When President Obama proposed “son of stimulus”, any remaining doubt about his intentions was removed. He doesn’t care about jobs; his overriding concern is to massively increase government spending and raise taxes to pay for it. One member of Obama’s staff famously said a crisis should never go to waste. That’s what this is all about - Obama using the economic situation as an opportunity to further his agenda. He doesn’t want to solve the problem; he wants to exploit it. He and his enablers are statists who want most of all to increase government control of every aspect of our lives. To them, only the elite ruling class is competent enough to know what’s good for the masses.
If Obama wants jobs, why does he prevent more off-shore drilling and the thousands of high paying jobs that would go with it? Why does he want to bankrupt the coal industry (as he was caught on tape saying)? Why has he delayed the Keystone pipeline project that would create more thousands of jobs? Why is he letting the EPA put forth even stricter standards that will cause AEP to have to close six power plants (including Glen Lyn). Why is he pushing cap-and-trade that will send thousands of jobs overseas? Why is his administration going after Gibson Guitar? Why did he let his NLRB sue Boeing to keep them from building a new factory in South Carolina? Why is he continually talking about higher taxes? Why is Obama doing so much to kill jobs if he wants jobs?
The facts show that the first stimulus was an abject failure. Unemployment is stuck at 9%, and the real unemployment rate that covers the underemployed and those who have given up is estimated to be at 16%. The economy is still on life support and the housing market is not recovering at all. These are the results that Obama and crew have achieved with all of their massive government spending.
What is their response to the failure of the first stimulus and all the other government spending? Spend more!
The government has no money of its own. It only has money that it takes from us as taxes, or it can borrow.
How can the government stimulate the economy by taking money from one citizen (as taxes) and giving it to another citizen? There is no net gain in that.
Or even worse, as is now happening, how can the government stimulate the economy by spending borrowed money. The national debt is now close to $14 trillion, which will all have to be paid back with interest. This will be a burden to the federal budget and the economy for generations. You can’t continually borrow your way to prosperity.
The Republicans tried to provide some adult supervision in the recent debt ceiling issue, but the Democrats fought it tooth and toenail. The Democrats don’t care about trillions of debt and all of the bad effects of that; they demand more of it.
If you want to look back at the Great Depression, it is actually very instructive. President Roosevelt and all of his massive government spending and government make-work jobs did not solve the unemployment problem. What got us out of the Great Depression was World War II and the real jobs in the private sector that came from that.
If Obama wants to create jobs, he needs to learn how to do it.
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!
This all happened without one penny of government stimulus money. There are untold more such examples. That is how you create jobs - provide an environment where companies large and small can flourish, grow, and hire people because they need them. Obama does the exact opposite; he punishes companies and incites class warfare.
Wednesday, November 16, 2011
Saturday, November 12, 2011
Liberals Feel; Conservatives Think
During my decades of observing and commenting on political and social issues, I have slowly come to the conclusion that liberals apparently live in a parallel universe where reality is not defined by past history, logic, reason, hard data, common sense, and factual observations but rather by how one feels. Reality to a liberal is determined by their feelings and their dogma. This is why you can’t have a legitimate debate of the issues with liberals; what they feel must be true even though past history and hard data show the contrary.
Let’s go on a journey through the parallel universe in which liberals live.
Liberals’ parallel universe: The “rich” don’t pay their fair share of taxes.
Real universe of facts: The top 1% of income earners paid 38% of all federal incomes taxes, the top 5% paid 59%, and the top 10% paid 70%, according to IRS data from 2008, the most recent year for which data is available. On the other end of the income scale, 49% of U.S. households paid no federal income tax whatsoever.
Liberal response: The rich have too much money and need to pay more, no matter what IRS statistics one can come up with.
Liberals’ parallel universe: The current federal budget deficit could be fixed if the “rich” paid only a little more in taxes.
Real universe of hard data: If Congress tried to pay off the deficit by raising taxes on small businesses, investors, and individuals making more than $250,000 per year, the top two tax rates would have to be raised to 132% and 142%, i.e., more than the affected people make. If Washington took all of the income of the top 1% , it would yield $938 billion, compared to a $14 trillion national debt.
Liberal response: Well, no matter, the rich need to pay more.
Liberal’s parallel universe: The economy can be jump-started by government spending.
Real universe of historical experience: After TARP, the stimulus, bailouts of Wall Street, bailouts of Detroit, cash-for-clunkers, bailouts of the states, bailouts of teachers, huge government deficit spending, etc. the economy has not recovered, the housing market is still in the tank, and unemployment has not gone down.
Liberal response: The government didn’t spend enough; we need another stimulus.
