Greed – Intense and selfish desire for something, especially wealth, power, or food. (Oxford American Dictionary).
President Obama and others in Washington have been vilifying “the rich” for months, saying among other things that they don’t pay their “fair share” in taxes. The greedy “rich” apparently want to keep all of that money for themselves, the selfish SOB’s.
And now we are hearing about “corporate greed” and all of the selfish people on “Wall Street”. Why do they hoard all of that money; why don’t they hire some people or do some such generous and appropriate activity with that money; spread it around, you know? But no, they keep it all for themselves. How greedy; they need to be punished.
I have a different view. There is a much bigger, much more powerful, much greedier villain out there: the federal government. I am organizing a new “occupy” movement. I want “we the people” to rise up and march on Washington to send a message to that huge, bloated, selfish bureaucracy and its protectorate (i.e., politicians).
Let me tell you a story about one of the “greedy” corporations I worked for. It was, at the time, a mid-sized, growing company with great prospects. Their goal was to dominate their market by way of superior products, which would lead them to becoming a big company. But, along the way, there was a business slowdown. In order to remain at a sustainable profit level and keep going toward the future growth that would no doubt return, the company President decided that two actions would be taken: 1) There would be a six percent reduction in the workforce, and 2) All executives, of which I was one, would take a ten percent pay cut. And so it was done. It wasn’t pleasant, but that’s what well-run companies do when their income goes down and it no longer lines up with expenses. In this case, the growth did return. Today that company is the dominant player in its market, is very profitable, and provides high-paying jobs for tens of thousands of people.
This is just one of an untold number of such stories in the corporate world.
How about Apple Computer, whose founder, Steve Jobs, tragically died of cancer at a young age recently? Steve Jobs literally started Apple Computer in his garage, with his high school buddy. After some initial success with his fledgling company, Steve Jobs was fired from the company he founded by the person he himself had recruited to take over as President so that Steve could focus on the technical innovation side of things. He then founded another company, sold it to Apple, returned to Apple again as part of the deal, and the rest is history, as they say. Today, Apple Computer is wildly successful, has revolutionized the way we get and use information, employs 46,000 people, has created thousand of other jobs in suppliers, has made millionaires of hundreds of its employees through stock option grants, and has more cash on hand than the U.S. government!
Is Apple Computer greedy? If so, give me more of it. All of those job holders plus the roughly seventy percent of Americans who are either directly or indirectly dependent upon corporations for some of their financial well being through the stock market, mutual finds, or retirement plans would probably agree.
Was Steve Jobs greedy? When he died, he was worth billions, and was also the largest shareholder in Disney Corporation (through another brilliant deal of his). Does he really need that much money?
I celebrate what Steve Jobs did. It’s the quintessential American story. Look at how many other people his “greed”, if you want to call it that, has enriched.
I don’t want to soak the rich such as Steve Jobs and others of his ilk; I want to join them!
Contrast these stories with the government’s intense desire for money and power.
During the last three years or so, our economy has gone through some very tough times, and it still is sickly. Obama has said that we were at the “precipice” economically. Given all of that, has the government cut back any? Has Congress taken a pay cut? Have any of Obama’s multitudinous czars taken a pay cut? Has the federal bureaucracy been cut? Has anybody in the federal government lost his job due to a reduction in force? Has federal spending been cut such that the budget is balanced, as corporations do routinely when times are tough?
None of that has happened. Quite the contrary. Obama is telling Congress it needs to spend MORE, and he is calling for higher taxes. Think about that. In the midst of all of this economic carnage, his response is to go on yet another spending spree and to demand that the federal government be given more of our money.
No, I don’t worry about corporate greed, because corporations have very limited power over me. In most instances, I can simply walk away from them if I think they are misbehaving. Corporations can’t pass a law requiring me to do something.
But the government, now they have real power over my life.
I worry about a government that is continually demanding more money from whomever seems to be the most promising target at the time. I worry about a government so power crazed that it wants to get total control of the very air that I breathe. I worry about a government that is so hell bent on exercising absolute control over my life that it is trying to seize the medical system and associated decisions that determine whether I live or die. I worry about a government that is completely incapable of showing even a modicum of financial responsibility. I worry about a government that is starting to tell me what I can and cannot eat. I worry about a government that pits one group of Americans against another in class warfare rhetoric to foment hate, under the strategy that if the people are fighting amongst themselves, the government can do pretty much what it wants. I worry about a government that uses its “bully pulpit” and the force of law in these ways.
If that’s not “greed”, then the word has no meaning. Government greed is the most dangerous kind, because it’s extremely difficult to rein it in. That’s the greed we should all be worried about it.
Saturday, October 15, 2011
Thursday, September 29, 2011
Is Social Security A Ponzi Scheme?
Few people attract so much notoriety that their name is coined into a new word. One interesting example is the word “hooker”, meaning a prostitute, which came to us from General Joseph Hooker during the Civil War who reportedly had so many women of ill-repute hanging around his headquarters that they became known as “hookers”.
Another example is “Ponzi scheme”.
Recently, a Presidential candidate said that Social Security is a Ponzi scheme. What was he talking about?
According to the Securities and Exchange Commission, a “Ponzi scheme” is an investment fraud that involves the payment of “returns” to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest their money in opportunities that are claimed to generate very high rates of return with little or no risk. In many Ponzi schemes, the perpetrators focus on attracting new money to make promised payments to earlier-stage investors and to siphon off for personal use, instead of engaging in any legitimate investment activity.
With little or no real earnings, the schemes require a consistent flow of new money from investors in order to remain in operation. Ponzi schemes collapse when it becomes difficult to recruit enough new investors or when a large number of existing investors ask to cash out.
The schemes are named after Charles Ponzi, who conned thousands of New England residents into investing in a postage stamp speculation scheme in 1916. At a time when the annual bank account interest rate was 5%, Ponzi promised investors that he could provide a 50% return in only 90 days. Ponzi initially bought international mail coupons in support of his scheme with the intent of reselling them in another country at a higher price, but he quickly switched to using new investors’ money to pay the promised high returns to earlier investors. Once Ponzi was no longer able to persuade enough investors to keep giving him additional money, his scheme collapsed. Ponzi didn’t invent this type of fraud, but he took in so much money that his was the first to become widely known in the U.S.
