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School of Business 11/03/2012

The BusinessMakers

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Russ and John present the show about people who REALLY create REAL jobs, the artists and athletes of our free enterprise system. Without the BusinessMakers, there ARE no taxpayers. Includes: The BusinessMakers Quote of the Week—a political comment from American novelist Ayn Rand; This Week in Business History includes big moments like the death of Butch Cassidy & the Sundance Kid, the collapse of Gallopin’ Gertie and the launch of Sputnik; and the Jargon Challenge Round—trendy technospeak that YOU should know.

Full Interview text

Russ: This is the Businessmakers Show heard on the radio and seen online at thebusinessmakers.com. And this is that show about people that really create real jobs.

John: That's right. These are the entrepreneurs, the champions of our free enterprise system, the artists and the athletes of our free enterprise system, and they're the ones that have the wherewithal to create jobs where people actually produce things and keep the economy growing, in a meaningful way.

Russ: Yeah. Paying taxes to the government.

John: Yeah. They pay taxes to the government and the government spends it as they wish. But without these people, there are no tax revenues.

Russ: That's right. Absolutely. And as you and I have discussed before, we live in this era where giving back to the community is such a high aspiration and lofty thing to do. I think we agree on what is the best way to [crosstalk].

John: I think a lot of these people are guilt-tripping, really, because they've got success, and some of them got it rather quickly, and they feel bad about it. A lot of Hollywood stars are like that. They get all this money and they don't know what to do with it. But I've got to tell you, the meanest S.O.B. business capitalist, arbitrage, I mean, the worst possible personality type who's caricatured daily, when you look at the Democratic talking points, that guy does more to give back to society than ten United Ways.

These private jets these guys fly around, who builds those things? Those are blue-collar workers. That's who services them. You've got a millionaire hangar down here at Hobby Airport. There's a lot of blue-collar workers walking around there. These 13,000 to 20,000 square foot mansions, that's like six regular-sized houses and it takes a lot of blue-collar workers to keep them up, and that money goes to their families.

Russ: Not to mention that that guy might have a lot of employees, and one of the best ways to give back to a community is to create jobs.

John: Essentially it's a manufacturing. There's blue-collar workers on the assembly line. I don't know. These people, it's fine that they give to the United Way and all these other things. I'm not saying they shouldn't be doing that. But they should be thinking about, also, when they talk about this, is how they're supporting the economy in meaningful ways.

Russ: Yeah. There's no better way to give back than to be successful.

John: Yeah. I mean, it's good to give money to some poor schmuck who's down on his luck. I'm not against that. But what about the highly skilled laborer who fine-tunes those Gulfstream jets. Who's taking care of them?

Russ: So giving back to the community can be done by creating jobs.

John: Just by running a company.

Russ: That's right. So this coming week, I don't know, we're here and it's the weekend and we're facing an election.

John: That's coming up soon.

Russ: Do you vote?

John: Of course I vote.

Russ: I've already voted.

John: Oh, have you?

Russ: Yeah. They counted my vote in the early votes.

John: I've got to tell you. I'm going to vote for Romney.

Russ: That surprises me.

John: Well, the thing is, there are some things about him that are questionable. But as I've told some of my liberal friends who bring that up, incessantly, to the point of near madness, I tell them, I say, "Look, you're right. In some ways you don't know what you're going to get with this guy." But we have a higher probability of getting this economy fixed with him running the show. We've already seen what the other guy can do. He has wrecked the economy. It's gotten so now that if the employment goes from 8.1 to 7.8, that's a big deal, man. Hey, things are great. We're at 7.8 percent unemployment. That's terrible.

Any Republican president would've brought those numbers in, they would've lynched the guy in Lafayette Park, across from the White House. So I've got to say, there's questions about Romney and they're good questions, but I think the probability of someone like him fixing the economy is higher than someone like Obama. He's done the Keynesian thing. The one thing to Obama's credit is he's proved that Keynesian economics and big government solutions to programs, and all that thing, does not work.

It's a shame we have to live through it. It's not like we haven't had perfect examples of it elsewhere, and a lot of cities in the Northeast are run like little socialist enclave, and they're all basket cases. So anyway, that's my take.

Russ: My two bits is I think Mitt Romney is perhaps more qualified to straighten up the economy than any of the last, probably, three or four presidents, including Republicans. I think that he knows it better than anybody, and I think that he's turned organizations around.

John: Okay, here's the thing that's in his favor. A lot of politicians have a theory, but do they have the ability to lead people to execute. In the case of politicians, they have to coerce people, because you have separation of powers. The thing about Romney is I think he's got the ability to convince people.

Russ: I do too.

John: I don't think Palin - I agreed a lot with what she said, but I didn't think she had the ability to do that. Obama sure doesn't have the ability to do that. Bush had some ability to do that.

Russ: But I think that he's spent too much anyway. I mean, he got [crosstalk]. What are we doing here?

John: I think we've already used our allotted time.

