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

Thursday, September 30, 2010

The Next Herbert Hoover

Who wants to be the next Herbert Hoover? Just line up over there on the right. See where all those chairs are arranged in a circle? Now here is what you do. Just join the others and after you all are standing behind a chair; you see there is one chair for each of you; you wait for the music to start playing. Then you start walking around the chairs, clockwise of course. When the music stops, you sit down in the chair that is in front of you. See how easy it is. Oh, there is one more thing. While the music is playing we are going to take away one chair. So, each time the music stops, there will be one person without a chair. That person gets to go home. We will do this until there are only two of you left and just one chair. And then, when the music stops, if you can sit down in the chair, you are the next Herbert Hoover. Much fame will come your way.

So far, we have had five or six players already go home. Let’s see where is that list with their names. Oh here it is. Christina Romer went home. Peter Orszag went home. Larry Summers went home. Rahm Emanuel is going home. So is David Axelrod. Five have already gone home. They don’t get to be the next Herbert Hoover. Too bad. They don’t know what they’re missing out on. Lots of fame. Invites to the Sunday talk shows. Lots of security protection. Heck, probably around the clock for the rest of their lives. The next Herbert Hoover is going to be getting a lot of attention.

Now here is what else is going to happen. In a few weeks there will be an election. You will notice that a lot of the people running for office are still trying to have a chair to sit on. They also want to be the next Herbert Hoover. Here are some of their names: Nancy Pelosi and Barney Frank and Henry Waxman; John McCain, John Boehner and Harry Reid are all there around the chairs hoping that they will have a seat when the music stops. Others didn’t seem to be so anxious to stay in this fun game. Chris Dodd walked away. He would have had a good chance to be the next Herbert. So did Evan Bayh and the senators from NDakota, Kentucky, Kansas, Delaware, Missouri, New Hampshire and Ohio. We wonder why? A bunch of them were associated with places and events like FNMA and FHLMC and making sure everyone, mostly those important speculators could buy as much real estate as they wanted. And they were always voting for giveaway programs and new ideas they called stimulus and TARP and all sorts of fun ideas they had. They walked away too. They don’t seem to want to play the game either. Why not? Are they seeing something the rest of us who want to play are not? We doubt it. It’s not every day you can get to be the next Herbert Hoover, huh?

Some people haven’t shown up for the game yet but they sure want to play. As a matter of fact two of them are so busy trying to get outside support to be named the next Herbert Hoover that we think they might just fix the game when they show up. A lot of the current players are worried that the fix is in. In one case they think some of the Chicago boyz who left early may have already pulled a fast one to make sure that their favorite is going to win this game. Who are these two you ask? Well here are some clues.

The first one should be odds on favorite. He studied Herbert Hoover in school and he claims to know more about good old Herbert and his economic policies than almost anyone ever. He says he studied Herbert very carefully so that, when the time came, he would know exactly what to do to not be like Herbert. What? That doesn’t make sense. Why would someone who didn’t want to be Herbert now work so hard to become Herbert? Boy, oh boy. It sure is hard to figure out how the minds of these really smart people work, isn’t it?

The other one, the kid from Chicago, probably has the inside track because he does get to say yes or no or maybe to almost everything so he can probably fix the game so that he is in the right spot when there is only one chair left and the music stops. He has been working real hard to be the winner. Some even say that the fellow who studied Herbert has been writing the scripted, teleprompter speeches for this kid from Chicago to keep him in the game to be the next Herbert. That sure would be very nice of him to help out the kid with all these great “Herbert” ideas, wouldn’t it?

Boy oh boy oh boy. We can’t wait. How about you? Pretty soon we will have a brand new Herbert Hoover. As Yogi Berra might say, "It's déjà vu all over again". Yogi also said something else that is guiding us as we watch the Herbert Hoover candidates do their thing. He said, "You can observe a lot by watching."

Tuesday, September 28, 2010

Leadership Series: American Mythology

Myth #1: America is the world’s leading exporter of goods and services.
Fact #1: 2009 exports as estimated by The World Factbook (CIA) in trillions of dollars:
  • $ 1.525   European Union
  • $ 1.204   People’s Republic of China
  • $ 1.159   Germany 
  • $ 1.046   United States (on a per capita basis, US of A is 41st) 

Myth #2: American has the world’s best health care system
Fact #2: Most certainly not as measured by either cost per citizen or life expectancy (source: United Nations.) Japan is number one in life expectancy: 82.6 overall; 86.1 for females. Virtually all the European countries and Canada, New Zealand, Hong Kong, S. Korea and Australia have higher life expectancy. The US ranks 38th in the world, after Cuba. The US overall age is 78.2; 80.2 for females. As pointed out on numerous occasions on these pages, the cost per capita for health care in the United States is at least double and, in many cases, triple that of other developed nations, all with higher life expectancy. Cuba’s cost per citizen is a fraction of the cost in the US.

Myth #3: American has the world’s greatest education system
Fact #3: If you look at young adults (25 – 34) who have an associate’s degree or higher, the US is tied with Belgium for 7th. Canada is 1st followed by Japan, South Korea, Finland, Norway and Sweden. Source: National Center for Public Policy and Higher Education.

