Risk Rap

Rapping About a World at Risk

To The Barricades!

Thomas Hart Benton
Mine Strike
1934

Workers in the heat of struggle throughout the history of the labor movement have often cried “to the barricades” as a last resort to defend their rights, freedoms and protect their means of living. It is a signal that the interests of labor and capital are at distinct odds with each other. When an impasse is reached and the irreconcilable requirements of both parties are unable to be resolved through negotiation, workers take direct action with slowdowns, strikes, sit ins and takeovers as the only means to exert their will and protect their interest.

So it is with great sympathy that we hold up the workers and picketers at Republic Window and Door in Chicago. Last week the management of Republic informed their workers that due to the slowdown in the housing market they are going out of business and that the company cannot pay the workers any separation compensation due to lack of funds. In a radical action to protect separation benefits owed to them in accordance with federal law, Worker Adjustment and Retraining Act (WARN); workers have taken over the factory in a desperate attempt to secure a just separation settlement. The workers, many of Hispanic decent and members of the United Electrical Union, have barricaded themselves inside the factory in a kind of Battle of the Alamo of the US labor movement.

The timing and circumstances of Republic’s closing is unfortunate and is symptomatic of the country’s severe economic malaise. Ironically the projected severity of the economic downturn facing the US economy is the direct result of the deconstruction and dismantling of America’s manufacturing base. The rationalization of the US manufacturers that began in the 1980’s with Micheal Milken and Drexel Burnham Lambert accompanied by a storied SWAT Team of vulture capitalists had to battle and undermine the political clout and power of labor unions to achieve their objectives. The erosion of union power accelerated as membership dropped and the demonization of unions became a political tool used by the Republican’s to attack their rivals in the pro labor Democratic Party. As Republican trickle down economics grew in ascendancy quality of life, wages, heath care and employment benefits for working people have fallen precipitously. The political attacks against unions continue as a large lobbying effort is underway to defeat The Employees Free Choice Act. Without strong unions working people are at risk and remain extremely vulnerable to the debilitating effects of the current recession.

Historically, Chicago has played a central role in the formation and development of the US labor movement. Chicago’s Haymarket Square Riots is a seminal event that propelled the development of the organized labor movement. It was critical to the rise of the American Federation of Labor and endowing unions with the political power to secure the 8 hour working day, better working conditions, decent wage scales and employment benefits. Today as the workers at Republic have walled themselves inside their perishing workplace in an attempt to be rightfully compensated for their exertions and service, Republics management must find a way to meet its commitment by respecting the dignity and economic well being of its former employees. Lets hope that this struggle going on in Chicago represents an awakening for Americas new found respect and support of unions and hopefully not its death knell.

Our prayers and best wishes are with the Republic workers; as they stand in defense for the rights and well being of all American workers. May God continue to bless them with dignity and may the unity of disenfranchised workers serve to assure a prosperity for themselves, their families, and our nation. For truly as it is written in the Gospel of Luke, the laborer is worthy of his pay.

May the Lord continue to bless them and keep them.

You Tube Video: Rachel Maddow, Republic Window and Doors

You Tube Music Video: Pete Seeger, Which Side Are You On?

You Tube music Video: Natalie Merchant, Which Side Are You On?

Risk: labor unions, recession, social safety net, manufacturing, WARN,


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December 9, 2008 Posted by | folk, manufacturing, social unrest, unions | , , , , , , , , , , , , , , | Leave a comment

Whats Good for GM

I always thought the quote “Whats good for General Motors is good for America.” was a vile admission that the rights and interests of individual citizens was subservient to the vested interests of corporations. I always thought this was uttered by Calvin Coolidge or Herbert Hoover, the historical poster boys of an out of touch presidency intellectually immune and emotionally removed from the pain and troubles of the working class. Happily ignorant or seemingly unconcerned of a country slipping into a paralyzing depression while they whistled past the grave yard.

More recently the voices of average citizens have again been raised to decry the power and privilege of special corporate interests. They buy access and favor through the deft abilities of well compensated lobbyists and generous financial contributions by the monied interests to encourage politicians to adopt their world view. America’s economic and political history is a sometimes sordid, sometimes splendid tale of the restive relationship of labor and capital and how their respective political interests are made manifest in our laws, policies and programs that emanate from Capitol Hill.

