I am a big fan of the creative, out of the box ideas to solve seemingly intractable problems. Sometimes when an idea is good enough, you can solve more than one problem with the same idea. I think I have a winner here, a homerun, a grandslam, the idea of the decade, maybe the century.
I think we should sell Alaska.
Look, if we are not going to make the best use of Alaska's resources, dadgummit, let's sell it to someone with enough capitalist moxy who will. Why does this make so much sense?...Easy:
1) Energy and commodity prices are at record highs and going higher.
2) We are drowning in debt.
This is one of those rare opportunities to help solve multiple problems with one stroke of genius. Alaska is chocked full of natural resources....and not just oil. We apparently are too timid or too preoccupied with other things, like congressional hearings into steroid use in baseball or what kind of coffee cups to use on Capitol Hill to get around to making the best use of Alaskan resources, so, our time is up. Time to sell Alaska to a country that will make Alaska the breadbasket (or barrel) of natural resources for the world. We have shown for 50 years that we are not interested in making Alaska all that it can be. Alaska has been misallocated, so it is time to reallocate.
All proceeds from the sale of Alaska go directly to retiring debt. I doubt we will get 14 trillion for it, but who knows, those Chinese have a lot of cash sitting around. The good news for whoever buys Alaska is that at least they will have a tangible asset for their money instead of just a promise by the US Government to pay them back. This will help our debt problem. It will deliver a tremendous supply of oil and natural gas tothe market driving down energy costs. Let's face it, other than a few displaced Alaskans, this is a win/win/win.
I am hoping England can come up with the cash to buy Alaska. They already know how to do the oil business and I feel like we kind of owe them one for kicking their butts in the Revolution.
The only fly in this ointment is how to make 49 stars look good on the American flag. I hope this is not a deal breaker, because I think this idea, once in the market, will quickly get legs.
Tuesday, April 26, 2011
Friday, April 22, 2011
Stop the Silliness from Washington
Well, the budget debate has morphed into campaign blather a full 18 months before the 2012 elections. I am not sure I can take 18 months of electioneering, but I wish we could at least put to rest some of the inane and silly rhetoric coming out of the mouths of our politicians and particularly our president.
I know the president is a smart guy and I know he knows that the reality of this comment is as ridiculous as it sounds, but the comments continue - to the effect that, "if we could just get back to the top marginal tax rates of the Clinton years...." fill in the blank here because the president and his minions have said them all..."we would solve the budget problem, we would restore economic growth, we would lower unemployment"...I think we solve world hunger too. The reality is, and the president knows it, there is no causal relationship, no magic that made the top marginal rate of just 39.6% the driver for all that was economically good in the United States in 1999. It was just one part of the equation of the economic expansion of the time...that ended BTW, like all expansions eventually end. Who is to say if the marginal rate had been 29.6% the expansion would not have been greater and lasted longer? I don't know, but neither does anyone else. Maybe it would have had the opposite effect (I doubt it)but no one knows. So the proclamations that better times lie ahead if we could just raise the top rate are just silliness.
Here is what we do know. In 1999:
Top marginal tax rate: 39.6%
US population: 278M
Total Federal Spending: $ 1.702T
Federal Spending per Ca pita: $6,123
Here is more of what we know. In 2010:
Top marginal tax rate: 35%
US population: 308M
Total Federal Spending: $ 3.456T
Federal Spending per Ca pita: $11,194
Hmmm, it seems to me that a couple of the variables have changed if we were going to roll back to the 1999 top marginal rates.
While the population increased from 1999 to 2010 by 10.8%, federal spending increased by 202%. If we rolled back tax rates to 1999 levels and rolled back spending per ca pita to 1999 levels then our federal budget would be just under $ 1.9T. I would suggest given the increases in productivity and technological advances over that time period, one could argue that government should be able to deliver more and better services to the population for less money - in absolute terms, not per ca pita. Business across the country are massively more productive and tremendously more efficient now than they were in 1999. So why not the Feds?