Under the Social Security (SS) system, employees and employers pay into the system, and employees receive a monthly pension upon retirement.
The payments to current SS recipients are taken from current incoming SS money. Any money that is not paid out is put into certain special U.S. Government bonds. That is, the SS system loans any left-over money to the rest of the government, which immediately spends it, as part of general revenues, on defense, the federal bureaucracy, other entitlements (Medicare, Medicaid), interest, and miscellaneous spending. None of the SS money taken in every year is saved, invested, put aside, or any such thing. The money is either paid out to SS recipients or used for other government spending.
There is no SS “lockbox”. There also is no SS “trust fund” in the sense of a bank account somewhere with money in it that can be drawn on as needed. The SS trust fund, or lockbox, consists solely of promises by the rest of the government to pay the SS system back someday. But since the entire federal government is operating at a deficit and there is a national debt, there is no reserve money with which the SS trust fund can be paid back. The only assurance that the SS system can ever get this money back is the full faith and credit of the U.S. government.
The very first SS recipient, one Ida Mae Fuller of Vermont, received her first check of $22.54 on January 1, 1940. She had paid only $44 in SS taxes over a three year period, but collected a total of $20,993 in benefits, since she lived to be 100. Such high returns were possible in the early years of SS since there were many people paying into the system and only a few taking benefits out. In 1950, there were 15 workers supporting every SS retiree. Today, there are just over three. By 2030, it’ll be down to two. The “baby boomers” are starting to retire and it’s swamping the system.
Another issue affecting SS negatively is that people are living longer and therefore collecting benefits longer. Data from the National Center for Health Statistics show that in 1900 the life expectancy was 47.3 years; 68.2 years in 1950; and 77.3 in 2002. When SS was first enacted in 1935, people didn’t live nearly as long as now, and so the system wasn’t designed to handle an aging population.
In 2010, annual SS costs (benefits paid out plus administration) exceeded non-interest income. However, from 2010 through 2022, total SS income including interest will be more than enough to cover costs. Beginning in 2023, SS assets (bonds and interest) will start to diminish until they are gone in 2036. At that time, there will be no more bonds to redeem or interest income from them, so SS will have only current tax revenues with which to pay benefits. Unless something is changed, that tax revenue stream will support benefits at a level of 77% of what has been promised, and the benefit level will gradually decline thereafter. In order to keep benefits at 100%, either SS taxes will have to be increased significantly or benefits will have to be reduced significantly, or some combination thereof.
Is Social Security a Ponzi scheme? No, because Congress can simply raise taxes and/or reduce benefits in order to keep the system solvent.
But SS does bear some disconcerting resemblance to a Ponzi scheme. Both pay early participants with money taken in from more recent participants. Both function best when there is a continual supply of many new participants. Both systems are unable to pay all participants the full benefits promised.
The key difference is that a Ponzi scheme is doomed to ultimate implosion since it cannot, by its nature, restructure itself. A Ponzi scheme can only keep on keepin’ on until the day of reckoning finally comes. SS will not collapse; it will be fundamentally modified, some day when Congress gets the will, into a sustainable program given today’s demographics.
Another example is “Ponzi scheme”.
Recently, a Presidential candidate said that Social Security is a Ponzi scheme. What was he talking about?
According to the Securities and Exchange Commission, a “Ponzi scheme” is an investment fraud that involves the payment of “returns” to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest their money in opportunities that are claimed to generate very high rates of return with little or no risk. In many Ponzi schemes, the perpetrators focus on attracting new money to make promised payments to earlier-stage investors and to siphon off for personal use, instead of engaging in any legitimate investment activity.
With little or no real earnings, the schemes require a consistent flow of new money from investors in order to remain in operation. Ponzi schemes collapse when it becomes difficult to recruit enough new investors or when a large number of existing investors ask to cash out.
The schemes are named after Charles Ponzi, who conned thousands of New England residents into investing in a postage stamp speculation scheme in 1916. At a time when the annual bank account interest rate was 5%, Ponzi promised investors that he could provide a 50% return in only 90 days. Ponzi initially bought international mail coupons in support of his scheme with the intent of reselling them in another country at a higher price, but he quickly switched to using new investors’ money to pay the promised high returns to earlier investors. Once Ponzi was no longer able to persuade enough investors to keep giving him additional money, his scheme collapsed. Ponzi didn’t invent this type of fraud, but he took in so much money that his was the first to become widely known in the U.S.
Under the Social Security (SS) system, employees and employers pay into the system, and employees receive a monthly pension upon retirement.
The payments to current SS recipients are taken from current incoming SS money. Any money that is not paid out is put into certain special U.S. Government bonds. That is, the SS system loans any left-over money to the rest of the government, which immediately spends it, as part of general revenues, on defense, the federal bureaucracy, other entitlements (Medicare, Medicaid), interest, and miscellaneous spending. None of the SS money taken in every year is saved, invested, put aside, or any such thing. The money is either paid out to SS recipients or used for other government spending.
There is no SS “lockbox”. There also is no SS “trust fund” in the sense of a bank account somewhere with money in it that can be drawn on as needed. The SS trust fund, or lockbox, consists solely of promises by the rest of the government to pay the SS system back someday. But since the entire federal government is operating at a deficit and there is a national debt, there is no reserve money with which the SS trust fund can be paid back. The only assurance that the SS system can ever get this money back is the full faith and credit of the U.S. government.
The very first SS recipient, one Ida Mae Fuller of Vermont, received her first check of $22.54 on January 1, 1940. She had paid only $44 in SS taxes over a three year period, but collected a total of $20,993 in benefits, since she lived to be 100. Such high returns were possible in the early years of SS since there were many people paying into the system and only a few taking benefits out. In 1950, there were 15 workers supporting every SS retiree. Today, there are just over three. By 2030, it’ll be down to two. The “baby boomers” are starting to retire and it’s swamping the system.
