Nine Shift

There is no economic uncertainty

Business says it won't invest because of "economic uncertainty."  There is no economic uncertainty.

We have two economies. The Industrial Age is in decline. The Internet Age economy is taking over. There's no uncertainty in either.

Invest in the new economy and we all win.  Invest in Fiat, Tesla, Ford or Ringling Brothers Circus, and good luck to you.

Business hoarding its money

American business is hoarding its money, not investing. It has, by one estimate published in The New York Times, $1.7 trillion dollars just sitting there.  Another NYT story revealed Blue Cross is sitting on hundreds of millions of dollars of "extra" reserves, not needed. Even nonprofits like colleges collected heaps of dollars before the economic collapse. "More is better," said one college fund raiser to us.

It is clear that business has the money to stimulate and grow the economy. They just won't make the investment in their own future.

Is government regulation holding back business investment?

There is no question, business fears government regulation. That's one big reason why business is not investing, "they" say.  But are "they" right? 

It is true that business fears government regulation. It is not true that government regulation hinders business growth.

100 years ago my great grandfather, William A. Draves I, co-founded Chain Belt, a manufacturing company that made, well, chain belts. The company testified before Congress, opposing the 8 hour work day. The company told the Senate Chairman on Education and Labor, "It is impossible for us to restrict our labor to eight hours and meet competition either in America or abroad."  (sound like a familiar argument?)

Of course Congress passed the eight-hour day bill. And what happened to Chain Belt? It grew to become a Fortune 500 company.  At one time in the last century it was one of the country's 500 largest companies.

The lesson: business does not understand that government has to make new rules, new laws, new regulations in the new economy, not only to protect society but also to stimulate business growth.

Why Business Is Not Investing

Business is simply not investing enough. And business investment is the source of economic growth and prosperity. Let's explore why.

1.There's no good investment in the old economy.
We now have two economies. One is the old Industrial Age economy that is in decline. The other is the new Internet Age economy that is on the rise. One reason why we had the financial collapse was that banks invested their money in phony trick investments instead of real growth investments. Why? Because investing in the old economy (newspapers, cars, suburbs, malls, retail, manufacturing) is simply not a good investment. 

2.Most business leaders are old.  Most business leaders are over 40. They can see retirement on the horizon. It's tough to engage in that new risky business venture when one could just coast into retirement.

3.They don't get it.  Business leaders do not understand the new economy and Nine Shift any more than anyone else, which is pretty zilch-ish. 

Tomorrow: Is business fear of government regulation holding back investment?

Business investment source of economic growth

Finally, all the economists agree. Consumer spending, long regarded as the economic engine of growth, is actually not. And that business investment, long ignored, is actually the source of economic growth.

I was listening to OnPoint radio and they all agreed with the economist who said, "Consumption doesn't create growth, business investment does."   The problem? They were all British economists. Americans still don't get it.

THIS WEEK: Why doesn't business invest in our economy?

"My boyfriend is unmotivated"

Our most popular entry ever on Why Boys Don't Want to Drive is still getting comments years later. Here's one from this week:

"My boyfriend is 24 years old and he STILL doesn't have a license. I am 20 years old and working on mine and I am very motivated...but he isn't. And it's not until recently I didn't want to be the only one driving us around. He is really unmotivated and I don't get why because when he was 17 his parents bought him a car that's just sitting in his drive way...and now his older brother is going to use it! I think the best was whenn we all had to go to a party and his younger brother was driving US there! I think it's really embarassing. I am saving up for a car and working my ass off, while he's procrastinating in La-La land about getting his license. It's really annoying because we live in the suburbs, so we need a car to see eachother. (Though we both live by the trainstation). It's just a pain in the ass because I feel he is at the point of his life (almost 25) where he should be working his ass off for the future. I am, why can't he? He's not a total loser, he is a college grad and he has a very good job he just is lazy about this. And i don't get it!" AC

Dear AC,
1.Read John Dos Passos' "The 42nd Parallel," one of the top 100 novels of the last century. It describes how young men, creating the new economy and century, have to 'wander' both geographically and mentally figuring out the new economy.

2.Your boyfriend 'get's it' with regard to the new century. He understands a) you cannot work and drive; b) cars are destroying the environment; and c) cars kill way too many people (it is the leading cause of death for people your age).

Take the train, enjoy your boyfriend, and support his quest for meaning and vocation in the Internet Age. In just 10 years young men like him will be the most valued workers in society. Sincerely, Dan Landers

Is Internet Access A Right?

What do you think? Is access to the Internet an individual citizen's right?

Earlier this month, Finland became the first nation to declare Internet access a right for each of its citizens. Meanwhile, this month the U.S. federal government announced it would sell more "air space" to commercial companies for broadband use.

But here's the deal Americans. The federal government has to have much more control and influence, regulations and power, over what companies can and cannot do with our air space. In the last century, the government had to make it a law before everyone could get electricity, and phone service. Snail mail service is a "right" for every American. So before we sell the public airwaves to BP, Goldman Sachs and Haliburton, we better get it right.

Are You a Player?

Are you a player in the 21st century? I want to be a player.

My great grandfather, William A. Draves I, was a player. He was one of the few thousands of industrialists at the beginning of the last century, those who created the 20th century.

He started the Northwest Malleable Iron Foundry in Milwaukee.  Then he was one of three men who founded Chain Belt.  Then he was even part of a failed automobile company, the Milwaukee Auto Company. Chain Belt eventually became a Fortune 500 company. 

But he was not famous. He was not part of the ultra rich. When it comes to auto makers, he was part of the 2,500 failed auto companies, not one of the Big 3 that succeeded.  Yet he WAS a player. What separated him from the famous, rich, successful few was luck. 

Today there are also thousands of "players" out there creating the 21st century.  It is an awesome time when we have the opportunity to be a part of this historically unique chance to help build the 21st century.  You don't have to be a player.  But you can if you want.  I want to. Wish me "luck".  Photo: Car of the Milwaukee Auto Company, circa 1902.

Irish Testimonial for NineShift

"The folks at Nine Shift have been consistently brilliant at describing both the problems and their root causes in society," writes Eoin Purcell, Editor, Irish Publishing News, Dublin, Ireland.  He made his comments today.

"Their book is a great read and I think their solutions sensible," he says. In particular, Purcell was commenting on our b og "Why we have a deficit."  Thanks much Mr. Purcell! You can check his blog and comments out here.

How is President Obama Doing?

My co-author says Gen Y thinks Pres Obama has not made enough changes. What do you think?

Think about the tremendous changes in his short term in office already:

1. Health care legislation
2. Financial regulation overhaul
3. Train funding
4. Rescuing the economy

But is it a good start, or insufficient?  Has he filled the glass half full, or left it half empty?  Tell us your thoughts.