Amateur college athletics died in private many years ago with the advent of “bag men” who  secretly paid high school athletes and their attendants to influence their college destinations. https://www.bannersociety.com/2014/4/10/20703758/bag-man-paying-college-football-players

SEC schools along with other football factories & basketball dynasties have perfected this clandestine practice over the past couple of decades as fans looked the other way and pretended that college athletics was about pristine amateur competition. 

Amateur college athletics died in public with the creation of the Name, Image, Likeness (NIL) rules where college athletes are paid to promote, partner with, or represent brands. With this program, college athletics as we know it is dead and will be replaced with a frenetic scramble to creatively pay athletes as much as possible during their minor league careers. The talent gap between the “willing” and “less willing” athletic programs will become an impassable chasm. The usual suspects will lure the best high school athletes with massive NIL offers. No blue chip high school athletes will attend college without a large payout awaiting their arrival. Late blooming athletes who blossom during their college careers at less-willing NIL universities will transfer at-will to play on a bigger stage for a bigger payout. The world of today’s NCAA “have” & “have not” college programs will seem like a socialist dream compared to what lies ahead.

I am not against college athletes getting paid for their talents. Colleges, networks, coaches, broadcasters, and sponsors have collectively been making billions on the talents of college athletes for decades. While the value of a free college education is substantial and noteworthy, it pales in comparison to the profits generated from D1 athletics. While we are being honest, let’s not kid ourselves that most big-time college athletes are graduating with meaningful or even cursory educations, so the education value for athletes, while a loss of their own making, does very little to address the financial imbalance in college athletics today. 

The notion that college athletes should get compensated beyond their educations for the product they produce seems not only reasonable, but also fair. The profit-pie for NCAA athletics is big enough that the players largely responsible for producing it should get a small slice. What bugs me is the NIL opens the floodgates for colleges to dangle dollar signs in front of 17 and 18 year old kids. The biggest NIL payout offers will rule the day recruiting high school athletes. What could possibly go wrong? 

I am afraid the financial downside is too steep for most universities to not be involved with NIL to some degree. The conversations with high school recruits have already shifted from selling a school, its coaches, & its program tradition to putting together NIL packages that will provide thousands (or hundreds of thousands) of dollars to athletes. All of this is making DIII athletics look a lot more appealing. I’m suddenly a lot more interested in going to watch Randolph Macon play Hamden-Sydney next year. 

Voters, Stupidity, & Election Results

Jonathan Gruber, a chief architect of the Obamacare fiasco, thinks that voters are stupid. I would contend that it is the politicians and their entourages that, while maybe not individually stupid, are collectively unwise and certainly do stupid things. 

I read an article about that warned against reading too much into big election swings and over-reading shifts in public sentiment about a particular party or ideology based on a given year’s election results. I disagree that big elections do not reflect big shifts in voter trends. The problem comes when one party makes a big gain in congress, the white house or both, the winning party almost always starts doing stupid things. 

In 1994 the republicans rode a wave of sentiment shift against Bill Clinton and the democrats to make historic gains and take control of both the House and Senate. What did they do with their voter mandate? They impeached a sitting president and shutdown the government over budget squabbles. The electorate predictably took away the levers of power. Similarly in 2006 and again in 2008 the democrats emphatically took over the reins of governement. And what did the newly empowered democrats do? They rammed a healthcare bill no one wanted down the throats of the American people. They enacted stifling regulations on the economy that muted the economic recovery. So what did the “stupid” voters do? They spanked the democrats in 2010 and again in 2014. Had the voters known in 2012 what they know now about the Affordable Care Act and IRS corruption, it is likely they would have punished the democrats then as well and we would have inaugurated President Romney. 

Many voters aren’t as informed as they should be. However, voters know stupid when they see it. They also know arrogance, corruption, and deception when they see it, and they have seen a lot of it over the past six years. 

Otis Wants Bread: Economic Patriotism & Spitting Vodka Through Your ...

Otis Wants Bread: Economic Patriotism & Spitting Vodka Through Your ...: The best part of an Obama administration is the never-ending stream pseudo-intellectual terms coined to shroud their ridiculous ideas in the...

Otis Wants Bread: Mid-Term Musings

Otis Wants Bread: Mid-Term Musings: A few hours before we start to see election returns from the mid-term elections and a few things rattle around in my head: I'll believ...

Mid-Term Musings

A few hours before we start to see election returns from the mid-term elections and a few things rattle around in my head:

I'll believe it when I see it - I've seen the polls and I've seen the Washington Post, CNN, and New York Times all rate the probability of the republicans taking the senate at somewhere between 70% to 98%. I recall polls all showing a tight race between Obama and Romney in 2012 too. The democrats still have a lead in demographics and analytics which is what won the 2012 race for them when by all historic measures, Obama's first term was a dismal failure and he should have been trounced. Maybe the republicans will take the senate. Maybe this will be a wave election like 2010. However, the republicans have yet to prove they understand big data and social media. The republicans also have great aim when shooting themselves in the foot. I'll believe a big night for the GOP when I see it and not until then.

