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

Thursday, October 27, 2011

Health Care Costs in the US of A

The cost of health care in the United States is now expected to rise above a staggering $10,000 per worker. How many people working in the private sector do you really think would be able to pay $10,000 just for their health insurance coverage?  How many people working in the private sector can afford to pick up this tab for public sector workers?  Who can afford these costs?  For just themselves to say nothing about spouses and children?    These numbers come from the large human resources business, Aon Hewitt. 

“According to Aon a number of factors are driving the projected increase in health care cost for 2012. Employers continue to experience an increase in the quantity and cost of catastrophic claims, as slower levels of hiring have resulted in slightly older workforces who are more prone to costly medical conditions. In addition, generally poorer health – leading to increases in costly conditions such as diabetes and heart disease – make it difficult for employers to deploy tactics that drive short-term cost savings.”

Please note some key words in the above revelation:  older workforces; catastrophic claims; costly conditions such as diabetes and heart disease; generally poorer health.

Why would this study and this information be of import to a blog that deals with the fiscal and financial matters of the US economy?
There are almost too many reasons to list in an essay of 900 words.  Here are a few:

1.    Businesses no longer wish to do business in the United States.  They go elsewhere.  Costs for things like health care insurance are among the most significant reasons why they go elsewhere.

2.    Sure there are many other reasons; having to do with out of control costs for unemployment insurance, social security/Medicare taxes, litigation concerns, union meddling and rules and too high taxes from every level of government – federal, state and local.

3.    But, take it from a former small business owner and take it from the many other small business owners this small business owner speaks with; health care insurance is no longer affordable for most business owners anywhere in this country.  That’s for its own employees.  Who on earth can afford to pay it for “public servants?”

Ask yourself this simple question, if interested.  Why should a person running a small to mid size business, say 20 to 150 employees; much less a large business, have to pay health insurance costs that are extremely high and rising because of an increase in the “quantity and cost of catastrophic claims”; “older workforces who are more prone to costly medical conditions” and a population beset with "generally poorer health -- leading to increases in costly conditions such as diabetes and heart disease?"
Could someone please explain why a business that is trying to compete with businesses domiciled in countries where these conditions do not exist or where there is no health insurance safety net for the general population or where such costly procedures are either not performed at all or are performed at a fraction of the cost in the United States should be forced much less even asked to pick up the tab for this nonsense?

Some folks seem to grasp that a massive rise in the cost of residential real estate is a bubble that cannot be sustained because no one can or could afford the cost of the inflated house prices.  But those same people cannot grasp that there is no difference between a real estate bubble and the bubble in health care costs.  Or the bubble in education costs.  Or the bubble in all government costs.  All three are now completely unaffordable for most Americans.  All must burst.  All must decline.  As with housing, heaven forbid that we should step in and stop the madness before it collapses.  Better to follow the Greenspan/Bernanke/Obama/Bush bubble madness wherein government supports everything until the whole thing collapses under its own weight.  Absolute and utter nonsense!

In the past these pages have displayed a health care cost per capita chart that compares the US of A with all other developed and developing countries and also measures the life expectancy in each of the listed countries (see: TheFundamentals, September 24, 2009.) The US is off the charts for cost – two to three times greater than most developed countries, even more with others, and no; let’s just repeat that, NO improvement in life expectancy.  As a matter of fact its life expectancy is less than most.

When will someone get it through their thick skull that burdening business with these health care costs and burdening taxpayers with the cost of insurance for 22+ million government employees is a sure and fast route to ruin?   Is it too much to set a limit?  Is it too much to say NO, you can’t have that procedure or that medicine or that therapy unless you pay for it yourself?  Is it too much to say that first American industry must remain competitive or all will be lost?

Folks, a democracy that does not set limits is no different than a dictatorship that knows no limit.  They both benefit the bureaucrats and insiders who get in on the goodies and destroy opportunity and comfort for all others.

Tuesday, October 25, 2011

The Boys

So I said to him, "Barack, I know Abe Lincoln,
And you ain't no Abe Lincoln."


You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away people's initiative and independence.
You cannot help people permanently by doing for them, what they could and should do for themselves.
- A. Lincoln

Thursday, October 20, 2011

Capitalism: RISK and REWARD

If you were asked to define capitalism in two words, TheFundamentals would suggest these two:  RISK and REWARD.  What do you call it when you base your economic actions on the meaning or the definition of these two words, RISK and REWARD?  We, at TheFundamentals, call it capitalism.