The everyday reality is that this is a complex problem with many variables. However, as evidenced by some pretty simple math, we have a spending problem, not a revenue problem. Statements of fantasy about "the Clinton tax rates" as a panacea or even a major part of the solution are not only false, but down right silly. If people support higher tax rates for punitive reasons, if they want to stick it to those greedy rich people and redistribute other people's money to the rest of the country, fine, I don't think it is smart policy, but I respect the point of view. To put out falsehoods that a reversal of policy to the Clinton top marginal rates is part of a serious national get well program is not just misleading, it is dishonest and hides what is likely a broader agenda - it also makes people distrust the rest of the president's agenda because this cornerstone suggestion is so clearly false.
Look, if you want to redistribute wealth, just say so and let's have the debate. Don't mask that objective with claims that are easily debunked in 10 minutes with a couple of Google searches and a calculator. It just cheapens your position. I am all for transparency in math and motives. If we could get this from Washington, it might make the next 18 months a little more bearable.
I know the president is a smart guy and I know he knows that the reality of this comment is as ridiculous as it sounds, but the comments continue - to the effect that, "if we could just get back to the top marginal tax rates of the Clinton years...." fill in the blank here because the president and his minions have said them all..."we would solve the budget problem, we would restore economic growth, we would lower unemployment"...I think we solve world hunger too. The reality is, and the president knows it, there is no causal relationship, no magic that made the top marginal rate of just 39.6% the driver for all that was economically good in the United States in 1999. It was just one part of the equation of the economic expansion of the time...that ended BTW, like all expansions eventually end. Who is to say if the marginal rate had been 29.6% the expansion would not have been greater and lasted longer? I don't know, but neither does anyone else. Maybe it would have had the opposite effect (I doubt it)but no one knows. So the proclamations that better times lie ahead if we could just raise the top rate are just silliness.
Here is what we do know. In 1999:
Top marginal tax rate: 39.6%
US population: 278M
Total Federal Spending: $ 1.702T
Federal Spending per Ca pita: $6,123
Here is more of what we know. In 2010:
Top marginal tax rate: 35%
US population: 308M
Total Federal Spending: $ 3.456T
Federal Spending per Ca pita: $11,194
Hmmm, it seems to me that a couple of the variables have changed if we were going to roll back to the 1999 top marginal rates.
While the population increased from 1999 to 2010 by 10.8%, federal spending increased by 202%. If we rolled back tax rates to 1999 levels and rolled back spending per ca pita to 1999 levels then our federal budget would be just under $ 1.9T. I would suggest given the increases in productivity and technological advances over that time period, one could argue that government should be able to deliver more and better services to the population for less money - in absolute terms, not per ca pita. Business across the country are massively more productive and tremendously more efficient now than they were in 1999. So why not the Feds?
The everyday reality is that this is a complex problem with many variables. However, as evidenced by some pretty simple math, we have a spending problem, not a revenue problem. Statements of fantasy about "the Clinton tax rates" as a panacea or even a major part of the solution are not only false, but down right silly. If people support higher tax rates for punitive reasons, if they want to stick it to those greedy rich people and redistribute other people's money to the rest of the country, fine, I don't think it is smart policy, but I respect the point of view. To put out falsehoods that a reversal of policy to the Clinton top marginal rates is part of a serious national get well program is not just misleading, it is dishonest and hides what is likely a broader agenda - it also makes people distrust the rest of the president's agenda because this cornerstone suggestion is so clearly false.
Look, if you want to redistribute wealth, just say so and let's have the debate. Don't mask that objective with claims that are easily debunked in 10 minutes with a couple of Google searches and a calculator. It just cheapens your position. I am all for transparency in math and motives. If we could get this from Washington, it might make the next 18 months a little more bearable.
Thursday, April 14, 2011
Did I Miss Something? Really?
Thanks to the miracle of Youtube (which was founded, developed, and brought to market with zero government assistance) I was able to watch the president's campaign speech last night...
Did I miss something? Have we all been transported to a parallel universe? Tax rates are now called "spending in the tax code"? I think I need my tin foil cap and some kite string, because we are not in Kansas any more.
First, let's get a few things straight. The current top marginal tax rate is just that, the current top rate. It is not "the Bush Tax Cut". That phrase, so well worn in the media, assumes that the current rates, implemented by former president Bush, broke some natural equilibrium for tax rates that is higher than the current rates. Such an assumption is pure hogwash. The top marginal tax rate has changed over 30 times since 1913. The current rates are not "cuts" that need to be restored to their natural order. They are simply the current rates, that are every bit as legitimate and natural as the 7% marginal rate or the 91% marginal rate. The argument is what rate optimizes revenue - through economic growth.
