Russ: This is The BusinessMakers Show, episode number 322 of that show that's always been focused on the innovators and the entrepreneurs.

John: That's right. These are the ones we really look up to in this show, 'cause nobody else really seems to do it as consistently. And, quite frankly, these are the people who really do most of the innovating that goes on in this country and turns those innovations into jobs and employment and helps the economy in ways that are - sometimes you just can't measure what they do. It's so great for this country.

Russ: Well, I think it's always been a sector that was under appreciated, misunderstood. And now in this anti-business environment that we've been living in for the past four or five years it's even more overlooked.

John: I don't think it's an anti-business climate.

Russ: What would you call it?

John: Well, for example, GE is a business, and they're getting all kinds of stuff thrown at 'em that's good, you know? I think they're an anti-free market. It's an anti-free market system, 'cause some businesses, you know, thrive on protectionism and high taxes and a lot of regulation, because it protects them for their competitors, and that's why they like to cozy up to the government, because the government will curry favor with these types of businesses, as opposed to others that are just trying to make a living.

Russ: You bet. You bet. All right, and by the way, it's time for those things that we've been doing lately - shout outs. We'd like to really give one to the EO Houston group, the Entrepreneurs Organization of Houston - a group of these people that have been together for a long, long time. They might have been the first entrepreneur group.

John: They've outlasted a lot of the marriages of the members of that group.

Russ: [Laughter] Exactly. They have.

John: I don't know. It just sounded like a funny thing to say.

Russ: But it's probably true.

John: It's probably true. Yeah.

Russ: Somebody ought to track that.

John: The other thing, you know we're living in kind of a questionable society when people belong to organizations longer than they've been married to their spouses.

Russ: Yeah, right.

John: Their various spouses. All right, and another shout out to the EnergyMakers Show. It's our new venture out there where we're literally interviewing energy innovators and entrepreneurs and policy makers and experts. It's at www.theenergymakers.com.

Russ: Right.

John: And here's our lineup for today.

Russ: That's right. It's time for the BusinessMakers School of Business, and this is that mission that John and I carry where we go out and select a very special curriculum to share with you during this segment.

John: It's so special and so individually constructed that we don't think any other schools bother to take the time and effort and energy that we do to make this such a ground level learning opportunity for anybody, whether you're in business or not.

Russ: We hear every once in awhile about business schools that are actually just replaying our show.

John: And it's terrible.

Russ: It's absolutely terrible

John: [Laughter] Yes, it is.

Russ: They replay our show, and then they get paid for doing it, and we don't get any money out of it.

John: That's right. But we're gonna keep going anyway.

Russ: And we kick off the School of Business each week with a quote of the day.

John: Quote of the day, yes.

Russ: And today I'm gonna quote Miss Rita Mae Brown, a U.S. author and social activist.

John: A social activist, Rita Mae Brown.

Russ: Rita Mae Brown, right. A social activist. Here it is.

John: A social activist.

Russ: "The statistics on sanity are that one out of every four Americans is suffering from some form of mental illness. Think of your three best friends. If they're okay, then it's you."

John: You're the one.

Russ: [Laughter] Yeah. So we just got - there's this little advice out there that you can kind of figure out what's going on with this quote. You can use this stuff that we have here on this show.

John: I know. One out of four people are nuts. That explains a lot.

Russ: [Laughter] It does. All right, and that brings us to this week in business history, so what happened during this August week in business history?

John: You know, there's a lot of innovative things that happened a long, long time ago, and in 1173, there was a tower that was made out of pizza. Oh, wait a minute. No, that was construction of the Tower of Pisa. You know, I go through these things so fast. I messed up. Okay. Took two centuries to complete this thing.

Russ: And it still wouldn't stand up straight.

John: It's still not right. I know. It's just - and every now and then they have to kind of close it down, put up some barricades around it and straighten it out.

Russ: Well, I don't think they straighten it out. They just brace it more to make sure - 'cause they don't want it to straighten out.

John: It's a tourist attraction.

