulate; our whole society can be elevated.

The Go Lean/CU roadmap represents the empowerment for the Caribbean communities to elevate – we now want to keep our artists at home. The people, institutions and governance of the region are therefore urged to “lean-in” to this roadmap for change. 🙂

Download the book Go Lean … Caribbean – now!

——-

Appendix – Source References:

1. STEM = Science, Technology, Engineering and Mathematics.

2. “What is culture?”. Bodylanguagecards.com. Retreived 2013-03-29.

3. Hoebel, Adamson (1966). Anthropology: Study of Man. McGraw-Hill.

4. http://www.nytimes.com/2011/12/03/arts/design/art-basel-miami-beach-review.html?_r=1&pagewanted=all

5. http://www.nytimes.com/2014/12/04/arts/international/art-fair-energizes-economy-of-region.html?_r=0

 

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Role Model Shaking Up the World of Cancer

Posted on December 9, 2014 in Economics, Ethos, Implementation

Go Lean Commentary:

The book Go Lean…Caribbean relates the statement that “if 1-in-3 Americans are at risk for cancer, Caribbean citizens cannot be far behind”. (Page 157). Though well qualified, this statement does not need to be verified; everyone knows people that have battled or is battling cancer; (more frequently that we would care to admit). The disease often wins.

The book does not posit to be a roadmap for curing cancer, but rather a roadmap for elevating Caribbean society by optimizing the economic, security and governing engines in the region. Yet, within this roadmap is the strategy to incentivize cancer research and facilitate treatment centers and workable solutions. In fact this roadmap invites role models like medical researcher, bio-technology entrepreneur and billionaire Dr. Patrick Soon-Shiong, featured here in the following VIDEO and article:

VIDEO Title: Disrupting Cancer
Sub-Title: Billionaire Dr. Patrick Soon-Shiong is turning heads with unconventional ways of treating the deadly disease

CBS News Magazine 60 Minutes – Posted 12-07-2014 –
http://www.cbsnews.com/videos/disrupting-cancer

In this week’s 60 Minutes story, CNN’s Dr. Sanjay Gupta — on assignment for 60 Minutes — profiles Dr. Patrick Soon-Shiong, who has invested nearly a billion dollars of his own money to help find a better way to treat cancer. (VIDEO).


———————————–

Article Title: The Billionaire shaking up the world of cancer
Sub-title: Patrick Soon-Shiong: An owner of the L.A. Lakers, friend of Kobe Bryant, and a doctor who’s shaking up the world of cancer

CU Blog - Disrupting Cancer - Photo 1

60 Minutes producer Draggan Mihailovich tells 60 Minutes Overtime that the most challenging aspect of this profile was to give viewers a sense of what goes on in Dr. Pat’s brain.

The following is a script of the video produced for 60 Minutes Overtime by Magalie Laguerre-Wilkinson and Lisa Orlando.

[Dr. Patrick Soon-Shiong: We now have patients with pancreatic cancer that are free of metatheses for five years. How many people know of that?]

That’s Dr. Patrick Soon-Shiong. This week on 60 Minutes Dr. Sanjay Gupta profiles the renowned doctor and entrepreneur who is shaking up the cancer world with a revolutionary approach to treatment. Dr. Soon-Shiong, also known as Dr. Pat, is not just the wealthiest man in Los Angeles; he’s a partial owner of the Lakers. And a familiar face [at court-side and] in the team’s training room.
…
Draggan Mihailovich: You’re talking about a city that thrives on celebrity and status.

Magalie Laguerre-Wilkinson: He’s neither.

Draggan Mihailovich: He’s neither. You know, most people have no idea. They think it’s somebody involved in the entertainment industry. Or, you know, a movie producer or, you know, even an actor. And it’s Dr. Patrick Soon-Shiong.…
Sanjay Gupta: I think Dr. Soon-Shiong is one of these guys who is probably used to having been the smartest guy in the room probably from a very young age.

One of the biggest challenges for Gupta and Mihailovich was how to give viewers a sense of what goes on in the mind of a medical genius.

They began by asking him about his ground-breaking cancer drug Abraxane.

Draggan Mihailovich: There was a white board there. He takes a marker and he starts, you know, as you saw at the beginning of the piece, and off he went. And this goes on for 45 minutes. I mean, it was as if your kid took, like, a bowl of spaghetti and threw it up against a white wall.

Sanjay Gupta: It was this idea that cancer patients lose weight. But why do they lose weight? Even if they eat the same number of calories or even double the calories that they used to eat, they could still be losing weight. Why? What Dr. Patrick Soon-Shiong was sort of thinking about was it’s the protein in the blood that is just sucked up by these cancers. So if the cancers love proteins so much, here’s an idea. Let’s stick the chemotherapy in the protein, and the protein’s now a Trojan horse around the chemo. So the cancer is happy. It’s being fed. It’s getting all this protein. Boom. Chemo goes off on the tumor. And all of a sudden, you got a very, very effective, potentially, therapy.

[Dr. Patrick Soon-Shiong: We have it approved in breast cancer, we have it approved in lung cancer and were talking about patients in pancreatic cancer, and melanoma.]

Sanjay Gupta: That’s Dr. Patrick’s mind.

Dr. Soon-Shiong believes that the conventional approach to classifying cancer according to its location in the body is short-sighted. He says it’s the mutation of the gene, what made it go haywire, that matters.

[Dr. Patrick Soon-Shiong: We need to reclassify cancers now to its molecular fingerprints.]

Magalie Laguerre-Wilkinson: He’s not just thinking out of the box. I mean, he’s creating a revolution.

Sanjay Gupta: He’s absolutely creating a revolution, and it involves so many different facets that are not just medicine. Quick example, when you’re talking about sequencing genomes of many, many patients — around the United States and around the world, that is a lot of data, you’re talking about 6 billion pieces of information for each patient. Right now, we move things through the Information Superhighway at about megabytes per second. He’s talking about wanting to do that in petabytes per second.

Magalie Laguerre-Wilkinson: Never heard of that.

Sanjay Gupta: You got megabytes. 1,000 megabytes is a gigabyte. 1,000 gigabytes is a terabyte. 1,000 terabytes is a petabyte. So you’re talking, you know, exponentially, more data per second. And he’s basically figured out ways and funded ways to make that happen. That’s part of what a revolution looks like.

[Dr. Patrick Soon-Shiong: Here we have the world’s fastest video camera, what we’ve done is to take the power of optics or the sun and created a rainbow from laser light.]

Draggan Mihailovich: He’s involved in the technology. He’s involved in immunotherapy.

[Sanjay Gupta: So you’re literally watching cancer cells die here?]

[Dr. Patrick Soon-Shiong: Correct.]

Draggan Mihailovich: He’s involved in circulating tumor cells. You know, he’s involved in metastatic cancers. He’s still involved in some respect with his original drug, Abraxane, and how that’s used in combination therapies. And the brain is always working with Patrick.

[Sanjay Gupta: Is there anything like this right now? I mean, is anyone doing this sort of.]

[Dr. Patrick Soon-Shiong: No, it’s in our lab. This is what you call the clinical translation world where 21st century exists today.]

Magalie Laguerre-Wilkinson: He comes across as incredibly confident and, if one has cancer, is he the only game in town?

Sanjay Gupta: I don’t think Doctor Pat is the only game in town, by any means. I think he’s someone who’s looking at trying to disrupt the whole system. I think there are a lot of great oncologists out there, and frankly, there are a lot of oncologists who not only believe what he’s doing is the right thing to do, but they’re doing it themselves. They’re doing it; it’s just its smaller scales. Patrick’s, sort of, belief is, “Look, I already think that this is what’s going to work.”

Magalie Laguerre-Wilkinson: He’s screaming it from the rooftops.

Sanjay Gupta: Screaming it from the rooftops, spending his own money.

[Dr. Patrick Soon-Shiong: Well, I haven’t really counted, but it’s close to a billion dollars.]

[Sanjay Gupta: A billion dollars?]

[Dr. Patrick Soon-Shiong: Billion dollars.]

[Sanjay Gupta: Where’s the government in all of this?]

[Dr. Patrick Soon-Shiong: Trust me, we tried. You know, since 2008, 2009, 2010, 2011, I was in Washington, I was at the White House, I was at Congress, I was everywhere. We have not received one penny of funding.]

Magalie Laguerre-Wilkinson: Is he an easily accessible physician?

Sanjay Gupta: There were times when I’d be riding along with him, his phone would ring and, it would be somebody who had been, sort of, referred to him by somebody, you know, one of those situations. And he’d be on the phone with them for 15-20 minutes. “Here’s what I think you need to do.”

Magalie Laguerre-Wilkinson: For the hundreds of thousands of people on chemotherapy, Dr. Soon-Shiong is not saying, “Stop what you’re doing.” But he’s pretty much on the edge of that.

Draggan Mihailovich: What he’s saying is, “Ask questions.” You know, is this the right thing to do. Because more and more what scientists and oncologists will tell you is that perhaps in some cancers, and I’m gonna qualify this. In some cancers, a heavy blast of chemotherapy may not necessarily be, you know, the long-term answer.
Source: http://www.cbsnews.com/news/the-billionaire-shaking-up-the-world-of-cancer/

The Go Lean book serves as a roadmap for the implementation and introduction of the technocratic Caribbean Union Trade Federation (CU). The CU‘s prime directives are identified with the following 3 statements:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The Go Lean book asserts that one person can make a difference and maybe even change the world. The innovations and passions of Dr. Patrick Soon-Shiong may very well fit this advocacy. He is a role model for Caribbean innovators and scientists. We invite him; and others of his ilk, to impact the world from a Caribbean domicile. How?

One feature of the Go Lean roadmap is the adoption of Self-Governing Entities (SGE). These dedicated, bordered grounds are ideal for medical research and treatment campuses for resources like Dr. Soon-Shiong. We hereby extend the invitation to him … and all like-minded individuals looking for cooperative and supportive governing structures to facilitate their impact on the world.

The Go Lean book strategizes a roadmap for economic empowerment in the region, clearly relating that healthcare, and pharmaceuticals/cancer drugs research are important in the quest to make the Caribbean a better place to live, work, heal and play. At the outset of the Go Lean book, in the Declaration of Interdependence (Pages 11 & 14), these points are pronounced:

 ix.  Whereas the realities of healthcare and an aging population cannot be ignored and cannot be afforded without some advanced mitigation, the Federation must arrange for health plans to consolidate premiums of both healthy and sickly people across the wider base of the entire Caribbean population. The mitigation should extend further to disease management, wellness, obesity and smoking cessation programs.

xxvii.  Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

xxviii.  Whereas intellectual property can easily traverse national borders, the rights and privileges of intellectual property must be respected at home and abroad. The Federation must install protections to ensure that no abuse of these rights go with impunity, and to ensure that foreign authorities enforce the rights of the intellectual property registered in our region.

