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


Monday, June 29, 2009

Competitive Advantage

TheFundamentals previous essay (June 24, 2009) prescribed a cure for the state of Michigan. It was designed to turn around the third world country economic climate MI has created for itself. MI just can't compete. Not for jobs, not for business, not for economic growth, not for home valuations, not for personal income, not for nothing. They are quite successful at unemployment, deteriorating neighborhoods, poor graduation rates, falling economic output and income and unmotivated populations. Predatory unions dominate commerce and business. Minorities clamor for more handouts and the party in power plays fiddle to the tune dictated by the minorities and the unions. We liken this situation to the overused metaphor of the perfect storm of three converging forces occupying the same longitude and latitude for a period of time. The three forces being minorities whose educational, societal and cultural behavior standards are substantially below those of the overall community; protected labor unions that pursue intimidation and the exercise of undisciplined power and the delusional and destructive actions of the political party in power.

The prescription written for the state of Michigan is not nearly as radical as it will appear to the above groups. In many other states the components of the prescription are in place and working well. And that brings us to the point of today's followup comments. There is such a thing as competitive advantage. Anyone who has ever competed in the business world (yes, that does exclude the entire Obama administration and most, if not all, of the senior officials of the party in power) knows that to be successful it is necessary that the products and services offered must have features that set them apart from the competitor's products and services. These set-them-apart features are "competitive advantages."

Some of our fifty states are doing quite well. TheFundamentals does not wish to pick on the states of IL, NY, MI, CA and others but these states just don't seem to care about attracting and keeping business, controlling taxes and spending and reducing legal hurdles and regulations and unnecessary rules and bureaucratic interference in the free enterprise, competitive marketplace. If you are not promoting the free enterprise, competitive marketplace you are not promoting wealth creation. Wealth creation is the source of jobs. The government does not create jobs. The prescription for MI is just a simple attempt to bring a state with loads of unemployed citizens back in the competitive game. What do you have to lose when your unemployment is skyrocketing and your economic output is plummeting? Does TheFundamentals really think that the destructive forces in MI will do some self examination and start to implement the prescribed changes? Well, who knows? Stranger things have happened. One thing we do know at TheFundamentals is that the states which have adopted a program of competitive advantage will continue to attract business and jobs and economic growth. That is change you can predict, change you can support and change you can measure. This is not Obama's immeasurable nonsense about creating and saving jobs, green energy and more health care for less. This is real. Watch the states with competitive advantage grow. States are sovereign entities. They can and should compete with each other. Is your state competing? Is your state growing? Is your state attractive to business growth, real job growth and wealth creation?

Competitive advantage. It's a good thing. It is one of TheFundamentals.

Wednesday, June 24, 2009

Michigan Rx

This essay is a followup to the posting dated April 28, 2009 entitled "State of Michigan R.I.P."

Readers have commented that the state of Michigan is on a big time advertising campaign to get visitors to visit and business to relocate. These ads are a waste of money. The prescription to heal the self imposed destruction of the health (employment, income and growth) of this once fine state is spelled out below:

The State of Michigan announces that it has adopted the following rules and laws for all businesses operating in the state:
  1. No income tax for five years; 2% for the next five years and 3% for the next ten years.
  2. No unemployment insurance premiums for five years; 1% for the next five years and 2% maximum for the next ten years.
  3. Right to work state guaranteed for twenty years.
  4. Property taxes capped at 1% of assessed value for twenty years.
  5. Tort law reforms enacted limiting all non economic damages to $500.00 per person per lifetime. All legal and court costs to be borne by losing party to any law suit.

