How to Recover the Economy

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Recover the economy? Pretty bold title, eh?

It’s way too easy to misdiagnose what ails the economy these days. Then again, how do you not misdiagnose a condition when you’re seeing the wrong type of doctor? A podiatrist is as likely to catch your brain tumor as a cardiologist is able to treat you for kidney stones. Similarly, and far too often, those who claim to be able to fix the economy, such as then candidate Barack Obama and now the field of GOP candidates, are attempting to use Band-Aids in place of stitches or putting a bruised arm in a cast.

recover the economy, promote entrepreneurism

Pres Obama, honorary doctor of economics

Such economic doctors will read a story in the New York Times and conclude that we need to tax the wealthy more, return to the tax code of the 70’s, and utterly unlearn the Reagan philosophies in order to return to a fair policy toward the poor.

That’s a casted bruised arm.

Others might suggest that in order to save the economy, they personally need to swoop in wearing a cape and single-handedly lower tax rates “across the board” so more money flows and business owners create jobs.

Should have used stitches.

Simple fixes cannot act as a long-term strategy to recover the economy, though they may provide a bump that they can take credit for, followed by a slump for which they’ll be able to place blame.

The economy is alive. It is comprised of every person on the planet. Each person has an identity in a worldwide economic game. In this Massively Multiplayer Online Role Playing Game (MMORPG), everyone must follow the rules. Anyone found breaking the rules risks varying punishments ranging from fines to removal from the game for a time while sitting in the State Penitentiary. Of the majority who follow the rules, everyone seeks their own advantage as defined by themselves. Perhaps advantage means personal wealth; perhaps it means spiritual value. Some players form clubs/teams/guilds/unions in order to achieve a greater advantage than would have been possible on their own.

Since the economy is composed of ourselves, there can be only one cause for why the disparity of wealth has increased over the last few decades: we allowed it. When your boss’s tax rate was reduced under any of the past administrations, did you immediately ask for a raise or did you fail to realize that your labors were then more valuable to him? Would you have stepped into a position for an extra $0.50 an hour over what you were making to fill the job made available by someone walking out after having asked for a $3.00/hr raise and not getting it?

Probably the latter and of course you would have, respectively.

Since we cannot trust our fellow man to not undercut us for our own jobs, the only real solution to preventing recessions and depressions–and to recover the economy as it is–is entrepreneurism. More employers means more employees. Lower unemployment means rising wages.

Undoing Reagan era tax cuts only makes it harder on the employers and managers who are now likely leveraged with their own debts they would not be able to pay if their tax rate increases. Lowering tax rates on everyone favors higher income earners dollar-wise and there’s no guarantee that the money will be used to expand a business or even spent at all. It may in fact already be spent and put towards paying off some of that debt.

Having more people own their own businesses has a compound effect: 1) they free up a job for someone to come off unemployment and 2) they hire, directly or indirectly in the form of paying for services or using contractors, people off unemployment.

Unemployment falls. Wages rise. Economy recovers.

Moral for the politicians who want to recover the economy: pass policies that encourage entrepreneurism; pass on those that do not.

The Mystery of Capitalism

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I finally got around to watching Michael Moore’s financial documentary: Capitalism: A Love Story. I don’t normally agree with the guy’s points of view, and this movie was little different. For the most part, his “heavy hitting” points fell on me like stardust–contrived and without weight. There were a few exceptions and maybe I’ll touch on them in a bit.

Capitalism: A Love Story movie poster

Capitalism: A Love Story movie poster

Each segment left me more and more convinced that “capitalism” is the most misunderstood and ill-defined word in the English language. As an economic system, it has been described as evil, as “anything goes,” as nonsense, and as the only fair means of running an economy. From what I can tell, though, especially from what was highlighted in the movie, is that few, if anyone, understand capitalism beyond their limited scope.

Before anyone gets offended at my calling your scope limited, please let me explain using some of my engineering background to illustrate. When an engineer sets himself on a problem in a larger process or system, a solution is often found more easily if the scope is set smaller. For example, in a manufacturing process involving multiple mixing vessels, several material streams, and a complicated control system, if liquid comes out of a tank at the wrong temperature, the engineer would limit his analysis to the inputs and outputs of that tank alone. Similarly, most people when shopping for some widget will look at competitors’ offerings, perhaps at different stores, and make a decision on price and value with limited consideration for anything beyond that scope.