Liberals’ parallel universe: The temperature of the earth’s atmosphere is rising due to the effects of mankind’s energy usage.
Real universe of actual events: Leaked emails from East Anglia University, one of the major climate research institutions, show that climate research scientists who support man-made global warming fudged the numbers to get the answer they wanted, ignored evidence to the contrary, ostracized and persecuted scientists who disagreed with them, and raked in millions of dollars in research grants in the process.
Real world of common sense: Meteorologists can’t accurately and consistently predict the weather for next week, the Farmer’s Almanac can’t reliably tell us what the weather will be this coming year, but global warming scientists can predict the earth’s temperature fifty years from now to within a hundredth of a degree, with surety.
Liberal response: It doesn’t matter, because man-made global warming just must be true.
Liberals’ parallel universe: Public schools are failing, in general, because they are underfunded.
Real universe of observable, factual results: The Washington, D.C. schools get more money per capita than any school system in the country, but achieve some of the worst results. Catholic schools spend much less than public schools per student and get some of the highest results.
Liberal response: It’s all about the children! Schools need more money!
Liberals’ parallel universe: Unemployment benefits are good for the economy.
Real world of common sense: So why don’t we just all quit our jobs (or get fired) and go on unemployment? The economy would boom.
Liberal response: Umm, umm, well ------.
Liberals’ parallel universe: We live in a racist society. People of color are held back.
Real universe of actual people: Condoleeza Rich, Colin Powell, Clarence Thomas, Barack Obama, Alan West, Marco Rubio, Michael Steele, Herman Cain, E. W. Jackson, the NFL, the NBA, Francis Rice, Thomas Sowell, college faculties, Nikki Haley, Jesse Lee Peterson, etc.
Liberal response: They don’t count.
Liberals’ parallel universe: People should wash their jeans less and do all sorts of other things in order to save water, because if we don’t, the planet will run out.
Real universe of science: The water cycle: Water evaporates from the oceans, goes into the atmosphere as water vapor, condenses and falls back down to Earth as rain or snow or ice, and the cycle repeats itself over and over. The water does not leave the planet. Local shortages can occur, but the planet will not run out of water, barring some cosmic event.
Liberal response: Huh?
Liberals’ parallel universe: Bill Clinton is a respectable person.
Real world of actual people and events: Jennifer Flowers, Paula Jones, and Juanita Broderick all accused Bill Clinton of sexual abuse of the worst sort. Ms. Broderick actually accused Clinton of raping her. Clinton settled with Ms. Jones for $850,000. And then there was Monica.
Liberal response: Well, Clinton supports abortion and other liberal causes, so he must be a good guy. We need more people like him.
Liberals’ parallel universe: Cigarette smoke is so dangerous that smokers must be banished to 25 feet from an office building because just a whiff of second-hand smoke or even coming into contact with third-hand smoke (yes, we’re up to third hand smoke now), such as touching the steering wheel of a car in which someone has smoked a lot, can kill you.
Real world of common sense: Touching the steering wheel of a smoker’s car can kill you?
Liberal response: You want people to die, don’t you?
The list goes on: Barack Obama has been a good President; The “occupy” movement is a peaceful uprising of ordinary citizens; Ted Kennedy was a great human being; “Cash for clunkers” was a worthwhile program; The H1N1 scare warranted a massive government response; Eating red meat is bad for you; CO2 is a pollutant; Passing out condoms to ninth graders is a good idea; Polar bears are dying off; The sub-prime mortgage collapse was caused by greedy banks; etc. ad nauseum. All of these notions are demonstrably false in the real world of rational fact-based thought, but they and many others live on and thrive in the parallel liberal universe of “feelings”.
The next time you try to have a discussion of some issue with a liberal, notice how quickly they resort to name calling and the questioning of your character. That’s because if they debate the issue, whatever it is, using facts, hard data, actual experience, logic, and reason, they lose every time. So they call you names instead and retreat to the safety of their parallel universe where all that matters is how they feel.
Let’s go on a journey through the parallel universe in which liberals live.
Liberals’ parallel universe: The “rich” don’t pay their fair share of taxes.
Real universe of facts: The top 1% of income earners paid 38% of all federal incomes taxes, the top 5% paid 59%, and the top 10% paid 70%, according to IRS data from 2008, the most recent year for which data is available. On the other end of the income scale, 49% of U.S. households paid no federal income tax whatsoever.
Liberal response: The rich have too much money and need to pay more, no matter what IRS statistics one can come up with.
Liberals’ parallel universe: The current federal budget deficit could be fixed if the “rich” paid only a little more in taxes.
