CapitalistMarks

Economic forest. Where to start?

Posted on 02. Jun, 2009 by scott.

Obama is plugging along, well into his 2nd hundred days in office.? How’s he doing?? Generally pretty good, in my opinion.? A hurricane of fresh air compared to the last 8 years.

But . . .

He is showing signs of missing the boat in the economic and social part of his growingly complicated and wishful agenda.

Two things worry my right now.? The first is his lack of attention to the single biggest economic and social issue of our era . . . Social Security/Medicare.? The second is his continuing lack of concern about unemployment.

Some words of wisdom on both.

I believe that BHO has it right when he points at NOW as the time to implement universal health care.? How can we even consider ourselves a great nation, let alone the greatest, if we fail to provide basic health care for every single one of our citizens?? We can’t.? So that is high on his agenda.? However, he is completely neglecting the pending failure of Social Security and Medicare and they are inextricably related.? Everyone in this country who is not in the highest tax brackets has a varying degree of reliance on these social programs.? Yet, we know they will fail.? Sooner rather than later in the case of Medicare (2017 or earlier).? Our governments unfunded liabilities in these two programs make the current bailout and stimulus package pale in comparison (in the tens of trillions of $$).

The problem here is that even the government has recognized this for a least a generation.? No one wants to do anything about it.? How is BHO going to implement a ’self-funding’ universal health care system if all retirees are bankrupt and living under the nearest freeway overpass? Frankly, I’m already staking out my spot.

This problem has to move to the forefront now.? We have to stop delaying the debate and move on it before it is a bigger crisis than energy independence.

Unemployment.? Jeez Louise, haven’t I said enough about this already?? China has the bulk of their stimulus package tied up in infrastructure projects that are creating meaningful jobs.? There economy is growing still.

And, remember there is a multiplier effect with any new jobs (as in every new job created by the government’s stimulus creates another? half a job or so in the service/retail sectors — the people with new jobs are going to eat and spend somewhere!).? What has BHO done.? Any infrastructure money is limited and mostly out at least 12-18 months.? He’s more worried about the money flow than who it needs to flow to!

Unemployment is 8.9% today (later this week I believe we will see it at 9.3% or even higher).? We have to do something.?

Bail out the banks? Done.? Bail out GM and Chrysler?? Done.? Bail out other financial firms that have close ties to Washington through their lobbyists (AIG, GE, airlines etc.)?? Done.?

Create jobs for the average Joe.? Haven’t even started.?

We are still sliding down that slippery slope with increasing speed.? At the bottom is one heck of a concrete wall and we are heading right for it.

Create jobs Mr. President.? Save our retirement? funds and medicare.? Help out the average American, not those knuckleheads who pay the most taxes but don’t shop at Walmart and the Dollar Store witht he majority of us.

There is an economic forest out there.? Real thick admittedly.? But look for the biggest and weakest trees in the economic and social food chain.? Social Security.? Medicare.? Unemployment.

Please Mr. President.? Please, Michelle.

Don’t care if the markets are taking off.? Don’t care if the future looks bright to Timothy Giethner or Larry Summers or the CEO’s of our corrupt banks.?

Do care if we won’t have anything waiting for us at the end of the 66 year rainbow.

Start with the issues just discussed.?

Then, in 4 or 8 years your legacy will be genuinely positive.? Give us all a future.

Thanks for listening folks, and keep those $$ pouring into the social tax buckets, I’m going to need them sooner than later.

And, you will too someday!

?

Thanks to flickr’s mgspiller for the foto

Continue Reading

GM, the Macro impact of Micro failure!

Posted on 29. May, 2009 by scott.

This is a brief lesson in macro & micro economics.? It is a friday evening musing about the failures of America’s once giant automakers and the impact these failures will have on the future.? Read this before next monday so you can watch the reality of greed versus need.

Then let me know if you think what you will learn from this is important, correct or even interesting.

En garde!

Many months ago I told a macro economic class I was teaching that GM was going to file bankruptcy (last September to be exact).? Now about $40 billion of taxpayer money later, the government and the company have come to the same conclusion.? How sad that it took this long.? I wish we had let this process go on during the trauma of late ‘08 and early ‘09 so it would be over by now.? But then our government knows best (uhhuh, like Madoff knew best).

Here is the quick catch up lesson.

Macro economics is the economics of a nation (geo macro in the case of multiple nations).? The stuff you have to understand here is GDP, interest rates, monetary policy (how the fed determines interest rates), fiscal policy (how the congress taxes us and spends our money), unemployment rates and such.

Micro economics is the economics of consumers (ultimately).? It is all about how companies manufacture, finance and market products or services and how consumers interact with those decisions.? The stuff you have to understand here is supply and demand, elasticity of demand, prices, labor costs, profits and such.

It doesn’t take a genius to figure out that the two are closely related.? Government policy helps determine whether business can afford to grow (or not).? Corporate decisions help determine whether consumers can afford (or want)? a product or service (or not).? The relationships go far beyond these obvious ones, but I am sure you get the idea.

Now, something on GM.? In an act of full disclosure I will tell you that I have not spent any money on a GM product since I bought a (very) used Pontiac Chieftain as my first car (for $200 by the way).? A second disclosure.? I have spent money on American made cars (three Jeeps) in the last 20 years but I haven’t been happy with any of them.? They break down, cost a fortune to fix, have horrible warranties that require a law degree and the patience of Job to deal with and are generally unreliable.? On the other hand the Hondas and Toyotas I have bought (about 5 so far) have been reliable though expensive to fix (even more than my Jeeps to be honest — but they last at least three times as long — one of them has over 200,000 miles on it and keeps on going!).

