The Blog

Roseanne Colletti: Mining the MJ Market

2009-07-10T22:31:42Z

I admit to a bit of morbid curiosity. I was not only interested in finding out what kind of Michael Jackson memorabilia has been selling since the death of the pop icon, but was also curious about their price and potential value as investments.

To that end I picked up the phone and called Dave Margulius, publisher of collectorsweekly.com. He gave me a primer of five rules for collectors, a least for collectors who are paying for the privilege.

Rule#1-Emotional Connection
"Do you love it"? He asked. "If the item turns out to be monetarily worthless, would you still be happy to possess it"? Margulius advises making the purchase only if the answer is yes. The last thing you want is to have buyer's remorse because you were caught up in the hype of the moment.

Rule#2-Displayability
While you purchase something for yourself, you also do so for the purpose of showing it off. Ask yourself how will it appear on your bookshelf, wall, or coffee table. Is the memento visually appealing? Even more importantly, will your significant other allow it inside the house? "A Michael Jackson signed guitar might be really cool and displayable because you can pick it up and play "Billie Jean", whereas an original studio executives copy of the 35mm film version of "Thriller" in its original metal canister might be unique but pretty boring to look at," advises Dave.

Rule#3-Buy Mass-Produced
Here Dave takes a contrarian point-of-view, but there is logic to it. Personally used items are appealing because of their exclusivity. At the same time, they can be the most difficult to authenticate. Sellers know buyers will jump at the chance of something personal and exclusive and the unscrupulous will fabricate to meet that demand.

Rule#4-Develop a Theme
Try to build your collection around a theme-a noteworthy event such as Michael Jackson's memorial service, or a specific article of clothing such as his hats or gloves. "Not only will your collection be complementary and complete, but you will also become a real expert on the items you choose. You can potentially create a website to showcase it and interested sellers and buyers will know how to contact you.

Rule#5-Confirm the Back Story
One of the biggest questions when making a purchase online is: is this real? Apparently, the "letter of authenticity" isn't enough these days because creating phony "genuine" articles is easy with today's technology. Dave suggests DNA testing by a reputable grading agency if you're considering a substantial purchase. "Mass media photographs or article mentions such as MJ wearing the exact item are also helpful," counsels Dave.

Now that you have a script to follow for MJ collectibles and others, what King of Pop items are selling best on E-bay? MJ fedora hats both black and white, signed Michael Jackson guitars, "Beat It" style red leather jackets, signed posters and photographs and Michael Jackson and Jackson five picture disc albums.

Yes, prices have increased since the music star's untimely death. Over the long haul, some items may increase in value while others won't. Remember value to the collector is in large part based on personal perception. Thanks Dave, nice picking your brain.

(If you want to see more of my stories and new GossipGrams go to nbcnewyork.com)

Steve Parker: This weekend's automotive talk shows

2009-07-10T20:45:02Z

Join us LIVE Saturday and Sunday at 5pm Pacific time on www.TalkRadioOne.com for our exclusive LIVE motoring and motorsports talk shows!

Steve Parker's The Car Nut Show
Saturday starting at 5pm Pacific

The dreaded Clunker Law! If you're an enthusiast, what does it mean to you? Peter MacGillivray, vice president of SEMA, the world's largest auto aftermarket trade group, joins Steve and explains what the law means and how SEMA fine-tuned it in the halls of Congress to make the law fit the world of the car collector! And he'll take your calls, too. Plus, GM exits bankruptcy, if your GM and Chrysler warranties will be in effect when you need them, and a look at one of the many cars Steve's driven recently. Be sure to call-in and join the action!

Steve Parker's World Racing Roundup
Sunday starting at 5pm

The economy is hitting racing worldwide, and hitting it hard. Jim Peltz, motorsports writer for the LOS ANGELES TIMES, joins Steve live and on-the-air to go over the crucial happenings - and cutbacks -- in IndyCar, NASCAR, Formula 1 and other major series. NASCAR's Jeremy Mayfield, suspended indefinitely for an alleged drug test violation, beat NASCAR in court but they still won't let him race --- what's up with that? Plus all the results from this weekend's world of racing. Be sure to call- in and let us know what you think!

The call-in number is: 213-341-4353. Podcasts of the shows are available one hour after the live shows' conclusions. That's this Saturday and Sunday at 5pm USA Pacific time on www.TalkRadioOne.com!

Rick Smith: What Is Your Primary Color? And How Will It Impact Your Career?

2009-07-10T19:21:18Z

Are you in a job that leverages your strengths and passions every day?

As your career continues on its current direction, are you getting closer to your ideal role, or farther away from it?

Are you willing to invest 15 minutes of your life to find out?

I am excited to debut on the HuffingtonPost the Primary Color Assessment. This tool was conceived from a single insight I had 8 years ago, and developed and tested since that time in partnership with a leading industrial psychologist.

