'MERICA - YOUR DREAM IS CURRENTLY BEING LIQUIDATED

After a mad dash sprint toward the election, I took a well earned break from politics and instead spent all my free time at my normal job filling in while my co-workers went out in search of Bambi's now grown grandchildren.  So in the 11 days since election day, I have worked just over 110 hours, with little time for any thing else except coaching my son's basketball team.

But you will not see me complain even one iota about working too much, since at the very least I still have a job post-election.  In the early days following President Obama's re-election victory, all hell has broken loose. 

In the past 11 days, we've seen dozens of companies announce layoffs, Europe has gone into recession, with the US to soon follow and our economy still sits at the edge of a fiscal cliff.  Our nation's top military figure and intelligence chief has resigned in scandal as we continue to seek information regarding the Benghazi coverup, precious energy land resources have been closed off from production by the government and Israel and Hamas have seen hostilities escalate again.

The census bureau's new report shows that an all-time high 49.7 million Americans are now living in poverty.  In addition, first-time jobless claims surged by a mult-year high of 104,548 for a weekly total of 466,348 new jobless claims. 

The Latinos that voted in record numbers to keep Obama and his policies, should also note another record milestone for Latinos - their poverty rate has now reached a high of 28%.  Bienvenido al 'Merica.

Denny's, Papa Johns, Applebee's and many other eateries and dining establishments have announced that keeping the Healthcare reform law intact will cause price increases on the menu and job cuts among their staff to remain profitable.  Employers across many industries have intimated that they may drop all health coverage for their employees.

It has now even reached the point that in 'Merica, the land of the massively obese, Hostess, maker of the Twinkie, can no longer make money and will close its doors, taking its 18,500 jobs with it.

Even as this is happening, my friends on Facebook are clamoring for a bailout for Hostess.  All I can say is, "Have we learned nothing?"

And I can sum up the mindset of everyone who has just read everything I just wrote and are thinking to themselves, "Yep, that's just like them greedy companies and Republicans.  Take from the workers to keep making their profit".  I will simply quote one of the soon to be unemployed Hostess workers.  Roger Harrison, a 56 year old who bags buns had this to say, 

"The people who are running this company are not interested in making bread...They are not in the baking industry; they are just interested in the money."

Uh, yeah, you think so?

Well, of course they're just interested in making money.  That's why they took their own money, $130 million of it, and invested it in the company to salvage it from bankruptcy just a few years ago.  If there was no hope of profit, they would have found a better place to invest their $130 million and Hostess may have folded at that time.  What Rex Harrison doesn't understand is that he kept his job an extra three years because a company that was not in the baking industry saw Hostess as an opportunity to make money and invested $130 million to do just that.

I mean, if someone had $130 million sitting around and an interest in baking but not making money, they could have just stayed home, grabbed an apron and a mixer, turned the oven on and let the flour fury fly.  And they could have done that while living on the interest for their $130 million.  So, no, they didn't buy Hostess because of a deepseated desire to be bakers; they did it to make money.

But alas, that effort has failed due to many reasons - a poor economy, stricter food standards in schools, more health conscious eating habits, high union labor costs, etc.  Businesses fail for many reasons.  Yet, I can tell you that the one thing that didn't cause Hostess to go under is that ownership was trying to make money.  I don't care how interested or vested one is in the baking industry or in the process of making bread, if one fails to understand that making money is the chief objective at the end of the day, then one will not be in business long.

My wife and I owned and operated a florist/gift shop a few years ago that ultimately failed to make money.  It didn't matter how much my wife was interested in flowers.  Because it was unprofitable, we closed it.  This made my wife jobless.  (There were no newstories written about my wife's jobless situation, that I can recall.) 