Myth #4: America paid down its debt during Clinton’s presidency 
Fact #4:  Debt on Clinton’s first inaugural day, Jan 20, 1993: $ 4.188 trillion
               Debt on Clinton’s last day in office, Jan 20, 2001:    $ 5.728 trillion
               Debt of the United States rose over $1.5 trillion during Clinton’s time in office.
               Source:  USTreasury

Myth #5: America is a nation of laws. 
Fact  #5: Well, we probably have more laws, containing more words, and more courts and more court employees and more prosecutors and, most certainly many more lawyers, than any other nation. But we either don’t like to be law abiders or we like to put people in jail for more reasons than any other nation on earth. The US leads the world with incarcerated people: 715 for every 100,000 citizens. Next in line is Russia with 584 per 100,000. Iran is 226; Israel is 174; Mexico is 169; China is 119 and Italy, Germany and France are all 100 or less. The US incarceration rate is seven times greater than Italy, France and Germany!  How can this be?  Japan is 54 and India is 29! Source: International Centre for Prison Studies.

Myth #6: America leads the world in innovation
Fact  #6: The United Nations has taken a crack at measuring a nation’s capacity for innovation. It calculates an Innovation Capacity Index. Here are their results:
Sweden and Finland rank 1 and 2; the US is third followed by Switzerland, Netherlands, Singapore, Canada, United Kingdom, Norway and New Zealand. Japan is 15; Germany is 20.

Do you have any myths about America? Please share them with us; but also research and share the facts. Myths are stories told by leaders and others to present a picture of how they would like the listener to perceive events and situations. Mr. Obama and Mr. Bernanke are now spreading the myth that their massive spending programs, massive deficits and massive debt buildup (well, they tend to not refer to the latter two consequences of the first reality) have saved the world. Kind of reminds one of the concept that myth spreaders think their audience will believe bigger lies (myths) than smaller lies. Obama just told the United Nations that he prevented the world from slipping into a great depression - “...over $2 trillion in stimulus to bring the global economy back from the brink.” Bernanke just told the world that he saved the financial system of the world. “We avoided what could have been a global meltdown,” Bernanke said.

TheFundamentals has said it before. Real leaders let measurable facts speak for themselves. Real leaders let historians write history. Neither Obama nor Bernanke have the insight, the facts nor the historical reference to make their statements. Mythology? Perhaps. Leadership? Absolutely not!

Friday, September 24, 2010

Madison Avenue

Can responsibility for the decline of American values and fundamentals be assigned significantly, if not completely, to Madison Avenue and the influence and impact of the combination of advertising themes and approaches with the development and pervasiveness of mass electronic media?

That is our theme; our question; our premise.

In order to analyze this question we start by displaying the list of the seven deadly sins. They are:

• Lust
• Gluttony
• Greed
• Sloth
• Wrath
• Envy
• Pride

Humans have a tendency to sin. Usually their sins fall within one or more of these seven human weaknesses.

Can we see any connection between the advertising worlds output – their ads, their appeals and this list of sinful conduct? Well, perhaps. OK. Who’s kidding whom? Advertising is built around the sins, all seven of them. Most ads incorporate at least two or three of the sins. Most really good ads will have an attractive and underdressed (lust) female or twenty; will have the theme of looking good compared (envy) with others and will appeal to your need or inclination of feeling about very good about yourself (pride.) Greed is a big seller too. Like, how much of this advertised crap do we really need? The bigger the car; the more dependable and frequent the erection; the pills that offset the problems of being obese or almost obese; gadgets or machines or appliances that do everything for you; constant promotion of silly TV programming; the list goes on and on. Sloth sells. So does gluttony. The only one we can’t directly build is the concept of wrath in an ad. But that does bring us to the electronic media:  television, movies, internet, bluray, Netflix, Hollywood and all their content.

How much of Hollywood and TV is based on anger or bad guys or people doing bad things to others? Well just about all of it, pilgrim. Unless you like movies named after animals, you can pretty well count on a bunch of murders; a bunch of sex (usually outside marriage); a bunch of car chases; a bunch of punching and karate chopping and swordplay and countless episodes of things being blown up – usually material things which, of course, leads to replacement of material things and the circle of life on Madison Avenue continues.

Are you beginning to see our theme come together?

But you say, no, no, you’re missing the point. Good wins out. Evil is overcome. Sin doesn’t win. Virtue wins. The good guys always prevail. The hero wins the heroine. Tears of joy flow at the end of each film; of each segment; of each episode. If you say so pilgrim.

And that is where we end our analysis for the day. In closing we do want to list the seven virtues:

• Chastity
• Temperance
• Charity
• Diligence
• Patience
• Kindness
• Humility

We don’t know if we should put all the blame on Madison Avenue or just split it between them and Hollywood and TV land. Essentially the bookends of America - New York and California.  Two of America's most corrupt places, most fiscally promiscuous locales; most indebted governmental entities.  We do know this. The people we admire; the people who we place on a pedestal are very human and they struggle each day to overcome their weaknesses and sinful tendencies with attention and commitment to virtue. And we know that everything that we can do to value this struggle and bring testimony to its historic consequences is worth every second of every minute of every hour so spent. We are in the struggle. We just aren’t big fans of the people who make money off it. Or the politicians who play to our weaknesses.  Should we shut them down? No. But it wouldn’t hurt for some more voices to join the discussion and bring more balance to the struggle. Sin. It’s a fundamental. Struggle is too.

Wednesday, September 22, 2010

Professional Politician

What is the motto of the professional politician? We’ve been told it is, “Your first job is to get elected; your second job is to get reelected.” Cynical of us you may ask? Perhaps but why would a person seek public office if the sole purpose is “to get the job?” Isn’t America about the private citizen who does his/her duty in public service and then gets back to their real job? Isn’t this a guiding principle of our national character? Isn’t this what our founders did? Let’s look at this issue.