Those same people look at the wealthy CEO’s of large companies who make decisions of hiring and firing, opening and closing plants and offices, and on the pay structure of employees in the company and see that they are making decisions based on the quarterly need of pleasing the stockholders with limited consideration beyond that scope.

These people are guilty of the same mistakes and none of them have embraced Capitalism’s awesome power for good.

Moore primarily pointed to the actions of larger corporations and their dealings with the government to highlight the evil nature of capitalism. The government granting special favors to a few at the expense of the many has no role in Capitalism; what Moore depicted was corporate cronyism.

Moore also belittled the idea that the mechanism by which Capitalism operates is that the people vote with their dollars on what products should be made, the producers of which then make more. What he failed to note is that the scope of Capitalism’s mechanism is not limited to what products are made, but how they are made, and by whom are they made.

Is it no wonder that the American people have as much an understanding of the power of their fiscal votes as for their political ones? Namely, very little.

When you need to buy a shirt, your dollars are encouraging not only the manufacturer of the shirt to make more, but making it the way they made it (virgin fibers vs recycled material) and by whom it is made (Asian sweat shops vs large American factories vs small American businesses). You are also supporting the store at which you bought it (corporate behemoth vs Mom&Pop shop) and their business practices (workers’ compensation and working conditions), as well as the store’s entire supply chain (multi-national distribution network vs locally sourced goods).

There is an immense responsibility inherent in spending your money.


This is spread far more easily than Capitalism and has been for far too long.

As to the people to whom we delegate the spending of much of our income, those we elect to public office, our votes that put them there carry similar weight and needed consideration. Must we have a representative in Congress or the Senate who promises to bring money in the forms of programs and projects or tax cuts to local industries back to our district or state, knowing that in order for our representative to do so he must give something to the others? Must we vote for local benefits when the extra deficit spending will lead to inflation and devalue our money? Those local benefits are likely of lesser value than the lost value of our currency in paying for every other districts’ perks.

How can Capitalism be so evil if everything about it is derived from what we do with our own money? If someone buys pornography, illegal drugs, or arms with the intent to harm, it is not the dollars spent that are sinful. We, collectively, decide what companies thrive and fail and what business practices are acceptable or not, so it is not the system that the Catholic Church should be condemning in the movie, but the people (everybody) using the system to buy everything they use. The greatest differences between Socialism and Capitalism can be summarized as the means by which we vote and the length of term for the consequence of that vote. With Capitalism interested parties attempt to persuade you to vote certain ways with your dollars, votes that can be changed with your very next purchase; In Socialism you elect a politician to make sure everyone else votes the same way with their dollars using government subsidies. If you so desperately want to try another economic system from what we have, try Capitalism because no one alive now has seen Capitalism in the USA.

Brilliance in Humor and the Dark Side of Politicians

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I seem to remember seeing the actual footage of the Marx Brothers, Groucho in particular, acting out a great piece of comedy, although since I cannot find it on YouTube, it must not have ever happened, right? Others claim it was others, but I don’t think I’d remember Winston Churchill in this video memory quite the same way.

