How Far Fetched Is It Really?

One of the central themes of Ayn Rand's Atlas Shrugged is the constant interference of government in normal operations of businesses.  From the government passing laws to restrict outputs, to laws restricting movement and relocation of companies.  When I first read the book 16 or 17 years ago I too thought that it was pretty far fetched.  That was before I knew about agricultural subsidies, corporate tax breaks aimed at boosting specific industries (and effectively limiting others) and the latest decision out of the National Labor Relations Board. 

So, Boeing has a new plane, and to build this new plane, they decide to open a new facility, not right next door in Washington State, but clear across the country in South Carolina.  Obviously this is a menace.  Completely unfair to the poor Boeing workers in Washington who are now out of work.  But no, Boeing isn't laying anyone off in Washington.  That plant is still fully operational.  So, what's the problem?  The problem is is that Boeing's employees in Washington are part of a union, and if you want to work for Boeing in Washington, you HAVE TO join this union.  The employees in South Carolina CAN join that union if they wish, but they are not REQUIRED to do so.  Well, that's clearly a violation of the ummmm, the uhhhh, well gosh darn it, it's just not fair.

No, I'll tell you what's not fair.  What's not fair is a law that forces an individual to join a union in order to get a job with a company that is in an antagonistic (by design) relationship with said union, then compels dues be paid to said union.  Unions require majority support to be formed.  If they have that support they should be forced to maintain that support in order to stay.  If you can't convince enough people to voluntarily pay your dues, you can't operate.  They would have to better serve their constituencies to survive.  No, you're right.  Compulsion works better.  Makes life easier.

What's not fair is an unelected federal agency mandating where a company can do business, where it can hire employees.  The argument is that this is just another way to bust a union.  Again, no unions are being busted, they just have to earn the loyalty of new employees, give them a return for their hard earned investment.  If you can only exist by forced payments once you're establish then maybe you shouldn't exist. 

What Would You Do?

ABC does a new magazine show every so often, asking this question, posing situations for people to intervene.  Maybe they should consider this for an Extreme Edition of their show.  Several incidents recently where a person in real physical distress and the best reaction from a crowd of on-lookers is to pull out a camera phone and record it.  No one steps in, no one breaks up a fight, or cares for a dying man.

What's happening in this country is that we are afraid.  Afraid of stepping up or stepping in when it's not our fight, not our problem.  You feel bad.  Someone should step in.  Are you someone?  But the physical danger!  But I could get sued!

I don't have solutions, I don't know what I would do.  I hope I would retain enough humanity to do something to help my fellow man.  What I do know is that there are too many cases of people walking away from situations where they can help and enough situations of trying to help coming back to haunt a good samaritan to make it understandable. 

We are or should be free to help as we choose, when we choose.  I hope I make the right choice.

Let's Blame the Unicorn

Did you know that supply and demand, that fundamental principle of economics, applies to dollars the same way it applies to cars, gas, oil, corn, and every other for sale item in the world?  What makes it different is that since dollars are the basis by which we operate our barter economy, the price of the dollar effects the price of everything we buy with dollars. 

It may not seem like it in this recession, but there are more dollars floating around now than there were 15 years ago.  A lot more dollars.  As the supply of dollars has gone up, the value or price of the dollars has dropped.  The supply didn't go up to meet some strong demand for dollars, in fact, the supply started moving rapidly up when the demand for dollars began to diminish during the world-wide recession.  This wasn't an accident.  The Federal Reserve created these new dollars on purpose.  Creating the money helped to provide liquidity to the financial institutions during a time of crisis.  This was the second part of the bank bailout, the one no one talks about. 

What does this mean for the average person?  Well, when your dollar is worth less (not worthless just yet) then things you buy with dollars require more of them.  Prices go up.  We talked about this the other day, despite the fed's assertions that core inflation is nothing to worry about, they've excluded food and fuel from the "core" numbers. 