Russ: Yeah. Nobody would come over here anymore. I wonder if we'll discover at some point in time that really leaning was the original intention and they knew that it would be a big money maker.

John: Or maybe the thing was built like 100 years ago and they've just been perpetrating this myth.

Russ: It was just built 100 years ago.

John: Maybe. No, it was actually built 100 years ago, but they say it was built in 1173 so they can get government subsidies. This is a historical landmark or something.

Russ: Right.

John: Okay, this week in business history, in 1851, Isaac Singer was granted a patent for the sewing machine, and it was the first machine that became the first one that people could use it in their home.

Russ: It really worked.

John: Yeah, it worked at -

Russ: If you think about it, I still don't understand how it works. You know? I mean how that needle pokes a hole in the deal and then it comes back out, and somehow or another as it's doing it, the thread's going in and -

John: Well, I think you have to move the fabric, and that's the way - when it comes back up, it - but it's still attached to the string. You're right.

Russ: Yeah. I don't know. I don't get it, man.

John: I don't get it either.

Russ: [Laughter] I'm glad though.

John: I know. I know. But, you know, there's some things that should remain ever a mystery.

Russ: [Laughter] That's right. I agree. That's one of 'em.

John: All right, this week in business history, in 1877, Thomas Edison makes his first ever recording, and it was "Mary Had a Little Lamb". 1877, a recording. I mean think about that, man.

Russ: Nah, I agree.

John: All right, this week in business history, in 1888, Bertha, wife of inventor Karl Benz, makes her first motor tour.

Russ: Oh, yeah. This is one of the subjects -

John: Precursor to the Mercedes Benz.

Russ: Well, absolutely. Yeah. And this is also one of the topics of Dr. John Leanheart, guest on this show several times. He talks about how significant the role was that Bertha played. And the way the story goes is that Karl Benz, who designed it and built it, wouldn't really take it out on the road till he got it perfect, which it took years and years and years. She finally had enough, got in it while he was like down at the store doing something, and drove it like 50 miles. It had a few problems along the way. And found some feed stores that had some kind of fuel. And they all say if she hadn't done that, it would have never gotten out of the garage.

John: Wow! Behind every good man is a good woman.

Russ: That's right.

John: Or vice versa.

Russ: That's right.

John: This week in business history, in 1902, the birthday of Felix Wankel, the inventor of the Wankel engine. Everybody thought that was gonna revolutionize the auto business, and it didn't.

Russ: And it was - wasn't it a -

John: A rotary.

Russ: A rotary, yeah.

John: Okay. This week in business history, in 1911, the millionth patent is filed at the U.S. Patent Office for a tubeless vehicle tire.

Russ: Wow! A tubeless tire!

John: Millionth.

Russ: That was in the era where they were beginning to think, "I think we've invented everything." Right?

John: Well, I think - no, that was -

Russ: Was it before that even?

John: Nah, I think it was after that. I think the guy wanted to close the patent office or something.

Russ: Yeah. Well, I think we have now invented everything. Don't you?

John: I think. You know, I don't know what else is left out there.

Russ: [Laughter] That's right.

John: Nobody has any money to do it anyway.

Russ: Right, right.

John: This week in business history, in 1911, the birth of Crisco, that famous solid fat hydrogenated shortening that causes heart attacks. [Laughter] Did you ever see that stuff in a can?

Russ: Yeah. There ought to be a class action suit filed against those guys. [Laughter]

John: You can use it lubricate your car.

Russ: [Laughter] Right, right.

John: This week in business history, in 1913, the invention of stainless steel by Harry Brearley.

Russ: Wow! You know, they say it's stainless, but leave it outside long enough, it'll get stains on it. But it goes a long - it goes further than -

John: They should say "stain resistant steel".

Russ: And it played a role in - what was the vehicle in Back to the Future?

John: Oh, yeah, the DeLorean. Yeah, right. Yeah. If it hadn't been for stainless steel -

Russ: There wouldn't be a DeLorean.

John: And there would have been no "ah ha" moment to build the flux capacitor.

