Heard about the riots in France? Greece? Demonstrations in the UK and Ireland? I can't say that I've looked everywhere, but in looking over the national news lately I can't say that these stories have been highlighted by media outlets around here. And why not? The media doesn't want to make a big deal about these stories because they are a glimpse of what we have to look forward to here. They are the stark images of what lays down the road of big government and socialist policies ... a road that we seem to be skipping happily down blindfolded to all of the pitfalls and potholes that litter its path.
The problem in Greece is, of course, that the government is BROKE ... they have no money ... but the government unions are rioting in protest of pay and benefit cuts, other groups are protesting and rioting against cutting spending (benefits) to social programs. The problem in France is that Government Retirement pensions are reaching critical mass and to try and stave of problems the government is trying to raise the retirement age to 62 from 60.
These governments are looking down the barrel of financial trouble and are trying to take the steps needed to get their financial house in order, but their opposition chooses to use violence and fear as their tactic to influence the situation. In France they have shut down public transportation, blockaded fuel depots causing a fuel shortage, barricaded access to airports disrupting passengers and flights, smashed store windows, burned cars, and become increasingly violent over the last week inuring 62 police officers.
Why? Because they feel that raising the retirement age could be the first step in eroding their other benefits ... which include long vacations, contracts that make it hard (or impossible) for an employer to fire employees, and a state subsidized health system that is draining the economy, in favor of a more 'American style' capitalist system.
Except here in America we're heading the opposite direction. We're heading straight down the road to those riots ... we are seeing a glimpse of our future, but we're turning a blind eye to it in the hopes that if we don't recognize it or acknowledge it that somehow we'll avoid it.
The government of the US is already essentially broke, we are spending much more than the government receives .... running much of our social programs and even essential government functions with borrowed money. This is an unsustainable policy, in many cases we are borrowing money to pay the interest on the loans we already had .... the national debt has increased every year since before Carter ... the much touted Clinton 'surplus' was a projection that assumed that nothing in the economy would change over the fifteen years following the report. Of course the report was before the 'dot com' bust that lead to the economic recession that started in Clinton's last year.
We have got to get spending under control in this country or we will be forced to when our economy crashes like Greece's. This is going to require some tough decisions and, more than likely, the elimination or drastic reduction in many if not all social programs. This is not going to be popular with the recipients of those programs, many of whom are proud career government leaches. These people, and the government unions whose over inflated salaries and pensions will likely come under the knife as well tend to be of a more mob mentality; a mentality that justifies and exonerates the tactics currently being used in France.
The longer we travel down the road of socialism the harder it is going to be to turn around and get our country back on track and in line with the goals of our founding fathers. We need to turn it around sooner rather than later ... it needs to start on November 2nd with these mid-term elections ... and it needs to start with an informed voting base.
DON'T just vote for Republicans just because they're not Democrats .... admittedly the Democrats (and particularly the top leadership of this Democrat administration) are largely responsible for accelerating this trip down the road we're on, but that doesn't mean that Republicans have all the answers either. Know the issues and the candidates stances on them ... Don't vote based on party, but on policy. Likewise don't vote for Democrats just because they aren't Republicans ... and don't vote for any candidate just because they are in a particular party.
DON'T just vote for someone just because they are running against an incumbent. There is a major anti-incumbent mentality out there, and I do believe that many of those that are currently in office (in both parties) need to be thrown out on their ears. But voting against an incumbent for no reason other than the fact that they are an incumbent is as just as bad as voting FOR him just because he is currently in the office. You need to know their voting record, know their opponent's stance, make sure that the person that you are voting for is, in your opinion at least, the person that is BEST suited for the job, if it so happens that they currently already have the job, then maybe they need to stay after all.
If you can not be bothered to make the effort to make an informed vote then please don't make the effort to go to the polls and vote, because it is uniformed votes that are the most dangerous to this country.
"The ignorance of one voter in a democracy impairs the security of all." - John F. Kennedy
Wednesday, October 20, 2010
Monday, May 24, 2010
Man
I need to blog more ... lately though I've actually been avoiding the news it's just too depressing that so many people are so out of touch in this country. Though I suppose it shouldn't really be that surprising. I saw a poll that had been done recently (of course I can't find the article now), but in generic terms what it found was that 70% of Americans over the age of (I think it was) 50 had a favorable view of Capitalism and the Free-Market economy and an unfavorable view of Socialism and a Centrally-Planned economy. Under the age of 30 (or so), however, the numbers were more akin to 80% in favor of Socialism and Centrally-Planned economy ... and yet let's step back and take a look at something:
Specifically the USSR (for those youngsters among us that is the Union of Soviet Socialist Republics and the poster child for a Centrally-Planned, Socialist style government) was founded in 1922 and dissolved in 1991.