For a limited time, I am making this available to all HuffingtonPost readers for free! (and NO, this is not a sales pitch for ANYTHING. really.)

First, Some Background

In early 2000, while conducting research for a white paper on leadership, I became increasingly frustrated with the amount of complexity associated with describing human ability (and the resulting absence of usefulness). In a cab leaving LaGuardia airport, I noticed a billboard with three overlapping circles representing the primary colors, and wondered, "Why is there not a similarly simplistic model with which we can understand and analyze our own abilities?" In the cab, I scribbled down on a napkin this image:

I then completed the diagram with the logical extensions (leadership combined with execution is management, leadership with curiosity is creativity, etcetera).

Over the next several years, I continued to refine and test this model, eventually using this framework to develop a spectrum of ability. Working with psychologists and other experts, I was able to mathematically map distinct sets of behaviors onto specific sections of the spectrum...

Now, this assessment can help you identify your own unique Primary Color - that point on the spectrum that is unique to your greatest strengths and passions. It also allows you to identify the region of the spectrum that your current job occupies - and highlights how close or far your primary color is to that. Close? Then you are more likely to be satisfied at work and developing rapidly. Far away? Likley frustrated and potentially stalled.

Additional research will even allow for the mapping of specific career paths over time (in this case, a Business Consulting career), or to project what types of jobs others with your color find the most satisfying as their career progresses. The future applications of this tool are extremely exciting.

I am a Purple Heart. My wife is an Electric Lime, and my daughter is a Candy Apple Red.

What is your Primary Color? Take the test now and find out!

www.primarycolorassessment.com

This post was originally published at RickSmith.me
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Andrea Chalupa: Government Health Care? Not a Health Scare

2009-07-10T19:03:13Z

I want my universal health care. I want our country to have a simple system like the Europeans enjoy. Like Katharine Zaleski, I've gotten sick abroad and have been blown away by how easy and cheap it was to be treated by a doctor in Europe. The unchecked greed of America's capitalism has been backed into a corner, we have it on the ropes. It's left our health care system in shambles, so let's finish it off. Profits have no place where people's lives are concerned, where the heartbreak and stress of raising a sick child is concerned.

Lou Carlozo has a healthy, beautiful son, but he lives with the special challenge of Sensory Integration Dysfunction (SID). Lou's insurance, during his 16 years as a reporter for the Chicago Tribune, fought him every step of the way in seeking covered treatment for his son. For Walletpop.com, Lou shares this struggle and breaks down the corrupt tactics of the industry:

A lot of people with vested interests in the Way Things Are will likely say some very scary things about health care reform to the American people...As a Chicago Tribune reporter, I heard many people at insurance companies acknowledge off the record that the system is designed to make people give up and pay up. What should be routine claims get denied on a technicality, often on purpose. And so you fight and fight until you either just decide to pay the bill, or maybe reach a compromise you shouldn't have had to reach in the first place.

Lou also shares some interesting history on the battle for universal health care:

The last president to take a stab at universal health care before Bill Clinton? That would be Richard Nixon -- the very, very Republican Richard Nixon. We haven't heard the likes of, say, former Sen. Bill Frist of Tennessee open his mouth on the issue, but you can trust him as far as you can throw him: His family made a fortune in the health care biz under the Way Things Are, and at one point his Hospital Corporation of America (founded with his dad and brother) paid more than $800 million in criminal penalties for Medicare fraud.

To read more of Lou's touching and empowering article, check it out here.

Eve Blossom: Women Entrepreneurs: Opportunities Where?

2009-07-10T18:34:55Z

With big-name thinkers and doers in town for the annual Aspen Ideas Festival last week, conversations were compelling but one session still lingers in my mind. At the Doerr-Hosier Center, where several business experts discussed America's role in the global economy, WNYC host Brian Lehrer introduced the diverse panelists for a live broadcast show before an audience loaded with entrepreneurs and I noticed a glaring absence.

I've enjoyed Lehrer's show in the past and the panel's live broadcast aspect was an exciting format. The topic was also relevant to my social entrepreneurship work in Southeast Asia collaborating with artisans to produce textiles. The discussion brought together TIAA-CREF president and CEO Roger Ferguson, award-winning economist Raghuram Rajan, Philips president and CEO Gerard Kleisterlee, and Wall Street Journal economics editor David Wessel.

Lehrer asked the panelists, "At this time, if you could start a business anywhere in the world, where would you start a new business and why?" As each one started to answer the question, it occurred to me that the diverse panel was inadvertently missing a woman's perspective.

Rajan told the audience that there are many opportunities in Asia since service businesses are under-represented there and the population that can afford services is growing. Ferguson made many great points and suggested targeting areas close to universities and urban centers. As an American businesswoman whose company Lulan Artisans, http://www.lulan.com, focuses on economic options for women, families, and communities in developing countries, I was sure that women around the world would answer Lehrer's question differently.

