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

Tuesday, August 30, 2011

Leadership Series: Getting Your Money's Worth

This essayist started full time work in a large and growing well known business. His job was to investigate all the financial implications of investing in plant, machinery and equipment to increase the profitability of his employer. In fact his job was to deal with those who ran the factory and who were responsible for producing the finished goods of the company in a consistent high quality manner that met unit production estimates at a predetermined budgeted cost. The factory folks were not necessarily college educated; their education was nevertheless thorough and they prided themselves on attaining the objectives described above. They knew they would be measured and they knew their behinds were on the line for the task at hand and the money spent to get the job done.

Now investigating the financial implications of investing in plant, machinery and equipment to increase profitability requires a pretty good knowledge of the production process and the only way to learn that process is to show up on the factory floor; shut up; pay attention; listen and then do it again the next day and the day after. Showing up and shutting up were as important as using present value tables and advanced cash flow analysis. It also didn’t hurt to have a thick skin because the old line production guys, while part of the big team, still were only too ready to determine if this new kid had any persistence to go along with the twirling propeller on the beanie on top of his pointed head.

Persistence pays; but so does showing up and shutting up. So what does all this have to do with “getting your money’s worth?” Here’s what. When you show and shut up you create the environment in which trust can develop. And when trust develops you actually learn about people and what they can do and can’t do and what they need and what they want. In other words you find out what is really going on; not what someone may want you to think is really going on. Here is what this essayist learned.

There are people with whom you could trust your last dollar because you know they will give it the same care and attention as they would their own last dollar. And then there are the others. You also learn that there are people who spend the company’s money as if it is their own and then there are people who spend the company’s money as if it were other people’s money. And the test to separate the former from the latter is “are you getting your money’s worth?” And we taxpaying Americans are not getting our money’s worth. So, when the next pundit tells you that Obama’s favorable ratings are low or that the poll says no one trusts congress and then they tell you they are sick of the bipartisan bickering and the finger pointing and all the rest, you tell them that is not the reason at all. The reason is the people who work and pay taxes and play by good financial rules are just not getting their money’s worth. There are too many ways in which they are not getting their money’s worth to document them in this essay. But here are a few:

• Money sent to foreign lands for wars and other purposes is wasted. There is no measurable, productive consequence to the expenditure  ( Read the book:  Imperial Life in the Emerald City by Rajiv Chandrasekaran)
• Money spent domestically is largely spent on administration, personnel and bureaucracies and not on measurable, tangible improvements ( Read any article about San Francisco’s billion dollar Chinatown subway)
• Money spent by government is not spent according to the discipline of frugality and value that the government employees apply to their own funds but rather are wasted because there is no possible way to monitor the quantity of expenditures and follow the myriad of rules and procedures and laws and political meddling
• Fraud and illegality are now rampant throughout all domestic and foreign spending
• Measurement of attaining specific predetermined objectives is non existent

Leaders do not tolerate this situation because it leads to destruction of confidence and that builds more corruption and waste. Leaders demand measurable objective setting before funding; government demands funding and then sets vague, non measurable objectives.

The disgust with governance throughout this country is not based on social agendas or bipartisan bickering; it is the consequence of too many people being paid too much for no measurable result. When you don’t show up and shut up but clamor for more spending and more government you destroy trust and confidence. When year after year the people who pay taxes and have to look at the growing debt as their responsibility to repay and then see what they are getting for their money, they turn away in disgust.

The old fool from Omaha says he wants to send more of his money to Washington and he wants Washington to take more money from his equally well heeled peers. This position is in direct conflict with what this wise old fool requires of his own business associates and investments. He literally speaks with a forked tongue; demanding measurable quality output from the money he oversees as a businessman and tolerating not getting his money’s worth from the money he sends to Washington. No real leader tolerates waste whether it steals 10% of your earnings or 50% of your earnings. Principled people and leaders are dissatisfied with either. A leader would fight for responsible spending. Could the old fool see some benefit for his companies in government waste? Why he is so inconsistent is up for others to determine but we question if he has an agenda that is tolerant of wasting other people’s money as long as some of it lines his pockets.

Shame on people who don’t believe in spending other people’s money as they spend their own and who don’t demand getting their money’s worth. We think getting your money’s worth is a fundamental of leadership.

Monday, August 29, 2011

The Hype

Do you remember the expression that the boy president from Texas, GWB, struggled to enunciate? It goes something like this, “fool me once, shame on you; fool me twice; shame on me.”

So why did we permit the “sky is falling” fear mongers to do it to us again?

The storm of the century.

