IS THE OBAMA ECONOMIC STIMULUS PLAN LEADING TO A DISASTER?

These quotes are being heard in the past 3 weeks, since Obama took office, this is a position that the Republican Party have put into consideration when the Economic stimulus plan is at the congress.

Leaders of the republican party, including John McCain have not heard and clearly understood the message of bipartisanship, they just want to stop the plan by saying to the American people and to the world that passing the Plan, will get America into a disaster they will never recover.

But, the current situation is not a disaster?, maybe for the republicans (from low and high chamber) the financial crisis will be recover by itself, following the theories of the auto regulation of the market, held by Alan Greenspan and strongly supported by Reagan, Bush & Bush Jr administration, are the republicans people who lose their memory? We have to remember that they have lead in the past 28 years to this economic disaster, they have to remember that there were only one shinning spot for the economy (and that was Bill Clinton Government), we have to remember that the public debt has doubled in 8 years, from 5 trillion to 10 trillion? That America is facing the worst results in decades?

Is so funny watching McCain speaking about US $80 bn lost for the implementation of the first part of the US $700bn package proposed by George Bush government, with the support of both the democrat and republicans?

The TARP plan ($700bn package) has not worked as it was proposed by the Republican government, the common people doesn’t know where the money goes, and only the banks who get the bailout get benefit, but what about the 3 million people who lost their jobs or the millions who lost their homes?

The Obama stimulus package is based in the premise of “call for action”, Obama administration is showing to the people that “DOING NOTHING is not option”, instead the republican party have designed parallel plans following the same economic principles who guide to this crisis, one of them, lack of transparency, taxes reduction to big corporations such Exxon Mobile, which in 2007 get approximately US 45bn in net revenue and reducing the budget to research, education and innovation.

Obama, itself has said: “This plan is not perfect, it was made on Washington”, but the great economic team he has (from Timothy Geithner, to Lawrence Summers, Paul Volker, Paul Krugman and many others) give the necessary confidence that the plan is designed to boost the economy and to plan for the long term. For example, the budget on ecosolutions will be doubled in 3 years, the budget for schools will be increased dramatically and the jobs that the Plan will create will be in the private sector (95%) of them.

By the other side, treasury secretary, Tim Geithner said in a recent interview to Bloomberg, that they have re-evaluated the second part of the TARP plan, offering full transparency for the people and how the money flows and what is really impacting, the plan also will have the creation of a bad bank for help clean the toxic balance sheets of the banks, but a great change is the plan will not only be directed to help banks, it will be for the people who struggle to survive in the crisis.
Abraham Lincoln is shaking in his tomb, thinking what had happen to his beloved party, to that party who foster for human rights, for the union of America, for the striving for excellence, but most important the party who always looks for increasing the quality of life for the people leaving their ideological differences.

Luckily, there are some republican senators that will help rebuild the power of America, and I want to thank them, and all the American people will thank them in the incoming future because they follow their instincts to put the conditions of the people first, to improve the situation of the country and to look for a really bipartisanship, which is lacking in these times, thanks to Susan Collins from Maine, to Olympia Snowe from Maine and to Arlen Specter from Pennsilvania.

With the help of the people wanting a better live for their grandsons, the Stimulus plan will pass, and then you can track all the transactions at this site: www.recovery.gov .

So, the republican should ask themselves: Is the republican party leading to a disaster?
If they do this, they will ask then: How we help America recover from the failure in the public policies we have implemented in the past 28 years?

Two forums searching "A BEST WORLD"... DAVOS Vs World Social Forum

Maybe, many people don’t know about the importance of World Economic Forum or known as DAVOS forum.

We know that DAVOS is considered the number 1 space for great global leaders to meet, from almost 38 years.

The forum is known in academic and economic world, the Mexican speaker Miguel Angel Cornejo said 15 years ago in one of his conferences:

“In Davos, Switzerland, year by year is developed a meeting of economist at global level, there is a very interesting discussion… Who meet in Davos? This year, we have 80 presidents from different nations, we have a Bill Gates, a Bill Clinton, and we have the most distinguished people at global level in business, politics, religion, etc”

But 2009 is a crucial year for Davos & world future.

