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School of Business 12/08/2012

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Russ and John present the show that doggedly stays tuned -in to free enterprise, entrepreneurship and capitalism. We worry about giving money to politicians when they are in an “overspend” mode. Includes: The BusinessMakers Quote of the Week— great words from someone clever but unknown; This Week in Business History includes the founding of the Brookings Institution, the gala opening of Houston’s Astrodome and the arrest of Bernie Madoff; the Jargon Challenge Round—trendy technospeak that YOU should know (today’s expression is a really good one); and Dumb Moments—the IRS launches taxes for Obamacare.

Full Interview text

Russ: This is the Businessmakers Show, heard on the radio and seen online at thebusinessmakers.com. This is that show that has doggedly stay tuned in to free enterprise and entrepreunership.

John: And don't forget capitalism, which is kind of the overarching principle behind the whole thing.

Russ: Absolutely.

John: And you're right, as we've proceeded since the election, and I know some people probably don't like us to talk about politics, but he can't - the politics of our society and our free enterprise system are so intertwined in conflict and in cognitive dissidence, that you can't help talking about one without the other.

Russ: Oh yeah. Well, I mean, when you try to get down to the civil level and try to talk about it, those on our side just worry about how much money you send to the politicians, because they have a track record. Of every dollar you send there, they spend two.

John: That's right. That's right.

Russ: And that's scary to some of us, when it's gone this far.

John: Yeah, it's that money is better off in the economy, building businesses or hiring employees, or what have you, but for now, it's all going you know where.

Russ: Yeah, well, I mean, I think we're all okay with giving people something that are in need.

John: Yeah, those are in need.

Russ: Yeah, but it's real hard to define "in need". I mean, I need.

John: We've talked about it. People that live in poverty in the U.S. I know I'm saying the right people who are like really destitute, fried on their back, but those that live in poverty actually live a lot better than most other people in the world.

Russ: But compare it -

John: And that's a census - U.S. Census Bureau statistic, so I'm not just making a generalization.

Russ: Right, but it - probably in their opinion, they don't see the other in the rest of the world. They just see the people that have better flat-screen TVs.

John: Bigger, bigger, yeah.

Russ: And they go, "Why can't I have one?" And what's really hard to explain, at the end of the day, those that feel like we do know that when you start giving something like that, it affects the recipient in a negative way.

John: It does, right.

Russ: I mean, they lose any understanding of why they ought to really work and contribute to the society, that they contend that society's been unfair to them, 'cause they don't have as much. Boy, is that concept is difficult to explain to the other side.

John: You can't. You can't explain it.

Russ: Yeah, and then the young people have grown up in a fairly rich period, and they feel like, "Well, we should help the have-nots." We feel like the way you help them -

John: Look at all - yeah, look at the charities.

Russ: Yeah, no.

John: Volunteer for a charity or something like that.

Russ: Instead of - and we feel like it helps the have-nots.

John: I mean, for every dollar the government's - it tries to spend on something, a certain percentage of it gets siphoned off in the bureaucratic expense. If charities operated under the same percentage, a lot of them would be shut down.

Russ: Well, and this discussion is depressing me, but -

John: All right, let's get on this.

Russ: We go on.

John: We go on.

Russ: And in fact, here's our lineup for today. We have a very special guest.

John: Oh, heck with it. I'm so depressed.

Russ: We have a very special guest who was on the show back in October of 2005, Mila Golovine.

John: All right, yes. The Russian.

Russ: The Founder and CEO of MasterWord, Inc. and had quite a story, and a cool part of her story too is that she's benefitting from this incredible American innovation that's happening these days in the energy sector. The energy world has changed dramatically, and luckily in our favor, and she does a lot of translations in that industry, as well as the healthcare. It's a real cool interview, and as you will recall, she's one that certainly knows the value of an American free enterprising capitalism.

John: Having lived in former Soviet Union.

Russ: Right, right. So, that's our featured guest today.

John: Good.

Russ: But first - That's right. It's time for the Businessmaker's School of Business, and this is that part of the show where we spend a lot of preparation time during the week putting together an unique curriculum.

John: I know, and it's unique in such a way that it provides a ground level, real world, informative education to people who are willing to sit through this radio show and listen to it. However, they - but what they're getting now on the radio is just an abridged version. It's not the full curriculum. I would strongly urge anybody listening on the radio show to go to the businessmakers.com and get the full monty.

Russ: That's right. Absolutely. Absolutely; and I've been thinking about the curriculum. I don't know if we can expand the show more, but we need to have an economics course now in the curriculum.

John: I think so.

Russ: Because I don't think they teach that in the school anymore. I mean, nobody acts like they do, but maybe we should.