Second, reducing tax rates is not "spending". At least not in the universe in which we used to live. Apparently, according to Obama's speech, my income belongs to Washington and the amount I am allowed keep is now "spending". Well, that is in interesting turn of events. I guess the post office lost that piece of mail, because no one told me that my income belongs to Washington and that money I don't send to Washington is now classified as spending. Does Obama really believe this or was he just ginning up his base...of loonies who do believe that?
Let's agree on a few things before whatever planet we have been transported to explodes from the sheer madness of the inane budget talking points. First, the United States is broke. We are borrowing 40 cents of every dollar we are spending in the budget that just passed today. At some juncture, the rest of the world will be unable or unwilling to lend us the money we need. Second, the money we are spending today and will spend tomorrow is uncollateralized debt...there is no tangible asset to back this spending other than the promise of the US government to pay. China can't re posses grandma's knee replacement. The rest of the world is lending us trillions of dollars so we can continue to provide unsustainable government commitments. I wonder how much longer that will last? Second, people who are serious about getting the United States fiscal house in order don't hate old people, they don't want people in poverty, and they do not want kids eating dirt for dinner as many on MSNBC, Solon.com, moveon.org, etc suggest.
However, let's agree that there are choices we are going to be forced to make. If a federal school lunch program is our top priority, then fine. Fund it. But what are you going to be willing to give up? If keeping seniors medical care costs low is the best use of our scarce resources, great. What are you willing to give up so granny can get her sugar pills? We have no money, so in order to get those pills, somethng has to give. We don't have a revenue problem, we have a spending problem. The discussion moving forward needs to be centered not around whose pie can we confiscate so we can flush it down the toilet like we have done in the past, but rather deciding what are we willing to fund? What are the priorities of the country? This is the "national conversation" that needs to occur.
Suggestions? Okay, I have a few.
Cut the crap in the tax code. Get rid of loopholes and deductions? Fine, done. Broaden and lower that rates so anyone can file their tax returns with a pencil and paper in 30 minutes.
While we are at it, lower the corporate rate to 15% get trapped earning repatriated to the US and get GE, Google, and Boeing etc back on the tax rolls.
1% national sales tax...I am fine with that as it gets everyone vested in pulling the wagon....but only if we eliminate capital gain taxes to get the economic engine running again. However in order to raise the national sales tax, congress must have a super majority.
Raise the retirement age for Social security and medicare for anyone under 50 to age 70. Let anyone under 50 opt out of both if they so choose.
Base line for domestic spending...pick a year any year....2008...2005...2003. I don't care. Just pick one and that will be the baseline for domestic spending and we will make choices in what we fund and don't fund and go from there.
I can go on, but it is too easy. Hopefully the next time I get transported to another universe it will be one where people let me make the decisions and where UVa football wins at least 8 games a year :) Now that would be way out there.
Did I miss something? Have we all been transported to a parallel universe? Tax rates are now called "spending in the tax code"? I think I need my tin foil cap and some kite string, because we are not in Kansas any more.
First, let's get a few things straight. The current top marginal tax rate is just that, the current top rate. It is not "the Bush Tax Cut". That phrase, so well worn in the media, assumes that the current rates, implemented by former president Bush, broke some natural equilibrium for tax rates that is higher than the current rates. Such an assumption is pure hogwash. The top marginal tax rate has changed over 30 times since 1913. The current rates are not "cuts" that need to be restored to their natural order. They are simply the current rates, that are every bit as legitimate and natural as the 7% marginal rate or the 91% marginal rate. The argument is what rate optimizes revenue - through economic growth.
Second, reducing tax rates is not "spending". At least not in the universe in which we used to live. Apparently, according to Obama's speech, my income belongs to Washington and the amount I am allowed keep is now "spending". Well, that is in interesting turn of events. I guess the post office lost that piece of mail, because no one told me that my income belongs to Washington and that money I don't send to Washington is now classified as spending. Does Obama really believe this or was he just ginning up his base...of loonies who do believe that?