Did you run out to the store and buy a case of canned soup? Milk? Water jugs? Flashlights? Candles?

Did you turn on the TV and try to find a news program delivering the news and find only the hand wringing fools with their paper mache credentials bewailing the ferocity of the storm? If the wind doesn’t get you the surge will? Were they speaking meteorologically or metaphorically?

At this moment, please just pause and glance over to the right on this page; move your eyes upward just a bit, and read the following words under the caption Worth Pondering, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary,” H. L. Mencken. Who was this guy Mencken? He was a newspaper writer. An essayist. He succeeded and preceded a long list of fellows (mostly) who see events and circumstances and people with a bit of a jaundiced eye. And a lot of angst toward authority or unsubstantiated claims to knowledge and wisdom. Understandably politicians and government folk tend to not fare well in the view of these skeptics.

Here are some other of these recent “fool me once” situations:

Saddam has weapons of mass destruction – nukes, biological, nerve gas…

Al-Qaeda will destroy us if we don’t destroy them first…

Iran, Korea and some other place are the axis of evil. Oh, you can also add in Syria, Cuba and Somalia or Yemen or….

Putin (or Castro or Chavez or….) is a bad guy (notice how we’ve always got at least two or three bad guys at any given time...?)

Irene will devastate the east coast of America (the humor of this current scare is the difficulty in separating the bad news from the good news)

The NEA and AFT are looking out for your kids (perhaps the most tragic of all the hype/scare tactics)

Tax the rich and solve the deficit/debt problem (recent hype from the old Omaha fool)

A drug for every ailment; a treatment for every disease; live forever… (gee, why do you think health care in the US cost 2-3 times as much as most any other developed country?)

Stimulus will create jobs. Keynes said it’s so… (didn't work in 1931; ain't working in 2011)

Deficits and debt don’t matter... (this came from GWB’s sidekick, the incredibly thick skulled and about to be widely acclaimed author of more nonsense from the fear mongering neocon group)

Apparently we’ve been fooled more than twice and that’s just in the last several years. It’s all the same old crap. Scare the people. How did the kid who is now mayor of Chicago put it. “Never let a crisis go to waste.” What he meant, of course, is scare the people and get some more goodies for your voting base. In the process, you may as well help yourself.  In the past even bureaucrats didn't make a hullabaloo out of most calamities.  But a NY businessman turned mayor?  And a reform NJ governor who claims to be in favor of cutting government back?   Do we really need them running around scaring everyone under the guise of taking care of us.  Shutting down public services and ordering folk out of their homes?  Is this the role of government?  Scare and Hype?

Which is what this essay is all about. A few helping themselves to something by using hype and scare tactics. Hype and Scare. Scare and Hype. How and when did we become so gullible to scare tactics? To hype?  What happened to people who look out for themselves and their neighbors?  Responsible people?

Apparently it’s not a new phenomenon. So, lock the door, pull down the shades, pour yourself a stiff drink and think about which one of the new fools you can vote for and hope for real change this time. Oh, by the way, remember to return all that storm crap you bought to the store before it goes to waste. If only we could return the wars and the bombing and the dead and maimed and the teachers unions and the debt and all the other crap we bought because of scare and hype.

Shame on me.

Tuesday, August 23, 2011

Endangered Species: Taxpayer Americanus

The purpose of this essay is to examine the personal income tax statistics of the United States for the years 1996 and 2008.  All tax statistics are from the IRS.  You can access this information at www.irs.gov  We have also included, for perspective purposes, the total workforce and total GDP statistics for the country for the same periods.  And, we have added arrows to the right of the 2008 statistics to display trend significance compared with the 1996 statistics.              
                                                                  2008                              1996

Total Returns Filed                              142,450,569 ↑                 120,351,208

Total Adj Gross Inc.                            $7.583 trillion ↑↑              $4.342 trillion

Total Taxable Returns:                          90,659,909 ↓                   90,906,919
Up to $100K                                           72,561,726 ↓↓                 84,778,318
$100 – 500K                                          17,201,185 ↑↑                   5,803,227
Over $500K                                                896,998 ↑↑                      325,374

Total Taxable Income                         $5.488 trillion ↑↑              $3.071 trillion
Up to $100K                                       $2.097 trillion ↑                $1.896 trillion
$100 – 500K                                      $2.125 trillion ↑↑↑                 .764 trillion
Over $500K                                       $1.266 trillion ↑↑↑                 .411 trillion

