Years ago I suggested that Texas should be a financial center. If it were easier to start a bank, we might start more banks in Texas, some of which could grow to become strong banks. Strong banks will increase prosperity in Texas. A set of readily available software systems, a bank in a box, could make it easier to start a bank. The term bank-in-a-box has been around for a long time. I propose a well organized, well designed and documented open source bank-in-a-box project would be a great benefit to Texas and America.
The variations in banking are wide. At the large end, the U.S. government or the Federal Reserve should be able to use the bank-in-a-box software set to immediately open new banks to loan money to businesses in order to keep the economy operating when large numbers of banks freeze loaning during a banking crisis, as happened in the 2008 meltdown. The Federal Reserve poured money into existing banks, which was a waste of money because the banks sat on the money and did not loan it. The American economy had a heart attack when the money quit flowing. The Fed did everything it could think of except open banks for direct loans to businesses.
In good times the U.S. Government could practice emergency bank-in-a-box deployment the same way city and state governments practice for emergencies. I believe it would be possible, with practice, to go from zero to granting loans within a week.
At the small end of the spectrum, individuals who are fed up with high banking fees and poor service should be able to start their own personal banks. Individuals should be able to accept direct deposit, make electronic payments, and use their own debit card through a clearing house. Some people are already doing this as described in the Wall Street Journal article, "Footnote to Financial Crisis: More People Shun the Bank" by Gary Fields and Maya Jackson-Randall, September 12, 2012, page A1.
Open Source Software
Long term development of a bank-in-a-box software set is well suited for open source software development. Large collaborative efforts like the GNU/Linux operating system have been very successful. A bank-in-a-box software project would benefit from collaborative development.
The main sources of Open Source Software are Sourceforge and Github. The user interface for Sourceforge is more intuitive. I will caution the reader that if you are not familiar with the Git system for source code management, then Github will be have a steeper learning curve if you plan to actually download software. There is no real activity on Github for banking at this time, so that is not a a problem.
You can easily browse both websites to see what is available for banking. Sourceforge reports that the software project called Bank management system has (at this time) an average of 42 downloads per week. The project is described as a simple example for bank system with different operations. This sounds like a learning tool, but is a good starting point for exploring banking sofware. There are other banking projects that seem to lack popularity.
The most popular banking software on Sourceforge is Gnucash, a personal and small-business finance manager. It reports 16,805 weekly downloads. Gnucash has a check-book like register GUI to enter and track bank accounts, stocks, income and expenses. GnuCash is designed to be simple and easy to use but still based on formal accounting principles. This looks interesting on a personal level, but is not a bank-in-a-box.
There is a company called MyBanco that has an open source software solution. This looks promising. They appear to be ready for business in America and Australia.
Open source bank-in-a-box software should be a priority for the people of Texas. A bank-in-a-box software project would strengthen banking and improve software development in Texas. A bank-in-a-box software project could improve the prosperity of Texas. Any state would benefit from starting or participating in a bank-in-a-box project.
Robert Canright
The Bank in a Box Software Project is part of the Texas Software Initiative
Saturday, September 15, 2012
Thursday, August 9, 2012
Global Surplus Capital
In a previous article I had referred to "the problem of too much money existing for the present state of the world economy." This is not a subject you hear being discussed. You see evidence of it by interpreting reports such as the following.
The article, "Denmark Moves to Drop Deposit Rate Below Zero," by Flemming Emil Hansen and John Stoll in the Wall Street Journal, Friday July 6, 2012, page A7, says that depositors "now face paying for the right to park their money in the central bank....Nationalbanken lowered its deposit rate to negative 0.2% from 0.05%" This says the national bank of Denmark has more money than it can use, it does not want deposits. Money exceeds investment opportunities, there is a surplus of capital.
The article, "Google Googles for Yield, Finds Auto Bonds" by Katy Burne, Wall Street Journal, Tuesday August 7, 2012, pages C1 and C3, says Google "has found a new place to park some of its $40 billion cash hoard: bonds backed by car loans." Remember how collateralized debt obligations crippled the banking industry and plunged the world into recession? Bonds backed by auto loans are not that much different than loans backed by home loans.
