When I read about the automakers’ plea for more money and the president’s response to them, my first thought was: a plague on both your houses.

http://www.cnbc.com/id/29956752

No one looks good in this. First, here are the automakers begging for more taxdollars so that they can pay outrageous labor contracts that make them uncompetitive with foreign carmakers. Second, here is the president agreeing to give over the money if one of the automakers will fire its CEO.

What is going on here? Why are we giving automakers all this money and why is the government firing a private company’s CEO? This is why it’s a bad idea for government to be in the middle of business. The cold, hard fact is: companies that can’t make it on their own shouldn’t make it. Their failure will open the door for another company. It will be painful in the short term, but beneficial in the long term. This is market economics 101.

Sadly, that seems to be a class that the president and the automaker executives never took in college.

March is National Peanut Month. So despite what the media say, I’m going to celebrate this wonderful, nutritious, affordable product:

http://www.peanutbutterlovers.com/loversmonth/index.html

As the website above points out:

“One serving of peanuts is a good source of protein, Vitamin E, Niacin, Folate, Phosphorus and Magnesium. Peanuts are naturally cholesterol-free and low in saturated fat.”

Peanuts are both good tasting and good for you. That’s a powerful combination. And, as I have written repeatedly on this blog, the peanuts you see in the store are safe.

So buy them and enjoy them…this month and every month.

Yesterday, the media reported that the Food and Drug Administration advised people not to consume products sold by Westco Fruit and Nuts. This is a classic case of where there is more to the story than the media reports:

http://www.upi..com/Science_News/2009/03/23/FDA_announces_more_peanut-related_recalls/UPI-64841237831962/

What this story doesn’t tell you is that Westco Fruit and Nuts already tested all of their peanut products in an FDA-approved lab. And guess what? They all came back safe.

I understand that the FDA is being overly cautious. But the FDA is on the verge of destroying entire companies and maybe an entire industry. I repeat what I have written on this blog several times: peanuts are some of the safest, healthiest and most affordable products on the market. If you see a peanut product in the store, it is safe to buy and safe to eat.

And don’t forget: you can’t always believe what you read in the newspaper.

Never let the facts interfere with a good story. That seems to be
the media’s approach to the peanut industry.

The fact is peanuts remain safe and healthy. The fact is less than
2% of the peanut industry has been impacted by salmonella. The fact is the
press has blown this out of all proportion. And who is paying the
price for it? Hard-working peanut farmers:

http://www.wtoctv.com/Global/story.asp?S=10057009

As the article correctly notes, peanuts are a “good source of
protein, lots of energy, stores well, easy to serve. Peanut butter
can stretch a food dollar a long way….” Yes it can. But not if everyone is scared.

I’m calling on everyone to get the facts. Go to http://www.peanutsusa.com/USA/Index.cfm and find out the truth for yourself.

They say one bad apple can ruin a whole bushel. But recently, some peanut farmers in Georgia met to show that one bad peanut producer can’t ruin a great industry:

http://www.walb.com/Global/story.asp?S=10049695&nav=5kZQ

As I’ve written on this blog, peanuts remains one of the healthiest, safest and most affordable foods on the market. Yet the media have focused on one bad producer–the Peanut Corporation of America. Yes, this company did not do enough to ensure safety and quality at its plants. But 99.9% of the rest of the peanut industry has. Here is how Congressman Sanford Bishop described it:

“It’s unfortunate. They [the Peanut Corporation of America] have such a small percentage in regards to the peanut industry. They have done a great deal of damage to consumer confidence, but we are not going to let that hold us back.”

Amen, Congressman. We are not going to let that hold us back. Let’s all go out and buy some peanuts today!

Today I end the week as I began it–talking about my first ebook, “From Tragedy To Triumph: How Economic Challenges Often Create Economic Progress.”  Here is the link:

http://www.rwhill.com/wp-content/uploads/2009/03/the-march-ebook2.pdf

When I released the ebook, little did I know that it would hit the same week the story broke about the AIG bonuses. I’m amazed at how smart people can be so dumb. As I’ve written before, the crisis is a symptom of how our business leaders are looking backward rather than forward. As my book notes, American entrepreneurs have always used times of crisis to create new products and develop new approaches. So far, AIG isn’t doing much of that.

