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Last night I had a heated, but friendly, discussion with my Uncle Tony Greco about our national economy. Tony turned 89 last July and like his parents and brother, my father Domenick, grew up in and established careers in the apparel industry, then known as the clothing business. Tony was a manufacturer of boys’ jeans in the 50s and 60s in Philadelphia with a NY showroom. He recalled selling denim jeans at $15.98 per dozen, including fabric, and made .05 per pair on 3,000 dozen per week.

In 1969 he closed his business and blamed very low price competition coming from Hong Kong. Previously he had been able to have his union shop be efficient enough to compete with non-union labor from southern factories. But the Far East was just too much. Tony continued as a jean contractor into the 70s and closed and retired after a few years when demand dried up. At the same time, I ran a sport coat factory on the same loft floor in North Philadelphia. I had 60 people employed during what became my first recession of 1973 to 1975. We made a few lots of Nehru jackets and then closed that factory. I had decided to continue in the business and due to a shortage of sewing machine operators was then drawn in 1985 to starting production in the Dominican Republic under the Caribbean Basin Initiative.

Since that time I have increased the sourcing capability in both breadth and depth by manufacturing a variety of products from headwear to footwear along with uniforms and career apparel. We source in various countries including the USA, Dominican Republic, Haiti, Nicaragua and China. Back to the discussion between Tony and me, with Tony contending that the ruination of the US economy was solely from imports: While from his perspective, his business did decline due to foreign competition, he had not taken steps to transition his manufacturing experience to other realms.

I stated my point of view that apparel manufacturing has always been an easy entry level business, which is why my grandfather had a pants shop in the 1920s after he had immigrated to Philadelphia from Calabria, Italy. I advised my uncle that a significant percentage of the types of jobs currently in America did not even exist in 1969 when his business closed. Further, that it was my belief that the current and severe recession was not a result of lower priced imports but rather the effect of typical human behavior- greed. This on the part of home owners speculating on potentially ever increasing home values and huge mortgages, and the investment bankers who created and promoted collateralized debt obligations or mortgage packages. Here’s a quote that summarizes the situation from Andy Rappaport writing in the Harvard Business Review:

“While global competition is increasing our need to invest in new industries and technologies, the strategy of financial institutions is to risk increasing amounts of capital on derivative investments that have no clear industrial benefit or economic value. This is crowding out our collective ability to take risks on enterprises that could have clear impact on our national competitiveness and standard of living in the future.”

I further enlightened my uncle to the recent retail environment that has changed drastically since the one he knew in the 1960s: Today’s climate is driven by fewer and larger retailers who call the shots by demanding markdown money; advertising dollars and lower prices each year regardless of commodity costs; high fuel prices, and the burden of health care upon businesses. This was not the first time we had this discussion but it was the first time in twenty-four years he ventured a thought. Maybe he should have given the jeans production to me to source in the Caribbean or Central America.

Let me state that I love my uncle and am very proud of him, particularly in light of Veteran’s Day just passed. He is an apparel industry veteran he also served 34 months in combat during WWII with the 36th Texas Division. Fighting in North Africa, Italy, France and Germany, he was highly decorated for valor with two Silver Stars, one Bronze Star and the Purple Heart. In addition he and his squad liberated the concentration camp at Landesburg, Germany. He had successfully fought the Germans, but lost his business battle to the world economy and imports.

Recently, I had the pleasure of listening to lectures by a couple of PhDs. One who spoke, Dr. Ken Dychtwald, was on PBS, and he discussed how our social dynamics are changing due to people living longer than ever before in history.

A few hundred years ago the average life expectancy was 18 years old. The traditionally accepted retirement age of 65 was determined by Otto Von Bismarck around the turn of the last century. At that time, life expectancy was only 35. No one expected many to reach the ripe old age of 65, so there would not be many benefits to pay, but thanks to modern medicine, we are living longer. Ken said that of all the human beings in history to have reached the age of 65, fully two thirds are alive today!

Our retirement planning from years ago did not encompass the idea of life expectancy to draw near 90 years as it stands today. This past Monday, I attended a lecture at the Philadelphia Speakers Series by Dr. Robert Reich, a highly intelligent and experienced tenured professor at Brandeis and former Secretary of Labor under President Clinton. Those two met at Oxford in the Rhodes Scholar program and attended Yale Law School together.

Reich has a comfortable speaking style to approach seemingly complex issues, like the economy, and put them in very understandable terms. He postulated that there are four major methods to stimulate the economy: higher consumer spending, increased business investment, increased exports, and government spending. The first three methods have been largely depleted since the big recession began. This left only government spending, according to the old Keynesian economic model, to be available to stimulate the economy. Reich argues that while the $800 Billion stimulus appropriation of last year may have seemed like a huge sum, it wasn’t enough. The fact is, nobody knew what the right number was then and I am not sure if they know the right number now.