Previous blog/commentaries addressed issues of cancer and other medical research and practices, sampled here:

The Cost of Cancer Drugs
Antibiotics Misuse Linked to Obesity in the US
CHOP Research: Climate Change May Bring More Kidney Stones
Welcoming Innovators and Entrepreneurs under an SGE Structure
Big Pharma & Criminalization of American Business
Medical Research Associates Kidney Stones and Climate Change – Innovative!
New Research and New Hope in the Fight against Alzheimer’s Disease
Research in Diabetes Detection – Novartis and Google develop ‘smart’ contact lens
Health-care fraud in America; criminals take $272 billion a year
New Cuban Cancer medication registered in 28 countries
Puerto Rico’s Comprehensive Cancer Center Project Breaks Ground – Model of Medical SGE

Cancer is a crisis, and a “crisis would be a terrible thing to waste”.

This premise is loud-and-clear from the foregoing VIDEO. Dr. Soon-Shiong is already a billionaire from his development (and returns) of other cancer drugs (like Abraxane). This demonstrates that there is money to be made in this industry-space. Most importantly, however, there are lives to be saved.

The foregoing news article and VIDEO provides an inside glimpse into the cancer research discipline. Obviously, the innovators and developers of drugs have the right to glean the economic returns of their research. The Go Lean roadmap posits that more innovations will emerge in the region as a direct result of the CU prioritization on science, technology, engineering and medical (STEM) activities on Caribbean R&D campuses and educational institutions. This is based on the assumption that intellectual properties (IP) registered in the Caribbean region will be duly respected around the world.

This IP protection mandate, on behalf of all 30 member-states, is a heavy-lifting task for the Caribbean Union Trade Federation. (Cuban cancer drugs do enjoy this recognition at this time, despite the country’s irrelevance in American commerce).

This is an issue of economic, security and governance.

The CU has the prime directive of optimizing the economic, security and governing engines of the Caribbean region. The foregoing article and VIDEO depicts that research is very important to new medical innovations and break-throughs. This is the manifestation and benefits of Research & Development (R&D). The roadmap describes this focus as a community ethos and promotes R&D as valuable for the region. The following list details additional ethos, strategies, tactics, implementations and advocacies to optimize the region’s health deliveries and R&D investments:

Community Ethos – Deferred Gratification Page 21
Community Ethos – Economic Systems Influence Individual Choices and Incentives Page 21
Community Ethos – The Consequences of Choices Lie in the Future Page 21
Community Ethos – Governing Principles – Return on Investments Page 24
Community Ethos – Governing Principles – Cooperatives Page 25
Community Ethos – Non-Government Organizations Page 25
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Intellectual Property Page 29
Community Ethos – Ways to Impact Research & Development (R&D) Page 30
Community Ethos – Ways to Promote Happiness Page 36
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Integrate and unify region in a Single Market Page 45
Strategy – Agents of Change – Globalization Page 57
Tactical – Fostering a Technocracy Page 64
Tactical – Separation of Powers – Health Department Page 86
Tactical – Separation of Powers – Drug Administration Page 87
Implementation – Ways to Pay for Change Page 101
Implementation – Ways to Implement Self-Government Entities – R&D Campuses Page 105
Implementation – Ways to Deliver Page 109
Planning – Ways to Improve Trade Page 128
Planning – Ways to Make the Caribbean Better Page 131
Advocacy – Ways to Improve Healthcare Page 156
Advocacy – Ways to Impact Cancer Page 157
Advocacy – Ways to Better Manage the Social Contract Page 170
Advocacy – Ways Foster Cooperatives Page 176
Advocacy – Ways to Improve Emergency Management – Trauma Medicine Page 196
Advocacy – Ways to Impact Foundations Page 219
Advocacy – Ways to Impact Persons with Disabilities Page 228
Appendix – Emergency Management – Medical Trauma Centers Page 336

The Go Lean roadmap does not purport to be an authority on medical or cancer research best practices. The economic-security-governance empowerment plan should not direct the course of direction for cancer research and/or treatment. But the war on cancer has been stagnant for far too long; yet more can be done. As depicted in the foregoing article, the solutions are not coming from the governments, so the needed innovation must be incentivized from private enterprises. The SGE structure invites innovations like that of Dr. Soon-Shiong and many others with his passion…and genius.

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the empowerments in the book Go Lean … Caribbean. This is a Big Idea for the region, that of Self-Government Entities (Page 127), in which R&D and Genius can take hold, and thrive. We can make the Caribbean a better place to live, work, heal and play. 🙂

Download the book Go Lean … Caribbean – now!

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Gas Prices Drop Below $2

Posted on December 4, 2014 in Economics, Strategy

Go Lean Commentary

This is one of the year’s biggest economic stories; Gas Prices have dropped below $2.

The OnCue Drive Thru in Oklahoma sold gas for $1.99 a gallon Wednesday, a trend that many U.S. drivers are hoping will spread. – Published December 3rd 2014, 6:52 pm

Video: http://www.nbcnews.com/nightly-news/gas-prices-drop-below-2-gallon-oklahoma-n261101

It’s worth appreciating what’s going on here. The Power Player in this story is the Organization of the Petroleum Exporting Countries (better known as OPEC):

OPEC – a cartel of [12] oil producers that include Saudi Arabia, Iran, Iraq, and Venezuela – had a big meeting in Vienna on November 27. Before the gathering, there was speculation that OPEC countries might cut back on their own oil production in order to prop up prices. But in the end, the cartel couldn’t agree on how to respond and did nothing.

Oil prices promptly nosedived, with the price of Brent crude now hovering around $70 per barrel.

As recently as the summer, that price was over $100 per barrel.

CU Blog - Gas Prices Drop Below $2 - Photo 1

…

At this big meeting in Vienna, there was a lot of heated debate among OPEC members about how best to respond to this current drop in oil prices. Some countries, like Venezuela and Iran, wanted the cartel (mainly Saudi Arabia) to cut back on production in order to prop up the price of oil. The reason is that these countries need high prices in order to “break even” on their budgets and pay for all the government spending they’ve racked up:

CU Blog - Gas Prices Drop Below $2 - Photo 2

Source – Brad Plumer of Vox.com. Posted November 28, 2014; retrieved December 4, 2014 from: http://www.vox.com/2014/11/28/7302827/oil-prices-opec

OPEC is an international intergovernmental organization and economic cartel whose mission is to coordinate the policies of the oil-producing countries. This structure aligns with the book Go Lean… Caribbean, a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU). This calls for the confederation, collaboration and convention of 30 member-states into one intergovernmental organization. The same as OPEC does for its 12 oil-producing nations – a proxy agency to represent all members – the CU seeks for the Caribbean region. But instead of elevating oil prices, the CU coalition has these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus, including energy security, to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The goal of the CU is to optimize Caribbean society, allowing us to better compete globally and hopefully present more favorable options for our youth here in the homeland. (Previous generations sought refuge abroad).

The goal of OPEC is to secure a steady income to the member states and to collaborate in influencing world oil prices through economic means. Though this charter seems fairly benign, the reality of OPEC is vastly different; they have emerged as a monstrous entity! Autocratic leaders of OPEC countries – think Saddam Hussein – would constantly urge pushing world oil prices up; their claims were to help all OPEC members financially, but their motivation were purely nationalistic. The public view of OPEC now coincides with this dialogue from a movie, “art imitating life”:

“It can’t be bargained with, it can’t feel pain or mercy, and it will stop at absolutely nothing until you are dead!” – Movie dialogue from The Terminator (1984)

OPEC is not a monster, just protective of its own self-interest; many of their member-states feature a mono-industrial economy; it’s oil or bust! Plus, with 40 percent of global oil production, they do wield some power, influence and control of the eco-system of crude-oil pricing. But their power-influence-control is not absolute; there are always the laws of Economics!

Back to the foregoing article, the fact remains that oil prices were falling well before OPEC’s Friday announcement; this change was driven in large part by factors from Economics 101: less demand + higher supply = lower prices. In this case, economic slowdowns in much of the world have dampened demand, as supply has expanded considerably, especially within the U.S.

This premise directs the Energy Policy as communicated in the Go Lean book: the Caribbean region must lower crude oil demand.

This Go Lean/CU roadmap recognizes that modern life has expanded the definition of basic needs to now include food, clothing, shelter and energy. And thusly the book proposes many solutions for the region to optimize energy generation, distribution and consumption. No “stone is left unturned”. Go Lean posits that the average costs of energy can be decreased from an average of US$0.35/kWh to US$0.088/kWh in the course of the 5-year term of this roadmap. (Page 100).

Primary to this strategy of lowering the demand for crude oil is increasing options with alternative energy sources: natural gas, solar, wind and tidal. This will translate to more electric, hybrids, and fuel-efficient vehicles. The CU is a strong proponent of compressed-natural-gas vehicles (buses, trucks and passenger vehicles).

Lowering demand for energy works in lowering the costs.

In the US, the Obama administration’s improved fuel-efficiency standards have ultimately affected consumers, in that they are using less gas: “The sales-weighted fuel economy of vehicles in the U.S. increased from 20.8 miles per gallon in 2008 to 25.3 miles per gallon in 2014.” Other countries share the same experiences.

The Go Lean roadmap details a series of community ethos, strategies, tactics, implementations and advocacies to foster the progress in the wide fields of energy generation, distribution and consumption. The following list applies:

Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos – Cooperatives Page 25
Community Ethos – Regional Taxi Commissions Page 25
Community Ethos – Non-Government Organizations Page 25
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Improve Negotiations Page 32
Anecdote – Pipeline Transport – Strategies, Tactics & Implementations Page 43
Strategy – Harness the power of the sun/winds Page 46
Tactical – Fostering a Technocracy Page 82
Tactical – Separation of Powers – Energy Commission Page 82
Anecdote – “Lean” in Government – Energy Permits Page 93
Anecdote – Caribbean Energy Grid Implementation Page 100
Implementation – Ways to Develop Pipeline Industry Page 107
Implementation – Ways to Improve Energy Usage Page 113
Advocacy – Ways to Impact Public Works Page 175
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Impact Monopolies Page 202
Advocacy – Ways to Improve Transportation Page 205
Advocacy – Ways to Develop the Auto Industry Page 206
Appendix – North Dakota Oil Boom Economic-Societal Effects Page 334

This commentary asserts that energy needs are undeniable; and that OPEC may or may not be classified as a “monster”. The main take-away though is that monitoring and mitigating the realities of the global energy eco-system is a necessary role, a heavy-lifting task for the lean, agile operations of the CU technocracy.

So the message to the Caribbean region is clear: Help is on the way – the Terminator can be defeated – “life imitating art”!

Now is the time for all of the Caribbean, the people, business, institutions and governments, to lean-in for the optimizations and opportunities described in the book Go Lean … Caribbean. 🙂

Download the book Go Lean … Caribbean – now!