What is the concept behind the process by which RISK and REWARD operate?  Well, that question may cause confusion.  So let us explain what we mean by the question. The interplay between these two words, RISK and RETURN, defines a process by which the old adage, “nothing ventured; nothing gained,” is actually put into real life, living action.  This is the process of placing something in jeopardy (something ventured) in order to create the possibility of receiving something (something gained.)  The act of placing something in jeopardy or exposing something to the possibility of loss is taking a RISK.  If that something works out, you may receive a REWARD.  The REWARD is usually wealth; that age old measurement stick of success.  But, behind this process is a concept.  What is that concept? 

The concept is called discipline.  First comes discipline; then comes RISK and REWARD.  Capitalism depends on discipline for its existence so we can really say that wealth creation depends on discipline for its existence and the process for attainment is RISK and REWARD.  (Aside:  there is a bit more to capitalism, particularly predictable return opportunity and hard work, but the discipline of risk and reward is genetically wired in most species.)

These pages have previously documented the abandonment of RISK and REWARD as a governing process in the United States.  The abandonment of RISK and REWARD is now rampant throughout the country.  Losing RISK and REWARD as a controlling process is not workable beyond the immediate which explains why the long term rules and fundamentals of the past have now been replaced with short term satisfactions and remedies.  But behind the abandonment of RISK and REWARD in the United States is the gradual but consistent abandonment of discipline.  Everywhere you look, discipline is gone.  Nothing is more discouraging to the future of America than the loss of discipline by its leadership and believers.

Predictable?  Perhaps so.  Today even those Americans defined as “poor” have more comforts; more belongings; more freedoms to state expectations and claim entitlements than 90+% of the human beings on the face of the earth.  And the middle group, the widely heralded middle class, has wealth, possessions and leisure time that would place even the royalty of just a few generations ago into fits of jealous rage.  The well to do travel in private jet airplanes unencumbered by contact with the hoi polloi and their annoying rules and ways.  They even suggest that they would willingly throw a few more of their devalued dollars to the hoi polloi if only they would just leave them alone.  “Just don’t bother us if you please.”   What they are really saying is, “We’d like to keep our heads attached to our necks.”

And what does all this mean?  This caterwauling about paying your fair share and doing your part and spread the wealth around and down with business and Wall Street and bailouts for the rich?  What can one make of it?

RISK and REWARD are gone. Left the station.  Caught the last train to the coast to snitch a phrase from a classic song.  When RISK and REWARD depart the scene; you know one thing for sure.   Discipline left earlier.  Without discipline there is no fairness.  There are no standards.  Up becomes down; expectation becomes entitlement; measurement becomes mythology.  It is now a free for all.  Who can grab the most while there is still something left to grab? 

Without discipline there is nothing.  Without limits there is nothing.  Discipline and limits are both the master and the servant of progress.  Democracy is meaningless without discipline and limits.  As is capitalism.

Today the worker who takes no risk still receives great reward.  Why take risk if you can get great reward without it?  This simple new fundamental is the discipline of SEIU, AFSCME, AFL – CIO, NEA and AFT.  It dominates professional sports cum entertainment; dominates Wall Street, politics, government, education, health care and large business.  (See:  http://www.bloomberg.com/news/2011-10-19/beltway-earnings-make-u-s-capital-richer-than-silicon-valley.html   Washington DC has more people earning more than anywhere in the country.)  If you glance back at the words of previous essays you will find numerous examples on these pages of reward with no risk.  If you look around you, you will identify even more examples of reward without risk.  More than likely you could write your own essay with your own examples.

Much of today’s caterwauling is coming from folk who like their attainments under this new idea of reward without risk.  But don’t be surprised if you find a growing awareness among the hoi polloi, particularly the younger hoi polloi, who know something is amiss.  Something is wrong.  Something doesn’t make sense.  They will not see it for what it is right away but they will come around to seeing it clearly, we think. 

What the young will see is an undisciplined, no-limits culture around them that discarded RISK and REWARD and replaced it with expectation and entitlement.  And they can see that the train has left the station for them.  They can see that they cannot become part of the largesse of reward without risk because all they get are the scraps and the due bill.

They are not going to like what they get.  They don’t grasp now that a reward without risk culture is not their friend.  And few teach them that hard work is still a key fundamental basis of any wealth creation system.

Tuesday, October 18, 2011


No one ever said capitalism was easy.  One of capitalism’s fundamental rules is “hard work.”  It is a tough economic system.  Maybe that’s why we have burdened it with every possible form of rule, tax, fee, form, cost and application conceivable.  Do you think the Chinese have similarly burdened their nascent capitalism system?  Democracy is not easy either.  One of its fundamental rules is “hard work.”  Today we have burdened our version with voluminous laws favoring special interests and protected classes.  Do you think in China you can file a lawsuit if you “feel” discriminated against because your old, fat, gay, handicapped, black or all of the above?

