Dr Jeff Cornwall

The Office of Advocacy of the SBA reports that the state of Rhode Island has taken a major step forward in assuring that regulations do not unfairly burden small business. This is consistent with evidence that shows the importance of a two-pronged approach to supporting entrepreneurial economic development: education and getting government out of the way.
“‘Rhode Island’s small business owners now have a seat at the table when regulatory decisions are made,’ said Thomas M. Sullivan, Chief Counsel for Advocacy. ‘When their voice is heard, better decisions are made, and that means more jobs and growth for Rhode Island.'”
Rhode Island is the latest state to move in this important direction. The Office of Advocacy reports that legislation is “pending in 11 states. In the past year, small business regulatory flexibility has been implemented in six other states, most recently in Missouri and Kentucky.”
All of these states are following the model legislation written about earlier at this site.

From the Congressional Joint Economic Committee:
“The economic expansion has regained traction following the soft patch of late spring. Payroll employment growth picked up in August and consumer spending appears to have rebounded in July and August. Business investment spending continues to grow and employment and output in manufacturing are on the rise. Levels of activity in housing markets and new construction remain strong. Exports rebounded in July while imports declined, leading to an improvement in the trade balance. Inflation, inflation expectations, energy prices and long-term interest rates have recently eased. Forecasters see strong growth in the gross domestic product (GDP) for the second half of the year.”
Find the full report here.

While manufacturing is, and will remain, a vital part of our economy, we have heard for years about the transformation to a service/information economy. And yet, up until now, the government did very little to track this major part of our economy–on that is dominated by entrepreneurs. On Monday (gee, I missed it in the papers and the evening news, too) the Census Bureau issued its first full report on this sector’s economic health. Any fears that service and information are still hurting were completely smashed by this report.
Here is a summary of this report for Q2 2004 from Inc.com:
“The report showed that information services revenue rose 4.4% in the second quarter of 2004 to 0.1 billion. Revenue from administrative and support services, as well as waste management and remediation services, totaled 1.9 billion, up 5.6% from the first quarter. Revenue from professional, scientific, and technical services posted the largest gain, rising 6.3% to 1.6 billion.”
How important is this sector?
“According to the Census Bureau, the three sectors constitute approximately 15% of U.S. gross domestic product, with service industries in general accounting for nearly 55% of the nation’s economic activity, excluding retail and wholesale trade.”
Note that this is excluding retail and wholesale. So these are not just burger flipping jobs. This report certainly helps support the strong employment data we have seen recently from the household employment numbers.

Competition in domains that were once thought to be permanent governmental monopolies is proving to be effective in many arenas. Certainly schools have been one of the modern success stories of privatization. In today’s Tennessean it seems that public school teachers in Nashville (yes, those same public school teachers who fight the creation of charter schools and lobby for more and more and more money without any accountability) agree that competition and markets really do work.
“More than one out of every four Metro teachers, or 28.6%, send their children to private school, according to a study released last week.”
So, how does this compare to the overall population in Nashville? Teachers are twice as likely to send their kids to private schools as the average family in Nashville.
What could possibly be the reason behind this startling statistic?
Well, School board Vice Chairwoman Kathy Nevill thinks it must be racism. “A lot of it stems back to the same reason the community left the school system — they are scared to death of busing. To some degree they are still scared to death of diversity.”
The Director of Nashville Pedro Garcia “had not seen the report and questioned its accuracy.” He has gathered his own data. “‘I talk to lots of teachers, and I know where they send their kids. I don’t believe it’s anywhere that high.'” But if the data proves to be true, isn’t that a call to action, Dr. Garcia?
“If the report holds up, Garcia said, he is not overly concerned. ‘Teachers can send their kids wherever they choose,’ he said.”
Well, maybe we should go to the teachers and find out the real reason.
“Attempts to interview Metro teachers whose children attend private schools were not successful.”
I’ll go out on a limb and posit my own explanation. The private schools are better and the teachers know it. Gee, maybe if we all had real choice in schools it might just push public schools a little harder to improve and compete.

While many shoe manufacturers long ago gave up on making shoes in the US, FastCompany tells about one entrepreneur who hasn’t followed that trend. John Stollenwerk, president, chief executive, and owner of Allen-Edmonds Shoe Corp., is among the last remaining shoe manufacturers in America. He employees about 700 people in his company, which located in Wisconsin (see Packers beat Carolina in opening MNF).
While many have held him up as a true patriot, Stollenwerk is just responding to his market. Customers have come to appreciate the quality that Allen-Edmonds produces and the service they can provide to their customers. Take as, an example, banking. Predictions that soon there might only be two or three mega-banks have proven wrong. The market has needs not being met by the mega-banks and entrepreneurs are responding with many new (and successful I might add) banks for us to choose from. It takes vision and commitment to that vision, but like those worms and shrimp that were discovered living off the gas vents in the bottom of the ocean, entrepreneurs can flourish in remarkably hostile environments.
“This unassuming leader isn’t refusing to go overseas because of some abstract principle. It’s all about the shoes, and he still believes that Allen-Edmonds can make them better — and serve customers faster — in the United States.”
What is most remarkable to me is the courage that Stollenwerk has shown in sticking to his vision for the company that he purchased in 1980. “‘John could take this all offshore tomorrow, and we could probably double — maybe even triple — our profits,’ says Mark Birmingham, Allen-Edmonds’s COO. ‘But he knows that’s probably shortsighted’….That philosophy — built around a willingness to sacrifice short-term gains for the long-term good of his organization — is what defines Stollenwerk’s quiet kind of courage.”

The Congressional Joint Economic Committee has issued a report on household debt and our economy that has some interesting and rather complex findings:
“Many analysts have expressed concern about the growth of consumer debt and its effect on the U.S. economy. Some fear that the combination of increasing debt and higher interest rates will impair the ability of households to meet their monthly financial obligations. However, interest payments as a percentage of disposable income have actually fallen since the end of the recession in 2001. Total household debt has increased since the end of the recession, but the vast majority of the increase can be attributed to the growth of home mortgage debt spurred by historically low mortgage interest rates.
Highlights:
* More than 90 percent of the increase in total household debt since the end of the recession is due to growth in home mortgage debt.
* As a share of total household debt, consumer credit (e.g., credit cards and automobile loans) has fallen to its lowest level in a decade.
* After rising throughout the 1990s, the burden of household debt has fallen in recent years.
* Total household assets are more than five times larger than total household liabilities.”