Some Middle Eastern countries prohibit women from owning businesses by law. Even where there are no laws stopping women, cultural barriers persist in other countries. India is not an easy place for a woman to start her own business. While there are examples of women who have succeeded there, societal norms still don't entirely support it. And, when laws and unspoken rules don't edge women out, lack of support, networks, and investment can still stand in the way.

Access to capital, peer mentoring groups, social acceptance, precedents from other women, and a host of other factors still make the United States and Canada the best countries for a woman to start a company. There are other countries that also support women-led businesses, such as in Scandinavia and Australia, but the largest growth of women-led businesses over the past 10 years was in the United States. The number of women-owned firms in the United States has skyrocketed: they account for over 30% percent of all businesses in the United States for 55 percent of new startups.

Listening to the panelists speak in turn I wondered, "What would the economy look like if women the world over had the same opportunities I did?" We do know that it would change the state of poverty substantially. Current transformations in the world economy have changed social development in all countries but the trend shows increased poverty of women, due to lack of opportunity in markets, not a decrease. Solution: participation and changes in economic structures that ensure access for all women to resources, opportunities and public services.

In addition, it would likely begin to reduce the horrific human trafficking epidemic by giving women and families more opportunities to earn a living. Such a shift would foster cultures where women are respected and girls are better cared for. Over time, these communities will thrive on productivity and ideas, instead of repression and fear. The communities that don't discriminate on the basis of gender are those most suited to competing on a global stage. After all, these businesses can maximize their talent pool instead of cutting it in half.

Realizing that a woman's perspective and voice was not represented on the panel and concerned that the answers to Lehrer's question missed the point, I waited for the question and answer session. As soon as the floor opened up, on behalf of women who have ever dreamed of starting a company, I stepped up to the mic.

Jeff Kreisler: This Week In Cheating

2009-07-10T18:24:51Z

Some Great Cheating this past week... in case you missed it.

Binge & Cheat
"Ex-executive accuses insurance giant of 'purging' customers"
The Cheater Says: Well, duh. How else are they supposed to exploit people and make billions? Geesh. I suppose you think health care "reform" will change everything, too, right? Yeah, mandating health insurance... that's really going to hurt the... health insurance indu$try. Hooray!

Goldman Cheats
Ex-Worker Steals Goldman Sachs Code.
The Cheater Says: Kudos, young cheater! Aim high! Way to go for Goldman, connected to all the money in the world. Good luck and send tips.

Cheat Dot Com on TheStreet.com
Lenny Dykstra Files For Bankruptcy
The Cheater Says: Dykstra writes a financial column for TheStreet.com... and now he's bankrupt. Jim Cramer runs TheStreet.com and is about 50-50 on stock picks and famously admittedly to manipulating the market...
Seems like a good place to throw away your money. Some cheater will be there to catch it.

I Always Cheat Like... Nobody's Watching Me
CIA director admitted lying to Congress
and
Federal Prosecutors Won't Pursue Subprime Cheats
The Cheater Says: Whether cheating him or cheating with him, there's no better family member than Uncle Sam. (He's less "grabby" than your other uncle, too...)

Jeff Kreisler's new satire, Get Rich Cheating, is a Boston Globe bestseller and is now available from HarperCollins.
GetRichCheating.com

Chris Gunn: U.S. Hispanic Chamber Challenged on Its Small Business Credentials by ASBL

2009-07-10T17:30:33Z

The American Small Business League (ASBL) released the following press release this morning. In it, the ASBL challenges the U.S. Hispanic Chamber of Commerce to, "put-up or shut-up," and to, "produce any press releases, media appearances, legislation or lawsuits filed by the chamber that would indicate the chamber has ever supported or worked towards the removal of large firms from federal small business contracting programs."

The ASBL has estimated that every year up to $100 billion in federal contracts intended for small businesses are awarded to Fortune 500 corporations and other clearly large firms around the world. Now, with the introduction of H.R. 2568, the small business community has an opportunity to stop these abuses and redirect these government funds to America's middle class.

Small businesses are the backbone of our nation's economy. According to the U.S. Census Bureau, 90 percent of all American firms have less than 20 employees and those firms are responsible for up to 97 percent of net new jobs.

It is not reasonable that the U.S. Hispanic Chamber of Commerce would refuse to back legislation that would redirect billions of dollars in federal infrastructure spending to our nation's chief job creators, its small businesses.

______

Petaluma, Calif. - After being criticized by the American Small business League (ASBL) for refusing to support legislation to stop widespread fraud and abuse in federal small business contracting programs, on July 1, the U.S. Hispanic Chamber of Commerce (USHCC) issued an abrasive and grossly misleading press release attempting to reaffirm its commitment to "comprehensive and substantive federal contracting reform."

