How can the lessons of innovation, free enterprise, technology, and the motives of capitalism, apply to how our governments run?  

“Globalization and the adoption of Capitalism in every corner of the globe are rapidly expanding the circle of inventors and innovators that seek a better life, and the means to exploit entrepreneurship….the accelerating expansion of this sphere of influence has become self-sustaining now…unbridled capitalism can drive our efficiency…it is bolstering global growth, and driving remarkable profit margins,” Dave Goerz, Chief Investment Officer, Highmark Capital Management.

Comments like that just get me fired up. I’m a strong believer in the free will of well-intentioned millions having the ability to affect society for the better.  We see great examples of innovation every day in the private sector, and can’t seem to apply it enough to inspire our elected officials, or hold back the sprawl of bureaucracy. And I don’t think it’s a dream to see innovation applied to government structures, local or national. Since governments in the west are generally run by the Folks, as indirect as it is, we should be able to demand the kind of service we get from a well-run company, shouldn’t we?

Amazing is the power of the individual consumer, who, en masse, can indirectly motivate the firms that serve them to deliver innovative products. Buying habits do that. How can we consume government services and programs more effectively?

Consumer decisions have driven positive, worldwide change by driving the development of more efficient, more robust, and more portable, and in some cases “greener” products. Inventions and innovations have created brighter, but lower-consumption light bulbs, smaller, more powerful batteries, thinner, but more effective insulations, fuel injectors for more power and less fuel use, and light weight, but stronger materials for making everything.

The application of technology and intelligent policies can lead to natural and positive works, the improvement of life style and living conditions, expansion of food and drug distribution throughout populations, and inspire broader and higher education for people all over the world.

Consumers, and those that are motivated to buy, drive innovation from the companies who monitor their habits. A microcosmic version of this mass decision-making activity and change of habit is taking place in the greater Los Angeles and San Francisco Bay Areas, as it relates to transportation: I know more than a few Investment Industry professionals who are enjoying the benefits of commuting on freeways in diamond lanes in Hybrid cars and in propane, or alternative fuel vehicles. Their motivation begins as one of selfish- time management-that is, to avoid traffic jams; but ends up creating a fashionable alternative to large and consumptive luxury cars. As wealthy consumers purchase low volume, specialized high-tech cars, these “exotic” models become cheaper and more widely available. The hip factor of small vehicles and Hybrids is not lost on a population of people that are sensitive to fashion. Seeing the sensibility of downsizing becomes pervasive. The pursuit of efficiency in more than just transportation seems to have become fashionable too. So choice becomes enhanced for everyone.

I am a new volunteer for the new efficiency program, having exchanged my much-loved seven-series executive cruiser for a Mini Cooper. Economical, entertaining, and carbon negative, in comparison to its predecessor in my garage, I am happy to have made this fairly drastic adjustment.

Maybe we can inspire our political leaders to focus on design and innovation in how they deliver government, beyond having a website for citizen access. With design and innovation, we have all begun to point to the dynamics of conserving and efficiency in every corner of our homes and offices. All can be accessed online, without going out to shop. Entrepreneurs are inventing new approaches to efficiently distributing products and services, and they are rewarded for breakthroughs.

Another great example of technology delivery comes to mind: The drive to market flat screens, which has gone beyond space-saving and spectacular picture quality. These devices, once astronomical in price, have become ubiquitous to the home and office in our lives. They contribute to dramatic reductions in energy use, too. Computers are less and less consumptive than earlier versions. Batteries for every conceivable device are much more compact, and more efficient than ever. Computers are smaller, more powerful, more portable, and the competition for “small and compact” continues.

The successful companies win consumers whenever they deliver a dramatic improvement with these benefits. A sixty pound tube-type TV found at a garage sale has been eclipsed by a twenty pound equivalent that now hangs on the wall, with twice the viewing area.  With increasing mass production, prices are coming down for those who couldn’t afford this high-end technology two years ago.

So why don’t we demand dramatic innovations and efficiencies from our government? We could try to offshore it, but that wouldn’t work! But, we can demand efficiency. As we consider elections, especially the upcoming presidential one, will we listen to promises of a better, bigger, government program, to address one of our special interest needs -like that old Sedan De Ville of a government?  Or, will we opt for, and elect, a lean and mean alternative? Can we get at least a Hybrid?

The working model for a more highly efficient government structure is simple: organizations that fail or do not add value, should cease. The government as a whole should serve our basic needs, and get out of the way for everything else. Can a government operate part-time, or on flex schedule? Will it be lean, efficient, and accessible? Will it be available on-line, serving us when we want, where we want, nimble, changing when necessary, and conserving our dear energy resources?

We need to push hard for the efficient model.

Global Investor Confidence Falls

State Street’s index fell to 87 in July versus 97.7 in June.  U.S. subprime mortgage market woes spooked global investors worried over the possibility of tighter credit and higher interest rates.

