Russ: This is the BusinessMakers Show heard on the radio and seen online at TheBusinessMakers.com. This is Episode Number 368 of that show that features those that make our lives better.
John: That's right.
Russ: We're talking about the entrepreneurs.
John: You're right, the entrepreneurs, the people who create. You know they're the artists and the athletes of the free enterprise system - artists because they're so creative in what they do and athletes because it requires such stamina and mental toughness to see these things through.
Russ: Yeah, they're the working class.
John: There the - they're, they are, the working class.
Russ: Yeah, yeah.
John: You're darn right. They hire people and create goods and services that people made and that need and make money.
Russ: And taxpayers.
John: And taxpayers, too. Right.
Russ: Yeah, right, right. In fact, speaking of those people.
John: Yeah?
Russ: Here's our weekly shout out to the EO Houston Group.
John: EO Houston, right.
Russ: Yeah, a serious group of entrepreneurs.
John: A personification of just what we just been talking about.
Russ: Absolutely.
John: Right, mm-hm.
Russ: EO Houston.
John: Yeah.
Russ: All right and here's our lineup for today. First up, I interview Glenn Outerbridge, founder and CEO of eyeMe, that's E-Y-E me.
John: Yeah.
Russ: That's a new app for the iPhone that's kinda clever and -
John: Yeah, what's, what does it do?
Russ: Well, I don't know completely 'cause I've not done the interview yet, but I have a glimpse and what it does, it's a real cool, easy way for you to take a picture with your iPhone -
John: Right.
Russ: - and then to add an audio sound bite to it.
John: Oh really? Like you can talk over it like, "This is what this is?"
Russ: Yeah, yeah.
John: And, "I met him at this restaurant -
Russ: Yeah, I'm -
John: "And he ordered -
Russ: Yeah.
John: - this food"?
Russ: You could, you could.
John: Stuck me with the bill when he left, saying he, said he had to go to the men's room -
Russ: Right.
John: - but actually left me with the check."
Russ: But when you say, "Stuck me with this food," you could also have a picture of the food there, too, so -
John: Yeah.
Russ: But I'm more interested - listen to this. I think that the app has potential for maybe us to just do the show with it.
John: Oh really?
Russ: I take a picture of you and I say, "This is the BusinessMakers Show heard on the radio, seen online at TheBusinessMakers.com, the show about entrepreneurs,"
John: Right.
Russ: Then you take a picture of me and then you say, "We're talking' about the entrepreneurs. The athletes and the artists,"
John: Yeah, and we just keep pushing the phone back and forth.
Russ: Yeah, yeah. No we can do it even our individual phones.
John: Oh, on our individual phones.
Russ: Yeah, yeah.
John: On the same app?
Russ: The whole, the whole show.
John: We can - wow.
Russ: And it will be like a TV show, then.
John: Wow.
Russ: All right, so but can -
John: We'll have to join another union.
Russ: Yes, we will. But continuing on, Glenn Outerbridge of eyeMe is not the only guest.
John: Sorry I asked.
Russ: He's not the only guest.
John: Okay.
Russ: Also, Esther Freedman is gonna be interviewing Robbie Wright, founder and CEO of Bounce, one of these retail electrical service companies that are doing some things unique in that category.
John: Okay.
Russ: And then on the Entrepreneur's Playbook, Greg Price is gonna sit down with Rafael Carsalade, the guy that's an expert on international business and particularly as it pertains to taxes.
John: Taxes.
Russ: And then Leisa Holland-Nelson on Women Mean Business is gonna be interviewing Charlene Ripley, the new author that is really making it happen these days.
John: Okay.
Russ: But first -
John: Here we go.
Russ: That's right. It's time for The BusinessMakers School of Business.
John: Class is now in session.
Russ: You bet.
John: That's right.
Russ: And then -
John: I'm taking roll.
Russ: You bet.
John: Russ Capper.
Russ: Here.
John: Okay.
Russ: John Beddow.
John: Here.
Russ: Yeah.
John: Okay.
Russ: I was always the guy, when the teacher did that, I liked to say something a little di- I usually, everybody's saying, "Here," I'd say, "Present."
John: Yeah, or I'd say, "Yo."