The USHCC's commitment to contracting reform was called into question by the ASBL after the chamber refused to offer its support to H.R. 2568, the Fairness and Transparency in Contracting Act of 2009. H.R. 2568 is the only legislation written to stop the flow of billions of dollars in federal small business contracts to Fortune 500 corporations and foreign-owned firms.

Since 2003, more than a dozen federal investigations have reported that every year billions of dollars in government small business contracts are awarded to Fortune 500 corporations and thousands of other clearly large firms around the world. The ASBL estimates that the diversion of federal small business contracts to large corporations could exceed $100 billion a year.

In its press release the USHCC and its Chairman David C. Lizárraga touted Chairwoman of the House Committee on Small Business Nydia Velázquez as the "principle champion" of reform on small business contracting issues. The USHCC has never supported any policies, or pushed for the removal of corporate giants from federal small business contracting programs, and Chairwoman Velázquez has never proposed legislation or policy that would end the abuses. Since 2002, ASBL President Lloyd Chapman and the ASBL have been the primary advocates of federal small business contracting reform.

The ASBL challenges the USHCC to put-up or shut-up. Chapman challenges the USHCC to produce any press releases, media appearances, legislation or lawsuits filed by the chamber that would indicate the chamber has ever supported or worked towards the removal of large firms from federal small business contracting programs.

"The U.S. Hispanic Chamber of Commerce has shown no commitment to removing corporate giants from small business contracting programs. To see that, all you have to do is look at their track record on this issue," ASBL President Lloyd Chapman said. "I seriously doubt that they will be able to produce any evidence of any kind to prove that they have done anything to stem the flow of federal small business contracts to Fortune 500 corporations."

Harry Hanbury: The Fed Under Fire (VIDEO)

2009-07-10T17:07:13Z

The Federal Reserve is one of the most powerful and secretive institutions in Washington, long considered beyond the reach of lawmakers. But now, as details emerge of how the Fed secretly doled out more than a trillion dollars during the financial crisis, a rare bipartisan movement in Congress demands that the Fed be held accountable.

WATCH:

Amnesty International: Yahoo!, Click Refresh Button on Internet Censorship

2009-07-10T16:49:32Z

By Tony Cruz, Amnesty International USA's Business & Economic Relations Group

Yahoo! held its annual shareholder meeting on June 25th -- the first meeting with the company's new CEO, Carol Bartz. In the meeting, Ms. Bartz attempted to show a new face of Yahoo; a bolder and progressive "no-nonsense" Yahoo. It was my third Yahoo! shareholder meeting and a chance to see if Yahoo!'s new face meant new business practices that would respect human rights. I presented two questions:

Since 2006, what concrete steps has Yahoo taken to address the problem of Internet censorship in China?

Will you publicly support the Global Online Freedom Act; legislation that would give you the power to fight the Chinese government?

Ms. Bartz responded:

Okay, I'm going to go real simple here. Yahoo is not incorporated to fix China. I'm sorry. It wasn't incorporated to fix China. It was incorporated to give people a free flow of information. Ten years ago the company made a mistake but you can't hold us up as the bad boy forever. We have worked better, harder, faster than most companies to respect human rights and to try and make a difference. But it is not our job to fix the Chinese government. It's that simple. We will respect human rights, we will do what's right, but we're not going to take on every government in the world as our mandate. That's not the mandate that the shareholders gave us.

Not only did Ms. Bartz avoid answering my questions, she also seemed to have misconstrued their meaning. Amnesty International members are not asking Yahoo! to "fix" China. And we haven't singled out Yahoo! in our campaign against Internet censorship. We've targeted Microsoft and Google, too. Because Yahoo!'s actions have led to the highly publicized imprisonment of two Chinese dissidents, we've asked the company to call for the release of Shi Tao and to adopt business practices that actively support human rights. You can take action right now to remind them.

After a civil suit was settled with Shi Tao's family, Yahoo! attempted to "fix" itself. Yahoo! hired a new CEO and implemented a new marketing strategy to distance itself from its tarnished image. The company even created a Business and Human Rights Program. But Shi Tao remains in prison and Yahoo! continues to censor its search engine in China. (I wonder how that technology has helped the Chinese government to block browser searches using the key-word Uighur this week.) So, I still don't understand how Yahoo! "will respect human rights" and "will do what's right" when the company hasn't addressed the problem of Internet censorship in China - a problem that limits innovation and restricts freedom of expression.

The Internet is vital in bringing change to China, and increasingly so around the world. It appears the Obama administration agree, since they objected to China's mandated web filtering software. Former Amnesty USA Chair Chip Pitts has been blogging about tech companies and democratic rights and the reaction in the US Senate, following the news that Nokia provided technology to the Iranian government that was used to monitor and repress protesters and dissidents. Hmm... doesn't that sound familiar?