The State of Michigan announces that it has adopted the following laws and rules for all politicians and city/county/municipal and state employees:

  1. All pension plans have been converted to defined contribution plans. Employer contributions to such plans shall be limited to 3% of each participant's annual compensation, up to $20,000.00 compensation per annum (Note to Harvard graduates - that's a maximum of $600.00 per employee per year.)
  2. Term limits apply to all state and city/county/municipal elected positions. No one can occupy any one office for more than five years or any combination of offices for more than ten years.
  3. No state/city/county/municipal employee may belong to or seek membership in any union.
  4. No elected or employed individual may solicit any monies to campaign for any office in the state. Each publication, TV station and other media outlet will provide any candidate (subject to above term limits) with 5% of the vote in the previous election (or signatures from 5% of the voters in the previous election) for the position sought with free access to their media for a minimum of 5, ten minute presentations (or the print equivalent) in the 30 days preceding an election. Any payments of cash or goods/services to any candidate or elected individual will be deemed a bribe and both the giving and receiving parties shall be jailed for no less than one year at hard labor and pay a fine of no less than 3X the amount involved. Hard labor inmates are billed for room and board expenses.
  5. Any person receiving a paycheck from any tax funded entity in the state shall be subject to termination without cause at any time. Any such person may be held responsible for personal damages equal to all monies paid them if they are negligent in performing their duties, cause injury or damages to any taxpayer through their negligence or are convicted of any crime while so employed. Here's the simple concept: If you work for the people, you will work hard, be pleasant and responsive to the people and keep your nose clean. Otherwise, you're gone.

To the citizens of the State of Michigan. This state seeks to be a haven for responsible individuals. Accordingly:

1. No welfare payments of any kind will be made within the state. If you don't have enough to live, you have three choices:

  • Leave the state. The State of Michigan recommends the following destinations: IL, NY, MA, CA and VT. One way bus tickets will be provided.
  • Visit your local church, Salvation Army or Democratic Party headquarters and seek a handout.
  • If you have valid medical reasons, you may apply to become a ward of the state.

2. You can own a gun and use it to protect your person, family and possessions from any threats. Any other use of the gun will result in a minimum 5 year prison sentence at hard labor (10 hours per day; six days per week) and you will be billed for your room and board expenses.

3. There is no such thing as a hate crime in this state. There are no protected or coddled groups or classes of people in this state. A crime is a crime and you will be punished severely for any criminal activities.

4. Unemployment benefits paid by the state will be limited to 60 days after 5 full years of employment.

Sunday, June 21, 2009

Just Say No

TheFundamentals has learned that the USTreasury intends to borrow over $100 billion this week which is in addition to borrowing $65 billion two weeks ago. We appeal to all lenders with the following message:

If you have any money and you are thinking about loaning it to the US government, on behalf of the taxpaying, common sense based, over extended citizens of the US, please do not buy any more US treasury securities. We appeal to foreign and US banks, to money market funds across the globe and particularly to the governments of China, Japan and Canada. Please do not buy any more US treasury securities. The citizens of the US do not need any more of your money; it is only the politicians, bureaucrats and bloated public sector unionized employees who want your money. The taxpayers cannot afford any more debt. We have no idea how we will ever repay what you have already loaned us. Please do not extend any more credit to the US.

We know you would not provide an alcoholic with booze, would you? You would not provide heroin or crack to a junkie, would you? You would not sneak in high fat treats to Oprah, would you? Surely you would not loan your vehicle to Mel Gibson or Lindsay Lohan. You would not give OxyContin to Rushbo, would you? You would not give your credit card to your n'er do well brother in law, would you?

The taxpaying, over indebted citizens of the US beg you to follow in the footsteps of NReagan and, "Just say no!" No to Barney Frank (gads) and little Timmy Geithner (supreme scaredy-cat) and pudgy Larry Summers (failed academician); no to Ben Bernanke (fiscal promiscuity expert) and Nancy Pelosi (botox queen.) These people cannot help themselves. They cannot pass up an opportunity to spend, spend and spend. They are like gamblers in Las Vegas who are certain that the next bet will be a winner. If they lived on Long Island they would have been drawn to characters like BMadoff. They cannot pass up a sure loser. They can detect ways to waste money that would send common sense folks running home and locking their doors. They appear to be struggling with some crazy syndrome or mental illness that removes any concept of frugality or value. It may be that they were abused as children or bullied in the play lots of their private schools and they are now making up for their desperate insecurities with the substitution of US securities. We don't know. We don't care. Just keep your money. Spend it on your children and grandchildren. If you have to spend it, buy real estate in the US. There are some great deals right now. Please do not buy our bonds.