Since at least the beginning of this year we have been barraged with prognostications of a catastrophic economic collapse. The Federal Reserve and Treasury Department have moved with dispatch to bolster bank capital to assure that liquidity and confidence in the banking system is protected. The EESA and TARP responded to the capital formation needs of banks. Most legislators supported EESA even though it only had tepid support by taxpayers. But the deal went through because we were told that if we failed to pass the bailout legislation for banks our nation would be swallowed by an economic black hole. Paulson’s defense of the TARP and its strategic transformation will be covered in subsequent posts but this authors skepticism of the TARP and Paulson’s intention is on record. The TARP and EESA are temporary short term liquidity fixes to frozen credit and capital markets. Supporting and protecting manufacturing is how the US will transition its bankrupt merchant capitalism to an economy based on the manufacture of value capable of long term sustainable growth.

So today we go on record in support of a Federally mandated capital infusion and formation initiative for the automotive industry. As we have previously stated the dismantling of our countries manufacturing infrastructure lies at the root of our current economic dilemma. We advocate acceptance of The Hamilton Plan to address economic recovery and long term sustainability of the US economy. Manufacturing is the bedrock of recovery and the Federal Government needs to encourage the formation of capital clusters of all stakeholders to incubate support structures that will accelerate the recovery of manufactures. The support program is not about writing a blank check to an industry that is badly managed. The automotive recovery plan needs to recognize, aggregate and focus all forms of capital to address this rapid deterioration of our ability to create value through manufactures.

The Hamilton Plan advocates that the Treasury Department form an SME Development Bank to encourage manage and administer the capital formation required to address a GM turnaround. The recovery proscription will need capital, cooperation and political will from all parties. Those include, government, business, labor, social service and academic institutions. The need to support manufacturing is paramount if we hope to recover from structural economic malaise. The failure of GM would have a profound impact on the fiscal, physical and psychological health of the US economy and its citizens. In this instance what is good for GM is not only good for America but it is vital for its survival.

We will offer a more detailed outline in future posts.

You Tube Music Video: James Cotton, Rocket 88

Risk: manufacturing, recession, unemployment, sustainability

November 13, 2008 Posted by | blues, Bush, manufacturing, recession, TARP, unions | , , , , , , , , | Leave a comment

Economy Sheds 157,000 Jobs


Lost in the euphoria of Barack Obama’s electoral triumph is todays rude reminder of the the continued deterioration of the economy.  ADP published its monthly report on employment yesterday revealing that the US economy shed another 157,000 jobs during the month of October.

According to the report, “large businesses, defined as those with 500 or more workers, saw employment decline 41,000, while medium-size companies with between 50 and 499 workers declined 91,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 25,000. This is the first outright decline in small business employment reported by the ADP Report since November of 2002, and the largest percentage decline since the economy was emerging from recession in early 2002.”

The recession is now enveloping small businesses.  This is a most ominous sign.  It should be born in mind that the ADP report usually reports numbers that are not as severe as numbers that the Department of Labor will issue later this week.

Not surprisingly manufacturing lost 85,000 jobs during the month.  This was the 26th consecutive monthly decline for the sector.

The full ADP Employment report can be accessed here.

President elect Obama will have a tough row to hoe.  The revival of the economy will be a prolonged and difficult effort requiring patience and careful attention to undo three decades of erosion to the countries industrial infrastructure.  Sum2 advocates The Hamilton Plan as a recovery program for the economy and SME manufactures.

Music Video: Bruce Springsteen, Pay Me My Money Down

Risk: recession, industrial capacity, unemployment

November 7, 2008 Posted by | folk, manufacturing, recession, unemployment | , , , , , , , | Leave a comment

Manufacturing Job Loss Continues

ADP has just released its National Employment Report for August 2008 indicates that nonfarm private employment decreased 33,000 from July to August 2008. The report bears out the continued weakness in the US economy.

Employment fell in the manufacturing sector for the 24th consecutive month and large business employment declined by 28,000 jobs.

Offsetting these losses, small business added 20,000 jobs during the month while the service providing sector added 45,000 jobs.

The report confirms the pressing need for a concerted program for job creation. Sum2 advocates the adoption of The Hamilton Plan; which outlines a program to foster the development of SME manufactures to strengthen the United States economy and position it for sustainable growth.

Highlights of the ADP National Employment Report include:

This month’s employment loss was driven by the goods-producing sector which declined 78,000 during August, its twenty-first consecutive monthly decline. The manufacturing sector marked its twenty-fourth consecutive monthly decline, losing 56,000 jobs. These losses were somewhat offset by employment gains in the service-providing sector of the economy which advanced by 45,000.