Total Tax Paid                                    $1.032 trillion ↑                 $ .658 billion
Up to $100K                                           .263 billion ↓                 $ .320 billion
$100 – 500K                                          .426 billion ↑↑                   .197 billion
Over $500K                                           .343 billion ↑↑                   .141 billion

US GDP                                           $14.369 trillion ↑↑               $7.784 trillion

US Civilian Workforce                         154,000,000 ↑                   134,000,000

Taxable Inc % of GDP                                  38.2% ↓                            39.5 %

Tax Paid % of GDP                                        7.2% ↓                              8.4 %

Taxable Returns %
of Workforce                                                63.6% ↓↓                           75.5%

Now let’s do some basic analysis. The workforce of the country grew by 20 million people from 1996 to 2008 and, believe it or not, the taxpaying citizens of the country declined by 200,000. Workforce grows, population grows and taxpayers decline. We've highlighted some of the statistics in red to draw your attention to this situation.  That is neither sensible nor readily explainable unless there is a belief that you can run a growing country with a declining taxpaying citizenry. The decline in taxpayers earning up to $100,000 per year is dramatic; dropping from 85 million in 1996 to 73 million in 2008 and equally dramatic is the growth of taxpayers in the $100-500,000 category and the $500,000+ category. Obviously it is good that there is a movement to higher wage categories but with a growing population there should also be growth in the up to $100,000 category. Instead there is a dramatic decline.

In 1996, about half of all personal income taxes were paid by people making under $100,000 and the other half by people making more. Twelve years later the group making more than $100,000 was paying 75%. That 75% of all personal taxes was paid by 18,100,000 citizens out of a total population of 304,000,000 in 2008. That means that 6% of the population is responsible for 75% of all federal personal taxes paid. We would like to repeat that fact: 6% of the all citizens are paying 75% of the personal income taxes! Not only unbelievable but an incredible imbalance in the scheme of things. As we wrote last week, you can add to the tax burden on the rich and we showed you the numbers. But we don’t have a tax the rich problem; we have a disappearing taxpayer problem in the United States.

What has happened to the taxpayers in the up to $100,000 category? They exist. They vote. They most certainly are recipients of government spending and government programs. We know that they are out there because the total returns filed grew by 22,000,000; a bit higher than the workforce itself. So, they are working and earning money. Adjusted gross income grew from $4.3 trillion to $7.6 trillion. GDP almost doubled. But the taxpayers declined. Taxpayers in the up to $100,000 category are becoming an endangered species.   And there are politicians who glorify this situation.

The larger perspective statistics are also quite disconcerting. Taxable income as a % of GDP declined from 39.5% to 38.2% and the actual tax paid as a % of GDP declined from 8.4% to 7.2%! How can we tolerate declining tax percentages when our government spending is skyrocketing; health care costs are skyrocketing; claims against social security funds are skyrocketing? Yet, inexplicably, fewer people are paying taxes. Twelve years ago the country relied on the large group of up to $100,000 earners for half the tax revenues. We need them to pull their fair share. Where are these disappearing Americans? And where are the endangered species bureaucrats when we need them?

Friday, August 19, 2011

The Coming Long Awaited Program

Mr. Obama has just completed a listening tour of the Midwest. His aides have stated that the tour was a great success. Mr. Obama spoke repeatedly to his audience about all the difficulties he has had to face since becoming president and how he and his staff and appointees and the millions of federal employees and all their private sector supporters have worked diligently for the people. He also stated that change is coming. That change takes time and that he had a very special announcement that was specifically thought up just for this listening tour. He announced that he would be bringing forth a plan for a program to deal with everything that has not yet been dealt with. He announced that this plan would, from this moment on, be referred to as The Coming Long Awaited Program or simply, “The CLAP”.

Now he cautioned his audience during the listening tour that The CLAP was going to infect and affect all Americans. It was actually being developed in secret government circles as he announced it and the full ramification would not be felt until he got back from vacation and could be much more specific. However, the white house press corps that accompanied Mr. Obama on his listening tour was, nevertheless, excited to know that the government was going to be working on a new program with such wide reaching impact. Here is how Brian Williams of NBC News reacted: “Oh, golly gosh Mr. President you are just so cool. Just think you are working all the time for all of us, even as you prepare for vacation. Can’t you just give us a couple of the key effects that The CLAP will have for all the poor Americans still looking for a job and trying to make ends meet? Please.”

Obama clearly was deeply touched by the insightfulness of Williams concise questioning. He paused seriously for a moment and said, “Brian, let me just tell you that when my fellow Americans get The CLAP they will no longer be concerned about whether or not they can pay their mortgage of keep the lights on. The CLAP will have that significant an impact on their lives.”

