Friday, October 29, 2010

Wright Travel Chair in Entrepreneurship

Doug Tatum, Chairholder 
Doug Tatum, associate professor (Business Communication and Entrepreneurship), is serving as holder of the Wright Travel Chair in Entrepreneurship.

From the Murfreesboro Daily News Journal, Tatum
... is a recognized expert on the capital markets and entrepreneurial growth businesses. He has testified before Congress concerning financing issues faced by growing companies and tax policy.
The author of “No Man’s Land: What to Do When Your Company Is Too Big to Be Small and Too Small to Be BigTatum was Chairman and CEO of Tatum LLC for more than 17 years, growing the company to the largest executive services consulting firm in the United States with more than 1,000 employees and professionals in 30 offices. He later served on the firm’s board and as chairman emeritus until the company merged with Spherion Corporation in early 2010. 

Tatum can be reached at or 615-898-2785.

Column: MTSU Grad, Entrepreneur Patrick Honeycutt

by Martin Kennedy

Patrick Honeycutt
Construction sector doing lousy? Not for this MTSU grad. He has a job with a Nashville-based construction company and is pursuing an intriging business idea on the side. I had the great pleasure of sitting down with Patrick Honeycutt yesterday. He is a recent MTSU grad. He majored in Construction Management with a Business Administration minor and enjoyed a great career on the gridiron for the Blue Raiders. He told me about his opportunity to work out with the Denver Broncos, with whom he got a free-agent contract. I got the inside story on rockstar rookie Tim Tebow. Apparently he really is a great guy.

Honeycutt got hired just two months ago by Capitol Homes, a Nashville-based home builder that is making the successful transition to home renovations. I never taught Honeycutt while he studied here in the 'Boro, but he let me know that Dr. Katie Kemp (Management and Marketing) was his favorite professor here. As for his business concept, I was impressed. He has identified an interesting niche and thought through many of the details. His business plan is impressive, and he is learning a great deal as he tries to put this together. People like Honeycutt are great ambassadors for MTSU. The president of the company has a good employee and is likewise impressed with his entrepreneurial effort. That word gets around and helps MTSU grads out there in the labor market and the ones who enter it every year.

Martin Kennedy

Martin Kennedy teaches economics at MTSU. In this column he will discuss business news and interview Jones College faculty experts on particular topics. Views expressed are not necessarily those of the Jones College. He invites reader input. 

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Thursday, October 28, 2010

Introducing a New Column

Today we are introducing a new column by Martin Kennedy, who teaches economics at MTSU. He will be discussing business news and interviewing Jones College faculty experts on particular topics. Views expressed will not necessarily be those of the Jones College. We invite reader input. 

Residential Lending Reform

"The reform of residential lending is going to result in a massive overhaul of the government-supported entities."  That's Senator Bob Corker (R-TN) as reported by the Nashville Post during a symposium in Nashville.  Those government-supported entitites are Freddie Mac and Fannie Mae.  Such entitites were created by the U.S. Congress.  The idea behind such government-supported enterprises was to facilitate the flow of credit — to make housing more affordable.

Freddie and Fannie buy mortgages.  They hold some and bundle and sell the rest — Mortgage Backed Securities.  How do they make money?  Buyers of these securities pay a fee in order to get the GSEs to assume the credit risk; Freddie and Fannie agree to pay the principal and interest on the underlying loan even if the actual borrower fails to pay.  Though Freddie and Fannie are not backed explicitly by the government — they are private corporations — there is what is called an implicit guarantee.  Buyers of their securities believe that the Federal government would not allow them to fail — a good assumption, it turns out, as the Federal Government had to bail them out in September 2008.  Bundling mortgages is a form of diversification but still limited to one sector in this case — housing. 

Ironically, the development of this system made it more difficult for many marginal homeowners to work things out with their bank.  Their bank had sold their mortgage long ago.  The solution?    

Corker again:  "We've got to figure out a way to pragmatically move more of the market to the private sector."

That may be.  Historically we have pursued policies to make housing more affordable, and now policymakers are scrambling to prop up home prices, in other words to make housing less affordable. 

A look north might provide insight.  Housing prices in Canada are above pre-crash levels.  In the past decade, subprime mortgages accounted for just 5% of home loans originated in Canada, while in the U.S. they represented 20%.  There is no tax deduction for mortgage interest payments, and buyers typically put 20% down.  Canadian policy doesn't encourage speculation.  

Home ownership might be a noble social policy goal, but in the end housing prices will be driven by the fundamentals of supply and demand.  Failure to recognize and respect that won't get us any closer to nobility.

Martin Kennedy 

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Wednesday, October 27, 2010

TN Jobless Numbers Don't Tell Whole Story

From the Tennessean (Oct. 22): For the second quarter, the state's unemployment rate actually was 17.9 percent when "underutilized" and "discouraged" workers are included, said MTSU economist David Penn, who tracks unemployment trends. [ full story ]

Thursday, October 21, 2010

MTSU Homecoming Activities

Please visit the Jones College of Business homecoming tent this Saturday, Oct. 23, from noon to 2 p.m. (located near the Naked Eye Observatory in Walnut Grove behind Cope Administration Building).

Lunch will be available at $6 for adults and $4 for children under 12. Giveaways include this Jones College mini megaphone. 

Wednesday, October 20, 2010

Expectations for Nashville Area

Presentation by David Penn to Independence Trust, Franklin, TN [ pdf ]

Wednesday, October 6, 2010

Economic Stress Declines Slightly

From the Tennessean: "After witnessing some expansion earlier this year, we've hit a soft spot," economist David Penn said at MTSU's recent Economic Outlook Conference. "The patient is recovering — but not up and exercising yet." [ full story ]

Monday, October 4, 2010

State Braces for Long Recovery, Economist Says

From the Murfreesboro Post: "The Tennessee economy lost so many jobs over the last three years it will take four or five years to recovery, said David Penn, director of the Business and Economic Research Center at MTSU." [ full story ]

TN May Suffer from Congress' Tax Cut Inaction

From the Tennessean: "Not extending the tax cuts for the middle class would be a serious blow for the recovery of the state's economy," said David Penn. "This would occur at a time when the local economy needs to grow, not cut, spending."

[ full story ]

Friday, October 1, 2010

Tennessee's Business: Green Issue

A look at:
  • Green Jobs
  • Green Businesses
  • Energy Efficiency Loans
  • Green Investment
  • Renewable Energy
  • Green Legislation