No one is admitting that this is a problem yet.  Obama is looking at the greedy speculators (ie commodities investors who are betting that the price of oil will go up) and big bad oil companies.  The oil companies are demonized for getting taxpayer subsidies.  (quick aside - These big subsidies are essentially the same as allowing a small business person to write off the expenses of purchasing new equipment or hiring new employees from their gross income and are not as blatant a subsidy as giving a tax credit to GE or Whirlpool for manufacturing a product that they sell for a profit.  Oil companies spend a LOT of money looking for oil, paying surveyors, landowners, geologists and then for exploratory wells, the "subsidies for big oil" allow them to expense these) 

Other people blame the "free market" for this "non-core" inflation.  This one always gets me.  I have been looking for a "free market" for years.  It doesn't exist.  Our markets are so heavily regulated that to even reference them as "free" makes Adam Smith roll over in his grave.  We do the best we can with the markets as we have them, but don't make the mistake of thinking that they're free.  You show me a FREE market that causes this runaway inflation and I'll fly to your house on a Pegasus.  Next time you hear someone say "the free market system has failed" ask them if it was the market or could one of the many layers of burdensome and inefficient regulations overlaying our markets have impacted that failure in any way?

But The Critics Gave it Bad Reviews!

A friend of mine, trying to ridicule the movie (without having seen it or having any interest in seeing it), pointed out that "Rotten Tomatoes" gave this movie it's worst ever critics rating. OH NO! Not the CRITI CS!  Those same critics gave The Piano excellent reviews, and let's not get me started there.  The same site acknowledges that closer to 90% of those who have seen it loved it.

Finally, my review of Part 1 of the movie adaptation of Ayn Rand's capitalist opus, Atlas Shrugged.

Having recently finished my first re-read of this book in 17 years, I wanted to be certain to see this movie opening weekend.  It's not the most masterfully written book.  The dialogue doesn't flow.  It's exaggerated to make a point.  It was DESIGNED to make that point, and did it ever. 

Having actually read the early reviews I didn't have high expectations regarding the acting, cinematography, etc.  To say I was pleasantly surprised is an understatement.  It was actually very well presented.  The acting was a notch above ABC Family, but since I expected OWN or Lifetime, this was a big improvement.  As the movie moved along the acting actually improved.  Like watching a play on opening night where the actors are a bit tense, but as the play progresses they relax and let the rehearsals and practice carry them through.  Hell, even the score was well done. 

Having said all of that, let me now say, it didn't matter.  It could have been acted by sock puppets and had they kept the message intact it would have been wonderful.  They kept the message intact.  What is the message though?  Some people, I fear, have mistaken it.  The message is not "Only those super-successful producers of the world are important."  Far from it.  The point of the movie, of the book, the underlying message is to be the best producer you can be, in whatever productive capacity you can find and fill, not for the benefit of society, not for your family and especially not for your Government.  Do it for the love of yourself and be proud of it. 

I want to encourage all of you, go out and see this movie.  It started out in only 300 theaters and will be expanded to 1000 or more by the end of May.  Go see the movie.  I believe you will be glad you did.

To Govern vs To Rule - Battle of the Verbs

NEWS FLASH!

Words Have Meaning!

When you're talking to your friends, as I know you often do, about the Government, state, local or federal, you probably don't often refer to them as our rulers.  Are they our Government or are they our rulers.  Just the visceral reaction in the pit of my stomach at the thought of having a ruler tells me that there is a distinction.  Webster doesn't see a lot of difference.  The definition of the two words are strikingly similar.  So, why don't we use them interchangeably when referencing our Rulers, errrr, Government.

Think about this:  What does government mean to you?  How do you want to be governed?  Do you want someone telling you how you HAVE to raise your kids, run your business, how much of your money you have to give to those less fortunate?  Or do you think, well, I'm going to do it right anyway, but someone should tell those other people how they have to act right?  What happens when the consensus turns against something you believe in?  What happens when they want to make YOU act right?  How much intrusion is too much? 

Sometimes you have to stand for Freedom even when you agree with the latest rule.

Do you too get that feeling in the pit of your stomach thinking about being "ruled?"  Here's what we have to do:

Stand up and get involved.  Get educated.  Look past the numbers you are given.  Trust reason before passion and right over need.  Be the best producer you can be, not for the sake of the looters, but for your own benefit. 