Real universe of hard data: If Congress tried to pay off the deficit by raising taxes on small businesses, investors, and individuals making more than $250,000 per year, the top two tax rates would have to be raised to 132% and 142%, i.e., more than the affected people make. If Washington took all of the income of the top 1% , it would yield $938 billion, compared to a $14 trillion national debt.
Liberal response: Well, no matter, the rich need to pay more.
Liberal’s parallel universe: The economy can be jump-started by government spending.
Real universe of historical experience: After TARP, the stimulus, bailouts of Wall Street, bailouts of Detroit, cash-for-clunkers, bailouts of the states, bailouts of teachers, huge government deficit spending, etc. the economy has not recovered, the housing market is still in the tank, and unemployment has not gone down.
Liberal response: The government didn’t spend enough; we need another stimulus.
Liberals’ parallel universe: The temperature of the earth’s atmosphere is rising due to the effects of mankind’s energy usage.
Real universe of actual events: Leaked emails from East Anglia University, one of the major climate research institutions, show that climate research scientists who support man-made global warming fudged the numbers to get the answer they wanted, ignored evidence to the contrary, ostracized and persecuted scientists who disagreed with them, and raked in millions of dollars in research grants in the process.
Real world of common sense: Meteorologists can’t accurately and consistently predict the weather for next week, the Farmer’s Almanac can’t reliably tell us what the weather will be this coming year, but global warming scientists can predict the earth’s temperature fifty years from now to within a hundredth of a degree, with surety.
Liberal response: It doesn’t matter, because man-made global warming just must be true.
Liberals’ parallel universe: Public schools are failing, in general, because they are underfunded.
Real universe of observable, factual results: The Washington, D.C. schools get more money per capita than any school system in the country, but achieve some of the worst results. Catholic schools spend much less than public schools per student and get some of the highest results.
Liberal response: It’s all about the children! Schools need more money!
Liberals’ parallel universe: Unemployment benefits are good for the economy.
Real world of common sense: So why don’t we just all quit our jobs (or get fired) and go on unemployment? The economy would boom.
Liberal response: Umm, umm, well ------.
Liberals’ parallel universe: We live in a racist society. People of color are held back.
Real universe of actual people: Condoleeza Rich, Colin Powell, Clarence Thomas, Barack Obama, Alan West, Marco Rubio, Michael Steele, Herman Cain, E. W. Jackson, the NFL, the NBA, Francis Rice, Thomas Sowell, college faculties, Nikki Haley, Jesse Lee Peterson, etc.
Liberal response: They don’t count.
Liberals’ parallel universe: People should wash their jeans less and do all sorts of other things in order to save water, because if we don’t, the planet will run out.
Real universe of science: The water cycle: Water evaporates from the oceans, goes into the atmosphere as water vapor, condenses and falls back down to Earth as rain or snow or ice, and the cycle repeats itself over and over. The water does not leave the planet. Local shortages can occur, but the planet will not run out of water, barring some cosmic event.
Liberal response: Huh?
Liberals’ parallel universe: Bill Clinton is a respectable person.
Real world of actual people and events: Jennifer Flowers, Paula Jones, and Juanita Broderick all accused Bill Clinton of sexual abuse of the worst sort. Ms. Broderick actually accused Clinton of raping her. Clinton settled with Ms. Jones for $850,000. And then there was Monica.
Liberal response: Well, Clinton supports abortion and other liberal causes, so he must be a good guy. We need more people like him.
Liberals’ parallel universe: Cigarette smoke is so dangerous that smokers must be banished to 25 feet from an office building because just a whiff of second-hand smoke or even coming into contact with third-hand smoke (yes, we’re up to third hand smoke now), such as touching the steering wheel of a car in which someone has smoked a lot, can kill you.
Real world of common sense: Touching the steering wheel of a smoker’s car can kill you?
Liberal response: You want people to die, don’t you?
The list goes on: Barack Obama has been a good President; The “occupy” movement is a peaceful uprising of ordinary citizens; Ted Kennedy was a great human being; “Cash for clunkers” was a worthwhile program; The H1N1 scare warranted a massive government response; Eating red meat is bad for you; CO2 is a pollutant; Passing out condoms to ninth graders is a good idea; Polar bears are dying off; The sub-prime mortgage collapse was caused by greedy banks; etc. ad nauseum. All of these notions are demonstrably false in the real world of rational fact-based thought, but they and many others live on and thrive in the parallel liberal universe of “feelings”.
The next time you try to have a discussion of some issue with a liberal, notice how quickly they resort to name calling and the questioning of your character. That’s because if they debate the issue, whatever it is, using facts, hard data, actual experience, logic, and reason, they lose every time. So they call you names instead and retreat to the safety of their parallel universe where all that matters is how they feel.