Russ: Yo. I'd say, "Aqui," sometimes.
John: Aqui.
Russ: Just 'cause I like people to know I'm bilingual.
John: Well, you're in Seguin, Texas.
Russ: Well, yeah.
John: It kinda has a kind of a Mexican flair to it.
Russ: You have it, oh very - named after Juan Seguin.
John: Yeah, the hero of the Texas revolution.
Russ: That's right, that's right.
John: Yeah, okay.
Russ: All right and we kick off the School of Business each week with the Quote of the Day.
John: Quote of the Day, yes.
Russ: I kinda got stuck on Peter Drucker -
John: Yeah, right.
Russ: He's got so many good ones.
John: Well he's a great - he helped shape the new leadership paradigm.
Russ: Yeah.
John: Right.
Russ: I wish he would -
John: He reshaped people.
Russ: - wish he would get hold of the leadership leading the country right now -
John: Yeah, well it's -
Russ: - and reshape them.
John: - I think they're so far out, nobody can reach them.
Russ: All right, here's his quote.
John: Yeah.
Russ: Whenever you see a successful business, someone once made a courageous decision.
John: That's right, oh yeah.
Russ: People don't think that but particularly the people that don't understand business, which the more I read about this new book on Barack Obama, he's anti-business through and through, not -
John: Yeah.
Russ: -not like just for political reasons. It's because that's what he thinks.
John: Yeah, he's an ideologue.
Russ: Yeah.
John: He's a socialist at heart.
Russ: Yeah.
John: And he thinks the state has all the answers.
Russ: Right.
John: Yeah.
Russ: And business doesn't. Wow.
John: Yeah, right.
Russ: So I bet you he doesn't listen to our show.
John: I don't know. I think someone's probably listening. We'll probably gonna be taken away in handcuffs, just a gulag and never be seen again.
Russ: All right, well before that happens, can you share with us -
John: We'll be labeled as dissidents or something.
Russ: - what happened in business history 'cause we're fans of business.
John: I'm afraid to say, now after all this.
Russ: Business history.
John: Nothing happened. Next topic.
Russ: The last week in June in business history, what happened?
John: All right, this week in business history in 1844, Joseph Smith, Jr., founder of the Latter Day Saint movement, also known as the Mormons, and his brother Hyrum Smith are murdered by a mob in a Carthage, Illinois jail.
Russ: My - I did, I did not know that happened.
John: I didn't know that either. Man, it's - you know you stick to your religious beliefs among the wrong people, they're gonna kill ya. I mean you're ____.
Russ: Well, you know, we've seen that happen a lot lately.
John: That's right, yeah.
Russ: You know but I had no idea that the founders of the LDS movement were murdered.
John: Were murdered - either did I.
Russ: Geeze.
John: I know, it's just -
Russ: Kinda started off this week's history lesson with a cold -
John: On a downer.
Russ: - yeah brutal story.
John: Yes, right and they, you know, we'll go forward, here.
Russ: All right.
John: This week in business history in 1854, Abraham Gesner patents kerosene. Now his - he began his life in Nova Scotia, in Canada of course and was fascinated by chemistry and geology and he was one of these boy chem wizards.
Russ: Yeah?
John: And he discovered, in the 1840s, a process for distilling a cheap fuel that could burn brightly and without odor. Before he could make its use, he became entangled in a situation that got him in a - mired deep into debt, so he left Canada, left all that bad news behind him, settled in New York and he improved the process, which he named kerosene and launched an entire industry. He never made any money off of it, though, surprisingly. Yeah.
Russ: That's a shame. I wonder if it started off as just plain old-fashioned distilling moonshine.
John: I don't know, maybe he's just drunk all the time.
Russ: And he discovered that it would burn.
John: He didn't know _____. Yeah.
Russ: And turned it and said, "Well let's don't call it a drink. Let's call it a fuel."
John: A fuel, I don't know.
Russ: There's some of those tequilas out now that'd probably make good fuels.
John: Yeah, I was at a restaurant on Sunday. They made this banana Foster. I mean it looked like it could, like a blast furnace or something.
Russ: Yeah, well -
John: My God.