Pitts makes a good point: whether the Internet's "liberalizing effect" on the flow of information will continue greatly depends on how Internet technology companies, NGOs and governments interact. Take action and remind Yahoo!, Google and Microsoft that they, too, bear the burden of promoting the freedom of information no matter where they operate. It's time to get behind the Global Online Freedom Act.

Jill Schlesinger: GM Bankruptcy: 40 Days and 40 Nights to a New Era

2009-07-10T15:15:57Z

Noah endured 40 days and 40 nights on his ark, the Hebrews traveled for 40 days and nights before the parting of the Red Sea and now, after 40 days and nights, General Motors has emerged from bankruptcy as of 6:30 this morning.

The new GM is leaner: It's exiting bankruptcy with $48 billion in debt, a massive reduction from the $176 billion it was carrying when it started the process; it will have four brands (Chevrolet, Buick, Cadillac and GMC) versus the eight it had before; the number of manufacturing facilities will now be 34 from 47; and the number of employees eventually will be reduced by nearly a third from the end of 2008.

In a press conference this morning, CEO Frederick "Fritz" Henderson said that the new GM would focus on three things: customers, cars and culture. That's a nice slogan, but now the hard work begins. GM must now create and produce cars that consumers want to buy. Maybe they're on the way--GM sold 9,300 Chevrolet Camaros in June.

Henderson said that the goal "is to make each and every General Motors car, truck and crossover the best-in-class." I would settle for the company producing vehicles at a profit, which would be a welcome new development for a company that lost $80 billion over the last four years.

It's been a long road (pardon the pun) for GM and much has gone wrong over the years. But on the dawn of GM's new era, I want to believe that the company can succeed. Sure, that might be wishful thinking, but considering that US taxpayers now own 60.8% of GM, we should all root for its success.

Image by Flickr User Stomashek, cc 2.0

For more on GM, continue on moneywatch.com

Jonathan Littman: The Ten Office Disruptors

2009-07-10T03:56:00Z

Summer time is here, and when you manage to make it into the office you find that the Disruptors get on your nerves even more than usual. The best defense? A coffee run, closing the door, or blocking your cube. Our favorite strategy: working from your beach shack.

1. Unprepared
Never brings a pen to meetings. Forgot to read the memo. It's not just that he's an occasional dimwit -- we all have those moments when we suffer a mind leak. The problem is that Unprepared always seems to want to borrow your pen.

2. Cud
That crud a cow works over in its massive mandible all day long. Remind you of anyone? Like maybe your office's endless eater? It's bad enough that they eat more than the Three Little Pigs, but you are doomed to suffer the horrid accompanying sound effects.

3. Bad Comedian
Jokes spew from him like bees from a broken hive. The stand-up routine around the water cooler. E-mails. They're lame. Tasteless. A few are funny. Don't laugh, you're only encouraging him. There's no easy out -- except maybe the fire escape.

4. Yackety Yak
His constant chattering gives other people license to talk and then the volume rachets up exponentially. You can cough. Clear your throat. Nothing short of a brazen "Shut up!" clamps Yackety Yak's voice hole.

5. Swipe
That sticky fingered culprit who helps himself to things with every intention of never returning them. Staplers, pencils, notepads -- stuff from your desk vanishes. Even when you've deduced the identity of the Swipe, you still can't figure out what happened to the missing items. And Swipe never has anything worth swiping in return.

6. Buzzsaw
Loves to pepper his office jawing with buzzwords, heaping the latest terms and clichés on top of the old. A slang compost heap composed of "Shoot you an email," "Touch base," "Circle back," "Let's take that one offline," "Mission Critical," "Raising the bar," "Drill down." It's all just office filler. Pinned to the dingy carpet Buzzsaw probably couldn't explain half of their spewage. We're sure you'd agree "110 percent."

7. Space Invader
Crashes your personal space. If they're close enough to strangle you, they're too close. If you can make out the rotting molars, pitted acne and are overcome by the halitosis -- they're way too close.

8. Sound FX
Everyone has a Clicker, the frustrated musician who must click one object on their desk against another, like a pen against a coffee mug. Slurper can't seem to drink anything -- coffee, water, soup -- without that obtrusive sucking noise. And Squeaker, whose desk chair squeals every time he moves.

9. Vulture
Crashes any and all meetings that feature food. Many of these corporate parasites are so lousy for calories that they'll gladly stomach an extra meeting that has nothing to do with their work for an impromptu feed.

10. Play By Play
Can't make a move without broadcasting it: "I'm going to refill the toner!" "I'm off to the Mexican place for lunch!" "I'll be in the bathroom if anyone calls!" These phrases are rhetorical, you quickly learn -- no response is expected. And there's no way to stop the announcements. should bother us -- they just do.

Jonathan Littman is the co-author of the new book I HATE PEOPLE! (Little, Brown and Company; June 2009) with Marc Hershon. A Contributing Editor at Playboy, Jonathan is the co-author of the best selling Art of Innovation.