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Robots help Amazon tackle Cyber Monday

Posted on December 3, 2014 in Economics, Industries

Go Lean Commentary

To understand American commerce, one must learn the BIG shopping “days of the week” – Friday, Saturday, Monday, Tuesday, as follows:

    • Black Friday – This is the Friday following the Thanksgiving Day holiday in the US (the fourth Thursday of November). Since the early 2000’s, it has been regarded as the beginning of the Christmas shopping season, and most major retailers open very early and offer promotional sales. Black Friday is not a public holiday, but some states observe “The Day After Thanksgiving” as a holiday for state government employees, sometimes in lieu of another federal holiday such as Columbus Day.[5] Many non-retail employees and schools have both Thanksgiving and the day after off, followed by a weekend, thereby increasing the number of potential shoppers. In 2014, $50.9 billion was spent during the 4-day Black Friday weekend. While approximately 133 million U.S. consumers shopped during the same period.[6]
    • Small Business Saturday – This refers to the Saturday after Thanksgiving during one of the busiest shopping periods of the year. First observed in 2010, it is a counterpart to Black Friday and Cyber Monday, which feature big box retail and e-commerce stores respectively. By contrast, Small Business Saturday encourages holiday shoppers to patronize brick-and-mortar businesses that are small and local. Small Business Saturday is a registered trademark of American Express Corporation. Small Business Saturday UK began in the UK in 2013 after the success of Small Business Saturday in America.[7]
    • Cyber Monday – This is a marketing term for the Monday after the Thanksgiving holiday. The term was created by marketing companies to persuade people to shop online. The term made its debut on November 28, 2005, in a Shop.org press release entitled “‘Cyber Monday Quickly Becoming One of the Biggest Online Shopping Days of the Year”.[2] According to the Shop.org/Bizrate Research 2005 eHoliday Mood Study, “77 percent of online retailers said that their sales increased substantially on the Monday after Thanksgiving, a trend that is driving serious online discounts and promotions on Cyber Monday this year (2005)”. In 2014, Cyber Monday online sales grew to a record $2.68 billion, compared with last year’s $2.29 billion. However, the average order value was $124, down slightly from 2013’s $128.[3] The deals on Cyber Monday are online-only and generally offered by smaller retailers that cannot compete with the big retailers. Black Friday generally offers better deals on technology; with nearly 85% more data storage deals than Cyber Monday. The past Black Fridays saw far more deals for small appliances, cutlery, and kitchen gadgets on average than Cyber Monday. Cyber Monday is larger for fashion retail. On the past two Cyber Mondays, there was an average of 45% more clothing deals than on Black Friday. There were also 50% more shoe deals on Cyber Monday than on Black Friday.[4] Cyber Monday has become an international marketing term used by online retailers in Argentina, Canada, Chile, China, Colombia, Denmark, Germany, Ireland, Uganda, Japan, Portugal, Sweden and the United Kingdom.
    • Giving Tuesday – refers to the Tuesday after Thanksgiving. It is a movement to create a national day of giving at the beginning of the Christmas and holiday season. Giving Tuesday was started in 2012 by the “92nd Street Y” (Young Men’s and Young Women’s Hebrew Association in New York, NY) and the United Nations Foundation as a response to commercialization and consumerism in the post-Thanksgiving season (Black Friday and Cyber Monday).[8][9] This occasion is often stylized as #GivingTuesday for purposes of hashtag activism.

That’s a lot of commerce … and philanthropy too!

This encyclopedic discussion is necessary for the Caribbean to model the best-practices of American commerce. The focus of this commentary is the role of one company in the pantheon of Cyber Monday, Amazon. This firm has previously been featured in a Go Lean blog, and is identified as a model for Caribbean logistics, our means for delivering the mail; this is the vision for the Caribbean Postal Union (CPU).

The focus of the book Go Lean…Caribbean and the CPU is not just postal mail, but rather logistics. Mail requires logistics, but logistics encompasses so much more than just mail. So we would want to model a successful enterprise in this industry space, like Amazon, not just another postal operation, like the US Postal Service (Page 99).

Amazon provides a good example of lean technocratic efficiency. So Amazon is a good model, not just for the CPU but the entire Caribbean Union Trade Federation (CU). The Go Lean book, serves as a roadmap for the introduction and implementation of the technocratic CU.

One reason why Amazon is modeled for their lean stature is their use of automation. This following VIDEO depicts the creative solution of using robots to facilitate logistics in a warehouse environment:

VIDEO: Robots help Amazon tackle Cyber Monday – http://www.cbsnews.com/videos/robots-help-amazon-tackle-cyber-monday/

December 1, 2014 – Cyber Monday is the biggest sales day of the year for online retail giant, Amazon. Last year, Amazon customers ordered 426 items every second on Cyber Monday, and this year that number is expected to grow. In addition to the 80-thousand seasonal workers they employ to fulfill orders, thousands of robots also crawl the warehouse floors. CNET.com’s KaraTsuboi takes us inside an Amazon fulfillment center to watch the robots in action. (VIDEO plays best in Internet Explorer).

Lean, automation, robotics, technocratic …

… welcome to the new Caribbean.

This is the mission of Go Lean roadmap, to elevate the economic engines of Caribbean society; industrial policy plays a key role in this roadmap. The region needs the jobs, so we need job creators: companies. These companies, or better stated, Direct Foreign Investors, need a pro-innovation environment to deploy their automated solutions. The Go Lean roadmap allows the structure of Self-Governing Entities (SGE) to incentivize industrial developments in the region. It is the expectation that robots and automated systems will flourish. The independence of the SGE structure neutralizes conflicts with “labor”.

Related issues have previously been detailed in these Go Lean commentaries listed here:

Disney World – Successful Role Model of a SGE
Using SGE’s to Welcome the Dreaded ‘Plutocracy’
Where the Jobs Are – Ship-breaking under SGE Structure
Fairgrounds as SGE and Landlords for Sports Leagues
Puerto Rico’s Comprehensive Cancer Center Project Breaks Ground – Model of Medical SGE

In addition to the roadmap encouraging robotic automation, the CU will directly employ such technologically innovative products and services to impact its own prime directives; the CPU is such a reflection; more automation and less labor. The CU’s prime directives are identified with the following 3 statements:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The CPU features economic, security and governing concerns.

The Go Lean roadmap seeks to change the entire eco-system of Caribbean logistics and resulting commerce  – the interaction with postal operations. This vision is defined early in the book (Page 12 & 14) in the following pronouncements in the Declaration of Interdependence:

xv. Whereas the business of the Federation and the commercial interest in the region cannot prosper without an efficient facilitation of postal services, the Caribbean Union must allow for the integration of the existing mail operations of the governments of the member-states into a consolidated Caribbean Postal Union, allowing for the adoption of best practices and technical advances to deliver foreign/domestic mail in the region.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

Amazon is not our only example. A previous blog/commentary identified Chinese company Alibaba as a fitting role model for Caribbean consideration. There are so many best-practices around the world for the region to study and glean insights and wisdom from. The successful application of this roadmap will foster such best-practices for the delivery of the CPU logistics in the Caribbean. The wisdom the Go Lean book gleans are presented as a series of community ethos, strategies, tactics, implementations and advocacies; a detailed sample is listed as follows:

Community Ethos – Deferred Gratification Page 21
Community Ethos – People Respond to Incentives Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Intelligence Gathering Page 23
Community Ethos – Lean Operations Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Foster Genius Page 27
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Promote Intellectual Property Page 29
Community Ethos – Ways to Bridge the Digital Divide Page 31
Community Ethos – Ways to Improve Sharing Page 35
Strategy – Customers – Citizens and Member-states Governmental Page 47
Tactical – Separation of Powers – Postal Services Page 78
Tactical – Separation of Powers – Interstate Commerce Administration Page 79
Implementation – Year 1 / Assemble Phase – Establish   CPU Page 96
Anecdote – Implementation Plan – Mail Services – US Dilemma Page 99
Implementation – Steps to Implement   Self-Governing Entities Page 105
Implementation – Improve Mail Services – Electronic Supplements Page 108
Implementation – Ways to Deliver Page 109
Planning – 10 Big Ideas for the Caribbean Region Page 127
Advocacy – Ways to Improve Interstate Commerce Page 129
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy –Ways to Improve Governance Page 168
Advocacy – Ways to Foster Technology Page 197
Advocacy – Ways to Foster e-Commerce Page 198
Advocacy – Ways to Promote Call Centers Page 212
Advocacy – Ways to Impact Urban Living Page 234

Following the Amazon’s example (and Alibaba’s example) will spur the Caribbean to embrace more robotic technologies. This field is new, fresh and ready for innovation. There is a level-playing-field for any innovator to earn market share. The underlying company in the foregoing VIDEO is Kiva Systems – a Massachusetts based company that manufactures mobile robotic fulfillment systems.[10][11] They rolled out a great product, then “Lo-and-behold”, they were acquired by a major e-Commerce company. Today, they are a subsidiary of Amazon, yet their material-handling systems are currently used by many other retailers including: The Gap, Walgreens, Staples, Gilt Groupe, Office Depot, Crate & Barrel, Saks 5th Avenue, and more.[12]

CU Blog - Robots help Amazon tackle Cyber Monday - Photo 3

CU Blog - Robots help Amazon tackle Cyber Monday - Photo 2

CU Blog - Robots help Amazon tackle Cyber Monday - Photo 1

CU Blog - Robots help Amazon tackle Cyber Monday - Photo 4

This commentary therefore features the subjects of commerce, logistics and entrepreneurship. The Caribbean can emulate this model from Amazon. The biggest ingredient missing in the region is the ‘will’. But the ‘will’ can be fostered anew in the Caribbean. This is the heavy-lifting for the CU, instituting such new community ethos.

Now is the time for all of the Caribbean, the people and governing institutions, to lean-in for the empowerments in the book Go Lean … Caribbean. This is a Big Idea for the region; that of a Cyber Caribbean, in which Cyber Mondays may become a big deal for our region – not only as consumers, but producers as well. Therefore, this roadmap is not just a plan for delivering the mail/packages, but rather a plan for delivering the future.

We must employ whatever tools and techniques, robotics included, to make the region a better homeland to live, work and play.

Does “play“include Robots? Yes, indeed. Consider this fun VIDEO here.  🙂

Supplemental VIDEO – The Nutcracker performed by Dancing Kiva Order Fulfillment Robots: http://youtu.be/Vdmtya8emMw

Download the book Go Lean … Caribbean – now!

————–

Appendix – Source References:

2.    “‘Cyber Monday’ Quickly Becoming One of the Biggest Online Shopping Days of the Year”. Shop.org.
3.    “Fundivo – Cyber Monday Statistics”. Fundivo.
4.    “What’s the difference between Black Friday and Cyber Monday?”. Mirror.co.uk. Mirror.co.uk. Nov 28, 2013. Retrieved 2014-11-25.
5.    “Pima County in Arizona Replaces Columbus Day with Black Friday”. BestBlackFriday.com. 2013-08-07.
6.    “”Fundivo – Black Friday Statistics””. Fundivo.
7.    Small Business Saturday Hailed as Success. The Telegraph. 8 December 2013″. Telegraph.co.uk. 8 December 2013. Retrieved 2 December 2014.
8.   Fox, Zoe (October 23, 2012). “6 Inspiring Organizations Joining in #GivingTuesday”. Retrieved February 15, 2014.
9.    “#GivingTuesday: About”. Giving Tuesday. Retrieved February 15, 2014.
10.  http://www.kivasystems.com/about-us-the-kiva-approach/
11.   http://www.boston.com/business/technology/innoeco/2012/03/amazon_buys_warehouse_robotics.html
12.  http://www.kivasystems.com/about-us-the-kiva-approach/history/

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Michigan Unemployment – Then and Now

Posted on December 2, 2014 in Economics, Planning

Go Lean Commentary

The tagline “a better place to live, work and play” is the focus for empowering the Caribbean, placing equal emphasis on all 3 spheres of activity. But the focus of work is easier said than done. Without work, the Caribbean will continue to suffer societal abandonment – our good people would simply leave to go elsewhere to find the missing work element. They will do this despite how pleasant the “live” and “play” elements may be in our society.