Changes at Davos are moving faster, this year only one member of Obama administration cabinet or top advisers will be send to the forum, because Obama and his economic team will be very busy negotiating with the republican party the 825bn Bailout to save and boost American economy; this member will be Valerie Jarret (White house senior advisor and assistant to president for Intergovernmental Relations and Public Liaison).

Many multinational companies CEOs will not be in the forum, because they were managing the companies hit by the crisis, as Bearn Sterns, Lehman Brothers and others.

Some parties, (Innovation Businessweek editor Nussbaum said are the key of the event), will be canceled, an example is the cancelation of one of the hottest parties held at Davos, the Goldman Sachs party.

Even that 41 head of state will be there, from Vladimir Putin, Angela Merkel & Alvaro Uribe Velez and others; to presidents of multilateral organism as World bank, Interamerican development bank (with the Colombian economist Luis Alberto Moreno, who is going to celebrate the 50 years of the bank at Medellin, Colombia in march 31 of 2009), ONU and others, to Michael Porter, Bono and the always members of the forum: Bill Clinton & Bill Gates.

The main topic will be the global crisis and how to shape the new world, the past DAVOS meeting held in 2008, the discussion was centered in: Will be crisis or recession? , this year the topics covered will be: The new global structure, the environmental policies and the work of the business in shaping a new world.

As Duncan Niederauer, CEO, NYSE Euronext said about the forum: “It’s all going to be about globalization and where we go from here. We’ve had a globalized economy and markets over the past few years and that’s been brought into question given the financial crisis. There’s no going back. Given the financial crisis, I can’t think of a better time for us all to be together. Investor confidence more than anything has been lost throughout the crisis. We’ve got to work together as global leaders to determine how to restore it.”

Many people said that this is an event for the politics, business leaders, academics, economist, “The ELITE of the society”, but we must think and reflex how the decisions or proposals think these days will impact our daily life, that is why I invite you to be pendant of what is going to happen.

So, I will make an analysis about the relevant topics and see what is really happening with the decision makers of the world.

By other side, we should pay attention to DAVOS counterpart, a forum created in Latin America for treat the same topics but with the point of view of New-socialism; in this 9th edition will be 5 Latin-American presidents, including Lula da Silva, because the event will be held in BELME, a Little town in Brazil.

One of the organizers, Francisco Whitaker said about the event: “Davos will meet in a losing environment because the people who are meet there are guilty for nowadays financial situation and are asking what to do”, “We have the right in 2001, with the statement of another world is possible”…”the proposals for create a new world will come from Belem, not Davos”

This is the World Social Forum (FSM, for the meaning in Spanish) 2009.

Okey, thats all, and let the game begins. And see how the 2 approaches came for convert this world a better place.

Obama + technology + new age Rules : Politics

I was reviewing the Obama stimulus package, after reading an excellent article of businessweek and a friend (Andres Murcia, CEO of CuazArt-Studios) ask me in Google Chat: “ Obama + technology + new age Rules ???”

So, I immediately think in how president Obama has already change the way to do politics and how he is going to start the revolution in Innovation, not only in America, but as inspiration to the entire world.

When Obama began his campaign he used the internet as his pillar for communicate to all the people, with www.barackobama.com, the people can organize events, can know the updates of Obama addresses in all the country, can watch online all his participations during campaign and can see the videos connected with YouTube; Obama supporters also can create a page mybarackobama.com , so they can communicate effectively with the strategist of the campaign and can manage their preferred info and organize actions for contact undecided voters. The page was a success in fundraising, even one day they organize, 1 million in 1 hour, and they do effectively.