Another issue affecting SS negatively is that people are living longer and therefore collecting benefits longer. Data from the National Center for Health Statistics show that in 1900 the life expectancy was 47.3 years; 68.2 years in 1950; and 77.3 in 2002. When SS was first enacted in 1935, people didn’t live nearly as long as now, and so the system wasn’t designed to handle an aging population.
In 2010, annual SS costs (benefits paid out plus administration) exceeded non-interest income. However, from 2010 through 2022, total SS income including interest will be more than enough to cover costs. Beginning in 2023, SS assets (bonds and interest) will start to diminish until they are gone in 2036. At that time, there will be no more bonds to redeem or interest income from them, so SS will have only current tax revenues with which to pay benefits. Unless something is changed, that tax revenue stream will support benefits at a level of 77% of what has been promised, and the benefit level will gradually decline thereafter. In order to keep benefits at 100%, either SS taxes will have to be increased significantly or benefits will have to be reduced significantly, or some combination thereof.
Is Social Security a Ponzi scheme? No, because Congress can simply raise taxes and/or reduce benefits in order to keep the system solvent.
But SS does bear some disconcerting resemblance to a Ponzi scheme. Both pay early participants with money taken in from more recent participants. Both function best when there is a continual supply of many new participants. Both systems are unable to pay all participants the full benefits promised.
The key difference is that a Ponzi scheme is doomed to ultimate implosion since it cannot, by its nature, restructure itself. A Ponzi scheme can only keep on keepin’ on until the day of reckoning finally comes. SS will not collapse; it will be fundamentally modified, some day when Congress gets the will, into a sustainable program given today’s demographics.
Wednesday, September 21, 2011
Obama Wants More Taxes On The "Rich"
President Obama is worried about the "fairness" of the federal tax code. He says he wants changes to make sure millionaires are taxed at a higher rate than their secretaries. I guess he doesn't know that they already are.
On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.
This year, households making more than $1 million will pay an average of 29.1 % of their income in federal taxes, including income taxes, payroll taxes, and other taxes, according to the Tax Policy Center, a Washington think tank. Households making between $50,000 and $75,000 will pay an average of 15 % of their income in taxes. Households making between $20,000 and $30,000 will pay 5.7 %.
The latest IRS figures are from 2009 and are limited to federal income taxes; they show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 % of their income in federal income taxes. Those making $100,000 to $125,000 paid on average 9.9 % in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 %.
The Tax Policy Center estimates that 46% of households, mostly low- and medium-income households, will pay no federal income taxes at all this year, although they will pay other taxes.
If Obama wants to make the federal tax code "fair", he's barking up the wrong tree. As shown above through hard numbers, the "rich" already pay more than their "fair share". Obama needs to go after those 46 % of the people who pay not a dime in federal income tax. Wouldn't "fairness" require that everyone pay at least something?
On average, the wealthiest people in America pay a lot more taxes than the middle class or the poor, according to private and government data. They pay at a higher rate, and as a group, they contribute a much larger share of the overall taxes collected by the federal government.
This year, households making more than $1 million will pay an average of 29.1 % of their income in federal taxes, including income taxes, payroll taxes, and other taxes, according to the Tax Policy Center, a Washington think tank. Households making between $50,000 and $75,000 will pay an average of 15 % of their income in taxes. Households making between $20,000 and $30,000 will pay 5.7 %.
The latest IRS figures are from 2009 and are limited to federal income taxes; they show much the same thing. In 2009, taxpayers who made $1 million or more paid on average 24.4 % of their income in federal income taxes. Those making $100,000 to $125,000 paid on average 9.9 % in federal income taxes. Those making $50,000 to $60,000 paid an average of 6.3 %.
The Tax Policy Center estimates that 46% of households, mostly low- and medium-income households, will pay no federal income taxes at all this year, although they will pay other taxes.
If Obama wants to make the federal tax code "fair", he's barking up the wrong tree. As shown above through hard numbers, the "rich" already pay more than their "fair share". Obama needs to go after those 46 % of the people who pay not a dime in federal income tax. Wouldn't "fairness" require that everyone pay at least something?
Sunday, September 18, 2011
The King's Speech
It’s déjà vu all over again.
President Obama recently gave his umpteenth speech about the bleak situation we have with jobs and the economy and what needs to be done to make things better. That’ll solve our economic problems – another speech.
The next day, the stock market dropped three hundred points.
Obama proposed his latest and greatest plan to fix the economy, and it was for more of the same: massive government spending, throwing money at his favored groups, demonizing “the rich”, repairing the infrastructure, touting “green jobs” as the savior of the economy, demanding that Congress pass his proposal immediately, blah, blah, blah.
You may have detected that I am more than a little skeptical, which I am, because we have been down this road before with Obama. I’m sure you all remember the last stimulus, in 2009. It was twice as big as this one; we were told at the time that it would revive the economy and keep unemployment under eight percent. We were also told back then that that stimulus, like this one, had to be passed immediately in order to avoid financial calamity. Now, two years later, unemployment is stuck at over nine percent, the economy has flat lined, the housing market is non-existent, and there is almost no good economic news. Everything that Obama and crew told us the last stimulus would prevent has happened! So why would anybody still listen to these people when it comes to the economy and jobs? They are obviously clueless.
I actually read in the paper after Obama’s speech that an economist at Moody’s Analytics said this latest stimulus plan would reduce the unemployment rate to, you guessed it, eight percent!!
Of late, Obama has developed a new concern for the federal budget deficit, or at least he wants us to think so. In his speech, he said that the new spending called for in his current plan will not increase the deficit because everything in his bill will be “paid for”. He didn’t tell us how it would be paid for, though; he promised to do that later.
You can’t make this stuff up.
No matter which way one looks at Obama’s new plan, you find absurdities. Let’s start on a broad, overall scale and then work our way down to some of the specifics.