This is a lesson learned from Detroit, Michigan USA.

The book Go Lean…Caribbean serves as a roadmap to elevate the Caribbean “work” environment. It analyses the regional disposition and then seeks solutions by studying the performances of other global cities, especially in the US.

The following chart highlights 50 cities, 2 of which were studied for the Go Lean book, a good example, Number 1 on the chart: Omaha, Nebraska and Number 50 on the chart: Detroit, Michigan, the once great industrial city.

CU Blog - Michigan Unemployment - Then and Now - Photo 2

The lessons from Omaha have already been a subject of this commentary. Now we focus on the other end of the chart, Detroit; this city specifically and the overall State of Michigan in general.

The entire eco-system of jobs was crippled in Michigan during the recent Great Recession (2007 – 2009). In response to the crisis throughout the country, the US federal government began extending unemployment benefits as a safety-net. There was a federal program to provide additional weeks of unemployment benefits to people starting in 2008.[2] The program was then extended again and again; the most recent extension was provided by the American Taxpayer Relief Act of 2012, which continued the supplemental unemployment benefits until the end of 2013.[2] Only then was the comfort level established that the “recession was over”, and the recovery was well enough in hand.

The United States Department of Labor’s Bureau of Labor Statistics reports that in November 2013 the average (mean) duration of unemployment was 37.2 weeks. [3] The median duration was 17.0 weeks. 22.6% of people who were unemployed found a new job in less than 5 weeks, while 37.3% had been unemployed for 27 weeks or more.[3]

These numbers were very bad during the throes of the Great Recession. In line with the following article, which quotes statistics, the impact on the streets of Michigan were 1 million unemployed. See article here:

Michigan unemployment tops 15% – July 2009
Sub-title: Government says jobless rate is the highest for a state since 1984. Rate tops 10% in 15 states and District of Columbia.
By: Ben Rooney, CNNMoney.com staff writer
CU Blog - Michigan Unemployment - Then and Now - Photo 1NEW YORK (CNNMoney.com) — Michigan became the first state in 25 years to suffer an unemployment rate exceeding 15%, according to a report released Friday by the Labor Department.

The state’s unemployment rate rose to 15.2% in June (2009). It was the highest of any state since March 1984, when West Virginia’s unemployment rate exceeded 15%.

Michigan, which has been battered by the collapse of the auto industry and the housing crisis, has had the highest unemployment rate in the nation for 12 months in a row.

Rhode Island had the second highest unemployment rate at 12.4%, followed by Oregon at 12.2%.

A total of 15 states and the District of Columbia had unemployment rates of at least 10%.

Friday’s report from the U.S. Labor Department also showed that six states recorded record-high unemployment rates in June.

Over the month, jobless rates increased in 38 states and the District   of Columbia. Michigan’s 1.1 percentage point increase from May to June was the highest in the nation, followed by Wyoming’s 0.9 point increase.

On an annual basis, jobless rates where higher in all 50 states and the District of Columbia. Michigan also recorded the highest yearly increase at 7.1 percentage points. Oregon came in second with a year-over-year increase of 6.3 percentage points in its unemployment rate.

The national unemployment rate rose for the ninth straight month in June, climbing to 9.5% from 9.4%, and hitting another 26-year high. Nearly 3.4 million jobs have been lost during the first half of 2009, more than the 3.1 million lost in all of 2008.

Unemployment rates decreased in five states, and seven states had no rate change.

North Dakota’s 4.2% jobless rate was the lowest in the nation, followed by Nebraska at 5%.

The Midwest and West both had jobless rates of 10.2%. The jobless rate in the Northeast rose to 8.6% from 8.3% but was the lowest of any U.S. region. In the South, unemployment rose to 9.2%.

Non-farm payroll employment fell in 39 states and the District of   Columbia in June. California had the largest month-over-month decrease in jobs.

Payrolls increased in 10 states and were unchanged in one state. The largest over-the-month increase occurred in North Carolina.

Source: CNN Money Online Financial News Site (Posted July 17, 2009; retrieved 12-02-2014)http://money.cnn.com/2009/07/17/news/economy/state_unemployment_report/

The Great Recession was truly a crisis. That was then; this is now.

Detroit still has the highest unemployment rate of the 50 largest cities in the U.S., at more than three times the national average for May, which was 6.3%. The unemployment rate for Detroit hovered at 23%, six percentage points ahead of the nearest on the list — Oakland City, Calif., at 16.9%, according to the Bureau of Labor Statistics in June 24, 2014.[4]

Once the metrics fall so low, there is no place to go but up.

In the past year Michigan is starting to finally feel the beneficial effects of the recovery. From those ghastly numbers of 1 million in 2009, the numbers petitioning for the Extended Unemployment Compensation (EUC) at December 19, 2013 were slightly “over 43,000 people in Michigan”. (The extension measure failed in the US Congress – the economy was a victim of its own success).

The Go Lean publishers are here to observe and report. Detroit in specific and Michigan is general is starting now to experience a turn-around. While there may be an ongoing hardship for those 43,000 people, the overall economy of Michigan has greatly improved since 2009, as the foregoing article relates, when the state “recorded the highest yearly unemployment increase of 7.1 percentage points”.

Michigan unemployment rate edges toward pre-recession numbers
Sub-title: …but employment hasn’t recovered
By: Emily Lawler – elawler@mlive.com MLive.com

LANSING, MI – Michigan’s seasonally unadjusted unemployment rate dropped to 7.1 percent in October, according to data released by the state Department of Technology, Management and Budget.

October’s 7.1 number is a .1 percent decline from September and the third monthly decline in a row. A year ago, in October 2013, unemployment was more than a point higher at 8.6 percent.

That’s the lowest rate this year and in fact the lowest since January through March of 2008.

“October’s 7.1 percent jobless rate was the lowest in Michigan since the January thorugh March 2008 period, and close matched pre-recession rates from 2003 to 2007. However, Michigan employment remains far below pre-recession levels,” noted the Department in a press release.

In October 2007, total employment in the state was 4.6 million. In October 2014, total employment in the state was 4.4 million.

Gov. Rick Snyder issued a statement on the unemployment:

“There is optimism and opportunity in Michigan as our state’s economy continues to move forward. More people are working and our labor force is growing as companies create more and better jobs. Our reinvention is helping working families and we are seeing results.

“But while we can recognize this accomplishment, there is more to do to fulfill our goal of the brightest possible future. We need to continue creating an environment for success, and that includes building a workforce with in-demand skills – and making sure a pathway to those skills is available for Michigan students and adults.”

Emily Lawler is a Capitol/Lansing business reporter for MLive Media Group.
Source: http://www.mlive.com/lansing-news/index.ssf/2014/11/michigan_unemployment_rate_edg.html

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The CU is set to optimize Caribbean society, not Detroit, starting with economic empowerment. In fact, the Go Lean roadmap has 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion & create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance to support these engines.

The CU will foster the right climate for Direct Foreign Investments, entrepreneurial initiatives, industrial development, and preparation for a ready, willing and able work force.

These points are pronounced early in the Go Lean book with the Declaration of Interdependence (Pages 12 – 14) with many statements that demonstrate the need to empower the Caribbean labor force:

xx. Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv. Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

xxvi. Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, pre-fabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries like tourism, fisheries and lotteries – impacting the region with more jobs.

Despite the weaknesses of its current dilemma, Detroit does have strengths. The city is working hard to turn-around. See VIDEO here of a Job Fair for STEM (Science, Technology, Engineering, Math) jobs peculiar to the Motor City:

Engineering Society of Detroit job fair on Monday – Posted November 9, 2014

Video – http://www.wxyz.com/money/job-finder/engineering-society-of-detroit-job-fair-on-monday#Job%20fair%20today:

We must learn from Detroit. The Go Lean book details a series of community ethos, strategies, tactics, implementations and advocacies to impact jobs in the Caribbean region, member-states, cities and communities. Below is a sample:

Assessment – Anecdote – Caribbean Single Market & Economy Page 15
Assessment – Anecdote – Dutch Caribbean – Integration & Secessions Page 16
Assessment – Anecdote – French Caribbean – Organization & Discord Page 17
Assessment – Anecdote – Puerto Rico – The Greece of the Caribbean Page 18
Community Ethos – Economic Systems Influence Individual Choices & Incentives Page 21
Community Ethos – Voluntary Trade Creates Wealth Page 21
Community Ethos – Consequences of Choices Lie in the Future Page 21
Community Ethos – Minority Equalization Page 24
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments Page 24
Community Ethos   – Ways to Foster Genius Page 27
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Impact Turn-Around Page 33
Community Ethos – Ways to Manage Reconciliations Page 34
Community Ethos – Ways to Impact the Greater Good Page 37
Strategic – Vision – Integrating Region in to a Single Market Page 45
Strategy – Mission –   Facilitate Job-Creating Industries Page 46
Strategic – Agents of Change – Globalization Page 57
Tactical – $800 Billion Economy – How and When – High Multiplier Industries Page 70
Tactical – Separation of Powers – State Department – Self-Governing Entities Page 80
Implementation – Ways to Pay for Change Page 101
Implementation – Foreign Policy Initiatives at Start-up Page 102
Implementation – Ways to Deliver Page 109
Implementation – Ways to Benefit from Globalization Page 119
Planning – 10 Big Ideas – Cuba/Haiti Page 127
Planning – Ways to Make the Caribbean Better Page 131
Planning – Lessons Learned from 2008 Page 136
Planning – Lessons from Omaha Page 138
Planning – Lessons from Detroit Page 140
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Battles in the War Against Poverty Page 222
Advocacy – Ways to Impact the Middle Class Page 223
Advocacy – Ways to Impact Urban Living Page 234

Other subjects related to the pros-and-cons of job empowerments for the region have been blogged in other Go Lean…Caribbean commentaries, as sampled here::

Making a Great Place to Work® – Detroit Employer Example
Where the Jobs Are – Entrepreneurism in Junk
The Geography of Joblessness
Continued Discriminationor Latins/Caribbeans in Job Markets
Where the Jobs Are – Computers Reshaping Global Job Market
Where the Jobs Are – One Scenario: Shipbreaking
Casino   Jobs – Changing/Failing Business Model
The Future of Golf; Vital for Tourism Jobs
STEM Jobs Are Filling   Slowly – High Demand, Low Supply
Where the Jobs Were – British public sector now strike over ‘poverty pay’
Where the Jobs Are – Fairgrounds as SGE & Landlords for Sports Leagues
Self-employment jobs on the rise in the Caribbean – World Bank

The purpose of this roadmap is to elevate Caribbean society. To succeed we must apply lessons from advanced economy countries like the US, and the cities there in; lessons from their good, bad and ugly experiences of the past.

The Go Lean movement (book and blog commentaries) posits that there is less effort to remediate the Caribbean homeland, than to flee to a city like Detroit and try to thrive as an alien in that land. So the book thusly advocates to “prosper where planted”. With the appropriate effort, as defined in the Go Lean book, the Caribbean can truly become a better place to live, work and play.

Download the book Go Lean…Caribbean now!

