The short answer, NO.

Why, because the Dow is comprised of Multinational companies who derive much of their income from international markets.

The most current S&P 500 figures reported 47.9% of their 2008 sales from outside of the United States versus 45.8% in 2007 and 43.6% in 2006. This upward trend shows that while the economy in the US continues to suck, Multinationals continue to grow based on sales outside of the U.S. Along with this increased percentage of international sales goes an even larger increase in international employment growth. So while these companies, and in turn the stock market, are thriving , Main Street is struggling.

As a result, the major driver in employment growth, small businesses, are not able to play their traditional role in helping the U.S. pull itself up and out of the recession. Of those small businesses that are seeing opportunities for growth, they continue to struggle with banks still unwilling to lend.

Wall Street and Main Street

September 15, 2010

Today it is easy to hate Wall Street. Almost everyday in the news we hear about something someone or some organization did to promote the financial and banking industry meltdown. Generally our first reaction is to blame. While I don’t think that either executives in the banking or financial industry are without fault, sitting back and complaining and moaning about it will accomplish nothing.

The World Distribution of Household Wealth by the Helsinki-based World Institute for Development Economics Research of the United Nations University states that 2% of the people hold the 50% of the worlds wealth, 1% hold 40% and the top 10% hold 85% of the worlds wealth. They define wealth at Net Worth vs just annual income. While we live in global economy, I want to contrast this report to one by Professor G. William, Sociology Dept at UC Santa Cruz who published a paper, updated this August, that shows that in the U.S. 34.6% of total Net Worth is held by the top 1%, the next 19% hold 50.5% and the bottom 80% hold a mere 15% resulting in 85.1% of wealth residing with the top 20%. A 2007 report by the U.S. Census Bureau show that 40.1% of the population earns over $75,000 per year, 51.9% earn between $15,000 and $74,999 per year and 8% earn $15,000 or less.

This is all interestingly summarized in a statement that was made to me by an Investment Banking Attorney, “1% of the people in this country earn $1 million or more per year, 5% earn $100,000 or more per year and the rest earn less than $100,000 per year. This means that 1% think, 5% think they think and the rest would rather die then think”. Okay, okay, I’ll hold him while you hit him. But this is just a good example of what the people controlling the wealth, and in turn the government, think. I’d translate this to the wealthy aggressively exercise their voice, money and vote to get the people in place to ensure their continued success and the rest of use just aren’t as effective (I’m being polite).

So if 80% of the people earn about 15% of the annual income in this country and want to change the rules, they have the power (in their sheer numbers) to shift things. This 80% we like to call “Main Streeters”. They make up the small businesses that are responsible for the majority of current and new jobs. In turn, they are at the center of a stable and sustainable economy. They are also the people who support these businesses by buying their products and services.

Like the “wealthy” Main Streeter can also shift things with their votes and they can also shift things with their actions. At Money for Main Street we think Main Streeter can take action by banning together in a community where they provide the resources that small business need to prosper, including peer-to-business social lending, providing small business focused products and services and the advice and experience they share.

So rather then being angry at Wall Street, support and build Main Street.

According to U.S. Chamber of Commerce, 65% of small business owners had a very positive impression of the term “Free Enterprise”, while 45% viewed the term “Capitalism” in the same light. In a Gallup poll conducted in February, 86% of individuals had a positive image of the term “Free Enterprise”,, while 61% had a positive image of the term “Capitalism”.

Webster defines Free Enterprise as:
“An economic and political doctrine holding that a capitalist economy can regulate itself in a freely competitive market through the relationship of supply and demand with a minimum of governmental intervention and regulation.”

While they define Capitalism as:
“An economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.”

Pretty interchangeable terms.

When you google Free Enterprise, the first entry is the definition of Capitalism found on Wikipedia. The second is Free Enterprise as defined by Wikipedia.

It appears that Capitalism has become a “10 letter” word. Steve Lombardo who’s consulting group conducted the poll of small business for the U.S. Chamber of Commerce claims that it’s because “Americans love things that are “free,” whether it’s free enterprise or free ice cream.” Still others have theories that vary from capitalism’s root “Capital” and it’s association to banks and the financial industry, (a popular group these days) has a subconscious negative connotation. Also, people associate Free Enterprise with “Freedom”, and we in the U.S. are all about freedom!

In Walter Russell Mead’s book God and Gold, America and the Making of the Modern World he discusses, among many topics, how Americans and their capitalistic focus make them cold, money hungry people in the eyes of almost everyone else in the world.

When considering the definitions above, there is an underlying concept of free and competitive markets that regulate themselves with little or no government intervention. In The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals, Frank Partnoy tells a story, that reads like recent newspaper and magazine articles, of how Ivar Kreuger’s creative “financial strategies” not only lead to the market collapse of the 1930 but also the government stepping in with regulations. Some 80 years later history is repeating itself.