The skit goes something like this:
Groucho: Excuse me, miss, would you sleep with me for a million dollars?
Woman: You’re not so bad looking, so, yeah, for a million I’d consider it.
Groucho: Well, since I don’t have a million dollars, would you sleep with me for a hundred?
Woman: Mister! What kind of a girl do you think I am?!
Groucho: We’ve already established that, miss, now we’re just negotiating…
Delivered with cigar in hand, huge mustache, and large rimmed glasses, it’s a classic.
It came up in conversation recently with my wife, but not for a similar reason as the subject of the bit. Herman Cain reminded me of it, actually.
How does Herman Cain, the 2012 Republican primary candidate for President of the United States reminded you of Groucho Marx, you ask?
Actually, Presidents, candidates, and other politicians often remind me of it. The reason is that their great policy that they come out with is generally accepted by the majority of Americans at the time of its inception. Just take a look at a few paraphrased propositions throughout history:
Woodrow Wilson: My fellow Americans, to be able to afford the programs that will cure this economy, would you pay a small portion–just 1%–of your income if you make more than $20,000 (the equivalent of almost $400,000 in 2010 dollars)?
Populous: Well, the poor need help, and I’m only middle class and won’t be taxed at all with this deal, so it sounds good to me.
Franklin Delano Roosevelt: My fellow Americans, to assure that people are cared for after the end of their working years, would you pay 1% of your first $3,000 (about $45,000 in 2010 dollars) of income, with your employer paying an equal amount to provide for the less fortunate among us?
Populous: For the equivalent of about $38 (in 2010 value), I’ll be assured an income after I reach 65? And my parents who are approaching that age will not be a burden to me either? Sign us up!
Barack Obama: My fellow Americans, health insurance is a right. If we all pay premiums, our costs will go down. That’s how insurance works: you distribute the risk. If you already have insurance, you’ll keep your carrier and your doctor.
Populous: I’m already insured, so if you need to force others to buy insurance in order to reduce what I pay, that sounds reasonable.
Herman Cain: My fellow Americans, I propose a new tax structure. Instead of complicated forms and myriad loopholes, let us set the corporate income tax rate at 9%, the personal income tax rate at 9%, and impose a national sales tax of 9%.
Populous: I’d love to only pay 9% income tax and only new products incur the 9% sales tax, so I can control how much tax I pay by controlling my purchases. Sounds good to me.
Of course, Woodrow Wilson eventually left office and Congress and succeeding Presidents saw it prudent to increase the now negotiable rate. Following FDR, Congress raided the Treasury for the trust fund and soon realized they had to bring in more revenues to pay the retirees. Barack Obama’s successors could easily one day make changes to the health care programs, the nature of which can only be speculated. What would Congress do with the opportunity to adjust both a flat income tax and a national sales tax in the years following Cain’s one-day departure from the office?
I like the idea of a flat tax. I prefer the idea of the Fair Tax, the national sales tax, to the exclusion of income taxes. The trouble with the Fair Tax is that you cannot guarantee that there won’t be a return of the income tax one day in the not too distant future. In fact, after thinking this train of thoughts that started with a memory of a video of Groucho Marx, the station at the end of the line is another video, this time out of Star Wars.

The Not Guilty Plea

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A few days in a courtroom on jury duty and now reading two articles in the paper today abnout drunk driving may have just eliminated my faith in the legal system–a faith that has bee tenuous ever since OJ Simpson was pronounced not guilty.

The case I was released from for employment obligaions was of a fellow in Trenton who disobeyed police as he continued to ride a Quad-bike/ATV through the city of Trenton, NJ. Just riding an ATV on the streets of Trenton is illegal, but this guy disobeyed officers–nearly running one down–and kills an innocent woman. While he was on bail, he gets picked up for selling crack. He’s currently serving a sentence for the drug charge, but the issue of his ride through Trenton resulted in a hung jury, so he’s getting another trial. Apparently, since he didn’t have the intent of killing the woman, the prosecutor is having trouble convicting him of it. Right.

Today I hear of a woman who is on record admitting that she smoked crack at 2am, did heroin at 9am, had one drink (just 1?) at noon, and hid the crack pipe in "a bodily cavity" after a car crash at 5pm. As a consequence of the crash, two of her four or five foster kids are dead. After admitting the use of mind altering substances, this woman has the audacity to stand before a judge and say she is not responsible for the two children’s deaths? She pleas Not Guilty to the court and is held on $500,000 bail. She also has a history of driving drunk and at the time of the crash was allegedly driving 70 mph. Sounds not guilty to me.

The second story in the paper today covers a drunk driver who was carting around 8 kids. When she crashed, also at 70 mph, an 11 year old was killed. Her 11 year old survived. Several were not even wearing seatbelts. Her lawyer is making the case that his client is not the only one responsible, that the parents of the kids she picked up saw she was drunk and chose to let the kids ride with her. Her blood-alcohol level was .132 ( the limit is .08) and she has plead Not Guilty.

I’m confident that the system will ultimately find these clowns guilty, so maybe my faith in the system isn’t completely ruined yet. Until then, how frustrating is it knowing that our tax dollars have to pay for others’ inability to own up to the consequences of their actions?

What Really Happened Last Week in Montana

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I just received this as an email forward and felt it was worthy to pass along. Personally, I’m glad I was not there as I would have probably gotten “confrontational.”

“By now you have probably heard that President Obama came to Montana last Friday. However, there are many things that the major news has not covered. I feel that since Bill and I live here and we were at the airport on Friday I should share some facts with you. Whatever you decide to do with the information is up to you. If you chose to share this email with others I do ask that you DELETE my email address before you forward this on.