The article "The Bonds, They Are A-Changin'" by Liz Moyer and Al Yoon, Wall Street Journal, Wednesday August 8, 2012, page C4, says that Sesac, "A privately held Nashville, Tenn., company is preparing a $300 million bond backed by the cut it receives as a middleman between music companies and songwriters and the outlets that broadcast their music." Goldman Sachs is preparing this bond offering. The article mentions three other bonds backed by revenues.
Investment money is not going into new business creation that would produce employment. Unemployment is keeping us all in a recession. We cannot solve a problem we do not recognize. It is time for us to discuss the problem of global surplus capital and the related problem of inadequate business creation.
The independent intellectual Judge Richard Posner has mentioned "the emergence of a global capital surplus," on page 20 of his book, A Failure of Capitalism. The alternative press has mentioned it. The Monthly Review, an independent socialist magazine, in its May 2012 issue published the article "The Endless Crisis" by John Bellamy Foster and Robert W. McChesney, which says, "...more and more surplus capital tended to accumulate actually and potentially within the giant firms and in the hands of wealthy investors, who were unable to find profitable investment outlets sufficient to absorb all of the investment-seeking surplus." But these articles do not mention the problem of inadequate business creation.
If we face the problems of inadequate business creation and lack of investment in new business, then we can get out of our recession.
Robert Canright
This article is part of the New Business Project of the Texas Ascendant Campaign.
I also wrote the article Excess Global Capital on October 15, 2017
PS: the term capital surplus is an accounting term, which is why I use the term "global surplus capital."
Also, the article "The Endless Crisis," does quote the book The Great Stagnation by Tyler Cowen as saying, "Even before the financial crisis came along, there was no new net job creation in the last decade." But I don't see a discussion of new business creation in the article "The Endless Crisis."
The article, "Denmark Moves to Drop Deposit Rate Below Zero," by Flemming Emil Hansen and John Stoll in the Wall Street Journal, Friday July 6, 2012, page A7, says that depositors "now face paying for the right to park their money in the central bank....Nationalbanken lowered its deposit rate to negative 0.2% from 0.05%" This says the national bank of Denmark has more money than it can use, it does not want deposits. Money exceeds investment opportunities, there is a surplus of capital.
The article, "Google Googles for Yield, Finds Auto Bonds" by Katy Burne, Wall Street Journal, Tuesday August 7, 2012, pages C1 and C3, says Google "has found a new place to park some of its $40 billion cash hoard: bonds backed by car loans." Remember how collateralized debt obligations crippled the banking industry and plunged the world into recession? Bonds backed by auto loans are not that much different than loans backed by home loans.
The article "The Bonds, They Are A-Changin'" by Liz Moyer and Al Yoon, Wall Street Journal, Wednesday August 8, 2012, page C4, says that Sesac, "A privately held Nashville, Tenn., company is preparing a $300 million bond backed by the cut it receives as a middleman between music companies and songwriters and the outlets that broadcast their music." Goldman Sachs is preparing this bond offering. The article mentions three other bonds backed by revenues.
Investment money is not going into new business creation that would produce employment. Unemployment is keeping us all in a recession. We cannot solve a problem we do not recognize. It is time for us to discuss the problem of global surplus capital and the related problem of inadequate business creation.
The independent intellectual Judge Richard Posner has mentioned "the emergence of a global capital surplus," on page 20 of his book, A Failure of Capitalism. The alternative press has mentioned it. The Monthly Review, an independent socialist magazine, in its May 2012 issue published the article "The Endless Crisis" by John Bellamy Foster and Robert W. McChesney, which says, "...more and more surplus capital tended to accumulate actually and potentially within the giant firms and in the hands of wealthy investors, who were unable to find profitable investment outlets sufficient to absorb all of the investment-seeking surplus." But these articles do not mention the problem of inadequate business creation.
If we face the problems of inadequate business creation and lack of investment in new business, then we can get out of our recession.
Robert Canright
This article is part of the New Business Project of the Texas Ascendant Campaign.