John: What they teach you is theory, not fact.

Russ: It's a problem.

John: You're right, because it all revolves around supply and demand -

Russ: And competition.

John: Right. When the government interferes, it usually drives the prices up and our quality down.

Russ: Okay. That's right, but we kick off the School of Business each week with a quote of the day.

John: Quote of the day, yes.

Russ: And today's quote - I lost the author, but if you really want to know who said this, you should take the quote, go to Google, put it in. You'll find out who the author is. All right? Here it is. Vitality. That's the topic. "Vitality shows not only the ability to persist, but the ability to start over."

John: That's right. I mean it's - it's what our world, the entrepreneurial world, is all about.

Russ: Absolutely. Failure just means it's time to start over and start something else. All right, and that brings us to this week in business history. So during this second week in December, what happened in business history?

John: Well, we're going to talk a little bit, I guess, about a bad boss. This week in business history, in 1927, Robert Norton Noyce, he was one of the inventors of the integrated circuit, was born in Iowa, this week in business history. In 1927, he studied at Cornell College, got a PhD at MIT, and then went to work for a company in Philadelphia, and then he moved out to California to work for a guy named William Shockley, one of the three men given - who has credit for - invented the transistor, which is a great thing, but Shockley, I guess he was kind of the leader of the group, proved to be an unbearable person to work for and he subjected an employee to a lie detector test, and all this, and then Noyce and a bunch of people left the company, started their own company called Fairchild Semiconductor, which is a very famous company, and in 1959, invented the integrated circuit.

Russ: Yes, wow, wow, and I think -

John: Put a bunch of transistors together on a sheet of silicon, and there you go.

Russ: Yeah, and that evolved - that Fairchild evolved into Intel.

John: That's right.

Russ: Which, when you look at the end of the day, what's happened in our economy, Intel has played an enormously positive role.

John: That's back in 1968. So Intel's been around a long time. All right, this week in business history, the Brookings Institution - that's one of the oldest think tanks in the country - was founded by three organization that had been created by philanthropist Robert S. Brookings.

Russ: And what year was that?

John: And, oh excuse me, this - 1927.

Russ: Wow.

John: So that's been - that organization's been around a long time, and they issued edicts all the time on their opinions on things that they study, and -

Russ: Do people really listen to them?

John: I don't think so, 'cause I don't think they're right all the time. I mean, nobody's right all the time.

Russ: No. I'm not.

John: I'm not. Right. We could start our own institution.

Russ: Right.

John: This week in business history. In 1928, the clip-on was invented. Wow, where would they be without the clip-on.

Russ: Now we're getting into important stuff.

John: I know. Did you wear one when you put on your tuxedo?

Russ: I've got one on right now.

John: You do not. Do you see it?

Russ: ____ tie. Right.

John: I've tried to hand-tie a bowtie. It falls apart.

Russ: I've tried to. That's ridiculous.

John: And I've watched videos on the internet and everything.

Russ: But I think those bow - most of those bow-tie clip-ons have the little thing, goes all the way in the back and clips on, but they're - my definitely of a real clip-on is got that little hook. Hooks inside the front of your -

John: If you don't watch how you put it in there, you'll pierce your larynx.

Russ: What do you call that?

John: And you'll need to access our healthcare system. Okay, this week in business history, in 1941, President Franklin Roosevelt, I guess you could say, one of these - probably one of his finest hours, declares December 7th to be a date which will live in infamy.

Russ: Which is the day preceding this date, so _______ about Pearl Harbor when he makes his announcement.

John: Yeah, this date, December 8th, 1941, and also around that time, the Japanese forces also attack Malaya, Thailand, Honk Kong, Philippines.

Russ: So they were just getting going.

John: They were attacking every place simultaneously. Scary, scary time in our history, but six months later was a battle of Midway, and we wiped out half the Japanese fleet, or something like that.

Russ: Turned it around.

John: Just six months. Okay, this week in business history, in 1955, Mighty Mouse Playhouse premiers on TV. I loved Mighty Mouse.

Russ: I was a huge fan of Mighty Mouse.

John: I know, right? Whatever happened to Mighty Mouse?

Russ: I don't know, and in our many years of doing this show and doing history, we touch on important comics like this. This is the first time Mighty Mouse has made it.

John: Mighty Mouse has finally made this week in business history, and then I like the thing - what was it - what was that comedian who was on Saturday Night Live, the first episode who did the lip synch to the Mighty Mouse song?

Russ: I never saw it.

John: Oh, okay, all right. Forget his name.

Russ: Let him sing to [singing] "Here he comes to save the day."