Reich asked for a show of hands of those in the audience born from 1946 (as he was) through 1964 as most of the audience was and we are known as the Baby Boomers. Well, we Boomers are now reaching the retirement age and many or most don’t have the means nor the desire to retire, myself included in both categories. Social Security, Reich said, after speaking to the DC economists, is not in trouble if you assume a modest 3% growth in the economy. This is the historic US growth rate from the time of the Revolutionary War. It seems that the economists threw a scare into us by theorizing that Social Security would run out but that was based on a growth assumption of just 2.6%. They just wanted to be conservative. When running the numbers at 3% we turn out well-positioned to fund SS.

Medicare on the other hand is a different story. With people living longer and medical costs rising, the funding of that program is in jeopardy. Reich noted that the monumental health care bill is an enormous undertaking when you consider that benefits will extend to 30 million of our citizens not covered before. Blend in the no pre-existing condition clause to avert personal catastrophic cost disasters, and we can imagine the strain potentially on Medicare.

Reich noted our Boomer generation could be called the Med-Med generation. While we would like to plan vacations on a regular basis at Club Med, we will still rely on Medicare. Obviously, preventative measures to reduce much costly disease conditions in the future would be an attractive choice.

The thing I have found with lectures by PhD’s is that they generally give you good information, many “a –ha” moments, and much to think about, but not solutions that would apply to each of us individually. The trouble is that there are so many variables for each family to consider giving accurate universal advice is challenging. We are supposed to take in the information, learn the rules of finance and health care (rest, exercise, good nutrition and a positive mental attitude), – you know the drill – and develop life plan programs to help ourselves. Isn’t this ‘rugged individualism’ in the traditional American Spirit? You bet, and now we have cable TV and the vast internet (thanks to VP Al Gore) to help guide us, answer questions and reduce the number of excuses to take care of ourselves.

So get up to speed. We are living longer and healthier if we are both genetically fortunate and adhere to health rules and we will have greater financial needs to support our longer lives during a period of less active earnings potential. At least wake up to reality although we may not like everything we see, we should know about the many things that can be done.

Many are starting new careers after age 65. There’s not much money in the retirement account left by Von Bismarck, but there is a plethora of educational and training opportunities to continue to support the do-it-yourself American Spirit. Avoiding problems and being attracted to a brighter future was in large part what drove mine and other’s recent ancestors to the shores of the USA. Some theorize that there was a greater incidence of ADHD among immigrants that motivated them to leave their unattractive old country surroundings and venture into a new world where they didn’t necessarily have a job line up or speak the language.

We need to ratify and fulfill the dreams of our grand and great-grandparents and take advantage of the opportunities afforded in the land of their dreams and our ever evolving democracy. People are still dying to get into this country. There are no fences keeping our citizens in. I know it is a political hot topic but as Dr. Reich confirmed, those immigrants still streaming in here are taking jobs that the previous residents do not desire. They work on the farms, in construction or in the kitchens. The work is hard but honest with pay. They dream of the better life for themselves and more so for their kids as our parents did.

And by the way, governments have been subsidizing and spending economies out of trouble for a long time. Better times will bring higher revenues so that people and businesses will be able pay more taxes and contribute to the arts and charities that have been suffering over the last two years. No matter how bad one’s situation may be, chances are good that someone else may be worse off. Consider now the unimaginably devastating earthquake that shook our Caribbean neighbors in Haiti. They are the poorest country in the hemisphere and their Capitol city was just flattened attended by the loss of at least 100,000 lives and counting. Let us pray for them and help them however we can because there but for the grace of G-d go us.

Recently I learned that I had lost my mentor who passed away last December. I had only met Jim Rohn three times, at seminars I attended, but I read his books and listened to his lectures on cassette tape, for probably hundreds of hours. While driving in my car in the ’80s and ’90s, I almost wore the cassettes out.

His life may have passed but his wisdom is timeless. He taught me more about personal growth and self-actualization than I learned in all the years of school through graduate school. Mr. Rohn’s words written below come from his books and my recollections of his talks.

In one talk, he told a story of some successful business people in his audience who asked him to predict what the future would be like based on his own experience in business and sales. Mr. Rohn said that the future would be similar to the past: opportunity mixed with difficulty, the same as it’s been for more than six thousand years of recorded history.

