"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27,2010


Tuesday, April 28, 2009

State of Michigan R. I. P.

There is a great sorrow among those of us familiar with this beautiful place. It is quite a big place. You can drive more than 600 miles from one corner to another. You can get to a body of water within minutes. You can get a good education and join over 100,000 somewhat delirious fans in one of the greatest sports stadiums ever built. The state was home to some unique branded products: Stroh’s beer (fire-brewed), Kellogg’s cereal and Vernor’s ginger ale. They also used to make cars in the State of Michigan.

So what went wrong?

Well, some say it was bad management at the car companies. Some others say it was the nasty demands that the union foisted on these companies. And then some others say throw in bad political leadership over the last 20 years. Add the three together and you’ve pretty much got your answer.

Can Michigan survive? What happened?

In the April 27, 2009 issue of The New Yorker, Peter J. Boyer writes about Detroit and the automobile industry and the future in an article entitled, “The Road Ahead, Smyrna, Tennessee, vs. Detroit.” Here’s an excerpt from this well researched article describing events almost 30 years ago, “Ishihara (president of Nissan) had a low opinion of American manufacturing and workmanship. Detroit’s management focused more on short-term profit than on quality, and the antagonistic labor-management relationship, governed by a tangle of burdensome workplace rules, seemed designed to frustrate efficiency. The high rate of absenteeism on the American assembly line was shocking to the Japanese. Ishihara wanted to make cars in America, but he was determined that Nissan would not become an American automaker.” TheFundamentals recommend that you read the entire article.

The current governor of the state of Michigan is Jennifer Granholm (see left image.) A few days ago she opined on the situation (banking crisis and auto crisis), “Who knew when we were bailing out the banks we were setting them up to kill the auto industry," Granholm said. "They need to think about the tens of thousands of workers whose lives hang in the balance because the banks want to get a better deal than what even the market will bear. It's totally unacceptable."

That statement says nothing about the facts but speaks volumes about the political leadership in Michigan. The cabal of democrat politicians and unions has destroyed an economic machine. Think about it. In a matter of a few decades, democrats, unions and the management that would not face them down has destroyed an entire industry that basically fought and destroyed the Hun and the Jap and put the US on the road. These folks either are incapable of introspection and self analysis or engage in blatant deceit in order to cover up their sins. Thirty years ago they were being ridiculed by their competitors! Granholm should be fired! The UAW leaders (?) should be fired. The community organizer (co) fired the head of GM. Hallelujah! What about the other little piggies (re: TheFundamentals 3/18/09)?

The co wants to spend his time with Bush, the CIA, credit card companies and tin horn dictators around the globe. But if he wants to lead he should read the New Yorker article and get to real work, serious work, and real change. All he needs to do is suggest that the folk who support him take a pay and benefit cut and start working 40 hours per week. That would be transparency and honesty and change that we can all accept. All the stimulus; all the bailout money and all the recovery act wasteful spending is not about saving the financial system or creating new demand for products. It is about sustaining dopes like Granholm and their constituency with the remote hope that they can reinflate the balloon and keep their jobs for a few more months. You want change? Fire them all!

Friday, April 24, 2009

Witness to History

Is this the demise of America?

This question may not be in the headlines but it sure is on the minds of many thoughtful Americans. The issues facing America have nothing to do with recession, low demand in the housing and the auto markets and a novice president bowing to an Arab potentate. These are catchy topics, some with more carry power than others, that fill the chatter party lines at the various cable TV and network “news” programs. These issues are passing. They are not fundamental.

Fundamental issues have to do with beliefs and values. Fundamental issues have to do with trust and reliance. Fundamental issues have to do with charity and faith.

The fundamental issues facing Americans are growing with everyday. The debt of this country and its lesser political entities is just too high. It is a millstone around the neck of every taxpayer and is now the birth defect of unborn generations. It is a fundamental issue when the unborn cannot look forward to the clean slate provided by nature but is instead burdened with the promiscuity of their parents. Nature provides most children with hope and innocence and strength and vitality. We all feel sorrow for those children who face challenges because they are denied this opportunity and marvel at the spirit and ingenuity of their small persons to adapt and grow. Promiscuous parents frequently deny their children this opportunity through disease and abuse. We have all become promiscuous parents because of our inability to practice denial and discipline. Denial and discipline are fundamental values.