Don't say stupid stuff - If the GOP takes the Senate, I wonder what Mitch McConnell will have to say. Hopefully he won't say something stupid like he did in the 2010 mid-terms when instead of making comments about using the republican congressional momentum to work for the benefit of the American public, McConnell instead stated that the GOP would work to make Obama a 1-term president. How did that work out? The stupidity of that remark confounds me to this day.

Win, serve your time, then go home - I'd vote for almost any candidate who is committed to enacting term limits on congress.

Gerrymandering, it's been here all along - It is funny how democrats and their friends in the media have suddenly discovered gerrymandering as if it was something the republicans just authored and just started doing. Democrats gerrymander as do republicans. It only makes the news however, when it hurts the democrats.

Crime pays - If Scott Walker loses, it will be a crime...literally a crime, just like when Ted Stevens had his senate seat in Alaska taken from him in 2008. The democrats play hardball, there is no question about it - laws and ethics be damned.

Eric Holder on the scene - Eric Holder announced that DOJ was sending people to monitor polling stations for the mid-terms. I wonder if he is sending the thugs from the New Black Panther Party who stood by with clubs as people went to vote in Pennsylvania in 2008? Maybe Louis Lerner will be there harassing conservatives because there is not a smidgeon of corruption in the IRS and Holder's DOJ is doing everything they can to prove it...no matter what the evidence says.

Obama, we have a problem... - The republicans can be as maddening as the democrats, but for different reasons. I hope they take the senate, if for no other reason, to show Obama just how badly his policies have failed the American people and that we need a new direction. A little humility would go a long ways for Obama. It's a shame he's not the leader her thinks he is.

Government Screws Itself...Again

The latest government-created and media-supported public outrage is the "inversion" process of re-incorporating a company overseas to reduce the liability for income earned abroad.

Is this an unusual tactic? Sure it is. Is it a risky public relations move? Thanks to the economically illiterate media and a public more interested in The Duggars than economics, yes inversion is a risky public relations move. Is there anything unethical or immoral about the process? Absolutely not. In fact, not minimizing tax burdens and paying more than required by law is irresponsible leadership on the part of any for-profit company. In the private sector, companies have been using the tax code to their best advantage for decades. Just in case anyone is unaware, companies keep two sets of books for recording their performance - one for Wall Street and one for the IRS...which is perfectly legal and good business. Firms want as much revenue and profit as possible to report to WallStreet and a little as possible to report to the IRS. Depreciation is a great example of this reality at work. In the financial books reported to Wall Street, assets are generally depreciated using a 5-year straight line method, meaning the "cost" recognized by the company in using up the asset is fixed each year at 1/5th of the purchase price and is tallied as "expense" for that year. In the IRS books, the company uses the Modified Accelerated Costs Recovery System (MACRS) established by the government to allow companies, for tax reporting purposes, to depreciate the same asset faster in the first 3 years of its life. Therefore the company can increase their "costs" and reduce their tax liability...and also will have incentive to replace the asset with new assets sooner rather than later.

Does this sound convoluted? It is, but we are just getting started. The 2013 US Tax Code was over 73,000 pages long. Therefore businesses and individuals have to comply with 73,000 pages of regulations. However, there are also goodies and incentives in the Tax Code as the government tries to manipulate and incent specific behavior it deems laudable. Often old incentives and manipulations overlap with others or become outdated and are expanded rather than replaced...and we end up with 73,000 pages of tax code.

Whether we like it or not, the tax code is the law of the land. It is the rules of the road for business. Businesses don't write tax code, they pay lobbyists to plead their interests to congress, and then after the code is published every year, they figure out how to leverage the new rules to their best advantage. Guess what? Inversion is to the best advantage of many corporations and they are and should be inverting as quickly as they possibly can. They don't write the rules, they have to live with them, so if the government is telling them to invert through the rules of the tax road, then companies will restructure themselves and reformulate overseas. None of this happens without a perverse, over reaching, and exhausting tax code.

The delightful irony is government officials sternly wagging their fingers at tele-prompters scolding US companies for doing something the government has essentially directed them to do through tax policy. Obama and his leftwing friends had two years with a veto-proof majority in congress. If incentives for inversion were such bad tax policy, they should have fixed it. They didn't, or more likely government was outsmarted once again by the private sector. The very likely reality is that there was no plan to incent inversion, rather inversion is a side effect of some other attempt to manipulate behavior through the tax code. I love it when government smarties with Ivy League diplomas hanging in their offices come up with their newest social do-gooder scheme only to have it blow up in their faces when a highly motivated, very efficient, and ruthlessly effective private sector finds unimagined ways to implement the new rules to their advantage dreaming up outcomes that are completely foreign and contrary to the ivory-towered bureaucrats...leaving them both bewildered and seething that they have been foiled again by the market economy and the private sector.

