Russ: Good morning. This is the Business Makers Show, heard here and online at thebusinessmakers.com. This is that show about innovators, the business builders.

John: Okay, these people create. They're the artists of the free enterprise system, and they're also the athletes because they got the stamina to get it going, and make it go, and keep it going.

Russ: That's right, it's time for The Business Makers School of Business.

John: That's right and I ran into somebody, a couple of weeks ago. He's a banker at Whitney Bank. I was actually a taste taster for their chili cook-off contest, and they invited me to be a judge, and as I was leaving the premises, a guy comes up and he tells me how much he really likes the School of Business. It's informative and funny.

Russ: And we, therefore, like the Whitney bank and chili from their chili cook-off.

John: That's right. It was very good chili.

Russ: All right. We kick off the School of Business each Saturday morning with the quote of the day.

John: Quote of the day.

Russ: And our quote this morning is from E. F. Schumacher, the great British economist.

John: A British economist.

Russ: A British economist.

John: Okay.

Russ: It sort of epitomizes some of our problems. Here it is. "Infinite growth of material consumption in a finite world is impossible."

John: That's right. Sooner or later you hit the wall, baby.

Russ: All right, and that brings us to this week in business history. What do you have for us, John?

John: We have an action-packed, informational packed, and a somewhat humorous packed list of great things that happened in business history.

Russ: I can't wait.

John: This week in business history, in 1794, the United States government, the United States of America, establishes a permanent navy and authorizes the building of six warships.

[Music: "Anchors Away"]

Russ: Okay.

John: Where would we be without our navy?

Russ: There you go.

John: I'll tell you.

Russ: All right.

John: Okay, this week in business history, in 1845, a patent is awarded for an adhesive medical plaster which really was the precursor, the forerunner, of the Band-Aid.

Russ: Wow.

John: Okay.

Russ: Before then you couldn't put a Band-Aid on then?

John: No, you just kind of had to put mud on it or something. A Dr. Horace Harold Day and William H. Shecut received patent number 3,965 for an adhesive medical plaster. Think about it.

Russ: Cool.

John: This week in 1931, John McGraw-he's a major league player first and a manager, but anyway, in 1931 he said night baseball will never catch on.

Russ: Do we know if he lived long enough to see how wrong he was?

John: Well, even though night baseball is good because before then it was all in the daytime. If you were in to work or something, kids at school. they couldn't see the games.

Russ: Well, and in 1931, we were in the depths of the depression. A lot of people didn't have jobs then, so you didn't have anything to do in the daytime anyway.

John: But they didn't have money for a ticket.

Russ: That's true too, so there were all kinds of complexities.

John: Okay, moving on to 1937, spinach growers of Crystal City, Texas erect a statue of Popeye.

Russ: Man, you can only get this kind of material on the School of Business, right?

John: I know, but Popeye was like a-

Russ: -a huge advocate of spinach.

John: I mean-how many cartoon after cartoon, Popeye loved Olive Oil and Bluto, or somebody. That was his make moves on Olive Oil.

Russ: That was his nemesis, yeah.

John: If I were Popeye, I'd say go ahead and take her-you know.

Russ: I could do better.

John: But he would always get in a fight. He would just get the ever-loving crap beat out of him, and then all of a sudden, someone would slip him a can of spinach-

Russ: -and boom!

John: Boom! I mean-you wonder why Mark McGuire didn't eat spinach instead of the steroids he allegedly took.

Russ: Great point.

John: Or Barry Bonds-you know-

Russ: They should've just eaten spinach.

John: Why didn't they eat their spinach?

Russ: There you go.

John: All right, okay.

Russ: Good observation.

John: This week in business history, in 1941, Glen Miller begins work on his first movie for 21st Century Fox.

[Music: "In the Mood"]

John: This week in business history, 1943, an assassination attempt, one of many assassination attempts on Hitler, fails. A guy named Colonel Rudolf von Gertsdorff who reported to General Kluge, Chief of Intelligence, tried to kill Hitler and he had a concealed bomb, detonated by acid, sitting close to Hitler. Hitler had to leave the building early. This week in business history in 1953, Dr. Jonas Salk announces a vaccine to prevent polio.