But my guess is plenty of other companies are. And their experiments will benefit all of us in the years to come.

Today I’m continuing to promote my first ebook, “From Tragedy To Triumph: How Economic Challenges Often Create Economic Progress.” Here is the link to it on my website:

http://www.rwhill.com/wp-content/uploads/2009/03/the-march-ebook2.pdf

As I read the news this week about the AIG executives doling about government money for bonuses, I’m reminded that these executives lack one of the key qualities that my ebook describes: creativity. The AIG executives panicked because they thought if they didn’t pay out the bonuses they would lose talent to other companies. Talent? These are some of the same executives that got the company in trouble in the first place. AIG should have let them leave. In fact, 11 of them took the bonus money and left anyway!

What AIG should have done was see this challenge as an opportunity. Let those executive go and replace them with new people, new ideas, new approaches. But to pursue this kind of plan, AIG needed some creative thinking. Evidently, they don’t have it. But real entrepreneurs do, like the ones I profile in my ebook.

Come to think of it, maybe AIG executives should read by ebook.

This week I am promoting my first ebook, “From Tragedy To Triumph: How Economic Challenges Often Create Economic Progress.” It tells the story of how some of our country’s greatest economic development came out of economic downturns. Here is the link to the ebook on my website:

http://www.rwhill.com/wp-content/uploads/2009/03/the-march-ebook2.pdf

Yesterday I talked about how often entrepreneurs experimented with an old product and created something new. Another interesting fact I learned is how often entrepreneurs created something from scratch….before there was even a market for it. In the Great Depression, the Galvin brothers figured out a way to install a radio into a car. It had never been done before. There was no market for it. But once it had been created, everyone wanted one. Now, no one has a car without a radio. The market followed the product.

This is a great example of the great progress that can come out of bad times. So keep faith…and keep looking for that new market!

My first ebook is officially launched! It’s entitled, “From Tragedy To Triumph,” and it can be found at this link on my website:

http://www.rwhill.com/wp-content/uploads/2009/03/the-march-ebook2.pdf

One of the fascinating things I learned in my research is how often a small change can make a big difference. Like the story I tell in the book about the creation of the chocolate chip cookies. A similar recipe had been used for years; but out of necessity, chocolate chips were once tried and a cookie legend was born.

Isn’t that the way life always is? We find ourselves in a bad spot and try something different. Many times, we end up creating something better than ever before. I believe so many new ideas and new inventions are going to come out of this current economic recession. If only we have the courage to experiment.

What about you? Use this time to try something different and create something new.

Today is the day! Around noon today, I’ll post my first e-book, entitled “From Tragedy To Triumph: How Economic Challenges Often Create  Economic Progress.”

This book takes a tour through some American history to show that some of our greatest economic inventions occurred not in times of growth but in times of challenge. In our current economic climate, that’s a good message for all of us to remember.

Check back later today and I’ll have the ebook posted on the website!

This week, Pulitzer Prize winner Thomas Friedman argued that bad economic times might be good:

http://www.nytimes.com/2009/03/11/opinion/11friedman.html?_r=1

In particular, he argued that:

“…to get out of a crisis like this you need to let markets clear. You need to let failed companies, or homeowners, go bankrupt, unlock their dead capital and reapply it to thriving entities.”

That’s exactly what I’ve been saying for months. Economic downturns have a way of shaking things up; when things finally settle down, we are going to find ourselves with an even stronger economy than we had before. That’s not to say it won’t be painful; it will. But it is to suggest it’s necessary; it is. During these hard times, companies will be forced to create new products and new ways of doing business. Once the credit market returns to normal, these new ideas will fuel a new economic boom.

This has happened several times in history. And I just wrote my first ebook about it. It’s called, “From Tragedy to Triumph: How Economic Challenges Often Create Economic Progress.” It will be released on Monday. Keep checking here on this website for more details!