—————–

Source References:

  1. http://www.michigan.gov/uia/0,4680,7-118–318402–s,00.html
  2. Ayres, Sarah (20 November 2013). “Why Congress Must Extend Emergency Unemployment Benefits”. Center for American Progress. Retrieved 9 January 2014.
  3. “Economic News Release: Table A-12 Unemployed person by duration of unemployment”. Bureau of Labor Statistics. 6 December 2013. Retrieved 9 January 2014.
  4. http://www.marketwatch.com/story/should-you-move-to-detroit-2014-06-24. Retrieved December 2, 2014.
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Why India is doing better than most emerging markets

Posted on November 19, 2014 in Economics, Planning

Go Lean Commentary

BRICS = Brazil, Russia, India, China, South Africa …

There are no “push-pull” factors luring Caribbean citizens to emigrate to these countries, (though Caribbean member-states Trinidad and Guyana have a majority population of Indian descent), but still it is very important for the stewards of the Caribbean economy to study the BRICS countries. We need to learn from their lessons, good-bad-and-ugly, and try hard to keep pace.

This global assessment is part of the technocratic activities needed in comparative analysis, essential and strategic in the effort to ensure the region remains competitive. This effort is inclusive of the publishers of the book Go Lean…Caribbean; it urges the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU). The book serves as a roadmap for the elevation of the region’s economy-security-governing engines; providing turn-by-turn directions to integrate the 30 member-states of the region and forge an $800 Billion economy.

A likely analogy would be navigating a vessel across a tumultuous ocean. As a humorous depiction, subject matter experts joke that “an economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today”.

All joking aside, the incremental progress of one BRICS country, India, is not to be lambasted or readily dismissed. See this recent news article:

By: JO’s

CU Blog - Why India is doing better than most emerging markets - Photo 1MUMBAI – Investors have fallen out of love with emerging markets. Since the start of last year emerging-market stocks has trailed their rich-world peers. Currencies are falling. Worst-hit is the Russian Rouble, which has fallen by 30% against the Dollar this year. The currencies of other biggish emerging markets, such as Brazil, Turkey and South Africa, have also weakened. For such economies growth is harder to come by. The IMF recently cut its forecasts for emerging markets by more than for rich countries. But India is a notable exception to the general pessimism. Its stock market has touched new highs. The Rupee [currency] is stable. And the IMF nudged up its 2014 growth forecast for India to 5.8%. That figure is still quite low: growth rates of 8-9% have been more typical. But in comparison with others it is almost a boom. Why is India doing better than most emerging markets?

In part optimism about India owes to its newish government. In May Narendra Modi’s Baratiya Janata Party (BJP) won a thumping victory in elections on a pro-growth platform. Since then the BJP has strengthened its position in some key states. So far reform has been piecemeal. Procedures for government approvals have been streamlined. The powers of labour inspectors have been curbed. Civil servants now work harder. That has been enough to sustain hopes of further and bigger reforms. Yet much of the continued enthusiasm about India is down to luck. The currents that sway the global economy presently—the dollar’s strength; slowdown in China; aggressive money-printing in Japan; stagnation in the Euro Zone and falling oil prices—are less harmful to India than to most emerging markets.

Start with the dollar, which has been buoyed by a resilient American economy and the prospect of interest-rate increases by the Federal Reserve. Past episodes of rising interest rates and dollar strength (for instance in the early 1980s or mid-1990s) have not been kind to emerging markets. Bond yields rise and currencies fall as capital is drawn back to America. India has a bit less to fear from such a rush to the exits; its bond markets are tricky for foreigners to enter in the first place. India is less harmed by slowdown in China, as only around 5% of its exports go there. It is not part of the China’s supply-chain that takes in much of Southeast Asia. Nor is it a big exporter of industrial commodities, like Brazil. Equally a weaker yen in response to quantitative easing by the Bank of Japan hurts Asia’s manufacturing exporters more than service-intensive India. The misery in the Euro Zone is of greater concern to its local trading partners in Turkey and Russia than to faraway India. And the fall in the crude prices that hurts oil exporters, such as Russia and Nigeria, is a boon to a big oil importer like India. Indeed the deflation that is stalking large parts of the world is helpful to India, which has suffered from high inflation.

India is not impervious to bad news. Some of its recent economic data have looked a little soggy. Exports slumped in October. Car sales have fallen for two consecutive months and there is little sign yet of a meaningful recovery in business investment. This is in part why there have been growing calls (including from the finance minister) for the central bank to cut interest rates soon in response to a drop in consumer-price inflation. The troubles in other emerging markets ought to counsel caution. Any sign that policymakers might be ditching discipline in favour of quick fixes might see India crossed off the love list.
The Economist Magazine – Online Edition – November 18, 2014 –
http://www.economist.com/blogs/economist-explains/2014/11/economist-explains-11

Other BRICS countries are struggling with growth, at this moment; see story here:

As emerging economies hit hard times, Brazil and Russia look particularly weak.

CU Blog - Why India is doing better than most emerging markets - Photo 2

Considering the realities of the emerging economies, the BRICS countries, it is obvious that there is an ebb-and-flow associated with economic stewardship. This stewardship constitutes the prime directives of the CU:

  • Optimization of the economic engines in order to grow the regional economy and create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance/administration/oversight to support these engines.

The best practice for effective stewardship of an economy’s ebb-and-flow is the recovery; managing the ability to “bounce back” quickly. This fact is related in the Go Lean book (Page 69), chronicling the experiences in the US when the economy lost $11 Trillion in the 2008 Great Recession, but recovered $13.5 Trillion back a few years later, by December 2012. The US has 50 member-states and 320 million people. Shocks and dips can therefore be absorbed and leveraged across the entire region .The Go Lean roadmap is to integrate the Caribbean in such a structure with 30 member-states and 42 million people.

At the outset, the roadmap identified an urgent need to contend with, since the Caribbean is still in the throes of the financial crisis (commenced in 2008).  This is pronounced in this clause in the opening Declaration of Interdependence (Page 13):

xxv.   Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

The Go Lean roadmap signals change for the region. It introduces new measures, new opportunities and new recoveries. Economies will rise and fall, ebb-and-flow; the recovery is key. Currencies and inflation issues also factor in the economic stewardship. The foregoing article relates:

“the dollar … has been buoyed by a resilient American economy and the prospect of interest-rate increases by the Federal Reserve. Past episodes of rising interest rates and dollar strength … have not been kind to emerging (BRICS) markets”.

So the CU strategy also calls for the establishment of the allied Caribbean Central Bank (CCB) to manage the regional monetary and currency affairs. The Go Lean book describes the breath-and-width of the CCB. This stewardship of monetary-currency was envisioned and pronounced in the roadmap’s Declaration of Interdependence (Page 13):

xxiv.   Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

The CU roadmap drives change among the economic, security and governing engines. These solutions are as new community ethos, strategies, tactics, implementations and advocates; sampled as follows:

Who We Are – Veterans of 2008 “Wars” & Financial Crisis Page 8
Community Ethos – Voluntary Trade Creates Wealth Page 21
Community Ethos – Consequences of Choices Lie in the Future Page 21
Community Ethos – Money Multiplier Page 22
Community Ethos – Job Multiplier Page 22
Community Ethos – Cooperatives Page 25
Community Ethos – Impact the Greater Good Page 37
Strategy – CU Vision and Mission Page 45
Strategy – Facilitating Currency Union, Caribbean   Dollar Page 45
Strategy – Collaborate for the Caribbean Central Bank Page 45
Anecdote – Caribbean Currencies Page 64
Tactical – Fostering a Technocracy Page 64
Tactical – $800 Billion Economy – How and When – Trade Page 67
Tactical – Recovering from Economic Bubbles Page 69
Tactical – Separation-of-Powers – Caribbean Central Bank Page 73
Implementation – Assemble Caribbean Central Bank Page 96
Implementation – Ways to Pay for Change Page 101
Implementation – Trade Mission Objectives Page 117
Implementation – Ways to Benefit Globalization Page 119
Planning – Ways to Improve Trade Page 128
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Control Inflation Page 153
Advocacy – Ways to Better Manage Foreign Exchange Page 154
Advocacy – Foster Empowering Immigration – Indentured Indians Page 174
Advocacy – Reforms for Banking Regulations Page 199
Advocacy – Ways to Preserve Caribbean Heritage Page 218
Advocacy – Ways to Impact Trinidad & Tobago Page 240

The Caribbean region needs to learn from the lessons of the BRICS countries, (see VIDEO below). and do the work, the heavy-lifting, to compete with them, and the rest of the world in trade and culture. The subject of trade empowerment has been directly addressed and further elaborated upon in these previous blog/commentaries:

https://goleancaribbean.com/blog/?p=2887 Caribbean must work together to address rum subsidies
https://goleancaribbean.com/blog/?p=2488 Role Model Jack Ma brings Trade Marketplace Alibaba to America
https://goleancaribbean.com/blog/?p=2435 Latin America’s Dream and Trade Role-model: Korea
https://goleancaribbean.com/blog/?p=2090 Elaborating on the CU and CCB as Hallmarks of a Technocracy
https://goleancaribbean.com/blog/?p=1869 US Senate Bill Targets Companies for Dishonorable Trade Practices
https://goleancaribbean.com/blog/?p=1847 Caribbean Cigar Trade – Declared “Among the best in the World”
https://goleancaribbean.com/blog/?p=1416 Amazon – Role Model for Trade Marketplace, Introduces New Tablet
https://goleancaribbean.com/blog/?p=994 Bahamas Rejects US Trade Demand
https://goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – #3: De-Americanize World Money for Currency in Trade

The Caribbean is arguably the best address on the planet, but there are many deficiencies, as in jobs and economic empowerments. We have suffered as a result of these deficiencies, as a region losing a large share of human capital, one estimate of 70%, to the brain-drain.

No More! Change has now come to the Caribbean.

Shepherding the Caribbean economy is the job for technocrats, trained and accomplished from the battles of globalization and trade wars. This is the Go Lean roadmap. Everyone, the people and institutions are hereby urged to lean-in to this roadmap to make the Caribbean a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

————

VIDEO: BRICS to change world economy – http://youtu.be/wmS11HnNbk0

Published on Mar 28, 2012 – The BRICS countries’ leaders were preparing for their annual meeting in 2012. These countries make up 42 percent of the world’s population and a quarter of its landmass. They are also responsible for 20 percent of the Global GDP and own a whopping 75 percent of the foreign reserve worldwide. In these tough times for world economics these countries are trying to find a solution for the situation. RT America’s Correspondent Priya Sridhar (the US based arm of Russia Today, a 24-hour English-language international broadcast news network based in Miscow) gave a sneak peak of the summit from India.

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Funding Caribbean Entrepreneurs – The ‘Crowdfunding’ Way

Posted on November 15, 2014 in Economics, Strategy

Go Lean Commentary

The Washington, DC-based World Bank believes that Caribbean entrepreneurs can be funded by networking with the Caribbean Diaspora. This objective aligns with the book Go Lean… Caribbean which serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) with the charter to facilitate entrepreneurship and job-creation in the region.

Early in the Go Lean book, the responsibility to attract investors and create jobs was identified as an important function for the CU with these pronouncements in the opening Declaration of Interdependence (Pages 13, 14):

xxiv.  Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvi.  Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries… In addition, the Federation must invigorate the enterprises related to existing industries … – impacting the region with more jobs.