A few months back, we began a home based business promoting the ViSalus Body By Vi 90 Day Challenge that we feel very strongly about.  Our life has been transformed by the 90 Day Challenge, so we are very motivated to share our experiences with as many people as we can and hopefully, help facilitate the personal transformation of as many people as possible. (For info on our transfomation click here or for more info on the 90 Day Challenge, click here)

But its a business.  We need it to make money.  If it ever stopped being profitable, we would quit doing it.  As much as we may be helping people, we still have bills to pay at home.  We have children to feed, a mortgage to pay off.  If our business was not a profit making venture, we could not afford the gas to get to our appointments or the phone to make our calls or even the computer to take our orders and run our business.

In a business, you either make money or you don't.  When you don't, you don't stay in business long.  People once understood that.  Today I don't think they do.  Which I feel is a big reason why we had the election results we had last week. 

Once upon a time in America, any person could work and save his/her money and one day investe this money into a business, where he/she would scrimp and save and work to make it profitable.  But I'm not sure we live in that America anymore.  We seem to be living in a cheap knock-off country - 'Merica.  The American Dream is being shortchanged by a people who don't even understand what it is anymore.  Instead we are left with the notion that business is a government partnership where we all work together to make a better life and making money is optional.  But that doesn't work.  It can't.  Businesses exist for one reason - to make money.  That's it.

So even as the avalanche of bad news is falling around us, too many will fail to see the underlying truth.  Instead, we are a nation where nearly 50% of the voting electorate would agree with this poor misguided woman as she marched on the picket line Thursday outside a bankrupt Hostess factory in Indianapolis,

"Do it.  Shut it down."

Well 'Merica - you just got what you asked for.

Come Hither for the Rant (Clothed in Subduedness)

Due to football practice, a union meeting and the football game, I didn't watch President Obama's speech until nearly midnight last night.  I fell asleep throughout it (only 3 hours sleep the night before) but had the feeling that someone had been very rude to the president by continually shouting at him.

I awoke this morning and cued up the speech on the DVR.  Turns out the disrespectful person interrupting the speech was actually Obama shouting, "Pass this bill!"  It was like some awful Baptist* preacher shouting AMEN! after every statement.  What he seems to not understand is that the congregation will shout AMEN! when they are persuaded that what you have said is a true and worthy statement.

Obama's speech had several true and worthy statements.  He spoke of the need to address jobs (AMEN!), how we need to cut regulation (AMEN!), help small businesses (AMEN!), educate children (AMEN!), and lead the world (AMEN!).

But the solutions he would use to address these issues are utterly underwhelming.  To offer such a package is truly an act of treachery. AMEN!)  Treachery is defined as a willful betrayal of fidelity, confidence or trust.  If we had a parliamentary system of government, a vote of no confidence would have been taken against this president immediately following this speech.

This new package (Stimulus II:Economic Boogaloo) is just more of what we've already done that has failed spectacularly.  In 2009, we sent an enormous amount of money to states to stop layoffs and meet budgets, rebuild infrastructure, offer small and temporary tax cuts and invest in green technology.  That effort is exactly why we are (I'm so mad I can't see straight) DOOMED!!!  WHAT THE H!!!!!

Sorry, I've been trying to keep myself contained, but I can't.  This is ridiculous.  This is like a bad actor who thinks they're not getting hired because they have bad promo materials.  They're broke, but they think to get a job they need new promo shots, business cards, flyers, etc.  So this actor goes and runs up more debt to buy all this stuff, but it's useless.  No job is coming because they don't see the problem.  Buying an acting lesson may be a worthy investment, but that means admitting that you're not good enough

President Obama can't admit the truth.  Government can't fix this by making all these small changes.  Some of them may be worthy on their own given the right circumstances.  But they don't change the underlying problem - the government has inserted itself into the market place and spooked businesses.  Employers don't want to see a temporary tax credit.  They want to see a long term future without unnecessary regulations and interference in their business.

