American Businesses Still Not Exporting Enough

Its wet, slippery, and continues to go down like a game of Chutes and Ladders. Its the trade deficit again. American companies are still not exporting enough products to lower the gap. The commerce department said that the deficit rose 3.4 percent to $43.9 billion from $42.5. Industrial goods and food exports declined marking slower trade. Even though it has been this way for some time it doesn't have to be.

The economy is very much tied to our ability to develop and export products that people want. Whether we are talking about Middle Class jobs or corporate profits the problems are related to the same fundamental business environment. I am believe that if we create the right environment our businesses will do a better job competing and hiring. 

This means getting two political camps, left and right, to agree on some fundamental principles about what is important. Regardless of their personal agendas, it is important to create a strong business environment that maximizes the puts Americans into meaningful jobs. How this done is a point of contention as each has a focus on one aspect or another of the economy. 

Getting back to the idea of corporate tax reform, I believe it is beneficial to lower taxes for companies; especially if they reinvest that money to expand their operations within the U.S. to provide American jobs. Only dying entities raise taxes while growing entities expand their tax base. It is much better to have more companies and people paying in then to simply raise the amount of money. 

Slowing exports has been part of the American economic landscape for decades but is preventable. Encouraging companies to invest, innovate, develop, stay, train and hire is beneficial. The incentives for doing so is should be because the American business environment is the best place to start and develop companies. Until we solve that problem everything else will be a gimmick with short term gains.

CEO's Not Happy About Next Few Quarters-Frustrated with Slow Pace of Tax Reform!

Corporate tax rate is at 35% and CEO's are frustrated! So frustrated they might just slow down on investments in the near term.  According to a report released by the Business Roundtable from 74.1 to 67.5. CEOs are concerned about volatile global markets and the lack of movement on tax reform.

Corporate tax reform is an important issue that helps companies grow and hire employees. When offered more competitive tax rates overseas by hungry countries many large companies moved their headquarters to other shores in an effort to dodge U.S. tax bills.

We can argue about it and get upset but.....the problem is that we are in a global world and this means we don't have captive companies. Companies can put their headquarters just about anywhere they want while retaining the ability to manage  large global networks. When push comes to shove----- they can leave.

This is bad news for investment. Creating the right framework for growth means reforming the tax rate in a way that encourages further investment in the U.S. Politicians are squandering an opportunity to get it right and set up a new tax structure that attracts businesses, encourages greater investment and fosters a stronger labor market.

It is also an opportunity to expand employment and raise wages. Sounds counter productive doesn't it? However, if the tax rate goes down, companies invest their differences in expanded operations to take advantage of the investment environment, foreign companies become attracted to improving business prospects and qualified labor moves into a demand position.

Combining hot topics such as reforming the public education system and encouraging higher education innovation could further developing higher skilled workers that command higher wages. It would be an important goal to increase investment, raise wages, and improve the demand for American workers. It is possible to support corporate needs while enhancing labor through tax reform.

Changes in the Higher Education Market Show More Consolidation and Less Variability

Changes in the higher education fields that show shifts are occurring that lead to greater consolidation and less market variability.  A recent report on HigherEdJobs website, using data from U.S. Bureau of Labor Statistics, show that total number of jobs in Q3 2015 continued to decline but advertised jobs increased.

There were less faculty per administrator and a noticeable shift toward hiring full-time faculty. Many universities are becoming top heavy and loosing their core responsibility to teach students. Shifts toward more administrators and less faculty show the bureaucratic nature of universities that will likely cause problems down the road with changing market trends.

More legislation is typically the result of the higher concern profile of higher education in recent years. Costs have skyrocketed and government is trying to get a handle on it. Some ideas may be beneficial but other ideas that create too much "red tap" may actually do the opposite. 

Community colleges were quickly loosing jobs and are having a hard time keeping up with their budgets. Smaller entities may not be able to command higher tuition rates or secure alternative funding sources. Their limited resources and small local populations may lead them to go out of business. We have seen this trend grow with small private universities.

In the past many universities  hired part-time adjuncts to keep costs low. In recent years, there has been a greater push by stakeholders to ensure that full-time faculty are hired. Some universities are replacing aging, retired, and shifting faculty with new full-time recruits. Hiring full-time faculty helps to keep the incentives alive for people to move into academia.

A lack of sufficient market variability can be dangerous for the industry is some major market shift occurs and there isn't enough diversity to provide adequate models that can compete. International, cross-border, schools are growing and too much restrictive legislation could limit options for future competition. Ensuring America maintains a place in the higher education fields means balancing the need for quality and variability.


https://www.higheredjobs.com/career/quarterly-report.cfm

The Importance of Selecting the Customer and the Channel

Businesses can't and won't succeed without marketing. Whether the business is as simple as a lemonade stand or as complex as a multi-billion dollar conglomerate, the marketing plan is the main avenue of communicating with and attracting potential customers. Ensuring the marketing plan is focused on the "right" customers and reaching them through the proper channels is what ensures a company can achieve.

 The "Right" Customer:

The "right" customer is one who has the most need for the product and has the will and way of paying for it. The target customer is selected after extensive market research that ensures the company is focused on attracting those who have the most interest in the products/services. Most companies build a customer profile and use this as a guide in their marketing decisions.