John: [joins in singing] "…to save the day." This week in business history in 1965, the Astrodome opens, and Judy Garland and the Supremes was the first event. That's kind of an interesting mix.

Russ: Yeah, no kidding.

John: Judy Garland and the Supremes. Okay, this week in business history, in 1971, Don McLean's eight-minute version, actually a little over eight minutes, of American Pie was released. That's a timeless song. I love hearing that song. I'm trying - I always try to - I know I don't understand a lot of it. It's supposedly roughly based on a night that all those three rock musicians died.

Russ: Yeah, which included the -

John: The Crickets. What was his name?

Russ: Buddy Holly.

John: Buddy Holly.

Russ: Right. He was the main one. And also, La Bamba, that guy.

John: The La Bamba guy, and then the Big Bopper.

Russ: Yeah, the Big Bopper guy.

John: Okay, all right. This week in business history, 1977, Saturday Night Fever, starring John Travolta, premiers in New York City.

Russ: What a show that was.

John: That was quite a movie.

Russ: The beginning of disco.

John: Yeah, disco ____ in the white suit.

Russ: It was interesting how disco dominated the club scene for probably three to four years after that.

John: I know, and made John Travolta very famous, and went into some other things, and now he's kind of famous for -

Russ: Yeah, he's kind of getting in trouble.

John: He's a little trouble famous. This week in business history in 1980, John Lennon murdered two months after he turned 40, and we're going to hear that song Imagine, which I think runs counter to his overall - his lifestyle, so to speak, but it was - he was a former member of the Beatles, killed by some guy who - just an awful thing. Whether you agreed with Lennon's politics or not, I mean, he's a heck of a song writer, good musician.

Russ: Well, it's a weird behavioral thing in our society now that some people, their mission in life, they feel like, is to wipe out people that are famous.

John: Yeah, right, yeah. John Wilkes Booth was like that.

Russ: Yes, he was. He was.

John: And Hinkley was like that. Brutus, who killed - the last guy to stab Julius Caesar. I mean, that's been going on for a long time.

Russ: Somebody ought to put a stop to it.

John: Ponch's pilot, and Jesus Christ. He's all the way back. They recorded Cain and Able, right?

Russ: Oswald.

John: Oswald. Yeah, JFK. Yeah, so it's been going on for a long time.

Russ: When John Lennon's assassination - was kind of interesting. I don't remember hearing about it, 'cause it was like in the middle of a Monday night football game, and the announcers, they even stopped and felt obligated to announce it, and then they actually did a pretty good job, but it kind of put a damper on -

John: I wonder _____ the aim. I wonder if any fans called up and complained.

Russ: Yeah, quit interrupting the game. This is the Dolphins are playing right now. I'm trying to watch this game.

John: I've been waiting all week for this game. I've got $50,000.00 riding on this game. Anyways, it's like when these players get injured during the game, they stop the game, 'cause they're helping their guy. I know there's a part of every fan saying, "God, I wish -"

Russ: They drag him off the field and keep going ____.

John: And they cut to a commercial. That's what I like.

Russ: And boy, there are lots of injury in football, and now that they've - and not to change the subject, but my goodness, the research the neuroscientists on the brain injuries, man, there's gonna be some kind of a paradigm shift in the games.

John: I think what they're going to do is they're going to - the final uniform - everyone's going to be in an inflatable bubble.

Russ: They're going to play like that.

John: Yeah, and then they're ____ heads, and there's going to be enough air in there, or somehow will have an air supply thing, and they're just gonna bounce around in these bubbles.

Russ: Will they be able to stick their legs out where they can run? Then you might have leg injuries.

John: _____ playing a bubble. It would be like a space suit, only being kind of inflated, and I think we're gonna -

Russ: I think you've just come up with a new business idea. Once again, here at the Businessmakers Show.

John: Will guarantee against any kind of injury.

Russ: Yeah, bounce right off of them.

John: Yeah, bounce. They'll be like - and the feel will be like those bounce houses. You will be just a giant bounce house, and instead of astroturf or grass, you'll be on a little -

Russ: So, when you -

John: - inflatable thing and -

Russ: So when you're like when they're down, when they're tackled, is like when their bubble hits the ground.

John: That's it. They're down, right?

Russ: 'Cause you can't bouncing the bubbles around, could you?

John: Yeah, you can't dribble your running back into the end zone, so there'll have to be rules against it.

Russ: Yeah, and will the quarterback be able to throw his - bring his arm out of the bubble? He might get injured.