What comes first, the politician or the philosophy? Does one say, “Hey, I’d like to be on the city council or senator or president but I don’t know what I stand for? I’d like the job; it pays well; they call me Mr. Councilman or senator and everyone listens to what I say.” Or does one say, “Hey, I stand for this and that and it’s about time someone who supports this and that get a voice in political affairs. You see no one else stands for this and that so I am going to go public with my stands for this and that and see if voters see this and that the way I do?”

There are some interesting examples that TheFundamentals would bring to your attention. The one that really jumps out at us is this guy John McCain from Arizona. Now, we preface all of our comments with this stipulation – the people of AZ have the right to elect anyone they choose to any of their national offices at least under current law. Just because McCain has been around for years and appears to never have been employed in a real life experience job and just because he ran for President on the POOP ticket and just because he has held committee chairmanships of great power in the national congress does not make him a bad guy. He does, however, appear to subscribe to the motto quoted above of the professional politician and his lack of any interest in or success at any other form of employment (yes, we know he flew military jets and yes we know he got shot down) would suggest that he is a professional politician.

Here is another example. This guy also appears to be a professional politician. His name is Arlen Specter and he even changed parties a few years ago so that the voters of his party would not defeat him in a primary election. Guess what? Yep. The voters of the other party threw him out after he switched to their side. So what does one make of that situation? Is it best to get thrown out by the gal (guy) that brought you to the dance or is it best to switch partners while at the dance and then get thrown out by the new partner? We don’t know but you can pose that question to Arlen at http://specter.senate.gov/  and see if he will give you a straight answer.

Last example. This guy is the present governor of Florida and he wants to be FL’s next US senator. He was also a POOP guy and he was elected governor on the POOP ticket and signed up for senator on the POOP primary ticket and then he started to read the polls. Apparently the POOP voters were nowhere near as impressed with his this and that stands so they were clearly going to vote for one of his primary opponents which would have left him on the POOP pile so to speak. So, what did he do? Nope he did not switch to PIP like good ‘ole Arlen. He declared himself an independent. And now he is the third guy running for the senate seat from FL.

Are these three fellows’ just examples of “survivorship” or are they just professional politicians or a little of both? Do we care? Should we care?

TheFundamentals suggests that all three are examples of professional politicians and we should care greatly. Perhaps we should not be picking on them simply because they had to scurry like rodents to try to keep their jobs. Most professional politicians do not have to do much more than show up to keep their jobs. Think about the lifers; the long timers; the really well imbedded politicians with names like Nancy Pelosi and Richard Durbin and Henry Waxman and Charles Schumer and Barney Frank and the late lion of the senate – Edward Kennedy and the living senatorial corpse – Robert Byrd. The list is quite long and they all were imbedded, professional politicians. And as much as some may argue that voters should be able to choose whomever they wish to fill these jobs, TheFundamentals argues that their pattern of behavior is a distortion at a minimum and more likely a corruption of democracy because the imbedded national professional politician develops powers that extend way beyond her or his electoral base. They also embrace an entitlement mentality about their offices and their power and their influence which is usually available for sale under the guise of legal fund raising. This entitlement mentality extends to their voters/supporters. For these reasons alone they must be limited to an arbitrary cumulative time in office. Otherwise how are they different than a ruling monarch or tyrants like the North Korean lineage or some Arabian family of despots with their sycophantic followers, supporters and hanger-on-ers?

Please support a constitutional amendment to limit the cumulative time in office for any national politician, except president because that office is already limited to two terms via the 22nd amendment. Twelve years total, cumulative in any combination of national offices should be more than enough. America does not need professional politicians and we clearly cannot afford their financially promiscuous conduct. They are part of America’s problem. The solution is simple: TERM LIMITS. National term limits require an amendment to the US Constitution. Make sure the candidates you support this November will support and vote for a term limit amendment in the next year.

Monday, September 20, 2010

Leadership Series: Real Experience Required

Meredith Whitney is a young woman who figured something out before others figured it out. She was a guest on a show we catch from time to time – CSPAN’s Q and A. We have no observations about Ms. Whitney’s specific professional skills. What caught our attention was her list of most influential financial personnel in this administration. We caught the list and we were both shocked and incredulous about what has happened to the adults when we most need them. It reminded us of the story, Lord of the Flies, of the young boys shipwrecked and the unfortunate havoc they wreak on each other until the adults arrive.

Well, here is Meredith’s list:

1. BBernanke
2. TGeithner
3. SBair
4. EWarren
5. LSummers
6. BFrank
7. CDodd

Just think these are the gals and guys who are making the decisions about fiscal and monetary policy as well as financial regulation. They are not newcomers on the scene.  Many have been in government positions for years.   In other words, to use their leader’s metaphor, they drove the car in the ditch. Why are they still behind the wheel?

Here is a very brief work experience bio on each of these influential financial gurus. At the end of each recap we note the time spent working in a real life job which, if you read TheFundamentals thoughtful and well researched essays, you know simply means the opportunity to be terminated without any reason or accommodation. Five years minimum required to warrant reference.

BBernanke. Summer work at a restaurant. Balance in either government or academic. Zero.

TGeithner. 3 years at Kissinger Associates. Balance in either government or think tank. Zero.

SBair. All government/academic. Zero.

EWarren. Summer law firm work. Balance in academic/government. Zero.