Now, not to be outdone, Bob Schieffer of CBS News, one of America’s most preeminent, thoughtful and incisive analysts held up his hand, waving furiously and almost interrupted Mr. Obama by saying, “Mr. President, this is wonderful news. Will Tim Geithner and Ben Bernanke also be involved in spreading The CLAP around?” Well, it appeared now to Mr. Obama that he had better be moving on or these fools; er, these insightful news people would want him to give all sorts of details about The CLAP and he knew darn well that no one had really figured out anything new to do about the mess he inherited much less made much worse. He knew that The CLAP was just one more delaying tactic but he couldn’t show to these dimwits that all it would be is some more spending and a few pretend savings to keep the republicans at bay. But, he had to say something. “Bob, he started, Tim and Ben have been working night and day to make sure that all aspects of The CLAP are carefully thought through. They have actually introduced The CLAP to their own families and neighbors and the early returns are amazing. It appears that once you get The CLAP you cease to worry about almost anything else. Ben and Tim are big supporters of spreading The CLAP around.”

Now Obama is thinking let’s get out of here before one of these dopes asks me why I’m going on vacation when I could be spreading The CLAP around and he almost makes it to the bus steps when the hard hitting, never pull a punch Anderson Cooper says, “Oh Mr. President, thank you for this listening tour and all the important information you have listened to while talking to us but let me ask you just this one question, please.” “Oh, okay Anderson but this is the last question because I’ve got to get going and do some more listening. What is it?” “Well, Mr. President, will the republicans go along with The CLAP and spreading it all over the place?” Obama, paused thoughtfully and then said, “A lot of republicans are already into The CLAP. And the congressional black caucus has told me that they will be glad to meet with those rambunctious new tea party folks in the congress and make sure that they get The CLAP. So, I think you will find that the republicans will spread The CLAP around just as much as my CLAP infected friends in the Democratic Party. Nancy Pelosi said that she would make it her personal mission to make sure that John Boehner gets The CLAP.

With that closing comment, Obama boarded the bus and thought, cripes; I still got another 500+ days of this crap and then four more years. Yee gods. These dopes will buy anything.

Tuesday, August 16, 2011

Tax the Rich

Taxing the rich is a catchy concept and has a certain grass roots appeal in that many envy the rich.  Beginning with Robin Hood right up to Obama’s hood the idea that snitching money from their pocket and spreading it around is probably okay. After all, they either got it from daddy or on the backs of the poor. At least that’s what John Kerry (hmmnn, isn’t John the one living off his wife’s inherited millions?) and the big public employee and teachers unions tell us. And now the oracle of Omaha is blabbing about his heroic responsibility to pay more as long as others also do so. Thank God real heroes in foxholes are more unselfishly motivated. So, let’s tax the rich. Let’s see if it will work, by the numbers; the facts.

In the tax year 2008, the most recent tax year for which stats are available, it looks like this: There were 90,660,000 returns with taxable income (TI) of $5.5 trillion and tax liability of $1,032 billion. There was an additional 51,791,000 tax returns filed with no tax due. Of the total tax liability due of $1,032 billion, $263 billion was due from taxpayers with TI of $100,000 or less (72,562,000 filers); an additional $426 billion comes from taxpayers with TI between $100 – 500,000 (17,201,000 filers) and the remainder of $343 billion comes from taxpayers with TI of $500,000+ (897,000 filers).

So, you’ve got the picture. About 52 million filers paid no tax. Then about 76 million filers paid $265 billion or 26% of the total; the next group of 13.5 million which earned between $100 – 500,000 paid $349 billion or 41% of the total and the remaining 897 thousand making over $500,000 paid $320 billion or 33% of the total. Let’s take a closer look at this last group, the so-called rich; the ones we want to nail.

In 2008, those with TI of $500,000.00 or more paid $320 billion. Their TI as reported to the IRS was $1.266 trillion so they paid about 25% to the feds. That leaves about $946 billion still to be taxed. If you wish to take it all; confiscate all their TI, you would put a big dent in the deficit. If you were to double their taxes, which no one has proposed, you would get an additional $320 billion which would have made a good dent in the old deficits under Bush II but amount to only about 20% of Obama’s deficits. If you were to add five percentage points to their tax rate (which Obama supports) that will raise about $60 billion which is helpful but sure not a solution. So take your pick. Grab all their dough and you get $946 billion to fund the deficits; double their taxes and you get $320 billion (not gonna happen) or increase the tax rate by 5% which is what the party in power wants to do and you get about $60 billion.