America needs a cleansing. We are not talking about a bath or a diuretic. There is no laxative that will provide an easy solution for this challenge. We are talking lengthy fasting and exercise and denial and discipline.

It is easy to blame our elected “leaders.” Frankly way too easy. They are a group that reflects the greed, pride and promiscuity of the source of their power. We can change them as quickly as soiled clothing. In a matter of months they can all be gone. But who do we choose? Pro life or pro abortion? Pro free enterprise or pro government control? Less spending or more spending? Pro states or pro national government? These are not passing cable TV topics. These are fundamental issues.

Where do you go if you want to live within your means and you want your government to live within its means? Where do you go to be rid of government forms and invasions of your privacy and home? Heck, where do you go to find people who don’t seek a government solution to everything that comes up? Where do you find people who take care of each other, don’t call 911 and think that families set the standards and values for themselves? Are these values gone? TheFundamentals thinks not.

The country was founded on the belief that not all people wanted the same thing but that there would be benefit if the thirteen defined political entities could form a common bond that would provide benefit to all the citizens. So the compact said several “enumerated powers” could go to the common bond and all others were left to the states. That concept is a fundamental that may well be the only hope for America. In the meantime, the fasting has begun. Fasting, self denial and discipline. American Fundamentals. Have you embraced these fundamentals? If not, why not?

Wednesday, April 22, 2009

Free Enterprise, Capitalism and Risk

What do administrators, politicians and bureaucrats have in common?

They are risk adverse. They seek safety, reelection and the avoidance of risk.

What do good businessmen, entrepreneurs and Bill Gates have in common?

They are risk takers. They measure events and circumstances with their knowledge and vision and take measured risks. Sometimes they succeed and sometimes they fail. In a capitalist economic system risk takers make or lose their investments based on the market provided result of their decision making. When they are successful their returns can be phenomenal and the results of their actions can benefit millions. When they fail they usually fail in degrees of personal difficulty. When administrators, politicians and bureaucrats fail they survive. They have no comparable success factors because they are not risk takers. Selling books and becoming lobbyists are not measures of success in economic disciplines.

Today very few observers are critical of the success of Bill Gates. The vision and risk taking and execution of he and his partners/supporters built an industry that improved productivity and efficiency around the globe and created millions of jobs (the credit for which was taken by WJClinton in a powerful example of the survivability of non risk takers.)

Is risk taking a good or bad thing or is it just a fact of life?

Depends on who you ask. In controlled economies risk taking is minimal to naught. The nomenklatura pretend to be in control. Do we want the US of A to follow this path? Big question for the American taxpayer/voter. As we follow this path and encourage the safety of the masses we discourage the risk takers. The current political regime likes to depict the successful risk taker as a pariah.

In free enterprise economies risk taking is the mechanism by which change occurs. Most folk think this change has been good but it is most certainly difficult when it fails or sputters or gets out of whack. Many folk cannot succeed in free enterprise. It is just too difficult. They need safety nets and effective charities. What they don’t need is risk adverse politicians, bureaucrats and administrators pretending to extend the benefits of risk takers to those who have difficulty competing in a tough, competitive environment. This activity is selling snake oil. In recent history in showed up in Ann Arbor, MI in 1964 with an unlikely Texas politician offering to solve the problems of the world.

Whither goes the US of A?

That is the $64.00 question. A self described community organizer is the director for the next four years. His decisions will have some impact, particularly if he seizes the opportunity to revitalize the environment for risk taking. His training does not suggest that he grasps the nature of the current events but TheFundamentals believes he can grasp the choices if he does his homework. His first risk taking would be to challenge the powerful imbedded forces in his constituency. Only he can take that risk. The early returns are not looking good.

Friday, April 17, 2009

Buccaneers and Booty

· What’s the big deal with paying pirates a few coins to gain safe passage around the Horn of Africa? We gave the Indians some good stuff and got the island of Manhattan. It only took us 300+ years to turn that deal into crap. Lobbyists pay millions to our representatives and senators each year to gain favor on legislation that produces economic benefits for their clients. We paid France a lot to get their territory and didn’t even realize that one day it would produce the man from Hope, Arkansas. We’re paying $900 million to fix up the Gaza just in time for the next Israeli war games. We’re bailing out every crook and congressman in DC and New York.

