I did a spot on CNBC Squawk Box this morning to discuss the impact of the recent unrest in China. Much of the news surrounds stories about migrant worker protests. As I wrote yesterday, the drivers for the protests making the news is not ideology–it is practical life issues like pay, jobs, work practices, discrimination, and corrupt local government officials. Wen Jiabao recently said that corrupt officials is China’s greatest crisis. Last year more than 146,000 corrupt officials were arrested in China; 97% of them were at the county, city, or village level.
Our discussion this morning turned on the impact on the US. The biggest US risk is supply chain interruptions, much like the Japanese earthquake. Just under half the manufacturing capacity in the world is in China. Much of it is in southern China, especially Guangdong, where the factories are operated by migrant workers from Sichuan, Hunan, and Xinjiang. Recent job losses in Guangdong caused by “hollowing out,” (businesses moving to cheaper locations in Vietnam and other Asian countries) are a real problem. Migrant workers are often the only source of income for their families in poor villages in western provinces. Rising food prices has also put the squeeze on migrant worker incomes, even though the incomes are rising at 10% per year.
All this is interesting, but what I care about are the people. It is easy to lump groups of people together and call them “migrant workers” if you have never met them. Not so easy when you know their names.
I thought I would just take a minute to inject a little humanity into the story by posting a few pictures of the kids I work with in the migrant worker schools in China. For several years, my partner Fred and I have organized teams of university students to work in primary schools in poor villages, often migrant worker schools. We have done projects in Tibet, Yunnan, northern China, and tried to do one in North Korea that failed to happen. In each case, we supply the students with books and materials to build libraries and kitchens, plant gardens, pay student fees, and give the children pencils and paper. The students spend a month or more in the schools teaching and working with the children.
Here are a few pictures from one of our recent projects in a migrant worker school in northern China.
The photo above is our team for a migrant worker school project. Fred (white t-shirt just in front of me) is my partner in all the projects we do. Ethan (black Rutledge capital shirt in front of me) was team leader for this project. The other team members are students at China Agriculture University.
Below are a few of the children, including an unforgettable kindergarten student showing me her very beautiful graduation dress.
Finally, the picture below is a very special one for me. We were able to arrange for 15 of the students graduating from the migrant worker school to go to the official public school nearby, which will allow them to later go to university. They needed clothes, school supplies, and the like to fir into the new school. This is a picture we took on their first day of class. I keep this photo on my desk.
I hope you get to meet some of these wonderful children one day for yourself.
(May 16, 2009) Yesterday I woke up a lot earlier than I like (that would be noon) to do the Fox Business 8AM Money for Breakfast show with Alexis Glick. Our assignment was to review the impact of recent government policies on the economy. It was set up as a debate with me squaring off against Christie Hefner (yes, that Hefner). Fun stuff. Here are a couple of the things we discussed.
JOBS- Government policies are destroying jobs, not creating them. The Treasury alphabet programs (TARP, TARF, BARF, TALF, ALPO, WALDO, DILDO,…) should have been titled the Hedge Fund Relief Act. They have set up a situation where banks can make tons of money by selling bales of certain kinds of paper to hedge funds who will make 30% returns on the paper. Banks have responded by ordering their troops to shut down all other activities, including small business loans, personal credit lines, home equity lines and jumbo mortgages.
Memo to Geithner (the Doogie Howser of finance): ALL JOBS come from small businesses. The shutdown of business credit lines is forcing small businesses to fire people. We get heart-breaking calls from these people every Saturday noon-2PM on our FBN entrepreneur show. You can measure the impact of the working capital shutdown in the weekly new unemployment claims reports (+637,000 last week) and the monthly job reports (-539,000 in April). You can also measure the loan activity directly in the chart below.
(May 16, 2009) In spite of what many people think, entrepreneurs don’t only happen in America. They happen everywhere people want to build a better life—in China, in India, in Colombia and in Brazil. And as I keep reporting week after week from our Fox Business Saturday show, there are tons of entrepreneurs in America too. Entrepreneurs are the source of the energy that makes the world grow and keeps living standards rising.
America is the richest, freest country in the world. We need to make sure we nurture and grow entrepreneurs and small businesses in America if we want to stay that way. That’s why I make such loud noises on TV when politicians do thing–taxes, regulations, mandates–to make it harder for people to start and grow businesses.
I Just received an email from my good friend Ed Hotard who is in China this week. Ed divides his time between Beijing and Houston–his travel schedule makes me look like a homebody.
Ed is in Kunming participating in the Annual Entrepreneur Forum to make a speech on how entrepreneurs are dealing with the financial crisis and to discuss policy actions China can take to help people start and grow businesses. Ed wrote to tell me there are 1200 entrepreneurs at the meeting, from CEOs of start-ups to Liu of Lenovo and Zhang Ruimin of Haier. Ed says the energy in the room is extraordinary.
I met an interesting man yesterday at my Berkeley lecture. He has taken the energy transformation framework from my new book and designed a framework for restructuring companies to accelerate innovation and entrepreneurial activity.
The show is to help people who want to make the leap and start their own companies to light the blue flame and leave the cubicle, kick butt and take names. Live call-ins, emails and twitters during the show.
Hope you can make the show and would welcome your comments and advice how to make it better.
The producers asked everyone on the Fox Business Bulls and Bears (4-5PM EST) show today to each bring one idea we would like the viewers to walk away with. Mine was ‘Kick butt-take names’.
Too many people today are sitting home in front of their TV in panic like a deer in the headlights. Fear is for tourists. My grandma Flora used to tell me it’s OK to get knocked down, but it’s not ok to stay down. Many viewers have been paralyzed while watching their 401ks shrink with a mindset that their productive life is over. No matter who you are, where you are, or how old you are your productive life is not over. There are lots of ways to start businesses today with no capital, even small ones run by old guys like me. It’s OK to fail trying. But you have to change your mindset and attack to win.
We are starting a new show on Fox Business about entrepreneurs-Saturday 1-2PM EST. All live call-ins, emails and twitters. I will answer any question there about anything. I sent out a blog asking for stories from entrepreneurs. Here is a comment I got this morning from Marilee.
Today the news is full of bailout stories. People like Marilee aren’t waiting for a bailout-they are doing it themselves with their own hands and their own energy. I think we need to spend more time celebrating Marilee and less time discussing what some politician said. If we had more Marilee’s we would not be in this mess.
Send me your stories.
Being a Realtor and having the CA Real Estate market taking a serious downturn, I started to look at other avenues in business. I landed on a Beauty Salon in our small town of Cool, CA (population 2520). My thought process was regardless of a recession and even when tightening the purse strings, women will give up shopping, movies and lunch dates before cutting back on their beauty routine.
I’ve grown the business in 4 months, from 2 hairstylists to 5 hairstylists and one manicurist.
I am still active in Real Estate. The Salon will hopefully allow me to survive this economy until CA Real Estate (especially Horse Properties) recovers.
Thanks for writing. You are exactly what the country needs today to climb out of the hole we are in. It is people’s ENERGY, not bailout packages, that will fix the economy. You have my admiration.
Give us a call on the show.
Wish there were 10 times more of you.