Next lesson.? Why the micro economic failure of GM (and Chrysler)?? These are also obvious.? Things like making the unreliable cars they believed people wanted, making cars getting less than half the average mileage efficiency of foreign competitors, making cars so big you can’t park them in a mall (in Europe I saw THREE of their cars parked in a single space next to a honkin’ big old Hummer that took two!) and so on.

Hey, Ossama Bin-Laden captured a Hummer and we’d capture him easily if we just waited for him to ‘park’ the sucker by his caveor try to fill it up at the local terrorist gas depot!

Who is to blame for the GM failure?

Management, yes.? Government, yes.? Consumers, yes.

In a world where we are using exhaustible resources (gasoline) like they were unlimited, where we import so much oil that our national defense is at risk, where middle-class consumers are continually falling down the economic ladder, where consumers allow the greed/pride pressure of ‘advertising’ influence decisions . . . we all have failed.

GM should have known better, Bush-Clinton-Bush should have increased mileage standards long ago (as promised but NEVER with follow-on), Joe Plumber should have been satisfied with a trailer for use as needed rather than a truck capable of hauling an M-1 Abrams tank!!

It is too late to pass the blame around and accomplish anything, but, it is NOT too late to learn from this lesson and make changes going forward.

GM today is a lost cause.? The market cap of the whole freaking company is less than the cost to build a good bridge.? Nobody in their right mind wants a Hummer (excepting the afore mentioned Bin-Laden).? And yet, when they declare bankruptcy next week the macro impact is going to be humm(er)dinger.? Jobs will be lost, investments will be lost, confidence will be lost.? I expect the markets will take in with benign indifference.

But they will be wrong to do so.

Jeez Louise, the president of GM was asked to resign by Obama and his team.? Are we really going to let the government run the ‘new’ company that will come out of bankruptcy?? Afraid so but sure as heck don’t want to see it.

How badly do you want to buy a car from a guy like Joe Biden, Harry Reid, or Orrin Hatch?? Its carcinogenic to even think about!

We have two choices as a nation.? Let this happen and watch from afar or let our elected officials (and our ‘retailers’) know that we want real macro change as a result of this particular micro failure.? This is bigger than the banks (CITI) , the mortgage companies (Wachovia) or the insurers (AIG).? This is about our future (i.e. more than five years down the road).

We have to stop abrogating responsibility and take power from our government.? We the people have to stop buying gas hogs.? We have to insist on cars we can park with one hand and a broken rearview mirror.? We have to stop paying attention to the ads and make decisions for our own good.? And, by the way, we have to stop using plastic shopping bags and just recycle the ones we pull off branches of trees on the way to the grocery store!

Did you think I was going to write about rising unemployment?? Lost investments?? Angry union workers?? Really?

If you did, then you are part of the problem.

The real macro impact of this failure has to be the considered response of more than 300 million American consumers.? If the government won’t do what they should, then we must shine the light for them.

Think about it . . . what kind of car do you want your children or grandchildren to be buying for their first car out of highschool?? Not a Pontiac Chietain (about 11 mpg and big enough for a mainsail and a jib).

Nope, a Prius or something like it and hopefully made in America.

The macro impact is ours to make.? Don’t miss this opportunity to stop sending our $$ to Venezuela and Saudi Arabia.? Take this opportunity to save $$ and time and our future so that our grandkids can afford to play golf or go camping.

You are the ‘micro’ in micro economics, but shoot you can also be a part of the ‘macro’ in macro economics.

I’d love to hear your opinion (but you dang well better agree!!).

Thanks to franco folini for the flickr photo

Continue Reading

Power corrupts! The Supreme Court issue.

Posted on 27. May, 2009 by scott.

Obama done good.? Yeah again.? We need more diversity and a hispanic woman nominated to the Supreme Court is right on point.

Yet, as you might suspect I have some issues.

Power corrupts and the longer one has power the more it corrupts.? History has proven this time and time again.? Dictators are not a good thing.? Hitler, Stalin, Mao etc., etc., etc.

As I have written before, term limits for ALL politicians is a good thing (a REALLY good thing).? Now we are looking at a politically appointed position on the Supreme Court of our land.? The Founding Father’s had a lot of things right and some things just barely or even flat our wrong (slavery for example).? But this one they just got bad!? It might have worked two hundred years ago, but not now.

Putting someone on ‘The Court’ is a big deal.? These guys influence our culture and laws, they make decisions that will last for decades and even centuries.? Don’t you believe it when you hear that a ‘judge’ will not legislate from the bench.? That is impossible over the long term.? Personal opinions can’t help but influence.? Opinions on one’s religion, political ideology, economic upbringing, education . . . they all have an impact. And they WILL come into play sooner or later and keep on coming for years at this level.

Here is the problem.? Sotomayor is young for the position.? Fifty four years old is young today.? She could live and work for another thirty or forty years easily.? Heck, without a family she has mainly work to motivate and encourage.? Why would she ever want to quit the cushy job if she gets it? She will get comfortable, determined and resolute.? This could turn our bad (not just because of her but ALL the justices).