OK, from the 30,000 foot level, as they say, let’s look at this plan. It’s another government stimulus, much like the last one, only this one is smaller by half. It’s about half as big as the 2009 stimulus, and that one, by any objective measure, was a total failure. Here’s the absurdity: If a big stimulus has already failed, why will a smaller one now work? The only logical argument one could make is that the last stimulus failed because it wasn’t big enough, so now we need a larger one. But a smaller one --- ? Absurd.
Let’s go on to some of the specifics of the new plan.
It calls for government spending to keep teachers, firemen, and police on the job. But why do we only want to keep these groups employed? With the jobs picture being as bleak as it is, we need to do something to increase job creation across the board; we need to get everyone back to work. We need to create economic conditions such that all companies, large and small, in every industry, in every location, will be able to expand and start hiring. It makes no economic sense whatsoever to restrict job creation efforts to just some segments of the work force.
Now let’s look at the proposed tax breaks in Obama’s plan for companies that hire or increase wages.
I worked in the corporate world for over thirty years as an engineer and manager at various levels up to vice president. During that time, I must have hired literally hundreds of people. Never, not once, did I or anyone I knew or observed ever hire somebody because of a tax break, nor would we have. That’s not why businesses and companies hire.
Hiring is a serious matter to companies. It involves taking on a significant new expense that will be there far into the future. Note: I’m not talking about temporary or seasonal help here. Companies are looking out into the future, not just the short term. They don’t like to have to lay people off, so they only hire when they are convinced that they can afford it in the long term and that the additional sales will be there to pay for it. Hiring is a business decision, not a public service matter.
People are hired because the company has more work than it can handle, or because the company is confident that additional business is coming, or because they see a new business opportunity, or they want to do a better job of servicing customers. Those are the reasons that companies hire, certainly not because of some one time tax break or other such gimmick.
People who think that such short term tweaking of tax provisions here and there will stimulate broad scale hiring and reduce unemployment in the long term have absolutely no knowledge of how the business world operates. In the real world, that kind of an approach is pure nonsense.
Then there is the part of Obama’s new plan about giving a tax break to companies that increase workers’ wages. This is so idiotic it defies belief. How could increasing wages possibly spur hiring? If anything, such an action would have the opposite effect, since the more a company pays existing employees, the less money it has to hire new ones. Furthermore, the tax break is a, again, one-time thing, but the increased wages are permanent, so no business will pay the slightest attention to this provision of Obama’s new plan.
Obama wants to, once again, extend unemployment benefits. Regardless of the merits of this proposal on humanitarian grounds, as far as job creation is concerned, it’s another absurdity. Paying people not to work for an even longer period of time will obviously not get them a job. Our goal in this area shouldn’t be to keep people on the unemployment roles for a long time; or goal should be to get them off of unemployment because they have gone back to work. The unemployed don’t need another government handout; they need a job. Extending unemployment benefits will not get them onto somebody’s payroll; if anything, it might discourage them from looking hard.
I have a suggestion for President Obama: If you want to stimulate the economy and job creation across the board, stop doing those things that stymie that. Mr. Obama, you’re part of the problem, and if you truly care about job creation, here are some things you could stop doing.
First, stop demonizing “the rich”. We continually hear you talking about how the rich don’t pay their fair share, that they are greedy, that they got where they are because they won life’s lottery rather than due to their own hard work, etc. Why would anybody, such as a sole proprietor or a small business, who can afford to hire someone actually do it when they feel they are being targeted by the government? So just stop it, Mr. Obama.
Next Mr. Obama, stop punishing companies that you regard as unworthy or that your political cronies don’t like.
Your National Labor Relations Board recently sued Boeing for moving a factory from a unionized state to a right-to-work state, which was displeasing to your union buddies.
Gibson Guitar was raided by the government because of some obscure law about wood that they import from India.
Coal users and producers have been on your hit list for years. You famously stated that you want to bankrupt the coal industry, because you think they are polluters. Your EPA recently issued new emission standards for coal-fired power plants, which will result in the closing of plants and the loss of jobs.
You apparently don’t like oil drillers, either, as you have stopped any new offshore oil exploration or drilling, loosing potentially tens of thousands of high paying jobs.
Mr. Obama, if you really care about jobs, just stop this jihad against companies and businesses.
Once you have stopped you job-killing behavior, Mr. Obama, here are two positive actions and one attitude adjustment you could undertake. These alone would have a game-changing effect on the U.S. economy and job creation.
Number 1. The U.S. has the highest corporate income tax rate in the world – 35%. Cut it. You could follow the example of Canada, and use their 16% rate. With this one action, you’d see so much increased business activity and the hiring that goes along with it that your head would swim.
Next, take a machete to onerous government regulations on business. A good start would be to cut the EPA staff by, say, half, and then go from there on a rampage through other government regulators. Companies would save millions, which they would be more than glad to use on business development. This, too, would promote economic expansion and job creation in a significant fashion.
Finally, Mr. Obama, have an epiphany. Start looking at companies and businesses of all sizes as the drivers of our economic prosperity that they are. Come to realize that the private economy, not government, creates wealth. Celebrate our free enterprise system and the magnificent benefits we all receive from it.
President Obama recently gave his umpteenth speech about the bleak situation we have with jobs and the economy and what needs to be done to make things better. That’ll solve our economic problems – another speech.
The next day, the stock market dropped three hundred points.
Obama proposed his latest and greatest plan to fix the economy, and it was for more of the same: massive government spending, throwing money at his favored groups, demonizing “the rich”, repairing the infrastructure, touting “green jobs” as the savior of the economy, demanding that Congress pass his proposal immediately, blah, blah, blah.
You may have detected that I am more than a little skeptical, which I am, because we have been down this road before with Obama. I’m sure you all remember the last stimulus, in 2009. It was twice as big as this one; we were told at the time that it would revive the economy and keep unemployment under eight percent. We were also told back then that that stimulus, like this one, had to be passed immediately in order to avoid financial calamity. Now, two years later, unemployment is stuck at over nine percent, the economy has flat lined, the housing market is non-existent, and there is almost no good economic news. Everything that Obama and crew told us the last stimulus would prevent has happened! So why would anybody still listen to these people when it comes to the economy and jobs? They are obviously clueless.