Large businesses, defined as those with 500 or more workers, saw employment decline 28,000, while medium-size companies with between 50 and 499 workers declined by 25,000.

Employment among small-size businesses, defined as those with fewer than 50 workers, advanced 20,000 during the month, after posting a stronger gain of 46,000 in July.

Two sectors of the economy hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending.

Today’s report suggests little lessening of the recent strain on employment in these industries. In August, construction employment dropped 25,000. This was its twenty-first consecutive monthly decline, and brings the total decline in construction jobs since the peak in August of 2006 to 377,000. Employment in financial activities declined 2,000 during the month.

Song: Devo, Workin in a Coal Mine.

Risk: Unemployment, manufacturing, labor unions, sustainable growth

September 4, 2008 Posted by | manufacturing, pop, recession, unemployment | , , , , , , | Leave a comment

SME Development Bank

Over the Labor Day Weekend Sum2 announced The Hamilton Plan. The Hamilton Plan is a ten point program to foster the development of manufacturing in the United States by tapping the entrepreneurial energy of small and mid-size enterprises (SME). The plan’s 10 points address sustainable business models, GRC best practices, capital formation initiatives, SME banking, labor union stakeholder empowerment, association syndication, cooperative formation, support for public education and cooperative learning.

This is an introduction to The Hamilton Plan, why it’s needed and the call for the creation of an SME Development Bank (SDB) to facilitate capital formation to achieve the goals of the program.

The Hamilton Plan, named after the first Secretary of the Treasury of the United States, proposes a ten point program to develop small and mid-size enterprise (SME) manufactures. The Hamilton Plan invites business owners and executives, industry associations, chambers of commerce, banks, capital market participants, labor unions, academia, non-profit organizations and governmental institutions to join forces in a concerted effort to support the reestablishment of the manufacturing infrastructure of the United States.

The vital national interest can be served by institutions representing business, labor, local communities and government to join together to foster optimal conditions to incubate and develop SME manufactures. SMEs are a natural strength of the US economy. SME represent largest most vibrant sector of the economy and by combining the entrepreneurial drive and creative energy of SME’s with the pressing need for innovative manufactures; America can reestablish its ascendancy as a preeminent power in the global economy. The Hamilton Plan is designed to provide incentives and encourage the formation of support clusters to develop SME manufacturing.

The Hamilton Plan:

1. Adoption of World Business Council Standards for Sustainable Business

2. Establish Incubators for Targeted Growth Industries

3. Adopt Sound Governance, Risk, Compliance Practices (GRC)

4. Formation of SME Development Bank / Capital Formation Initiatives

5. Partnership Lyceums for Government / Business / Academic Institutions

6. Labor Unions as Preferred Stakeholder / Association Syndication Unions

7. Establish Cooperatives for Technology / Licensing / Commodities / Energy

8. Superfund for Progressive Tax Code / Universal Health & Benefits

Infrastructure Investment / Brownfield Remediation and Reclamation

9. Expand Public Education Funding & SME COOP Program

10. Support Millennium Development Goals

Capital Formation Key to Success

The Hamilton Plan in its entirety is designed to respond to the compounding economic and political crisis that is confronting the United States. The credit crisis, energy dependence, industrial stasis, trade deficits, geo-political instabilities, aging infrastructure and climate change are the result of long term systemic problems that government and industry has failed to address effectively. The Hamilton Plan advocates the adoption of the program to squarely address these pressing issues with the full understanding that it will require the concerted cooperation of all stakeholders to assure the continued development, security and prosperity of America.

The Hamilton Plan requires concerted focus of investment capital to fund development and to make sure that assets are allocated to channels that will assure optimal returns and that equity participation of stakeholders is protected and rewarded. The establishment of an SME Development Bank (SDB) is a structured investment vehicle and corporate institution that will focus, manage and administer capital formation initiatives to incubate and develop SME manufactures.

At its core, The Hamilton Plan seeks to preserve the free flow of investment capital to finance national economic development and empower SME manufactures. The Hamilton Plan is not a substitution nor in any way seeks to supplant the American free market system. The Plan is designed to unleash, pool and focus investment capital. The Plan leverages regulatory capital, compliance and governance. The Plan seeks to achieve strategic economic goals, build wealth and prosperity in US and realize broader goals and objectives to assure sustainable economic growth, nurture innovation,  ecological balance and global competitiveness.

