Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Archive for December, 2009

Inbound Marketing Great Book for Ideas on Marketing on Web

Posted by Hopeton on December 28, 2009

One of the best books I’ve run across for entrepreneurs looking for guidance on how to utilize all the google and social media tools to promote your business is Inbound: Get Found Using Google, Social Media, and Blogs.  I interviewed one of the co-authors, Brian Halligan, on KAZI Book Review yesterday and I plan to post the interview on my Podcasts: Listen to Past Interviews page, by Friday.  Halligan is CEO of HubSpot, an internet marketing company.  HubSpot has a great free tool to measure the effectiveness of your web site, http://website.grader.com.  I used it yesterday to measure the effectiveness of my blog and scored a 61 out of 100.  The grader provides you with a report with advice on things to do to improve your web site.  I was initially excited about scoring 61 until Halligan told me in my interview that an effective web site scores in the 90s.  Also, don’t forget it’s important to have a good website hosting company that you can trust to keep your site working properly.

Advertisements

Posted in Books, Business | Tagged: , , | 1 Comment »

Tax Tip: Advantages of Using Standard Mileage for Auto Expense

Posted by Hopeton on December 22, 2009

By Rosheila Motley

Advantage 1 – It’s Easier: The rates are very generous, and, unless you use your vehicle 100% for business, it’s much easier to figure your deduction using the rates, rather than using actual expenses.

Advantage 2 – It’s More Flexible: As a general rule, it is usually better to take the standard mileage rate the first year you put a car or truck into service, rather than actual expenses. This allows you some flexibility in subsequent years, because you can choose which to take. However, if you take actual expenses in the first year, you must continue to use actual expenses thereafter.

Advantage 3 – You May be able to Write Off More: For people who drive many business miles each year, taking the standard mileage rate may allow you to write off more than the value of your vehicle over a period of years.

Advantage 4 – It’s Easily Defended: If you get audited and you’ve kept a good log book, your mileage deduction will most likely remain intact.

Tip  – Keep Good Records: Keep a log book in your car and record the following information each time you drive the car for business reasons:

  • Date
  • Business Reason/Place Visited
  • Beginning Odometer Reading
  • Ending Odometer Reading

    Rosheila Motley

Rosheila is the President and CEO of  Motley’s Financial Services, which provides accounting, tax, and consulting services to individuals, partnerships, corporations, and non-profit organizations in the local and surrounding areas.  She is also a Lifetime Member of the National Association of Black Accountants, Inc. (NABA) and currently holds the position of Director- Division of Firms in the Austin-Centex Chapter.  She can be contacted at ROSHEILA@MOTLEYFINANCIAL.COM or 210.896.0496.

Posted in small business | Tagged: , , | Leave a Comment »

Author of “In Cheap We Trust” Guest on December 28 Economic Perspectives

Posted by Hopeton on December 17, 2009

Note: Weber was scheduled for December 21, but a miscommunication resulted in the interview not being conducted.  We apologize for the mishap.  Weber will definitely be on Economic Perspectives December 28.

Cheap suit. Cheap date. Cheap shot. It’s a dirty word, an epithet laden with negative meanings. It is also the story of Lauren Weber’s life. As a child, she resented her father for keeping the heat at 50 degrees through the frigid New England winters and rarely using his car’s turn signals-to keep them from burning out. But as an adult, when she found herself walking 30 blocks to save $2 on subway fare, she realized she had turned into him.  Lauren Weber, author of In Cheap We Trust, is the December 28 guest on Economic Perspectives on KAZI 88.7 FM.  You can listen live to the interview online at http://www.live365.com/stations/kazifm?site=pro&play.

In this lively treatise on the virtues of being cheap, Weber explores provocative questions about Americans’ conflicted relationship with consumption and frugality. Why do we ridicule people who save money? Where’s the boundary between thrift and miserliness? Is thrift a virtue or a vice during a recession? And was it common sense or obsessive-compulsive disorder that made her father ration the family’s toilet paper?

In answering these questions, In Cheap We Trust offers a colorful ride through the history of frugality in the United States. Readers will learn the stories behind Ben Franklin and his famous maxims, Hetty Green (named “the world’s greatest miser” by the Guinness Book of Records) and the stereotyping of Jewish and Chinese immigrants as cheap.