Jacob Frydman: The Case for Public-Private Partnerships

2009-07-10T02:55:06Z

California is the world's 10th largest economy. The mansions of Beverly Hills, tech giants of Silicon Valley, and stars of Hollywood all evoke thoughts of wealth and success. Simply put, California is a giant.

In the wake of the sub-prime mortgage crisis however, this giant is being brought to its knees -- straddled with a mind-blowing 23.4 billion dollar budget shortfall and no relief within sight. Its cities are declaring bankruptcy, the most recent being the city of Vallejo, located in the affluent San Francisco Bay area. State and local governments are desperate for capital -- a shrinking tax base and the lack of credit has resulted in an inability to meet budgetary needs and has forced cash constrained governments to look for new ways to raise cash.

Simultaneously, it has become increasingly obvious at the Federal, State and local levels, that aging infrastructure in our country cannot continue to be properly serviced. Maintenance costs are prohibitively high while replacement is financially unthinkable. The American Society of Civil Engineers has estimated the un-met need for such maintenance costs to be $2.2 trillion over the next five years. Political infighting in many states makes decisive action impossible, leaving most constituencies with outdated, underfunded and overused infrastructure.

Given these realities, many governments are looking to privatize their infrastructure, including tolls roads and parking systems, to provide capital and eliminate costly maintenance and operational burdens. The privatization of public infrastructure is not a novel concept; however the recent economic downturn may well be the accelerant which takes this process from an orderly transition to a needs-based avalanche.

In today's world, private investors and local and state governments, through public-private partnerships (P3's), have the unique opportunity to satisfy each other's needs. Through this arrangement, the skills and assets of each are shared to affect a joint undertaking to provide facilities or services to the general public. In New York State alone, over $51 billion of infrastructure assets are being reviewed for possible infrastructure P3's.

There are some who challenge this idea and suggest that private entities should not operate or profit from public infrastructure. Yet the facts are compelling in pointing towards such public-private partnerships. In the first instance the assets typically remain owned by the government, and are only leased to the private entity. Moreover, the asset continues to be available to all the same users who previously benefited from that asset.

While many governments seek to operate their infrastructure efficiently, when they face crippling cash constraints, they simply don't have the money available to improve and enhance those assets. This creates a catch-22 in that the government doesn't have the money to improve the system in a fashion where additional revenue can be generated over time. Private enterprise does -- and by virtue of the private sector's willingness to invest in these assets, the public benefits from improved operations and services, not to mention the allocation of all current and future maintenance, repair, and replacement obligations to the private entity. Obviously, the private investor seeks to make a return on its investment, and generally does so with increased user fees. As a result, private investors are usually able to pay large up-front payments to the governmental entity for the right to collect revenues over a long-term lease, usually in excess of 50 years.

Even if the government had the capital necessary to make these improvements, the government does not hire entrepreneurial people who get paid to take risks. Typically, caretakers of infrastructure assets are risk adverse and preserve the assets without "rocking the boat". Individuals running Departments of Transportation or parking systems are not paid bonuses or increased revenue for taking risks. They are in fact incentivized to avoid risk and keep things going just as they are, especially in these difficult economic times.

Though private enterprise is in a position to bring about necessary and positive changes, it is also able to preserve the status quo where such maintenance benefits the community. Some private investors (including this author) believe that a successful private-public partnership demands the participation of organized labor. Public infrastructure, such as parking systems and toll roads are frequently staffed and maintained by union employees. These workers have invaluable experience in their respective positions and offer any private-public partnership the opportunity for a seamless transition of operations. Private investors have shown that a labor-friendly business model benefits both the private investor- by offering an experienced and capable workforce, and the general public-by providing high-paying local jobs.

Public-private partnerships should be embraced rather than feared. The recent economic downturn has left our economy reeling and forced state and local governments to rethink the way they do business. Fortunately, a unique opportunity has emerged in the form of public-private partnerships, an alliance which stands to benefit all parties involved. In these trying economic times, a government's success may well depend on its ability to explore non-traditional sources of revenue. California can be a giant again, but only if it maximizes its resources and harnesses the drive and ingenuity of America's entrepreneurs.

Les Leopold: Wall Street's Collateral Damage (Before You Take Public Transportation, Ask Your Banker)

2009-07-09T23:02:41Z

As soon as anyone calls for tight controls on Wall Street, pundits and politicians rush to the defense of "financial innovation." Even after the catastrophic collapse of the latest and greatest financial tools, like synthetic collateralized debt obligations and their many offspring, politicians still seem to believe that financial engineers are always on the cusp of developing new and wondrous products that will make the world a better place... like maybe the financial equivalent of solar energy or wind turbines. But in reality our imaginative financial whizzes invent highly profitable casino games to beat the system... or, as the case may be, smash it into the ground. (See The Looting of America)

Their favorite game is elegantly called "regulatory arbitrage" -- how to find ways around the government rules, and make lots of money doing so. It's particularly profitable to invent new financial tools that allow the wealthy and large financial institutions to avoid taxes, which leaves the rest of us to pay more or be left with lousier public services.