Gibson, the guitar manufacturer was raided by the Fed and had a supply of rosewood confiscated.  Gibson has some 40 employees who treat and and set the inlays on this rosewood which will become the fretboard on some of their higher end guitars.  The Fed told them that due to some law in India, that work needs to be done overseas.  WHAT THE????  Obama is trying to create (or save) jobs by spending all this money while at the same time, his administration is working to kill jobs with non-American regulations (my mind is about to explode).

Look at the history of economic downturns.  There are two that did not quickly rebound - the Great Depression and now our Great Recession.  Why is that?  The similarity between the two is that the government became overly involved in both.  Some have declared that this was because it was needed.  Most now say this was in fact, the reason why a recovery was delayed.

I can't do this anymore.  I'm TOO FREAKING UPSET!!!  I'm just sick.  This is stupid.  Has the president never read a history book? (AMEN!) Does he not understand math? (AMEN!) Can he not open up a newspaper and read about what is happening in Europe? (AMEN!) Do they not have an economic record of his predecessors in the White House? (AMEN!) Is he oblivious to the hurt and discontent in our nation? (AMEN!) Is he more concerned with his campaign rather than the economy? (AMEN!) Does he not care enough to put aside his politics and do the right thing? (AMEN!)

How any president could make that speech last night is beyond the pale.  As I said earlier, it was an act of treachery.  November 2012 cannot come soon enough. (AMEN!)

*I'm a Baptist minister, so that makes this okay

How the Ball Lost Its Bounce

Zero.

0.00000

Nada.

That is how many jobs were added in the August jobs report - zero.  At this point can anyone even trot out the cliched "unexpectedly worse" line to describe this report?  It's absolutely not unexpected if you understand how our economy operates.

Let me provide a quick picture of how our economy works.

Imagine a bouncy ball - it represents the movement of our economy moving forward in time.  As the ball moves upward, our economy is experiencing growth.  But as the economy grows, poor decisions or wagers accumulate.  Think about the tech bubble or the housing bubble.  As people continue to overprice certain stocks or commodities, overhire & overspend, the ball begins to become weighted down by all this - we'll call it excess.

Burdened by the weight, the ball begins to fall.  Somewhere underneath is a natural floor which the ball will hit.  This is the downturn of a recession.  But when the ball hits this floor, all the excess will be broken off the ball and the bouncy ball will do what bouncy balls tend to do when they hit the floor quickly.  It will bounce back.  And the cycle will repeat itself if left alone.

The problem develops when the government tries to alter the cycle.  Can government help?  Yes, but only when it understands how.

In 2008-2009, both Presidents Bush & Obama saw an economy in a death fall and they believed they could and should do something about it and they did.  Rather than allow the ball to fall to its natural floor, they attempted to arrest the fall - which they did.

(Wait a minute.  Are you giving President Obama credit for ending the economic downturn?  Absolutely.)

The policies put into place, mostly by Obama, created a soft landing place for our economy, sort of like a pillow, in an attempt to protect Americans from being hurt by the fall.  It arrested the fall before it hit a natural floor, thus keeping the downturn from going as low as it may have. 

But, unlike what Obama says, that does not mean he prevented another Great Depression.  In fact, he has ensured that we would go through a depression.

By cushioning the fall, protecting homeowners, bailing out banks & the auto industry, funding states, Obama prevented the ball from shedding the excess that had accumulated on it.  Now it just sits there, overweighted with no bounce.  It's not going anywhere for a while.  This pretty much represents, if not a literal depression,  then at least the quagmire our economy is stuck in.

Even worse, the president's administration is putting in place new regulations that will represent obstacles to growth, so that even if we can get the ball bouncing, it will be hard to build any momentum.

Contrary to how this recession was handled, look at how Ronald Reagan reacted to taking office under a similar economic downturn.

Reagan understood that a falling economy could not be propped up.  Rather than attempt to stop the fall, he & Treasury Secretary Volker put into place policies that actually accelerated the fall.  By doing so, the economy hit the floor sooner and quicker.  This created an even larger bounce than would normally be expected.  The economy quickly shed the excess and took off. 