Let's agree on a few things before whatever planet we have been transported to explodes from the sheer madness of the inane budget talking points. First, the United States is broke. We are borrowing 40 cents of every dollar we are spending in the budget that just passed today. At some juncture, the rest of the world will be unable or unwilling to lend us the money we need. Second, the money we are spending today and will spend tomorrow is uncollateralized debt...there is no tangible asset to back this spending other than the promise of the US government to pay. China can't re posses grandma's knee replacement. The rest of the world is lending us trillions of dollars so we can continue to provide unsustainable government commitments. I wonder how much longer that will last? Second, people who are serious about getting the United States fiscal house in order don't hate old people, they don't want people in poverty, and they do not want kids eating dirt for dinner as many on MSNBC, Solon.com, moveon.org, etc suggest.
However, let's agree that there are choices we are going to be forced to make. If a federal school lunch program is our top priority, then fine. Fund it. But what are you going to be willing to give up? If keeping seniors medical care costs low is the best use of our scarce resources, great. What are you willing to give up so granny can get her sugar pills? We have no money, so in order to get those pills, somethng has to give. We don't have a revenue problem, we have a spending problem. The discussion moving forward needs to be centered not around whose pie can we confiscate so we can flush it down the toilet like we have done in the past, but rather deciding what are we willing to fund? What are the priorities of the country? This is the "national conversation" that needs to occur.
Suggestions? Okay, I have a few.
Cut the crap in the tax code. Get rid of loopholes and deductions? Fine, done. Broaden and lower that rates so anyone can file their tax returns with a pencil and paper in 30 minutes.
While we are at it, lower the corporate rate to 15% get trapped earning repatriated to the US and get GE, Google, and Boeing etc back on the tax rolls.
1% national sales tax...I am fine with that as it gets everyone vested in pulling the wagon....but only if we eliminate capital gain taxes to get the economic engine running again. However in order to raise the national sales tax, congress must have a super majority.
Raise the retirement age for Social security and medicare for anyone under 50 to age 70. Let anyone under 50 opt out of both if they so choose.
Base line for domestic spending...pick a year any year....2008...2005...2003. I don't care. Just pick one and that will be the baseline for domestic spending and we will make choices in what we fund and don't fund and go from there.
I can go on, but it is too easy. Hopefully the next time I get transported to another universe it will be one where people let me make the decisions and where UVa football wins at least 8 games a year :) Now that would be way out there.
Sunday, February 27, 2011
Ultimately a Win-Win Scenario
Should Virginians support Wisconsin Goveror Scott Walker or the government union workers in the standoff in Madison? As an ardent free market capitalist, I know I should back Governor Walker, however as a fiercely loyal Virginian, I hestiate, just a little.
While Virginia legislators can pat themselves on the back for the comparitively competitive state of the Virginia economy, the reality is that as the northern-most right to work state in the Union combined with anti-tax executive leadership from Governors Wilder, Allen, and Gilmore that mitigated profligate general assembly spending, Virginia's economy has grown sharply in boom times while weathering recessions better than most states and certainly better than all of our union-based bretheren to the north. So, while my free market instincts suggest that I should fully support Governor Walker and his attempts to reign in budget-busting union costs and benefits, I pause when I think that Virginia's future economic success might be less assured if Wisconsin and other union states emancipate themselves from the shackles of union servitude. While I know that Governors Walker, Christie, and Daniels are on the right side of the issue, the loyal Virginian in me recognizes the local value in the success of the unionized government workers and the transient mercinary protesters throwing a 50,000 strong temper tantrum.
