Interview with Richard D. Smith (Second in Series of 5 Interviews)
About Smith's U.S. 'Wealth Creation' Plan Follow-up to Plan to Create 2 Million New U.S. Jobs SUNNY: Welcome back Richard. As always, it's good to have someone with your perspective with us. Can you recap for our audience what your 'Wealth Creation' Plan is really all about?
RICHARD: Sure can. Here are four of the most significant attributes of the plan. One, the overriding objective is the creation of 2 million net new U.S. based jobs for American citizens in 12 months from the plan's 'green light'. The initial wave of new jobs will be created in historically labor intensive industries. Two, jobs we're talking about are employment sustainable jobs with defined and positive career paths. This is not a make work effort designed for short term social and economic impact. Three, everything associated with our plan must create value, add value, and produce positive cash flow and/or profitability results. Four, overall we're looking to transform or re-invent 'at-risk' declining businesses or market segments. In the process these businesses, we help the employees build, must be able to effectively compete in U.S. markets and have the ability to gain market share world-wide.
SUNNY: Given all your work on this U.S. 'Wealth Creation' Plan, how do you feel now...when you see McCain and Obama pitching job creation initiatives to prospective voters? From where I sit, it sure looks like Obama is laying the foundation for a more socialistic economy with a 'New Deal' type rationalization. From your perspective, do their programs sound like the government will again, but more deeply, get into the business of economic stimulation a.k.a. pork-barrel spending a.k.a. buying votes with price tags ranging from $50 billion to $300 billion?
RICHARD: What would I have preferred -- that twelve months ago each candidate articulated a JOB Creation initiative as a core part of their campaign theme. But, they didn't. Good news, their most recent stump speeches say JOBS! Sunny, domestic U. S. jobs creation has and continues to be the primary cure for what ails America. The natural bi-product of all job growth is the enabling of resolutions to basic economic problems -- such as tax revenue generation, deficit reduction, home price and market stability, stronger dollar, medical care cost containment, etc..., etc... America is no different from any other business, or working citizen for that matter, -- we need income generation to pay bills, manage budgets, and save or invest for the future. My politically agnostic approach to large scale job creation is not predicated on financial intervention by the government.
SUNNY: Richard. Are you saying your Wealth Creation plan funding will come from the private sector -- not the Federal or a State treasury?
RICHARD: Yes. That's true. Actually, in today's economic situation, private sector funding is preferred because it helps preserve America's brand of free-enterprise capitalism.
SUNNY: All right Richard. You've got my attention. How would your initial funding plan work?
RICHARD: Here is one of several existing options. America has over 1,000 billionaires! America's 400 richest people, according to Forbes Magazine, have a collective net worth of $1.57 trillion dollars. Their average net worth is $3.9 billion and the minimum is $1.3 billion. Now, let's pretend, for purposes of this example only, all 400 Forbes list members commit 10% of their net worth wealth to launch a U.S. 'Wealth Creation' Plan.
SUNNY: What's in it for them -- besides helping America regain its economic footing?
RICHARD: Wealthy contributor(s) could: become preferred shareholders, take an equity position as strategic investors or venture partners, apply their assets as collateral for loans or directly supplement other fundraising efforts, and/or receive some special - to be defined - reward for helping America.
SUNNY: O.K., $157 billion...not a bad start. Let's assume only a 1% contribution. You still have a $1.57 billion without government financial aid. Give me a minute to think out loud... Suppose the Federal government decides to place a new 10% net-worth tax on the uber-wealthy... Now, government gets a one-time 'heroine like' revenue injection of $157 billion. In the process they ticked off the wealthy...a.k.a. campaign contributors. Seems to me the smarter money play -- let you Richard and your buddies raise major funds so you can go about putting 2 million American citizens to work.
RICHARD: You're right. Strategically, the best way to address national debt and other related issues is to build a sustainable wealth creation society. Get people -- regardless of age or profession -- off-of unemployment, enable them to be social contributors. Build a business and community environment highly conducive to career job creation.
SUNNY: Where do you go to identify and market exploit business opportunities that in general are labor intensive?
RICHARD: We're not looking at the migrant farm worker space. Nor are we looking at the Energy Sector -- T. Boone Pickens has that sector plan well under control. As I mentioned earlier, we're looking for business scalable opportunities to transform and re-invent existing enterprises. We're looking for situations conducive to re-invention as well as market leadership enabled by innovation.
SUNNY: Can you give me an example?
RICHARD: For example -- think manufacturing -- where it has been and where it's going. U.S. global manufacturing dominance peaked in the late 1990's when the U.S. produced 27% of all manufactured goods -- due primarily to the boom in U.S. made computers. As you most likely know, desktop and most laptop computers are manufactured overseas - by U.S. and foreign owned companies. Sunny...No. We're not looking to make computers in the U.S.
SUNNY: Didn't think so. This is good stuff... keep going.
RICHARD: Manufacturing employment has indeed decreased from 1979 high of 17 million workers to 13.5 million today, notably in industries like automobiles and textiles. Without question, this 3.5 million job loss is a hardship -- be they older workers who lost their jobs, or younger ones having a hard time finding manufacturing jobs to begin with -- and their families. "We have a trade surplus in manufacturing among nations that abide by the principles of free trade", says National Association of Manufacturers.
SUNNY: Do you think China and other underdeveloped economies play by these principals? RICHARD: No. But there are certain manufacturing intensive market sectors and sub-segments where bad-boy disadvantage can be offset. American workers -- whose hourly productivity has increased 160% over 30 years -- moreover are not only flexible, they are often ingenious, inventing and inspiring new products. Unfortunately, in traditional manufacturing states like Michigan unemployment is 9% and 1.3 million men, women andd children are homeless. SUNNY: Implied message here -- you are targeting situations in places like Michigan, Indiana and Ohio?
RICHARD: Long but politically correct answer. The primary mission of the U.S. "Wealth Creation' Plan is to create 2 million net new jobs in the U.S. within a period of 12 consecutive months -- a huge challenge. The states you mentioned, as well as others with similar but less pronounced challenges, have many of the core attributes we seek relative to revenue and profit productivity goals we intend to achieve.
SUNNY: Richard, what can the average laid off person do? Call their Governor or mayor and say they should contact you and get involved in your plan?
RICHARD: They can. I mean, they should have their most senior state or County Economic Development official contact me directly, that would be at RDSmith@SMITH-TRG.com, to discuss their unique situation and possibly explore potential options.
SUNNY: All right. Richard, this has been insightful and very informative. Excellent approach. I look forward to learning more in our follow-up interview. Take care.