"Not so!" say the financial gurus. They claim these innovative tools actually help public agencies obtain more capital at cheaper rates so that they can provide better public services. Even some highly reputable journalists seem to agree. Here's how NPR's Adam Davidson put it when contemplating the current financial collapse:

"There is a tragedy here too. Over the last thirty years, there have been a series of financial innovations that have just been plain good. They have allowed city governments, local governments, to get money more cheaply, which means more hospitals, more schools, betters sewers, you know, just basic good public services, and that whole system may be permanently broken by this crisis. And that means, really for the foreseeable future, there's just going to be less public service in the U.S."

But sometimes financial innovations are just plain bad, like the one that didn't work out so well for the nine Washington DC Metro riders who were killed in a crash on June 22. In all likelihood they died because they were riding in cars that inspectors said three years earlier should have been removed from the tracks in favor of newer, stronger subway cars. Those stronger cars were not deployed because the old cars had to stay on the tracks to fulfill the terms of a financial innovation called a "lease-back agreement."

Creative bankers and lawyers had figured out that non-profit public agencies pay no taxes and therefore have no use for tax breaks that come from the depreciation of fixed capital -- like subway cars and buses. So how about selling those tax breaks to banks and others who would love to shelter as much profit as possible? In return the public agencies would get some badly needed capital (capital that has not been forthcoming over the past forty years due to outrageous tax cuts for the super-wealthy, large corporations, and banks.)

This particular innovation is simple. The public agency sells its subway cars to the bank and then the bank leases them back to the public agency. The bank now has titular ownership and can claim the depreciation to shelter its profits, and the public agency gets the capital back while paying leasing fees to the banks each year. The subway cars stay on the tracks.

The banks love it because they get an excellent return from the lease, and they get the tax write-offs form the depreciation. The public agencies get the extra needed capital. It's win-win, isn't it?

Well, the banks aren't stupid. They build into the contracts as many fees as they can. There are up front fees to set up the deal and very hefty fees if the public agency wants to get out of the deal. Also, the banks make sure the agency obtains insurance from AAA-rated companies (like AIG used to be) to cover its lease payments. And if the insurer lost its top rating (like AIG did last September) then the contract goes into default and the public agency would have to pay even more hefty fees.

Well, you probably can a guess what happened to the Washington Metropolitan Area Transit Association (WMATA). To secure more capital it got entwined in twenty of these leaseback agreements.

These leases made it difficult for the WMATA to remove the thirty-year old 1000 Series Metro cars from the tracks until the leases expired in 2014, even though the inspectors warned that those cars were less crash-worthy than the newer models. The WMATA did so because they could not handle the fees involved in breaking the leases. And they couldn't afford to pull the cars and still pay the leases. Bloomberg News explains that

"The National Transportation Safety Board had advised Metro to improve its rail cars after a January 1996 collision that killed a train operator. In a 2006 report, the NTSB said it was dropping the matter because WMATA was citing funding concerns related to lease-back agreements in its decision to resist the recommendations to retire or overhaul the 1000 Series rail cars."

Now that's financial engineering with a vengeance.

The IRS finally decided that those leases were, duh, tax dodges! It is demanding that the parties shut them down. There's even more confusion because, as we all know, AIG is no longer AAA-rated which puts the lease-back agreements in technical default. And we don't know the half of it because the lease-back agreements contain confidentiality clauses which prevent prying public eyes from examining the details.

So the next time a lobbyist or a politician rushes to the defense of Wall Street's innovations, let them explain it to the families of those who died from the collateral damage.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

Dennis Whittle: The Power of Proximity

2009-07-09T22:40:23Z

The physical proximity of talented, highly educated people has a powerful effect on innovation and economic growth. Places that bring together diverse talent accelerate the local rate of economic evolution. When large numbers of entrepreneurs, financiers, engineers, designers, and other smart, creative people are constantly bumping into one another inside and outside of work, business ideas are formed, sharpened, executed, and--if successful--expanded. The more smart people, and the denser the connections between them, the faster it all goes.

That is from a recent McKinsey study. It has much relevance for economic development in poorer countries as well as the US. There have been a number of attempts to create physical clusters of economic activity in the developing world, most of which have failed because we don't yet understand the conditions leading to cluster formation (or how to create these conditions from scratch). And while the physical dimension of clusters remains very important (I am always amazed at how much I can get done on a short visit to Silicon Valley), the Internet opens up new virtual clustering possibilities.