· So, TheFundamentals suggests that each vessel traveling through troubled waters prepare a goodie bag filled with worthless US currency and mortgage backed securities and when the ship is approached by those nasty pirates (some of them appear to be almost entering puberty) the official tribute tosser (union leaders/politicians take note – opportunity to add jobs) tosses the bag at the pirate ship and sails on to calmer waters. Robin Hood, Blackbeard and the community organizer, spreading the wealth around. Bring cameras and teleprompters.

· Everybody is happy. In Sicily they call this protection. In the US we call it a political contribution or foreign aid. In the Indian Ocean we’ll call it “booty bag.” Not, of course, to be confused with a “booty call.” The new Secretary of State can explain the difference to her husband.

· Included in the bag could be invitations to appear on Larry King, if he is still breathing. Or, we could send Catie Kouric to Mogadishu to do a live feed from Camp Booty. Show ‘em your legs Catie. Matt can show them his vacation pictures.

· Next Fox TV could do a reality show featuring talented buccaneers capturing vessels at sea. The Donald could fire the ones who fail. Janet Napolitano could hire the failures for TSA. The ones with teeth could do Burger King commercials. The community organizer could do a cameo in which he explains that failed buccaneers also can become teachers and get all the booty they want if they just join the NEA or the AFT and vote for him, of course.

· TheFundamentals can imagine a pirate union specializing in tribute and extortion. Who could run that union you say? Tee-hee-hee. There’s a softball if ever. Anyone from Chicago politics. Maybe one of Rev. Jackson’s progeny? Blagojevich? Richardson? Daschle? This list can go on forever. Please add your favorite(s) for pirate union leader.

· The opportunities are endless. Buccaneer booty, an American political fundamental.

Wednesday, April 15, 2009

Code of Honor

The Code of Honor says that one neither cheats nor lets the cheater go undiscovered. In other words, the cheater is held to count as is the knowing and tolerant observer.

Let’s take a look at the Code of Honor and apply it to the world of today. We will observe the situation and then apply logic and reasoning to the facts.

A cheater can be anyone who expects to receive the benefits of work, toil and effort without performing the work, toil and/or effort. That would be a standard definition of a cheater. Get the goods without paying for them. Get a paycheck without working for it. Get the grade without studying or researching and writing the required papers. Jacking the system is cheating. So, who gets the benefits without doing the work in today’s world? Well, how about those union employees who don’t work but get paid? They meet the definition. How about those welfare recipients who get a check but don’t work for it? They meet the definition. How about early retirees who get paid for not working or work another job and get paid twice? They meet the definition. How about unemployed workers who get a check for being unemployed? They meet the definition. How about government workers who stand around on the job (one sees them on TV all the time) but still get a paycheck? They meet the definition. How about the nephew or cousin or brother in law who gets the job because he did some political work for the politician but who doesn’t really have anything to do? They meet the definition.

So, now we have defined a few cheaters in today’s world. Remember we defined cheaters as someone who gets the benefits of work without doing the work. We didn’t say anything about legality because we all know that legality is sometimes this and sometimes that. TheFundamentals remembers when smoking was legal and cool and abortion was illegal and shunned. Some of you may not remember that time. We also all know that what’s legal for one may not be so legal for another. There are people in jail right now for either possession of certain drugs or use of same. There is pretty good evidence that the last three presidents of the US of A used drugs and may have even been in possession of drugs at some time.

The Code of Honor says that you get in trouble if you cheat (see cheaters defined above) and you get in equal trouble if you tolerate cheating. So, does anyone out there know anyone who:
1. Gets a paycheck without working for it?
2. Belongs to a union and doesn’t work but still gets paid?
3. Is a welfare recipient?
4. Gets an unemployment check?
5. Is retired and being paid but doesn’t work?
6. Works for the government and sleeps on the job?
7. Holds a government make-work job because they know someone?

Of course not. We know that this is just logic and reasoning and a Code of Honor applied to the year 2009 and we know that there is no logic and reasoning going on in the year 2009.
Code of Honor. One of TheFundamentals. Not applicable in the year 2009.

