Material Man

If you hang around the wizards of high finance (investment bankers, bond traders, brokers, and the like) you’ll soon hear the word “monetize.”  It’s a synthetic term meaning turning something of value into money.  In it’s most practical sense it’s used to describe how a new company like Google can monetize their search engine technology by selling advertising connected to search results.  Similarly, we can monetize our golden retriever pet by breeding her and selling the puppies.  It’s not a bad thing in and of itself, but when it becomes the only way you look at the world, it transforms you into a scoundrel.  Please excuse my shocking example but young girls are being monetized in countries like the Philippines and Thailand by being sold to pimps as young prostitutes by their own parents.  You see when we lose sight of the inherent, spiritual dignity of human beings and lose respect for the sacred value of nature we begin to see people and our planet as “things” to be monetized.  The reason we need to regulate our financial markets is that the mindset of Wall Street is to turn everything into money.  There is no financial language for human, spiritual, or nature’s inherent value.

So now we have a growing economic crisis.  Economists hope it’s simply a modest tidal wave.  They want it to hit quick and recede so the mess can get cleaned up and they can get back to monetizing things, people, and the planet.  Business as usual.  But their economic problem is likely to be more like global warming submerging our coastline rather than a single wave.  The melting icebergs are the declining values of trillions of dollars of residential real estate.  Sure the sub prime mess might be contained at losses of $200 billion or so.  But now prime borrowers who used their good credit on bizarre loans that encouraged interest only or even minimum payments that added interest to a loan’s principle every month are in deep yogurt.  Eighteen months ago a client of mine was offered a $1.5 million loan to buy an overpriced house in San Diego for $1465 a month!  The true 30-year amortization of the loan was over $10,000 a month but not to worry.  He was assured he could always sell in 6 months for $2 million.  When he asked me what I thought, I told him my mother taught me whenever “my eyes were bigger than my stomach” I would get a bellyache.  Yes he could afford $1465 a month; what he couldn’t afford was a $1.5 million house.  He passed.  Well lots of other people didn’t pass, and they’ve got a looming heartache.  Some estimate there are more than $500 billion of over-bloated prime mortgages that are at risk in the next 4 years.  If prime borrowers start walking from their homes, the impact on the global economy and our children’s well-being could be staggering.

I, of course, don’t know what‘s going to happen.  What I do know is that all this was caused by Wall St. trying to monetize our homes.  Yours and mine.  The idea was simple.  American homeowners on average owned nearly 60% of the equity in their homes in 2002.  They represented trillions of dollars of “locked up” value…money.  Banks began to offer home equity lines in the 1990’s to get at this value by creating secured, interest-earning loans.  But that was chicken feed for Wall St.  They got federal regulators to relax oversight of the mortgage market then they trained an army of retail mortgage brokers to sell homeowners on refinancing their old fashion mortgages with a new variable rate, payment option loan to “monetize” the equity in their homes.  Free up cash for us to pay for granite countertops, Hummers or just blowout vacations.  The financial wizards made billions in fees and we got suckered into thinking there was such a thing as a free lunch.  Now we’re paying for it.  All of us.  Not just those who took out loans, but also our children who are already having a harder time finding jobs in a frightened economy or are paying higher credit card interest for gas they can’t afford.

Could all of this been avoided?  Absolutely.  The hyper-inflated real estate boom made our whole nation Enron 2.  The lack of oversight and regulation of Wall St.’s monetization of our assets is a direct result of a failure of leadership.  Leaders of financial institutions and regulators who are supposed to insure our financial markets have integrity completely failed.  Meanwhile, today oil speculators have driven the price of oil to at least $20 a barrel higher than real demand says it should be.  You see prices of nearly every commodity from wheat and corn to oil is going up faster than demand because financial wizards are now focused on “monetizing” the essentials of our lives.  No, it’s not a conspiracy.  It’s simply the result of only seeing the value of things as money.  When powerful people operate without rules, we all pay more than we should.  It would be great if the world could operate on the honor system.  But it can’t.  We need real leaders who can’t be bought and who aren’t afraid.

And speaking of fear, it doesn’t hurt to look inside.  We also have our own inner “Wall Street Banker.”  An inner voice calling us to monetize our own lives.  To work at jobs we don’t value or to work too long and too hard for money at the expense of our relationships and peace of mind.  We need to take care to regulate ourselves lest we become corrupted by our own fears.  All of us need to stand for the quality of our lives rather than quantity of what we can produce.  We need to own 100% of the equity of our souls.

To visit American Dream Project’s home page, click here.

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The Launch of ThoughtRocket

I sincerely appreciate your many emails and other expressions of encouragement for the messages of the American Dream Project.  As you share and forward our blog, our community steadily expands.  And that’s what makes it worth it.  So, first of all, thank you.