Have the two systems, one economic and one political, finally reached the point of diminishing returns?  We mean here in the US of A?  We seem uninterested in how they do things in other countries like China, Brazil and Korea.  Do democracy and capitalism sound good in theory but when you cut through it most people would just as soon have someone make the decisions for them; tell them what to do and when to do it as long as they get some needs met without working too hard?  This is the question that every good entitled patriot needs to examine.  Particularly the gang in power who is watching it all unravel on their watch.  Is it inevitable that the seduction of the public purse to entitled citizens coupled with embedded politicians and bureaucrats just overwhelm the forces that feed the purse?

Let’s take a closer look.

We read, hear, see that there are groups and gatherings of vigorous people who are marching and picketing and whooping it up against wall street and banks and bailouts and anything or anyone who pursues commercial interests and business in general.  Even the union thugs are jumping on this bandwagon.  Even high positioned elected officials, those comfortable with the community organizing themes of tax the rich; take back what you can from the greedy people who accumulate wealth at the expense of the common working man, are discreetly and not so discreetly supporting these new patriots.  We hear more and more that it is time for the common man and workers and labor to stand up for their piece of the action; take back what they have earned; what “the man” has pocketed from their efforts.

It sounds good doesn’t it?  The little guy gets screwed.  The big guy takes and keeps and gets richer.  Someone has to balance the scale.  Let’s take to the streets and get what is ours. 

Marx said wealth came from labor.  Nothing about capital.  No one likes to talk about capital.  And the guys with the capital are easy to hate.  Not only because they have capital but because often they play the role up a bit too much with their excesses.  The worker says try to get that oil out of the ground without me.  The farmer says try to feed your villages and towns without me.  The construction worker says good luck putting up that building without me.  But someone has to have the idea and then make the plans and then raise the money and then buy the land and purchase or lease the equipment and file the forms and applications with the government agencies and on and on and on.  All before one worker shows up and picks up one shovel or starts one piece of machinery.  All before the union steward shows up to tell the man with the plan how things are going to be.

So you patriots who want to change the system, whether employed or not, TheFundamentals supports your first amendment street shenanigans.  Talk the capitalists down at every opportunity.  Tax them.  Regulate them.  Make them jump through hoops to do anything.  After all there are a lot more workers and laborers than there are capitalists.  And democracy says one man/woman/one vote.  You’ve got the numbers; got them by the private parts.  Make ‘em pay.   

The street patriots outnumber the greedy capitalists.   They say, “We have more votes than they do. We have rights.   We have rights to health care.  Disability payments.  Unemployment checks.  Food stamps.  Good schools.  Go to college if you want.  Get government loans.  Study anything you choose.  Be all you can be.  Handicapped?  Special treatment. Old?  Oops, senior we mean.  Discounts and freebies for everything.  Too fat and your joints don’t work.  Get a replacement part.  Any ailment or inconvenience?  Get a pill or go to therapy or see a specialist.  It’s all on the house.  No charge.”

“Don’t forget, you greedy capitalists out there, we have the votes.   Don’t be trying to build something without all these new requirements being met; don’t go dumping your waste in the field over there; make sure everything is insured and hire lawyers and accountants to make sure that every report and every law and rule is adhered to.  Pay your fair share.  We want jobs; good jobs; on our terms.  Not yours.”

Is someone missing something?  Could these patriots have missed some very simple facts?   They are in charge, aren’t they?  Their organizer is in the white house.  They control most all government everywhere in the country.  Could it be the capitalists who have left?  The man with the plan has said phooey on your taxes and fees and applications and costs and rules and regulations.  We have rules too.  Rules like “hard work” and predictable rate of return.   We’re taking our capital to places that honor our rules.  See you community organizers and street patriots around.  Hasta la vista, baby.

The reason you “occupy something” patriots don’t have a job is because you’ve won.  That’s simple fact numero uno.  You’ve won.  You drove the capitalists away.  You patriots don’t even know it but all you are doing now is fighting over the table scraps.  Go for it; grab what you can before it’s too late.  The world is filled with countries and communities loaded with patriots without capital.  They’re called third world countries. 

Thursday, October 13, 2011

Basic Values: The Lone Ranger

The following link will connect you to the very first episode in the saga of the Lone Ranger, our never ending hero.  We apologize for the commercial interruptions; particularly the one involving Tracy Ullman.
More episodes are available; just click at the bottom left of your screen.
Here is the link to episode 2.  http://www.hulu.com/watch/84784/the-lone-ranger-the-lone-ranger-fights-on Remember the Lone Ranger did not have his horse, Silver, or any of his trademark silver bullets at the end of episode 1.
My gosh do we miss the Lone Ranger.