We are starting to see clustering behavior on GlobalGiving and are rolling out features to encourage more of this. Since no one knows exactly what works, there is a large element of trial and error, which puts a premium on our ability to experiment rapidly with new features, keeping those that work, and dropping those that don't.

(Thanks to Dana Messick for the pointer.)

[GlobalGiving]

Arianna Huffington: Keeping the Spotlight on Lobbying Outrages and Economic Hard Times

2009-07-09T21:58:39Z

I'm pleased to announce the launch today of two new HuffPost features designed to keep the spotlight on two vital stories: the overwhelming role that lobbying is playing right now in undermining reform (of Wall Street, energy, and now health care), and on the full extent of the economic hardship caused by the ongoing downturn.

Let's start with lobbying. Along with many others, I've written extensively about how lobbying consistently waters down, guts, or out-and-out kills attempts to serve the public interest. We've connected the dots between the special money that pours into Washington and the reform-lite legislation that sputters out. We've pointed fingers, named names, and fanned the flames of outrage.

And yet the lobbyists remain as pervasive -- and even more powerful -- than ever. Just take a look at what's happening with health care. The Washington Post and TPM [via Open Secrets] this week offered up some details of the unprecedented lobbying effort aimed at undermining health care reform: $1 million a day spent on lobbying; 350 former Members of Congress and Congressional staffers hired to influence the debate, including half a dozen former staffers of Sen. Max Baucus, who remains a human roadblock to real health care reform; the hiring of bipartisan big gun arm-twisters like Bob Dole, Tom Daschle, Dick Armey, and Dick Gephardt to try to sway their former colleagues.

Stories like that tend to pop up, make our blood pressure rise, then quickly drop off the media radar until the next outrage grabs our attention. But the sporadic -- and often scattered -- nature of the media's coverage of the DC quid pro dough game is one of the reasons the special interests have been able to maintain their power. When another example of the lobbyists' power to undermine real reform hits the headlines, they just lay low until the public's focus moves on to the next hot story, and then get back to business as usual.

Which is why we have decided to launch LobbyBlog, an ongoing, consistently refreshed collection of the latest information on lobbying, lobbyists, the politicians whose arms they are twisting, and the tragic impact they are having on the kind of legislation that is passed -- or not passed -- and therefore has on the lives of millions of Americans.

LobbyBlog will be edited and served up with a heaping helping of attitude by HuffPost's Eat the Press Editor Jason Linkins. But all HuffPost editors and reporters will be contributing.

And we want you to be a big part of LobbyBlog. Send us tips (big or small), news stories you think Jason should be highlighting, outrages you want to share with the world, and leads you want our reporters to follow. We hope you will be a big part of the process and the discussion. You can connect with Jason at huffpostlobbywatch@gmail.com. Here is the first installment, offering the latest on lobbying efforts on the environment, on heath care reform, and banking reform.

The other new feature is a work in progress. It's called The Real Misery Index -- and it aims to provide a more accurate gauge of what is happening in the lives of millions of Americans as a result of the ongoing economic hard times.

The original Misery Index is a formula created by economist Arthur Okun that adds the current unemployment rate to the yearly increase in the consumer price index (a measure of inflation). It's an easily digestible number that the media loves to use to give a snapshot of how well or badly the economy is doing.

Unfortunately, it's not a very useful statistic. For starters, the unemployment stat traditionally used only represents a portion of the jobless since it doesn't include part-time workers and those who have given up looking for work. Plus, the consumer price index has been criticized for under-emphasizing essential goods such as food and gas. And the original Misery Index doesn't include a whole host of economic indicators that have a huge impact on the actual misery of millions of Americans -- things like the latest numbers on people losing their homes, people losing their health care, and people going bankrupt or defaulting on their credit cards.

The rise in the cost of gas is important -- but what does it matter if you don't have a home to heat or a car to drive?

In short, we feel there is a need to create a new and improved Misery Index. The Real Misery Index.

To this end, HuffPost News Editor Marcus Baram has been consulting with economists and coming up with a better formulation that includes more accurate employment numbers and a wider range of consumer price statistics. But even this number -- though a great improvement -- does not fully capture economic reality, as it would not include foreclosures, credit card defaults, and bankruptcies.

So, starting Monday, we are going to start featuring a Real Misery Index chart that also lists the latest statistics on those other misery-causing factors. And we'd love some input from any economists, accountants, or savvy readers out there with ideas on how to make our Real Misery Index as useful as possible. Send your suggestions to misery@huffingtonpost.com.

And beyond highlighting the numbers in the Real Misery Index, we are committed to telling the story of those being affected by the economic hard times -- to putting flesh and blood on the gloomy statistics. That's why we have one of our reporters, Arthur Delaney, dedicated to covering the Economic Impact beat.

So check out HuffPost's LobbyBlog, and send us your suggestions about our Real Misery Index. And let's keep the spotlight on both.