Something exciting has recently happened.  Mark Effinger, the founder of Rich Content, which is an internet media company, has discovered our extensive library of American Dream event DVD’s, speeches, and interview video footage.  He has asked to “broadcast” them as short (1 to 3 minute) segments all over the world wide web.  He has also asked me for daily video commentaries on a wide range of topics that affect all of us ranging from politics, the economy, careers, relationships to book reviews.  All related to issues that impact our quality of life right now.  Doing these daily video blogs is a big commitment.  And, I agreed.  So, I converted part of my basement to a very simple “studio” and am starting these test videos.  I am more used to talking to live, see-your-face audiences so it’s a new and challenging experience to just “let it rip” in front of a single camera in a musty basement.

The name of the daily super short video commentary is “ThoughtRocket – Ideas that Boom.”  And it can be found on a new dedicated website – www.thoughtrocket.com.  What you’ll see are short clips of professional video from speeches and on other days you will see my comments on important topics.  It’s absolutely free and you can automatically receive new video posts by clicking the RSS link on the home page of the site.  Of course, you can unsubscribe at any time if it gags you to see my face everyday.

The American Dream Project blog will continue just as it has been,  usually once a week.  So, if you want to stick with that, you don’t need to do anything.  We’ll keep sending you our American Dream Project blog, calling for a new American agenda based on the “pursuit of genuine happiness.”

The voice of the American Dream Project, and now daily videos on ThoughtRocket.com will continue to creatively confront the issues of our time and how our responses can save our future and enrich our personal lives.  Please be assured that neither the current American Dream Project Blog, or the ThoughtRocket videos will become obsessed with politics to the exclusion of coaching and comments on enlightening our lifestyle and strengthening our relationships.  Although many of you like to engage in the great political debate of today, others of you appreciate a discussion on our personal lives and how to improve them no matter who is in office or what they are doing.  We will seek to keep a healthy balance between these two and connect the dots wherever we can.

I encourage you to reply back with your thoughts, hopes and dreams.  It is by coming together that we can amplify our individual voices so the future will be built on our united wisdom.

Oh yes, if you decide to view the daily ThoughtRocket videos, I’d love your feedback.  I especially need help with my basement commentaries.  I had no idea that talking to a camera would be so challenging.  No matter what I do, I just can’t seem to get that tiny digital camera to laugh!

Thanks again for your support and comments,

Will Marre

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Leadership Insanity

Most of our problems have the same root cause…leadership failure.  Whether leading our lives, leading a business, or leading our country, it takes good judgment to put us on a path to a better future.  In the case of our current economic woes, rarely have so many of our national leaders been so united in stupidity.  Stimulating our economy by dispensing $160 billion for us to go on one final binge of consumption is simple but insane.  Our economy is not healthy and hasn’t been for over a decade.  We have become a consumption-based economy artificially stimulated by first a stock market bubble and then a real estate bubble which did nothing but cause reckless inflation in food, energy, health care, and housing prices.  Sure, our economy is the biggest in the world, but it’s not muscular.  It’s obese, fattened by the junk food of personal and public debt.  Now is not the time to give billions to consumers to buy more stuff made in China or oil pumped from the Middle East in some last orgy of shopping.  There are things real leaders should be doing to invest in our future while we still can.

We have a serious problem.  80% of container ships return from West Coast ports empty on return trips.  For the most part, the world doesn’t want what we make.  They want our ideas, our technology and our markets.  One of our biggest exports is our investment capital.  Tens of billions of our U.S. company profits are being invested in productive capacity in China and India instead of Ohio and Michigan. This was not inevitable.  Germany with 82 million people leads the world in exporting over $100 billion of extremely well engineered cars, precision tools and advanced technology products.  Their total manufacturing employment has been reduced by only 2% over the past 15 years, while their wages, benefits and vacations are legendary.  The point is we don’t have to destroy our productive capacity.  We choose to.

You can blame decades of leadership failure that overlooked the need to keep our K-12 education system first rate.  Or keep our physical infrastructure of roads, bridges, airports, and public transportation up to date.  We even created a two tier tax system on businesses in which huge business get subsidies and rarely pay anything near the stated tax rate and small and new business, which is the only sector that creates jobs, pays taxes on profits that would otherwise be reinvested in local growth.

So what should real leaders who want to invest in the future spend $160 billion on?  How about skilled job training for U.S. precision manufacturing which is currently running unfilled job rates of 20% plus?  How about more investment in clean renewable energy research?  How about full tuition scholarships for math and science majors?  How about a 21st century national infrastructure and mass transit?  How about anything that builds our productive capacity, encourages new business formation and provides education?  I realize that none of this is a quick fix.  And that’s exactly the point.  Liposuction is not a cure for obesity.  And having everyone spend an extra $700 between now and July is, as one economist said, giving one last drink to an alcoholic.

People running for president are all claiming to be the one to lead change.  Well I hear it.  I just want to see it.  Where is the substance?  To unleash our creative capacity and become a productive economy we need to build a support structure with affordable access to education, training, capital, transportation and technology.  That’s what deserves our investment and nothing less.  Debates are good, speeches inspiring, but refried liberalism won’t help us.  And a continuation of old industrial-style capitalism will destroy us.  What we need are bigger, bolder, higher solutions.  Most of all, how about some real, genuine leadership?!

To visit American Dream Project’s home page, click here.

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