Tuesday, April 14, 2009

It's the debt, Stupid!

Genius Krugman has stated that the percentage calculated by dividing debt by GDP in the US can go to 100% without jeopardizing the economy in the form or excessive debt burden and bankruptcy. He cites other countries (source: CIA – Japan 170%; Sudan and Egypt 106% and Greece 90% among others) as the empirical source of his brilliant conclusion.

Krugman is wrong for many reasons, mostly the following:
1. What is included in debt? In the US debt exists at many different layers. The US debt is now over $11 trillion and rising (look left) at the fastest pace ever. There is more US contingent debt than ever in history and the new transparent administration has not cleaned the windows that show those numbers. What is the current US contingent debt? Also, there is debt all over the 50 states and municipalities and commitments to fund programs and pensions. Last there is consumer debt. Add it up and that 60% current percentage quoted by Krugman is vastly understated.
2. Any citation of debt without the specifics of debt service ability is fiction. How much will the burden of debt service be on this economy? Further, the US and its political subdivisions have used long term debt to fund current costs. This is a violation of fundamental financial values. It is just plain bad policy and lenders with any standards would not make loans for these purposes. Someday, someone will wake up.
3. Debt refinancing issues. What is the likelihood of the US’s ability to refinance its debt as it comes due? To answer this question it would be appropriate to look at the current experience with US mortgage backed securities which would suggest that lenders can disappear even with US government backing. Today, the FED is the principal buyer of US supported mortgage backed securities. Woe be unto those who can’t imagine this happening to US securities.
4. Shrinking GDP. Shrink the GDP and the denominator in Krugman's formula shrinks increasing the debt/GDP percentage. The debt numerator is rising quickly; not stabilizing or declining. Paul, better get that GDP denominator moving up. Oh yes, we’ll borrow and print money to do that. Is the Nobel Prize granted for practicing idiocy?

Simple question. The geniuses who led the US into this briar patch are alive and well. Why are they still in their jobs in congress and in bureaucracies and in the media, academia and business? They have suffered naught for their terrible stewardship of the economy. Their answer to the problem they created is massive spending, massive deficits and massive debt buildup. It is a certain path to insolvency.

The US is in big trouble and the geniuses who led us into this problem are still in charge. Unless and until these fools are removed and no longer directing wasteful spending programs the future is doubtful. Krugman is wrong and this little man will disappear just as his predecessors - Reich, Rubin and Greenspan. They will be joined by Geithner, Summers and Bernanke. They are not the solution; they are the problem. They will be to Obama as the neocons were to GWBush.

Sunday, April 12, 2009

There is Hope

He is Risen. There is Hope.

This simple message, http://orthodoxwiki.org/Paschal_greeting , celebrated by many today, is available to all.

Cristo ha resucitado. There is Hope.

There is also need in all our communities. Please locate the food bank in your community and support it. Food banks need donations of supplies and cash. Food supplies include canned goods – meats, vegetables, fruits and pasta meals like those tasty spaghetti-o’s that kids eat. They also need cereal and spaghetti sauce and diapers. No perishables. They need cash donations to help them pay their bills.

Food banks are located at neighborhood churches and run by other charitable organizations. Google “food bank” and you will get a listing for your town (hopefully.) They are staffed by generous volunteers. You will feel good just visiting the food bank and assisting. Other food bank characteristics include helpful people, lack of forms or applications, no standing in line, no scowling and put-out looks, no impatient sighing and you will not be x-rayed through your underwear. You will be able to park close to a food bank, walk right in, no armed guards busting the seams of their trousers, no concrete barriers or cameras and no posted messages threatening imprisonment for minor infractions. The buildings are not fancy; the quarters are Spartan. Caution: food bank visitation and assistance is contagious and addictive.

Food banks offer anonymous and much needed help to our neighbors who are struggling.

Please help.

Friday, April 10, 2009

New York Bubble Machine

“Job cuts needed to stop NY bankruptcy: mayor,” reports Breitbart.com

‘Sweeping layoffs of government employees are needed to prevent New York going bankrupt, Mayor Michael Bloomberg said Thursday.’

Bloomberg, who is in tense negotiations with municipal workers' unions, said an extra 7,000 jobs would have to go unless major reductions are made in employee benefits.