LSummers. Limited hedge fund work. Balance in academic/government. Zero ( Harvard fired him)

BFrank. Virtually all government. Zero.

CDodd. US Army Reserve. All rest government. Zero.

These folks have combined, barely a smidgen, of real life experience. Real life experience in the private sector. Think about it. They write the laws, set up the bureaucracies and oversee the bureaucrats that now dominate the private sector and dominate its ability to compete and they have no real experience in the private sector.

Now what does this have to do with TheFundamentals, you ask?  Experience is a fundamental.  We accept that some individuals are born with certain characteristics that support their leadership propensity.  These characteristics may include their competitiveness; intelligence; ability to think strategically and charisma.  But without experience they flail with theories and concepts.

We are not kidding when we say it is time, way past time as a matter of fact, to get back to TheFundamentals. What fundamental are we talking about? Try this one: don’t send a boy to do a man’s job. Don’t like that one. How about this one? If you want to get something done, give it to a busy man. Sorry folks. Academicians, bureaucrats and politicians just don’t qualify for this definition of busy. America was not built on the accomplishments of academicians, bureaucrats and politicians. We did not become a competitive commercial society based on their direction or leadership. We have lost our way with their meddling and their disconnect between theory and getting something done. If we want to get back in the game, if we want to get something done, it is time to find a busy man and a busy woman or two to do the job. It’s that simple. It’s that fundamental. Many jobs require experience as a prerequisite for employment. It is time to require some real life experience when we hire our politicians and bureaucrats.  Not much we can do about the academics but in the college towns their damage is limited to students.  When they go to Washington they damage America's competitive capability.  All government job descriptions need one basic change.  They need to require at least 5 years experience in the private sector in a job where the employee could be terminated at any time for any reason.  Real experience in a real competitive environment.  It's a fundamental of leadership.

Wednesday, September 15, 2010

Military Industrial Complex

This reference term that we use to title our essay today was made famous as a consequence of a speech given by retiring 34th US president, Dwight David Eisenhower in 1961. There was a lot more to this brief speech than a warning about the military industrial complex. First we present highlight phrases from his speech:

• “…there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. But each proposal must be weighed in the light of a broader consideration… balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress…” Eisenhower is explaining the fundamental of setting priorities and making choices.

• “…we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations. “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.” Eisenhower warns about a bureaucratic monster that will run its creators; not the other way around.

• “…we -- you and I, and our government -- must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.” These comments are self explanatory and immensely prescient about our fiscally promiscuous ways.

Here are three full excerpts from Five Star General Eisenhower’s talk:

Excerpt #1 (This excerpt deals with self discipline needed to maintain our freedoms)

“Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research -- these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs -- balance between the private and the public economy, balance between cost and hoped for advantage -- balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.”

Excerpt #2 (This excerpt deals with creating a Frankenstein monster that rules its creators)

“A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence -- economic, political, even spiritual -- is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.”

Excerpt #3 (This excerpt deals with fiscal responsibility and not burdening America’s youth)

“Another factor in maintaining balance involves the element of time. As we peer into society's future, we -- you and I, and our government -- must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”

TheFundamentals highly recommends that you read the entire brief speech at: http://www.h-net.org/~hst306/documents/indust.html

We post these speech excerpts and reference because it is a profound reminder of a time when America was able to find and elect real leaders to its high positions of power. We had lots of problems back then also.  But the leaders didn't just blame each other.  They made choices that included doing without.  We must return to TheFundamental values, beliefs and standards of these men and women if we are to provide future generations’ opportunities similar to those provided past generations. We must stop this culture and the political posturing that demands “to live only for today.” We must stop grasping for the “…recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties.”

These words were spoken just 50 years ago. General Eisenhower grasped, embraced, lived and reminded us Americans of fundamental values.

It is time for us to heed this advice. It is time for us to be responsible Americans.  When Americans embrace responsibility, they will also find responsible leaders.

Tuesday, September 14, 2010

Falling Into bin Laden's Trap

About a month ago, we posted a brief introduction and link to an article written by Pat Buchanan that cogently focused attention of the combined problem of too many government workers and too much federal assistance to keep them employed while bypassing the federalism concept of making the states fiscally responsible for their own financial affairs. It was an excellent article. Well written. And we linked to it because TheFundamentals sees no point in reinventing the wheel. If someone else can say and communicate and get the message transmitted, we will bring attention to their work.

Today, we repeat this process but on a very different topic. The article is written by a former newsperson and TV personality – Ted Koppel. It was published last Sunday in the editorial section of the Washington Post. We present it today in lieu of an essay we were going to post today based on General and President Eisenhower’s speech about the military/industrial complex. We will print our own essay later this week.

Now, to Koppel’s article, entitled, “Nine years after 9/11, let’s stop playing into bin Laden’s hands.” This article is worth reading by anyone who wishes to enter the discussion about measured and appropriate response to threats and attacks. We all know, have lived through, the significance of the US response to 9/11. We know only too well the impact on our deficits and debt of this response. We know only too well the fear based reactions that we can see every time we go to the airport, or try to find a parking place in a downtown area, or enter a government building. We also know the wide reaching impact when we renew our driver’s license or open a bank account. Some families know it with great pain and loss because their military family members did not come home from Iraq or Afghanistan. We at TheFundamentals do not wish to tarnish their loss or their sacrifice with these comments but we do think it is time to reconsider just how much loss of life and freedom and how much cost and militaristic bureaucratic activities we as a nation wish to endure as a consequence of suicidal terrorists, past and present.