I actually read in the paper after Obama’s speech that an economist at Moody’s Analytics said this latest stimulus plan would reduce the unemployment rate to, you guessed it, eight percent!!
Of late, Obama has developed a new concern for the federal budget deficit, or at least he wants us to think so. In his speech, he said that the new spending called for in his current plan will not increase the deficit because everything in his bill will be “paid for”. He didn’t tell us how it would be paid for, though; he promised to do that later.
You can’t make this stuff up.
No matter which way one looks at Obama’s new plan, you find absurdities. Let’s start on a broad, overall scale and then work our way down to some of the specifics.
OK, from the 30,000 foot level, as they say, let’s look at this plan. It’s another government stimulus, much like the last one, only this one is smaller by half. It’s about half as big as the 2009 stimulus, and that one, by any objective measure, was a total failure. Here’s the absurdity: If a big stimulus has already failed, why will a smaller one now work? The only logical argument one could make is that the last stimulus failed because it wasn’t big enough, so now we need a larger one. But a smaller one --- ? Absurd.
Let’s go on to some of the specifics of the new plan.
It calls for government spending to keep teachers, firemen, and police on the job. But why do we only want to keep these groups employed? With the jobs picture being as bleak as it is, we need to do something to increase job creation across the board; we need to get everyone back to work. We need to create economic conditions such that all companies, large and small, in every industry, in every location, will be able to expand and start hiring. It makes no economic sense whatsoever to restrict job creation efforts to just some segments of the work force.
Now let’s look at the proposed tax breaks in Obama’s plan for companies that hire or increase wages.
I worked in the corporate world for over thirty years as an engineer and manager at various levels up to vice president. During that time, I must have hired literally hundreds of people. Never, not once, did I or anyone I knew or observed ever hire somebody because of a tax break, nor would we have. That’s not why businesses and companies hire.
Hiring is a serious matter to companies. It involves taking on a significant new expense that will be there far into the future. Note: I’m not talking about temporary or seasonal help here. Companies are looking out into the future, not just the short term. They don’t like to have to lay people off, so they only hire when they are convinced that they can afford it in the long term and that the additional sales will be there to pay for it. Hiring is a business decision, not a public service matter.
People are hired because the company has more work than it can handle, or because the company is confident that additional business is coming, or because they see a new business opportunity, or they want to do a better job of servicing customers. Those are the reasons that companies hire, certainly not because of some one time tax break or other such gimmick.
People who think that such short term tweaking of tax provisions here and there will stimulate broad scale hiring and reduce unemployment in the long term have absolutely no knowledge of how the business world operates. In the real world, that kind of an approach is pure nonsense.
Then there is the part of Obama’s new plan about giving a tax break to companies that increase workers’ wages. This is so idiotic it defies belief. How could increasing wages possibly spur hiring? If anything, such an action would have the opposite effect, since the more a company pays existing employees, the less money it has to hire new ones. Furthermore, the tax break is a, again, one-time thing, but the increased wages are permanent, so no business will pay the slightest attention to this provision of Obama’s new plan.
Obama wants to, once again, extend unemployment benefits. Regardless of the merits of this proposal on humanitarian grounds, as far as job creation is concerned, it’s another absurdity. Paying people not to work for an even longer period of time will obviously not get them a job. Our goal in this area shouldn’t be to keep people on the unemployment roles for a long time; or goal should be to get them off of unemployment because they have gone back to work. The unemployed don’t need another government handout; they need a job. Extending unemployment benefits will not get them onto somebody’s payroll; if anything, it might discourage them from looking hard.
I have a suggestion for President Obama: If you want to stimulate the economy and job creation across the board, stop doing those things that stymie that. Mr. Obama, you’re part of the problem, and if you truly care about job creation, here are some things you could stop doing.
First, stop demonizing “the rich”. We continually hear you talking about how the rich don’t pay their fair share, that they are greedy, that they got where they are because they won life’s lottery rather than due to their own hard work, etc. Why would anybody, such as a sole proprietor or a small business, who can afford to hire someone actually do it when they feel they are being targeted by the government? So just stop it, Mr. Obama.
Next Mr. Obama, stop punishing companies that you regard as unworthy or that your political cronies don’t like.
Your National Labor Relations Board recently sued Boeing for moving a factory from a unionized state to a right-to-work state, which was displeasing to your union buddies.
Gibson Guitar was raided by the government because of some obscure law about wood that they import from India.
Coal users and producers have been on your hit list for years. You famously stated that you want to bankrupt the coal industry, because you think they are polluters. Your EPA recently issued new emission standards for coal-fired power plants, which will result in the closing of plants and the loss of jobs.
You apparently don’t like oil drillers, either, as you have stopped any new offshore oil exploration or drilling, loosing potentially tens of thousands of high paying jobs.
Mr. Obama, if you really care about jobs, just stop this jihad against companies and businesses.
Once you have stopped you job-killing behavior, Mr. Obama, here are two positive actions and one attitude adjustment you could undertake. These alone would have a game-changing effect on the U.S. economy and job creation.
Number 1. The U.S. has the highest corporate income tax rate in the world – 35%. Cut it. You could follow the example of Canada, and use their 16% rate. With this one action, you’d see so much increased business activity and the hiring that goes along with it that your head would swim.
Next, take a machete to onerous government regulations on business. A good start would be to cut the EPA staff by, say, half, and then go from there on a rampage through other government regulators. Companies would save millions, which they would be more than glad to use on business development. This, too, would promote economic expansion and job creation in a significant fashion.
Finally, Mr. Obama, have an epiphany. Start looking at companies and businesses of all sizes as the drivers of our economic prosperity that they are. Come to realize that the private economy, not government, creates wealth. Celebrate our free enterprise system and the magnificent benefits we all receive from it.