Russ: - it's probably releasing all kind of carbon into the atmosphere.
John: I know; people were doubled over in the dining room because of the pollution.
Russ: It's cause-
John: The EPA -
Russ: - causing the planet to light up?
John: - yeah well the EPA came in and shut the place down.
Russ: For bananas Foster?
John: And one of the owners of the restaurant out in handcuffs with a raincoat over their head and I haven't heard from 'em since.
Russ: All right.
John: All right.
Russ: Well there you go.
John: The let us - they didn't charge us for the meal.
Russ: That's good. Well, you won, then.
John: I won, okay. This week - I made all that up, by the way.
Russ: Oh.
John: Except for the banana Foster part.
Russ: Oh. Now, you did - were in a restaurant, they did fix bananas Foster -
John: Yeah and it was quite -
Russ: - and it did flame up.
John: - and it flame up, yeah.
Russ: Okay.
John: But the rest of it, I made up.
Russ: Extrapolation.
John: Extrap- you know -
Russ: All right.
John: Yeah. Whatever you wanna call it.
Russ: Okay.
John: This week in business history in 1867, we talk about barbed wire last week -
Russ: Yeah.
John: This year it's - this time it's patented.
Russ: Yeah.
John: 1867 by Lucien Smith of Ohio. Still in use today.
Russ: Yeah.
John: Prisons, used car lots -
Russ: Yeah.
John: - ranches, you name it.
Russ: I have some around my house.
John: Yeah and some people even have barbed wire tattoo around their biceps, you know?
Russ: Wow, yeah. I wonder if ol' Lucien Smith who patented it ever realized one day people would be putting tattoos of his product.
John: I know, I wonder, I wonder. I know. It's just -
Russ: Wow. It's cool.
John: - yeah, it's amazing. Yeah. This week in business history in 1926, the College Board administers the first SAT exam.
Russ: Wow.
John: Wow, I didn't know that it was that old.
Russ: That's cool. Yeah. Had Roger Elani on the show not too long ago. The founder of Master Teacher and they do a lot of SAT -
John: Now that was June, okay?
Russ: Oh.
John: Of June is 1926.
Russ: Yeah.
John: But in two months after that, they arrested the first cheater on the test.
Russ: Didn't take long, right?
John: Didn't take long. No, I'm just kidding about that, too.
Russ: Yeah, right.
John: But I'm sure, you know, if it was the first administration of the test, you can imagine what the reaction would have been to students.
Russ: Yeah.
John: 'Cause that's a hard test.
Russ: It is. It is.
John: It's not like the ACT test or anything.
Russ: Well -
John: So -
Russ: - but it's amazing, the whole psychology of testing these days.
John: Yeah.
Russ: You know the teachers in the school and the Departments of Education have come out and said it's bad -
John: Yeah.
Russ: - to test these people for - and then they start taking about they're just teaching for the test.
John: Right.
Russ: Well I always thought that's what all my teachers were doing.
John: That's right.
Russ: And that's why I was learning, so that I could take the test and know the answers.
John: Yeah, these kinds of teachers would just like to give everybody an A and get on with it.
Russ: Yeah, move 'em on.
John: You know, move 'em on. Okay, this week in business history in 1938, Federal Minimum Wage Law guarantees workers 40 cents an hour. We talked about it again this last week, didn't we?
Russ: Yeah, I'm beginning to think we have the wrong lesson.
John: I'd say we really - we got the wrong - no.
Russ: Or we did last week.
John: We did.
Russ: I think that was the problem, yeah.
John: Yeah.
Russ: So everybody that was in the School of Business last week, just forget it.
John: Yeah, forget it. Okay, some of this stuff - but anyway.
Russ: You know you were all taking notes.
John: Yeah, well.
Russ: All right, so anyway.
John: Okay, forget that one. Okay -
Russ: But as we said last week, it works -
John: It's too low.
Russ: Yeah, if it works at 40 cents an hour -
John: Just, yeah, $500.00 an hour. Just think at what -
Russ: Everybody'd be rich.
John: Everybody would be rich.
Russ: We'd solve all these problems.
John: I know, just, yeah.
Russ: All right.
John: Just jack it up, man.