Before stating an opinion on the plausibility of the World Bank’s proposal, first consider the article, as follows:

Title: Caribbean entrepreneurs need to look to Diaspora for funding – World Bank Group Exec

CU Blog - Funding Caribbean EntrepreneursBRIDGETOWN, Barbados — Caribbean entrepreneurs who are looking for funding to develop new or existing businesses are being encouraged to look to their own nationals living abroad.

“Diaspora financing should be explored as a source of funding for entrepreneurs”, said Aun Rahman, head of the infoDev Access to Finance Programme, at the World Bank Group.

Rahman was speaking on the topic “Access to Finance: Examining Non-Traditional Platforms for Funding”, during the final day of the Caribbean Exporters’ Colloquium 2014 in BridgetownBarbados today.

About 85 per cent of Caribbean people in the Diaspora have said they would “be interested in investing in business back home,” Rahman said adding that they are not only interested in their own countries – but those across the region.

But despite the high interest, Rahman said only a “very few” — about 13 per cent — have actually invested in the Caribbean. The Diaspora investors need a “trusted local partner,” he said.

Project co-ordinator for the Jamaica Venture Capital Programme at the Development Bank of Jamaica, Audrey Richards, also spoke on non-traditional investment sources.

“If we want to attract non-traditional finance, we need to start thinking in a non-traditional way,” she said.

Other participants in the session included Nelson Gray, special project director at LINC Scotland, Shadel Nyack Compton, managing director of Belmont Estate Group of Companies and Judith Mark, managing director and enterprise development consultant at CME Consulting Ltd.
Jamaica Observer Daily Newspaper – Online Site – Retrieved 11-14-2014
http://www.jamaicaobserver.com/business/Caribbean-entrepreneurs-need-to-look-to-Diaspora-for-funding—-World-Bank-Group-exec

“Say it ain’t so”. This assertion seems so out-of-touch. This plays into the fallacy that life is so much better outside the Caribbean, so that when a Caribbean resident emigrates and now lives in the US, Canada, or Europe that they thrive financially to the point that they have disposable income (beyond funding their own basic food-clothing-housing needs, plus support for their families left-behind) so as to be able to invest in entrepreneurs back in their ancestral homelands.

This is a distorted “view” from afar … as in Washington. This is not the true experience “on the ground”. (While a picture is worth a thousand words, it is no substitute to actually being “there”. A picture only describes the visual sense; there is so much more, there are the sounds, smells, touch and taste. All of that experience cannot be easily captured in words or pictures).

The book Go Lean…Caribbean, authored by Diaspora members, posits that while the Caribbean region is the greatest address in the world, (the tropical flora-fauna, islands landscapes-waterscapes, and Caribbean culture cannot be topped any where else on the planet), life “at home” is much harder than picturesque postcards depict. This is why residents leave in the first place,  “push and pull factors”, and join the Diaspora.

The Caribbean does need help from the Diaspora to fulfill the Go Lean vision; we need their Time, Talent and Treasuries. But in truth, the Caribbean Diaspora does not thrive financially in their foreign abodes; not with the first generation. Economic studies indicate that only at the 2nd generation, do the immigrant’s legacies (next generation) start to prosper financially[a]. At that point, these are no longer Diaspora (Nationals of the Caribbean member-states); and may not feel any attachment to their ancestral homelands. This is not just a Caribbean issue; it has been proven with other Diaspora groups: Irish, Italian, Chinese, etc. Added to the reality is the fact that Diaspora/legacy members can easily participate in Wall Street; with such an investment/economic engine, local Caribbean options cannot compete. The foregoing article concedes as much:

“only a ‘very few’ – about 13 per cent — have actually invested in the Caribbean”

The Go Lean roadmap is therefore realistic! We are not expecting the Diaspora to be some panacea of Caribbean societal ills. Rather, as a region, we must do the heavy-lifting ourselves. This roadmap proffers a unified, consolidated Caribbean effort, engaging all stakeholders: residents, Diaspora, Direct Foreign Investors, passive investors, NGOs and even governmental agencies, domestic and foreign. “All hands on deck”!

The foregoing article also states that “if we want to attract non-traditional finance, we need to start thinking in a non-traditional way”. This is the siren call of the Go Lean book, to effectuate change in the region, allowing for the following 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion GDP and create 2.2 million new jobs.
  • Establishment of a security apparatus to protect the resultant economic engines.
  • Improve Caribbean governance/administration/oversight to support these engines.

The Go Lean book/roadmap reflects the recommended “non-traditional thinking” to attract non-traditional funding for Caribbean empowerment and entrepreneurial endeavors:

  • The book advocates for incubators… helping/coaching entrepreneurs to put together proper business plans and structures…
  • The book advocates for cooperatives…
  • The book advocates for the full exploration and exploitation of social media, identifying www.myCarribbean.gov  …

All these strategies allow for non-traditional funding methods such as crowdfunding[b] (already essentially practiced in the region as no-tech offerings: Asue, Partner, Asociacion); this is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet.[1] One early-stage equity expert described crowdfunding as “the practice of raising funds from two or more people over the internet towards a common Service, Project, Product, Investment, Cause, and Experience or SPPICE.”[2]

(See crowdfunding definition/explanation in the below VIDEO in the Appendix).

The crowdfunding model is fueled by three types of actors:

  • the project initiator who proposes the idea and/or project to be funded;
  • individuals or groups who support the idea (inclusive of the Diaspora);
  • and a moderating organization (the “platform”, envisioned for the CU‘s www.myCarribbean.gov) that brings the parties together to launch the idea.[3]

This strategy has proven successful for many other endeavors. In 2013, the crowdfunding industry grew to over $5.1 billion worldwide;[4] (see Kickstarter Appendix below):

There are three primary types of crowdfunding:

  • Reward-based crowdfunding – entrepreneurs pre-sell a product or service to launch a business concept without incurring debt or sacrificing equity/shares. Reward-based crowdfunding has been used for a wide range of purposes, including motion picture promotion,[16] free software development, inventions development, scientific research,[17] and civic projects.[18] For a joint study between Toronto, Canada’s York University and Universite Lille Nord de France, in Lille, France, published on June 2, 2014, two types of reward-based crowdfunding were identified: “‘Keep-it-All’ (KIA) where the entrepreneurial firm sets a fundraising goal and keeps the entire amount raised regardless of whether or not they meet their goal, and ‘All-or-Nothing’ (AON) where the entrepreneurial firm sets a fundraising goal and keeps nothing unless the goal is achieved.”[19] The study’s researchers analyzed 22,875 crowdfunding campaigns, with targets of between US$5,000 and US$200,000, and concluded: “Overall, [all-or-nothing] fundraising campaigns involved substantially larger capital goals, and were much more likely to be successful at achieving their goals.” In its review of the study outcomes, the Inc.com publication explained that potential investors are more inclined to support “all-or-nothing strategy” initiatives, whereby a substandard product will not be released if the funding goal is not achieved. The Inc.com review concluded that “AON” campaign typically provide more detailed information on the campaign.[20]
  • Equity-based crowdfunding – the backer receives unlisted shares of a company, usually in its early stages, in exchange for the money pledged. The company’s success is determined by how successfully it can demonstrate its viability.[15] Equity-based crowdfunding is the collective effort of individuals to support efforts initiated by other people or organizations through the provision of finance in the form of equity.[21][22] In the United States, legislation that is mentioned in the 2012 JOBS Act will allow for a wider pool of small investors with fewer restrictions following the implementation of the act.[22]
  • Credit-based crowdfunding – In the U.S., credit-based crowdfunding from non-banks became more prominent as a form of crowdfunding in 2012, with the launch of the Lending Club, which had advanced more than US$500 million in loans via its website by April 2012. Prospective borrowers of  the Lending Club first submit their requirements, and are then matched with pools of investors who are willing to accept the credit terms. Platforms such as the Lending Club gained popularity, as banks increased interest rates or reduced their level of lending activity. Another credit-based platform, Prosper.com, was established in 2006 and had funded nearly US$325 million in personal loans by April 2012.[23]

There are many dynamics of this nascent industry that must be considered and mastered if the Caribbean is to benefit from crowdfunding. Consider the following:

  • Crowdfunding applications – Crowdfunding is being experimented with as a funding mechanism for creative work such as blogging and journalism,[51] music, independent film,[52][53] (See KickStarter Appendix below) and for funding startup companies.[54][55][56][57] Community music labels are usually for-profit organizations where “fans assume the traditional financier role of a record label for artists they believe in by funding the recording process”.[58] A Financialist article published in mid-September 2013 stated that “the niche for crowdfunding exists in financing films with budgets in the [US]$1 to $10 million range” and crowdfunding campaigns are “much more likely to be successful if they tap into a significant pre-existing fan base and fulfill an existing gap in the market.”[60]
  • Philanthropy and civic projects – A variety of crowdfunding platforms have emerged to allow ordinary web users to support specific philanthropic projects without the need for large amounts of money.[18]
  • Real estate crowdfunding (and REITs) – Real estate crowdfunding is the online pooling of capital from investors to fund mortgages secured by real estate, such as “fix and flip” redevelopment of distressed or abandoned properties, and equity for commercial and residential projects, acquisition of pools of distressed mortgages, home buyer down payments and similar real estate related outlets. Investment, via specialized online platforms, is generally completed under Title II of the JOBS Act and is limited to accredited investors. The platforms offer low minimum investments, often $100 – $10,000.[63][64]
  • Intellectual property exposure – One of the challenges of posting new ideas on crowdfunding sites is there may be little or no intellectual property (IP) protection provided by the sites themselves. Once an idea is posted, it can be copied. As Slava Rubin, founder of IndieGoGo said: “We get asked that all the time, ‘How do you protect me from someone stealing my idea?’ We’re not liable for any of that stuff.”[65] Inventor advocates, such as Simon Brown, founder of the UK-based United Innovation Association, counsel that ideas can be protected on crowdfunding sites through early filing of patent applications, use of copyright and trademark protection as well as a new form of idea protection supported by the World Intellectual Property Organization called Creative Barcode.[66]
  • Innovative new platforms, such as RocketHub, have emerged that combine traditional funding for creative work with branded crowdsourcing – helping artists and entrepreneurs unite with brands “without the need for a middle man.”[61]
  • Global Giving allows individuals to browse through a selection of small projects proposed by nonprofit organizations worldwide, donating funds to projects of their choice.
  • Microcredit crowdfunding platforms such as Kiva (organization) and Wokai facilitate crowdfunding of loans managed by microcredit organizations in developing countries.
  • The US-based nonprofit Zidisha offers a new twist on these themes, applying a direct person-to-person lending model to microcredit lending for low-income small business owners in developing countries. Zidisha borrowers who pass a background check may post microloan applications directly on the Zidisha website, specifying proposed credit terms and interest rates. Individual web users in the US and Europe can lend as little as one US dollar, and Zidisha’s crowdfunding platform allows lenders and borrowers to engage in direct dialogue. Repaid principal and interest is returned to the lenders, who may withdraw the cash or use it to fund new loans.[62]
  • DonorsChoose.org, founded in 2000, allows public school teachers in the United States to request materials for their classrooms. Individuals can lend money to teacher-proposed projects, and the organization fulfills and delivers supplies to schools.
  • There are also a number of own-branded university crowdfunding websites, which enable students and staff to create projects and receive funding from alumni of the university or the general public. Several dedicated civic crowdfunding platforms have emerged in the US and the UK, some of which have led to the first direct involvement of governments in crowdfunding.