Lauren Weber, photo by Isabelle

Weber also explores contemporary expressions and dilemmas of thrift. From Dumpster-diving to economist John Maynard Keynes’s “Paradox of Thrift” to today’s recession-driven enthusiasm for frugal living, In Cheap We Trust teases out the meanings of cheapness and examines the wisdom and pleasures of not spending every last penny.

Lauren Weber was formerly a staff reporter at Reuters and Newsday. She has also written for The New York Times, The Los Angeles Times, American Banker, and other publications. Weber has a masters degree in business journalism from Baruch College, and was a Knight-Bagehot fellow, a fellowship that invites 10 business journalists each year to study finance and economics at Columbia’s Graduate School of Business. Since 2007 she’s been working on her book full-time and trying to live as cheaply as possible.

Posted in Books, Budgeting, Business, Interview, Radio | Tagged: , , | Leave a Comment »

Book Review: “Where Keynes Went Wrong and Why World Governments Keep Creating Inflation, Bubbles and Busts” by Hunter Lewis

Posted by Hopeton on December 16, 2009

Reviewed by Travis Kent

In the book “Where Keynes Went Wrong and Why World Governments Keep Creating Inflation, Bubbles and Busts “, Hunter Lewis takes on one of the most influential Economists in the history of the modern world. A little background as to why this is important. John Maynard Keynes was a British Economist in the early 20th century. His book “The Economic Consequences of the Peace” published in 1919 dealt with economic theory based upon the Versailles peace conference for World War 1. Later, Keynes penned “General Theory of Employment, Interest and Money” or more commonly called, The General Theory.  These and his other works have shaped public monetary policy by many world leaders, including western Europe and the United States.

In this book, Hunter Lewis does essentially 2 things: (1) attacks the general writings and teachings of Keynes and (2) lays out his argument why governments should not be following Keynes, his followers and his writings. While the text of this book contains 6 parts laid out by the author, each can be read and absorbed independent of the others. There are 2 main parts: “What Keynes Really Said” is a systematic study of Keynes writings, mostly from “The General Theory”,  that address many areas of macroeconomic theory, laid out free of criticism and “Why Keynes Was Wrong” where the author takes on the writings of Keynes that are outlined previously.

As an example, Mr. Lewis takes on Keynes’ famous “Paradox of Thrift”. Keynes Paradox of Thrift is, stated very simply, that while in times of recession it may be good for the individual to save, but if everyone saves, then it is detrimental to the economy. The implication is that demand drives the economy and for demand to exist, money must be spent.  Lewis debunks this in Chapter 10 with the following:

“The bad investments of the recent past need to be liquidated, or at least marked down in price. Until this happens, savers should build their cash positions and refuse to use them. To invest at the old, unrealistic asset price would just continue the old pattern of throwing away money.”

The obvious argument here is that there is no paradox. Spending savings in a recession does not address the economic problems and serves only to drag out the inevitable bubble burst. Or as Keynes puts it, “…consuming more alcohol will not cure the hangover.”

Mr. Lewis succeeds in pointing out several flaws in Keynes’ theories that seem to escape world leaders when setting policy. From monetary policy, interest rate theory and recession recovery, Keynes ideas are to this day employed throughout the world and have been used most recently by Presidents George W. Bush and Barak Obama. I would highly recommend this book for any reader interested in learning about how governments arrive at decisions to raise or lower interest rates, bailout corporations or simply guide the economy in good times and bad.   

Travis Kent is surety underwriter and regular book reviewer for Economic Perspectives

Posted in Books, Business, Economy | Tagged: , , | Leave a Comment »

LA County Commissioner to Discuss Economic Development on Economic Perspectives December 7

Posted by Hopeton on December 7, 2009

Los Angeles County Commissioner Kenia Davalos will discuss economic development strategies for underserved communities on the December 7 edition of Economic Perspectives on KAZI 88.7 FM, 5:30 p.m. – 6 p.m. central time.  The interview can be listened to live online at http://www.live365.com/stations/kazifm?site=pro&play.  Davalos was one of the keynote speakers at the PeopleFund Conference on Economic Opportunity on October 24 in Austin, Texas.