SME Development Bank (SDB)

The SDB would be chartered to assure that capital is deployed to meet appropriate program projects and assure effective stewardship of shareholders capital. The SDB would be the repository for economic and regulatory capital. It would maintain capital adequacy ratios in conformance with Basel II directives. The SDB would serve as a fiduciary to distribute capital through local community banking channels. SDB governance would assure that program objectives, ownership equity, credit requirements, capital allocations, shareholder rights and income distributions are made to SDB shareholders.

Government funding of the SDB would consist of share purchases financed by capital from a national development Superfund. The Superfund would receive tax receipts from a progressive national tax program, budget allocations, licensing and royalty receipts, dividend reinvestment’s and capital gains proceeds from the sale of assets.

Shareholders in the SDB would be community banks, institutional fund managers, state/local/federal government, private equity firms, business owners, company management, associations, labor unions, employees, academic institutions, non-profits organizations. Different forms of capital would be recognized and used to purchase shares in the SDB. For example, local governments can purchase shares in the SDB with tax credits or land grants or infrastructure improvement projects; labor can purchase shares with sweat equity, academic institutions with intellectual capital etc.

Securitization of SDB shares can be created to trade on public exchanges. Any secondary market listings would occur after underlying assets have been properly seasoned. Shares in the SDB would offer terms of extended time frames for investment lockup and share redemption.

Community Bankers as Risk Managers and Distribution Conduits

Community Banks have a critical role as an SDB equity partner. The community bank is the primary channel by which equity and credit capital is provided to the SME. They are front line risk managers and advisors for portfolio companies. Community banks are astute relationship managers. Community banks understand local market conditions and can link assets and service providers to build support clusters and expanded value chains for SMEs. Community bankers will help SMEs focus on capital allocation strategies and support efforts in encourage growth and profitability.

They will provide help in the following areas:

Corporate Governance
Risk Management
Business Promotion, Acceleration and Development
Corporate Advisory Services
Information Services
Performance Evaluation Services

Community banks will be offered regulatory capital relief through its equity participation in the SDB. Community banks will form a joint back office (JBO) to address regulatory capital requirements for its participation and share ownership in the SDB. Community banks must continue fulfill capital requirements for retail banking and other lines of business in accordance with regulatory requirements of its governing agency. State regulatory agencies relating to SME banking regulation, enforcement and inspection would conform to a unified national banking regulatory agency.

Community banks will share in the equity appreciation of the SME and any distributions, dividends or corporate actions the Board of the SDB effects. The differentiation of credit and equity capital participation will be accounted for at the SDB level. Administrators for hedge funds and other Alternative Investment Vehicles have developed sophisticated partnership and shareholding accounting capabilities that can address questions of share class ownership, tranche construction and attributes, asset valuation, distributions and returns.

The community bank in working in conjunction with the SDB will help SME’s effectively manage risk, improve stakeholder communication, implement effective corporate governance that create sustainable business practices to assure long term profitability and growth.

The Hamilton Plan lays the foundation for SMEs to seize market opportunities. SMEs in partnership with community bankers must assess products and markets, business functions and critical success factors. Sufficiently capitalized by the SDB, the SME and local bankers will execute an action plan to support the corporate mission in line with the larger goals of The Hamilton Plan to build wealth for its shareholders and assure the future prosperity of America.

Song: Average White Band: Work To Do

Risk: manufacturing, small and mid-size business, global competitiveness, middle class, national prosperity

September 3, 2008 Posted by | Hamilton Plan, hedge funds, manufacturing, Millennium Development Goals, pop, recession, SME | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments

The Hamilton Plan: Reindustrialization of America

Photograph By Anthony Augustine



Sum2 Announces

The Hamilton Plan:

A Ten Point Program to Develop

Small and Mid-Size Enterprise (SME) Manufactures

Great Falls Festival

Paterson NJ, Labor Day 2008

Sum2 is proud to be participating again in this year’s historic Great Falls Festival and is pleased to announce The Hamilton Plan, a ten point program to develop small and mid-size enterprise (SME) manufactures. The Paterson Great Falls Festival is the perfect opportunity for Sum2 to invite business owners and executives, industry associations, chambers of commerce, banks, capital market participants, labor unions, academia, non-profit organizations and governmental institutions to join forces in a concerted effort to support the reestablishment of the manufacturing infrastructure of the United States.