I also wrote the article Excess Global Capital on October 15, 2017
PS: the term capital surplus is an accounting term, which is why I use the term "global surplus capital."
Also, the article "The Endless Crisis," does quote the book The Great Stagnation by Tyler Cowen as saying, "Even before the financial crisis came along, there was no new net job creation in the last decade." But I don't see a discussion of new business creation in the article "The Endless Crisis."
Sunday, August 5, 2012
The Cause of the Crash of 2008 and the New Business Project
What really caused the crash of 2008 was the lack of businesses able to absorb investment money. This is the flip side of the problem of too much money existing for the present state of the world economy. Because there are not enough companies to soak up the money available for investment, collateralized debt obligations (CDOs) were created to soak up the excess money. The CDOs were time bombs waiting to explode and take down all who bought them. The excess money is presently rattling around in derivatives, making them very dangerous.
I propose a New Business Project within the Texas Ascendant Campaign. It is important that we have some focus on the creation of new businesses. The problem of excess money bouncing around the international capital markets is an issue that should also be addressed, but not in this article.
There are plenty of organizations encouraging entrepreneurship. The Ewing Marion Kauffman Foundation is one example. The Institute for Innovation & Entrepreneurship at UT Dallas is another example. But we need to focus on new business creation in the many things we do. For example, our schools have a big push on science, but we would be better served by pushing business education instead of science education. We desperately need more business owners than we need scientists.
Areas of special focus for Texas could include the following:
Robert
The following are related articles
North Texas Industrialization Tuesday, May 5, 2009
The Exploitation of Innovation Saturday, March 13, 2010
Exploitation, Not Innovation Sunday, August 5, 2012
Global Surplus Capital Thursday, August 9, 2012
I propose a New Business Project within the Texas Ascendant Campaign. It is important that we have some focus on the creation of new businesses. The problem of excess money bouncing around the international capital markets is an issue that should also be addressed, but not in this article.
There are plenty of organizations encouraging entrepreneurship. The Ewing Marion Kauffman Foundation is one example. The Institute for Innovation & Entrepreneurship at UT Dallas is another example. But we need to focus on new business creation in the many things we do. For example, our schools have a big push on science, but we would be better served by pushing business education instead of science education. We desperately need more business owners than we need scientists.
Areas of special focus for Texas could include the following:
- Software Products
- Manufacturing
- Banking
- Investment
Robert
The following are related articles
North Texas Industrialization Tuesday, May 5, 2009
The Exploitation of Innovation Saturday, March 13, 2010
Exploitation, Not Innovation Sunday, August 5, 2012
Global Surplus Capital Thursday, August 9, 2012
Exploitation, Not Innovation
It is exploitation, not innovation, that needs to be taught to boost our economy. Boaz Fletcher, 44, a consultant to new companies in Israel, says “As a country, Israel is amazing at technology, but not great at building sustainable businesses," in the article Want to Graduate? Create a Company by Hannah Seligson in the Sunday New York Times, July 29, 2012. This article describes how the Founder Institute teaches people how to start companies.
You hear a constant drum beat in the public schools for innovation. America is awash in innovation. What is difficult is picking the right product to promote, at the right time, and selling the product in sufficient quantities to sustain a successful business. The judgement on which product will win and picking the right time are skills that are hard to teach. But product sales and marketing can be taught. The skills to create and run a company can be taught. I have seen plenty of innovative people flounder and sink from poor skills in sales and business. It is the successful exploitation of a product that is needed for success.
America needs more successful businesses. To grow our businesses we need to focus our energies on the right skills to teach: exploitation, not innovation.
Robert
A related article:
The Exploitation of Innovation Saturday, March 13, 2010
You hear a constant drum beat in the public schools for innovation. America is awash in innovation. What is difficult is picking the right product to promote, at the right time, and selling the product in sufficient quantities to sustain a successful business. The judgement on which product will win and picking the right time are skills that are hard to teach. But product sales and marketing can be taught. The skills to create and run a company can be taught. I have seen plenty of innovative people flounder and sink from poor skills in sales and business. It is the successful exploitation of a product that is needed for success.