Some of the considerations a company chooses in selecting their target customer are age, income, interests, geographic location, related purchases, and market size. The market is sliced up based upon some characteristics. Companies often focus on only a small percentage that constitute their most lucrative buyers. Each marketing campaign has a return on investment, conversion rate, and other metrics to ensure it is maximizing resources.

 Customer Channels:

The target customer demographics will also determine which channels are best. For example, older Americans may prefer certain print media formats while younger generations are more reachable using online advertising. Because a large percentage of Americans use the Internet, online marketing has exploded many times over in the past decade.

It isn't only the channel that is important but the words, symbols and methods transferred across the channel that counts. Specific words and images are going to attract the target customer more than other ones. Knowing how they like to receive messages and what images most appeal to them can make a big difference in ensuring they respond accordingly.

The Benefits of Critical Thinking and Self-Awareness

Naturally each of us holds bias in the way we think about and understand the world around us. Critical thinking is a process of thinking about thinking using our meta-cognitive abilities in ways that ensure we understand how our thinking impacts our conclusions. Being self-aware of our own thoughts and needs creates higher order thinking that leads to better final conclusions.

Almost all human beings have blind spots in their thinking that damages their ability to think critically about issues. Many of these blind spots come from memories, feelings and identity that lead to a particular way we view the world and formulate an understanding of our being. For the vast  majority of the world, we are stuck in a vicious cycle of bias where we self-confirm our being in nearly all of our conclusions.

That makes us poor critical thinkers seemingly doomed to always push our personal beliefs and fallacies onto each situation. Only when we are able to used critical thinking to weigh and explore alternative explanations can we uncover all the possible solutions and make the best possible decision. Without critically evaluating all alternatives we can make no worthwhile judgement.

To see all the alternatives for each situation means we must be aware of ourselves so that we do not discard those explanations we hold personal and emotional judgement over. Wise decision makers have knowledge of themselves and knowledge of the possibilities in any problem to make proper evaluations. They can use their meta-cognitive abilities to manage their thought processes.

Critical thinking can help us in many ways in our lives. Whether we are deciding to buy an expensive product, pondering an important family affair, or settling on a belief critical thinking can help us make the right choices for us. When each decision leads to a beneficial outcome our entire lives can become defined by our many choices. Success is created by those who are self-aware enough to use critical thinking skills to their maximum benefit.

Allowing Higher Education Institutions Be Incubators for New Ideas

Universities serve an important function in society as incubators of new concepts. Sometimes these new ideas create groundbreaking scientific discoveries that changes entire industries. Other times it might be a new way of looking at the world which in turn creates paradigm shifts in thought that advances civic and governmental interest.   Keeping universities as places where thought is advanced which means we need to accept new ideas as part of the process even when we don't like their implications.

We should not stifle intellectual thought because it can destroy its development that may lead to ideas that have practical benefits for society. We often are quick to criticism an idea because all of the details have not been thought out and its use not immediately apparent. However, over time beneficial ideas will grow and adjust as they become confirmed through testing while poor ideas die off because they are not confirmed through testing.

Ideas take time to develop. They start out kind of goofy and not well thought out. Over time these ideas become better defined, compared against various scenarios, and tested against other models. Eventually, a solid idea will develop that can be used to solve a complex problem. It may not be the same idea as the original but a more mature well thought out idea.

Good ideas are never fully developed. Think of how something as simple as Thomas Edison's Light bulb sparked a revolution of thought, created entire industries, and sparked new innovative developments that will likely continue long into the future when humans are sitting on other planets. He was not immune to criticism for his eccentric ways and crazy ideas.

Universities are places were many great ideas are developed, explored and sometimes patented. The value of some universities are based in their research and patents while other are more associated to their publication amounts. In either case, it is more important to avoid criticism of infant ideas and encourage greater freedoms in higher education to ensure that immature ideas cav develop to full fruition without molestation.

Consumer Spending Slides! Animal Spirits at Work?

Consumer spending slows to a walking pace. According to the Commerce Department both September and October saw very modest .1 % growth in consumer spending from the previous third quarter 3%. Is this dip based in real market concerns and expected to be prolonged or are something else like animal spirits at work that indicate a shorter time-frame?

The reason why the slowdown might not be long-term is because of other indicators such as jobs, inventories, wages, and investments don't seem to be doing too bad. If multiple data sets across varying industries show the same trend this could be indicative of a problem. At present it isn't.

Of course projections can always be wrong and I take some fun in seeing if I can find some accurate way of perceiving future trends based on present data. I see people being more cautious than anything else. Yes...I know what a few polls have said but.....there is no economic basis for it if other aspects of the economy have improved.

If unemployment actually is decreasing, wages are moving up, saving rates are stable, and manufacturing is making a turnaround despite the inflated dollar, than how does the average person come to a conclusion about the market? In many cases these are feelings based upon other aspects in their environment. 

Lets look at an example. If politics is brutal, negative rhetoric about doomsday in the economy, international conflict brewing, and fears of personal safety related to terrorism talk impacts the thinking of a significant population of society there is bound to be some pessimism. People don't spend when they are not sure of the future. They covet and hold their money.

Animal spirits are wild and often uncontrollable. These phantoms of doom do have an impact on spending. Considering that over 3/4 of our economy is based on consumer spending pessimism can have an impact on consumer choices and the economy. Therefore, a dip in consumer spending may be more of our own making than any real issues in the market. Future information and data changes the assumptions.