This week brought more seemingly bad news about the economy. Here in Texas, two major employers announced layoffs. In Arlington, National Semiconductor announced it would close its plant:

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/031209dnbusnationalsemi.251f3213.html

In Austin, Dell Computer announced layoffs for many of its employees:

http://www.statesman.com/blogs/content/shared-gen/blogs/austin/theticker/entries/2009/03/11/dell_cuts_jobs.html

Bad news, right? Yes and no. For those losing jobs, it’s absolutely bad news. But as I’ve previously written on this blog, sometimes good things take place in a bad economy. One of the Dell spokesman hinted at this when he said in announcing the layoffs:

“The layoffs are not about individual performance but about properly sizing Dell’s business for the economy and business environment.”

Exactly. Economic downturns force businesses and entrepreneurs to re-focus for their new environment. The bad news is that people lose jobs. The good news is they take with them their skill sets and they can then apply these skills to new endeavors. My guess is those employees let go by National Semiconductor and Dell will do just fine and end up using their high-tech skills in new fields, and maybe even create new jobs.

I’ll have more to say on this in a few days when I release my first ebook, “From Tragedy To Triumph: How Economic Challenges Often Create Economic Progress.” It will discuss the economic good that can come out of a bad economy. Stay tuned!

WHY JERRY GAVE UP ON T.O.

Now that Terrell Owens has left the Cowboys, people are beginning to wonder why Jerry Jones gave up on him. After all, it was Jerry, over the advice of then-coach Bill Parcells, who insisted on bringing T.O. to Dallas. So why pull the plug now? This week the Fort Worth newspaper gave us a hint:

http://www.star-telegram.com/cowboys/story/1245141.html

Come to find out, there is one person Jerry will listen to: his son, Stephen. Evidently, Stephen is quite unlike his father. He is calm and rational and can make sound business decisions. That’s why he recommended to his dad that T.O. be let go. It’s a great testament to Stephen that he was able to convince his father to do the right thing. After all, T.O.’s production has gone down while his antics have gone up.

But while this impresses me about Stephen, it still depresses me about Jerry. Did he really need someone to convince him what a disaster T.O. was? The guy divided the locker room during a crucial period late in the season. What more evidence did Jerry need?

As a Cowboy fan, I’m ready for the Jerry Jones era to end and the Stephen Jones era to begin.

The conventional wisdom on Jerry Jones has always gone like this: great owner, terrible GM. By this it was meant that Jerry was great at the business side of football and not so great at picking talent in the draft. But like most conventional wisdom, this one is wrong, too. There is plenty of evidence that Jerry is not such a great owner, including his handling of the sale of tickets to the new stadium:

http://www.dallasnews.com/sharedcontent/dws/spt/stories/031009dnmetstadiumsuite.1c42741f.html

The basic idea is to overcharge people since they will likely want to be a part of the new stadium. But as previously noted on this blog, the tickets have not sold out. And while Jerry’s daughter is showing off the new luxury suites (which, by the way, will cost you up to $500,000.00), Jerry is frantically running commercials trying to sell the rest of the regular tickets.

Commercials? For Cowboys’ tickets? That tells me the sales have not gone as well as Jerry had hoped. And that’s yet more evidence that Jerry’s business talents are much closer to his football talents than we ever knew before.

So the House that Jerry Built has run into some problems:

http://www.dallasnews.com/sharedcontent/dws/news/localnews/cowboysstadium/stories/022109dnmetstadiumdevelop.40c84e1.html

The first problem is that he hasn’t been able to sell out the seats.  Imagine that: here is one of the most storied franchises in sports history moving into a brand new stadium and yet Jerry hasn’t been able to sell the new place out.  Incredible.

The second problem is Jerry hasn’t been able to get a naming deal done on the building.  He had originally thought he would get countless dollars for placing a corporate name on the stadium.  But so far, he hasn’t had any takers.

The third problem is that all the development that was planned around the new stadium simply hasn’t happened.

Sure, the economy is partly to blame for these problems.  But let’s not lose sight of the real cause: the owner himself.  If Jerry wants to be the great owner he thinks he is, he should practice some accountability.  And he could start by telling us how many season tickets remain unsold.  After all, he used millions of dollars in public funds to help build this stadium.  So the taxpayers have a right to know some details.