Russ: And man-oh-man was that huge.

John: Tell me about it.

Russ: We grew up in that era, and everybody was so fearful.

John: I know.

Russ: And all of a sudden, there was a solution.

John: A solution.

Russ: Yeah.

John: I know.

Russ: Cool.

John: Why aren't there more solutions?

Russ: We need more of those, man.

John: We need more cures. Okay, this week in business history, the Ballad of David Crocket becomes the number one record in the United States. Can you believe that, the Ballad of David Crocket?

[Music: "The Balad of Davy Crocket"]

John: This week in business history, in 1963, The Beatles release their first album, Please, Please Me.

[Music: "Love Me Do"]

John: Okay, this week in 1972, Evel Knievel breaks 93 bones after successfully clearing 35 cars. Now, these were his bones. These weren't somebody else's bones.

Russ: Does that mean it was a success for him that cleared the 35 cars.

John: Or maybe he cleared 93 bones after breaking 35 cars. It's up for conjecture.

Russ: They kept score by broken bones.

John: That' right. Okay, this week in business history, in 1980, ABC's nightly Iran hostage crisis program was renamed Nightline with Ted Koppel.

Russ: Oh yeah.

John: Remember that? It was huge. I know. I was living in D.C. at the time, Washington D.C.

Russ: Well, remember it was like an extra to the nightly news, late night.

John: Because nobody could get enough of it, man.

Russ: Right, and he started off, remember, it was like day 8, and then the next night, day 9.

John: Yeah, America held hostage.

Russ: And finally they named it Nightline.

John: They had to.

Russ: Wow.

John: Yeah, because after the hostages were returned, which is not too far past 1980, after that-

Russ: Nightline continued.

John: Nightline continued because people liked-

Russ: Ted Koppel was Teddy good.

John: Ted Koppel, right, that red hair, man.

Russ: Yeah.

John: Okay, this week in business history, in 1981, John Lennon releases Watching the Wheels in the United Kingdom.

[Music: "Watching the Wheels"]

John: This week in business history, 1982, the musical Best Little Whore House in Texas closes its run in New York City after 1577 performances.

[Music: "LaGrange"]

Russ: Wow.

John: Okay, here's something that's monumental. This is something that really changed the direction of history, in my opinion. This week in business history, in 1989, the worse U.S. oil spill, the Exxon Valdez, spills over 10 million gallons, of oil that is, off Alaska. The tanker was captained by Joseph Hazelwood, who allegedly and later proved that he was drunk.

Russ: Okay, yeah, it was significant because it really gave the environmentalists a lot of fire power on how bad this can be.

John: I know.

Russ: But we haven't really had that kind of spill since then.

John: I know. Before and since then it's been pretty safe.

Russ: That's right.

John: And finally, this week in business history, in 1989, the first free election in the U.S.S.R., 190 million votes cast, and Boris Yeltsin wins.

Russ: Yeah, and that was a pretty legitimate election, wasn't it?

John: Yeah right. Yeah, and we're not going to see too many elections in that country anytime soon.

Russ: Well, I know.

John: Vladimir Putin still trying to pull the strings.

Russ: Right, but Yeltsin was pretty interesting. We all kind of liked Gorbochav and this election replaced him, but Yeltsin really kind of pushed them in the right direction, I think.

John: Well, yeah, because Gorbochav was still a communist, once a communist, always a communist.

Russ: And Yeltsin wasn't.

John: He was not. He was a democratic patriot.

Russ: Okay, but tipped the vodka a little bit, didn't he?

John: Yeah, he succumbed to the pressure of the office.

Russ: Is that what it was or-

John: I would say that had some pressure with it.

Russ: -or the pressure of the bottle?

John: Well, I'd say a little of both.

Russ: Okay. All right. Okay. All right. Does that wrap up the history lesson?

John: I guess that's a wrap. Okay.

Russ: Good job. You always look almost drained after it's over because you put so much into it, so-and that's a compliment.