Saturday, October 29, 2011
Yes we Cain!
Herman Cain is running for the Republican nomination to be their candidate for President in the 2012 election. To say that he’s not your usual Presidential candidate is an understatement. As far as I’m concerned, he’s a breath of fresh air in what can be the stultifying world of political candidates.
Let’s take a quick look at his life. He has truly lived the American dream.
Herman Cain grew up in Atlanta in the 1950’s and 60’s with, as his bio says, “loving parents and little else”. His father worked three jobs and his mother was a domestic worker. Their dream was for their two children to go to college. Herman graduated from Morehouse College in 1967 with a degree in mathematics, and his brother graduated from Morris Brown College. Mission accomplished.
Herman went on to get a Master’s degree in computer science from Purdue University while working full-time for the Department of the Navy (as a civilian employee). After moving back to Atlanta, he took a job as a computer systems analyst for Coca-Cola. His mathematics and computer science degrees made Herman somewhat of a techno-geek of that time. He liked the work, but gravitated toward business management. He moved to Pillsbury and became regional vice-president of the Burger King division. Herman was assigned to a low performing region of 450 restaurants, and within three years it became the best performing segment of the company.
With that success under his belt (no pun intended), Herman accepted the challenge to become President of Godfather’s Pizza, a company that was close to bankruptcy. Herman and his management team returned Godfather’s to profitability; then they bought the company!
All of this led to Herman being named President of the National Restaurant Association, a trade and lobbying group for the restaurant industry. In this role, he once had the opportunity to speak to President Clinton regarding the impact to businesses of Clinton’s proposed health care overhaul. Herman challenged the President on this issue, which gained Herman some national attention. Newsweek magazine credited him with being one of the primary reasons that Hillarycare got nowhere.
Herman’s work at the National Restaurant Association gave him the opportunity to work with business leaders across the country. This resulted in him being named to the Board of Directors of the Federal Reserve Bank of Kansas City. He subsequently became Chairman of the Board.
Think about this life. Here is a person who started with literally nothing except his God-given talents, a desire to get ahead, and a willingness to work hard to make it happen. And look at what he’s accomplished! Only in America; that’s what I love about this country.
Now Herman is running for President, because he thinks the country is headed in the wrong direction. He sees a big, bloated federal government that is exerting too much control over almost everything; he sees an economy that is on life-support with no improvement in sight; he sees federal government policies that are making the economic problem worse; he sees out-of-control federal spending; he sees a President who only wants more of the same. Herman wants to get us back on track as a nation so that the American dream he experienced can continue to be available to future generations and so we will remain the land of the free.
I had the opportunity to hear Herman speak live at an event last June. At that time, he was getting little attention, and many of the political elite were saying that this pizza guy had no chance to get the nomination. Herman came out on stage and blew the others away. No one else was close. His catch line was: I didn’t get that memo (saying I have no chance), so I’m going on. Nicely done, I thought.
Speaking of the “pizza guy”, I really do wish Herman would let it be known that he was Chairman of the Federal Reserve Bank in Kansas City. Given that the economy is one of our major problems and there is all of this talk about monetary policy, quantitative easing, inflation/deflation, interest rates, etc., I don’t understand why Herman doesn’t play up his experience in this area more. No other candidate has this kind of monetary policy experience
Now Herman is pushing his “9-9-9” plan to improve the economy and overhaul the federal tax code. His plan is getting a lot of attention. It’s all over the news, the internet, and even The Wall Street Journal did a piece on it. In one of the recent debates, the other candidates were attacking 9-9-9 from all angles, which was curious, I thought, since at the time the only other candidate with an economic plan was Romney. So all of the others who had no plan were attacking Cain’s plan!
Herman’s 9-9-9 plan does, however, need to be discussed and debated. That’s as it should be. But whatever you may think of 9-9-9, Herman deserves credit for taking a bold position and for initiating a national discussion on this major issue, rather than tiptoeing through the tulips, as politicians are wont to do.
And that brings me to another reason why I like what I see in Cain: He’s not a career politician. Herman isn’t running for President because he’s next in line, or because this is his next promotion, or because he’s good at telling people what they want to hear, or because he has been pandering to various special interest groups his whole life and they will now support him, or for his own self-aggrandizement.
Not being a career politician has another benefit: Herman has no fear of the party bosses. They didn’t make him, and they can’t hurt him. His career isn’t at stake. He’s already made it in life. He is untouchable.
Herman has lived his life in the real world; a world where he solved problems instead of just talking about them. It’s a world where posturing isn’t enough; you actually have to deliver. He wants to be elected President so he can lead the way in solving our nation’s problems and ensuring that America remains that shining city on a hill, the world’s last best hope, the greatest nation on Earth.