“Many of the economic, political and cultural challenges confronting the United States can be traced back to the dismantling of our industrial and manufacturing base” stated James McCallum President of Sum2. “Since the 1980’s America’s economic infrastructure has dramatically changed. The evolution of our economy to service oriented businesses has seriously eroded the manufacturing capabilities and industrial capacity of our country. This has produced a decline of higher wage paying jobs, the disincentive to develop innovative manufacturing methods and practices, deteriorating support infrastructure and the impairment of ancillary support businesses.

It’s in the vital national interest for institutions representing business, labor, communities and government cooperate to foster optimal conditions to incubate and develop SME manufactures. The SME segment is the largest most vibrant sector of our economy and by combining the entrepreneurial drive and creative energy of SME’s with our pressing need for innovative manufactures; America can reestablish its ascendancy as a preeminent power in the global economy. Sum2’s Hamilton Plan is designed to encourage the formation of support clusters to develop SME manufacturing.

The Hamilton Plan

1. WBC Standards for Sustainable Business Model
2. Establish Incubators for Targeted Growth Industries
3. Adopt Sound Governance, Risk, Compliance Practices (GRC)
4. Form SME Development Bank / Private Equity Capital Formation Initiatives
5. Partnership Lyceums for Government / Business / Academic Institutions
6. Labor Unions as Preferred Stakeholder / Association Syndication Unions
7. Establish Cooperatives for Technology / Licensing / Commodity / Energy
8. Superfund for Progressive Tax Code / Universal Health & Benefits /
Infrastructure / Brownfield Remediation and Reclamation
9. Expand Public Education Funding & SME COOP Program
10. Support Millennium Development Goals

Historical Significance of Paterson’s Great Falls

Paterson’s Great Falls Festival is an ideal venue to announce the Hamilton Plan. The Friends of the Great Falls website writes that in 1791, Alexander Hamilton and a group of investors created the S.U.M., the Society for Establishing Useful Manufactures, to harness the tremendous power of the Passaic Great Falls. It was the boldest private enterprise ever conceived in the early days of the United States. Hamilton envisioned an industrialized America and the creation of this raceway system was his ambitious example of how corporations could be organized to develop manufacturing on a large scale. With this enterprise, along with the law, finance and incentives he put in place as the nation’s first Secretary of the Treasurer, Hamilton forged the basis of American capitalism. The planned industrialization of this historic place is the realization of the Hamiltonian vision of an industrialized America. This is truly a founding father’s site.

Sum2 Sound Practice Thought Leader

Sum2’s announcement of the Hamilton Plan is in response to the compounding economic and political crisis that is confronting the United States. The credit and energy crisis, inflation pressures, trade deficits, geo-political instabilities, global warming and ecological degradation are the result of long term systemic problems that government and industry has failed to address effectively. Sum2 advocates the adoption of the program to squarely address these pressing issues with the full understanding that it will require the concerted cooperation of all stakeholders to assure the continued development, security and prosperity of America.

Sum2 offers a series of products and services to help SME’s effectively manage risk, improve stakeholder communication, implement effective corporate governance that create sustainable business practices to assure long term profitability and growth.

At last years Great Falls Festival, Sum2 announced its new product series the SMB|360°. Since that announcement the series has expended to include, the Profit|Optimizer and a soon to be announced premium product that that will expand the breath and depth of the SMB|360° product series.

The Profit|Optimizer is a qualitative risk assessment and opportunity discover tool. It assists SME’s to identify and score business vulnerabilities and opportunities. The Profit|Optimizer conducts over 200 assessments encompassing products and markets, business functions and critical success factors. The Profit|Optimizer aggregates assessment scores and presents initiatives on a series of dashboards that allows business managers to decide what action items mitigates the greatest risk and produces the greatest return. Managers can make informed capital allocation decisions to build profitability and maintain business growth.

The Profit|Optimizer demonstrates to shareholders, bankers and other stakeholders that company management are effective risk managers that are committed to practicing corporate governance excellence.

Sum2 also offers the award winning PACO™ (Patriot Act Compliance Officer). PACO™ helps financial services companies comply with the anti-money laundering provision of the Patriot Act.

About Sum2

Sum2 was founded in 2002 to promote the commercial application of sound practice programs. Sum2’s sound practice program addresses risk management, corporate governance, shareholder communications and regulatory compliance. Sum2’s objective is to assist businesses and industries to implement corporate sound practices that add exponential value for stakeholders, employees, customers and to be exemplary citizens within the communities in which they operate and serve.