When Obama was elected president, they create a new site call www.change.gov , so the people know the plans in deep and participate actively, by entering their stories, by presenting proposals to Obama advisors, by participating with Obama cabinet and giving their opinions in relevant topics as healthcare or minorities (they use Google technology for this issue); this site also have the Obama weekly speeches; One month before Obama took office they created “The Citizens Briefbook” , an online tool for the people to ask direct questions to Obama (with online voting by the same users) and the best will remitted to Obama in person (they used salesforce.com technology for this issue).

By other side, Obama is well known for his personal usage of his Blackberry (a true fan of the device and lover of technology), Research in Motion said if Obama was paid for his promotion he could get a 50 million dollar advertising contract. After a lot of debate about security issues on blackberry for president, National Security Agency (NSA) has allowed Obama to continue use his Blackberry only for personal matters, and instead of that he has to use the Sectera Edge, considered the safest phone in the world.

Right now, the official info of Obama government can be find in www.whitehouse.gov , we should review what new features they are going to implement to continue the communication with the people.

In our next article we will discuss the appearance of the Chief Technology Officer for Obama administration and how the Stimulus package will maintain the innovation and increase the gap with other countries.

Where the capitalism is heading? - THE AMERICAN WAY

Obama economic stimulus plan is the main concern for U.S right now.
Besides the cruel conflict in Gaza the people are analizing how this plan will affect the live of any american and each citizen of the world.
Several public figures agree with the plan:
Tim O´Reilly (the founder and CEO of the biggest technological publisher, said in his twitter: "Letter detailing Obama's Reforms to Troubled Asset Relief Program sounds promising"
Ben Bernanke (FED CHAIRMAN) said on a conference at London, 13 of January :"A mammoth stimulus package being crafted by President-elect Barack Obama could give the economy a much-needed lift, but other steps must be taken to bolster the wobbly financial system and for any recovery to stick"

The question many people is asking could be: Does the Obama plan will boost the economy and help me to get out of this crisis?

Right now, the economist have great contradictions and making predictions is foolish.
But, we can put attention to what Bernanke said in that conference: "History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively."

Even if you agree or not with Bernanke policies, we should get into the global debate about the world financial system and the future of Capitalism.

The crisis has shown the weakness of the actual financial system, many experts, think tankers, policy writers and economist are reviewing the Capitalist system and proposing a readaptation or change of the system that has held the world to this crisis.

In a series of articles, we will try to abstract the opinions of some global leaders from different nations and cultures, that will give a broader vision of the problem and the solutions offered to change the Global financial system.

We start with America.

THE AMERICAN WAY

Almost one year ago, in that time Microsoft chairman, Bill Gates, was at Davos Forum, discussing about what he call the "Creative Capitalism".
After that, many people have created forums and debates discussing Gates proposal, now we offer the Key points of his "Creative Capitalism"

When Harvard Business School was celebrating their first century of creation, several figures were invited to speak at the 2008 Harvard Business School summit, and one of them, LAWRENCE SUMMERS, who was Harvard president and now the Director of National Economic Council for president elect Barack Obama; gave an interested speech about "The future of Market Capitalism".

In 1889, Andrew Carnegie (considered the second richest man in human history by FORBES in 2007 and the revolutionary entrepreneur of the steel sector, also known for his philantropic activities such the creation of the national library system, the building of the "Carnegie Hall" and the founding of Carnegie Mellon University (CMU). Wrote an article about the Capitalism, the distribution of wealth and the future of the philantropy entitled : "Wealth".

This 3 differente characters, from different backgrounds could give us a different approach to financial system in The American Way.



P.D ; Wait for the next article entitled "The reborn of the dragon"

Davos 2009, The breakthrough the world was looking for...

In 1971 the world lived great difficulties and problems; the Indo-Pakistan war, the Cambodian war, and Bangladesh liberation war, but also it was a year of positive breakthroughs; the foundation of Walt Disney world, Intel released their first commercial microprocessor, the Apollo 15 as the starting point for lunar rovers and the NASDAQ debuts on the stock exchange.