Russ: But we do have some cool guests lined up today. First up, Mr. Aron Susman, the co-founder of The Square Foot. We're talking about commercial real estate online, kind of an interesting model, and that's going to be followed by an interview with Robert Scharar, who's going to talk about doing business in Africa. He's the President of FCA Corp and has his own Africa fund, and there's a lot of people saying that Africa is sort of the new Asia.

John: You know, they've been saying that for 50 to 100 years.

Russ: I know. They're still saying it.

John: The problem with Africa is those countries are very unstable.

Russ: But there are a bunch of [crosstalk].

John: And they play for keeps over there. Look what happened in Libya.

Russ: I don't count Libya. Those things up north, we're not talking about those. We're talking about South Africa. We're talking about around south of the desert. Listen to the interview. It's pretty cool.

John: I'm not saying he's not worth listening to or that he doesn't have a good idea. I'm just saying Africa is not a capitalistic paradise.

Russ: No, it's not, but it's a huge continent with a lot of history.

John: It is. I've seen the maps. That's a pretty good-sized continent they've got going on over there.

Russ: It is. It is. But first [break in audio until 0:07:29].

Russ: That's right. It's time for the Businessmakers School of Business. Golly, if you just tuned into this you'd probably learn what was really happening in the free enterprise.

John: You're probably screaming for the exits. What the heck have we gotten ourselves into by listening to these guys.

Russ: Right. And we kick off the School of Business each week with a quote of the day. Believe it or not, this is the first time I've ever selected an Ayn Rand quote, author of Atlas Shrugged, The Fountainhead. Pretty impressive capitalist. It goes like this: "Government help to business is just as disastrous as government persecution. The only way a government could be of service to national prosperity is by keeping its hands off." She was pretty aggressive about that position, too.

John: Absolutely, and I think that capitalism can't exist without the rule of law, but there's this thin red line between properly created law, properly administrated law, and really overdoing it to the point where you're paralyzing the will and the spirit of the free enterprise system. I think she does have a point, but you do need to a set of rules that are reasonable, or you have chaos. Look what happened in Moscow, and in Russia.

Russ: But are you sure that line is red?

John: Well, it could be blue.

Russ: Okay. I just wanted to make sure.

John: It could be chartreuse. Depends on the mood I'm in.

Russ: All right. And that brings us to This Week in Business History. So what happened during this early November week in business history?

John: Oh boy. Okay. I don't know where to start so I'll start at the beginning. This week in business history, in 1633, the inventor of the thermostat, Cornelius Jacobszoon Thermostat, passed away. His real last name was Drebbel, but we find a lot of products are named after the person that invented them. He was actually into glasswork, engraving, and mapmaking, and he got into this thermostat thing rather by mistake, and invented new kinds of dyes. I mean, the guy was just an all-around good guy scientist.

Russ: Yeah. Thermostats are good.

John: Thermostats are good. Where would we be without them? Okay, this week in business history, in 1893, the father of industrial design is born, named Raymond Loewy. Much of human history design of technology was dictated only by its purpose and according to this article I'm reading, was a slave of function. But this guy, Raymond Loewy, was born in Paris in 1893, in this week in business history. He designed and redesigned an enormous quantity of products, including radios, refrigerators, lighters, and toothbrushes, so the form and the function were matched.

Russ: He cared what they looked like.

John: Yeah, and ease of use, and how they'd fit in a person's hand, like those toothbrushes. And design means a lot when people buy products, when companies buy products.

Russ: Absolutely. Sometimes it means more than the function.

John: That's right. This week in business history, in 1895, Wilhelm Conrad Roentgen, a German scientist, discovered x-rays. My business, this has been a very prolific week in business history. It occurred accidentally in his lab. He was experimenting with cathode rays and capacitor glass and he noticed a glow coming from a nearby chemically coated screen. He dubbed that caused this glow x-rays because of their unknown nature. During the '30s, '40s, and '50s, many American shoe stores featured shoe-fitting fluoroscopes that used x-rays.

Russ: Until people started getting cancer of the foot. But they did. I remember.

John: Well, look at Madame Curie and her husband. They died of radiation.

Russ: But I don't think I ever looked at my feet through those shoe store x-rays, but I remember one place, when I was little bitty. We were in a big city, San Antonio, Texas, probably, and it was a shoe store, and I saw one, where you could go stick your feet in there and see what they looked like, so that you would get good-fitting shoes, I guess. But it would fry your feet off if you did it too often.

John: Or your feet would shrink.

Russ: Right, and then you'd need a smaller shoe.

John: Okay. This week in business history, in 1904, Harvey Hubbell II patents the electric plug. When electricity started moving into the home, of course it was used only for lighting. Since the only electrical appliances were the light bulbs and the light fixtures, but as new things came on the market that used electricity, they knew they had to distribute that electricity in the house, to make it easier to use these appliances.

Russ: You know, we don't think about innovation like that. We just think, okay, there's electricity. Wow, we'll put lights up like this, and we'll plug the toaster in like this, so boom.

John: I guess the first wave of sales of the electric toaster didn't go very well.

Russ: You had to go plug it into the light socket.

John: Okay. This week in business history, Butch Cassidy and the Sundance Kid are reportedly killed in San Vincente, Bolivia, in 1908, proving that crime doesn't pay, but the hours are good.