Russ: That's exactly right. See how these things kind of get chain linked together?

John: I know. It's amazing. It really is. Especially when they're fictitious.

Russ: Right. [Laughter]

John: This week in business history, in 1930, Betty Boop debuts in Max Fleischer's animated cartoon, Dizzy Dishes.

Russ: Now, were you a Betty Boop fan?

John: No, no. But she did have a cameo in that Who Killed Roger Rabbit.

Russ: Oh, that's right.

John: Who Framed Roger Rabbit, which I thought was one of the most clever movies I've ever seen. Did you ever see it?

Russ: Yes, I did.

John: And Betty Boop has a cameo in it.

Russ: Yeah. Cool.

John: This week in business history, in 1935, the government decides to begin a Ponzi scheme. [Laughter] They thought this would be a good way to bring in some extra money. And they didn't want to call it a Ponzi scheme, so they called it the Social Security Act.

Russ: Oh, I thought you were gonna say the Subprime Mortgage Act. That was kind of a -

John: This is 1935.

Russ: That was kind of a Ponzi scheme, too.

John: Well, in a way it was, 'cause, yeah, they sold mortgages to people who couldn't afford them so they could sell them to investors, and without telling the investors that these mortgage backed securities were laced with terrible -

Russ: Right. Now Bernie Madoff -

John: We're still - it's gonna be years before we get out of all this stuff.

Russ: Oh, I - you know, I'll tell ya. It is so big. It's amazing if we do get out of it.

John: If the government can get the debt under - not the debt, but the deficit under control. And you figure, all this started just because some liberals thought, "Wouldn't it be great if everybody could own their own home?" It just wasn't liberals. Jack Kemp used to talk about that all the time when he was a congressman. And then he retired from Congress and got _____________. If people get into home ownership, they'll take care of their home much more than if you stick 'em in a tenement.

Russ: And I believe that is true if they earned the right to borrow the money and pay it back. [Laughter]

John: Yeah, right.

Russ: But these guys - so, Bernie Madoff must have learned from the Social Security Administration.

John: Oh, yeah. He learned from not only that, but a lot of other government. They figure, "Well, if the government can get away with it, maybe I can, too."

As a matter of fact, we're having an event come September, September 7th, The Best Corporate Councils in Houston, and our speaker is Diana Henriques who wrote the book Wizard of Lies. A New York Times best seller. And she's the only reporter he's talked to since he got sent to prison.

Russ: He must have owed her some money or something.

John: He must of. Yeah, right. She -

Russ: And she's getting it back by selling her book.

John: I don't think she invested in this Ponzi scheme.

Russ: Right.

John: This week in business history, in 1945, the U.S. drops a second atomic bomb, Fat Man, on Nagasaki, Japan, and then one day later, Japanese surrenders and provided that the Emperor Hirohito's status remains unchanged.

Russ: That means he gets to continue to live.

John: Yeah, right. And he gets the palace and all the hard earned graft and all that.

Russ: But he probably had to remain and continue to live with himself and the decisions that he made. That could have been pretty painful.

John: Yeah, right.

Russ: I think so.

John: Oh, obviously. I mean the whole country was destroyed.

Russ: Yeah.

John: But the benefit of dropping this bomb - it did kill a lot of people, obviously. A lot more would have been killed and injured had we invaded the island and fought a conventional war.

Russ: Yeah. I think you and I talked about this, too. That why couldn't we have dropped it into a location that was not populated? Would they have seen, "Wow! They got a pretty cool weapon."? Or would -

John: ____________ surrender.

Russ: Yeah. Or would they have said, "Well, they're not gonna drop something like that on us."? I don't know. But -

John: It's good to have 20/20 hindsight. But, you know, we were in a war, and people were getting killed up until the moment we dropped those bombs.

Russ: Yeah. And it ended the war. [Laughter]

John: It did. I mean it's - and a lot of lives were saved. But you could see - you could argue why they didn't just drop it out in the middle of the ocean and -

Russ: And invite them to watch it.