And, don't take any calls from the White House or its temporary occupant. If the WH or any of the above named want to come visit tell them that you will get back in a week or five months. Don't let them come visit because they will just beg you to buy more US bonds. Please keep your money.

Thank you.

Thursday, June 18, 2009

TV Taste Test

"No one went broke underestimating public taste" – PTBarnum

Interesting comment coming from a guy who made millions running carnival sideshows featuring hirsute women and two headed snakes (no, not the politician version.) Regardless, no one will ever go broke underestimating the boorishness and arrogance of American TV performances.

Recently, one of the fools who pounds drivel over the American airwaves almost every weekday night, delivered what he called a “joke.” If there was ever an example of the abuse of freedom of speech, it was his “joke.” In societies with a minimum level of fundamental values, this statement would produce a termination notice and, at the high end, perhaps a more grisly outcome. Not in America. He is America’s cutie pie. Heaven help us.

Any one watching TV even occasionally has seen a recent example of the trash produced by either NY advertising agencies or their counterparts in CA. We have seen false advertising on TV for way too long. Be it buffoons pushing crappy, salty, fatty foods or beer without flavor or poorly constructed vehicles that now set on storage lots in every major town and city to over priced, over hyped medications that will help you sleep, pee more/pee less and engage in sport intercourse (no forget that, those drugs are either for middle age men who are so insecure that they need chemicals to build their confidence or oldsters who think they are Dorian Gray.) When some of us were youngsters our parents did not have to deal with the repeated warning, “Notify your doctor if you have an erection lasting more than four hours.” What? Is this necessary? How about this warning instead, “There is no fool like an old fool.”

There is a series of ads now running for some company, perhaps a bank, using young girls and placing them in situations wherein the adult male misleads them and the ad emphasizes their disappointment at being unfairly treated. Somehow the fools who run this company think they can use this uncomfortable example as a lesson of how they won’t treat you. What? TheFundamentals knows one company that will never get a cent of our business.

Fundamentals are simple. If you need to use a child to make a joke or hype a product or just draw more attention to yourself, you are a low life and a degenerate. Americans used to shame such people back into their hiding places.

Monday, June 15, 2009

Risk and Reward - Success and Failure

Our founding fathers spoke of life, liberty and the pursuit of happiness. TheFundamentals, because of our economic bent, tends to think of economic freedom as the bedrock of the life, liberty and the pursuit of happiness concept. It’s great to be able to write this blog and ridicule idiotic politicians, economists and the media addicted personalities that abound in our society. But we get to do that because we are not working in the field from sunup to sundown, toiling to make a few pennies and grow a few crops to feed our families. This freedom from that type of toil is the consequence of risk and reward, success and failure and the phenomenal productivity that results. Freedom to choose is a much greater concept than that advanced by pro abortion interest groups. This larger form of freedom to choose is based on the concept of risk and reward. Do I spend my money to get this degree or that training? Do I use my savings to open up a franchise? Should I quit this job and start a new one? Can I take this gadget I’ve been working on for eight years and sell it to the consumer? Should I try to qualify for the tour? What if I fail? What if no one buys my gadget? What if my new employer doesn’t like me? How long should I keep waiting on tables and hope I get my break? These are not the questions being asked by members of the UAW and AFSCME or government employees.

What causes a culture that has so benefited from risk and reward, success and failure to drift into the apparent safer waters of less risk, less reward and failure avoidance? Health care for all. Financial security for all. Safety nets for all. Feel good. Equality for all in all things. Affirmative action. Let’s not confuse the virtue of charity with the wonderful virtue of risk taking. Failure is not a bad thing. No pain, no gain makes sense in economic matters as well as athletics and medical treatments.

Is it simply that this democracy is suffering from the bad consequences of letting politicians control the public treasury? It is interesting to note that the political support for the safer society is being promoted by the party in power and they find their voter support to be primarily in ethnic, racial and predominantly female voting groups. The party out of power finds its voter support to be primarily a white male voting group.

Fellas, please take note. It should not be a great surprise to demographic analysts that white male voters are dwindling in their pluralities. It may be that there is no turning back from the safer and much less risk-reward oriented society that is responsible for the strong economic progress of the world over the last 200 years. Other societies with a strong male presence are testing our competitiveness. All American men need to embrace this fight. The women will follow our lead.