John: No, I'm not drained. I'm fit as a fiddle and ready for the next segment.

Russ: All right, good. You better be because it's time for navigating business jargon.

John: Hey, I won last week.

Russ: I know you did. It was easy, and this one's going to be even easier.

John: Okay.

Russ: This is going to be so easy. I guarantee you it's going to be easy, and you're going to get it.

John: I know this is radio, but I wish people could see the smug look on your face. You know the word, I don't.

Russ: That's the way-

John: We agree a long time ago, it would be more fun if I did not know the word, but that doesn't mean you have to belittle me in the process.

Russ: No, it's a contest. We're going to see whether or not John is a winner or a loser this morning. The way it works is, I say the word- Say the word and then he guesses the meaning. But I know he knows this one. You ready?

John: Uh-Hunh (affirmative)

Russ: It's a term. It's an economic term. The Laffer curve.

John: Oh, the Laffer curve. That's named after Arthur Laffer.

Russ: Right.

John: He's still alive. He's a noted economist. His theory was if you lower tax rates, the government will get more revenue.

Russ: Yeah, that is correct. We're going to give you a winner. I think-

John: Oh, it was a big winner. I've even met him. I've even met the guy.

Russ: You've met him?

John: Yeah, of course, I have.

Russ: Well, then maybe that's-

John: I met him right after Arnold Schwarzenegger became governor.

Russ: Wow, that might be a disqualification for a win though, since you even know him.

John: Well, you should've screened me on this.

Russ: All right. But here's the real definition. It's a little bit different from the other perspective. The Laffer curve is a bell-shaped graph that shows that tax revenues increase and then fall, as marginal tax rates increase.

John: Yeah, right, so I just said the opposite. It still means the same-

Russ: It works a little bit, and then it just kills everything and dumps a bucket of cold water on the economy.

John: Yeah, because they do static analysis. They don't use dynamic scoring because people's behavior changes the more money you take away from them.

Russ: There you go. All right, and that brings us to dumbest moments in business history. Do you have a story for us?

John: Well, this started a cascade of dumb moments because this is probably the single most crucial element of our financial collapse that we're going through.

Russ: Wow, wow, okay.

John: And that is the formula.

Russ: Right.

John: Okay, there's a mathematician named David Lee, developed a Gaussian copula formula, and this is the mathematical formula that lead to the credit, the fault swaps, which got the whole thing unraveled.

Russ: Unraveled completely.

John: Yeah, because there's not enough insurance to back the failure of these secure type mortgages.

Russ: What did he do, just put the decimal point in the wrong place or something?

John: No, no, I think the captains of the universe that ran Wall Street didn't understand what they were doing.

Russ: Ah, did he?

John: A lot them, a lot of them will admit that too, to doing that.

Russ: Well, can you talk to this guy Lee. Could we get him on the show?

John: No, he's back in Beijing.

Russ: Oh, oh.

John: The communist government says he's working on project-

Russ: Something else now.

John: -which does not involve him ever having to come out and speak about it, so for all we know, he may be in jail.

Russ: So we can't get him on the show?

John: We can't get him on the show, but famous words, Mr. Lee himself said on this theory that the most dangerous part of it is when people believe everything coming out of it which is what exactly happened.

Russ: You got to be kidding me.

John: No, I'm not kidding you.

Russ: So, the guy that devised the formula that was used that evaporated trillions and trillions, says, "Hey, you can't believe this formula," and Wall Street was believing it and banking on it.

John: Right, yeah, yeah.

Russ: Good. That qualifies as a dumb moment.

John: Well, it's a dumb era.

Russ: All right, but before we wrap up this morning's School of Business, it's time for that PKF Texas, The Entrepreneur's Playbook.

John: Here's somebody who doesn't hide from us in Beijing. He comes in the front door, punctual every time.

Russ: That's right. Let's welcome Greg Price on the piano.

John: A one, and a two, and a-

[PKF Texas - The Entrepreneur's Playbook]

Russ: And that wraps up the School of Business. You're listening to The Business Makers Show heard here and online at thebusinessmakers.com.