Mr. Koppel's article is available at http://www.washingtonpost.com/wp-dyn/content/article/2010/09/09/AR2010090904735.html

We would like to make one very important point about the process and beneficiaries of government reactions and involvements. Koppel alludes to them in his article. Businesses and bureaucracies, including the US military branches, benefit monetarily from these reactions and deployments. They get and make a lot of money as a consequence of these decisions. There are former government officials who have made money on these reactions.  As Koppel points out, defense contracting is one of our few growth industries as, TheFundamentals would add, is the security business. Later this week we will present President Eisenhower’s exact same observations, made 50 years ago. 

A fundamental of our government is that Americans must control their bureaucracies. Our politicians are not up to the job. It is a true failing of our form of representative democracy. The bureaucracies are now running the government and the taxpayers. This situation must be reversed. Koppel says it well. Five Star General Eisenhower said it well 50 years ago. We cannot afford another 50 years of bureaucracy control of the US government.  The United States is not about presidents and congress people and bureaucrats.  It is about "We The People" and we must make sensible strategic and tactical decisions that serve the long term interest of the many; not the short term interest of the few.  Bureaucrats and politicians will fill any void left by the people.  They will stand down quickly when the people speak and are involved.  America, we have become complacent with our responsibility to speak out and stand up.  It is up to us to find capable and experienced leaders.  In a few weeks, we can dismiss these failed politicians.  We can insist that our new representatives dismiss the failed bureaucrats.  It is time to do our job.  November 2, 2010.

Thursday, September 9, 2010

Mrs. Clinton for President

TheFundamentals got a message very, very recently. The source of the message made it quite clear that Mrs. Clinton was getting very smug with the self embraced aura of someone who no longer had to be the only person on the planet who was now thinking 24/7, “I told you so.” Or, even more to the point, “How could you have been so stupid?” “I tried to tell you.” “I did my very best but, oh no, you wouldn’t listen.” “You fell in love with the nonsense of the message, the glamour (?) of the messenger and the image of the event.”

So, now what?

The party out of power (POOP) has a taint, an odor and its very own voters are not much inclined to return this gang to the dance. It will take the tea party (TheFundamentals calls them concerned citizens) gang a long time to get rid of all the imbedded POOP players. They don’t seem to want to up and quit. Do you really want to give the keys back to Boehner and Hatch and McConnell? We don’t think so. Sure, they get some balance back in congress in a few weeks but do you think they have learned a thing? Will they cut government back? Seriously cut it back? Take on the protected groups and the special interest groups? Will they stand up to SEIU and NEA and AFT and stop borrowing national funds to spend on local public employees? Can they? Not a chance. Could POOP get a non political leader who has the credentials, the experience and the moxie to start the process and is willing to take one for the team? And even then PIP will fight that person forever. Any likelihood of such a person being drafted by 2012? Very, very little. Any likelihood of the current list of POOP candidates being able to generate the spine; the experience; the credentials to be able to muster the following? Very, very little.

By 2012 this nation of ours will be clamoring for change and not the nonsense of the incumbent. There is only one expression that comes to mind when we watch him, think of him and project his future – Stick a fork in him; he’s done.

Why did Mrs. Clinton say that the debt level of the US is now a national security concern? Why did she say that the debt level of the US limits our options? Hmmnn. When the last time debt level was was not a concern? Who was that guy in the white house when debt was not a concern? When spending and receipts were almost in balance? Hmmnn. Is she thinking what we’re thinking?

Bu 2012 this nation of ours will be facing the consequences of being controlled by its debtor status. It can either print currency to keep up its fiscally promiscuous ways or it can face the music and start taking its medicine? Now who would want to be the leader to oversee those options and to make the choices of which ones to implement? Not a lot of fun, huh? Do you want Sarah Palin making those choices? Or Mitt Romney or Rudy Giuliani? John McCain would probably volunteer for the job? Maybe POOP can prop up Bob Dole and bring him back. Where will POOP look to find the person to do the job? The military? One of the successful generals who ran one of the many US adventures of the last two decades? Wall Street? One of their heroes? Meg Whitman? Carly Fiorina? POOP can’t run Ahnold but we’re sure he’d do it. Some track record, huh? Perhaps one of their new kids? One of the wannabee politicians who is making noises about cutting back; taking back the country; limiting government? C’mon, it’s fun to think about and its fun to hope and wish for but it’s not going to happen.

Usually when you make a mistake, you correct the error and then go back to one of the alternatives that you didn’t choose when you made the mistake. And guess what folks? The corrective measures are not all that difficult. As a matter of fact, in business, when one takes over a failing concern, there are so many early on steps that can be taken to build the confidence that permits the next more difficult level of steps that this first group of steps has its own designation – low hanging fruit. Mrs. Clinton knows about low hanging fruit. Her boss has nary a clue

Which brings us back to the title caption?

There’s one election coming up between now and when she needs to decide. Will she decide? What will hubby say? The media is already picking up on it and she gets to be so smug that you almost want to like her. She was left at the altar just months ago and now the bridal party is back asking her to put the dress on again. They are already talking to her. Will she? Wont she? Wouldn’t we all like to be in her position? You can be brutally honest and wonderfully informed as you discuss the issues, the problems, the choices. The entire focus is on the kid and the kid doesn’t have a clue. He is rolling out the same speeches and it works with his dedicated base who are basically the recipients of his Robin Hood ways - I am the way; the others are not the way. Follow me. We are looking out for you. We can spend so that you can spend. We are putting money in your pockets, creating and saving jobs and we are not going to give a cent to those who have. We are going to raise their taxes and we are going to make life better for you. Spread it around; take from the rich; free health care; jobs; don’t worry; we have money for you; just tell ‘em you’re unemployed. Tell ‘em you’re looking. Endless money. Don’t worry about jobs. 40% or so get the goods so he can’t fall much lower than 40% in the polls.

