The American Dream

During my career, I have had the privilege to work with many bright, talented, and hard working individuals. I have worked for many people who fit this description but even better, have had the privilege of having such people on my teams.

Something I have learned over the course of 25 years in the technology business, is that there is no single recipe for success. In fact there are many pathways to success. I make this comment as I believe the technology industry is a reflection of all that is great about the American economic system. It is fluid, it is dynamic, it rewards those who deliver value, it gives unlimited mulligans for those willing to keep trying. It rewards hard work and innovation, and best of all, anyone who is industrious and willing can participate in the game. Technology firms, maybe more than most businesses, are interested in what you can do & what you can deliver and the rest is pretty inconsequential. Technology folks are rarely the snappiest dressers, because no one cares what you look like, if you can haul the mail.

As I stated earlier, I have been privileged to work with many very bright, talented, and industrious individuals in my career. When thinking about the opportunities that this industry and this country offers to anyone willing to take advantage, two people jump off the page as shining examples of the success that is possible in our country, like no other in the world. These two should be "poster kids" for anyone who has lost faith in the opportunity this country offers. Both of these folks come from working class, blue collar backgrounds - backbone of America kind of folks who were long on hard work, but short on fancy education. Neither of these folks has a pedigree, they did not graduate from prep schools nor attend elite private universities. They took advantage of their state college systems paying their ways through at least part of their college careers. They took what was ingrained in their roots and combined that with a tough competitive spirit. They started at the bottom rungs of the industry with the humility to learn and the drive to succeed. The result has been staggering. They are self-made, highly respected professionals who could have easily chosen much less challenging paths, but didn't. They have achieved sustained success over time. Everything they have, they got the hard way - through their hard work, their determination, the apt use of their talents, and little luck here and there. They did not hold the hand they were dealt they improved it. They are what our politicians should think of when they reference the American Spirit. They are living evidence that our economic society is indeed one of mobility and opportunity and those born into a circumstance are not destined to finish in that circumstance.

I think if our leaders knew more people like this, who are self made success stories, who leveraged opportunities available to the common man for uncommon results, they might understand little better why so many Americans just want a fair shot on goal and a chance to earn their way to success instead of a slice of someone else's pie. I have learned a lot from these two. I am proud to have worked with them, I am proud to have seen their accomplishments, I am proud that they are my friends. I only wish more people, especially people in Washington, knew their stories, because there are millions of others just like it. This is why America is exceptional, this is why so many flock to our shores, this is why I have such faith in the long term success of our nation. I have have seen what is possible, I know folks who are living it. I hope they are proud of what they have accomplished, because they ought to be, it is the American Dream.

Workers vs. Employees

I have noticed over the past 2 years that Obama and his fellow progressives are fond of the term "worker" when talking about business, economic, and employment issues. There are always programs and strategies to help "workers". Maybe I am reading too much into this, but I think the term implies that there are workers, and then there are non-workers. The workers are the ostensibly the middle class back bone of America folks. And that's fine, hard working, salt of the earth, resilient folks are the backbone of our country and our economy. However, I think the implication of the "workers" as they are always described is one of a perpetually adversarial relationship in the work place. This term implies that there are workers, who are well, working and then there are non-workers - I guess these are the fat cats sitting around with their feet propped up on their desks counting their money - made on the backs of the workers. Workers are good - and I agree, they certainly are both good and necessary for economic prosperity, but if you are not a "worker" it does not mean that you are bad, greedy, or exploitative as is implied in the progressive lexicon.

I think this messaging comes from the perspective of many progressives and many in the current administration who have spent little to no time in the private sector - managing businesses, making payrolls, serving customers, earning profits, and investing in future growth. They never talk about "employees" and "employers" and the mutually beneficial relationship that exists throughout the vast majority of the economy. Employees have a desire to earn money, they have their time, and they have skills to bring to the market. Employers, (businesses and their owners) have jobs that need to be done to deliver value to the market and therefore profits to the bottom line. There is an intersection of mutual interest between employers and employees. In most cases this is a productive and mutually beneficial relationship that fosters a win/win for all parties involved. Most employees are hard working, loyal, and productive. Most employers want their employees to support their lifestyles and have productive careers. Not all employers strive for a mutually beneficial relationship with their employees and not all employees are the model of consistent and selfless performance, but over most of the economy the relationship in the workforce is one of employees and employers working for mutual and common purpose. It is not that of oppressed "Bob Cratchets" scraping around for paltry wages in oppressive working conditions. It is not us vs. them and an on-going struggle against "the man".