It is just plain wrong to have any lifetime position.? Lifetime is a LONG time for most of us and one thing I have learned is that the older one gets the less one cares about what people think and the less they worry about criticism (it just doesn’t make any difference to most over 50!).

A judge job is cushy, lucrative and powerful.? In this case it is also dangerous long-term.? The longer one serves the more entrenched they become, the more privileged they feel (the ‘court’ traditionally denies public/media access and is very ’secretive’ in their deliberations), the less likely they are to accept cases they don’t care about or don’t want to put time into, the more entitled they feel and become.

Pretty soon it gets where there is little or no transparency and virtually no oversight.? And we as a nation are stuck with their decisions . . . right or wrong . . . and there are plenty of wrong ones from their past.

No one gets it right all the? time.? We just can’t let them keep chugging when things go bad.? But the way things are right now we have no choice.

And, people, these judges are there for life!? The court becomes a fraternity (or sorority), a country club, an executive dining-room, a clique.? Well, I am sure you get the idea.

Do we want the same people making decisions that affect our lives for thirty or forty years?

Not just no, but HECK no!

Unlike anywhere else in government, our judges (and particularly those on the Supreme Court) are not accountable to the people.? We can second guess them sure, but we can’t change what they do short of the difficult and nearly impossible task of changing the Constitution.? Throw out the 27th (on Congressional compensation) and we are 28 years from the last amendment!

But you know what?? We gotta do it.? We have to push through an amendment that limits the time served on the ‘Court.’?? Ten years makes sense, but surely no longer than fifteen.? And while we are at it let’s limit all elected offices to no more than 8 years.? Period.? No exceptions.

Darn, I like the nomination but I really hate to think of her serving in 2039 while I’m vacationing on the moon with my great-grandkids.

Term limits . . . in all cases!

Thanks for the photo to flickr’s s baker

Continue Reading

Two sides of the same coin. Obama vs. Cheney.

Posted on 21. May, 2009 by scott.

This morning I listened to President Obama (BHO) talk about his administration’s approach to dealing with terrorism and the use of torture.? Only minutes later former Vice-President Cheney (DC) spoke with his views on the subject after being an integral part of our ‘defense’ for 8 years.

I was impressed with both talks.? I was persuaded by both talks.? How can this be?

BHO is a smooth talker and very personable.? DC is niether.?

BHO reflected on the founding principles of our nation.? DC spoke about the war that has been declared and is being executed against our nation each day.

I was encouraged by BHO’s compassion and sense of right.? I was frightened by DC’s arguments against limiting action in a time of war.

Didn’t we hear this about Korea and Vietnam too?? Liberals willing to stand for right in the face of destruction?? Conservatives willing to ‘go nuclear’ to save lives?

How do we distinguish which argument is right when they both resonate?

I think torture is awful.? I think war is worse.?

I think spending years trying to recover from disfuguring and crippling wounds on the battle-field is worse than any ‘days-long’ torture.? I can’t imagine how much suffering our wounded soldiers and their families are going through.? Frankly I don’t want to know every detail.? It is just too painful to think about–and yet it is real and it is out there (times many thousands).

With thousands killed and tens of thousands wounded this argument about torture seems frivilous.?

If BHO is not going to release the documents that show whether or not ‘enhanced procedures’ were effective in obtaining information that saved lives (as DC wants) then we must trust someone.?

Who?

At least BHO is willing to have oversight by the other branches of the goverment.? This is something that DC and his? partner George Bush were never willing to do.? Action without responsibiity is un-American that is for sure.??

Torture?? I don’t think I could have any part in it, but who knows what each of us would do to save the lives of our loved ones (or?decades of pain and suffering of a brother or child)??

So, I choose transparency without disclosure of every detail to the public.?

Let our chosen leaders make the decisions . . . as long as their is consensus and not dictated action.? But, never make it alone and in a vacuum.? We are a republic not a dictatorship.

Have there been others times like this in history?

I would hate to think of how many would have died (both Japanese and American) if the bombs had not been dropped and an invasion of the Japanes homeland was initiated.

I didn’t vote for BHO but I can tell you that given the last few months I would not regret admitting it if I had.? He is showing more courage in the face of fire, more willingness to negotiate and discuss, more clarity of thought, more directness of speech, more intelligence, more?bipartisanship . . . in the last months . . .?than we have accumulated in the last sixteen years (yeah, Clinton and Bush combined).

I just wish those knuckleheads in Washington D.C. would stop debating about fleas and start doing something about the economic, political and social buzzards that are circling overhead!

Continue Reading

Capitalism redux!

Posted on 13. May, 2009 by scott.

Today I make a seminal effort based on my current opinions. This may be long but I promise you it will be worth it (to me if not you).

My ideas have not come easily or quickly but they are the result of a lot of thought, observation and experience. If you had asked me just a few years ago about this I would have opposed it vigorously. How time and circumstances change things!

Here it is.

Capitalism has failed.  Plain and simple (well not so simple . . . it has taken a few generations).

The capitalism that I grew up with was traditional Adam Smith ‘laissez faire’ and it worked for a good long time.  No longer.  Too much laissez and not enough ‘fair.’

We have returned to the middle ages with a privileged ‘royality’ of overpaid selfish executives, stars, athletes and politicians and a vast middle class who are moving steadily down the economic ladder.  Capitalism has made it so.  It isn’t right, it isn’t American and it can’t continue.