Monday, September 12, 2011
Big Education
Radford University (RU) raised tuition by 8% this year, after an 11.3% increase last year. That’s a 19.3% increase in just two years. Other Virginia colleges and universities have had similar tuition increases in recent years, as have colleges around the country. One year of a college education now typically costs between $20,000 and $50,000, which comes out to $80,000 to $200,000 for the four years it normally takes to graduate.
My entire undergraduate education at the University of Virginia cost me a total of about 12 or $13,000 (that’s for tuition, fees, room, food, books, everything). Now at UVA, it’s going to cost you $25,000 a year, at least. That’s a 669% increase (since 1969).
Here is a test: Why do we not hear politicians, newspapers, TV talking heads, pundits, and all the chattering class fulminating about “big education” and price gouging and demanding investigations, and all that?
My entire undergraduate education at the University of Virginia cost me a total of about 12 or $13,000 (that’s for tuition, fees, room, food, books, everything). Now at UVA, it’s going to cost you $25,000 a year, at least. That’s a 669% increase (since 1969).
Here is a test: Why do we not hear politicians, newspapers, TV talking heads, pundits, and all the chattering class fulminating about “big education” and price gouging and demanding investigations, and all that?
Tuesday, August 30, 2011
Exegesis on "ed"
This is the one that pushed me over the edge.
Yesterday, I went to McDonald’s. This is something I do now and then as a reward for having done some especially hard work. I had been in the vineyard all day pruning the vines and picking off bad grapes one-by-one, getting ready for the harvest. So, on the way home, I stopped at McDonald’s to get a small burger, small fries, and a soda, a line-up that would be heavenly after a hot day in the field.
And then the trouble started.
I am particular about what is put on my hamburger. I want lettuce, tomato, and onion on it, but nothing else. Nothing else; especially not mayonnaise, mustard, or ketchup. So, on that day, I innocently ordered a burger with lettuce, tomato, and onion only, as I have done many times before. But this time, things progressed differently. The lovely young lady behind the counter asked if I wanted leaf lettuce or shred lettuce on my burger. I said that I’d have shredded lettuce, she punched it in, and it came up on the screen: shred lettuce. I saw it with my own two eyes: shred lettuce. I wasn’t just misunderstanding her; they were actually calling it “shred lettuce”.
So I now must address this issue, which has been tormenting me for years: the omission of “ed” in words that cry out for it to be there. I can no longer let it go. Which is one of my problems; I can’t let anything go. Really, I get concerned about such matters, because they are important to an inquisitive and disciplined mind. Yes, the proper use of “ed” is critical, because if we don’t pay attention to such details in matters of linguistics, before long we’ll all be talking baby talk.
By the way, I never talked baby talk to my babies. I conjugated verbs to them instead, but that’s another story.
Back to “shred lettuce”. Don’t the people running McDonald’s know that “shred lettuce” is what you do in order to get “shredded lettuce” to put on burgers? How can they not know this?
This is not the only time I’ve been haunted by a missing “ed”.
I actually saw a sign at a local produce stand that read, ”tree ripen peaches”. I am not making this up; it was right there on the sign. Don’t the fresh produce mongers know that “ripen” is the present tense of the verb “to ripen”; “ripened” is the past tense and is also used in the past perfect and future perfect tenses. “Ripen” means it’s occurring now; “ripened” means it has already happened. Voila! Peaches that have been left on the tree until they are fully ripened rather than being picked green are called “tree ripened”, because that’s what happened to them. I couldn’t sleep that night.
There are more. All of these are real life examples I have personally observed, much to my consternation.
When you drink cold tea with ice in it, you are consuming “iced tea”, not “ice tea”. Food that is put into cans is “canned food”. Staying with the food theme, potatoes that are mashed are ------ mashed potatoes! I have seen “mash potatoes” on a menu, and I had to bite my tongue in order to avoid making a scene. Don’t get me started on “bake potato”, because it won’t be pretty. How about “toss salad”, again, right there on a menu. What am I supposed to do, throw the salad around or something? No, it has already been “tossed” in the making, so it’s called “tossed salad”. How hard is this?
Thankfully, the cereal makers understand this issue and correctly label their boxes “shredded wheat” so I don’t have to start my day by foaming at the mouth on those mornings when I have this particular cereal for breakfast.
And if you do or make something the way it was done in days gone by, that item is “old fashioned”, as in: I am old fashioned about the proper use of the ed suffix.
Reliving all of these horrors has drained my psychic energy. I’m emotionally exhausted. But it has been worth it, because now I’m sure the world will understand this issue and it’s importance. Finally, everyone will diligently use, and pronounce in an exaggerated fashion, the “ed” that is so needed at the end of certain words.
Now, if I can just get people to understand that they don’t “graduate” high school or college, they “graduate FROM” a school, my work will be done.
Yesterday, I went to McDonald’s. This is something I do now and then as a reward for having done some especially hard work. I had been in the vineyard all day pruning the vines and picking off bad grapes one-by-one, getting ready for the harvest. So, on the way home, I stopped at McDonald’s to get a small burger, small fries, and a soda, a line-up that would be heavenly after a hot day in the field.
And then the trouble started.
I am particular about what is put on my hamburger. I want lettuce, tomato, and onion on it, but nothing else. Nothing else; especially not mayonnaise, mustard, or ketchup. So, on that day, I innocently ordered a burger with lettuce, tomato, and onion only, as I have done many times before. But this time, things progressed differently. The lovely young lady behind the counter asked if I wanted leaf lettuce or shred lettuce on my burger. I said that I’d have shredded lettuce, she punched it in, and it came up on the screen: shred lettuce. I saw it with my own two eyes: shred lettuce. I wasn’t just misunderstanding her; they were actually calling it “shred lettuce”.
So I now must address this issue, which has been tormenting me for years: the omission of “ed” in words that cry out for it to be there. I can no longer let it go. Which is one of my problems; I can’t let anything go. Really, I get concerned about such matters, because they are important to an inquisitive and disciplined mind. Yes, the proper use of “ed” is critical, because if we don’t pay attention to such details in matters of linguistics, before long we’ll all be talking baby talk.