Is capitalism just too tough for the voters who support the party in power? Or, do those of us who support a risk and reward, succeed and fail environment just need to do a much better job of message creating and message delivering and messenger selection? This is a fight worth fighting. If you believe in risk and reward, success and failure, it is time to join the fight.

Friday, June 12, 2009

Frugality

Recently, TheFundamentals was presented with the observation that it is out of touch with the difficulties, the troubles and, particularly, the financial hardships that are facing people who have lost their jobs, cannot pay their bills and are dealing with problems that are beyond their control. The observation was clearly designed to say that it may well be okay to talk the talk when you have savings in the bank and have lived a frugal life but others may not be as fortunate and, without help coming in the form of unemployment checks and government bailouts, they will succumb to the current difficulties. Here are some comments in response.

TheFundamentals is about values and common sense. Two basic values are frugality and savings. How does TheFundamentals define frugality and savings? Live within your means after saving at least 10% of your earnings. Do without things that are unnecessary - expensive cars, clothes and housing. Eat out occasionally and avoid the high priced places. Buy when things are on sale or out of favor. Shop for a good used car. Use common sense.

Never borrow unless it can be justified. When can it be justified? Well, to buy a home when you can reasonably predict an income flow sufficient to meet the recurring payments, taxes and upkeep expenses.

Do not incur credit card debt. Use the cards for convenience and pay them off in full at the end of each billing period. If you find that you have accumulated possessions that are not being used, sell them. EBay is a wonderful way to dispose of items that have value and are not used. Do not accumulate garage and basement and attics full of “things.” Do not rent storage space for the overflow from the basement, garage and attic. It is the time of year for "garage sales."

Have meals at home with your family and friends. Rent a vacation house and set up household for a week or two. Buy airplane tickets in advance. Cancel the cable TV (or at least the premium channels) and shut down the cell phone or the Blackberry or the IPhone.

No one needs a house with 5 or six bedrooms and baths. No one needs a fancy Mercedes or Lexus or huge SUV that gets 12 miles to the gallon. No one needs a Hummer. No one needs season tickets to a baseball park or a basketball team. Play golf at the local municipal course. Run up and down the stairs and forgo the personal trainer or the health club. Do sit-ups and push ups.

If you have done all of the above and are still in trouble, there are numerous charities and food pantries and church organizations that are available and that are supported by TheFundamentals. We still like casseroles and pasta meals and hamburgers on the grill. Homemade pizzas aren’t all that bad either! We bet our readers have a lot of their own good ideas that they may wish to share with others.

Frugality. Savings. They are fun, addictive and two of TheFundamentals.

Thursday, June 11, 2009

Scavenger Hunt

On May 15, 2009, TheFundamentals proposed a plan for helping the party out of power (poop) get back into power. It involved a commitment tied to improved representation numbers in congress to start reducing the burdensome debt of the US federal government. Let’s hope someone is listening. (Again these ideas are offered without expectation of compensation to all you high paid political consultants out there.) This plan is a work in process. Here’s more (no charge.)

Poop will make a commitment that if a business or a bank or an insurance company or an automobile company or a state or city or union or pension fund or any organization gets in financial trouble we’re just not going to even consider bailing it out. We will let the federal bankruptcy laws and the federal bankruptcy courts and their thousands of employees and established laws and precedents and rules and procedures and processes do what they have been doing for 200 plus years and that is taking care of business. By the way, bankruptcy is one of the defined “enumerated powers” (see TheFundamentals June 8, 2009 for the list of these powers) extended to the congress in the US Constitution. For some strange reason, “bailouts” are not enumerated in the US Constitution. Once again, without benefit of the Internet, Harvard Law Review or the fabulous leadership of the Austrian weight lifter, the folks who had the job of forming a nation and limiting government powers from the very start got it right.