Likewise it was in 1921 that the Communist Party of China (CPC) was founded and it wasn't until 1943 that it actually came to power by defeating the Nationalist Party in a long and bloody civil war. The CPC is still the ruling body of the Peoples Republic of China, but in recent years has been moving more toward a more Free-Market approach to their economy.
The two largest Communist/Socialist 'empires' if you will ... One collapsed almost 20 years ago, bankrupt, and the other is moving away from a Centrally-Planned economy. The USSR lasted 69 years ... if you take it back to the start of the revolution then it lasted 74 years, maybe a little longer. The People's Republic of China is only 67 years old (89 if you go back to the CPC's founding) and is no longer a purely Socialist / Centrally-Planned economic model.
Conversely, the USA founded upon individual liberty, Capitalism, and the Free-Market was founded in 1776. To date it has stood roughly 234 years. When the USSR and CPC were founded the USA's model of Capitalism had been operating for 145 years.
This is where some people point out that we aren't a purely Capitalist economy anymore either, and that is true. Since the Great Depression (and FDR's 'New Deal') socialism has been eating away at the capitalist structure of this country and since then we have seen the greatest losses of economic liberty, the greatest growths of government, and the greatest decline in power. The New Deal and many of the later growths and mutations of the policies that stemmed from it contain some of the biggest problems in American government today ... Social Security (which was known at the time to be unsustainable and only meant to be a temporary system until a better version could be enacted), the FHA (which would eventually lead to FreddyMac/FannieMae), the SEC, and eventually Medicare.
Whether we would have survived had we not incorporated some of these socialist systems into our economic model is impossible to say. I believe that operating on a pure, or nearly pure, Capitalist/Free-Market system is possible ... and I believe that it is infinitely more likely than a purely Socialist/Centrally-Planned system operating successfully for any significant length of time.
In any case ... why is it that so many seem more than willing to move away from the system that has worked the longest and brought more people out of poverty than any other system in history, in favor of a system that seems to burn itself out in about 70 years. Why are we trying to become more like a system that failed? Do we want long bread lines, longer hours and lower pay? Because that's what the USSR was best known for ... and that isn't from text books or propaganda reels, that's from talking to some clients here at work that lived over there before the fall.
Maybe part of the reason that the young ones do have a more favorable view of Communism/Socialism is simply the fact that the USSR fell almost 20 years ago. They didn't see and hear about the problems, about the living conditions of anyone not in the political class, and things of that nature. They've heard stories, sure, but those are just propaganda, and besides they have all the answers, they'll do it right.
Pardon me if I don't hold my breath ......
Specifically the USSR (for those youngsters among us that is the Union of Soviet Socialist Republics and the poster child for a Centrally-Planned, Socialist style government) was founded in 1922 and dissolved in 1991.
Likewise it was in 1921 that the Communist Party of China (CPC) was founded and it wasn't until 1943 that it actually came to power by defeating the Nationalist Party in a long and bloody civil war. The CPC is still the ruling body of the Peoples Republic of China, but in recent years has been moving more toward a more Free-Market approach to their economy.
The two largest Communist/Socialist 'empires' if you will ... One collapsed almost 20 years ago, bankrupt, and the other is moving away from a Centrally-Planned economy. The USSR lasted 69 years ... if you take it back to the start of the revolution then it lasted 74 years, maybe a little longer. The People's Republic of China is only 67 years old (89 if you go back to the CPC's founding) and is no longer a purely Socialist / Centrally-Planned economic model.
Conversely, the USA founded upon individual liberty, Capitalism, and the Free-Market was founded in 1776. To date it has stood roughly 234 years. When the USSR and CPC were founded the USA's model of Capitalism had been operating for 145 years.
This is where some people point out that we aren't a purely Capitalist economy anymore either, and that is true. Since the Great Depression (and FDR's 'New Deal') socialism has been eating away at the capitalist structure of this country and since then we have seen the greatest losses of economic liberty, the greatest growths of government, and the greatest decline in power. The New Deal and many of the later growths and mutations of the policies that stemmed from it contain some of the biggest problems in American government today ... Social Security (which was known at the time to be unsustainable and only meant to be a temporary system until a better version could be enacted), the FHA (which would eventually lead to FreddyMac/FannieMae), the SEC, and eventually Medicare.
Whether we would have survived had we not incorporated some of these socialist systems into our economic model is impossible to say. I believe that operating on a pure, or nearly pure, Capitalist/Free-Market system is possible ... and I believe that it is infinitely more likely than a purely Socialist/Centrally-Planned system operating successfully for any significant length of time.