‘We cannot continue. Our pension costs and health care costs for our employees are going to bankrupt this city," he said in comments broadcast on NY1 television.

Bloomberg, running for a third mayoral term at the end of this year, said that proposals from unions so far were "nowhere near what is adequate."

TheFundamentals has been discussing the bubble machines at work in Congress, California, The Federal Reserve, Illinois, Department of the Treasury, New York and countless other government sponsored entities around the nation. Mayor Mike Bloomberg apparently is a bit late in finding it in his own backyard. TheFundamentals thought Mayor Mike was a pretty smart guy at least based on his business success. Could he also have feet of clay? Are we looking at another “Maestro” in the making? The Maestro was the label the media applied to former Fed Chairman Greenspan whose failures to regulate financial institutions and provide a stable dollar has resulted in some interesting bubble machine breakdowns around the globe.

Mayor Mike, who thinks that the Obama stimulus is ok because it's free money to support his own bubble machines, now thinks that New York cannot afford to support the labor costs and pensions and benefits for the employees he hired. Mayor Mike, did you just come to this realization? Where were you when the budget was being assembled? Where were you when previous labor contracts were being negotiated? Can you not see beyond your nostrils? Do you think that there is an endless supply of cash and debt available to pay excessive wages and benefits to non performing employees? Is every year better than the previous year? Is that how you ran your own business Mayor Mike? TheFundamentals doubts it.

So now what? Mayor Mike and his deficit spending friends in DC and Albany have been building houses of straw and sticks. The big bad wolf (read unable to borrow more money) has now shown up at the doorstep and is blowing on the whining mayors weak structures and the poor mayor is afraid the straw and stick houses are going to collapse (bankruptcy.) Well Mikey, here’s what the rest of us who have to balance our budgets and save and do without have to say to you and your gathering of spoiled, overpaid, underworked public servants, “Oh - boo - hoo - hoo.”

Buck up Mikey. The community organizer may print you some money.

Wednesday, April 8, 2009

What's good for the country....

What are the differences between General Motors and the country (US)? Is what’s good for the US still good for GM and vice-versa? Let's take a closer look.

GM and the US are identifiable around the world. They are brands that represent a certain image, a certain connotation, a certain meaning to a varied audience. They conjure up images of largeness, the 800 pound gorilla in the room and a global presence. The image is one of success and excess. Affluence and yet a certain misguided direction; trying to be what they were but never having quite the right outfit on, no longer working quite as effectively as their image, never living up to their advertising and press releases.

Many people depend on GM and the country both within the US borders and outside. The numbers are in the millions for GM and the hundreds of millions for the US. The idea of failure is not readily comprehensible. It bespeaks an unknown and uncertain possibility. What would happen if….?

They both produce products and services but the products and services, when measured against other products and services available elsewhere, don’t measure up in many ways. It may be appearance and styling. It may be fundamentals; under the hood type specifics. Where the world once awaited both of their moves for advancement and benefit it now looks elsewhere for change and enhancement. In GM’s case there are better alternatives. Not so in the case of the US. Both are dominated by bad management decisions and both are overwhelmed with labor unions that care little about “what’s good for either the country or GM.” The unions care only about their benefits, their perquisites, their pensions and their future. Both have senior management (congress for the US and the board for GM) that seem to look inward for answers rather than question and examine. Self introspection is lacking; the fundamentals are lacking. They have lost their way.

There is however one very significant difference between the US and GM in this regard. No one has to buy GM products. There are many good alternatives. What is the good alternative to the US? What happens if the US ceases to offer hope, liberty, future, benefit and reward for hard work, the place where an individual human being can respect the rights of others and still advance to their own drumbeat, where they can teach their children their values, their beliefs, their fundamentals? Where would one go to hear a leader say, “Ask not what your country can do for you, ask what you can do for your country.” “I regret that I have only one life to give to my country.” “We only ask that you give us a few acres of ground to bury our dead.”

There is one other significant difference between GM and the US. The US can borrow and borrow and borrow and when the borrowing sources dry up it can print money and pretend that it is still a strong force. The US is doing just that now. GM is all borrowed up. It has turned to the country for it sustenance and the country has offered a large but old teat. The unions want one or two more drops. GM has returned to the cradle and is fetally curled up, grasping at the teat. The teat is dry. GM needs to be reborn. The country and GM are very similar.