However, I think if one's adult background is exclusive to the halls the Ivy league, the government, or the local union, it is easy to believe that there is always someone to go after, someone who is getting more than they deserve, and some fat cat whose pocket can be picked for the benefit of "the worker". In the world of the government, the union, and the academic theoretical, there is always a wrong to be righted and a grievance to be addressed. There is also a belief in perpetual employment stagnation and ignorance that many "workers" today can be employers tomorrow. The reality is, that absent meddling from external forces the employer/employee relationship works well. Market checks & balances and the free will of both parties creates an equilibrium that keeps employers motivated to keep employees happy and therefore productive in the business and motivation for employees to maintain earnings stability and career growth through quality work and skill development over time.

Employees work. Employers work. Managers of business work. To proclaim the focus of topics of business and employment always tilted to the benefit of the "worker" mis-characterizes the nature of most employment experiences. External forces to help workers are usually additional intrusions into a relationship that naturally would work pretty well, if the progressives would simply let it. Maybe their indebtedness to unions won't let progressives change their mantra, but if they want to reverse their losses from the past mid-terms, they might want to project a more business aware image, rather than simply cheer leading for causes that unilaterally transfer funds from one pocket to another.

Consistency Can Be Inconvenient

Today is election day. I expect lots of ridiculous comments from the pudantry on both sides of the ideological spectrum. That's part of what makes this so much fun. I have read a lot of commentary and analysis about the coming election, but there is one connection that has not been discussed. It popped in my head when I heard a story about the governor of Arizona Jan Brewer (America's hard-liner on illegal immigration) campaigning in California. The ensuing story was about California's proposition 19, which proposes legalizing recreational pot use in the Golden State....

If you saw the movie "the Fly" remember what happened when a fly was accidentally mixed with the human in the teleporter test? Hang with me here just a second...hopefully the uncommon mixture here is not quite as tragic.

It seems to me, that supporters of Arizona's new immigration law and California's push to legalize recreational pot smoking are on the same side of their arguments and should support one another...though I suspect they would both be generally perplexed and offended at this suggestion.

Arizona is pushing a state's right to enforce essentially existing immigration laws - at the state level, primarily because the feds have done such a crummy job of enforcing federal law. After lots of grandstanding over this issue and much angst in the professional media, as we stand today the 9th Circuit court will decide whether or not a state can write and enforce a laws that are currently the domain of Federal law.

Now, let's look a the California pot smokers. I have heard and read several times that the Californians can pass any law they want with respect to smoking pot for recreational purposes, but at the end of the day, it doesn't matter because smoking pot is a federal crime covered by federal statute and the California law will be trumped by federal law....hmmmmm, aren't the pot smokers arguing the same position as the pro-boarder security crowd in Arizona...state law - based on local needs and local conditions should trump federal intrusion or federal inaction? Why yes it is.

It seems to me in the record of missed opportunity this is a biggie. Pot smokers and boarder security advocates pushing for the same fundamental rights - they are both being tormented by "the man". I think if they are intellectually honest they could see a formidable coalition in the making. Consistency is not always pretty nor convenient, but if you think about it, theses folks are on the same side of the fence, whether they like it or not.

The Richmond Times Dispatch - Always on Their Game

The Richmond Times Dispatch ran a "special pullout" section in the Sunday paper today entitled "Health-Care Reform" the subtitle was "Saving Lives and Reducing Costs". Hmmmm....is this a special news section? Sounds more like propaganda to me. The section is really laughable in its content and would be funny if the implications of the health-care reform legislation signed into law this past March were not so sweeping in their potential impact.

It is also interesting to note that at the bottom of page there is a boxed in headline proclaiming "Va. to get Millions for Public-Health Programs" Great! Millions of tax dollars siphoned out of the economy through tax policy will be returned to Virginia at pennies on the dollar. That reality is probably worthy of a headline, but more for the ridiculous inefficiencies of government rather than spiking the ball in celebration of funds cycling home from Washington.

The journalistic masterpiece by the far-from-fair-minded Tammie Smith, is long on predicted benefits of government busy-bodies telling us how we should be living our lives in the name of preventative care and predictive medicine. It is short on actuarial reality of healthcare. I am all for people taking steps to lead a healthy lifestyle. However, let's not kid ourselves about the idea of the cost of care and saving money through this legislation. The fact that I can prevent a heart attack today is great news and to be celebrated, but let's not kid ourselves that this saves us in healtcare costs over he long run. It doesn't, and everyone with half a brain and without an agenda knows it.

The really funny (or sad) commentary in this propaganda came in the "Preventative Care Scenarios". I laughed out loud when I read the lament that "the plan may impose cost sharing for the treatment" Cost Sharing!?!? I don't want to misinterpret Tammie Smith's intricate ideas here, but I think cost sharing means I have to pay for something. "Cost sharing!" I love it. What a great new term. Who is sharing in this arraignment. Am I sharing my costs with the government or are they sharing their costs with me? Are there other things I can cost share? I'd like to know as soon as possible, because I would love to cost-share my daughter's college tuition. Can I cost share my mortgage? How about my groceries, are they cost share-able? If I could cost share a new Lexus that would be great too. Maybe I should write congressman Cantor and see if cost sharing is a new program that starts as part of that swell new stimulus spending.