The royalty of the twenty-first century are those born to great wealth (or power/influence) as well as those who reaped great wealth (power/influence) without genuine effort/sacrifice and have failed to use a good part of such wealth (power/influence) for the common good (charities, jobs etc).  For them life has become all about ’self’ and nothing about ‘us.’  Worse, this plague of selfishness is spreading further down the food chain.

Not far from my neighborhood are houses as big and fancy as medieval castles (one was even built to look like them!).  Too big for function and need.

So why?

Pride ? Singular distinction?  One-upmanship?  Keep up with the Joneses? You get the idea.

That is a big part of the problem.  Pride cometh before the fall.  Jealousy too.  Bad news.

The protestant (puritan) ethic of Adam Smith’s capitalism no longer exists.  Selfishness and pride have taken its place.   All you have to do is look around, watch TV, listen to the radio, go to a movie, shop in the mall.  The thesis that hard work along with social responsibility leads to true success have been replaced with the proposition that money is power and power is right and that both are good.

This is true in politics, in business and even in religion.  It has infiltrated the minds of retired grandparents living someplace warm and far from family responsibility, of adults with no desire for children or sacrifice, of teenagers whose greatest desire is fame and fortune, clergy who lust after money or power.

Jeez, Louise people!  Do you think Edison did what he did for money?  Did Washington seek out the great power he was given?   Bhudda?  Muhammad?  Christ?  Isaiah?  Krishna?

American businessmen and politicians are more like Russians of this century (think Putin and his fellow oligarchs — greedy, self-serving and egotistical).  Those who idolize, envy or look up to them are joining the madness.

Selfishness, selfishness selfishness . . . red is blue, green is black, taking responsibility for your own actions or words are things of the past.  We hear daily of entitlement for the masses and greater wealth and power for the elite (the rich and powerful).  And, we let it go on.

The wealthy democrats don’t really care, they are set for life.  The wealthy republicans just want more.  Where does it end?  Most of us fit in the ever growing middle losing hope.

I am well aware this sounds like Marx and Engels.  Shoot, I’ve read all their stuff.  Thought it was rubbish too.  They didn’t get it right but they sure as heck didn’t get it completely wrong.

Power corrupts and absolute power corrupts absolutely.  Sadly today power comes from wealth–not intelligence, compassion, capability or wisdom as it has in the past.

This is not to say all those with wealth are corrupt.  There are a few who at least try to demonstrate a modicum of gratitude and social responsibility.  But the others?  What do you expect when wealth is handed to you or taken (given) in immoral and dishonest ways?  If you don’t really work for something it has little or no value.  Give someone a hundred-million dollar salary and they won’t think cheating on a measly hundred-thousand dollar shower curtain is wrong.  Give someone a fortune for putting a ball in a basket four times a week and they won’t care about frequent indiscretions.

NO ONE. I REPEAT NO ONE, is worth what our public companies pay their CEO’s, what owners pay athletes, what studios pay actors, what talking-heads make on TV or radio.  It isn’t right when people are going hungry–not in Christian belief, not in Muslim belief, not in Hindu belief, not in Jewish belief, not in any sane person’s mind!

And it is not part of any capitalism that I want to engage in.

The uniquely American form of capitalism is a failed model as it now stands.  It worked magically when it was left to the masses.  Individuals, and small organizations, took advantage of opportunities.  When larger organizations (including the government) started joining the the ‘band’ things went haywire.

How did we come to the point that thinking executive leadership alone (decision making really) is the be all and end all?  Where is the work ethic?  What good can come from sitting in meetings or going to two-martini lunches all day?  Leaders for leadership’s sake leads to empty promises and misguided decisions.  At the top of ANY organization bigger than fifty people or so committee trumps executive decision ANY time.   I believe that literally anyone with an IQ in the normal range can run a big company–or a nation.

Adam Smith (Milton Friedman, John Galbraith and others as well) never contemplated incredibly enormous international corporations with revenues bigger than most nations (influence bigger too what with their PAC money, payoffs and such).  The founding fathers never contemplated a legislature hamstrung in partisan politics.

We ended up with a social/economic society that saw profits and money/power as the ‘only’ goal.  Individually and organizationally.  Large corporations started setting goals for execs that were measured in dollar terms and rewarded short-term.  Imagine anyone making over $100 million a year let alone the CEO of a publically held company.   The guy that makes a few decisions every so often but never,ever sweats about a house payment.

The very thought is obscene.

Who is the real boss?  Stockholders. Those with investments of hard-earned money that came from their own sweat and tears.  Not fancy Board of Directors or CEOs.

How did this happen?

What about so-called ’stars’ or athletes with incomes in the tens of millions annually?

Politicians who change parties or laws to get elected?

Marx must be turning over in his grave laughing at us.  Lenin is shaking his head.  The founding father’s are shedding tears!  I am sickened at what the last few years have shown us about our society.

Our large public companies and our politicians have NO social conscience.  And they have proven that they aren’t operating for the common good of shareholders or the public.  How could they create huge losses or deficits and they still pay gigantic bonuses or provide immoral perks?  They want only what is best for them such as higher pay, special treatment at airports, incredible retirement, private jets, big staffs and on and on and on.

It isn’t right.

Now the good news.  It doesn’t have to be this way.

It is time for capitalism to reinvent itself.  Capitalism II.  Capitalism redux.