Russ: So we're talking about Paul Newman here.

John: Yeah, right. Paul Newman and Robert Redford. Paul Newman passed away recently. Robert Redford is still out there. This week in business history, in 1940, one of the most infamous industrial structural collapses occurred. It was the Tacoma Narrows Bridge, called the Galloping Gertie, collapsed in the Puget Sound, called the Tacoma Narrows, and this wind came up and this thing was just flopping all over the place.

Russ: And they captured it in video, didn't they, which is amazing in 1940.

John: Cars falling off of it. It wasn't aerodynamically designed to withstand the high winds.

Russ: And that's what made it start flipping around and break. Wow. Scary.

John: This week in business history, in 1952, the first use of a computer to predict winners on election night, done in 1952. That summer, the CBS television network was approached by Remington Rand. They produced a Univac, the first all-electronic computer, and they used it for the Eisenhower-Stevenson election.

Russ: Which Eisenhower won.

John: Yeah. Eisenhower won by a landslide, and then won again. They ran against each other the next time around.

Russ: Did the computer get it right?

John: I guess so, because we're talking about it, aren't we? Okay. This week in business history, in 1957, the Sputnik program. The Soviet Union launched the Sputnik 2, and onboard was the first animal, a dog named Laika.

Russ: Do you think Laika is still up there in Sputnik 2?

John: I don't know. It was one of those early space launches by the Soviet Union. Nobody knows what happened to those poor animals and people. There could've been some humans that died up there that they sent up. We'll never know. Okay. This week in business history, in 1966, the Truth in Packaging law takes place. Lyndon Johnson pushed a rather confusing array of bills through the legislative change, and it resulted in a lot of confusing language, that's survived to this day, on food labels.

Russ: But some of it was necessary.

John: Yeah. I'm not saying it wasn't.

Russ: That was kind of when they quit allowing things like jumbo ounces.

John: It was almost as misleading as the body count figures coming out of South Vietnam when he was president. We should've had a truth in battle strategy law passed at the same time. He had room to talk there. This week in business history, Rolling Stone magazine publishes its first edition in San Francisco, in 1967. Rolling Stone started out as a worthwhile read. It was amusing for rock and roll junkies, and it's kind of morphed into this magazine that has political expertise. It's anything but. It's very liberal and all that.

Russ: [Crosstalk] if you're worried they're going to start competing against the Houston Business Journal.

John: No, and we're not going to be covering rock. Actually, we do. Once a year we used to cover rock and roll music because we had the battle of the business bands, but we're not going to be doing that this next year. This week in business history, in 1994, was the first conference focused exclusively on the commercial potential of the World Wide Web. It was held in San Francisco, and I'm sure a lot of good came out of it, because we all know a lot of that potential has been realized.

Russ: And it was controversial, somewhat, in the beginning. I still remember a company that I was running at the time. We had some real high-tech guys, and one day we got a call from somebody serious, because somebody from our organization was pounding upon a commercial site, and nefariously trying to choke them. The reason our guy was doing that is that he thought it was abusing the World Wide Web.

John: What, by trying to sell something on it?

Russ: Yeah. And it turned out very well, but in the very beginning it was universities and government, just chatting with each other in the way they chat.

John: And last but not least, this week in business history, in 2008, the first African American is elected president of the United States, Barack Obama.

Russ: And we're going to see if he gets a second term here in this next week. It's going to be interesting. All right. Good history lesson. And that brings us to the vocabulary lesson. The vocabulary school.

John: I haven't been doing so well on this lately.

Russ: Also called the jargon challenge.

John: Yeah, because I don't know the word, or the phrase you're coming up with. I just have to guess it right off the top of my head, or the bottom of my heart.

Russ: Right. That's the way it's presented.

John: From the top of my head to the bottom of my heart, I try to come up with the meaning.

Russ: Here's today's word. It's a noun and it's transliteracy.

John: Transliteracy. I'd say it's a word similar to translation, where you're taking people who don't know how to read, or are not very intellectually curious people, and you're trying to teach them something that will do them good. It's the ability to take that kind of information and make it interesting enough for the people who really don't care about that subject to understand it and appreciate it.

Russ: Such a creative attempt, but it's wrong. Sorry. We talk sometimes about some of these new words don't exactly have the best meaning tied to them. This might be one of those, although you weren't even close. Transliteracy means the ability to read and write using multiple media, including traditional print media, electronic devices, and online tools.

John: That's a terrible definition. Mine is better.

Russ: Maybe we should just rule that one out. I'm not going to give you a win, but I'm not going to give you a loss either. It was just like it got rained out, okay?

John: Rainout. All right.

Russ: And before we wrap up today's School of Business, once again it's time for the PK of Texas Entrepreneur's Playbook. All right. And that wraps up today's School of Business. Stayed tuned in for our interview with Aron Susman, co-founder of the The Square Foot, and Robert Scharar, president of FCA Corp. This is The Businessmakers Show, heard on the radio and seen online at thebusinessmakers.com.

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