Here's a little information-sharing for Tammie Smith...it's okay to pay for things. That's how the economy and business works. I paid for my edition of the Times Dispatch this morning because the product you all were selling was more valuable to me than the 2 bucks I had in my pocket (and today's issue was a real bargain too. You can't get this kind of comedy every day) We don't have to sweep the price of healthcare services under rug as items to be "cost-shared." If fact, if we really want to control the cost of healthcare we should cost-share as little as possible and encourage people to consume healthcare services wisely, judiciously, and effectively. There should be a hard line between the cost and service, not a shared line.

I expect little business and economic acumen from the journalists at the RTD. Rarely do they fall short of my low expectations. I think Tammie must have worked extra hard to miss so many obvious points in her special pull out section today. I can't wait to see what the Monday edition brings...maybe Tammie can cost share it with me.

What if GM & Chrysler Weren't Wards of the State?

What do you think would have happened if the US government had not decided to swoop in and bail out, rescue, takeover (pick the verb you like best) GM and Chrysler? I ask the question because I read a commentary about the current economy and the coming economy that sparked a feeling I have had since the initial bailout of the banks & AIG. The comment was essentially that we have not averted the coming economic chaos with massive government intervention and spending, but rather we have changed its shape, maybe delayed its arrival, but it is doubtful IMO that we have solved the problem.

The reason I mention this is the concept of equilibrium - a state of rest or balance due to the equal action of opposite forces. Markets, my golf game, the number of squirrels and rabbits that inhabit my yard and feast in my garden all have a point of equilibrium. When outside and unbalanced forces are introduced into the market, my golf game, or my yard...then equilibrium (balance) is broken and there are adjustments and changes until a new equilibrium is reached...one that might be radically different than the prior point of equilibrium.

By spending massive amounts of cash we don't have, the federal government over the past 2 years has been trying to artificially maintain an equilibrium in the economy that has long been out of balance. Someday, markets and the economy will get back in balance -governments will run out of prop-up cash, or there will be another oil shock...something will get us out of this expensive holding pattern trying to stop the creative destruction that free markets and economic growth requires.

Hence the question - what if we had let GM and Chrysler meet their natural fate without billions of prop-up cash from Washington? Well, we don't know but we can speculate. One outcome clearly in the solution set, is that they would have gone under. No more Chevy Tahoes, No more Jeep Wranglers. That would have been a massive economic shock, put hundreds of thousands out of work and created a depression in Michigan. But you know else? We would have cleansed the system. The bad practices, bad contracts, and bad products from GM and Chrysler would have gone away - as they should in any business cycle. Then, the assets that have value would have been bought by new investors, they would have been modified, optimized, and adapted to the new market of 2010. New jobs would have been created and either a new GM/Chrysler or totally new companies would have been formed out of the out-dated and mis-managed rubble of the originals. The tough times would have sucked, it would have been horrible for many families. However, the new companies that emerged from this creative destruction would have been best suited to produce cars for America and the rest of the world. Capital would have been reallocated to its highest use. Workers would have been hired at the new companies, investments would have delivered market returns and the new equilibrium would be etstablshed in the car market.

Instead however, we have a 1950's incarnation of US industry, propped up by billions of dollars in capital that could be put to far better uses in the economy elsewhere. This is why the efforts of the government to stop the march of market evolution by protecting outdated and inefficient businesses and industries is anathema to economic prosperity and it is why we have not solved the business challenges of the US auto industry, but rather changed their shape, time, and scope of their eventual impact.

The mess of GM and Chrysler being left on their own would have been enormous. It would have been the death of organized labor in America, which probably would have boosted GDP bu 1% alone. However, the real long term result would have been massively better than what we have now. We currently have GM and Chrysler still saddled with all of the same liabilities that put them on the market chopping block in the first place, spending capital that we gave them to continue their crummy business model.

It would have cost us a lot to let GM and Chrysler fail in 2008. It is going to cost us a lot more in the long run to have them around. Euilibrium is patient. It always wins given enough time. Given the massive debt of governments around the world, it is my opinion that equilibrium will not have to wait that much longer before it is restored. The question is how big will the tidal wave be?

Two Ends to a Funnel

Arizona (and now other states and localities) have thrown gas on the smoldering immigration debate. Hopefully this will net out to be a good thing over the long term. There is no question that the past several administrations have done a crappy job securing the boarder and dealing with illegal immigration. It seems to me that the government, once again, has made a simple problem far more difficult than it should be.

