Leadership

Laws of Physics Spur Economic and Financial Growth

As the Trump administration continues to make good on the president’s campaign promise to roll back regulations across a broad scope of industries, there is at least one financial advisor from the Midwest whose boisterous sideline cheering is nearly spilling onto the field of play.

He is unrestrained in his viewpoint that deregulation will help the American economy.

It’s because F. Patrick Cunnane, managing principal of Masters Consulting Group, which specializes in creating and managing employer-based retirement plans out of its Chardon, Ohio, offices, believes that deregulation removes yet another barrier to the positive economic growth his corporate manufacturing clients need to grow their businesses and continue providing good wage and benefit-paying jobs to their employees.

“Regulation is a counter force that works against the laws of physics as applied to finance,” Cunnane said. “Reduce the amount of regulation and the process that produce positive impacts on finance such as mass, distance and time when energy is applied to them will inevitably create more wealth.”

Hang in here with him for a just a moment: His tying of economics to the laws of physics is indeed a new and perhaps even revolutionary concept, but its germination came from Cunnane observing the production work of his clients – agricultural companies, parts producers and steel manufacturers to name a few – and noting the things that caused declines in their economic output and productivity.

These “negative forces” include, but are not limited to, government debt, taxes, unemployment rates, trade deficits, excessive government regulation and the natural counter force due to friction.
Cunnane began to ponder the idea of applying the laws of physics to economic models.

And while he had worked with numbers all his life, he sought help from math tutors with expertise in the mathematical models used in physics. He searched for minds that could take his theories and develop equations to prove on paper what he suspected from his observations.

“For seven years, I had a weekly math tutoring session and learned more and more and more,” said Cunnane. “More models, more thoughts of just how true it is that physics does govern economics kept coming alive for me.”

Hence, his proprietary statement, the “Physics to Economics Model,” expressed in mathematical notion in his firm’s official logo as, “E= 1/2e(Tr)2” now influences his every decision as he advises clients.

For Cunnane – and ultimately his clients benefitting from his application of his innovative economic approach – the words, “mass, distance and time,” usually found with lengthy explanations in university science text books, have just as bold a heading in his economic glossary.

Mass – the actual material that resists force of something or the amount of area it takes up in scientific terms – is translated in economic terms to represent the physical object used in a specific industry such as a lump of coal to create electricity, or steel to build a car, or a cow to milk to produce cheese or yogurt. It takes energy to cause objects to change position or move to enable production.

Distance – again the scientific term for how far something travels – becomes the economic idea of how far a producer has to ship raw materials to combine together to make a product, as well as how far that product then has to travel to get to its purchasers. This is what occurs in a transaction; things go from A to B as distance.

Time – science’s definition of how long it takes – is similarly applied to economics in measuring the amount of space between final production and consumer purchase. Transactions happen in time.

cunnanepat300x400The big “E” in Cunnane’s mathematical notation equals energy or what does it cost to cause the mass, distance, and time to change behavior to get to the end product: an airplane part, a ball bearing or an ice cream cone in the hands of a toddler.

It is the use of this energy concept that Cunnane believes impacts financial success.

“A change in energy is what creates the amount of wealth someone has. Increased energy puts more money; more wealth in the bank and decreased energy detracts from wealth,” he explains.
Cunnane recognizes he is on the bleeding edge of this concept’s acceptance.

In economic activity something must change. From iron to car, from tree to house. In the laws of physics only energy can cause a change in the behavior of an object.

He understands how Samuel Morse, the inventor of the single-wire telegraph, must have felt just before the U.S. Civil War when he invented the machine that allowed people on the East Coast to communicate instantly with people on the West Coast and parts in-between. Prior to that, the Pony Express letter-carrying service did its best to facilitate communication, but even the work of sure-footed ponies and dedicated riders took months to get letters back and forth.

Yet, despite the ground-breaking advance of Morse’s telegraph, it would be decades before the technology was in full use. Most of the wires necessary for the system to work weren’t hung until after the war.

“Now I am hanging out my wires,” Cunnane said in reference to his book, “The Physics to Economics Model (PEM): A Natural Science First Principle of Economics How to Increase the Gross Domestic Product of the United States by 100 Percent in Eight Years,” published in Feb. 2017.

Cunnane’s financial-advising approach in his view is more rational than economic policy that advocates printing unearned money, but may seem a bit unorthodox for a man whose company sets up employee pension plans.

But he remembers the faces of the workers he talks to on the shop floors of the manufacturing plants he visits. They are Jane and Joe Americans – folks doing the best they can to earn a paycheck producing products needed to keep American manufacturing in the fight against foreign competitors.

He remembers addressing a factory full of workers giving a speech about the problems facing retirement planning.

One guy from the shop floor shouted out to him, “Well, then; just fix it.”

Cunnane stopped speaking and asked, “What do you mean?”

To which the worker responded, “If you are so smart, then you fix it. Just fix it for the rest of us. You are telling us you know how to do all of this, so just fix it. Fix the whole thing. Fix the whole economy. Fix the entire thing and make it good.”

It stopped Cunnane in his tracks.

“I said to him, ‘that is the best question I have ever heard, and it makes more sense to me than anything else.”

And so Cunnane started on a path to do just exactly what was asked of him. Hence, the book now available on Amazon based on a “physics” oriented approach to financial advising for his corporate clients – the mainstay of his firm’s business – and his individual clients – which compromise approximately 35 percent of the workload at Masters Consulting Group.

The bulk of his corporate clients are doing over $100 million in business each year. The sweet spot for marketing his firm is with companies bringing in between $25 and $50 million annually.
“We can easily handle firms with 1,000 participants,” he said.

Masters Consulting Group works with corporate clients and business owners that don’t just talk about helping their employees achieve well-funded retirements. He is honored to work with those demonstrating that notion by regular facilitation of meetings with employees – even if that means right on the shop floor where the employee does his or her work. Even if that means getting in where the sparks fly, the grease flows, and the nitty gritty happens.

Cunnane wants to look at every individual account within a corporate benefit plan to help the average guy.

“I want to talk face-to-face on an ongoing basis with all employees and make sure their account is achieving what their goals are,” he said. “We look to work with companies run by people and the kinds of owners that believe their employees are paramount to their success and are willing to go the extra mile on their behalf to ensure when retirement comes, they are prepared.” This business axiom of “employees first” is observed to cause significant business success and we want to be part of it.

Cunnane has three patents and patents pending on energy generation related to his theories.

Learn more about F. Patrick Cunnane and Masters Consulting Group online at mastersconsultinggroup.com. Find his book online here: “The Physics to Economics Model (PEM): A Natural Science First Principle of Economics How to Increase the Gross Domestic Product of the United States by 100 Percent in Eight Years”

The Cunnane Building - 113 North Hambden Street Chardon, OH 44024-1166 866-275-0409 mastersconsultinggroup.com

 

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