Jerry is once again showing us a recipe for failure.  What should be a great moment in this franchise’s history is turning into another embarrassing moment for Jerry.

-Randy Hill

Much has been made of the economic challenges we are facing. But not enough has been made of the root causes. Economic challenges do not appear by themselves. They are the culmination of other factors working together.

Here is one factor that hasn’t gotten nearly enough media coverage: the drought. I fear if the drought doesn’t end, the economic challenges we face may grow:

http://www.star-telegram.com/804/story/1242134.html

As this article correctly notes, the drought we are facing in various states, including Texas, threatens our economy:

“Texas will face more agricultural losses, a growing wildfire risk and possibly water restrictions this summer if the drought persists. And the exceptional drought that has gripped Austin, San Antonio and Corpus Christi appears to be spreading closer to North Texas.”

Simply put, a drought impacts our ag crops, which impacts our food prices, which impacts our economy.  What can we do to fight back?  Really, only two things.  First, we can all do a better job of conserving water at home.  And second, we must pray for rain.

This drought is a good reminder of who is in control.  Fortunately, He has a lot more power than we do.

-Randy Hill

So much of the market is driven by emotion, not logic.  I’ve written about this phenomenon before.  But this week brings another example from the oil industry:

http://www.bloomberg.com/apps/news?pid=20601081&sid=av8ef_3cMSmw&refer=australia

So China decides to embark on a stimulus spending spree and the price of oil goes up.  Why?  The reality is we still have an excess supply of oil, we’re still in a recession and we still have not reached the driving season (summer) yet.  It’s basic economics 101 that given those factors, the price of oil should be going down (which it mostly has been in the last few months).

But leave it to some market analysts to hear that China is pumping more money into its economy and these so-called market experts react emotionally and decide that the price of oil should go up.  Here is what was reported by Bloomberg News:

“China is key,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “They are talking about doing the right things to boost growth. An additional stimulus program will be good for commodities such as oil and copper.”

I repeat my claim based on logic and reason, not emotion: the price of oil will continue to go down.  Stimulus spending may drive up deficits, but it won’t drive up the price of oil.

-Randy Hill

Here is a question: if the people working for Obama are so talented, why can’t any of them count?

http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/030409dnnatkirk.3373a13.html

So former Dallas Mayor Ron Kirk is in hot water because of a tax problem.  Stop me if you’ve heard this story before.  Here is how the Dallas Morning News reported it:

“The Senate Finance Committee revealed Monday that Kirk would pay $9,975 in back taxes, mostly stemming from speaking fees he failed to report as income and business-related deductions that weren’t properly documented.”

There are two issues here.  First, why can’t these Obama nominees pay their taxes correctly like the rest of us?  And second, why can’t we finally get serious about tax reform?  After all, the tax code is so complicated, so complex and so confusing that I can almost understand how Kirk might have made the mistake.

Years ago, Ronald Reagan said that the federal tax code is like getting mugged every day of the year.  Isn’t it time we stopped this madness and had real tax reform?  I bet Ron Kirk might even favor that.

-Randy Hill

President Obama has been in office nearly six weeks. In that time, he’s introduced a stimulus plan and a budget. And the results? The stock market has continued its collapse:

http://online.wsj.com/article/SB123599406229708501.html

In my opinion, the markets are responding to the president’s plan.  And simply put, they don’t like it.  And how could they?  We can’t spend or regulate our way out of the economic crisis.  Instead, we need to look at the real economic challenges facing us, like health care costs and taxation.

But mostly, I think what the markets are responding to is the need for leadership.  When Obama let Congressional Democrats write the stimulus bill for him, he wasn’t showing leadership.  When he met with Congressional Republicans and told them to get on board because “I won,” he wasn’t showing leadership.  The markets sense that we have a new president, but not necessarily a new leader.  And the markets are responding accordingly.

I’m hopeful that the president will learn on the job.  He should not have let Congressional Democrats write the stimulus bill for him.  And he should have listened to more Republican ideas.  But it’s not too late for him to start heading in the right direction.  For the sake of the country, let’s hope he does.

-Randy Hill