Let’s take a quick look at his life. He has truly lived the American dream.
Herman Cain grew up in Atlanta in the 1950’s and 60’s with, as his bio says, “loving parents and little else”. His father worked three jobs and his mother was a domestic worker. Their dream was for their two children to go to college. Herman graduated from Morehouse College in 1967 with a degree in mathematics, and his brother graduated from Morris Brown College. Mission accomplished.
Herman went on to get a Master’s degree in computer science from Purdue University while working full-time for the Department of the Navy (as a civilian employee). After moving back to Atlanta, he took a job as a computer systems analyst for Coca-Cola. His mathematics and computer science degrees made Herman somewhat of a techno-geek of that time. He liked the work, but gravitated toward business management. He moved to Pillsbury and became regional vice-president of the Burger King division. Herman was assigned to a low performing region of 450 restaurants, and within three years it became the best performing segment of the company.
With that success under his belt (no pun intended), Herman accepted the challenge to become President of Godfather’s Pizza, a company that was close to bankruptcy. Herman and his management team returned Godfather’s to profitability; then they bought the company!
All of this led to Herman being named President of the National Restaurant Association, a trade and lobbying group for the restaurant industry. In this role, he once had the opportunity to speak to President Clinton regarding the impact to businesses of Clinton’s proposed health care overhaul. Herman challenged the President on this issue, which gained Herman some national attention. Newsweek magazine credited him with being one of the primary reasons that Hillarycare got nowhere.
Herman’s work at the National Restaurant Association gave him the opportunity to work with business leaders across the country. This resulted in him being named to the Board of Directors of the Federal Reserve Bank of Kansas City. He subsequently became Chairman of the Board.
Think about this life. Here is a person who started with literally nothing except his God-given talents, a desire to get ahead, and a willingness to work hard to make it happen. And look at what he’s accomplished! Only in America; that’s what I love about this country.
Now Herman is running for President, because he thinks the country is headed in the wrong direction. He sees a big, bloated federal government that is exerting too much control over almost everything; he sees an economy that is on life-support with no improvement in sight; he sees federal government policies that are making the economic problem worse; he sees out-of-control federal spending; he sees a President who only wants more of the same. Herman wants to get us back on track as a nation so that the American dream he experienced can continue to be available to future generations and so we will remain the land of the free.
I had the opportunity to hear Herman speak live at an event last June. At that time, he was getting little attention, and many of the political elite were saying that this pizza guy had no chance to get the nomination. Herman came out on stage and blew the others away. No one else was close. His catch line was: I didn’t get that memo (saying I have no chance), so I’m going on. Nicely done, I thought.
Speaking of the “pizza guy”, I really do wish Herman would let it be known that he was Chairman of the Federal Reserve Bank in Kansas City. Given that the economy is one of our major problems and there is all of this talk about monetary policy, quantitative easing, inflation/deflation, interest rates, etc., I don’t understand why Herman doesn’t play up his experience in this area more. No other candidate has this kind of monetary policy experience
Now Herman is pushing his “9-9-9” plan to improve the economy and overhaul the federal tax code. His plan is getting a lot of attention. It’s all over the news, the internet, and even The Wall Street Journal did a piece on it. In one of the recent debates, the other candidates were attacking 9-9-9 from all angles, which was curious, I thought, since at the time the only other candidate with an economic plan was Romney. So all of the others who had no plan were attacking Cain’s plan!
Herman’s 9-9-9 plan does, however, need to be discussed and debated. That’s as it should be. But whatever you may think of 9-9-9, Herman deserves credit for taking a bold position and for initiating a national discussion on this major issue, rather than tiptoeing through the tulips, as politicians are wont to do.
And that brings me to another reason why I like what I see in Cain: He’s not a career politician. Herman isn’t running for President because he’s next in line, or because this is his next promotion, or because he’s good at telling people what they want to hear, or because he has been pandering to various special interest groups his whole life and they will now support him, or for his own self-aggrandizement.
Not being a career politician has another benefit: Herman has no fear of the party bosses. They didn’t make him, and they can’t hurt him. His career isn’t at stake. He’s already made it in life. He is untouchable.
Herman has lived his life in the real world; a world where he solved problems instead of just talking about them. It’s a world where posturing isn’t enough; you actually have to deliver. He wants to be elected President so he can lead the way in solving our nation’s problems and ensuring that America remains that shining city on a hill, the world’s last best hope, the greatest nation on Earth.
Saturday, October 15, 2011
Government Greed
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.
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.
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.
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