Tuesday, October 11, 2011

Buying Votes or Just Plain Lying

Call it what you want – distortion, partial truth, spinning, rhetorical excesses, ignoring facts and/or flat out deceit.  When a president does it, it comes down to a simple truth.  He is either buying votes or lying.  Mr. Obama is, simply, either a vote buyer or a liar.  If the latter, he follows in the footsteps of some great liars of the recent past – Bernie Madoff, Richard Nixon and Bill Clinton.   You can add in Eliot Spitzer and Newt Gingrich if you wish.  Or Johnnie Edwards; yes that John Edwards chosen by the brilliant senator from Massachusetts with the wealthy wife to be his vice president on the democrat presidential ticket just a few years back, or Mark Sanford.  They are all liars with terrific bona fides.  Welcome to this group Mr. Obama.  Perhaps you would care to challenge this assessment of your truthfulness.  If so, just read the following article and respond to each of the very specific instances noted of your lies.

The article we are referring you to was written by Erica Werner of the Associated Press.  Few in her field are as objective and as blunt even though she does provide Obama some unwarranted cover in her piece.

Here is what we don’t get.  You, Obama, wanted this job with full knowledge of its trials and tribulations.  You asked for it; you sought it out and now it overwhelms you to the point where you choose to lie instead of admit failure and exit.  You appear to be waiting for; almost hoping for, some form of intervention.  Something.  Some event or occurrence; some distraction from your ineptitude and failed leadership to take the spotlight away. 

Why do you want the job again?  You have failed at it.  So what?  People lose every day.  You are a loser and now you are a lying loser.  Have you no shame?  Is this your idea of leadership?  Of accountability?  Or change?  This is utter failure with no responsibility.  This does not work in the United States.

There is always one simple way to get out of the spotlight.  Actually two.  One is to resign. Two is to step down and let your party find someone who is willing to try something different in the hope; yes, just the HOPE that it will work.  There is adequate time for you to exit.  If you continue to lie your exit will occur on or about November 6, 2012 and, more than likely, it is already determined that you will not be reelected.

So, Mr. Obama, you have two choices.  Lying is not one of them.

Thursday, October 6, 2011

Ya' Gotta Be Nuts

Elvis Presley had it all figured out some years ago.  Remember the lyrics of his song “Suspicious Minds?” 

“We’re caught in a trap
I can’t walk out
Why can’t you see
What you’re doing to me
We can’t build our dreams
On low interest borrowed money”
Okay we changed it a bit. But do you get the idea?  How much money do you want to lend Washington DC?  Below we show you what they are paying you for your loans  (Aside: for those who don’t either remember or are currently students in any secondary school or college, there used to be a payment made for deposits in money market accounts at banks for the temporary use of your money.) These payments were called “interest” and the rates are set by the fed.
                                                            Interest Rate

30 day treasury bill                                      .00 %
One year treasury bond                              .11 %
And for those of you who are really nutso:
10 year treasury bond                               1.93 %
30 year treasury bond                               3.26 %              
So, how much do you want to loan Messrs. Obama and Bernanke and Geithner at these rates?  Stop, before you answer, remember that they have companions who will be spending the money you loan them:  Here are a few of them:  NPelosi, RDurbin, CSchumer, JBoehner, JMcCain, MWaters, BFrank and the hundreds of thousands of employees at the department of defense and homeland security and a few other well staffed Washington enterprises.
If you worked your fannies off, saved your money, did without but tended to the business of raising your families, paying your bills, getting your kids educated and still helping out others, what does the gang above have in store for you?  Well take a look at what they pay you for your money (see above) and what they are paying themselves (below): 

Isn’t that great?  Average federal pay with benefits, $123,000.00?  You make a money market deposit at the bank (lend them your money) and they use it to pay themselves $123,000.00 each.  They give you between .00 (that’s nothing) and .11% per year.  In the meantime if you are lucky enough to have a job in the private sector you are earning one half of what they pay themselves.  Hmmnn. 

Now who is the smart one and who is the fool?  Ever wonder why most of the government employees treat you like a fool when you have to deal with them?  Hmmnn.    
One other thing.  People write books and make movies about things that happened a long time ago.  Sometimes they even try to recreate the historic scene with their vivid descriptions of what people were doing and what they were thinking and how/why they behaved.  We have all experienced this phenomenon.  These writers and historians have been quite creative with our own American history recreating the beginning times and conflicts of our own country.  When the colonists were struggling with the despotic antics of George III and his bureaucratic domineering royal agents and employees.  Ever wonder how the colonists felt back then?  Look around.  You’re living it.  Now you know why they pledged “…to each other our Lives, our Fortunes, and our sacred Honor” to dissolve their political connection with the bad guys. 

Folks, ya’ gotta be nuts.  
We don’t have to go to war to get rid of them; all we have to do is vote them out of office.  We don’t !!!

Tuesday, October 4, 2011