By the way, I never talked baby talk to my babies. I conjugated verbs to them instead, but that’s another story.
Back to “shred lettuce”. Don’t the people running McDonald’s know that “shred lettuce” is what you do in order to get “shredded lettuce” to put on burgers? How can they not know this?
This is not the only time I’ve been haunted by a missing “ed”.
I actually saw a sign at a local produce stand that read, ”tree ripen peaches”. I am not making this up; it was right there on the sign. Don’t the fresh produce mongers know that “ripen” is the present tense of the verb “to ripen”; “ripened” is the past tense and is also used in the past perfect and future perfect tenses. “Ripen” means it’s occurring now; “ripened” means it has already happened. Voila! Peaches that have been left on the tree until they are fully ripened rather than being picked green are called “tree ripened”, because that’s what happened to them. I couldn’t sleep that night.
There are more. All of these are real life examples I have personally observed, much to my consternation.
When you drink cold tea with ice in it, you are consuming “iced tea”, not “ice tea”. Food that is put into cans is “canned food”. Staying with the food theme, potatoes that are mashed are ------ mashed potatoes! I have seen “mash potatoes” on a menu, and I had to bite my tongue in order to avoid making a scene. Don’t get me started on “bake potato”, because it won’t be pretty. How about “toss salad”, again, right there on a menu. What am I supposed to do, throw the salad around or something? No, it has already been “tossed” in the making, so it’s called “tossed salad”. How hard is this?
Thankfully, the cereal makers understand this issue and correctly label their boxes “shredded wheat” so I don’t have to start my day by foaming at the mouth on those mornings when I have this particular cereal for breakfast.
And if you do or make something the way it was done in days gone by, that item is “old fashioned”, as in: I am old fashioned about the proper use of the ed suffix.
Reliving all of these horrors has drained my psychic energy. I’m emotionally exhausted. But it has been worth it, because now I’m sure the world will understand this issue and it’s importance. Finally, everyone will diligently use, and pronounce in an exaggerated fashion, the “ed” that is so needed at the end of certain words.
Now, if I can just get people to understand that they don’t “graduate” high school or college, they “graduate FROM” a school, my work will be done.
Monday, August 22, 2011
Saved From The Edison Light Bulb
While the politicians in Washington haven’t been able to do anything serious about unemployment, the economy, or the out-of-control government spending, it is reassuring to keep in mind that they can, in fact, solve big, important, pressing problems from time to time. Congress can rise to the occasion. For example, come January 1, Congress’s solution to one of the most serous problems to confront America in recent times will kick in. As of that date, a bill passed by Congress will save us from a deathly hazard that threatens “the nation’s future and collective health”, as the luminaries at the L. A. Times put it. That threat is the light bulb invented by Thomas Edison.
Take heart, my beleaguered friends. Your 401k may have tanked, you may not have a job or any prospects for one, the U.S. Government may have less cash on hand than Apple Computer, you may have to pay an amount for your little cherubim’s college education that would have gotten a building named after you in the old days, the comrads in Washington may want to raise your taxes to cover their profligate spending because you don’t pay what they consider to be your “fair share”, Iran may be about to nuke up, the country may lurch from economic and budgetary crisis to crisis, but at least you no longer have to worry about incandescent light bulbs. Those are the ones that have that horrid little filament in them. You know, the type of light bulbs we’ve been using for the last 130 years or so.
I’m sure you have been worried about them, unless you are a dim bulb indeed. As you no doubt know, incandescent light bulbs are energy hogs of the worst sort. They suck up energy like Fat Albert chowing down on the vittles over at the all-you-can-eat catfish and hush puppy shack. You have noticed that incandescent light bulbs do that, haven’t you? Pay no attention to your air conditioner or heat pump; it’s those evil light bulbs that are wreaking destruction on you and the world.
But you have been saved. You no longer have to live in fear of incandescent light bulbs. You can now rest easy; CFL’s (compact fluorescent lamps) have arrived just in the nick of time.
Umm, well, those CFL’s do have some very minor problems, but you needn’t worry your pretty little self about any of that.
What are those problems, you say? My, my, my, aren’t you the curious one. It’s nothing, really, nothing.
Oh, OK, since you insist.
First of all, CFL’s contain mercury, an extremely dangerous substance. It’s a small amount, to be sure, but it’s mercury none the less.
If, God forbid, one of those Earth-saving CFL’s happens to break in your house, people and pets must immediately evacuate (avoiding the “breakage area” on the way out), windows and/or doors should be opened to air the place out, central heating or air conditioning is to be turned off, and then you are to follow the seven step Hazmat clean-up procedure published by the EPA. If you use a vacuum cleaner in the clean-up process, the vacuum cleaner bag must be sealed in a plastic bag and immediately removed from the house.
Because of this problem with broken CFL’s, the EPA also recommends that a drop cloth be used when replacing a CFL, in case it is dropped and broken.
Since the CFL’s contain mercury, disposal is also a problem. Again, one CFL contains only a very small amount of mercury, but with the millions upon millions of them that will be used over the years, the total amount of mercury involved is significant. If the used bulbs are thrown into the trash, you’d better make sure you don’t use a trash compactor that will crush them. Even if the used CFL’s make it out to curbside unbroken, they will get deposited in a landfill to be pushed around by a bulldozer that will no doubt break them, and all of that mercury will eventually seep into the ground water. Or you could take your used CFL’s to a recycling center (being sure to tell them what you have), and let them worry about it.
Other than all of that mercury stuff, the CFL’s are just great.
Well, there is one other very trivial problem. Some CFL’s have been known to smoke or catch on fire. The August 2011 issue of Consumer Reports had an article under the title “Bulbs pose fire hazard” discussing this and identifying the CFL’s that have been recalled.
Did I mention that CFL’s typically cost several times as much as an incandescent bulb? No matter, you’ll recoup that extra cost by means of reduced electricity usage and longer bulb life.
Maybe.