First off, I don't blame the destitute Latinos who try to cross into the US looking for work. If I were in their shoes, short on money and with a family to support, I would probably do whatever I could to get across the boarder. Second, only with the government in charge could adjudication of immigration requests take years. Why wait in line for years when I can run across the boarder tomorrow and take my chances. I sympathize with the decision and would likely be a runner if posed with the choice of waiting years to cross legally or crossing tonight and having a job next week.

So how to fix the immigration problem? First, secure the boarder. 5,000, 10,000 agents, whatever it takes, but stop the illegal crossings. Second, invest heavily in the adjudication process. Make a deal with anyone looking to immigrate to the US - give us 90 days and you will have a decision on your request - no exceptions. There are two ends to a funnel and there is no reason that we cannot give people who want to come to America the chance, without having to wait years for legal entry. Lastly, punish employers who hire illegals...maybe $ 25K per illegal on the payroll. I am pretty sure that would diminish demand for cheap illegal labor. If folks who want to come here can live with a 90 day process instead of a 3 year process, the incentive to make a dash across the boarder is greatly reduced. If employers will get slammed for hiring illegals, demand drops. Those who still want to cross illegally, for expedient or nefarious reasons will meet sufficient enforcement resources to keep the boarder safe.

See? Not really a hard problem. People who want to come here legally deserve quick adjudication of their request. Those who exploit illegal labor should be punished. Sufficient boarder enforcement agents clean up the rabble who insist on breaking the law. Not a hard problem for those of us who live in the real world. Too bad those in Washington can't get with the program.

Do the Democrats & Obama Really Support Small Business?

How many times have you heard something along the lines of...."we support America's small businesses....small business is the driver of job growth in America and we want to jump start small business owners...yadda, yadda, yadda".

Well, I guess Obama and the Democrats support small businesses, just not very good ones. It looks like Obama and his "progressive pals" want to raise taxes on the top 2% of wage earners in the United States to pay for his profligate spending. Well, guess who make up the vast majority of the top 2% of tax filers....you guessed it, small business owners. So Obama supports small businesses, just not businesses that make a lot of money. Those need to be punished through increased taxes. I am not sure why. I guess they took more than their share so the small business that are very successful need to be taxed so they are not so successful. Obama supports small businesses as long as they don't make much money - not sure why that is. I wonder if, when Obama needs a plummer, he calls a mediocre one, a firm that is teetering on bankruptcy versus a very successful, value adding company.

So the administration wants to help create jobs through small businesses by taxing them more. How does that work? I am a successful small business owner, my tax filing is reflective of the earnings from my business. Due to the increase in taxes, I will now have LESS money left after I pay Uncle Sam. How am I going to invest in my business (which is the only reason I hire more employees) with less money in my account? Why would I risk my capital only to have my returns dampened by increased taxes?

Just how obvious that no one in the Administration has ever run or owned a business? News Flash to Obama!! I am not going to hire new employees just to "create jobs". I am going to create new jobs to increase the financial performance of my business. Second News Flash!! Increasing my taxes will not increase returns on my investments in my business. I cannot believe that concepts this simplistic escape all the Ivy League diplomas hanging in the offices of this Administration. I guess Community Organizations and the organizers who run them never had to read and income statement or deliver a return on capital. That's a shame, and an expensive one for those of us who have.

If I could Ask Obama One Question...

If I could ask President Obama one question, I think it would be this...why does he always have to have a villain? Think about this for a minute. Obama is always bashing a villain....of his own choosing.

During the campaign and throughout his adolescent administration Obama has always vilified "the rich" (BTW, the rich defined as those who make more than $ 250k but not the super-rich because the super-rich throw really great fund raising parties) As Obama started his push to ram healthcare down America's throat he has railed against a variety of villains. First it was the docs who did unnecessary procedures to line their pockets. Next it was big Pharma, then it was the health insurance companies. Now that the voters of Massachusetts have summarily rejected Obama's health care fiasco, he is going after the banks. Now I am not here to defend obtuse Ivy Leaguers who can't understand why giving themselves mega-bonuses the year after the government bailed them out is a bad idea, but they are the the new villains in the Obama cross hairs. Thankfully Obama's aim is about as good as his ability to read public opinion, but why a new villain? It seems like the only people Obama has not vilified are the villains from radical Islam who want to blow us up.

Maybe Obama skipped his business law classes at Harvard or his finance classes at Columbia, but someone needs to point out that the "corporations" that Obama continually pummels are made up of employees, stockholders, and suppliers who feed their families, pay their mortgages, and buy their cars with salaries, commissions, and bonuses from their jobs...at corporations.

Maybe the common thread here is that all of these villains make money...but not enough money to be big donors to the Obama campaign. I can't figure it out. All of the employees of these corporations are regular Americans minding their business, trying to make a good living. I guess in the 3 years remaining in his administration, Obama will get around to making all of us a villain. Wait your turn.