There are two things, at least, that are clear. We can not legislate or regulate away greed and capitalism run a muck doesn’t work. So what are we to do? Recently there have been a number of news reports and articles on the 2% highest income earners in America and the “bottom” 95% of income earners in America. I call this 95% Main Streeters. Both groups represent almost equal total incomes as a group and pay almost equal percentages of income tax as a group. As we look at both the 1930s and recent times in the economy and financial markets you’ve got to ask yourself “Why does it appear that the 2% are in control?”

The answers, to me, seem quite simple they exert their control and Main Streeters don’t. Given that Main Streets represent a much larger group of voters, buyers and business people (small businesses drive the economy and employment) means that they have the potential power to both pull the U.S. out of its current economic problems, and ensure that we stay out of economic trouble going forward.

What do you think?

Monday and Tuesday of this week I attended AFFCON2010 at the Denver Convention Center. This 2 year old event is the brainchild of Daron Babin. Daron is the co-founder of WebmasterRadio.FM and is well know as one of the top SEO (Search Engine Optimization) and SEM (Search Engine Marketing) experts. Check out the AFFCON2010 site (www.affcon2010.com) and his online radio (www.webmasterradio.fm).

The event was targeted at Affiliate Marketers. They are Entrepreneurs who have created a web presence (a Blog, E-commerce Site, etc.) and link to providers (known as Merchants) who offer products and services for sale and pay the affiliate a fee or commission for every sale they drive to the merchant’s site.

What I saw at the show were people from all walks of life, from young to old, conservative in style and dress to “creative” in style and dress. But they all had the same thing in common. They were small business people. People who saw an opportunity to free their inner entrepreneur. It made me think of all the people I’ve encountered lately who, through choice or lay off , are looking for what to do next. It dawned on me, being an affiliate marketer could be the answer may are looking for.

A common thread through many of the presentations was the advice, “Do what you are passion about. That is the secret to success”. There were several examples of people who blog about their passion and have successfully built businesses, business that generate their revenue by driving people to another’s site to buy.

So to all you looking for the next step, consider being an affiliate marketer. The barrier to entry (how much it will cost you) is extremely low. Your first step is to create your site. Go to WordPress (www.wordpress.com). You will be amazed at how much they offer (for free) to build your site. Once you get going you might find that you want to spend some money on your own domain name, etc., but for now start free, you have no excuse for not starting. Pick something you love. Something you are passionate about. Then, start writing. If you have experience in something and a passion for it, you will be amazed at how it flows out of you.

Some other places for you to check out:

http://www.affcon2010.com check out all the vendors
http://www.scmrush.com
http://www.crazyegg.com
http://www.browsersize.com
http://www.lowhangingloot.com
http://www.wordvision.com

Ask not what the Government can do for Main Street, but what Main Street can for the Government. Read more at: http://wp.me/pDwNy-7

Desiderata

May 21, 2010

This wonderful poem, Desiderata (Latin for “things desired) was shared with me by Jerry Ashton a fellow member of the Linkedin group Linked Strategies.  You can follow Jerry at http://www.Twitter.com/writtenoffusa

I hope you enjoy it as much as I do.

Eric

“Go placidly amid the noise and the haste, 
and remember what peace there may be in silence.

As far as possible, without surrender, 
be on good terms with all persons. 
Speak your truth quietly and clearly; 
and listen to others, 
even to the dull and the ignorant; 
they too have their story. 
Avoid loud and aggressive persons; 
they are vexatious to the spirit.

If you compare yourself with others, 
you may become vain or bitter, 
for always there will be greater and lesser persons than yourself. 
Enjoy your achievements as well as your plans. 
Keep interested in your own career, however humble; 
it is a real possession in the changing fortunes of time.

Exercise caution in your business affairs, 
for the world is full of trickery. 
But let this not blind you to what virtue there is; 
many persons strive for high ideals, 
and everywhere life is full of heroism. 
Be yourself.  Especially do not feign affection. 
Neither be cynical about love, 
for in the face of all aridity and disenchantment, 
it is as perennial as the grass.

Take kindly the counsel of the years, 
gracefully surrendering the things of youth. 
Nurture strength of spirit to shield you in sudden misfortune. 
But do not distress yourself with dark imaginings. 
Many fears are born of fatigue and loneliness.

Beyond a wholesome discipline, 
be gentle with yourself. 
You are a child of the universe 
no less than the trees and the stars; 
you have a right to be here. 
And whether or not it is clear to you, 
no doubt the universe is unfolding as it should.

Therefore be at peace with God, 
whatever you conceive Him to be. 
And whatever your labors and aspirations, 
in the noisy confusion of life, 
keep peace in your soul.

With all its sham, drudgery, and broken dreams, 
it is still a beautiful world.

Be cheerful. Strive to be happy.”

Max Ehrmann (http://www.depauw.edu/library/archives/dpuinventories/ehrmann_max%20.htm)

Interesting article on small business tax break inside the Health Care bill http://tinyurl.com/SMBTaxBreak

Interesting article on small business tax break inside the Health Care bill http://tinyurl.com/SMBTaxBreak

This come compliments of http://www.mashable.com

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