Stocks Crushed in Broad Sell-Off

The Dow and S&P 500 fell 2.3%, their worst losses since the February 27 sell-off that sparked the last market correction.  The NYSE composite tumbled 2.8% and the Nasdaq 1.8% as investors fled risk.

Few Buyouts

As July came to an end, the number of U.S. buyouts has fallen to 70 this month, the fewest so far in 2007, according to data from dialogic.  The value of those deals is a solid $64.66 billion – but nearly $46 billion of that was in the first week of July.

HSBC Upbeat, but Risks Still Exist

The largest bank in Europe by market value lifted net profit 25% to $10.9 billion.  Net interest income rose 9% to $18.23 billion.  It said the world economy is strong, but risks lie ahead.  Despite subprime woes, HSBC said U.S., consumer spending is robust and the labor market firm.

ABN Withdraws Barclays Backing

The Dutch bank yanked its support of Barclays’ $87.5 billion takeover bid, but it also said it didn’t support a rival $96.6 billion offer by Royal Bank of Scotland due to “unresolved questions.”  The battle began in March when Barclays’ launched its bid.  RBS topped it a month later and both have sweetened their offers.

Credit Market Fears Intensifying

The 10-year Treasury yield sank 12 basis points to 4.78%, the lowest since May as investors re-price risk worldwide.

Minimum Wage Increase

The minimum wage rose to $5.85 an hour, a 70 increase, and became effective July 24.  This was the first hike in the rate in a decade.

GDP Growth Rebounds

In the second quarter, the U.S. GDP rose at a 3.4% annual rate.  Gains were driven by growth in exports, higher government spending and improved spending on infrastructure.

Latin America’s Economy Strong

The U.N. Economic Commission for Latin America and the Caribbean raised its forecast for growth in Latin America to 5% in 2007, from its December estimate of 4.7% due to strong growth in Brazil.

New Home Sales

June sales fell to an annualized 834,000 units, far below views and just over March’s 7-year low.  Prices fell and the supply of homes grew.

Jobless Claims

New jobless claims fell 2,000 in the week ended July 21 to 301,000, the lowest in more than 2 months, the Labor Department said.  The 4-week average fell by 4,000 to 308,500.

Student Wish List

The 2007 Universum Ideal Employers Survey revealed that the No.1 company undergraduate students would like to work for is Google, followed by Disney. 

• For two years in a row, Goldman Sachs, JP Morgan, Merrill Lynch and Morgan Stanley held the top four positions, respectively, with investment banking students.
• Among commercial banking students, Bank of America ranked No.1, followed by Ernst & Young, Goldman Sachs, JP Morgan Chase and PricewaterhouseCoopers.

Monster Cut

Monster.com will be cutting approximately 15 percent of its staff, mostly in North America.  The restructure plan is intended to streamline operations and eliminate duplication of effort in areas like human resources and finance.  Most of the jobs to be eliminated are in North America.

Wasted Time

The average worker admits to wasting 2.09 hours per day at work, not including lunch and scheduled breaks, according to a survey done by the Microsoft Office team, Salary.com, and AOL.

America Online

One in five online Americans watch video clips over the Internet, according to a study by Pew Internet and American Life Project.  News ranked first, followed by comedy videos.  Half of video viewers ages 18-29 watch clips on YouTube, and only 7% turn to a cable or network TV site.

High Class Air Travel

The demand for more spacious business- and first-class seating aboard airlines is climbing, according to the International Air Transport Association.  In May, nearly 700,000 people purchased such seats on flights between the U.S. and Europe, up 14% from last year’s average.  Recently, United and American unveiled plans for seats that recline 180 degrees to be installed on their international planes.  This high class preferred way of travel doesn’t come cheap: Round-trip fares from Newark, N.J., to London cost more than $8,000.

Who’s THAT Guy’s Financial Advisor?

The retiring chief executive of Hilton Hotels Corp., Stephen Bollenbach, will walk away from the Beverly Hills-based hotel chain owner and operator with about $125 million when private equity firm Blackstone Group buys the company.  Bollenbach is also planning on retiring at the end of the year and will also receive close to $35 million under a deferred compensation plan.

Management

Managing is like holding a dove in your hand.  Squeeze too hard and you kill it, not hard enough and it flies away.
-Tommy Lasorda, baseball manager

Work

Work spares us from three great evils: boredom, vice, and need.
-Voltaire, philosopher

Perspective

Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.
-Ted Williams, baseball player

Thought

Discovery of a solution consists of looking at the same thing as everyone else and thinking something different.
-Albert Szent-Gyorgyi, biochemist

Determination

The price of success is perseverance.  The price of failure is much cheaper.
-Author Unknown

Making a Mark

If you would not be forgotten as soon as you are dead, either write things worth reading or do things worth writing.
-Benjamin Franklin, statesman

Potential

You commit a sin of omission if you do not utilize all the power that is within you.
-Oliver Wendell Holmes, writer