Lets get back to basics.  If you want to get rich in this country lets make it possible to do it the old fashioned way.  Work for it.  Do it with innovation and job creation.  Do it with new and better products and/or productivity.  Don’t do it on the back of the middle/working class.  Don’t do it by transferring the wealth (what’s left of it) from the workers to the slackers.

If you want to get rich in corporate America do it as a shareholder or entrepreneur.  Don’t do it with huge salaries and undeserved bonuses . . . or with golden parachutes or back dated options.  Do it by earning it over a long time and do it honestly.

If you want to ’serve’ the country, do it for a few (very few) years and then get back to what you should be doing.

We have to change the background to make capitalism II work.  It will take (and I can’t believe I’m writing this) new laws that will limit (or tax) the amounts executives or stars or athletes make.

We have to have a political and economic environment where innovation, creativity and effort are rewarded.  We have to have a society where a person lacking legitimate skills can earn fortunes for ‘playing.’  We have to shun the idea that executive leadership (in business or politics) is deserving of inordinate reward.

We have to reward small business, entrepreneurs and everyone for honest effort.

It won’t be easy nor quick.

Here are some basic ideas to get the ball rolling.  I’ll confess I’m no angel but I can think at least as clearly as our best economists, politicians, and business leaders.  So can most of you.  Our country was not founded by geniuses.  It was founded by hard-working patriots who were also citizen soldiers willing to shed their own blood for principles they believed in.

What a great example.  How do we use it?   Simple and straight forward.  Those are things are leaders might not understand and so we have to make them do so.

Change will come from the bottom up and we are responsible for it.

So.

No public CEO or executive of any kind should make more in a year than the President of the United States of America makes during a four year term.  At least not in direct compensation. Allow such folk to earn more ONLY with legitimate stock options that last at least 5 years ( and put limits there too unless they buy stock with their own money!).

On top of that change the law so that the President makes about ten times the average wage of American workers (thus CEO’s can only make 30 times the average American wage).

As to ’stars’ and athletes and such?  Let them make what the market will bear, but tax the living daylights out of them and anyone willing to pay them more than ten times the average pay of American teachers of grades one through twelve (then use the taxes to increase pay for teachers, make classes smaller or improve our schools).

We have to loose the false vision of a privileged and royal class who are above the law and make sure everyone is a real part of our society.

Don’t get me wrong.  Wealth isn’t bad.  Live long and prosper, someone said.  I agree (and thank you Spock).

But, prospering doesn’t mean living like King Solomon while tens of thousands in America are homeless, or lack decent healthcare, or have no real education, or don’t have jobs etc, etc, etc.

Next solution.  A shadow government.  This creates jobs and will completely guarantee that Congress (and all politicians) will make better, if not perfect decisions.

It works like this.  Every single elected official must have three advisors appointed (by independent means to be determined, but randomly from all walks of life and subject only to the meanest of qualifications — i.e average joes).  They will be only from the general public of the politicians constituency and will take the part-time job for as long as the politician holds it (which should be no more than two terms in ALL cases).

Under this system NO politician will be able to cast a vote or make a binding decision unless the majority of these advisors agree.   They will be paid a salary nearly equal to one-half of the politician’s and will also have access to all his records and dealings (with PACS, influence peddlars, lobbyists etc.) to insure transparency.

That’s nearly 2,000 high-paying jobs for the Federal government alone!  Sure it increases the size of government, but it also increases the influence of ‘us’ on that government … for the people, by the people.

As a matter-of-fact we can do something similar for top executives of ALL multi-national corporations.  Wouldn’t that be something?  Hey, imagine if every single pro-team had to have a few average athletes and they had to play? Cool huh?  Man would this equalize the world!

We have to make America great again and don’t you believe it when some radio or TV knucklehead rants that it is going to come by free market economics or government control. Free markets as we know them have failed.  Now we have to try something else.

Let’s make individual self-reliance, effort and reward popular again.

Let’s find a way to ‘tax’ our way out of the incredibly huge deficit that Bush, Obama and those ‘gems’ in Congress have created for us.  Don’t believe it when you hear more laissez for big business will accomplish that.  Small business?  well that’s a whole different story.

Let’s end the coming class warfare before it starts.  Let’s not have any royalty or American idols.   All men were created equal (women too).  Let’s not change that premise.  Throw those who won’t play by the rules, the crooks, in jail be they CEO’s, Senators or janitors.

Real capitalism relies entirely on individuals.  We need a social/political/economic environment that both realizes and rewards that.

Capitalism II.

Capitalism redux.

Capitalism can rock again!

IF WE LET (make) IT!!

The picture is from flickr’s aussiegall

Continue Reading

Pirates, a sensible multi-faceted solution!

Posted on 16. Apr, 2009 by scott.

Pirates are a huge?and expensive issue.? The issue is political, economical and social.? It has to end.? Millions?are paid to pirates each year in ransom.? Millions more are spent to evade or avoid them.? Yet, millions more to bring a naval presence to bear.? Nothing has been effective.? Sure we got lucky last week.? But, we can’t expect that to continue in the enraged environment our justified action has caused.? There has got to be a way.

To start, check out Ron Pauls’ solution (not bad either) and there are of course other ideas out there.? I am adding mine to the mix and it is the best yet, as you will see.

One thing is for sure, politcally and economically we (the U.S.) can’t let this awful situation continue, let alone get any worse.? It could end next week, or month, if we implement this plan and?bring the problem to a screeching halt.? The plan solves other problems as well, including?economic, political and more importantly unemployment (it will generate thousands of jobs . . . albiet with an?element of danger).