Just watch her. She has every right to enjoy this time.

But here are the questions she has to answer? Do I really want to clean up Bush and Barack’s mess? Do I want to deal with the deficits and the debt? How much low hanging fruit is out there? Do I want to fight with the other party? Do I want to deal with China? Iran? The never ending Middle East mess? Can I succeed? Could I fail? Is it best to just sit back and enjoy this time? They had their chance and they chose the kid.

It really comes down to her. What will be the determining factors? The megalomaniacal dreams of my husband? My own? The practical reality of the messes at hand? My time in history?

She’s enjoying it now. She should. It’s not going to get much better than this.

Monday, September 6, 2010

Labor Day 2010

Americans have lived through several decades of obscene intrusion in their lives brought about by large groups of people who promote, benefit and retire handsomely as a consequence of obscene intrusion into the lives of the very people who fund the obscene intruders. We do not want to celebrate these people today.

In the olden days, the townsfolk would cringe and hide when the bad guys rode in and grabbed their livestock, harvested crops and pubescent daughters for fun and food and teenage boys for recruits. Finally the townies would figure out a way to either ambush the bad guys themselves or employ the “Magnificent Seven” to do it for them. No such luck for us townsfolk’s now. Mostly, the bad guys never even see us. We sign up voluntarily. We let them know about every move we make or someone else does it for us. Today it is done electronically. It is done comprehensively. And insidiously.

You cannot own a bank account, a share of stock, a mutual fund, an automobile, a house, a piece of land, a job, a business or an airplane ticket without registering it with the government. You cannot produce a child without registering him/her with the government. You cannot travel anywhere without being recorded countless times on government, and privately, owned cameras and numerous digital recording devices. They actually view you naked and capture the images at the airport; just for using the services of a private company. You can’t walk many city sidewalks or make a right turn on red without your very presence being captured.

If you wish to self insure your retirement, you can, but only after you contribute handsomely to the social services net the government forces you to fund. If you wish to self insure your retirement health benefits you cannot, because you will be forced to use the government health insurance program and you will be forced to accept whatever limitations may arise, present or future, as a consequence of being forced into that arrangement.

Each of these intrusions is overseen by multitudes of faceless, nameless, careless and mostly ill informed minions known for centuries as “bureaucrats.” In some societies they are called apparatchiks and in the new Europe, “eurocrats.” They have been called “civil servants” although they are neither. In Russia they have been referred to as “nomenklatura.” In China, years ago, they were titled, “mandarins.” Their common characteristics include: ability to follow rules designed to accommodate the very lowest common denominator of human behavior; follow said rules with unthinking consistency and behave in a manner of absolute disconnect and superiority through the process.

In America, the land of Madison Avenue and making all things mediocre (Bud Light is America’s top selling beer – go figure) appear otherwise, the bureaucrat/apparatchik/mandarin has taken to self endowing their highly paid, highly benefitted, highly pensioned activity with the new designation of “public servant.” So, you can now find public servants everywhere. Mostly, you can find them behind secure windows, walls, chambers and doors. They usually occupy buildings that are off limits, except under quite challenging access rules, to the very people who finance their existence. This is what we at TheFundamentals call, “good news, bad news.” You don’t want to go there anyway so it is good news that they make it so difficult for you to even enter much less engage. The bad news is that it irritates us that these servants of ours (giggle; tee – hee –hee) are so insulated because they are so afraid of being targeted because of their very behavior and entitlement.

If you want another decade of this nonsense make sure to cast your vote for one of the PIP or POOP incumbents who are scurrying now to appear to be concerned about the mess we are in. If you don’t want another decade of this nonsense, there is only one way to put an end to this massive shadow over freedom, privacy and entrepreneurial inclinations. No, we are not talking revolution; it is not worth your time, blood, energy or additional financing to engage is that form of disposal. We are talking the simple technique of eliminating the funding. Think of it as stopping the blood flow to cancer cells. There is no other way to cut back on the intrusion and still be civil. We simply need to take extraordinary steps to terminate the funding of these intruders whether they are local, county, state or federal.

The cut back techniques can be both focused and general. What do we mean by that?

Focused cuts would be the elimination of entire gatherings of intruders – for example, the NSA and its massive listening/ eavesdropping/ intelligence (?) gathering intrusion into the American way of freedom and privacy. It needs to be eliminated in one act. If it turns out a small portion of its activity is subsequently missed, such as following students from foreign lands who enter this country with a purposes other than higher learning, we can find a group of existing bureaucrats who will only be too glad to add this task to their dwindling “public servant” task book. Another good example would be the elimination of all funding to the Corporation for Public Broadcasting or PBS as it is known.

General cuts would include the long overdue 25% cut for all government agencies coupled with 50% cuts across the board of any funding and subsidization activity. Large cuts should be applied to all forms of subsidization – from oil drilling to pharmaceuticals to education to health care to agriculture to research and colleges and universities. The cutbacks should be phased in – 25% the first year; 25% more the second year in order to provide for a manageable period of adjustment. When we see how the first 50% works, we can then assess the next level of cuts. The concept is to make the cuts orderly and with great “bureaucratic compassion.”