On Wednesday, August 5th it was announced locally that the President would be coming here. There are many groups here that are against his healthcare and huge spending so those groups began talking and deciding on what they were going to do. The White House would not release ANY details other than the date.

On about Tuesday Bill found out that they would be holding the “Town Hall” at the airport. (This is only because Bill knows EVERYONE at the airport) Our airport is actually located outside of (tiny town) in a very remote location. Nothing is around there. They chose to use a hangar that is the most remotely located hangar. You could not pick a more remote location, and you can not get to it easily. It is totally secluded from the public.

FYI: We have many areas in Belgrade and Bozeman which could have held a large amount of folks with sufficient parking. (gymnasiums/auditoriums). All of which have chairs and tables, and would not have to be SHIPPED IN!! $$$$$

During the week, cargo by the TONS was being shipped in constantly. Airport employees could not believe how it just kept coming. Though it was our President coming several people expressed how excessive it was, especially during a recession. $$$$$

Late Tuesday/early Wednesday the 12th, they said that tickets would be handed out on Thursday 9am at two locations and the president would be arriving around 12:30 Friday.

Thursday morning about 600 tickets were passed out. However, 1500 were printed at a Local printing shop per White House request. Hmmmm……900 tickets just DISAPPEARED.

This same morning someone called into the radio from the local UPS branch and said that THOUSANDS of Dollars of Lobster were shipped in for Obama. Montana has some of the best beef in the nation!!! And it would have been really wonderful to help out the local economy. Anyone heard of the Recession?? Just think…with all of the traveling the White House is doing. $$$$$ One can only imagine what else we are paying for.

On Friday Bill and I got out to the airport about 10:45am. The groups that wanted to protest Obama’s spending and healthcare had gotten a permit to protest and that area was roped off. But that was not to be. A large bus carrying SEIU (Service Employees International Union) members drove up onto the area (illegal)and unloaded right there. It was quite a commotion and there were specifically 2 SEIU men trying to make trouble and start a fight. Police did get involved and arrested the one man but they said they did not have the manpower to remove the SEIU crowd.

The SEIU crowd was very organized and young. About 99% were under the age of 30 and they were not locals! They had bullhorns and PROFESSIONALLY made signs. Some even wore preprinted T-shirts. Oh, and Planned Parenthood folks were with them…..professing abortion rights with their T-shirts and preprinted signs. (BTW, all these folks did have a permit to protest in ANOTHER area)

Those against healthcare/spending moved away from the SEIU crowd to avoid confrontation. They were orderly and respectful. Even though SEIU kept coming over and walking through, continuing to be very intimidating and aggressive at the direction of the one SEIU man.

So we had Montana folks from ALL OVER the state with their homemade signs and their DOGS with homemade signs. We had cowboys, nurses, doctors you name it. There was even a guy from Texas who had been driving through. He found out about the occasion, went to the store, made a sign, and came to protest.

If you are wondering about the press…..Well, all of the major networks were over by that remote hangar I mentioned. They were conveniently parked on the other side of the buildings FAR away. None of these crowds were even visible to them. I have my doubts that they knew anything about the crowds.

We did have some local news media around us from this state and Idaho. Speaking of the local media…they were invited. However, all questions were to be turned into the White House in advance of the event. Wouldn’t want anyone to have to think off the top of their head.

It was very obvious that it was meant to be totally controlled by the White House. Everything was orchestrated down to the last detail to make it appear that Montana is just crazy for Obama and government healthcare. Even those people that talked about their insurance woes……..the White House called our local HRDC (Human Resource and Development Committee) and asked for names. Then the White House asked those folks to come. Smoke and mirrors…EVERYTHING was staged!!!!!!!!!!!

I am very dismayed about what I learned about our current White House. The amount of control and manipulation was unbelievable. I felt I was not living in the United States of America, more like the USSR!! I was physically nauseous. Bill and I have been around when Presidents or Heads of State visit. It has NEVER been like this. I am truly very frightened for our country. America needs your prayers and your voices. If you care about our country please get involved. Know the issues. And let Congress hear your voices again and again!! If they are willing to put forth so much effort to BULLY a small town one can only imagine what is going on in Washington, DC. Scary!!”

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