Russ: Yeah, there you go.
John: Just print more money. This week in business history in 1962, Ross Perot begins Electronic Data Systems.
Russ: My goodness, yeah and -
John: That was a big deal.
Russ: Well yeah, and he was quite a hands-on leader.
John: He was.
Russ: He was a hands-on everything.
John: Former IBM'er.
Russ: Yeah, absolutely.
John: Didn't like the way he was compensated.
Russ: Yeah.
John: 'Cause he kept going over his quota.
Russ: Yeah. Former candidate for President of the United States.
John: Yeah, right.
Russ: Who is probably the most successful third-party candidate ever.
John: Yeah and did a very courageous thing as some employees that were kidnapped in Iran.
Russ: Yeah.
John: And he went to rescue them.
Russ: Yeah, now I know that story. That's interesting, too.
John: Yeah, Wings of Eagles, yeah.
Russ: Yeah. Do you know how they got 'em out, ultimately?
John: How?
Russ: They sorta staged a fanatical religious presentation in front of the prison every day and for about four or five days and every day the crowd got bigger and bigger and they were all getting excited about what the guy was saying, and it was like on day four or five, the guy finished his preaching and sermon with, "Let's just go charge through the prison," so they broke down the front doors and all the prisoners got out, including -
John: The ones that -
Russ: - that Ross Perot's prisoners.
John: I did not know that.
Russ: Yeah.
John: Oh, okay. Cool.
Russ: Yeah. So it worked.
John: Okay, this week in business history in 1963, the Beatles first song "From Me to You," hits the UK charts over there in Great Britain.
Russ: Well finally, we've gotten to some good news.
John: Yeah, the Beatles, yeah.
Russ: Yeah, that was good.
John: Yeah. Okay, this week in business history in 1985, US Route 66 ceases to be an official US highway and Route 66 was actually de-certified as a route.
Russ: Do you think they really needed to do that?
John: No, I think somebody had too much time on their hands.
Russ: I think it was bad politics.
John: Hey, I got an idea. Let's de-certify Route 66.
Russ: It's kinda like when they de-certified Pluto as a planet.
John: Pluto as a planet, that's right.
Russ: Yeah. I don't know which one is worse but Route 66 -
John: I say this is worse 'cause Route 66 is here.
Russ: Yeah we can't -
John: Pluto is like way out there.
Russ: We can experience it.
John: We don't miss Pluto.
Russ: Yeah.
John: You know, when's the last time you ever, you know, went, drove by Pluto.
Russ: It's been a while.
John: I know.
Russ: But if you ask me the same question about Route 66, I literally stood on -
John: On Route sixty-
Russ: - on some of the original Route 66, now de-certified.
John: You see a old Corvette -
Russ: About a year ago.
John: - off the side of the road up on blocks.
Russ: Yeah, and then - it was when I was taking my daughter in her car back to school at Los Angeles, so we diverted, specifically, to be able to go on Route 66.
John: To see - oh, right.
Russ: And I even stood on a corner in Winslow, Arizona.
John: Is that on Route 66?
Russ: Yes it is.
John: Oh, wow.
Russ: Yeah.
John: Yeah.
Russ: And it -
John: Such a fine place to be.
Russ: Absolutely. There was a girl -
John: There was a girl, my Lord, with a flatbed Ford.
Russ: - with a flatbed Ford.
John: Stopping down to - stopping by to take a look at me.
Russ: You ought to see and the history is that Winslow, Arizona, I read the history, kind of ignored the song for about 15 or 20 years.
John: Yeah.
Russ: And finally, they had a city councilman, "Have you guys noticed how many people come in our town and go down there and stand on a corner and take pictures and," and they kinda went, "Yeah, it's that, an Eagles song, right?" And so he said, "Let's do something about it." So now, on that corner, it's a little commercial but there are two or three actual souvenir shops that are quite extensive about Eagles, Route 66, and Winslow, Arizona and then there's also like a little store, a fake store -
John: A fake store.
Russ: - with a fake façade on it and in the façade there's like a window and you can look in the window and you see a reflection of a flatbed Ford and you turn around and look and there's always a flatbed Ford parked there on the corner.
John: Oh wow, on the corner.