Inversion is here to stay as it should be until the rules and incentives are changed. The best solution for the country and the economy would be to scrap the whole shit house full of 73,000 pages of tax regulations and implement a flat or value added tax from which no one or no corporation escapes, but under which we could all fill out our tax returns in 10 minutes on New Year's Day while watch bowl games. However, this would deprive the Ivy-League, meddling, do-gooders of something to, so I assume we will top 80,000 pages of tax regulations soon and more and more companies will re-incorporate overseas.

The Administration of "Hard Work"

How many times have you heard this from the current administration? (and to be fair this has been part of past administrations as well) "We are working day and night.....I will not rest until....we are working around the clock...." I have heard it a lot in the past 5 years. In fact, every time something goes haywire in the Obama administration, we can be sure that we will soon hear Obama telling us how hard he and everyone in his administration are working.

I worked with a systems engineer early in my career. She was brilliant, personable, and effective. In the years I had the privilege of working with her, I am not sure if she ever worked a 40 hour week. I can tell you with certainty that she never worked a 50 or 60 hour week. Guess what? I couldn't have cared less. Our customers loved her, she never missed a deadline, and she ran projects like a finely tuned swiss watch. There was nothing asked of her that she did not deliver in spades. Did it matter to me that she could get all of this done in 30 hours a week, making time for her tennis team or playing the piano? Nope. As many good executives have noted, we should never confuse hard work with results. We all appreciate hard work, but we expect and reward results, no matter how much or how little time it takes to deliver them.

President Obama's lack of private sector experience is no more evident in his value of "working hard" over results. I couldn't care less how hard anyone in the administration was working while the Obamacare systems crashed and burned. I'd have traded some of that hard work for good results any day. Obama told us how hard he and his administration have been working on 1) the economy 2) winning the war on man-made disasters caused by...well, we aren't allowed to say 3) the budget shortfalls, etc. The problem is, the results in all of these areas suck. They are terrible.

If anyone in the private sector worked hard on these problems and delivered the results of this administration, they would have been fired. I would feel better if they told me that they stayed out all night drinking and playing cards. At least there would be an excuse for such bad results and I wouldn't feel so bad firing them - and at least they had fun while delivering bad results. The problem with government is that no one gets fired. Ever, no matter how bad the results. All that matters is that they are working hard....outcomes be damned.

Opportunity Missed

Some enterprising young journalists are missing the opportunity of a lifetime. I think the standard for modern journalistic excellence and social relevance is the work of Bob Woodward and Carl Bernstein. Their initial work investigating a break-in at DNC headquarters uncovered corruption and a massive cover-up that led to the downfall of an American president. This was journalistic gold. It made the careers of two relatively unknown writers.

It is odd to me that no journalist today realizes that the current IRS scandal is a career, riches, and fame waiting to happen for someone willing to look hard enough and ask the right questions. A simple timeline of known events and admissions certainly rises to the initial scandal that held the national and world media for years as the trail of the Watergate scandal led higher and higher. We know that IRS singled out and targeted organizations based solely on their political views that ran contrary to the Obama administration. This is government overreach at its worst. It violates everything we expect from our government and runs counter to everything intended by the founders in the constitution. We know that the IRS exposed this activity by planting a question in a press conference. We know that the person who ran the unit responsible for tax exempt organizations stated that she had done nothing wrong, before pleading the 5th before congress....twice. We know that emails of Louis Lerner are either lost or not lost or that they exist in backup files that DoJ insists are to difficult to find. We know that laws were broken if emails were not backed up and archived. We know that Louis Lerner's blackberry was wiped clean right after congressional hearings began. We know that the head of the IRS visited the White House many times in the run up to the 2012 elections. Can you believe no one sees the abject corruption and disregard for the law in these facts or is at least curious enough to look for the truth about who knew what and when. One thing is certian, Louis Lerner's emails are damning of someone in the IRS or the administration, otherwise we would not have seen the biggest display of organized obfuscation and obstruction since the Nixon administration.

 This is the biggest opportunity in the journalism field since Watergate. Yet the media, outside of Fox News, sits on its hands. Maybe they are too vested in Obama. Maybe they know this could lead to the White House and don't want to know what really happened. Maybe they agree with Louis Lerner and detest Tea Party and Patriot groups. It is either odd, sad, or disheartening that the media is giving our government a pass on this massive scandal.