Kenia Davalos

For more than 10 years, Davalos has worked within the private, non-profit, and government sectors as an advocate for the Latino business community. Her career includes distinguished tenures at the White House, U.S. Small Business Administration, Latino Issues Forum, The Greenlining Institute, American Express, and now the Los Angeles County as a 2nd term County Commissioner. With such distinctions as “Philanthropist of the Year” (2002) and “Advocate of the Year” (2004) by the Latino Business Association, Kenia’s professional life has been dedicated to empowering Hispanic business owners. In 2001, while serving as Market Development Manager for American Express, Davalos developed and promoted an innovative marketing strategy through which proceeds of the American Express Community Express/ Latin Business Association credit card were donated to non-profit organizations promoting small business development. Featured in various publications on both a national and international level, Davalos’ experience as entrepreneur, advocate, and elected official gives her a comprehensive perspective on the challenges of economic development in minority communities.

Posted in Business, Community Development, Hispanics, Interview, Radio | Tagged: | Leave a Comment »

Getting Big Things Done in Government Focus of Dec 6 Book Review

Posted by Hopeton on December 5, 2009

The December 6 guest on KAZI Book Review is William Eggers, co-author of If We Can Put a Man on the Moon…Getting Big Things Done in Government.  Listen to the interview on KAZI 88.7 FM, 12:30 p.m. – 1 p.m. central time in Austin or live online at http://www.live365.com/stations/kazifm?site=pro&play.  Eggers’ book addresses the frustration of the American people with our government’s series of high-profile failures (Iraq, Katrina, the financial meltdown) that seems to just keep getting longer.

It also covers the nation’s proud history of great achievements: victory in World War II, our national highway system, welfare reform, the moon landing.  Eggers believes we need more successes like these to reclaim government’s legacy of competence. In If We Can Put a Man on the Moon, Eggers and his co-author John O’Leary explain how to do it. The key? Understand-and avoid-the common pitfalls that trip up public-sector leaders during the journey from idea to results.

The authors identify pitfalls including:

  • The Partial Map Trap: Fumbling handoffs throughout project execution
  • The Tolstoy Syndrome: Seeing only the possibilities you want to see
  • Design-Free Design: Designing policies for passage through the legislature, not for implementation
  • The Overconfidence Trap: Creating unrealistic budgets and timelines
  • The Complacency Trap: Failing to recognize that a program needs change

Eggers is one of the country’s leading authorities on government reform. A global director for Deloitte Research and director of the Deloitte Public Leadership Institute, he is responsible for research and thought leadership for Deloitte’s public sector industry practice.

He is a former manager of the Texas Performance Review and director of e-Texas. He has advised governments around the world and his commentary has appeared in dozens of major media outlets including the New York Times, Wall Street Journal, and Chicago Tribune.

Posted in Books, Government, Interview, Radio | Tagged: , | Leave a Comment »

House Committee Passes Legislation to Modernize Financial Regulations

Posted by Hopeton on December 4, 2009

From the press office of the U.S. House Committee on Financial Services
The House Financial Services Committee completed its work on a comprehensive set of reforms that responds to the recent economic crisis by modernizing America’s financial regulations. The Wall Street Reform and Consumer Protection Act (H.R. 4173), which will be considered on the House floor next week, incorporates nine major pieces of legislation approved by the Committee to address the myriad causes – from predatory lending to unregulated derivatives – that led to last year’s meltdown.

The Wall Street Reform and Consumer Protection Act includes the following provisions:

  • Consumer Protections: Creates the Consumer Financial Protection Agency (CFPA), a new, independent federal agency solely devoted to protecting Americans from unfair and abusive financial products and services.
  • Financial Stability Council: Creates an inter-agency oversight council that will identify and regulate financial firms that are so large, interconnected, or risky that their collapse would put the entire financial system at risk. These systemically risky firms will be subject to heightened oversight, standards, and regulation.
  • Dissolution Authority and Ending “Too Big to Fail”: Establishes an orderly process for dismantling large, failing financial institutions like AIG or Lehman Brothers in a way that ends bailouts, protects taxpayers, and prevents contagion to the rest of the financial system.
  • Executive Compensation: Gives shareholders a “say on pay” – an advisory vote on pay practices including executive compensation and golden parachutes. It also enables regulators to ban inappropriate or imprudently risky compensation practices, and it requires financial firms to disclose any compensation structures that include incentive-based elements.
  • Investor Protections: Strengthens the SEC’s powers so that it can better protect investors and regulate the nation’s securities markets.  It responds to the failures to detect the Madoff and Stanford Financial frauds by ordering a study of the entire securities industry that will identify needed reforms and force the SEC and other entities to further improve investor protection.
  • Regulation of Derivatives:  Regulates, for the first time ever, the over-the-counter (OTC) derivatives marketplace. Under the bill, all standardized swap transactions between dealers and “major swap participants” would have to be cleared and traded on an exchange or electronic platform. The bill defines a major swap participant as anyone that maintains a substantial net position in swaps, exclusive of hedging for commercial risk, or whose positions create such significant exposure to others that it requires monitoring.
  • Mortgage Reform and Anti-Predatory Lending: Would incorporate the tough mortgage reform and anti-predatory lending bill the House passed earlier this year. The legislation outlaws many of the egregious industry practices that marked the subprime lending boom, and it would ensure that mortgage lenders make loans that benefit the consumer.  It would establish a simple standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.
  • Reform of Credit Rating Agencies: Addresses the role that credit rating agencies played in the economic crisis, and takes strong steps to reduce conflicts of interest, reduce market reliance on credit rating agencies, and impose a liability standard on the agencies. 
  • Hedge Fund, Private Equity and Private Pools of Capital Registration: Fills a regulatory hole that allows hedge funds and their advisors to escape any and all regulation.  This bill requires almost all advisers to private pools of capital to register with the SEC, and they will be subject to systemic risk regulation by the Financial Stability regulator.
  • Office of Insurance: Creates a Federal Insurance Office that will monitor all aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis and undermine the entire financial system.

Posted in Credit, Finance, Legislation | Tagged: , | Leave a Comment »

Fed Chair Testifies About Financial Markets and Economy at Senate Confirmation Hearing

Posted by Hopeton on December 4, 2009

Enclosed below is the testimony of Federal Reserve System Board of Governors Chairman Ben Bernanke at his confirmation hearing before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Washington, D.C. on December 3, 2009.  Bernanke was nominated for a second term as chairmen by President Obama.

Chairman Dodd, Senator Shelby, and members of the Committee, I thank you for the opportunity to appear before you today. I would also like to express my gratitude to President Obama for nominating me to a second term as Chairman of the Board of Governors of the Federal Reserve System and for his support for a strong and independent Federal Reserve. Finally, I thank my colleagues throughout the Federal Reserve System for the remarkable resourcefulness, dedication, and stamina they have demonstrated over the past two years under extremely trying conditions. They have never lost sight of the importance of the work of the Federal Reserve for the economic well-being of all Americans.

Ben Bernanke

Over the past two years, our nation, indeed the world, has endured the most severe financial crisis since the Great Depression, a crisis which in turn triggered a sharp contraction in global economic activity. Today, most indicators suggest that financial markets are stabilizing and that the economy is emerging from the recession. Yet our task is far from complete. Far too many Americans are without jobs, and unemployment could remain high for some time even if, as we anticipate, moderate economic growth continues. The Federal Reserve remains committed to its mission to help restore prosperity and to stimulate job creation while preserving price stability. If I am confirmed, I will work to the utmost of my abilities in the pursuit of those objectives.