The social security net must be limited to citizens who have met certain minimum participation standards and every citizen should have the opportunity to choose their own form of alternative, non- government safety net retirement program and health insurance. Non citizens just need to head home for their retirement; the same way us Americans are expected to head home for our retirement.

Most importantly. There is no purpose or legal basis for any person working for any government at any level to be able to unionize or enforce a negotiation stance that is not in the public interest. If you work for any government agency you do so at the will of the people and that means you can be relocated, terminated or otherwise dealt with for any reason at any time with no consequence. If you don’t like those rules you need to seek employment in the private sector where you will be able to compete with others and rise to the level of your talent, motivation and behavior.

Last, all persons employed by any government agency will abide by pay and benefit scales consistent with the average of those funding their employment. So, if you work for the city of New York, you are paid the average wage for the private sector New York employee. If you work for Los Angeles County, ditto. Now, this last example violates our principle of states’ rights. So, we will modify it as soon as the national government enforces a “no funding of state and local employment” standard consistent with the US Constitution. Further, the same rules apply to both your benefits and your defined contribution retirement plan. Yes, defined benefit plan; no more defined contribution plans. All consistent with the wages, benefits and defined contribution retirement plans that the fine folk who pay your wages, benefits and retirement plans are receiving. We repeat, there will be no federal subsidization of any local or state employment or benefits. Clinton’s idea of a hundred thousand cops across the land paid for with US funds in both illegal and kaput.

Watch America grow under these changes. Watch the bureaucrats squeal. Watch jobs grow under these changes. Watch competition accelerate with these changes. The time to begin is November 2, 2010 at the ballot box. The challenge is to find a few good women and a few good men to embrace and spread the change and then get back to their day jobs. The era of the professional politician and massive government employment is over. We just need a good “two by four upside the head election” to get the message crafted and a few brave short term politicians to start the implementation. If not now, when? If not us, who? Do you want another decade of this nonsense? LABOR DAY celebrates the toil of the American worker; not the American bureaucrat. Let’s make sure we reestablish this fundamental by Labor Day 2020.

Friday, September 3, 2010

Municipal Bond Fraud

Any follower/reader/supporter/contributor to these pages knows that TheFundamentals has been adamant in its criticism of certain states fiscal policies with an emphasis on their very promiscuous and unnecessary pension programs. If you want to see the story told in startling facts and figures, click on this link to a recent article written by the governor of California: http://online.wsj.com/article/SB10001424052748703447004575449813071709510.html?mod=WSJ_Opinion_LEADTop 

There is just no local or state politician willing or able to vigorously represent the taxpayers in negotiating most remuneration/benefit or pension package with municipal and state public unions. The result is now a huge imbalance in pay scales between public and private employees and similar massive imbalances in their benefit programs and their pension programs. You can blame almost any of the responsible parties – greedy government employees; even greedier union representation; very weak political leadership and an electorate that either doesn’t care about the situation or has no idea what to do about the situation.

But that does not excuse the forces that still have responsibility for the mess in many of our larger cities, counties and states. Who or what are these forces you may ask? Well, they are numerous and they begin with the aforementioned parties. But after concluding that there is no real enforcement capability with any of the above parties, let’s look at others who also should be held responsible for fiscal promiscuity and terrible money management by government officials and employees.

Most government entities – cities, states, counties, school district and other local political subdivisions borrow money and are obligated to issue audited financial statements. These two facts bring them under the scrutiny of outside forces. These forces include laws, rules and reporting obligations that carry certain standards and deadlines for presenting accurate information independently reviewed, audited and certified. That process also includes penalty provisions for misstatement, deception and outright fraud. In many cases the penalties are civil in nature meaning a court of law may find a party guilty and require recompensation to correct a misdeed. In other cases, the penalties are criminal meaning the law will prosecute the case and may impose, upon findings of guilt, prison sentences as well as fines to the wrongdoers.

So, where is the accountability? Are the auditors of all the bond issuers demanding accurate financial reporting of all pension obligations and, more importantly, are they issuing opinions that accurately depict the circumstances of underfunded liabilities? Are they issuing opinions that would necessitate corrective action? We don’t know. We would like to hear from knowledgeable and interested parties about the fulfillment of this responsibility. Moving further on this topic, are the state auditors issuing accurate oversight reports about the financial condition of sub political units within their states? Are they determining that the public and the bondholders are receiving accurate financial information with full disclosure of all contingent liabilities as well as all recorded liabilities? We don’t know. We would like to hear from knowledgeable and interested parties about the fulfillment of this responsibility. Moving further on this topic, what about the Securities and Exchange Commission, the SEC, the outfit that missed Bernie Madoff, the outfit that missed FNMA and FHLMC and missed Citigroup and Bear Stearns and Lehman? Are they doing their job? Are they notifying the public about risk in the financial dealings of state and municipal entities and their liabilities and obligations, both known and contingent? We don’t know.

But here is one thing we do know. Quoting directly from the SEC press release issued recently: “Washington, D.C., Aug. 18, 2010 — The Securities and Exchange Commission today charged the State of New Jersey with securities fraud for misrepresenting and failing to disclose to investors in billions of dollars worth of municipal bond offerings that it was underfunding the state's two largest pension plans.” “The SEC's order further finds that New Jersey failed to provide certain present and historical financial information regarding its pension funding in bond disclosure documents.” You can read the entire press release at: http://www.sec.gov/news/press/2010/2010-152.htm  How much was involved you may ask? The release says $26 billion between August 2001 and April 2007. Just $26 billion! Anyone going to jail? Dunno. Anyone get fined? Dunno. Can’t find any suggestion that anyone even got fired.