But here is an observation we have never heard mentioned by anyone else. As a matter of fact, we offer it up free of charge to those expensive political consulting geniuses on either side. Either the ones who claim they will solve our deficit and debt problems by taxing the rich or the others who say look to cutting spending. Obama is piling up debt (almost $4 trillion in less than three years) faster than anyone in the history of the world. And some one, someday will have to pay off the debt. Now let’s say you’re one of those 897,000 tax payers who are paying one third of all the personal income tax in this country. That means your share of Obama’s debt is also one third of $4 trillion which is a cool $1.3 trillion and there’s only 897,000 of you. That means that, on average, each of you “rich” people is on the hook for debt of $1,450,000.00. Just coming from Obama; not all the rest of the debt that is outstanding. Almost one and a half million dollars per person! Perhaps the oracle of Omaha needs to pass this analysis along to his cronies.

There are a lot of ways to tax the rich; some more obvious than others. It may be time for the party out of power to figure out what is going on if they have any hope of becoming the party in power. Federal government debt is nothing more, or less, than deferred taxation unless you plan on just printing money in the future to repay it. Either way, taxes or printing money, you still take money away from those who saved/earned it.

In a future essay we will take a close look at the two large groups that are either not paying much tax or paying nothing at all. It seems that American taxpayers are becoming an endangered species.

Thursday, August 11, 2011

Lessons in Wealth Destruction - II

The clarity of what we were able to learn watching the combination of bad leadership coupled with corrupt governance systems and misguided economic philosophy makes for easy script. We can all see the problem. But can we fix it? Can we see the solution? Well, we’re not quite ready to reach that far. So today let’s do a bit of analysis based on our observations in the previous essay.

1. The system of representative democracy no longer works when economic growth falters. This is the big one. When things are good, jobs are plentiful and wages are rising, the heavy burden of unneeded public employment; bureaucracies and bureaucrats ruling and burdening everything and special interests siphoning (or sucking to use the parasitical metaphor) a large but unproductive piece for themselves it pretty well masked. Because most are happy that they doing well or, at least, okay.

2. But then economic growth falters. And what happens? Well, we have witnessed exactly what happens. The political leadership cannot bring themselves to lessen the burdens because they are afraid of the outcome(s) which could include losing their own jobs. So, they revert to bad policy using inapplicable justifications. In effect, they hope that things will get better but they do not take the needed steps to assure that they will get better.

3. In the meantime, in our own situation, the dominant private sector (think real source of economic growth) bears the entire burden of the economic decline plus all the costs and requirements of the hefty public sector burden. The private sector employees are unemployed, not the public sector. Even though unemployed they are taxed heavily by the numerous political entities in the US.

4. What normally happens in this situation? Correction occurs. What is correction? A natural occurring event that eliminates excess or other forms of distortion. Why is correction not occurring today? Because nature is not at work; man is. And man can intervene, at least for a while, to prevent needed corrections. Some of these preventions are called stimulus spending; bailouts; extended unemployment payments; public works projects and federal payments to states.

5. When will these needed corrections occur? That is, of course, the $64 question. Over three years have now passed and the corrections have been postponed through rapid debt acceleration and sustained unneeded burdens being placed on the private sector. Why would anyone build a manufacturing plant in this country? You can go to several competing Chinese manufacturers with your product specifications; place your order and take delivery in 6 – 8 weeks. Or send your software specifications to India and receive beta test ready code in 4 weeks. At a lower cost; no unions; no health care concerns; no litigation threats from protected groups of employees; no lawyers; no lengthy rental or bank loan contracts and no requirement to sign personally for anything.

6. What else don’t you have to worry about? Local and state licenses and codes and permits and fees. The local fire inspector or the health department. State unemployment taxes and filings; police unions asking for contributions; workmen’s compensation and property taxes. Property, liability and theft insurance costs. Dealing with OSHA, the EPA and minimum wage laws. Overtime payments and record keeping. Withholding taxes and costly payments for social security and Medicare. These latter two add 7.65% to every US employer’s payroll costs. Oh, you don’t even have to calculate payroll. All you do is pay for the finished product. And some can even borrow at the lowest interest costs in memory. Just think. Because of the Fed, American manufacturers can finance their entire overseas deal at record low interest costs, avoid all the headaches of American business matters and make a good profit.

7. Why do you think most everything we buy these days is not made here? If you can’t answer this question just reread items 5 and 6 above.