In any case ... why is it that so many seem more than willing to move away from the system that has worked the longest and brought more people out of poverty than any other system in history, in favor of a system that seems to burn itself out in about 70 years. Why are we trying to become more like a system that failed? Do we want long bread lines, longer hours and lower pay? Because that's what the USSR was best known for ... and that isn't from text books or propaganda reels, that's from talking to some clients here at work that lived over there before the fall.
Maybe part of the reason that the young ones do have a more favorable view of Communism/Socialism is simply the fact that the USSR fell almost 20 years ago. They didn't see and hear about the problems, about the living conditions of anyone not in the political class, and things of that nature. They've heard stories, sure, but those are just propaganda, and besides they have all the answers, they'll do it right.
Pardon me if I don't hold my breath ......
Tuesday, April 13, 2010
Myth of Corporate Greed
Corporate Greed ... I'm sure that you've all heard the term. It seems to get thrown around a lot, particularly when economic troubles are in the air ... it is used as the explanation of what is wrong with everything in our economy. Companies laying off workers? Corporate Greed. Companies raising prices or fees? Corporate Greed. Companies going bankrupt? Yup, Corporate Greed.
There's a problem though ... the people using the term can't define it. Basically ... someone else is making more than they are and they don't like it, because if you ask them and press the issue they will likely tell you that the problem is 'greedy' CEOs.
Here's the thing though ... CEOs are employees. Hired ultimately by the shareholders of the corporation. Their pay (and bonuses) are defined by a contract negotiated, often by the board of directors, but ultimately approved by the shareholders of the corporation. Their job (for which they earns the pay and bonuses defined in the contract) is to make as much profit for the shareholders as he possibly can.
You see ... a corporation is basically an elaborate legal structure which exists for one single purpose ... to make a profit. It does not exist to employ people, it does not exist to produce a product, it exists to make money. Employees and Products (or services) are a means to that end.
When the cost of employment starts lowering profit the CEO has a problem ... his job is at stake. He has to make some choices. An over simplified version of the choices available to him are to 1) Pass the cost on to the end user of the product (raise the cost of his product/service to compensate for the additional labor costs) ... probably not a good idea in a down economy as it may result in drastically reduced sales. 2) find ways of lowering costs in other areas (advertising less, etc.) .. these can also have consequences on sales or other aspects of the company itself). 3)Go to the source of the problem and cut employment or compensation packages ... generally the most effective direct result though for a large company it can be a PR nightmare and the effect on production/services does need to be considered heavily.
Most often, of course, it is some combination of all available options that is going to be taken. No matter what the CEO does many of his decisions may be unpopular and very few of them are going to be easy. But that is why they makes the money that they do ... because their experience and business sense has taught them how to make those decisions and what the best road is likely to be for the short and long term health of the company; and more specifically for the shareholders of the company.
It's funny that often if a CEO is given a raise (by the board of directors, or the shareholders) it is because he's greedy, it can't possibly be because ... oh ... I don't know ... that he did a good freaking job. If the employees (or employee union), however, demand a raise ... it's not because they're greedy ... no ... they are the victims of the greedy corporation, enslaved to their pitiful paycheck and benefits.
You see ... the fact of the matter is that in many areas US workers have priced themselves out of the market. A company hiring US employees typically has to pay a lot more in benefits and wages than they would pay someone with the same level of skills in other countries. (Or in some cases even in other States within the US.) .... This effect can usually be traced back to 2 factors - Government Regulation (interference) and Labor Unions. Doing this isn't 'greedy' it's good business sense ... the CEO has a responsibility to the shareholders of the company, not the employees ... the employees exist to assist the company in making a profit, the company does not exist in order to provide them a job and means of income.
Let's take a moment and take a step back .... let's look at who the shareholders are in many of the 'big' companies. The largest holder of many of the large corporations in the US are ... retirement funds ... so, Teachers, Police, Fire, Employee Unions ... in other words 'every day workers'. (It's actually kind of ironic that Unions are often working against the best interests of the retirement funds of the very people that they are supposed to be representing ... but then again the Unions have generally had more of a 'now' outlook so they probably would prefer the 100 now instead of the 1000 later....)
These people have a vested interest in the corporation making as much profit and making it for as many years as possible ... to do this they have a vested interest to hire the best CEO and officers that they can find ... like any market there is a limited supply of people that can reasonably perform that role, as such, experience, track record, all of that is going to come with a price tag.
Are there CEOs (and/or other corporate officers) that are making more than they should be, perhaps, but then again if they were offered the contract, or if the terms that they offered to the corporation were accepted then the shareholders agreed to it and it's up to them to correct the situation for their own good.