Saturday, April 4, 2009

Leadership

· Leadership is based on self sacrifice. It is the act of doing something or giving up something for the greater good. The best example of this leadership characteristic is in military combat where one person sacrifices them self for other(s).
· Leadership is based on setting by example. The banker in Florida, Leonard Abess Jr., who voluntarily shared the proceeds of the sale of his business with the employees who helped build the business, illustrates this characteristic as well as generosity. Leaders look out for others.
· Leadership is based on the recognition that fame, wealth and power is fleeting and that it only lasts as long as it serves others. Mr. Abess sought no fame or publicity for his sharing.
· Leaders do not “jack” the system for personal benefit. They are selfless; not selfish.
· Leadership is adherence to fundamental values. Fundamental values are honesty, frugality, charity, humility and self sacrifice.
· Leadership is rejection of destructive traits. Destructive traits are gluttony, greed, hubris, promiscuity, debt and sloth.
· Leadership is the pursuit of the difficult path. The difficult path is always based on fundamental values, sound principles and time tested processes and the rejection of destructive traits.
· Leadership does not require consensus building or poll taking to determine success.
· Leadership is knowing oneself. It means knowing one’s own strengths and weaknesses. It means knowing what you know and knowing what you don’t know. Pretension behavior is the antithesis of leadership. Polling is the antithesis of leadership. Appearing on TV shows, talking too much, pretending to be an entertainer, writing books, giving speeches and sending out talking points are all signs of weakness. Let others analyze your acts and entertain.
· Leadership is exiting before your time. Leaders do not need term limits or mandatory retirement ages.
· Leaders develop successors. Leaders surround themselves with capable people. Leaders accept responsibility. Leaders acknowledge their mistakes and give others the opportunity to lead.
· Leadership is paying your own way. Leaders do not surround themselves with trappings of royalty in the form of perquisites, security, pensions and other benefits provided by others.

These are the characteristics of a leader. Can you name any?

Wednesday, April 1, 2009

Mr. Obama's Day

In the Emperor’s New Clothes the clever fools around the emperor talk him into parading around naked by telling him how wonderful he looks in his new outfit. The narcissistic emperor, of course, believes it and shows the world his shortcomings. Mr. Obama do you want to be a leader or do you want to be a fool?

The people around you are leading you down their destructive path and it does not lead to either change, transparency or accountability. You, Mr. Obama, are the all too willing follower. You are playing the fool. Today is your day.

Why would you send your Secretary of State to China to beg for money and then travel to London with a retinue that would shame an Arabian sheikh? Does it really take 200 secret service people running around London, whispering in their sleeves and hundreds of more bureaucrats to key an eye on you? Do you really need your own chef and kitchen staff? Who is paying for all your gang? The Chinese? Your country has no money. You and your predecessors have spent it all. Perhaps you should stay home, save money and do some more video or internet conferences. It’s easier to read from the teleprompter.

Look at the debt numbers to the left. Look at the horrific level of spending you are undertaking to “save the banks and the financial system.” Recognize these wasteful acts for what they are – the continued balloon blowing of a bloated, obese government that is so afraid of its own shadow that it engages in Cecil B. DeMille style productions to masquerade its insolvency.

Will you pass the hat at the conference? Ask for more money from others who see right through the Madoff like schemes you and your associates have foisted on the voters and the press? Do you really think the Germans would like to assist you in running the printing presses and distributing dollars to your faithful followers (Axelrod calls them voters.) They might have longer memories of such foolishness.

Why don’t you show them your budget deficit projections? Trillions of dollars to prop up public sector unions that serve the union and not the public. Trillions of dollars for silly education programs that prop up the NEA and AFT when the only solution is either school choice or privatization. Heaven forbid that teachers should either teach or be fired. Heaven forbid that they should work twelve months each year. Oh no. Run the presses. Big pensions for all. Inflate, inflate, inflate.

The old joke was the unemployed could always get a job where they either ask, “Would you like fries with that?” or “Paper or plastic?”

Here’s what frugal people all over the world want to know: “Borrow or Print?”

Which is it Mr. Obama? Borrow or Print?

Have a nice day. This one is named for you.