As severe as the effects of the crisis have been, however, the outcome could have been markedly worse without the strong actions taken by the Congress, the Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corporation, and other authorities both here and abroad. For our part, the Federal Reserve cut interest rates early and aggressively, reducing our target for the federal funds rate to nearly zero. We played a central role in efforts to quell the financial turmoil, for example, through our joint efforts with other agencies and foreign authorities to avert a collapse of the global banking system last fall; by ensuring financial institutions adequate access to short-term funding when private funding sources dried up; and through our leadership of the comprehensive assessment of large U.S. banks conducted this past spring, an exercise that significantly increased public confidence in the banking system. We also created targeted lending programs that have helped to restart the flow of credit in a number of critical markets, including the commercial paper market and the market for securities backed by loans to households and small businesses. Indeed, we estimate that one of the targeted programs–the Term Asset-Backed Securities Loan Facility–has thus far helped finance 3.3 million loans to households (excluding credit card accounts), more than 100 million credit card accounts, 480,000 loans to small businesses, and 100,000 loans to larger businesses. And our purchases of longer-term securities have provided support to private credit markets and helped to reduce longer-term interest rates, such as mortgage rates. Taken together, the Federal Reserve’s actions have contributed substantially to the significant improvement in financial conditions and to what now appear to be the beginnings of a turnaround in both the U.S. and foreign economies.  To read the rest of the tesimony click here.

Posted in Credit, Economy | Tagged: , , | Leave a Comment »

U.S. Leader Lays Out Plan to Grow Minority Businesses in Speech

Posted by Hopeton on December 2, 2009

David Hinson, National Director of the U.S. Department of Commerce Minority Business Development Agency (MBDA), was a keynote speaker at the PeopleFund Conference on Economic Opportunity on October 24 in Austin, Texas.  In his speech, Hinson provided an overview on the strategies MBDA is using to promote the growth and development of minority businesses.  Enclosed below is an excerpt from the transcript of his speech, and the link to the entire speech is at the end of this excerpt.

Good Afternoon! On behalf of President Barack Obama and Secretary of Commerce Gary Locke, it is my honor to be here today.

I’d like to take a moment to thank the Board of Directors for the People Fund for extending this wonderful invitation, specifically Mr. Hopeton Hay who has had a long career as a staunch advocate for minority business development.

I had the pleasure of being a guest on Mr. Hay’s radio show, “Economic Perspectives,” when I was first appointed to be the National Director of the Minority Business Development Agency only a few, short months ago.

I would also like to thank Kenia Davalos, Suzi Sosa and all of the other participants and panelists who have provided sound advice and counsel at this very important conference.

Hinson at PeopleFund Conference

But most of all, I want to thank the entrepreneurs and business owners here today, who are indeed the backbone of our nation, who continue to hang in during these very difficult times.

It is your unwillingness to flinch in the face of this economic downturn that is putting food on the tables of millions of workers nationwide and ensuring that these families remain hopeful as our economy adjusts to the impact of mistakes of the past. For this, you deserve our praise.

For those of you who may not know, the Minority Business Development Agency is the only agency in the federal government with the sole task of promoting the growth and global competitiveness of the minority business community. We manage over 46 centers nationwide, providing technical and business development assistance and access to capital to minority businesses of all sizes.

In our current business model, MBDA’s activities are centered on helping companies from these diverse communities obtain financing and contracts from both the public and private sectors. In 2008, MBDA generated more than $2 billion in contracts and financing for our clients and created more than 5,000 new jobs.  This gives MBDA a Return on Investment (ROI) of 74 times. In other words, for every tax payer dollar put into MBDA, we create $74 of economic output. Year-to-date, we have executed over $2.4 billion in contracts and financing and created nearly 3,000 new jobs in what has been an extremely challenging year for minority-owned businesses.

Over the last 40 years, MBDA has helped thousands of businesses grow.  And with a continued effort from MBDA, organizations like the People Fund and hundreds of strong entrepreneurs, like those of you here today, the minority business community now accounts for more than $660 billion in gross receipts and generates approximately 8 million jobs nationally.

In the great state of Texas alone, there are approximately 491,000 minority-owned firms generating more than $71 billion in gross receipts, and employing more than 543,000 workers. Between 1997 and 2002, minority firms in the state of Texas grew 34 percent (34%) and were significantly greater than the total growth percentage of all businesses in the entire state, which was only 13 percent (13%).

As you know, the state of Texas has the second largest minority population in the country!  And if the business activity matched the state’s minority population growth, there would be more than 830,000 minority businesses generating more than $305 billion and employing nearly 2 million workers.

To read the entire speech click here.

Posted in minority business, Speeches | Tagged: , , | Leave a Comment »