8. Have you ever heard Pelosi, Bernanke, Obama, Reid or Geithner even once mention any of the burdens listed above? Have you ever once heard them suggest indirectly that they know the burdens have driven the good jobs overseas? Have you ever once heard them acknowledge that these burdens need to be reduced even a bit, much less significantly, or entirely? The answer is an overwhelming “NO.” They don’t mention it because they do not live in the world of producers. They live in the world of consumers. And consumers don’t create jobs; producers do. They think by creating false demand through government stimulus efforts, jobs will be created here, in the US. They won’t. The jobs will continue to go overseas. Their stimulus payments actually increase jobs overseas. Just think of that. Why do you think the Chinese are willing to buy US bonds? Because it creates employment in China.

9. One last item: S and P and ratings. Obama can blame the tea party; the republicans; the congress; whatever. It still happened on his watch and he will bear responsibility. But this issue, unlike the normal cable news cycle, is not going to go away. There are hundreds of related bond issuers who are going to get their ratings lowered. You will see the fiscally promiscuous states downgraded and a variety of other governmental subdivisions. That ongoing process does not bode well for any current politician and it sure doesn’t bode well for public borrowings.

10. Our analysis is almost complete for today. Lets recap. The private sector is too burdened. It bears the burden of both the economic decline as well as the burden of supporting the public sector and the burden of all the rules, taxes, fees, impositions and requirements placed on it by government. The government adds to this burden with stimulus spending that further exacerbates the problem. The government cannot or will not reduce or eliminate itself. The economy falters even more under the weight of this entire cumulative burden.

11. Will a politician step forward and say no to government burden? Unlikely. Will a politician step forward and say I will fix it and you will hate me for it but I will do it anyway? Unlikely. Will a politician step forward and say I don’t care if you reelect me or my party to anything? I will get this job done. Unlikely. What is likely? Decline, malaise and more government. Dollar devaluation. The message: take your job creation overseas; don’t save money; hunker down for a long malaise with increasing levels of panicked behavior and decrees from know-everything government officials.

Tuesday, August 9, 2011

Lessons in Wealth Destruction

1. The United States congress lacks the leadership in either political party to rein in, through the combination of direct and immediate cuts and outright elimination, the dominant and controlling bureaucracies which it has created and now which control the country. The best analogy for this situation is Mary Shelley’s fantasy novel, Frankenstein. Once you create the monster; the monster controls the creator.

2. A similar situation exists in many of America’s lesser political subdivisions: counties, cities, school districts and states.

3. Our system of governance, which is a representative democratic republic, meaning that the people rule through elected representatives, has failed in todays drastically changed environment. This system is based on elected representatives in congress governing with a president who can either approve or veto legislation. The theory is, if you don’t like the current government, vote for change which is exactly what Americans did. They changed control of one branch in congress. Result: nothing; no measurable change in legislation.

4. A bad governance system and bad leaders can sustain when the economics are favorable as they have been for many years. But the economics of today with the growth of strong competitors has forever changed America’s ability to be self indulgent and entitlement based. We either change to be economically competitive in every possible way or we decline. China’s economic growth did not rise under its system of five year plans directed by a central planning agency. It rose when it loosened its government control and released its entrepreneurial capabilities. These obvious lessons in wealth creation fail us.

5. The dominant political party has used its majorities in government to take complete control of America’s borrowing capability and has spent public borrowed funds at such an aggressive pace without any traditional fiscal discipline that wealth destruction is now commonplace. Their behavior is third world like. Their leaders do not grasp the obvious. World financial markets and the economy of the United States will not begin to correct until the spenders/borrowers/special interest/entitlement folk are gone!

6. The dominant political party has succeeded in attaining voluntary control of all major media outlets to the end that even the weak suggestions coming from the minority political party for any form of fiscal discipline are editorialized as either economically unwise or physically and emotionally detrimental to the needs of the people. No major media voice today presents, through factual documentation and research, a commitment to old fashioned values and discipline which TheFundamentals calls “sacrifice and frugality.” The all important concept of the media as the “fourth estate” has been replaced with sycophantic, unquestioning political ideology.

7. There is no better example of the distortion and drastic consequences of this suicidal alignment than the current political and economic underlying philosophy that it is possible to borrow and spend out of an economic problem brought about by too much borrowing and spending.

8. And, on the sidelines, cheering every step of this misguided process, are the imbedded millions of bureaucrats hired by the misguided politicians who now are afraid to impose any discipline on them because of their ongoing dependence on their votes for their political survival. These bureaucrats are aided and abetted by millions of benefitting special interests who lobby (K Street) successfully to only one end - a continuation of unearned benefits and economic favors. This simple combination of greed and selfishness now motivates a majority of America’s elected representatives to self perpetuate themselves with complete disregard for the certainty of long term destruction.