Sum2 manufactures, aggregates, packages and distributes innovative digital data content products to selected channels and markets.

Music: Billy Joels Allentown

Risk: unemployment, urban decay, global competitiveness, national security, protection of middle class

August 30, 2008 Posted by | Hamilton Plan, manufacturing, pop, recession, SME, Sum2 | , , , , , , , , , , , | 4 Comments

Riding The Acela Express

I don’t really know what Acela means.

I imagined it to be a Greek or Latin word perhaps the name of a divine conveyance or swift footed messenger from Roman mythology. It’s probably nothing that deep. Most likely it is one of those made up words invented by a high powered marketing firm on Madison Avenue. Most know it as the rebranding of Amtrak. A kind of corporate rechristening available only to the well capitalized and those blessed with fat marketing budgets. They had to do it. After the supply-sider victory of the Reagan Revolution the legacy of losses and unending government subsidies to the failing railroad industries had to be purged from the new American political lexicon. It’s kind of like when Khrushchev was removed from power in the USSR. History books had to be rewritten to exclude the memory of Khruschev’s glorious contributions to building a workers’ paradise with Stalinist absolutism.

Riding the Acela Express from Newark New Jersey to our nation’s capitol in Washington DC provides a front seat view of a sad and sobering survey of our quickly evaporating manufacturing base and our country’s diminished industrial strength.

Riding the Acela Express down the spine of our county’s once formidable east coast industrial corridor presents a sad irony. The former Soviet Union unintentionally destroyed its economy due to its inefficient deployment and allocation of capital. While the United States, the USSR’s great historical antagonist and seeming victor of the cold war, destroyed it’s manufacturing base through the carefully considered rationalization of our industries by reallocating capital to foreign markets in search of superior returns.

In practice, this meant closing old inefficient factories and moving them overseas. From an economic standpoint it makes perfect sense. Capital seeks its best return. If that return can be found in an overseas market where labor costs are lower, tax rates are more favorable and regulatory oversight is non-existent the shareholders of the firm that closed the doors on US workers will realize a better return on their equity investment. That’s how capital markets work. Michael Milken and other predators would have a ball and build many fortunes instructing corporate America on the finer points of financial alchemy and demonstrate how easy it was to spin gold from the junk of old rust belt industries.

At first it kind of made sense. We didn’t want those kinds of jobs anyway. They were dirty and caused pollution in our communities. These types of businesses were highly unionized and susceptible to industrial disputes that only antagonized the uneasy relationship between labor and capital. Many of these industries were too capital intensive and the investment needed to maintain world class competitiveness was just too high to see any kind of acceptable return within the required time frames that benefited management and shareholders. The US was moving to a service oriented economy that obviated the need to manufacture anything. We would be an economy of designers, merchants, consultants, marketers and bankers. We did retain some clean, high tech, lite and lean factories that would rely on assembling machines from various components sourced just in time from overseas manufacturers. That was the industrial and economic vision of post cold war America.

But the vision outside my window on this Sunday morning Acela Express ride looks very different. They say that Georgian’s know their home when they see the red clay soil of their beloved state. As I pass through the metro areas of Trenton, Camden, Philadelphia, Wilmington and Baltimore I see miles and miles of half demolished factories whose crushed emulsified bricks have turned the earth of these abandoned industrial brownfield to blazing acres of red ochre.

The landscape offers a view of row after row of empty disassembled and decaying factories. They litter the landscape like forgotten industrial sarcophagi that was long ago broken into and pillaged, its contents whisked away by savvy tomb raiders.

The abandoned shipping docks whose bills of lading long since posted last orders that disembarked decades ago. Old forges, not fired since our Great War now stand as furtive tombstones to a productive past. These committed sentinels still stand post, watching over rusted rails that once creaked under the weight of bulging freight cars delivering goods to defend the arsenal of democracy. Now the rail yards serve no purpose other then rusted planter boxes for some invasive plant species. Closed beer gardens stand next to empty Union Halls whose cheap tin signage proclaims solidarity from a bygone day. You can still barely make out the union local number if you catch the right light from this mornings emerging sun. And the church steeples and factory smokestacks both covered in many layers of hard earned coats of gray soot stand in each others holy presence reminding us of the solemn Shaker proverb, “hands to work hearts to God.”