Here it is.

Our government, in collaboration with the U.N. or other governments (if they are willing, but without if they are not), declares a state of war against ’stateless’ pirates (Ron Pauls’ idea sort of gets to this but falls far short).? Then with the declaration in effect?we create lots of jobs by hiring?and training?guards (somebody has to train them — more jobs)?to accompany every American ship that travels in dangerous waters.? This will be like the sky marshal program?and will instantly be effective, cost efficient and most importantly ‘job creational’.

The pirates criminal acts need to be responded to legally, effectively, immediately, and overwhelmingly.? This plan would accomplish all of the above.? It just might?need a few refinements but it would work and work well!

Frankly, I would volunteer for training tomorrow and I would gladly take several?voyages each year as a guard.? Of course, my wife would come along to keep the weapons clean and in every port we would gladly spend money as tourists (further helping the world economy).

These jobs would have to be well-paid (a good full-time salary for limited part-time work–say no more than six months a year).? They would also have to employ only persons willing and able to do the dirty-work when it is required (please note here that I would consider it an honor to protect a vessel flying the American flag from pirates!).

The guards would in effect be deputized or enlisted so their actions are legal.? They would get training on all necessary weapons (up to and including anything necessary to outmatch the pirates) and be provided with such weapons and ammunition in sufficient quantities to get the job done.? A seperate note here:? every American vessel should be equiped with electronics to ‘jam’ communications from pirates so ‘mother ships’ and others won’t know what is happening.

Further, as an adjunct to this program, the involved navies would have to provide backup support with everything needed (including aircraft)?to ‘blow’ the pirate ships out of the water whenever called upon (including the so-called ‘mother ships’).? This plan would make piracy stupid, dangerous and with no economic benefits.

The new jobs would be good justification in their own right.? In the gulf of Aden alone there are about 20,000 transits per year?and this is not the only place where piracy takes place.? Say, 100,000 jobs at $100,000 per year and you have a $1 billion cost.? The benefits, worldwide, are far?greater than the total cost? and this does not include the benefit from the jobs that would be created (consider ransoms, increased insurance, risk of life and limb, increased costs etc.).?

Let’s do it.? Let’s stop piracy dead in the criminal’s tracks.? Let’s increase employment.? Let’s give veterans that need them a job (they should get preference).? Let’s spread money around the globe as the guards (and spouses if desired) get to see the world.? I admit the last one there is just my way of getting free (even paid) cruising benefits and I doubt the risks would be high after the first month or so.? Pirates would lose interest pretty fast.

Come on President Obama, this is the kind of creative thinking we need in Washington D.C.? and not just for this problem, but for a bunch more we face.? I am just a call away and there are thousands more like me.? The best ideas don’t come from D.C. they come from the ‘heartland’, so make the effort to get ‘our views”.

Capitalism rocks!?

Pirares suck!?

Sign me up, I can blog at sea!!

?

Thanks to flickr’s randy son of robert for the photo

Continue Reading

CEO solution for economic stimulus and failed corporations.

Posted on 31. Mar, 2009 by scott.

I have been wondering lately if the key executives in American companies care about anything other than? their own fat paycheck.? With ‘boards’ (the director type)?loaded with their own ‘interlocked’ friends, is it any wonder execs get away with all the crimes we have been hearing about?? Interlocked boards are those with board of directors who all have interlocking relationships.? In other words, a CEO of company A, asks his buddy who is a CEO at compay B to serve on his board . . . and the favor is returned.?

Multiply the above scenario by way, way too many corporate boards and you have a recipe for disaster.? We are living the results right now (sort of like term limits isn’t it?).? We aren’t getting the ‘best and brightest’ to run our companies, we are getting the ‘best connected.’? A far different circumstance than the average Joe understands.? Truth is the government is the same way.? Shucks, on Fox network’s “24″ last night the President asked her own daughter to be her new chief of staff.? Where do you think the writers got the idea for that?? Yehhp, from the great example of our country’s top corporations and their ‘interlocked’ and demonstrably incompetent boards.

I have a solution.? Replace all?executive sin America with someone capable of doing everything required and still have time left over to help a few neighbors.??Don’t laugh, this is serious stuff.? Our corporations, directed by their ‘boards’, are failing miserably at their mandates (to make money for their shareholders and provide security for their employees).? We need real change.

We need executives with the following traits:

????????? honesty, integrity, concern for others, love (for what they do–not for what they can rip from the cold hands of shareholders), commitment, ability to multitask, focus, native intelligence, desire, decisiveness, analytical ability, willingness to learn new things and then make them work . . . aw Jeez Lousie, I could go on forever here.? But, you get the point.? All the things our current batch of exec’s don’t understand let alone possess.

So, I have searched my memory for all of the executive types I have ever met (myself included).? You know what?? None of them meet the proper range of above criteria.?

So I thought some more.? Do Execs need to have MBA’s or Law degrees or Phd’s?? Heck no.? Do they need to have tons of experience in the field they are working?? Heck no (now this may not be ovbious, but good execs delegate and only make decisions when provided with reasonable alternatives).? Do they need to be the smartest dudes around?? Heck no (and here I need merely refer to the numerous knuckleheads who have failed miserably in their exec positions lately — throw a dart at any group of execs and you are probably going to hit one with an IQ lower than Forest Gump’s).