John: Yeah, right. And if you don't surrender, then we're gonna drop a few - they only had one more, so maybe that's what it was. I don't know, but it worked.

Okay, this week in business history, 1950 is the birthday of Steve Wozniak, American computer genius, pioneer, entrepreneur and -

Russ: And former guest on the BusinessMakers Show.

John: Yeah, right. Okay, this week in 1963, this week in business history in 1963, the Kingsmen release"Louie Louie" on radio stations, and they called it obscene.

Russ: Which helped its sales tremendously. Made it a hit. And I was with the group that was always trying to figure out what they said, and you never could figure it out.

John: No, you never could figure it out.

Russ: And I think they chose, "Well, let's don't release the lyrics. They'll see it was a corny song about Mickey Mouse or something," and they're all thinking it's wild sex, so it's made it a historical hit.

John: Yeah, a historical hit. This week in business history, in 1974, Richard Nixon, President Richard Nixon, announces he will resign his office at 12:00 p.m. the next day, and he resigned his presidency, flew off, and Gerald Ford became the 38th President of the United States.

Russ: Now, I always thought Gerald Ford - that was pretty interesting, because he was a Senator. He never held his hand up and said, "I want to be President. I want to be President." And yet he became President because he replaced one sort of fallen crooked politician named Spiro Agnew as Vice President just because they had to throw this guy out and we needed a Vice President. Who knew while here's there suddenly the President quits, too. And, wow, that's kind of a unique presidential stent there.

John: I know. Yeah, he made a very controversial decision when he decided to pardon Nixon, and everybody thought, "Well, this cover-up is still on." But I think he did it for honorable reasons.

Russ: Yeah. And I don't think Richard Nixon ever was able to kind of recover from what happened. I mean the punishment that came along with the shame was huge.

John: Yeah, the shame. But eventually he became a renowned authority in China and ____________. [Crosstalk]

Russ: That's true. No, he was smart.

John: And he did somewhat rehabilitate his reputation.

Russ: He did.

John: This week in business history, in 1981, the IBM personal computer is released. PC and PC DOS version of 1.0 was the software.

Russ: Huge announcement. This is when the world started changing. I mean the microcomputers -

John: But the world always changes.

Russ: Well, I don't think so. [Laughter]

John: But here it changed, you know, dramatically.

Russ: No, it did. And there was already kind of personal computers. I mean Apple was sort of out there, but this changed the landscape.

John: I mean look how the world changed when the sewing machine was -

Russ: That's true.

John: I mean it always changes, but there's degrees of change.

Russ: That's right. And at that time, I happened to be in IBM or working at IBM, and what was interesting about it internally within IBM is that IBM kept wanting to treat it like, "This is almost like a toy." They're the ones that came up with "personal computer". And even in the way that we sold 'em - I happened to be in the product center group. That was one of the only arms that kind of sold 'em. Is that you kind of didn't want to - they didn't want you to sell 'em to businesses. If a business actually wanted one, they'd probably try to discourage 'em or wanted 100 of 'em.

John: 'Cause they wanted to sell 'em the bigger one - the mainframe.

Russ: Yeah, the mainframes. Well, it was both that they wanted to sell them the big mainframes, but they discounted the ultimate power that the microcomputer would have and said, "You want a real computer. You don't want this." But it was the market that kind of changed that. Then Bill Gates. So, anyway. So much. Move on.

John: Finally, this week in business history, in 2003, a wide scale power blackout in the northeast United States and Canada. I've been through a few of these. Back in the 70's there was a huge blackout. I was stranded in New York City. I was trying to make some sales calls up there for two days. I couldn't - I mean power was out. Ports were shut down.

Russ: John, I was in this one on the verge of leaving Manhattan right going through the tunnel.

John: You were in the tunnel?

Russ: I was like 100 yards from it.

John: Wow!