Last we witness the awful toll the dismantling of our industrial base has claimed on our urban communities. We pass archaic schools that rise like Gothic anachronisms, resembling prisons not Lyceums of learning. We see the tiny wooden row houses of Philadelphia and Baltimore and wonder how the inhabitants will sleep through a night where temperatures will remain uncomfortably hot. Nature and capital both abhor a vacuum. In the absence of legal industry and commerce such areas will become incubators for the growth of black-markets whose social cost and commercial thrust poses great risk to the heath and efficiency of free markets and the personal liberties of free people.

The USSR failed miserably in its attempt to build a workers state. Centralized bureaucratic planning, totalitarian political control, and the parasitic drain of capital by a class of ruthless self serving party elites strangled all entrepreneurial initiative and any hope for an efficient economic system. The possibility for workers to fully enjoy the fruits of their labors vanished as nothing more then an idealistic dream.

The current state of our manufactures and how we got there may turn out to be one of those funny ironies of history. What the Soviets did to their economy by accident and incompetence, we did to ourselves through intention. The industrial policies and practices we have pursued have strengthened the economies and industrial capacities of Russia and China. Both countries economies are experiencing robust growth. Russia due to its extensive oil and natural gas reserves is once again an emerging superpower that the United States must consider in its global political, economic and military strategies. China due to its rapid development of its manufacturing capacity now boasts tremendous balance of trade surpluses. China’s exports far more then it imports and it puts its surplus into its massive Sovereign Wealth Fund. This SWF is an investment vehicle that loans money to the large US banks to bolster their fragile balance sheets so we can get through this dangerous and debilitating credit crisis. The tables have dramatically turned.

The Acela Express. What a window it provides on the state of the American economy. After an exhaustive search I discovered a reference to Acela. In a far eastern language it refers to “a cloth less one.” Or in other words naked, as in the emperor has no cloths or perhaps we are vulnerable and exposed as a naked child in a blizzard without a strong industrial and manufacturing base? Or as in the “clothless one” hides nothing and always presents the naked truth. However you interpret Acela, let us hope that the Midnight Special continues to shine an ever loving light on you.

Music: Lonnie Donagen, Midnight Special

Risk: capital flight, manufacturing, labor unions, urban communities, political, global competitiveness, balance of trade, railroads,

June 14, 2008 Posted by | China, culture, folk, manufacturing, sovereign wealth funds, unions | , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Rebuilding America’s Manufacturing with Better Process

Sum2 recently participated in a Podcast sponsored by Better Process Podcast. The subject of the podcast was GRC for SMEs.

Better Process Podcast discusses news and market events that address manufacturing issues. The topics range from US manufacturing, China competition, RFID, lean manufacturing, and manufacturing technology.

Better Process podcasts was founded by Ken Rayment. Ken is a Black Belt Six Sigma guy who has a passion for his work and is deeply commited to the development and revitalization of manufacturing in the United States.

Sum2 caught Ken’s attention through a press release we issued offering free access to the Profit|Optimizers macroeconomic risk module. Though Sum2’s market focus is small and midsize businesses we are heartened and honored to participate in the Bettter Process podcast series.

Sum2 takes its name from the Society for Establishing Useful Manufactures (S.U.M.), S.U.M. was founded by Alexander Hamilton in 1793. The purpose of S.U.M was to promote useful manufacturing by using the waterpower generated by the Great Falls. S.U.M was the first planned industrial city in North America and should rightly be considered the cradle of industrial capitalism in North America. The area of S.U.M.’s founding was later incorporated as the City of Paterson New Jersey, which would grow to become a major industrial center from the 1800’s through World War 2. Paterson was a key munitions, textile and locomotive manufacture center during the Civil War and thus played a pivotal role in helping preserve Alexander Hamilton’s conception of a Federalist Union of States.

Though the landscape of industrial capitalism has changed during the Information Age, Sum2 was founded to continue the useful and visionary work of the original S.U.M. Sum2 recognizes the strategic importance of manufacturing and will seek to build our business by creating proprietary content, ASP delivery capabilities and mission critical software to implement corporate sound practices for our clients as they seek to create value in the digital economy.

Podcast: Better Process, Sum2 GRC

Risk: Manufacturing, Capital Formation, Podcasting, Profit|Optimizer, Sum2, Six Sigma, SMB Risk Management

May 13, 2008 Posted by | commerce, manufacturing, SME, Sum2 | , , , , , , , , | Leave a comment