In addition, Reagan's tax & regulatory policies gave the economy room to grow so the ball bounced higher and higher than ever before and created a higher floor for the next bounce.

President Obama will give a speech next week on jobs.  I wish it mattered.  Unfortunately, I don't see how it does.  As long as our ball sits on the ground, covered in excess, surrounded by new regulations and the threat of higher taxes, it's not going anywhere anytime soon.

Dude, Where's My Recovery? - Part II

Dude, Where's My Recovery - Part I

In Part I, I discussed the errors and mistakes made by the Obama administration to arrest the economic free-fall, that have hindered our recovery.  As awful as those mistakes have been, the President was simply following the time honored tradition of jumping off a bridge because your friend jumped.

In choosing to follow the Keynesian formula, Obama has taken our economies normal recovery time of 18 -24 months and extended it into the 3-5 year range.  Just as we have seen happen before from Japan's lost decade to the Great Depression under FDR, such policies are very good at prolonging the bad times and preventing a quick recovery.

I contrasted our current remedies to Reagan's policies during a similar, if not worse economic predicament.  As the evidence shows, the Reagan recovery took off immediately after the end of the recession and soared in an unprecedented fashion (Obama likes to use the term unprecedented falsely, but in this case the term fits).  Unlike the failed Keynesian model, Reagan's supply side model worked and has been emulated across the globe to great success, especially in the former soviet satellite nations.

Today, we will discuss President Obama's plans to transform our economy.  As his chief of staff Rahm Emmanuel stated, "You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before."  President Obama has definitely used this crisis.

During the 2008 Presidential campaign, all of the candidates made one of the most ridiculous arguments I've heard.  They would all put money into creating Green jobs.  This was worse than the 2000 campaign's obsession with a "lock box".  Every campaign has it's ridiculous issue that seemed to make sense at the time and this was 2008's.  (go back and watch the speeches from previous conventions to see what I mean - Mondale '84 is a hoot)

Dude, Where's My Recovery? - Part I

Dude, Where's My Recovery? - Part II

After committing our military to fight a (air only) war in Bosnia...no, uhm, Somalia....uh....Libya (sorry, I was looking through the Congressional minutes for the authorization to use force, but I can't seem to find it), President Obama went on a Job Creation Jaunt to South America, where he samba'd, kicked a few soccer balls and agreed to fund and purchase oil from Brazil's newly discovered off-shore oil fields (I could of swore he meant create domestic jobs, but I must have read that memo incorrectly).  Except for a few snapshots in Rio with the landmark Christ the Redeemer statue, not sure why he didn't just take a trip to Miami & New Orleans.

Here in North America, spring has begun.  With the arrival of the warm air and sun, the new housing numbers came in.  New home sales in February were the worst ever for a single month in the 48 years these numbers have been tracked.  I remember hearing alot about Recovery Spring, then Recovery Summer last year as Washington tried to inspire a recovery, all to no avail.  But I've heard nothing but crickets about a Recovery Spring this year. Seems no one in Washington wants to talk about the economy.  So you may ask, "Dude, where's my recovery?"

While we are no longer in recession, the economy can't regain lost ground without going into overdrive.  Simply resuming normal economic activity will not create jobs to replace those that were lost.   President Obama has made the claim over and over that he acted to stop the fall, but stopping a falling economy is only half the battle.

Surreal is this Blindman's Budget

Yesterday I attempted to explain the basics of budgeting.  As I'm sure you know, the Federal Budget process is far removed from those basics.  In order to show you just how far off we are, here is a little chart from budget data found on the White House website (Office of Management & Budget).

Only a blind-man could look at this chart and fail to see that something must be done.  But Obama's new budget fails to notice reality.  Instead his proposed budget is a surreal venture that seeks to march onward listening to the beat of a drum that only the President can hear.  Talk of any higher spending needed to fix the economy now falls on deaf ears (Krugman), yet on he marches.