The problem with all of this is that the media has an important role in the recipe for our republic. When they are too lazy to look into obvious and rampant corruption or too timid to look into government over reach or so ideologically aligned with an administration, we are all in trouble. I detest hypotheticals, but....can you imagine the media frenzy if this had happened under the Bush or Reagan administrations? Yeah, pretty sure we'd be at the bottom of this already.

Economic Patriotism & Spitting Vodka Through Your Nose

The best part of an Obama administration is the never-ending stream pseudo-intellectual terms coined to shroud their ridiculous ideas in the cloak of credibility. The newest one is "Economic Patriotism." This one should win some sort of prize.

If I didn't know the source, I might think that economic patriotism meant acting in a way to drive the best possible economic outcomes. Fostering optimal growth, low unemployment, prosperity for all those willing and able to work for it. That sounds like economic patriotism to me. I think we should all drink to "economic patriotism"...as long as we are drinking Kentucky bourbon and not Russian Vodka.

However, president Obama and his team aren't all that interested in economic growth, low unemployment, and prosperity for all and they have 5+ years of economic results to prove it. When President Obama suggests that Americans support economic patriotism, he means that corporations should pay more taxes than required by law. Why would they do that? It doesn't seem very economically patriotic to me. Why does making 95 cents a share for my stockholders, when I could have made 97 cents, make me economically patriotic? If I am following the tax code, which by the way the Obama administration had two years of unfettered opportunity to write, why would I pay more taxes than required? The answer is I wouldn't and companies aren't, so the president is trying to shame them into paying more into wasteful government coffers by declaring that firms using the tax code to their advantage are being economically unpatriotic. It is delicious irony that the administration that has no shame is using it to alter the behavior of corporations that actually create jobs, wealth, and prosperity.

One a personal note...after the Obama tax increases kicked in last year and I had to write a big stinking check to those scalawags at the IRS, I didn't feel all that fucking patriotic.

Economic patriotism is a charade straight from the faculty lounge and not the faculty lounge of the business school. A corporation that does not use the tax code and all the other rules of the road set by Washington to its advantage in the marketplace isn't a corporation very long...it's a bankruptcy filing and a class action law suit. The most impressive part of this latest missive from the president is that he can say it with a straight face and all the indignation of a guy who just got bumped from first class to coach.

CEO's must have a good laugh behind closed doors when the president gets on his high horse and declaratively lectures us on things that he doesn't understand and that make no sense outside the Obama circle of sycophants. I wonder if Vladimir Putin spits Stolichnaya through his nose laughing when he reads the shit Obama dreams-up.

Trey Gowdy - "You 'da Man!"

It's no secret that there aren't many heroes serving in an elected or appointed capacity in Washington, DC. I am a big fan of term limits and think that throwing the bums out is almost always a good idea. Serving (and I use that term in its most generous interpretation) in the congress was never intended to be a career. Yet many come and few leave until they have had their fill...literally, filling their bank accounts and their egos with cash and perks the rest of the nation rarely knows.

As is always the case, there are exceptions to the rule. I think Trey Gowdy might be an exception to the aforementioned rules. I am impressed with his intellect, with his tenacity, and with his forthrightness. He strikes me as a person who gets things done, who doesn't suffer fools lightly, and who places doing the right thing over the politics of Washington.

He has been impressive in his public statements and in hearings about the terrorist travesty in Benghazi and he has been a singular ray of clarity in hearings with career bureaucrat John Koskinen when probing the abject scandal of the IRS turning on citizens based on their political point of view. Gowdy doesn't tolerate the usual Washington tap dance of dodging and obfuscation when asking direct questions. Gowdy expects straight answers and when he doesn't get them he probes deeper until he gets the information requested or forces his questionee into a position of providing obvious falsehoods and misdirection. Gowdy is good. He is very smart. I believe he is up there doing the people's work, not the party's work.

The leftwing media (which is most of the media) is starting to realize that Gowdy is a force on the Hill and have begun their attacks. Gowdy is everything they detest. He is from South Carolina. He didn't go to a swanky prep school or college in the northeast. He got is law degree from an SEC school not an Ivy League school. He is not "one of them", not in the club of sophisticates who revel in the chatter of the theoretical in the faculty lounge.

I hope Trey Gowdy is as good as he appears to be. I hope his star rises on the national stage because we need smart, motivated leaders who are not afraid to break glass and who know how to get things done. His real test will come when the republicans screw up (and we know they will). Will Gowdy be as tough and as relentless digging for the truth when the target has as "R" by their name or was appointed by a republican president? A lot of potentially great leaders have been tripped up by the party line. I hope Trey Gowdy doesn't join that club, but rather starts another, where leaders have the courage to do what is right, party ramifications be damned.