But in Switzerland, 2 key issues with great impact to the modern world happened:

1) In February 7, the women gain the right to vote in the country.
2) Klaus M. Schwab , a very influential Swiss economist create the “World economic Forum” in Davos, as a Non for profit foundation with the goal of gather the most influential people in business, government, NGOs , journalist and intellectuals, each year to discuss the course of the world and the global initiatives for improve the state of the world.

Right now, these meetings, also calls the “DAVOS MEETING”, because of the city were held, is the world most important forum.

2009, is a crucial year, world crisis getting worst each day, loose of millions of jobs, getting into bankruptcy financial institutions and companies from all the sectors, and an overall loose of confidence at global level.

You could find more info about this year meeting, here

http://www.weforum.org/en/events/AnnualMeeting2009/index.htm

“During the five-day meeting, over 2,500 participants from 91 countries will gather in Davos. Around 75% are business leaders, drawn principally from the Forum's members – 1,000 of the foremost companies from around the world and across economic sectors”

Have you ever thought having in the same place: Bill Gates, Gordon Brown, Indra Nooyi, Mark Zuckerberg and Bono in the same place, discussing the global topics?Okay, this is possible in DAVOS MEETING.

All these, combined with the great hope in the new government of President Barack Obama and how he will change the state of the world in 2009.

So, the debate of how Obama administration will improve the state of the world in 2009 is open, I have prepared a short video with information referred to the topic, and as a guide to track the effects of Obama policies around the globe.

In next days I will add more info about the topic, and will give you the outputs of 2009 Davos meeting.
If you have comments, doubts or anything you want to say, leave your comment!

Remember to enter into the debate… why?

Because in 2003, DAVOS MEETING open a space for the general public to discuss the same topics as the global leaders do each year.

Is your opportunity to get active participation in World decisions...

the decision is yours!

A proposal for Indicators for Outside investors when are looking where to invest in emerging markets SMEs

A lot of time, without writing an article, i was busy analyzing the new team of President Obama and the Public policies made by George Bush, but now i want to focus in the Venture Capital Industry, and a proposal to the venture capitalist when they are willing to invest in Startups of emerging markets, so here is the Indicators Model:

The Indicators show the connection of 3 key issues for Venture Capitalist, they combine the TEAM, the CONCEPT, and the Market, and how are they connected. But most important how they apply to Emerging Markets and their local reality. Another component for the indicators is the economic and business framework provided by the GOVERNMENT. This gives to the Investors another point of view, not in terms of the forecast made by the entrepreneurs in their business plans or executive summaries, but in terms of their skills, knowledge, creativity and innovation.

Now, i will describe the indicators.

The explanation of each indicator is below the indicator.

A

• Level of Industry-Research collaboration for development of the concept:

– The Research & Development of the entrepreneurs, from the academia to the development of the startup , publication of academic papers and studies

• Study level of the entrepreneurs:

– The successful companies from 1990 have show that the success is related to the level of study of the entrepreneurs, so the Investors should analyze the equilibrium between the study level, undergraduate, graduate, Master & PHD.

• Level of concept delimitation:

– How the entrepreneurs visualize the vision, mission and goals of the company in 5 and 10 years, and how they delimited the MAIN product or service to offer, because a common problem of the entrepreneurs is to offer many products and services when they are starting

• Level of prototype development

– What percentage of the MAIN product is developed

• Level of Risk Management Processes

– The investors should analyze: If the entrepreneurs have a Risk Management Plan, If the entrepreneurs consider the Risk Management as a key success factor for business; If the entrepreneurs have a process to implement Risk management in all the projects.

