Ideas for Recovery: A Special Treat

Back when I worked at IBM, my mentor, Dr. Richard Lazar, I was impressed as to how he was always looking for ways to help an individual improv , an organization, a company, and yes even our Country. In the 1970's we were all concerned as a Country about whether Japan was going to surpass the U.S in Manufacturing by ever increasing quality in their products and Richard was always looking for ways for IBM and U.S. Manufacturing to compete better globally and preserve jobs.

I received a copy of his latest work this morning titled, "DRIVING ON THE ONLY ROAD TO ECONOMIC RESURGENCE, 17 Innovative Products for Jobs" I am going to reprint a portion of his and his wife Caron's paper with a link below to contact him or if you would like a copy of the entire report. Richard is a great American and real patriot in the best sense of the word. He helped me get a start in this profession. I learned so much from him I will be eternally grateful. Now for the excerpt:

"The Heart and Brain
Without understanding the heart and the brain of our system, the CPP*, they do understand that non-regulation and runaway greed have been involved. They call the financial, banking and mortgage markets the Oxygen of our system. It is! However without the Heart and Brain, Oxygen is not enough. This error is the “sine qua non” to the restoration of the USA. We must build and sell new innovative products. We must develop excellent prime movers and key players. The second urgent piece to revitalizing the American economy is described in my “USA—The Innovation Nation” piece. I believe strongly that our new President, Barack Obama, will get it right, if helped by advisors and staff, as he has “gotten it” on so many vital issues that all Americans want resolved. In summary, jobs will come from our innovative products sold here and abroad in successful, victorious competition with China. We need our market share to provide jobs to produce sufficient income to enable our middle class to pay their mortgages, credit card debt and to finance health care for all. Prolonged war has hurt badly . . . very badly. At this time, 93% of Americans are hurting. There is no end in sight. They only way is through peace, progress and profit through the rigid adherence to the CPP and the prescription I advance in USA The Innovation Nation. Now let’s get it on!

(*CPP refers to Central Productive Process)

The Central Productive Process (CPP)
By Richard G. Lazar, PhD and Carôn Caswell Lazar

In 1987, Richard first constructed what he called a Behavioral Economic model that describes what it takes to have a strong and sustainable economy and called it The Central Productive Process or CPP. In fact, when we met 22 years ago our very first conversation was on the US economy and product building.

And, although he and we have refined the model over the last 21 years, it remains as true today, December 2008, as it was then. At the CPP’s core is the “Building and Producing of High Quality and Market Driven Products for Sale in the U.S. and Abroad,” (step #1 of model). Everything progresses from this single strategy for economic prosperity. Everything depresses from ignoring this single strategy. Economic wellbeing starts, or stops, with building and producing products domestically.
To believe otherwise, that a successful economy can be created, grown and maintained by the financial and service sectors, has driven us to one of the lowest economic points of our history.
From the production of tangible, market driven products all other sectors of an economy develop. When a company employs people to build a tangible product it will soon employ people to sell and service that product. The company will hire others to improve the design and function of its product. As the company grows more people will be needed to administer the affairs of the company. All of these employed people will need homes, furniture, food, and even books. Many want coffee and donuts from the coffee truck that comes at 10:15 in the morning or from Starbucks. The building of products springs forth all sorts of businesses that employ many times the number employed by the product producer (spin-off job factor estimates are 3.5x to 12x). All of the people employed in the construction trades to build the homes, the furniture makers to fill the homes, the farmers and food processing companies to feed the families that live in the homes, and the authors and publishers who produce the books to fill the minds-hearts-and shelves of peaceful inhabitants’ homes, and the coffee truck owner and Starbucks—all of them derive their income from the product builders.

They, in turn, also financially support the providers of goods and services and they all then pay taxes that combined with the taxes of others provide for the common good. But take away product building and there is no foundation upon which to grow and then a once mighty economy will begin to move towards the tipping point that can almost overnight reverse the fortunes of whole local communities, nations, and even a world. We are on the verge of that collapse now The key to a strong economy is income, taxable income. And the way to ensure income for individuals and government is with jobs centered in product building and then moving out in circles around that center—like the ripples formed when a rock is thrown into water. That’s the ripple effect to aim for. Have you noticed that when the rock sinks to the bottom, the ripples also end? That is not the ripple effect to aim for. We need to re-establish our economy as diverse product builders that provide a continuing stream of expansion. The financial sector is not one of the rocks it is one of the ripples. No product-building, nothing to invest in. A strong economy is founded on ideas made tangible and consumable. Believing that the financial markets can continue to offer sound investments and flourish while selling dying ripples is just foolish. There has been a misguided notion of what creates ripples."

To contact Dr. Richard Lazar you may email him at Richard@TheLazarGroup.com