What a novel idea - using established government processes to do what they do best – creating and cleaning up messes. A form of garbage pickup. Refuse disposal. The new congress could order up an extra large garbage can from a Chinese vendor (or WalMart but that’s redundant), put it down by the curb and in it, place the following damaged and no longer salvageable goods: GM, Chrysler, AIG, Citibank and the states of California, Michigan, Illinois and New York. The bankruptcy courts will probably try to auction the assets of those four states. Hmmnnn. The Fundamentals wonders what are lengthy welfare rolls and bloated public sector union payrolls and pension obligations worth in an open marketplace? Cuba might be interested. We could donate California to the Mexicans but that reverse diaspora may require a modicum of negotiation talent. We could ask Canada to take over Michigan and Illinois and, maybe, even New York. Do you think they could be enticed if we threw in Al Franken and the states of MN and WI? Eh?

By the way, TheFundmentals could care less if the party out of power (poop) makes the commitment to do this and therefore gets back into power or if the party in power makes the commitment to do this and therefore stays in power. The appeal to poop is only logical because the party in power could already be doing this but they seem to be intent on becoming the new poop which is what the previous party in power succeeded in doing with its misguided actions and therefore became poop.

Warning: Do not read the preceding paragraph during or after cocktail hour. In times like these, do not skip cocktail hour. Poop should also endorse cocktail bailouts as an alternative to monetary bailouts. The former USSR has embraced the cocktail culture with a degree of success and has simultaneously solved its old age benefit problem. Now that’s change we can all accept.

Wednesday, June 10, 2009

Epiphany

TheFundamentals likes to approach these fancy words and concepts which are much over used and much dramatized in the American culture of convenience with a bit of humor.

Anyone watching Oprah experiences numerous epiphanies daily. We liken Oprah epiphanies to sugar highs. The dozen donut solution to your problems. By the way, truth in advertising police, please note that there is a substantial disconnect between the appearance of the live pudgy Oprah and the svelte Oprah who shows up on the brief teaser ads on TV. A few days ago TheFundamentals observed several Obama and Oprah supporters having an epiphany after the community organizer stopped off at a burger joint and ordered up some greasy treats for the fawning folk back at the WH. The community organizer has captured a corner of the epiphany market with his endless appearances and speeches. In a very short time period he has brought his incredible insights to the Middle East situation, racism, world conflict, Islamic stuff and, of course, economic and financial turmoil. The latter has been the focus of the ramblings of this website in that the epiphany of spending more money we don’t have to solve a problem created by spending money we didn’t have may turn out to be an interim epiphany on the road to the only true epiphany that this fella is going to motivate and that is the day we all wake up and realize, “Holy smokes. We’re broke and no one cares.”

So the American melodrama plays out. This week the US Treasury is offering for sale $65 billion of its 3 year, 10 year and 30 year notes and bonds (note to SEC – aren’t you supposed to blow the whistle on this kind of paper?) TheFundamentals has suggested that the globe trotting activities of the wonderful NPelosi and the overperfoming TGeithner (they giggled at little Timmy in Beijing when he was pitching his snake oil) along with the epiphany producer himself bowing and curtseying through Arabia may have had a little to do with concern over the outcome of the sale of these valuable pieces of paper. Time will tell. TheFundamentals observes that this auction is analogous to BMadoff reluctantly accepting deposits into his investment accounts. If you can, visualize this scenario. Think of a Hollywood set with the front a beautifully maintained, large white house on Pennsylvania Avenue in Washington DC. The paint is sparkling and the flowers are blooming and important people are arriving and acting serious and important. You knock on the door with your life savings in your hand seeking to buy a US Treasury bond. The door opens, a hand grabs the cash and the door closes. But, in that fleeting second or two, you see behind the door and there is nothing but some WH interns eating burgers and fries.

Now that’s an epiphany.

Tuesday, June 9, 2009

Truth to Power

What an overused phase. Speaking truth to power. Well, here goes again.

Mr. Obama, the 600,000 jobs you “are saving” are not wealth creating/wealth producing jobs. They are wealth destroying jobs. The jobs you are “creating and saving” require wealth creation in order to be sustained. Government does not create wealth producing jobs. It can only help create an environment in which these good jobs are created. You and your ilk are not creating this environment.