The Department of Energy has said that mandatory use of CFL’s will save 15 quadrillion BTU’s over the next thirty years, or about 0.013 percent of U.S. energy usage. You will personally save pennies upon pennies in your monthly electric bill.
But your saving could well be eaten up by the greater cost of the CFL’s, since it turns out that they are not lasting nearly as long as expected. Pacific Gas & Electric (PG&E) in California has reported that CFL’s are lasting an average of 6.3 years verses the 9.4 that they initially estimated, or thirty-three percent less. An article in the Weekly Standard reported that a quarter of CFL’s only achieved about 40% of their projected life span. It seems that the life span tests were done under ideal conditions; e.g., turning the lamp on and leaving it on continuously. Surprise, surprise; in the real world, lights aren’t used that way. They are turned on and off, sometimes frequently, and that kind of usage reduces their life span. This is something that the incandescent people at GE and Sylvania have known for at least a hundred years, but it somehow escaped the notice of the CFL people until after they had convinced Congress to pass a law on the matter.
The last light bulb factory in the U.S. has closed, and it is most likely that CFL’s will ultimately be made only in China. The additional transportation costs should be factored into the CFL cost saving calculation, but it is difficult to do as accurately. The additional cost is there, though. And so much for “buying local”.
In any event, please join me in giving thanks that we live in a country where we have a government wise and caring enough to save us from incandescent light bulbs. That is of great comfort to me as I consider all of the other problems we face in this country.
Take heart, my beleaguered friends. Your 401k may have tanked, you may not have a job or any prospects for one, the U.S. Government may have less cash on hand than Apple Computer, you may have to pay an amount for your little cherubim’s college education that would have gotten a building named after you in the old days, the comrads in Washington may want to raise your taxes to cover their profligate spending because you don’t pay what they consider to be your “fair share”, Iran may be about to nuke up, the country may lurch from economic and budgetary crisis to crisis, but at least you no longer have to worry about incandescent light bulbs. Those are the ones that have that horrid little filament in them. You know, the type of light bulbs we’ve been using for the last 130 years or so.
I’m sure you have been worried about them, unless you are a dim bulb indeed. As you no doubt know, incandescent light bulbs are energy hogs of the worst sort. They suck up energy like Fat Albert chowing down on the vittles over at the all-you-can-eat catfish and hush puppy shack. You have noticed that incandescent light bulbs do that, haven’t you? Pay no attention to your air conditioner or heat pump; it’s those evil light bulbs that are wreaking destruction on you and the world.
But you have been saved. You no longer have to live in fear of incandescent light bulbs. You can now rest easy; CFL’s (compact fluorescent lamps) have arrived just in the nick of time.
Umm, well, those CFL’s do have some very minor problems, but you needn’t worry your pretty little self about any of that.
What are those problems, you say? My, my, my, aren’t you the curious one. It’s nothing, really, nothing.
Oh, OK, since you insist.
First of all, CFL’s contain mercury, an extremely dangerous substance. It’s a small amount, to be sure, but it’s mercury none the less.
If, God forbid, one of those Earth-saving CFL’s happens to break in your house, people and pets must immediately evacuate (avoiding the “breakage area” on the way out), windows and/or doors should be opened to air the place out, central heating or air conditioning is to be turned off, and then you are to follow the seven step Hazmat clean-up procedure published by the EPA. If you use a vacuum cleaner in the clean-up process, the vacuum cleaner bag must be sealed in a plastic bag and immediately removed from the house.
Because of this problem with broken CFL’s, the EPA also recommends that a drop cloth be used when replacing a CFL, in case it is dropped and broken.
Since the CFL’s contain mercury, disposal is also a problem. Again, one CFL contains only a very small amount of mercury, but with the millions upon millions of them that will be used over the years, the total amount of mercury involved is significant. If the used bulbs are thrown into the trash, you’d better make sure you don’t use a trash compactor that will crush them. Even if the used CFL’s make it out to curbside unbroken, they will get deposited in a landfill to be pushed around by a bulldozer that will no doubt break them, and all of that mercury will eventually seep into the ground water. Or you could take your used CFL’s to a recycling center (being sure to tell them what you have), and let them worry about it.
Other than all of that mercury stuff, the CFL’s are just great.
Well, there is one other very trivial problem. Some CFL’s have been known to smoke or catch on fire. The August 2011 issue of Consumer Reports had an article under the title “Bulbs pose fire hazard” discussing this and identifying the CFL’s that have been recalled.
Did I mention that CFL’s typically cost several times as much as an incandescent bulb? No matter, you’ll recoup that extra cost by means of reduced electricity usage and longer bulb life.
Maybe.
The Department of Energy has said that mandatory use of CFL’s will save 15 quadrillion BTU’s over the next thirty years, or about 0.013 percent of U.S. energy usage. You will personally save pennies upon pennies in your monthly electric bill.
But your saving could well be eaten up by the greater cost of the CFL’s, since it turns out that they are not lasting nearly as long as expected. Pacific Gas & Electric (PG&E) in California has reported that CFL’s are lasting an average of 6.3 years verses the 9.4 that they initially estimated, or thirty-three percent less. An article in the Weekly Standard reported that a quarter of CFL’s only achieved about 40% of their projected life span. It seems that the life span tests were done under ideal conditions; e.g., turning the lamp on and leaving it on continuously. Surprise, surprise; in the real world, lights aren’t used that way. They are turned on and off, sometimes frequently, and that kind of usage reduces their life span. This is something that the incandescent people at GE and Sylvania have known for at least a hundred years, but it somehow escaped the notice of the CFL people until after they had convinced Congress to pass a law on the matter.
The last light bulb factory in the U.S. has closed, and it is most likely that CFL’s will ultimately be made only in China. The additional transportation costs should be factored into the CFL cost saving calculation, but it is difficult to do as accurately. The additional cost is there, though. And so much for “buying local”.
In any event, please join me in giving thanks that we live in a country where we have a government wise and caring enough to save us from incandescent light bulbs. That is of great comfort to me as I consider all of the other problems we face in this country.
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