The reality is, the situation is a win-win for Virginia. If Governor Walker prevails, it is a triumph for the free market. Virginia and other right to work states will have to up the ante to create an even better business envornment for investment capital that rightly seeks the highest returns with the least risk. If the Union protestors prevail, then Virginia will continue to enjoy a structural market advantage over our neighbors to the north. If Virginia wins either way, I guess we can just sit back and enjoy the show
While Virginia legislators can pat themselves on the back for the comparitively competitive state of the Virginia economy, the reality is that as the northern-most right to work state in the Union combined with anti-tax executive leadership from Governors Wilder, Allen, and Gilmore that mitigated profligate general assembly spending, Virginia's economy has grown sharply in boom times while weathering recessions better than most states and certainly better than all of our union-based bretheren to the north. So, while my free market instincts suggest that I should fully support Governor Walker and his attempts to reign in budget-busting union costs and benefits, I pause when I think that Virginia's future economic success might be less assured if Wisconsin and other union states emancipate themselves from the shackles of union servitude. While I know that Governors Walker, Christie, and Daniels are on the right side of the issue, the loyal Virginian in me recognizes the local value in the success of the unionized government workers and the transient mercinary protesters throwing a 50,000 strong temper tantrum.
The reality is, the situation is a win-win for Virginia. If Governor Walker prevails, it is a triumph for the free market. Virginia and other right to work states will have to up the ante to create an even better business envornment for investment capital that rightly seeks the highest returns with the least risk. If the Union protestors prevail, then Virginia will continue to enjoy a structural market advantage over our neighbors to the north. If Virginia wins either way, I guess we can just sit back and enjoy the show
Saturday, February 19, 2011
Spring Cleaning of the Mind
Every year for about the last ten years I have approached December with the same goal...hang on to my training regimen just enough so that we when the time starts to really kick up the workout intensity in March/April I am not starting from scratch. Every year that has been the objective...and every year I have started a new training routine after 90-100 days of "workouts" that include holiday meals, duck blind food, and krispy kremes. Each year the first 3-4 weeks of training are a little more brutal than the last. I ran last week for the first time in 2011...it was not pretty. I ran again today...still not pretty. I have at least 3 weeks of this before things start to get better.
I checked the "totals" on the runner's GPS my wife gave me a few years ago. It shows a total of 1,672 miles. That is essentially running from my house to Denver. Do you know how many of those miles I ran with an iPod or a training partner? Zero. An appropriate response to that would might be "that's not normal" - no argument here. Another response might be "you are not normal" again, difficult to argue that point.
I think the biggest reason I don't run with an iPod or a companion is that I like the solitude of a solo run. I find that time out for a run, especially and hour plus run, is one of great mental clarity. Alone with your thoughts and the input of the surrounding environment plodding by creates a great environment to think, ponder, and suppose. I think a lot about my family, I think about my work, I think about politics and world events, I think UVa football. I think about blog posts I can write. I am not sure what it is about a run that make for such a good thinking environment for me, but I feel like I clear out a lot of mental clutter when I run. Maybe good food that is bad for me is not the only thing that builds up during my annual exercise hiatus...I think a lot of mental clutter builds up too...clutter that needs to be cleaned out like my garage every spring.
Tomorrow's run will be under an hour for sure, and will not be a think of beauty by any measure, but it will be another step in the spring cleaning of the mind. I am kind of looking forward to it now...a little.
I checked the "totals" on the runner's GPS my wife gave me a few years ago. It shows a total of 1,672 miles. That is essentially running from my house to Denver. Do you know how many of those miles I ran with an iPod or a training partner? Zero. An appropriate response to that would might be "that's not normal" - no argument here. Another response might be "you are not normal" again, difficult to argue that point.
I think the biggest reason I don't run with an iPod or a companion is that I like the solitude of a solo run. I find that time out for a run, especially and hour plus run, is one of great mental clarity. Alone with your thoughts and the input of the surrounding environment plodding by creates a great environment to think, ponder, and suppose. I think a lot about my family, I think about my work, I think about politics and world events, I think UVa football. I think about blog posts I can write. I am not sure what it is about a run that make for such a good thinking environment for me, but I feel like I clear out a lot of mental clutter when I run. Maybe good food that is bad for me is not the only thing that builds up during my annual exercise hiatus...I think a lot of mental clutter builds up too...clutter that needs to be cleaned out like my garage every spring.
Tomorrow's run will be under an hour for sure, and will not be a think of beauty by any measure, but it will be another step in the spring cleaning of the mind. I am kind of looking forward to it now...a little.
Sunday, November 7, 2010
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.
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.
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.
Tuesday, November 2, 2010
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.
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.
Sunday, August 8, 2010
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.
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.
Friday, July 30, 2010
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?
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?
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