So, in closing, we would like to be helpful. We don’t know who is telling the truth, the whole truth and nothing but the truth. We don’t know how accurate or inaccurate the bond filings are and how accurate and complete the financial statements are or whether the shenanigans that the SEC finally located in NJ are replicated in other locales. We just dunno. But, here is a suggestion; a clue; just a simple observation. If you are an accountant or an auditor or a regulator or a rating agency person, it just may be a remote possibility; there is an outside chance that some state or county or city or school board may not be sure just where they are going to get the funds to meet all their known and future obligations. And we think it’s about time you started getting that information out to the public. Or, to put it another way, we think it’s about time you started doing your job. That information should be made very public and very soon.

By the way, where is the FBI?  What is the US Justice Department doing?  Do they only concern themselves with citizens who don't tell the truth, the whole truth and nothing but the truth?  Do they just take a pass on governmental entities which fail to disclose the whole truth?  What is the responsibility of the "authorities" when a governmental entity could be the prevaricator?

Wednesday, September 1, 2010

Federalism in the 21st Century

This essay is about the fundamentals of respecting differences and encouraging competition.

When the United States was being formed, there were thirteen colonies and those colonies were not inhabited by like thinking; like religious practicing; like political leaning; like slave owning; like almost anything people with the exception of a good disliking for George III and his minions. So, they united to form a rebellion and they formed ways of raising monies to fight and then they met and debated the form of government they wished to adopt and there was great discussion and disagreement. They actually started with so called Articles of Confederation; a loose umbrella over the thirteen separate colonies which were now, for the first time, being called states. They tried to live under those Articles but found that it was difficult to raise funds (taxes and fees and duties) to pay back the revolution war debts and they found that they could not deal with chaos like the Shays rebellion in Massachusetts. So, they reconvened and set up the constitution and, in order to get nine of the thirteen states to adopt it so that it could go into effect they attached the first ten amendments to it, the so called bill of rights, to placate those who feared a powerful central government would arise and they would find themselves in the same situation they just dismantled. (Aside, why would they have had that concern?)

Now, they left a lot of space for the states to do their own thing. Make their own laws. Follow their own spirit and have their own debates to define their own course of action and responsibility. In the meantime there were those who lived in one state and they had figured out how people in a different state should be living and behaving and acting. In a neighborhood, we call these people “busy bodies.” In the United States, we call them “politicians in power.” In some instances the issues were rather profound such as freeing the slaves of the southern states. In some cases the issues were rather unprofound such as letting men marry men; oops, that sounds as if we accelerated to the present a bit too fast. But you get the idea. So, today we have national laws about darn near everything as if the people of the 50 states see everything much the same way. Well, we/they don’t. And we never will and that’s why we have sovereign states and that’s why the diminution of the concept of federalism is the fundamental that is tearing us apart.

We are not alike. We do not see every topic; every issue the same. We are a big country made up of many immigrants and their offspring and we believe different things – different standards; different values; different morals; different religions; different work ethic; different health, education, charity and welfare inclinations. Its just the way we are.

Let’s say in one or two or three states, they just love unions. Let’s call those states Illinois, New York and California. But let’s say in three other states they could care less about unions; they just want jobs. Let’s call those states Texas, South Carolina and Alabama. So the economic systems are a bit different. This is good. This is competition. But what happens when one state or several find themselves losing jobs to other states? Do they look to change their belief system or do they look for protection of their belief system? Yep, they like that protection concept. So they get the national government to do many things to make sure that each state follows the same set of beliefs and rules. And this is breaking down the system of valuing difference and encouraging competition. It is also a violation of the constitution. There is no one size fits all that works regardless of the brilliance of HReid and NPelosi and BFrank.

What do the states say? New Hampshire says, “Live free or die” and California says, “Eureka…I have found it!” Tennessee says, “Agriculture and Commerce” and Maryland says, “Manly deeds womanly words,” So, what’s it to you in New York or Michigan or Florida? Butt out. Leave them be. They know what is best for their folk just as you should know what is best for your folk. But when you start telling them what to do you had better grasp that, at some point, someone is going to tell you what to do. You started it and you may well find someone else finishing it.

So, when the feds say this is how it works for all of you; stand up and say, as the people of Alabama do, “We Dare Defend our Rights.” And when the feds say everyone has to do it this way or that way, just use the words of the people of Georgia, “Wisdom, Justice and Moderation.” Or even better, send them to Iowa where the people say, “Our liberties we prize and our rights we will maintain.”

Now, back to our essay. Competition is the only way we will grow and survive in a competitive world marketplace. The feds will not and cannot lead us to that spot. They have nary a clue. The people of the 50 states of the United States can lead us to that spot. Let them compete and let them find the best path. Let's back off this idea that Washington DC has the answer. It doesn’t. Let’s stop with one size fits all and that size is usually designed with the lowest common denominator in mind. That is no way to lead and to compete. Lets open up and thrive in a competitive marketplace. Lets follow the wisdom of the people of Oklahoma who say, “Labor conquers all things.”

The concept of federalism is based on the fundamentals of respecting difference and encouraging competition. These are fundamentals we can live with.

By the way, if you’d like to see the mottos of all 50 states, just click on: http://www.statesymbolsusa.org/Lists/state_mottos.html