America needs more successful businesses. To grow our businesses we need to focus our energies on the right skills to teach: exploitation, not innovation.
Robert
A related article:
The Exploitation of Innovation Saturday, March 13, 2010
Sunday, May 27, 2012
Raising the Bar by Talmage Boston
I was happy to read in the Dallas Morning News, Sunday May 27, 2012, an interview with Talmage Boston. He has written a book, "Raising the Bar: The Crucial Role of the Lawyer in Society," that seeks to provide a blueprint for how lawyers can and should contribute to society. When I proposed the Cicero Project, I suggested developing in Texas the most capable lawyers in the world. Mr. Boston's book is a positive step in that direction.
Robert Canright
Here is a link to the Cicero Project
Robert Canright
Here is a link to the Cicero Project
Sunday, May 13, 2012
On Modeling
Misused financial models contributed to the economic melt-down on Wall Street, leading to the Great Recession. Financial firms wagered fortunes on mathematical models they did not understand. Here is an excellent thought on modeling.
The art of model-building is the exclusion of real but irrelevant parts of the problem, and entails hazards for the builder and the reader. The builder may leave out something genuinely relevant; the reader, armed with too sophisticated an experimental probe or too accurate a computation, may take literally a schematized model whose main aim is to be a demonstration of possibility.
From physicist Philip Anderson's 1977 Nobel Prize acceptance speech, as quoted in Complexity, A Guided Tour by Melanie Mitchell. (page 224).
Mathematical modeling is easily misused, but it is important for working with complex systems. Mathematical modeling must be a part of our growth as an economic power.
Robert
The art of model-building is the exclusion of real but irrelevant parts of the problem, and entails hazards for the builder and the reader. The builder may leave out something genuinely relevant; the reader, armed with too sophisticated an experimental probe or too accurate a computation, may take literally a schematized model whose main aim is to be a demonstration of possibility.
From physicist Philip Anderson's 1977 Nobel Prize acceptance speech, as quoted in Complexity, A Guided Tour by Melanie Mitchell. (page 224).
Mathematical modeling is easily misused, but it is important for working with complex systems. Mathematical modeling must be a part of our growth as an economic power.
Robert
Military Research Drives Economic Growth
Some people believe military spending should be cut so more money could be spent taking care of the poor. The classic textbook Economics by Paul Samuelson has a chart of "guns versus butter" as an example of economic tradeoffs. This is a deceptive argument.
Military research created the dynamos that drive the modern economy: computers, computer programming, the internet, radar, and jet aircraft. Let us look briefly at computers, using the MANIAC computer as an example. MANIAC stands for mathematical and numerical integrator and computer. It was the brain child of John von Neumann while he was at the Institute for Advanced Study at Princeton. We all know how computers drive the modern economy. However, the first test of the MANIAC happened in the summer of 1951, and it was a thermonuclear calculation that ran for 60 days nonstop.
As we give more thought to economics, we must avoid being misled by spurious arguments. A strong military is indispensable for a free nation. Military research often leads to economic growth. Are Texas universities contributing enough to America's military research?
Robert Canright
Information about the MANIAC computer is from the book, Turing’s Cathedral, the Origins of the Digital Universe, by George Dyson
Military research created the dynamos that drive the modern economy: computers, computer programming, the internet, radar, and jet aircraft. Let us look briefly at computers, using the MANIAC computer as an example. MANIAC stands for mathematical and numerical integrator and computer. It was the brain child of John von Neumann while he was at the Institute for Advanced Study at Princeton. We all know how computers drive the modern economy. However, the first test of the MANIAC happened in the summer of 1951, and it was a thermonuclear calculation that ran for 60 days nonstop.
As we give more thought to economics, we must avoid being misled by spurious arguments. A strong military is indispensable for a free nation. Military research often leads to economic growth. Are Texas universities contributing enough to America's military research?
Robert Canright
Information about the MANIAC computer is from the book, Turing’s Cathedral, the Origins of the Digital Universe, by George Dyson
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