John: Well, no. They'll work it out, so there'll be some flexibility. I mean, you won't see a lot of long passes, but I mean, five years will probably be a pretty -

Russ: But will the receivers -

John: Boy, we've got a great quarterback here. He can throw the ball five yards.

Russ: But will the receiver's arms stick out, or will they have some kind of a little basket in their bubble?

John: No, no, they'll - I mean, it's gonna - some of their movement's gonna be restricted, I mean. That's the thing you got to sacrifice for the wellbeing, you know? The good thing, the plus side is no one's gonna have concussions or broken legs or spinal injuries. The downside of the whole thing is you're gonna see some pretty crappy football.

Russ: It's gonna change the game quite a bit.

John: It will change the game significantly.

Russ: But as I'm envisioning your idea, maybe they could even be made where guys like you and me could play. You think? As I said, the game will not be really ______ change quite a bit. Quality. The quality of the game will go down.

John: The injuries -

Russ: I think we should carry the idea a little further on future shows and get back to the history of ________.

John: Okay. This week in history in 2000, the Supreme Court of United States states - stays the sixth Florida recount.

Russ: Which means George W. won the White House.

John: Yeah, won the White House. What really happened, in the end, a group of reporters went down into Florida after all this happened, and these were news organizations. They were not sympathetic to the Bush ____. I mean, as a news organization, they should have been impartial to the Bush -

Russ: Right, right. I agree.

John: But no. But so they went down there trying to find discrepancies in everything and they couldn't. There was no fraud at all down there.

Russ: So they didn't report that either.

John: Well, yeah, they did, but it was buried on page eight in the travel section or something.

Russ: Still today, if we exposed it right.

John: Right, we just exposed it. Right, yeah, and it's - it was a _____.

Russ: Well, it was a damn near tie is what it was. Statistical tie. Nobody hardly ever says that either. They just accuse the other side of cheating, but when there's a vote that's that close -

John: Well, the thing is, and a lot of people don't realize this, voting, the alleged irregularities was in three counties in South Florida. Each of the three counties were controlled by Democrats. They had their local government, which is who conducts the election. The state does not conduct the election on the ground. It's the counties that do that, and these were - and the election officers, the people running the election, were Democrats.

Russ: Were Democrats, and you know this 'cause you spent time in South Florida, right?

John: Well, not that much. I lived in Tampa, but - which is a Democratic _______. Anyway -

Russ: Your time there wasn't in the state penitentiary, was it?

John: No, no. No, although… never mind. Oh, I could send it to you. This week in business history in 2007, the modern - the father of modern gaming, Nolan Bushnell, the inventor of Pong also had founded Atari and Chuck E. Cheese, which is one of the reprehensible places I've ever visited.

Russ: This guy had a mixed record.

John: I know, but he's a future gamer. He appeared on the Businessmakers Show.

Russ: Yeah, I mean, now he also - what people don't give him enough credit for is that he had two guys named Steve working for him, when he was working at Pong, called Steve Jobs and Steve Wozniak.

John: Wozniak, right.

Russ: And ultimately, they did a little bit better than he did. I think he's fighting for survival these days. Financial survival, but -

John: If your business model is having a fun place for parents to bring their kids -

Russ: Yeah, you're talking about Chuck E. Cheese.

John: Yeah, all based around a rodent, which is one of the filthiest animals God ever put on -

Russ: Mechanical rodent.

John: Yeah, well they have a guy dressed up as a rodent, or a woman ______.

Russ: Well, when you go - but I remember when you go watch their show, big stage, and there were just all these mechanical animals.

John: Oh, those, yeah. Those insipid songs.

Russ: Yeah, and the volume in those places, and the noise.

John: And then there's pizza was -

Russ: Yeah, but besides that, the kids loved it.

John: And that was a problem. This week in business history in 2008, Bernie Madoff is arrested and charged with securities fraud in the largest Ponzi scheme ever created.

Russ: Wow. So he's now been caught for four years. I wonder if he think it's -

John: He'll never get out.

Russ: No, he won't, but I wonder if he thinks it's still was worth it. The couple of decades, three or four, of -

John: Well, yeah, I met this woman who wrote this book. It's called Wizard of Lies and we had her speak at one of our events, and if you were - in the book, he was - and I think a lot of Ponzi schemers start out this way is they get into some financial trouble, and they use the Ponzi scheme process to get out. They know they're doing the wrong thing, but they think, "Well, eventually I'll be okay, correct it, and then pay back," but it never happens. It's just a vicious circle. So I think he -

Russ: So she felt sorry for him?

John: No. No, you can't feel sorry for this guy.

Russ: You can't.

John: It doesn't what - how you get into something. This week in business history in 2010, the second launch of the space dragon, Space X, becomes the first privately held company to successfully launch and orbit and recover a spacecraft.