If ‘things’ don’t really change, then what can be changed? His answered that we each need to change and grow and take advantage of our experience and that of others, authors and historians who relate past trials and tribulations so that we don’t need to experience everything personally to learn life’s most important lessons.

In these current “times that try men’s souls,” I am channeling Jim Rohn for he was a type of motivational speaker who spoke realism and practical perspectives. He taught that the only motivation is self motivation. You can’t just rely on someone else to stimulate you, because what if they don’t show up? What was most important, he warned, was to be careful of what you became in pursuit of what you wanted. And having more money is just not the full answer because more money only made you more of the character you already had become. If you were a gambler, you could now be a bigger gambler; if you were charitable, you could be more charitable. If you inherit a million dollars best you become a millionaire in your behavior and attitude very quickly. Because gold quickly slips through the fingers of those unskilled in it’s keep.

I remember when my two sons, Ben and Jeffrey, were in their teens and playing sports. They were better athletes than me, I am proud to say. My son Ben announced one day that he would join the NBA, make lots of money and therefore did not need to think about attending college. I said I am sure that you will make it to the NBA but you still need to go to school. Think of what happened to the great lefty pitcher for the Phillies, Steve Carlton. He made plenty of money but due to a poor or incompetent financial advisor, Carlton had lost most of his money through unwise investments. Ben must have listened because he did graduate from Cornell but did not make it to the NBA!

If we haven’t been born with the skills to live a successful life or fortunate enough to be taught the proper lessons during our childhood or educational life, then it’s up to each of us to make the changes necessary – without complaint.

What we are and what we have, we have slowly brought upon ourselves. Everyone is self made but only the successful will admit it. I know the economy can be tough, prices of supplies may rise, the government may take too much in taxes or run up the deficit but the fundamentals of success have not changed. It is the human tendency to blame someone or something else for our failures. There’s an old spiritual tune that says “it’s not my mother, my father, my sister or my brother standing in the need of prayer, oh Lord, it’s me.”

So a primary fundamental would be to take responsibility for our lot in life. The greatest value of the past is an understanding of how we can invest it in the future. Rabbi Kushner recently said that in order to be happy we cannot continue to hold onto our past failures. Accept them and move on. Everyone has ups and downs. Do you need to be reminded of the hardships and failures that Abraham Lincoln faced? And yet he became one of our greatest presidents. George Washington was to have the aid of two additional divisions of infantry to meet up with him when he crossed the Delaware on Christmas. But due to horrible weather only Washington’s troops made it to Trenton. What if GW had stopped because of a lack of planned support? We’d likely be speaking the King’s English today.

One of the greatest challenges of life is have both the wisdom to recognize those sources of negativity and the courage to cast them aside if necessary. Get rid or stifle those sources that may be poisoning your mind. It may be your family members or close friends; help like that you don’t need and you can choose to ignore.

There’s little difference between one who has given up his life and one who has given up his hope. Beware that there are those who will frown upon those who set ambitious goals. Yet without goals there can be no achievement and without achievement life will be as it has been. It’s our duty to examine the credentials or authority of those seeking to enter within the place where your attitudes are formed. The value of surrounding yourself with the correct, positive, realistic, supportive advisors and friends is immeasurably awesome. Protect your attitude as attitude determines choice and choice determines results.

All that we are and all that we can become has indeed been left unto us. The only limitation placed on our abilities is our own inability to easily recognize our unlimited nature. It is ironic that one of the few things in life over which we have total control is our attitude. And yet many of us live our entire life behaving as though we had no control whatsoever. By our attitudes we and we alone will actually decide to succeed or fail.

I realize that it’s much easier to listen to the lectures and wisdom than to absorb and employ and empower the guidance. Keeping an open mind towards positive outcomes and developing the discipline required is not just ‘happy hope.’ Don’t close yourself off to growth and profit possibilities with a poor negative attitude.

Yes times are tough. But many people are still employed and still wearing uniforms. They also purchase other products. At Greco Apparel, we have increased the types of products we source and manufacture from many types of apparel to include headwear and footwear. We have increased the number of countries from which we source to take advantage of sustainability for fabric sourcing, best prices and opportunistic trade laws in the both the Western and Eastern Hemispheres.

No one granted us a license to expand and diversify. We listened to the demands and requests of our clients and prospects as to what services and products they needed. It would have been simpler, believe me, to just continue making the same items we had for many years. You have to learn to plant in the spring, something your customers will buy come the fall harvest.

Take the pains now to make the required changes in your business plans and current competencies. For if you choose not to, be prepared to beg in the fall when your harvest does not come it. The pain of discipline weighs ounces and the pain of regret weighs tons. Making the changes may not be easy but I promise they will be worth the effort.