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Monthly Newsletter

*. September 2011. *. Monthly Newsletter. Quick Links:. Video Index Abstract Index. VIDEO INDEX. The History of the Debt Limit From Online Surfer to Successful Inventor Off the Workshop Floor. America ’ s Credit Downgrade Consumer ’ s Quickly Paying off Debt

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Monthly Newsletter

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  1. * September 2011 * Monthly Newsletter Quick Links: Video Index Abstract Index

  2. VIDEO INDEX • The History of the Debt Limit • From Online Surfer to Successful Inventor • Off the Workshop Floor

  3. America’s Credit Downgrade • Consumer’s Quickly Paying off Debt • Destructive Structural Unemployment • Subaru’s Miracle Factory • Chinese Labor Gets Pricier • Creating Corruption Confusion with the FCPA • Changing the Patent Process • Inventors Find the Right Tools at TechShop • The High Stakes World of Modern Farming • Warby Parker Takes on Eyeglass Oligopolies ABSTRACT INDEX

  4. In August, the S&P ratings firm downgraded U.S. Treasury debt from AAA to AA+. • The last-minute Congressional compromise over the debt ceiling will cut the deficit by $2.1 trillion, far from the $4 trillion that S&P suggested. • With recovery already moving slowly, the new rating doesn’t help encourage essential foreign investment in U.S. bonds. America’s Credit Downgrade

  5. What’s the message Standard & Poor’s is sending the U.S. government? What do you think? • What if nations like China refuse to buy U.S. Treasuries?

  6. Surprising new statistics show that Americans are shedding their debt at a much faster rate than initially expected. • In May, the average U.S. credit score rose to 696, while delinquencies on consumer loans dropped 30 percent over the last two years. • Although debt obligations are at a 17-year low, household debt still amounts to 115 percent of income. Consumers QuicklyPaying off Debt

  7. What did the financial crisis teach Americans about debt? What do you think? • Why are there concerns that Americans may continue to save and not spend? Photo courtesy of Robert Scoble

  8. Millions of positions across the country remain vacant as employers search for qualified candidates. • One study found that 40% of surveyed companies had positions open for at least six months due to a lack of qualified applicants. • Structural unemployment has the power to harm the economy even as jobs in other industries return. Destructive StructuralUnemployment

  9. What’s the key concern about structural unemployment? What do you think? • Why are Americans less willing to move for work than in the past? Photo courtesy of Matt Metzler

  10. During its 22 years in operation, the Subaru of Indiana Automotive plant produced more than 3 million cars without ever resorting to layoffs. • The zero-landfill factory uses waste elimination to keep costs low, jobs secure, and pay raises frequent. • Strenuous 47-hour workweeks and years of graveyard shifts ensure that employees work hard to earn their job security. Subaru’s Miracle Factory

  11. What do you think? • What’s important to note about Subaru’s recycling efforts? • Why has SIA been able to thrive while other automakers have suffered? Photo courtesy of Dave Walker

  12. Increasing manufacturing costs in China have some companies looking towards neighboring countries like Cambodia and Laos. • Although the average wage in China as a whole remains low at $3.10/hour, wages in eastern China can exceed that by as much as 50%. • As disposable incomes rise, many factories are beginning to make products to sell in the domestic market rather than export. Chinese Labor Gets Pricier

  13. What advantage do increasing labor wages offer the Chinese economy? What do you think? • Will other U.S. manufacturers join Wham-O in returning to the United States? Photo courtesy of Robert S. Donovan

  14. The Foreign Corrupt Practices Act prohibits American companies from bribing foreign officials. • The U.S. Chamber of Commerce, a business lobby, argues that employees at state-owned businesses do not count as foreign officials. • While the government disagrees, the Chamber claims that companies can be indicted for a gesture as simple as a free cab ride. Creating Corruption Confusion with the FCPA

  15. What are the major criticisms of the Foreign Corrupt Practices Act? What do you think? • Will the U.S. government relax the Foreign Corrupt Practices Act? Photo courtesy of Kyle MacDonald

  16. The U.S. Patent and Trademark Office can take as long as 34 months to approve a patent. • In March, Congress passed a new law that changes the grant process from a first-to-invent to a first-to-file basis. • Critics of the legislation see the law as biased towards big companies with the resources to file early and challenge often. Changing the Patent Process

  17. Will the change in patent law affect the efforts of entrepreneurs? What do you think? • Can foreign companies apply for U.S. patents? Photo courtesy of Dave Voegtle

  18. Home to expensive laser cutters and high-end saws, TechShop provides inventors with the equipment they need to build their vision. • Rather than pay as much as $50,000 for one heavy duty apparatus, inventors need only spring for a $100 monthly membership fee. • TechShop has helped develop everything from an electric-powered motorcycle to a heat pouch designed to warm premature babies. Inventors Find the RightTools at TechShop

  19. What’s the major advantage TechShop offers to aspiring entrepreneurs? What do you think? • Will the lagging economy impact TechShop’s future? Photo courtesy of TechShop

  20. Modern farmers must inhabit dual roles as businessmen and scientists along with their standard regimen of manual labor. • New GPS technology ensures that a farmer doesn’t seed the same field twice with his fleet of $250,000 tractors. • Farmers must decide whether to sell their crops domestically or on the lucrative but unpredictable international market. The High Stakes Worldof Modern Farming

  21. Why must today’s U.S. farmers focused on cost cutting and efficiency? What do you think? • What is a growing trend in the U.S. market that could help small farmers? Photo courtesy of Brian Forbes

  22. The optical industry is run by a few companies like Luxxotica, a group that owns glasses brands Ray-Ban, Oakley and Prada. • Dave Gilboa and Neil Blumenthal decided to take on this cabal while still in business school with their online eyewear startup, Warby Parker. • Thanks to a business model free from licensing fees or retailer markups, Warby Parker is able to sell quality glasses cheaply. Warby Parker Takes OnEyeglass Oligopolies

  23. Why do prices tend to remain high in oligopolistic industries? What do you think? • How can Warby Parker sell its eyeglasses much cheaper than its big rivals? Photo courtesy of Barry Pousman

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