Playing With Numbers

Numbers tell us a lot about our world.  Statistics, the study of finding meaning behind the numbers, can give us information about a variety of topics.  Like many things that are both manipulable and trusted, statistics can be used to manipulate how we view our world.  About 10 years ago, a joke email went about trying to explain how statistics can be used to lead you to draw a wrong conclusion.  First it pointed out that 90% + of violent crimes were committed within 48 hours of the perpetrator eating bread.  Without pointing out that 90% + of the general population consumes bread at least once every 48 hours it drew the conclusion, obvious with the information presented, that eating bread is a cause of violent crime.

How has this worked recently in the real world?  Well, back in 1979 annual inflation reached 10.75%.  Then in 1980 the government changed how they measured inflation.  How did they do this?  By removing key components from the numbers.  Why did they do it?  The cynic in me says they did it to hide trouble from the nation.  It could be because they wanted to alleviate a scare in the public, that these other factors weren't critical to everyday life.  Think deeper though.  What costs to the government rise associated with inflation?  The 800 lb gorilla sitting on our government...Social Security.  A new measurement that reduces inflation also reduces the cost of living adjustments to social security recipients.  To be honest, this move probably prolonged the social security system by 20 years.  Ok, that was 30 years ago.  Aaaah, but the deception continues to this day.  Have you noticed the price of food creeping up over the last year?  You may not have.  Companies are really good at hiding inflation they same way they're good at hiding cost increases in a recession.  For instance, a few years ago you could buy a 20oz soda for 99 cents.  Well, now that 99 cents will get you a soda that looks the same, but is in fact, only 16 oz.  Don't worry, they still sell that 20 oz soda, but it costs $1.59 now.  Cereal that came in a 32 oz box now comes in 26 for the same price.  The box looks identical.  The contents are not.  Meanwhile, our government tells us that inflation is within normal range of 2.7%.  Using the same measurement that the government used in 1979, however, it's not.  It's 9.7% or higher.

What should you do?  I don't know.  I don't give investment advice.  I personally believe that investing without a hedge against inflation is foolish.  We've often, as a society, made a show of demanding transparency, but done little when that demand is either flat out rejected or when we're given numbers that have no real meaning.  So, what should you do?  When a politician tells you that he's cut $38.5 billion from the budget, asks him why that $38.5 billion cut only reduced our deficit by $350 million.  When you're told that inflation isn't a cause for concern, ask why your dollar doesn't buy as many Apple Jacks as it did 6 months ago.

Numbers don't lie.  You've probably heard that expression.  It's a paradox.  While it's true, it will cause you to believe a falsehood.  Number's don't lie, but they can be made to deceive you.  Look behind the numbers.  The real truth is likely in the small print.

Working on a new post already, pondering the question between the difference in two verbs:  govern and rule.  Which did we consent to?  Which are we receiving?

Post Tax Day Review

Taxes, as expected for this time of year, have been much talked about in the past few weeks.  With recent reports that nearly half of US households pay no income tax at all, I thought it would be a good time to review the subject touching on various levels of taxation and the general feel of the population.

Recently we've learned that large corporations, some turning enormous profits in the US pay NO income tax whatsoever.  Giants like GE and Whirlpool make quite large profits manufacturing and selling "green" appliances.  Simply by making these the companies get a tax credit that allows them to offset taxes on non-green products.  These credits then become an asset of the corporation, thus making them more valuable to their shareholders.  Making and selling green appliances is a profitable line of business by itself, do we really need additional profits to be generated by providing government subsidies through the tax code? 

Now, let's take a look at our fiscal problems and how some would like to solve them.  We are currently running a 1.6 trillion dollar a year deficit in this country.  Some say this is because of "tax breaks for the wealthy."  The same people saying this are the ones who say that we should have the above mentioned tax credits for conducting a profitable business because it suits their political agenda.  Now some "facts" as they are currently accepted, straight from the Congressional Budget Office.  First, during the debate over extending the Bush era tax rates last December, the CBO budgeted the "cost" of those tax rates at $70 billion per year.  Yes, I know, the looters need that $70 billion.  Why stop there?  Why not tax 100% of income over $250,000?  No one really needs more money than that each year right?  (If you momentarily thought that this might be a good idea, then you're a looter.) The problem is, that would only fund the government for a little more than a third of 1 year.  And guess what?  No one is going to work to earn more than that after having their earnings confiscated by the government.  Consider this question as well.  If tax cuts cost money, why do revenues increase at a pace greater than GDP growth after a reduction in the top marginal rates?