Russ: Yeah, yeah.
John: Of Winslow, Arizona.
Russ: Yeah, I got my picture there, so I might show it to you some day.
John: Sheesh, yeah, I'd like to see that.
Russ: All right.
John: Can't wait. Okay.
Russ: All right.
John: Okay.
Russ: Sorry to divert the history lesson.
John: Well, what year am I in, here?
Russ: But you know, when there's a personal experience, be it with kerosene or the SAT scores.
John: I know, all bets are all off. I know.
Russ: You know?
John: I don't have any personal experiences right now.
Russ: But back on Route 66, my God -
John: Yeah.
Russ: - we've talked about it all this time without ever even talking about the show.
John: Yeah, and we remember that for a short time we were actually talking about various episodes and plots.
Russ: We would incorporate it in the history lesson.
John: That's right, yeah.
Russ: And I think we got booed by some young people that said, "That doesn't make any sense -
John: I know.
Russ: - a show with two guys driving down in Corvette.
John: And they would be helping people.
Russ: Helping people. That's what they do.
John: That's what they _____ and they'd always get in a fight somewhere.
Russ: That's right but they'd usually win.
John: Not with each other but -
Russ: No, no.
John: - they always - somehow, they would always be pulled into a bad crowd somewhere.
Russ: I wonder if those guys were gay. Todd and -
John: I don't know. That's probably something we shouldn't be talking about, here. Get picketed. All right, okay. This week in business history in 1987 for the first time in military history, a civilian population was targeted by chemical attack when the Iraqi war planes bombed the Iranian town of Sardasht.
Russ: Yeah.
John: And this is one of the things that led Bush to think, and his administration, that they had these weapons of mass destruction.
Russ: Well, they did have it. Yeah, they did. This was Saddam Hussein.
John: Yeah.
Russ: Now maybe that's all they ever had but Saddam -
John: But they were willing to use it -
Russ: Yeah, yeah.
John: - and they gave no indication that they never had it.
Russ: Maybe they were just wanting to use it on their own people -
John: Yeah.
Russ: - because this was their - no, this was the Iranian town. Oh, wow.
John: The Iranians, yeah, yeah, they went across state lines.
Russ: Across state lines, interstate commerce law breakers.
John: Yeah, the interstate - that's the Arab interstate commerce commission.
Russ: Right.
John: They had to put their foot down.
Russ: Right, all right.
John: Okay, fi- last but not least in this week in business history in 2008, Bill Gates stepped down as Chairman of Microsoft to work full-time for the Bill and Melinda Gates Foundation to assuage the guilt they have for having so much money. That's probably what happened there, plus they needed a tax break and you know -
Russ: Well he probably wanted to do something more interesting and just got tired of the software gig and made so much money.
John: Software gig, so he gives money to dictators and -
Russ: Yeah, well I think the thing that he's - the coolest thing that he's done, since he did that, was recognize Sal Khan and the Khan Academy because -
John: Yeah, right.
Russ: - you know, there's - I've read -
John: A lot of his money does go to good use.
Russ: Well it does but I've read a lot of reviews on it.
John: Yeah.
Russ: You know, there was a Wall Street Journal article one time about how they wish he had never quit because -
John: Yeah, right.
Russ: - because his creativity.
John: He does more good, yeah, right.
Russ: Yeah, was as great and this is hard to do to give away money and have it work. Now I think the exception, for sure - and I'm sure there's others - is this thing Khan Academy. Boy that is impressive.
John: Yeah.
Russ: All right, but -
John: Okay, all right.
Russ: - I digress once again.
John: That's it.
Russ: But that wrapped up today's history lesson?
John: I guess it does, yeah.
Russ: Well I liked it. It wasn't - it didn't seem like it was a extra-thrilling week.
John: No, no but we embellished enough to make it somewhat palatable to -
Russ: And we can only control history to a certain degree then it's out of our hands, right?
John: Well, whenever it seems to get out of hand, that's when we make everything up.
Russ: That's right.
John: To make it sound good, you know.
Russ: That's right.
John: We never, you know, making things up -
Russ: Takes some talent.
John: - I think most historians kinda make stuff up anyway.