Russ: Yeah, it was success, so which brings me to a question for you. What do you think about the privatization, commercialization of space.

John: Well, how do you think flight got started in the first place? The Wright brothers didn't operate under a government grant.

Russ: Yeah, but we couldn't have been to the moon. The Wright brothers didn't get very close to the moon.

John: No. No, of course not.

Russ: All right, but that wraps up today's school of business, _____. Pretty good show.

John: Well, we digressed a little bit.

Russ: Yeah.

John: I think it was warranted. People don't like it, they can do their own radio show.

Russ: That's right. That's right. And that brings us to the jargon challenge round.

John: Oh, my God. Here we go. I did pretty good on those. I've been going pretty good ______. I think my definition was better than what you had.

Russ: Well, that happens. That happens. That happens. I don't think it'll happen this week.

John: I mean, these are words, for goodness sakes.

Russ: That's right.

John: They're not - it's not holy writ.

Russ: That's right. I will change their meaning all the time. Remember when gay - when you said some - boy, there's a gay - that meant they were happy. Doesn't mean that anymore.

John: That's right. They change.

Russ: All right, so - but I doubt very seriously if this week's word you'll come up with a definition that's better. You might -

John: I might guess it.

Russ: __________ hit. All right, and it's unusual, because it's a three-word noun.

John: A three-word.

Russ: It's a three-word noun. So here it is. Are you ready?

John: Three words. Yeah.

Russ: Here it is. Bag of doorknobs. It's actually could also be an adjective.

John: Yeah, I know. Okay, see there's this expression. You say, "That guy is dumber than a bag of rocks." Okay?

Russ: Yeah, it's kind of in that category.

John: Yeah, so bag of doorknobs is - I don't know what - I have no idea.

Russ: Okay, well you'll love it when you hear it. It's a good one. It's a website with poor navigation and too many links.

John: Ah.

Russ: That website's just a bad of doorknobs.

John: That's right.

Russ: And there's a lot of those out there now too, but I mean, where would we be without the doorknobs?

John: The doorknob is - that invention really led to a very successful society.

Russ: That's exactly right.

John: Because without the doorknobs, I mean how would you open a door?

Russ: Or you couldn't lock a door.

John: Now, in 1,001 Arabian Nights, you had the guy say, "Open Sesame," and the door would open.

Russ: But that doesn't work anymore.

John: That doesn't work anymore.

Russ: All right, and that brings us to dumb moments in business. Do you have a story for us today?

John: Yeah, yeah, yeah. This is a - I don't know what this is, but anyway, we all know there's a new healthcare law, and you would think some of the first news out would be stunning breakthroughs in healthcare providing.

Russ: But no?

John: But no. It's 159 pages of rules authored by people who work at the IRS who are clarifying the investment income tax under the healthcare law. This is all according to Reuters, and it spells out when the tax applies to trust annuities, as well in a visual security traders. It was released last Friday, and with the new regulations, included a .9 percent healthcare tax on wages for high-income individuals, new taxes on capital gains. I mean, it's just - it's a plethora of tax increases, which really have nothing -

Russ: One-hundred-fifty-nine pages of explanations.

John: Yeah, right. There's like a 3.8 percent surtax on top of the tax you're already paying on investment income and it's applied to capital gains and dividend income. It says it only applies to individuals who have more than -

Russ: Who are breathing.

John: Yeah, who - individuals who make more than $200,000.00 in the - they call it modified adjusted gross income, and married couple filing jointly with more than $250,000.00. So, they're being targeted.

Russ: And that's how it's going to be.

John: And then you're considered if you make more than that.

Russ: Yeah, and that's how it's going to be paid for.

John: Yeah, in other words, you've never paid your fair share, and now, because they have this really fine and dandy healthcare system that they're putting the callwing together, make you pay for it.

Russ: Well, that should people ______ they have the IRS involved.

John: See, first they're going to raise the money, and then once they get all your money, then they're going to craft this wonderful healthcare system. It's like when they - they say, "Well, we need to raise taxes now, but we'll cut the budget later."

Russ: Yeah, that thing never -

John: Never happens.

Russ: Never do. All right.

John: Anyway, but we'll see. This could be the one time it does happen.

Russ: It could work - and it could work.

John: So we're going to monitor this.

Russ: All right. See if it works.

John: Yeah, this is with Reuters. They're keeping track of all this.

Russ: Well, good. All right, but before we wrap up today's School of Business, it's time for the very popular PKF Texas Entrepreneur's Playbook, and so let's welcome Mr. Greg Price.

John: Greg Price.

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