Now, of course, many CEOs are also shareholders themselves ... but that doesn't make them greedy either. Yes, it means that they are, in part, making the decisions for their own profit, but that just means that they too have a vested interest in making the best choices possible for the health and profit of the company .... and face it ... would you, as a shareholder, trust a CEO that had no such interest?
People need to realize that there is not a single company on this planet that exists for any purpose than to make a profit for someone; be it the company owner, the partners, or the shareholders. Calling them 'greedy' for looking after their own best interests ... while praising employees for looking after their own is what one typically calls 'hypocrisy'.
There's a problem though ... the people using the term can't define it. Basically ... someone else is making more than they are and they don't like it, because if you ask them and press the issue they will likely tell you that the problem is 'greedy' CEOs.
Here's the thing though ... CEOs are employees. Hired ultimately by the shareholders of the corporation. Their pay (and bonuses) are defined by a contract negotiated, often by the board of directors, but ultimately approved by the shareholders of the corporation. Their job (for which they earns the pay and bonuses defined in the contract) is to make as much profit for the shareholders as he possibly can.
You see ... a corporation is basically an elaborate legal structure which exists for one single purpose ... to make a profit. It does not exist to employ people, it does not exist to produce a product, it exists to make money. Employees and Products (or services) are a means to that end.
When the cost of employment starts lowering profit the CEO has a problem ... his job is at stake. He has to make some choices. An over simplified version of the choices available to him are to 1) Pass the cost on to the end user of the product (raise the cost of his product/service to compensate for the additional labor costs) ... probably not a good idea in a down economy as it may result in drastically reduced sales. 2) find ways of lowering costs in other areas (advertising less, etc.) .. these can also have consequences on sales or other aspects of the company itself). 3)Go to the source of the problem and cut employment or compensation packages ... generally the most effective direct result though for a large company it can be a PR nightmare and the effect on production/services does need to be considered heavily.
Most often, of course, it is some combination of all available options that is going to be taken. No matter what the CEO does many of his decisions may be unpopular and very few of them are going to be easy. But that is why they makes the money that they do ... because their experience and business sense has taught them how to make those decisions and what the best road is likely to be for the short and long term health of the company; and more specifically for the shareholders of the company.
It's funny that often if a CEO is given a raise (by the board of directors, or the shareholders) it is because he's greedy, it can't possibly be because ... oh ... I don't know ... that he did a good freaking job. If the employees (or employee union), however, demand a raise ... it's not because they're greedy ... no ... they are the victims of the greedy corporation, enslaved to their pitiful paycheck and benefits.
You see ... the fact of the matter is that in many areas US workers have priced themselves out of the market. A company hiring US employees typically has to pay a lot more in benefits and wages than they would pay someone with the same level of skills in other countries. (Or in some cases even in other States within the US.) .... This effect can usually be traced back to 2 factors - Government Regulation (interference) and Labor Unions. Doing this isn't 'greedy' it's good business sense ... the CEO has a responsibility to the shareholders of the company, not the employees ... the employees exist to assist the company in making a profit, the company does not exist in order to provide them a job and means of income.
Let's take a moment and take a step back .... let's look at who the shareholders are in many of the 'big' companies. The largest holder of many of the large corporations in the US are ... retirement funds ... so, Teachers, Police, Fire, Employee Unions ... in other words 'every day workers'. (It's actually kind of ironic that Unions are often working against the best interests of the retirement funds of the very people that they are supposed to be representing ... but then again the Unions have generally had more of a 'now' outlook so they probably would prefer the 100 now instead of the 1000 later....)
These people have a vested interest in the corporation making as much profit and making it for as many years as possible ... to do this they have a vested interest to hire the best CEO and officers that they can find ... like any market there is a limited supply of people that can reasonably perform that role, as such, experience, track record, all of that is going to come with a price tag.
Are there CEOs (and/or other corporate officers) that are making more than they should be, perhaps, but then again if they were offered the contract, or if the terms that they offered to the corporation were accepted then the shareholders agreed to it and it's up to them to correct the situation for their own good.
Now, of course, many CEOs are also shareholders themselves ... but that doesn't make them greedy either. Yes, it means that they are, in part, making the decisions for their own profit, but that just means that they too have a vested interest in making the best choices possible for the health and profit of the company .... and face it ... would you, as a shareholder, trust a CEO that had no such interest?
People need to realize that there is not a single company on this planet that exists for any purpose than to make a profit for someone; be it the company owner, the partners, or the shareholders. Calling them 'greedy' for looking after their own best interests ... while praising employees for looking after their own is what one typically calls 'hypocrisy'.
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