9. In the meantime, any American who has saved money, purchased a home and lived within their means is treated as a fool by politicians and bureaucrats with the reward of declining home values; drastic reductions in the purchasing power of their savings and no return at all for monetary assets. On the other hand, the bureaucrats provide themselves with unneeded employment and rising publically funded pensions. The politicians accommodate this process by giving handouts to the undisciplined voters who gladly keep the irresponsible politicians in power as part of this mutually beneficial deal.

10. The result is akin to a situation best described as “the inmates are running the asylum.” It would be similar to raising children by letting them decide what they can and cannot do; what they can and cannot eat; what chores they must do or not do; what behavior is acceptable or unacceptable and what homework they should or should not do. Come to think of it, there are many families that seem to follow a system of governance similar to that just described.

11. Many Americans observe with dumbfounded incredulousness the suicide missions undertaken by “fanatical Muslim terrorists” who regard Americans as imposing, undisciplined fools on a suicidal mission of self indulgence, sloth, greed, obesity and arrogance. Who is the fool in this dance of death? Which side would you bet on for long term survival? The disciplined, self denying party or the obese, self indulgent party?

12. America’s war machine is completely out of control. In no way more significant that the illusion that a hired, disciplined voluntary army can protect a nation from an underemployed and undisciplined citizenry with poor political leadership. One of our last great warriors described the exact process by which this situation could occur. TheFundamentals has referred to it many times over the last several years. You can read it by following this link: http://www.h-net.org/~hst306/documents/indust.html  or at: http://www.youtube.com/watch?v=CWiIYW_fBfY&feature=related  (full version) or at TheFundamentals, September 15, 2010.  BTW, the speech has about 12,000 cumulative views; almost anything hip hop or any idiotic Hollywood histrionics will receive millions of views.

Wednesday, August 3, 2011

Opportunity Knocks for John Boehner

Dateline: Monday, August 1, 2011
Location: John Boehner’s Washington DC home
Time: Early in the morning

Opportunity Knocks: Knock, knock, knock.

John Boehner: Who’s there?

OK: It’s me, John Boehner, opportunity. Open the door.

JB: Go away. I’m trying to get some sleep. I was at the white house all last night.

OK. Knock, knock, knock. Open up John Boehner this is the opportunity of your lifetime.

JB: Go away I say. I’m tired. I don’t want any more opportunities.

OK: John Boehner this is your chance to put an end to the deficits and the debt and the sure destruction that they will bring.

JB: No, go away; can’t you see that no one else believes that.

OK: John Boehner, who cares what they believe. You know that deficits and debt lead to destruction. You know you can stop it.

JB: No, they will blame me for everything if I say no.

OK: Blame you for what? For fixing things?

JB: When granny doesn’t get her check they will blame me. When credit card interest goes up, they will blame me. When the economy crashes they will blame me.

OK: John, that’s a lot of crap. Granny will get her check and credit card interest is already sky high and the economy has already crashed. This is your opportunity to fix it.

JB: Sure, tell that to the dopes at PBS, ABS, CBS, Fox, CNN and NBC.

OK: John, someone has to say no to the spending. Someone has to say no to the borrowing. That someone is you. They elected you leader. This is your opportunity to lead.

JB: I’m only one guy. The other guys control the senate and the presidency. Go see them.

OK: I did. They don’t get it. They like the deficits and the debt and all the borrowing. It makes them feel like they are doing something really, really important. It also buys them a really, really big bunch of votes. It’s up to you.

JB: No. I’m just a poor boy from Ohio. I can’t keep up with all the slicksters from the big cities.

OK: John, you can do it. You have many standing firm with you and many more will follow if you lead. You can lead the others. You can stop all the spending silliness. It is in your job description to write the spending bills; not theirs.

JB: No. Leave me alone. I just want to go along to get along.

OK: Knock, knock, knock. Opportunity only knocks once John. This is your time; this is your moment. The other guy is on the ropes; he is holding a bad hand; he is bluffing you John. This is your moment. It will not come again. All eyes are on you.

JB: Go see Mitch McConnell.

OK: I did. He folded before I even got there.

JB: Go see Michelle Bachmann

OK: I did. She will stand with you.

JB: Yeah, that figures.

OK: Knock, knock, knock.

JB: Go away. Please go away. I can’t do it.

OK: John, the people need you. They are waiting for you.