• Cultural Awareness from entrepreneurs

– What percentage of the MAIN product is developed

B

• Level of Blue Ocean Market:

– Analyze if the product/service has a BIG MARKET (more than US $500 mn) or have an Unexplored market

• State of art of technology to be developed and commercialized:

– How is the technology at international level, and what is required for implement in new markets

• Human Resources availability

– A very important factor, because the Investors should analyze the Educational level of the country (in number of graduates, number of researchers and quality of education: Availability of people to work in the project)

• Cultural apprehension of product/service

– Because each country is different, the Investors should analyze how the customer receive the product in his own context

• Number of established competitors

– Look at the number and size of the competitors if there is BIG MARKET; and analyze other competitors if there is a BLUE OCEAN

• Market growth forecast

– The investors should review the Forecast of the Market size from international organizations as IDC, Gartner, Jupiter and similar

C

• Experience of the team:

– Experience in terms of Market knowledge, Technology knowledge, and capabilities of the Team for developing the STARTUP

• Diversification of the team

– Look the study/experience of each team member and how its complemented

• Foreign language knowledge of the team

– This is a globalized world, so as part of the preparation of the team, The investors should analyze the number of languages speak by the members of the team (this is important for exportation matters)

• Marital Status of the team

– Analyze if they are single, married, etc, Because if there is a combined team, were some members of the crew are young is preferable to be single, so they can focus the 100% of the time to the company

• Leadership skills of the team

– How the members of the team are recognized in communities, groups, by other companies, in the sector; and how they are capable of leader new process to convince “The Best in the place” to join the team

GOVERNMENT

• Legislation:

– Analyze the laws protecting the business in the country

• Patent System:

– How is the patent system established

• Trademark System:

– A very important success factor is the Branding strategy, so the investors should analyze if the Country is in international Trademark agreements

• Tax Incentive for business:

– What are the advantages in economic terms for the company and for the investors

• Cost of life

– Review the cost of life in the country, and specially in the city, because this give a broader knowledge of the economy and the Venture Capital money required

• Cost of doing business

– Review the costs for machinery, human resources, taxes,

• Aligning of business with the Long term plan of the government

– Each government is different, and it have defined a 10,15 or 20 year plan, so the country can focus in some sectors of the economy; so the investors should have to review if the company they are going to fund aligns with this plan.

The importance of the Think Tanks in U.S Government policies

When Reagan won the U.S elections in 1980, with an overwhelming victory against the democrat candidate Jimmy Carter, it showed 2 important historic realities:

Economic Factor, when a president is considered guilty for recession or an economic depression, when is the cause for terrible foreign image abroad and is considered by the American people as ineptitude to lead the most powerful country of the world, not only generates low levels of popularity, instead of that, when a member of his party of himself run for presidency, it lose.

Think Tank consolidation, when Ronald Reagan was elected president, the HERITAGE FOUNDATION published the first Think Tank blueprint in 1981 entitled “Mandate for leadership”, containing the strategies employed by the past republican presidents, both in Public Policy & Public Management.

Okay, let’s analyze in detail the facts:

Economic Factor:

In 1932, after the “great depression”, the president Herbert Hoover (Republican) run for presidency and loose dramatically against Franklin D. Roosevelt (Democrat).

In 1980, Jimmy Carter, the first democrat to face a debt increasing, with 16% of inflation and a US $75 bn budget deficit.

In 1992, after the National Debt increasing from US $955 bn to US $4tn, the president George H W Bush (Republican) run for presidency and loose dramatically against Bill Clinton (Democrat).

And in 2008, with President George W Bush, the economic situation could not be worse, the National debt increased from US $ 5.6 tn to US $10.5 tn , the budget deficit reach US$ 500 bn, and a GDP for the third quarter of the reach reaching -0,3%, all these combined with the foreclosure problems of 3 million Americans. George Bush supported the Republican candidate John McCain (republican) who is going to lose dramatically against Barack Obama (democrat).

I attach a graph, taken from http://www.lafn.org/gvdc/Natl_Debt_Chart.html :

Think Tank Consolidation:

The Oxford English Dictionary defines a think tank as "a research institute or other organization providing advice and ideas on national or commercial problems"

These institutes, foundations and societies are the evolution of Plato´s academy for thinking how to impact the leaders with ideas to solve the society problems.