Russ: Well I know they do.
John: Yeah, right.
Russ: Absolutely. All right.
John: All right.
Russ: And that brings us to Navigating Business Jargon, also known as our history lesson -
John: Hey I hit the right on the nail of the head yester- or last week.
Russ: Yeah, yeah. It was a easy word though. It was beer____.
John: Oh, see now, look. There you go again.
Russ: Yeah.
John: Just 'cause I guessed the word -
Russ: Yeah.
John: - you say it's easy.
Russ: Yeah.
John: Okay.
Russ: Obviously.
John: If I don't guess the word -
Russ: Obviously.
John: - sometimes I - give me some credit. I mean if it's a difficult word, just 'cause I guess it doesn't automatically make it easy.
Russ: Okay.
John: Geeze.
Russ: But for those of you that don't know, the way that it works is I get to go out and choose -
John: I don't care if they don't know. I'm fed up with this.
Russ: - I choose the new word.
John: Yeah.
Russ: And -
John: You have too much power in this segment.
Russ: Well, I do have a lot but you, on the other hand, get all of the accolades when you guess it right.
John: Yeah, right.
Russ: Yeah, so but what we haven't done in a long time -
John: But doesn't - these little backhanded compliments you give me, though.
Russ: But what, we haven't done in a long time -
John: I could do without those, I'll tell you that.
Russ: - is express the caution required for people -
John: Yeah.
Russ: - that don't know about these -
John: Yeah, yeah, you gotta practice the use of these words and -
Russ: Before you go use them.
John: - yeah, right and be - I would suggest you like go to, go into your bathroom, lock the door and practice the words in front of a mirror so you can pronounce them right.
Russ: What if your family hears you?
John: No, don't -
Russ: Do you stuff towels under the door or something?
John: - don't use it - yeah, do that, yeah. Make it soundproof as much as possible.
Russ: Okay, yeah.
John: And then practice the use when you go to one of these cocktail parties and wait about an hour after you get there, everybody's kinda high on whatever it is they're high on.
Russ: And that's when you pull 'em out.
John: That's when you pull 'em out and people will be amazed by how erudite you are.
Russ: Yeah.
John: And then, and only then, after you practice its use in such a way, then, like that, then you can use the word at home.
Russ: Okay. All right, that's good.
John: That's my - that's always been our warning.
Russ: Yeah, it is.
John: Okay.
Russ: Okay.
John: And if you're listening to this on just a basic radio, I strongly urge you to go listen to the School of Business online at The BusinessMakers.com where you'll get the full course load of the week.
Russ: Right, that's The BusinessMakers.com.
John: Yeah, businessma-
Russ: Uncensored.
John: Uncensored and -
Russ: Uncut.
John: - and, right, and -
Russ: Unnecessary.
John: Enriched, enriched for to help you grow up big and strong.
Russ: There you go.
John: Yeah, okay. All right.
Russ: All right, today's word are you ready?
John: Oh yeah, the word, yeah, go ahead.
Russ: It's a layup but that's not the word.
John: Oh -
Russ: No, that's not the -
John: - come on, there you go again, all right?
Russ: I know, I know but it's a good word for you and for the audience to learn.
John: All right, okay.
Russ: Here it is: Appleism.
John: Appleism. Okay, a communism - a lot of the -isms are a state of, type of political control.
Russ: Sometimes religion, too.
John: Religion, yeah right.
Russ: Yeah, yeah.
John: So Appleism is someone who is so enamored and almost where they're developing a psychosis that the Apple way is the only way, so everything they have is Apple. They got an iPhone, their laptops are the - their PC's an Apple -
Russ: Ladies and gentleman, hold your calls, please.
John: - they are just, they are just a -
Russ: We have a winner.
John: - they are drinking that Kool- that Apple Kool-Aid.
Russ: You bet.
John: All right.
Russ: The religion which honors and worships Apple and their products.
John: Yeah.
Russ: So an Appleist would be a person that practices Appleism.
John: Uh-huh, an Appleist.
Russ: Yeah.
John: Yeah.
Russ: An Appleist.
John: An Appleist, right yeah. I used to live in Annapolis.
Russ: Did - in Annapolis? Yeah.