The Go Lean…Caribbean roadmap asserts that the adoption of new community ethos, plus the executions of the following strategies, tactics, implementations and advocacies will foster the “crowdfunding”/investment industry in the region:

Community Ethos – Deferred Gratification Page 21
Economic Principles – People Choose because Resources are Limited Page 21
Economic Principles – People Respond to Incentives Page 21
Economic Principles – Economic Systems Influence Choices & Incentives Page 21
Economic Principles – Consequences of Choices Lie in the Future Page 21
Community Ethos – Job Multiplier Page 22
Community Ethos – Lean Operations Page 24
Community Ethos – Return on Investments   (ROI) Page 24
Community Ethos – Cooperatives Page 25
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Help Entrepreneurship Page 28
Community Ethos – Ways to Promote Intellectual Property Page 29
Community Ethos – Ways to Impact Research & Development (R&D) Page 30
Community Ethos – Ways to Bridge the Digital Divide Page 31
Community Ethos – Ways to Improve Sharing Page 35
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Mission – Foster Local Economic Engines. Page 45
Strategy – Customers of the CU – Diaspora – Incentivize Investments Page 47
Tactical – Fostering a Technocracy Page 64
Tactical – Tactics to Forge an $800 Billion Economy – High Multiplier Industries Page 70
Tactical – Separation of Powers – Self-Governing Entities Page 80
Implementation – Ways to Pay for Change – SGE Licenses Page 101
Implementation – Steps to Implement Self-Governing Entities Page 105
Implementation – Ways to Deliver Page 109
Implementation – Ways to Impact Social Media Page 111
Planning – 10 Big Ideas – Self-Governing Entities / Cyber Caribbean Page 127
Planning – Ways to Improve Trade Page 128
Planning – Ways to Make the Caribbean Better Page 131
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Ways to Foster Cooperatives Page 176
Advocacy – Ways to Impact Wall Street – Adopt Advanced Products like REITs Page 200
Advocacy – Ways to Impact Main Street Page 201
Advocacy – Ways to Impact the Diaspora Page 217
Appendix – Job Multipliers Page 259

Under the Go Lean roadmap, there will be plenty of opportunities for entrepreneurial funding. The CU will solicit investors and foster entrepreneurism by featuring the structures of Self-Governing Entities (SGE); these are bordered grounds like high-tech R&D campuses, medical parks, and technology bases; but they will also include low-tech blue-collar activities like salvage yards and ship-breaking. The subjects of SGE’s, self-employment opportunities and entrepreneurial hustle has been directly addressed and further elaborated upon in these previous blog/commentaries:

https://goleancaribbean.com/blog/?p=2857 Where the Jobs Are – Entrepreneurism in Junk
https://goleancaribbean.com/blog/?p=2338 Using SGE’s to Welcome the Dreaded ‘Plutocracy’
https://goleancaribbean.com/blog/?p=2126 Where the Jobs Are – Computers Reshaping Global Job Market
https://goleancaribbean.com/blog/?p=2025 Where the Jobs Are – Attitudes & Images of the Caribbean Diaspora in US
https://goleancaribbean.com/blog/?p=2003 Where the Jobs Are – Ship-breaking under SGE Structure
https://goleancaribbean.com/blog/?p=1698 Where the Jobs Are – STEM Jobs Are Filling Slowly
https://goleancaribbean.com/blog/?p=1683 Where the Jobs Were – British public sector now strike over ‘poverty pay’
https://goleancaribbean.com/blog/?p=1596 Book Review: ‘Prosper Where You Are Planted’
https://goleancaribbean.com/blog/?p=1325 Puerto Rico Governor Signs Bill on Small-Medium-Enterprises
https://goleancaribbean.com/blog/?p=1214 Where the Jobs Are – Fairgrounds under SGE Structure as Landlords for Sports Leagues
https://goleancaribbean.com/blog/?p=599 Ailing Puerto Rico open to radical economic fixes – with focus on Informal Economy
https://goleancaribbean.com/blog/?p=398 Self-employment on the rise in the Caribbean – World Bank
https://goleancaribbean.com/blog/?p=273 10 Things We Don’t Want from the US – Job Discrimination of Immigrations
https://goleancaribbean.com/blog/?p=214 LCD versus an Entrepreneurial Ethos

The Caribbean is arguably the best address on the planet, but there are a lot of missing ingredients so as to be the best address for everyone. Due to this deficiency, the region has lost a large share of its human capital, one estimate of 70%, to the brain-drain. Some of the missing ingredients, “push” factors, have been jobs and opportunities for entrepreneurship.

No More! Change has come to the Caribbean. Starting first with the CU leadership – “thinking in a non-traditional way”.

The roadmap anticipates 150 million unique subscribers on www.myCarribbean.gov. This technocratic approach is more viable, more engaging than simply throwing our hopes over some wall to the far-flung Diaspora.

We must stop the floodgates of the debilitating brain-drain now and encourage our youth to seek a future in their homeland. While, we are at it, we must also encourage the far-flung Diaspora to repatriate back to the Caribbean.

This plan identified in the Go Lean book and blog/commentaries is a good start to create the missing opportunities for the region. The end result of this roadmap is a clearly defined destination: a better place to live, work and play. 🙂

Download the book Go Lean … Caribbean – now!

———-

Appendix A – Video – Crowdfunding:  http://youtu.be/8b5-iEnW70k

What is Crowdfunding? Crowdfunding planning? What, How, Why and When? One platform’s view:

Appendix B – Kickstarter Campaigns

On April 17, 2014, the UK-based Guardian media outlet published a list of “20 of the most significant projects” launched on the Kickstarter platform prior to the date of publication:

  • Musician Amanda Palmer raised US$1.2 million from 24,883 backers in June 2012 to make a new album and art book.[40]
  • American Hans Fex raised US$1,226,811 from 5,030 backers in March 2014 for his “MiniMuseum” project that he describes on his Kickstarter page: “For the past 35 years I have collected amazing specimens … I then carefully break those specimens down into smaller pieces, embed them in acrylic … Each mini museum is a handcrafted, individually numbered limited edition … The majority of these specimens were acquired directly from contacting specialists recommended to me by museum curators, research scientists and university historians”.[41]
  • Writer Rob Thomas raised $5.7 million from 91,585 backers in April 2013 to create a feature film version of the defunct television series Veronica Mars. The nine award levels were initially available to backers in 21 countries, including Brazil, Canada, Finland and Germany. Lead actress Kristen Bell explained on the launch date of the project: “I promise if we hit our goal, we will make the sleuthiest, snarkiest, it’s-all-fun-and-games-‘til-one-of-you-gets-my-foot-up-your-ass movie we possibly can.”[42]
  • Actor, writer and director Zach Braff raised US$3.1 million from 46,520 backers in May 2013 to create the feature film Wish I Was Here, which premiered at the Sundance Film Festival. Braff’s campaign was financially complemented by Worldview Entertainment.
  • Filmmaker Spike Lee raised US$1.4 million from 6,421 backers in August 2013 to make a feature film that, as of April 2014, is not titled. The film will feature actors Stephen Tyrone Williams, Zaraah Abrahams and Michael K. Williams.
  • YouTube celebrity Freddie Wong, who owns the company RocketJump, raised US$808,000 to produce the second series of the Web-based series Video Game High School. In February 2013, 10,613 backers committed funds to the project following the      series’ first season, which was also funded on Kickstarter.
  • Performance artist Marina Abramovic raised US$661,000 from 4,765 backers in August 2013 after paying US$950,000 to buy a building that would house the “Marina Abramovic Institute”. The building, as well as a corresponding organization, was foremost to the campaign, as Abramovic seeks to feature and maintain “long durational work, including that of performance art, dance, theatre, film, music, opera, and other forms that may develop in the future”.
  • The Kano technology company raised US$1.5 million from 13,387 backers in December 2013 to create a “computer and coding kit for all ages.” In June 2014, Kano will ship a case, a keyboard, a  speaker, a wireless server, and software that encourages children to learn the “Kano Blocks” coding language, a set of computer programming skills.
  • The Flint and Tinder company raised US$1.1 million from 9,226 backers in April 2013 for its “10-Year Hoodie” hooded sweatshirt that consists of 100%cotton and is made in the U.S. The company explains on its website: “Companies have systematically lowered your expectations to the point where it’s hard to know what to expect anymore. But while they’re busy off-shoring, out-sourcing and generally making things as cheaply and quickly as possible. It ends here.” According to Flint and Tinder, one million units of the product have been sold.[43][44]

———–

Appendix C – Source References:

a. http://www.urbandictionary.com/define.php?term=jamerican / http://www.nytimes.com/2013/04/21/sunday-review/hispanics-the-new-italians.html?pagewanted=all&_r=0
b. http://en.wikipedia.org/wiki/Crowdfunding

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‘Too Big To Fail’ – Caribbean Version

Posted on November 14, 2014 in Economics, Government

Go Lean Commentary

The book Go Lean…Caribbean serves as a roadmap to implement the technocratic Caribbean Union Trade Federation (CU) and Caribbean Central Bank (CCB) to provide better stewardship, to ensure that the economic failures of the past do not re-occur.

What economic failures?

There were crises on 2 levels: the Global Financial Crisis of 2007 – 2009 and regional financial banking dysfunctions.

Global – The banks labeled “Too Big To Fail” impacted the world’s economy during the Global Financial Crisis. (See the VIDEO below on the anatomy and consequence of the Credit Crisis). Though the epi-center was on Wall Street, the Caribbean was not spared; it was deeply impacted with onslaughts to every aspect of Caribbean life (think: Tourism decline). In many ways, the crisis has still not passed.

Regional – The Caribbean region has not been front-and-center to many financial crises in the past, compared to the 465 US bank failures between 2008 and 2012.[a] But over the past few decades, there have been some failures among local commercial banks and affiliated insurance companies where the institutions could not meet demands from depositors for withdrawal. Consider these examples from Jamaica and Trinidad:

  • There was a  banking crisis in Jamaica in the 1990s. In January 1997, the decision was made to establish the Financial Sector Adjustment Company (FINSAC) with a mandate to take control and restructure the financial sector. FINSAC took control of 5 of the 9 commercial banks, 10 merchant banks, 21 insurance companies, 34 securities firms and 15 hotels. It was also involved in the re-capitalization and restructuring of 2 life insurance companies, with the requirement that they relinquish their shares in 2 commercial banks.[b]
  • For Trinidad, the notable failure was the holding company CL Financial, with subsidiaries Colonial Life Insurance Company and the CLICO Investment Bank (CIB). In mid-January 2009, this group approached the Central Bank of Trinidad and   Tobago requesting financial assistance due to persistent liquidity problems. The global financial events of 2008 combined with other factors placed tremendous strain on the group’s Balance Sheet. The CL Financial lines of business ranged from the areas of finance and energy to manufacturing and real estate services. The group’s assets were estimated at US$16 billion at year-end 2007, and it had a presence in at least thirty countries worldwide, including Barbados. Most significantly, the company held investments in real estate in Trinidad and the United States of America, and in the world’s largest methanol plant prior to its difficulties.