Russ: And the traffic stopped, and eventually it crept through. We had no idea what was going on. And when we came out the other side, everything was different when we came out the other side. But wasn't really paying attention. And the cab driver got a cell phone call, and he turned around and looked at us and said, "Aah! That was my brother. Explained what happened." And we, "What do you mean 'what happened'?" He said, "Why, you know, we got stuck there." And we said, "Why is that?" And he said, "Well, there's a power outage. It's not a terrorist thing. There's a power outage all over up here." And we went, "Wow! Good thing we got out."

We were headed over to the Newark airport, and we thought we got out, but then we started noticing along the way all of the convenient stores, the filling stations, there were crowds of people. And we got to the airport. Total chaos. And the story here is it - I don't think enough people understand how much we depend today on the infrastructure in power. Nothing works. I mean even the cell phones quickly get overloaded by tower. Food isn't delivered. Nothing. Nothing works. And it taught me a lot about the energy situation, and at the end of the day, I mean there's just so much demand, and as China's growing, India's growing, they want it, too. The demand is way above the supply.

John: Can you run that by me again? [Laughter]

Russ: [Laughter] Sorry. I care about it. And that's why we launched the EnergyMakers Show.

All right, that wraps up today's history lesson. All right. Boy, there were some monumental pieces of information in here, too, from the Tower of Pisa to Betty Boop to a power outage and the PC. My God, big history lesson.

That brings us to the jargon challenge round. This week's word - are you ready?

John: Yeah.

Russ: Elderburbia.

John: Elderburbia? Well, suburbia is a part of a market, a town where people live in the sub part of the market, and they call it suburbia.

Russ: Yeah, that's right.

John: It's not the urban part. It's the sub urban part.

Russ: That's right.

John: So, what was the word again?

Russ: [Laughter] I'm not gonna tell you. That's part of your responsibility to remember it. No, it's elderburbia.

John: Elderburbia is a section of town where all the old people live.

Russ: You got it. Yeah. We got a winner. All right, and that brings us to dumb moments. Do you have one for us?

John: Yeah. This is one of the reasons why the government needs all this money, 'cause some of it they use, but then they never use the actual outcome of spending the money. In this case, it's a couple of Navy ships that cost about $300 million to build. And they partially built them - this was back in the 80's and 90's - and they were about 95 - some people say 84 percent complete. And they just sat there as part of this mothballed ghost fleet at the James River there in Virginia. And they tried to sell it to the Britt's. The Britt's didn't want it, and instead they had to take - they took $10 million to scrap them, along with two other ghost ships in Brownsville, Texas. So, the taxpayer builds these two ships for $300 million, and they never, ever, ever get used.

Russ: Well, that's just what happens when you have people up there making decisions that kind of rotate in and out and they're there two or three years. Or even the career politicians are Teflon when it comes to taking responsibility for any of their decisions.

John: Right. You'll find no bigger supporter of the U.S. military than me, but I mean this is part of the problem.

Russ: I think we - I think our former government just does - I think we have to go back to it.

John: It's too big.

Russ: We have to go to like a dictatorship or something like that.

John: Yeah, a benign monarch, like me. I'll be the -

Russ: [Laughter] Yeah, you could do it.

John: I'll be the benign - that's the problem, you see, with some - the problem with an autocracy is once these guys get in office - you know, they get elected in. I mean Hitler was somewhat elected. Not totally, but he was elected to a certain position and was elevated later when Hindenburg died. And, you know, Chavez was elected. And these guys, they want to rule for life, and the only way you can get rid of 'em is to shoot 'em, 'cause you can't have elections after these guys take over, so - I mean that's why you have these guys getting assassinated. That's why they assassinated Julius Caesar. You know, he did a lot good for Rome, but when he declared himself dictator for life, they knew it was over.

Russ: Enough is enough.

John: Enough is enough. So they -

Russ: Well, they got rid of Hosni Mubarak over there in Egypt without killing him.

John: Well, he's not dead yet. "I'm not dead yet." Remember that movie?

Russ: [Laughter] Yes.

John: Spamalot.

Russ: And before we wrap up today's School of Business, it's time for the very popular PKF Texas Entrepreneur's Playbook.

John: Here's a guy who's very much alive. He's not dead yet. Greg Price. A one and a two and a -