John: I used to live in Annapolis.
Russ: Yeah, they have a lotta Appleists in Annapolis.
John: Yeah.
Russ: All right.
John: Lotta Naval people, too.
Russ: All right, all right. There you go. All right, so that brings us to Dumb Moments in Business. Have there been any this week? Maybe there haven't even been any, you know?
John: Oh there's -
Russ: We don't know 'cause we don't do these in the past anymore. We do them in the present.
John: Or sometimes, you know, the -
Russ: Or the future.
John: -in the future.
Russ: Yes, that's right.
John: We are, we look into our crystal ball.
Russ: Yeah.
John: Now this is just a state of how screwed up everything is.
Russ: Yeah.
John: And there's no one to blame but our politicians.
Russ: Yeah?
John: This is from the AP, Associated Press. I'm just gonna read some of the few paragraphs in here and it's really kind of mind-boggling, what's going on. Recession-plagued states diverted scarce money away from pensions - guess what happens, these pension funds are so fat and these states have all these things they wanna do, so they take money away from the pensions to pay for what they consider to be more immediate concerns. Right now, there's a 750 -
Russ: Like their own increases?
John: Yeah, right their own salary increases or some stupid stadium or light rail or something like that.
Russ: Yeah, yeah.
John: Leaving a $757 billion hole in the retirement funds. Now you're talking about millions of public employees are supposed to be covered by this money.
Russ: Yeah, they were. They counted on it. Many that retired, right -
John: Yeah, right, yeah.
Russ: - and said, "Okay, I'm gonna get this much money per month."
John: Now there's this group called the Pew Center. They have a great website, you gotta go visit it sometime, just Google Pew Center, you'll get it. Thirty-four states, they found 34 states, have failed to maintain safe levels of money in the pension funds and most experts agree it's about 80 percent of the long-term obligations.
Russ: Yeah.
John: So these are 34 states that have less than 80 percent of their long-term obligations in reserve to pay for these retirement funds. Four states, Connecticut, Illinois, Kentucky, Rhode Island, didn't even have 55 percent of the money they'll need in the long run.
Russ: Geeze.
John: Right? This is serious stuff.
Russ: Well, I know it is and if it -
John: This is like Greece.
Russ: Yeah.
John: This is what got, you know, 30, about a third of the workers in Greece work for the government.
Russ: Right.
John: There's no money to pay 'em, you know?
Russ: Right. Well these are kinda like Ponzi schemes but they're worse because the administrators go -
John: They're legal.
Russ: - suck money out of 'em -
John: Yeah, right.
Russ: -at the same time.
John: They're diverting money.
Russ: I mean I feel sorry for the people that are not gonna get their money but there's just not enough to go around.
John: There's not enough to go around and get this: pensions, according to this article in the AP, actually it ran in Yahoo News, but pensions, it says here, pensions are the only retirement problem. States also face a $627 billion shortfall in the healthcare services. So you have a $627 billion health shortfall in health services and $757 billion hole in the retirement, so you're talking about $1.3 or 4 trillion just in the states.
Russ: We're gonna have to raise the taxes on the rich.
John: We're gonna have to raise the taxes. Now get this: this is what this means about the healthcare, the $627 billion shortfall in healthcare. What you're saying is for every dollar that these states'll eventually have to pay out in healthcare, the states have set aside, get this, 5 cents on the dollar.
Russ: All right, good luck.
John: Everyone's talking about the federal deficit.
Russ: I know, I know.
John: These states are gonna kill us all, man.
Russ: It's gonna be exciting times, here -
John: That's right.
Russ: - these ten years.
John: Get your guns, baby.
Russ: Right, all right.
John: All right.
Russ: All right and before we wrap it up, it's time for the very popular PKF Texas Entrepreneur's Playbook.
John: Oh yes, and here we go, Russ. Here is Greg Price.
Russ: All right and that wraps up today's School of Business. Stay tuned in for our interview with Glenn Outerbridge, founder and CEO of eyeMe, followed by Esther's interview with Robbie Wright, founder and CEO of Bounce. This is the BusinessMakers Show heard on the radio and seen online at TheBusinessMakers.com.