Back to the drawing boards.?

Then,?Eureka!?

I realized there are a whole bunch of folk out there that meet ALL of the above criteria.? They are faced with multi-task situations every day and make them work.? They labor more hours?than a first year law student.? They are honest, to a fault usually, with all those around them (except when it might hurt feelings and then they just tweak the truth to make it more palatable).? They learn quickly and prove it many times every day.? They?hit the floor running with every new situation that is thrown at them.? They are committed to doing–and doing well.? They are masters of the ’steep learning curve’.? They are intelligent and prove it over and over again.? They can analyze, compute the options, figure out the risks and then decide, and when they do decide nothing on earth will change their direction–unless the facts, or the needs,?change.? Then they are superbly adaptable.? They run around all day long like chickens with their heads cut off, but they do it purposefully and with great efficiency.

We have hundreds of thousands of this special type of person out there.? And let me tell you, they would love those ‘cushy’ executive jobs with the high pay and the?superb benefits and the much shorter hours.? Heck they would probably do all that is required for freaking?FREE.??Just give them hope that they?might enjoy the positive outcomes of their labors with a few restful days at the beach.? Maybe breakfast in bed.? Who knows, a few stock options wouldn’t hurt.

Yeah, they are out there and they are waiting, willing and able.? Call ‘em, telegraph ‘em, fax ‘em, but get them to work on our problems and then get outta the way?’cuz they will make things happen and fast!

I’m talking about stay-at-home moms.?

Right.? you read it correctly.?

Those underappreciated and?overworked bunch of loving, committed, intelligent, wise (there is a difference), quick-witted, top-notch executive capable, women are waiting for the call.

Use them America!??The rest of the world would have to watch out.?

Stay-at-home moms.?

America’s last great resource.?

The best Executives you could ever find!

Stimulus, shimulus!? Problem solved.

?

A special thanks to my mom, my wife, my daughter and three daughter-in-laws — everyone of them great mothers and potentially super-great executives!

?

?

Thanks to flickr’ cornish.pixie07 for the photo

Continue Reading

Oil prices rising, a forecast.

Posted on 25. Mar, 2009 by scott.

Lately the prices of oil have been going up.? I thought they would, since OPEC and Russia have been actually cutting back on production.? This is something they often threaten, but rarely achieve.? Are they shooting themselves in the foot?

I think so, and that is a good thing.

BHO is serious about achieving energy independence, at least he talks like he is.? Further, though some 55% higher than just a month or so ago, oil prices are only about 1/3 of what they were late last summer.? The threat of $150/barrel oil is still real, but all of the world is aware of that and beginning to recognize the need for consumption restraint.

The biggest thing is that America is noticing and ‘we the people’ are doing something about it.? A large part of this next series of statistics is due to the ugly recession of 2007-2009 (see I am putting a time frame on it…and it doesn’t go into 2010!) but a bunch of it is just due to recognition that high oil prices are bad for everyone.

towit.

According to the Department of Transportation ( March 19 press release) Americans are driving a LOT less than they were a year ago, or specifically 14 months ago.? In the period of Dec 2007 thru Jan 2009 Americans have driven 122 billion less miles than in the period of Dec 2006 thru Jan 2008.? This is 122,000,000,000 miles!? And, we drove 7 billion less miles in January than we did in the same month a year ago.

Go figure.? Are we getting smart?? Driving less? Taking public transportation more?? Carpooling?? Yes, yes, yes, and yes.

That is a lot of miles.? Figure 15 mpg average (and that is probably very conservative) then we have saved about 8 billion gallons of gasoline in the last 14 months.? That is about 150 million barrels of oil!? What with lower prices and less oil consumed, it can be argued that Americans just sent $22 Billion less to Chavez, Putin and Ahmadinejad. Take that one on the chin, dudes.

So, are OPEC’s cutbacks helping them??? I think not.? Not only are we using less oil, but so are the Chinese, the Indians, the Japanese, the Europeans and a whole bunch of others (not the Iranians nor the Venezuelans who pay only a subsidized 25 cents or so per gallon).

We are all smarter now.? OPEC is NOT going to dominate world economics like they have at times in the past.? Cutting back is going to hurt their economy not ours.? They will sell less oil for less $$ and their economies (dependent on that oil) will suffer.

Hey Putin, Chavez, Ahmadinejad…how do these ’shoes’ fit?

As I watch oil approach $55 a barrel I smile.? Not because I bought some oil tracking shares a month ago (oil at $36) and so even if prices increase more at the pump, my gains will pay for my extra costs.? No, I am confident that we will NOT see oil at $150 a barrel anytime soon, We will continue to use less and we will get much further into the? renewable energy cycle of investment as Obama moves us along (of course the Chinese need to help here too, but they have reasons of their own to do so).

Yeah, I am mentally sitting on the beach and watching the calm sea as those dufusus’ in Iran, Russia and Venezuela watch their hoards of? my our dollars decline.

AHHH!? It is beautiful out there!? Care to join me?

Thanks for the photo from flickr to eindzel

Continue Reading

The nut cleanup begins!

Posted on 17. Mar, 2009 by scott.

Two thumbs up for Obama and Giethner.? They have shown the courage to take a stand against the exisiting culture of unyielding arrogance in American corporate life (and in particular the financial/banking sector).