All wealth creating jobs are associated with products and services that are subject to competition and quality comparisons as well as features and cost factors and all the other market based considerations that go into the decision making process of a buyer. You need to consider adding some regular people to your advisory staff. Regular people who have competed in the marketplace and have examined a competitors product or service and who have bid against other competing firms and who have struggled to make a payroll, or hire a good engineer or technician or attended a meeting with a disgruntled customer or worked late into the night completing the release of a new product. These tasks are not taught at Harvard Business School or Columbia Law. They are learned in the workplace and they are learned through mistakes and through the able and dedicated example setting of older, wiser employees and employers who care.

So, as you blunder through another “creating and savings jobs” exercise, know this: The US of A is in a death struggle with other countries and other workers and other companies who care little about your PR schemes and made for TV announcements and political shenanigans. These people are capturing the technical capability of producing high quality products and services with advanced processes and materials and selling them to markets around the world. They are not worried about whether a labor union will object to a wage cut or pension cut or factory closing or the manner in which a production line is diagramed.

All you have done is support non competitive voters in various union jobs around the country. You have provided UAW and AFSCME members with the false prophecy of your schemes. You have provided countless non productive bureaucrats and government employees of all forms with a few more paychecks. You continue to kick the can down the road. The destination is not hope; not audacity; not good times and, most certainly, not wealth creation.

You are wasting the public treasury for feel good schemes that will only accomplish the temporary fix of your limited objectives of “saving or creating jobs.” You need to stop wasting the public treasury and help America get back its competitive energy; its wealth creation machine and that means you need to embrace real change.

Monday, June 8, 2009

Enumerated Powers

The Constitution of the United States specifically limits the Congress to certain enumerated powers as stated in Article I, Section 8. The Constitution of the United States does not empower government; it limits government to stated activities. This section is very important in defining and differentiating our country and is presented below. All Americans should be familiar with the stated powers. All other powers belong to the people and the states. Further, the first ten amendments to the Constitution specifically limit governments ability to infringe upon the rights of the people. These latter issues will be covered in a subsequent posting.

Article I, Section 8

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Wednesday, June 3, 2009

House of Saud meet the House of Cards

Why is BHO going to Saudi Arabia?

Why are Nancy and Timmy in Beijing?

Why isn’t Joe going anywhere?

What do they have in China besides lots of people and American Dollars to lend?

What do have in SArabia besides lots of sand, oil and American Dollars to lend?

What do the two places have in common?

American Dollars to lend.

Now you know why they are there.

But why now?

What could possibly motivate the "leader of the most powerful nation" to show up on the doorstep of SArabia now? Does he want to bow a bit lower this time? Is he looking to try on a robe and turban? That would be a great photo opportunity.

What’s with the beard of stopping off in Egypt?

Here’s a transcript of a recent call between the White House (WH) and the King (SA):

WH: Hey King, how about we get together and chat a bit about the price of oil and the fact that we don’t have any money?

SA: Sure, you’re always welcome here.

WH: Well, we were thinking of sending Joe or maybe you could come here.

SA: Joe who?

WH: Okay. We’ll send Nancy as soon as she gets back from Beijing. Or, maybe you could swing by in the next 48 hours because our treasury auctions are not going very well.

SA: (silence)

WH: Okay. Let me free up some schedule time. How about tomorrow?

SA: Make it next week and practice your curtseying. The bowing was a bit silly and it appeared that you may have been doing something else. And stop off in Jordan or Egypt or Somalia and make it appear that you are not so desperate. We’re getting a lot of grief around here about why we always bail you out. And don’t be bringing those silly boys (Diplomatic aside - this terminology is now the accepted label for Messrs. Geithner, Bernanke and Orszag) with you this time.

WH: Sure thing. Anything you say. See you next week. Hey, do you need a few Cadillac’s? They are going to be a lot smaller in the future so you may want some that accommodate your size. (BHO aside - "Uh oh, I probably shouldn’t have said that.") I can get you a deal.

WH: Hello... hello. What’s going on? I should probably be reading from a teleprompter from now on. Hello. (Assistant aside – “They hung up a few minutes ago.”)

Tuesday, June 2, 2009

Just the facts, ma'am

Some time ago there was a TV cop series set in Los Angeles starring Jack Webb in the role of Detective Joe Friday. Joe’s favorite line, when questioning witnesses about a crime, is noted in the title to this essay.