In U.S, The Heritage Foundation began in 1973, and is a Republican Think Tank; it supports 2 basic principles (employed by the past Republican Governments, including George Bush):

A) The direct attack of the communism and socialism, by establishing foreign policies focused in attacking other countries with the excuse of “National defense”. That’s the reason; Bush policies have increased the bad perception of America at international level. And counting the “Cold war”, the “Gulf War” and the “Iraq War”

B) Employ of Supply side economics theory, meaning the reduction of income taxes, and in theory causing an increasing of the revenues in the country. The reality has showed how the public policies implementing this theory have failed; let’s see 3 cases:

In Reagan government (1981-1988), the marginal tax rate for wealthiest Americans was cut from 70% to 38%, it produce an increasing of the top brackets wealth and a lost of the government incomes in 3% of the GDP.

In George H. W Bush government (1989-1992), he began with his phrase: “Read my lips: No new taxes”, but he raised taxes and the Washington Post entitled: “Read my lips: I lied”. He continue with the Reagan policies, and the result besides the debt increase was the highest unemployment rate reaching 7,8% and that 14,2% of all Americans lived in poverty by 1992.

In George W Bush government (2001-2008), he made US $630 bn tax cuts to the 1% of the Americans, the salary of the CEOs increased from 254 times the average worker to 400 times, Corporate profits increase from 17,7% in 2000 to 20,9% in 2005.

All these economic policies were considered by 2008 Economic prize laureate Paul Krugman as “Peddling poverty”.

So, all these governments, even if they have not reached their positive goals, they have been influenced by the THINK TANKS (including CATO & AEI, other republican Think Tanks).

So, in 2003, After a meeting between John Podesta (White House chief of staff under Clinton) and Senate Minority Leader Tom Daschle (D-S.D.) decided to create what Infoseek founder Steve Kirsch defined as : “‘a Heritage Foundation for the left”.

So, they began the “Majority American Institute” and then it transform to “The Centre for American Progress”, with an initial budget of US $10 mn and 75 staffers, in 2008, the budget reach the US $25mn with 150 staffers.

As is defined in their site www.americanprogress.com

"As progressives, we believe America is a land of boundless opportunity, where people can better themselves, their children, their families, and their communities through education, hard work, and the freedom to climb the ladder of economic mobility. We believe an open and effective government can champion the common good over narrow self-interest, harness the strength of our diversity, and secure the rights and safety of its people. And we believe our nation must always be a beacon of hope and strength to the rest of the world. Progressives are often described as idealistic enough to believe change is possible and practical enough to make it happen"

Barack Obama advisors include members of “American Progress”, and when he wins the presidency in November 4 of 2008, he will include in his gabinet some members of the Think Tank.

“American Progress” developed an ECONOMIC PLAN FOR THE ADMINISTRATION, call: “Progressive Growth, Transforming America´s Economy through Clean Energy, Innovation & Opportunity.

This plan contains the policies for reach the economic stability and recover the trust of Americans in United States government.

Some of the people, who worked in this plan, are going to be chosen by Barack Obama for his government, some names we are going to speak about in the future are:

Senator Dom Dachsle

Tom Kalil

Richard Samans

Gene Sperling

Todd Stern

Laura Tyson

Daniel Weiss

John Podesta

Sarah Rosen Wartell

Dan Restrepo

Cynthia Brown

We will see how the THINK TANK will impact in OBAMAs government.

Some final thoughts about our next president Barack OBAMA.

He has been supported by 68 Nobel laureates:

6 from Economy (Including Krugman and Stiglitz), 15 from Chemistry, 26 from Medicine & 22 from Physics .

Also he has been supported by 4 Pulitzer award winners.

And part of his economic advisers are: Erich Smidth( GOOGLE CEO), Indra Nooyi ( Pepsico Chairwoman) and Warren Buffet (the wealthiest man of earth in 2008).

Warren Buffet in an interview held in February 15 of 2008 spoke about corporate taxes and the policies for stimulate the economy:

“Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it’s gone up is fine as long as it’s proportional to GDP. Where do we get that 18.5%? There’s 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it’s capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.

I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don’t give it to guys like me. Infrastructure investment makes sense, but we haven’t done it in a while and it won’t do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.”