Welcome to the new Caribbean economy.

With the advent of the CARICOM Single Market & Economy (CSME), a more integrated region is expected to lead to greater linkages among the member-states of this existing economic union. The Go Lean roadmap calls for the deployment of the Caribbean Central Bank. So the issue of financial contagions will now have to be a constant concern for this regional sentinel.

The biggest threat of global financial contagions for this region has been dilution of net worth for the citizens of the US, Canada and Western Europe, the primary source of Caribbean tourists.

The prime directive of the CU is to optimize economic, security and governing engines to impact the Caribbean’s Greater Good, for all stakeholders: residents, visitors, bank depositors and mortgage-holders. This need was pronounced early in the Go Lean book, in the Declaration of Interdependence – (Page 13):

xxv.      Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the CU and of the member-states.

The foregoing news articles shows the type of functions executed by technocracies: monitoring risks, assessing risk factors, managing leverage and regulating industry performances. This first article considers and welcomes new stewardship for the global “too big to fail” banks:

Title #1: New bank rules proposed to end ‘too big to fail’
By: Joshua Franklin and Huw Jones

CU Blog - Too Big To Fail - Caribbean Version - Photo 1BASEL, Switzerland/LONDON (Reuters) – Banks may have to scrap dividends and rein in bonuses if they breach new rules designed to ensure that creditors rather than taxpayers pick up the bill when big lenders collapse.

Mark Carney, chairman of the Financial Stability Board and Bank of England governor, said the rules, proposed on Monday, marked a watershed in putting an end to taxpayer bailouts of banks considered too big to fail.

“Once implemented, these agreements will play important roles in enabling globally systemic banks to be resolved (wound down) without recourse to public subsidy and without disruption to the wider financial system,” Carney said in a statement.

After the financial crisis in 2007-2009, governments had to spend billions of dollars of taxpayer money to rescue banks that ran into trouble and could have threatened the global financial system if allowed to go under.

Since then, regulators from the Group of 20 economies have been trying to find ways to prevent this happening again.

The plans envisage that global banks like Goldman Sachs and HSBC should have a buffer of bonds or equity equivalent to at least 16 to 20 percent of their risk-weighted assets, such as loans, from January 2019.

These bonds would be converted to equity to help shore up a stricken bank. The banks’ total buffer would include the minimum mandatory core capital requirements banks must already hold to bolster their defences against future crises.

The new rule will apply to 30 banks the regulators have deemed to be globally “systemically important,” though initially three from China on that list of 30 would be exempt.

G2O leaders are expected to back the proposal later this week in Australia. It is being put out to public consultation until Feb. 2, 2015.

David Ereira, a partner at law firm Linklaters, said that on its own the new rule as proposed would not end “too big to fail” banks and that politically tricky details still had to be settled.

BASELTOWER

Carney was confident the new rule would be applied as central banks and governments had a hand in drafting them.

“This isn’t something that we cooked up in Basel tower and are just presenting to everybody,” he told a news conference, referring to the FSB’s headquarters in Switzerland.

Most of the banks would need to sell more bonds to comply with the new rules, the FSB said. Some bonds, known as “senior debt” that banks have already sold to investors, would need restructuring.

Senior debt was largely protected during the financial crisis, which meant investors did not lose their money. But Carney said it in future these bonds might have to bear losses if allowed under national rules and if investors were warned in advance.

The new buffer, formally known as total loss absorbing capacity or TLAC, must be at least twice a bank’s leverage ratio, a separate measure of capital to total assets regardless of the level of risk.

Globally, the leverage ratio has been set provisionally at 3 percent but it could be higher when finalised in 2015.

Some of the buffer must be held at major overseas subsidiaries to reassure regulators outside a bank’s home country. Banks may have to hold more than the minimum because of “add-ons” due to specific business models, Carney said.

Elke Koenig, president of German regulator Bafin, said supervisors should orient themselves more toward the upper end of the 16-20 percent range, though banks may be given more time to comply.

Fitch ratings agency said banks might end up with a buffer equivalent to as much as a quarter of their risk-weighted assets once other capital requirements were included. Analysts have estimated this could run to billions of dollars.

Analysts at Citi estimated the new rule could cost European banks up to 3 percent of profits in 2016.

Citi said European banks would be required to issue the biggest chunk of new bonds, including BNP Paribas , Deutsche Bank , BBVA and UniCredit , with Swiss and British banks the least affected in Europe.

(Additional reporting by Alexander Huebner in Bonn, Editing by Keiron Henderson and Jane Merriman)
Reuters Newswire Service – Online Site (Posted 11/10/2014; retrieved 11/13/2014) –
http://news.yahoo.com/g20-proposes-buffer-end-too-big-fail-banks-061252790–sector.html

Within the region, this second article considers the stewardship of one Caribbean financial institution in Jamaica and their lending practices:

Title #2: VMBS sees dramatic fall in foreclosures

CU Blog - Too Big To Fail - Caribbean Version - Photo 2VICTORIA Mutual Building Society (VMBS) recorded a three-quarters drop in property foreclosures last year.

It signals greater resilience by homeowners during an austere economy affected by heavy currency depreciation.

“The building society also enabled more members who were facing financial difficulties to retain ownership of their homes,” said VMBS in a statement about its year ended December 31, 2013. “Foreclosures on properties totalled 10 last year, compared to 37 the year before.”

Its non-performing loans, or loans unserviced for over 90 days, moved from 6.9 per cent at the beginning of the year to 5.6 per cent at the end.

“This improvement was the result of the continued drive to engage members who were having difficulty meeting their monthly mortgage payments, and working with them collaboratively, with the aim of helping them to bring their accounts current and retain ownership of their homes,” said Michael McMorris, chairman of Victoria Mutual, in his report for the group’s 135th annual general meeting held last month.

Greater focus was also placed on sales and services with mortgage disbursements up 133 per cent to $3.3 billion last year, the company indicated.

The Victoria Mutual Group, an amalgam of various financial, mortgage and insurance entities, made less after-tax surplus at $965.8 million for 2013 compared with $1 billion a year earlier.

The group’s pre-tax surplus actually increased year on year but its after-tax surplus dipped 4.2 per cent to $965.8 million as it was “adversely affected by the imposition of an asset tax on regulated financial institutions, which applied to both VMBS and VM Wealth Management,” stated the company.

The VM Group said that it aims to keep mortgage rates low by reducing administration costs, which augurs well for prospective homeowners.

Stated McMorris: “Internally, the year 2014 will see a continuation of a number of projects and initiatives geared towards improving efficiency and service delivery throughout the group.”

VM Group will seek to improve its financial advisory and brokerage services by growing the assets it manages on behalf of clients.

“To do this, Victoria Mutual Wealth Management Limited (VMWM) is working on new products to allow clients to customise their investment portfolios,” stated McMorris.

VMBS Money Transfer Services Limited (VMTS) plans to expand its services, both locally and overseas. The remittance company became profitable two years ago, and saw earnings grow by 61 per cent last year, due largely to an increase in fees, the company stated. VMTS also benefited from a 28 per cent increase in foreign exchange trading gains.

“Better gains on foreign exchange in part reflected a more challenging business environment last year, when depreciation of the Jamaican dollar was higher than 12 per cent,” stated the company.

VMBS allows its debit card holders free withdrawals at any of its teller machine or point-of-sale terminals.
Jamaica Observer Daily Newspaper – Online Site (Posted 08/20/2014; retrieved 11/13/2014) – http://www.jamaicaobserver.com/business/VMBS-sees-dramatic-fall-in-foreclosures_17381839

The related subjects of banking oversight and optimizing  financial governance have been a frequent topic for blogging by the Go Lean promoters, as sampled here:

5 Steps of a Bubble – Learning to make a resilient economy
Canadian Imperial Bank of Commerce failing investment in FirstCaribbean Bank
Bitcoin needs regulatory framework to change ‘risky’ image
Open the Time Capsule: The Great Recession of 2008
What Usain Bolt can teach banks about financial risk
Barbados Central Bank records $3.7m loss in 2013
US Federal Reserve Releases Transcripts from 2008 Meetings
Dominica raises EC$20 million on regional securities market
Fractional Banking System – How to Create Money from Thin Air
Book Review: ‘Wrong – Nine Economic Policy Disasters and What We Can Learn…’
10 Things We Want from the US – # 2: American Capital
The Erosion of the Middle Class

All Caribbean countries have experienced economic dysfunction: English, Dutch, French and Spanish territories. In line with the foregoing articles, the Go Lean book details many infrastructural enhancements/advocacies to the region’s financial eco-system; to facilitate efficient management of the economy … going forward:

Ethos-Strategy-Tactics-Implementation-Advocacy

Page
Anecdote – Caribbean Single Market & Economy

15
Anecdote – Puerto Rico – The Caribbean’s Greece

18
Economic Systems Influence Individual Choices

21
Improve Sharing

35
Confederating Non-Sovereignty

45
Facilitate Currency Union/Co-op of Caribbean Dollar

45
Fostering a Technocracy

64
Caribbean Central Bank

73
Deposit Insurance Regulations

73
Securities Regulatory Authority

74
Modeling the European Union / Central Bank

130
Lessons from 2008

136
Anecdote – Caribbean Currencies

149
Growing the Economy

151
Creating Jobs

152
Better Manage Foreign Exchange

154
Improve Credit Ratings

155
Foster Cooperatives

176
Banking Reforms

199
Wall Street – Capital/Securities Market

200
Impact the Diaspora

219
Impact Retirement – Need for Savings

221
Help the Middle Class

223
Re-boot Jamaica

239
Appendix – Alternative Remittance Modes

270

There is no doubt that there has been mis-management of the Caribbean economy in the past. Consider the example of Jamaica; their currency has suffered from many de-valuations and depreciations; an average amount of $2.50 a year since the 1970’s; trading at 87-to-1 US Dollar; (at the time that Go Lean was composed – November 2013). Social Anthropologist posit that when societies come under duress, the communities have 2 choices: ‘Fight” or “Flight”. How have the countries responded that are cited in this commentary? They have chosen “flight”. A previous blog reported an average of 70 percent brain-drain rate across the region; with Jamaica at 85% and Trinidad at 79%.

Now is the time for change; time for new stewards of the Caribbean economy, security and governing engines. It’s time for the CU/CCB. We must prove that we have learned from the past. See the VIDEO below on the anatomy and consequence of the Credit Crisis.

The purpose of this roadmap is to provide that new stewardship. A lot is at stake: the destination for the hopes and dreams of the Caribbean youth. No more flight! We must act now and make the Caribbean, a better place to live, work and play. 🙂

———-

Appendix Video: – The Short and Simple Story of the Credit Crisis – http://youtu.be/bx_LWm6_6tA

Source References:

[a]. https://news.yahoo.com/facts-numbers-us-bank-failures-183852568.html

[b]. http://www.centralbank.org.bb/WEBCBB.nsf/WorkingPapers/DB0CF759B9E97FB9042579D70047F645/$FILE/Exploring%20Liquidity%20Linkages%20among%20CARICOM%20Banking%20Systems.pdf

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