I was so very disappointed and angry about?AIG?bonus’ announcement yesterday (see yesterday’s blog) ?and couldn’t believe the administration was letting it go.

To the President’s credit, he acted, and quickly.? To Secretary Geithner’s credit he was outraged and promised to followup aggressively on the President’s demands to halt the bonuses.? It seems that the three of us (and a whole bunch of other Americans) are equally incensed at this pompous disregard for our tax $$.

President Obama has insisted that everything possible be done to stop the bonuses and to recover them if any have already been paid.? I would have given him three thumbs up, except for the fact that he made no strong condemnation of AIG’s irresponsible and immoral management.? I may upgrade to three thumbs up in the future, depending on the Government’s actions down the road.? A four thumbs up is? possible (the highest award to government, corporate of personal action on behalf of capitalism) IF Geithner manages (of course on behalf of the President) to stop/recover these bonuses and take appropriate actions against any executives involved in the outrage.

Frankly, senior executives of ALL public corporations in the US have a moral and ethical obligation to do what is best for their shareholders and employees.? There is also a good argument that such selfish actions (i.e. by AIG’ leaders) ?are also a breach of common-law and fiduciary obligations that just might (and hopefully will) lead to prison terms for those that are found guilty of any such, or similar defalcations.? We should be going after executives of MANY public corporations, and especially those that are public?and have taken public funds as part of a bailout.

I hope this serves as notice to other corporate leaders.

Thanks, Mr. President, you are restoring my original faith and hope in your administration.? Go get them, Mr. Secretary, prove to the faithful that the Treasury Department really does have some moxy and ‘teeth’ with which to enforce and control the way our BILLIONS are being spent.

The cleanup is starting.? Hopefully the kitchen will be clean soon and we can move into the ‘living’ room.

thanks got flickr and the picture from bimurch

Continue Reading

AIG’s management — are they nuts?

Posted on 16. Mar, 2009 by scott.

I just don’t get the audacity, ego and insanity of a good bunch of America’s top industrial/financial leaders.? Key exhibit?? AIG.

First, AIG takes more than $160 BILLION from us taxpayers in lieu of a bankruptcy that would have wiped out any and all further compensation for their management . . . this is not, by the way all, at once but in at least FOUR seperate bailouts over the last 6-7 months.

Hold on here, there is probably something before the above first.? It is the fact that management of AIG found the capacity and intellect to turn one of the biggest (and profitable) corporations in the world into a joke and house of cards with their stupid and reckless investments in derivative financial transactions.? With a company this big (over 100,000 employees) there must be at least 1,000 executives that are grossly overpaid and thus there are 1,000 job openings for the unemployed.

Back on track now. Second, AIG manages to loose more than any company in history last quarter.? The total is an incredible $161,000,000,000!? IN ONE THREE MONTH PERIOD!

Third, with our taxpayer investment to bail out AIG and their incompetent management we (the taxpayers) now own about 80% of the stock of this failed company.

Fourth, the management of AIG has been responsible for ‘pushing’ the stock too hard.? Yeh, pushing it all the way from $74/share to a low of $0.34/share? on March 2, 2009.? Don’t get out your calculators, I’ll do the work for you.? That is a decline in stock value of 99%!!

Fifth, our leaders (from Bush and Paulson to Obama and Giethner) believe that AIG is TOO big to let fail.? Well, the market cap of that entire company was only $1 Billion just a week ago (it is about $2.2 Billion today).? To give you some perspective some other ’struggling’ ?companies today have a market cap (multiply shares outstanding by the price of a singe share) of: GM — $1.5B, CITI bank?– $13.6 B, Ford — $5.5 B, and DELL — $18 B.

Sixth, we (and I guess here I have to mean the Treasury Department by default) ought to be making the key decisions about this company going forward.? Certainly NOT the management who got the company into this mess.? (As a further aside here, if the mafia had any money invested in AIG?then maybe we won’t have to worry about current managment much longer — unless they can manage from the bottom of the Hudson while wearing stylish cement boots)

And lastly, there is an argument out there that we have to keep the idiots who are managing this company in place to complete the workout.? Holy Cow!? Hey, Batman, isn’t it true that hundreds of thousands of the best financial minds in the business (oxymoron) are UNEMPLOYED right now.? NOBODY NEEDS BONUSES IN THIS MARKET TO KEEP A JOB.? There are?at least?10,000 capable people who would do anything right now to get any job let alone one like helping turn around AIG.? Count me in that list.

AIG is a mess.? The picture above, represents the executive kitchen at AIG.? It is indicative of how management there operates.? Make a mess … go on to the next thing … make another mess … go on to the next.? They just don’t bother to clean up first.? My mother would send me to my room if I went out to play before cleaning up!

Clean this mess up President Obama, they are NOT to lare to fail.? Stop any bonuses from being paid Mr. Giethner, this company does not need the kind of management they have now.? Send the knuckleheads responsible for the bonuses to their rooms (and I hope they are 12′x8′ rooms with bars).

Stop the bonuses.? Don’t permit the American taxpayer to be a part of such incredible ‘hutzpah’ and insensitivity.? These guys managing AIG don’t deserve a second chance.? Can ‘em.? I have enough experience to step in right now and there are thousands of?unemployed out there who are a whole lot smarter than me and would jump twice as hard to get any of those?jobs.

AIG’s management — are they nuts?? Heck, yes!

thanks to flickrs photo from eschipul

Continue Reading