Keeping with Joe’s no-nonsense approach to dealing with crimes and criminal activities, TheFundamentals brings to you some very important facts as reported by USA Today on May 29, 2009.

Here are the facts:

Each household in the US of A is responsible for debt totaling $668,621.00. Of that debt, each household is personally responsible for $121,953.00 in the form of their mortgages, consumer debt and other obligations. The remaining and bulk of the debt is $546,668.00 and yes, you guessed it, you may thank the wonderful geniuses in Washington, DC for your households portion of commitments for Medicare, Social Security, Federal Debt, Military and Civilian retirement programs and other commitments. Read the entire story at http://www.usatoday.com/news/washington/2009-05-28-debt_N.htm

TheFundamentals refers to this situation as promiscuous financial behavior. Just as promiscuous sexual behavior will lead to ruined lives because of both physical and emotional consequences so will promiscuous financial behavior lead to ruined lives. No one; no family; no household; no business; no government, even with the ability to print currency, can withstand the burden of this level of debt.

What to do about it?

The government of Germany is about to pass a constitutional amendment that will, for all intents and purposes, ban deficit spending. If government insists on continuing promiscuous financial behavior it will be forced to collect taxes necessary to pay the bills. Otherwise, unless the politicians wish to commit political suicide, they will be forced to curtail spending to levels set in the constitutional amendment.

The party out of power in the US of A needs to employ a German translator ASAP. The party out of power needs to introduce and start the mechanisms necessary to passing a constitutional amendment that outlaws deficit spending in the US of A.

Those are the facts. Add up the value of your households assets. If they are less than $668,000.00, your household is insolvent, at least from the viewpoint of a lender. You may or may not be concerned about this situation but a lender is quite concerned about the situation. Whenever you hear a politician or a bureaucrat describing the “credit crisis” they are misleading you. There is no credit crisis. Lenders just are not about to make loans to insolvent households.

You now have the facts. And, you now have the solution.

Monday, June 1, 2009

Taxing Times

Free at last…

There is an outfit called the Tax Foundation that produces some very interesting numbers about taxes. You can visit them at www.taxfoundation.org

Spend some time there and you will learn about your country and its addiction to increasing the tax burden on its citizens. Their statistics go back to the beginning of the 20th century. In 1909 we learn that an American had to work 19 days in order to earn enough to pay their taxes. So, the tax freedom day in 1909 was January 19. After that date Americans workers were working for themselves and their families. Back then, Americans were paying 4.9% of their income for taxes. That percentage is the lowest recorded in the last 109 years.

By 1918 the percentage of income paid in taxes had risen to 10% and it stayed in that range until 1929. Then it started to move upward big time. It seems that government uses periods of economic turmoil to take even more money from their citizens. And, it also seems that once it gets the money, it keeps taking the money at the higher rate. What is it about politicians and bureaucrats that cause them to want more and more of our money? Is it a disease? Is it a syndrome? Is it a psychological failing? Something that happened in their early years? Is it chromosomal? Is it a chemical imbalance? Is it a form of criminal tendency? Is it like animals in the zoo? What can explain this phenomenon?

By WWII the percent had risen to 20.9% in 1942 and 24.9% by 1947. Now we’re getting into the contemporary tax burden experience. In 1962, the percentage was 27.7% and it rose to 30.8% in 1969 and reached an all time high of 33.6% in 2000. In 2000, the average American worked until May 3 to pay their taxes. Slipped back in the last few years to the low 30’s and you can guess where it is headed. By the way, the report points out that in 2009 Americans will pay more in taxes than they spend on food, clothing and housing combined. What the heck has happened to our common sense? TheFundamentals wonders what the percentage paid by the colonists in 1775 was that upset them enough to upset the scheme of things? 30%? Doubt it!

Click on http://www.taxfoundation.org/files/sr165.pdf to see the entire report. If you are prone to depression TheFundamentals suggests that you avoid this site. In any event, TheFundamentals cannot accept any responsibility for your mental/physical state after reviewing the document.

Thank you to the Tax Foundation for their work in documenting this sad tale of governmental abuse and citizenry subjugation.

Free at last. NOT.