Not that popular opinion matters much to me, but it is interesting to see what people think.  Gallup introduced information from a series of polls taken between 2005 and 2011.  At all times during these polls the current tax rates have been in place.  If you're interested, go take a look at the entire poll.  First the basic info 45% of Americans pay zero income tax.  The top line of the poll says that 43% think they pay a "just right" amount of taxes.  Hey, if I paid no taxes I'd think that was Just right too!  Even more interesting was the perception of people in the lower and low middle income brackets, most of whom pay no federal income taxes at all.  About 80% of these combined groups felt that what they paid was either fair or too much.  Of course, these same people said that upper income individuals didn't pay enough.  Looters.

We're Awash in Budget Proposals (or How Many Football Analogies Can I Put in a Blog Post)

After neglecting to even propose a full year budget for 2011, Congress and the President are clamoring to present their brillian ideas for 2012.  First we had the 2 week late fumble by the White House.  Maybe fumble isn't the right metaphor.  What the president did instead was put the ball down on the fifty yard line and walk off the field.  Next came the hail mary pass by Budget Committee Chair, Paul Ryan.  A desperate pass, but it represents an honest effort.  As noted yesterday, the President came forward for another try.  This was akin to a pump fake followed by a kneel down.  The Congressional Progressive Caucus has joined the fray as well.  They have all climbed on the back of the most productive member of their team and are now insisting he carry them and the ball over the goal line. 

The progressive highlight reel begins with a near 50% tax rate for top earners.  That'll do wonders for small businesses.  Followed by a $300 billion reduction per year of defense spending.  All this extra money doesn't go to pay down deficits or pay off our national debt, instead it goes to adopting the single payer health care plan that was defeated in 2009, expanding bureaucracies, and of course, hiring more tax agents to track down half of your income.

You'll Need the Ghost of Billy Mays to Sell This Load of Shit

Every few weeks it seems, marketers in our nation's capital identify trends important to the People.  And, just like corporate marketers, politicians try to put that trendy twist on the crap they're selling.  Lately, Americans seem to be interested in reducing government spending.  The much villified tea party gains a lot of credit for turning this once neglected idea into the hip and trendy concept of today.

Rep. Ryan of Wisconsin is selling a fully loaded 6 trillion dollars worth of spending reductions.  The Speaker of the House and the President recently got together and are trying to now pass a bill that while it appears to be a spending reduction is half spending reduction and half "money we didn't spend last year and weren't GOING to spend this year."

And today, we have our president, shovelling more bullshit.  The sales pitch that jumped the spending reduction shark perhaps?  Ladies and gentlemen, I give to you The Spending Reduction In the Tax Code.

"Huh?"

Yes indeed.  Our tax code is responsible for spending about 77% of GDP annually, more than 3 times the rest of the federal government combined.  How?  By only taxing 23% of it.  That's right, the Spending Reduction in the Tax Code is simply a re-branded tax increase. 

Are you tired of being treated like an idiot, talked to like a simpleton, or just plain ignored? 

Me too.

Obama Calls a Mulligan

Tomorrow, our president will ask for a do-over.  You see, in February of this year, the President released his budget proposal calling for an increase in federal spending to $3.7 Trillion.  Despite the hype, seen exclusively at http://www.whitehouse.gov/, the budget contained very little in the way of real spending reform.  In fact, the only true nod to reform was a five year freeze on federal employee wages.

In the meantime,  the country has become more vocal in demanding real cuts faster.  The House is preparing to pass a budget that reduces the federal deficits over the next 10 years by $6 Trillion.  More, people have been demanding that our President be involved in this process, that the Leader of the Free World do something novel, like lead.  So, now, with an address scheduled for tomorrow night, the President appears ready to do just that.  Let's hope.

Atlas Shrugged Movie - Coming to a Theatre...somewhere

For those of you who have read Ayn Rand's Atlas Shrugged, an independent studio is preparing to release part 1 of their movie version this Friday, April 15th.  If you're interested in seeing the movie, check out their website below:

http://www.atlasshruggedpart1.com/

The film is being released to only a limited # of theatres due to demand and a lack of marketing budget.  The website includes a link to try to demand the movie come to a theatre near you.  Personally, I'll drive where I have to in order to see it. 

Down with the looters.