JB: Go away. I need to get some sleep. We’re going to sign Obama’s deal tomorrow. It’s the comfortable way out.  We're setting up a committee to deal with the mess.

OK: That’s no deal. All the debt in two years; peanuts for savings ten years out.  It's your job; not a committee's job.  Committee's never work.

JB: It’s my deal now. I sold out. He said he would be nice to me if I went along.

OK: Open up John. This is your last chance.

OK: John, open up.

OK: John….

Monday, August 1, 2011

Leadership Series: Standing Alone

Going along to get along. It starts very early in life; in childhood. Children are formed; disciplined and directed. Each society engages in childhood formation. Some in ways and directions different than others but all with a singular purpose. To form the child in the way of the society. In the way that produces a societal participation of acceptance and contribution.

In our country, the early adult years or the late childhood years are usually a time of major desire for acceptance and inclusion. Oh to be one of the pack; to be highly regarded; to be included; to be asked to join; to be called; to be texted; to be popular. Great pressure; from peers; from parents; from politicians; from psychiatrists; from priests, patrons and potentates. But we do, occasionally, hear the valedictorian or the commencement speaker say something about individuality. Know thyself. Follow your dreams.

Sometime, after a while, for some sooner; some later; for some never; a period of questioning begins. Sometimes it is triggered by a revelation. Intellectuals call it an epiphany. Sometimes it is in the person’s nature, their being, but it was covered up by the directions of their childhood. And then the nature begins to exert itself. The old childhood directions are neither dominant nor persuasive any longer. The exterior molts. A new person emerges.

Many just ignore it. Many are not concerned. Many like their positions that grew from their early acceptance. Many worked hard to lead and compromise and put up with nonsense because they were paying their dues and they were going to get to the controls; the acceptance; the head of the pack; the payoff. For many the payoff is more than worth the price.

But there are a few who stop paying the price. And start questioning the process. Those who see and have been involved in something that is not right. Others may see it too but they do not question. They do not speak out. They do not stand alone to say stop; no more; enough. Those who choose to stand alone can find themselves moved out. Pushed aside. The mainstream does not treat them well if they cease to go along. If they question authority. If they question the purpose of authority. If they question funding authority. After all, authority depends on discipline which requires obeisance which get us back to the childhood process of direction and guidance.

Who are these who step outside? Who are they who question and depart? Who are the ones who dare to listen and form positions different from the popular and the group? Are they the heroes of today? Politicians and entertainers and media personalities? Are these the ones who lead? The politically correct? Who question? These who follow the road less traveled. Step to the beat of the different drum.

No, they are not. Those who stand alone are usually unheralded. Dismissed. Shunned. Blasphemed.

Here are twenty two that stood up and said no. Enough with deficits. Enough with borrowing. Enough with debt. If you even know of one; if you even live in a state from whence comes one; if you are fortunate to be able to support one or vote for one or just say thanks to one; you now, at least, know who they are. By the way, you had better do it soon. They will probably not be in their jobs very long. The in group has very little patience with those who stand up to it:

Justin Amash (Mich.)    Jason Chaffetz (Utah)    Tim Huelskamp (Kans.)

Steve King (Iowa)    Tom McClintock (Calif.)    Mick Mulvaney (S.C.)

Tim Johnson (Ill.)    Scott Desjarlais (Tenn.)    Tom Graves (Ga.)

Chip Cravaack (Minn.)    Ron Paul (Texas)    Joe Wilson (S.C.)

Connie Mack (Fla.)    Tim Scott (S.C.)    Paul Broun (Ga.)

Tom Latham (Iowa)    Jim Jordan (Ohio)    Jeff Duncan (S.C.)

Trey Gowdy (S.C.)    Steve Southerland (Fla.)    Joe Walsh (Ill.)

Michele Bachmann (Minn.)

There are 435 congress people who could have said no.  22 did.  None of the "leaders" said no.  Boehner went along with the gang; the in group.  Leaders stand alone. Do they always succeed? Of course not. They fail. Fail frequently. But these twenty two took a position in the arena and they stood for their belief in the face of overwhelming odds against them. They chose to not go along with a fake deal to pretend that something was being done about a very real problem of too much government and way too little private enterprise. Believe it or not, two and one half years ago, the issues behind the stand they took and the positions that they now support were not even being mentioned by the current president except in vague, political campaign code words. Today, Americans are beginning to embrace the knowledge that too much government is destructive; that debt is destructive and that there are businesses operating in very competitive environments in foreign countries that are taking away our wealth creating activities; our economic growth and our good jobs. These twenty two grasp this reality. They took a stand.

Where do you stand?