Sunday, October 30, 2011

When You See That Macho 'Burly-Man' Senior On The AARP Commercials Threatening The Super Committee From Discussing Any Reductions to SS/Medicare.....

Show him this chart.
Chart C—Medicare Cost and Non-Interest Income by Source as a Percentage of GDP
You know the ad we are talking about. The one where the burly-looking senior looks in the camera like John Wayne and intones something to this effect:

'You mess with our Social Security and Medicare benefits...and we are gonna kick your butt!'

How is that for 'thoughtful, rational civil discourse' in America today, huh?

See it for yourself here: 'Burly-Man Senior Threatens Congress!'

We wouldn't want to face that guy in a showdown death match on the golf course or the shuffleboard court.

But here is the problem, ladies and gentlemen of the jury. Medicare never has and never will be 100% 'paid for' completely individually by any senior citizen for his/her coverage. Not during his or her working career. And most assuredly not from the monthly premiums they pay for the right to have Medicare Part B physician services.

Take a magnifying glass out and take a good long solid look at the chart above. In it, you will notice that, lo and behold!, in 1970, a mere 5 years after Medicare was passed, the program cost was virtually all covered by payroll taxes on then-working Americans (not the retirees themselves) and premiums imposed on the retirees themselves.

So far, so good as of 1970, right? Almost all paid for by the smaller payroll taxes on workers back then plus premiums paid for by the seniors who were on Medicare at the time.

But look at what happened to those two trend lines over the past 41 years since then. The payroll taxes on current workers, (again, not the retirees because they have already 'retired') has grown to account for about 1.25% of GDP. That is 'GDP' as in 'the size of our national economy'. Not percentage of overall health care costs or something 'small' like that.

Premiums on retired seniors have also grown, to an astounding 0.5%+ of GDP as well.

Since inception, Congress has added on taxation of retirement entitlement benefits on more wealthy seniors plus added certain state transfer funds and associated drug fees.

Add up all of those fees coming from payroll taxes paid by workers and premiums paid by seniors and they account for around 1.75% of GDP.

In a national economy that is still over $14 trillion despite this ridiculously long, lingering 'Second Contraction' as Harvard Professor Kenneth Rogoff calls it, 1.75% of GDP is a lot of money. $245 billion per year right now to be more exact.

Wouldn't you think that would be more than enough to pay for the medical needs of our less able and unhealthy senior citizens of America?

Not by a long shot. You, the American taxpayer, plus the still-willing (for some reason) lenders from China and other sovereign nations such as Saudi Arabia, foot the bill for over 50% of the cost of Medicare each year. The taxpayer subsidy part of Medicare is almost 1.5% of GDP today or another $210 billion per year.

Those are simply astounding numbers, aren't they?

And guess what? The Medicare Part A Hospital Insurance (HI) program is fundamentally broke today (that is what the {HI Deficit} brackets mean at the top of the chart)

This means that payroll taxes imposed on current workers are not even covering the cost of taking care of the elderly who need hospital care today much less setting aside anything for when the Boomers start to retire in full force this year and next.

And that all means that absent any substantive reform in Medicare this year beginning with the Super Committee's recommendations in November, your payroll taxes plus those of your children now entering the workforce are probably going to go way up to cover the shortfall.

Can you afford it? Can your sons or daughters readily find work in this troubled economy and then be able to pay a much higher payroll tax to support this already crumbling system?

Our suggestion to the 'Burly Man' in the AARP commercial is to send someone from the AARP with some diplomatic skills and appreciation for the dire straits our nation is now in financially to Congress and sit down with both sides and admit the following:
  1. The system is broke.
  2. We can't afford this system any more.
  3. Fundamental reform must take place now.
  4. Change Medicare so that it is 100% available for those seniors who can not afford health care at all on their own.
  5. Scale down any subsidy from the taxpayer to wealthier seniors as you go up the income scale.
  6. Warren Buffett and his mega-billionaire friends do not need Medicare and probably don't use it anyway since it limits their choice of finding the very best doctors and surgeons in the world to treat them when they fall ill.  So cut them off of the entitlement rolls.  We can't afford to subsidize poor people AND the super wealthy any more.
  7. Start a transition period whereby over the next 20 years, Medicare will become an income-support program based on income and household wealth when seniors will be able to use taxpayer subsidized funds to buy their own health insurance.
There are probably another 1000 things that can be done to fundamentally reform Medicare, much of which we have written about before but don't have room to do so today.

But this 'Burly-Man' AARP ad. It makes us want to burn up our AARP card because of the damage the AARP is costing our children and our children's children in terms of kicking the can down the road once again. Just like they have always advocated.

If we had an AARP card to begin with. Which we don't. You should burn yours up today as well. In silent but peaceful protest of their intransigence and inability to the see the forest fire out there for the trees.

Wednesday, October 26, 2011

Herman Cain's 9-9-9 Plan: Digging Down A Little Deeper

What is the MAIN reason why Herman Cain's 9-9-9 Plan has resonated so soundly with the Republicans lately?

And it has absolutely nothing to do with his race in case you haven't noticed that already.

How can there be so many 'white racist rich Republican people' in the nation and at all the country clubs around the country when Herman Cain is now leading white-as-Sunshine Bread Mitt Romney in the GOP presidential race?

Here's the answer:  'The 9-9-9 Plan  is NOT the current convoluted and corrupt US income, payroll, excise, estate (death), corporate tax system!'

'There just has to be a better way!' the primary voters on the Republican side are screaming at the top of their lungs.

Truth be told, this is at the heart of the Tea Party movement, the huge increase in registered and actual Independent voters across the nation and many Democrats as well.

The only people who seem to 'love' the existing tax code are the people who have learned to game the system and make full use of all the exemptions, loopholes and tax favoritism; the labor unions and guys like Chris Matthews of 'Hardball' and George Soros.

Wouldn't you love to see their tax returns to see if they are paying their 'fair share' according to the tax rules and not sheltering one thin dime anywhere!

Here's what the 9-9-9 Plan appears to do, although more details are 'forthcoming' which should have been prior to its publication:

1) Establishes a 9% flat rate income tax on all taxpayers.
2) Establishes a 9% national sales tax on all transactions, not just at final consumer purchase level but at every transaction in-process.
3) Establishes a 9% corporate income tax rate on all US corporations.

Embedded within this new regimen are the following assumptions of which you need to be apprised:

1) No deductions (except for charitable deductions) at the individual level.  Including home mortgage interest deduction. Including mortgage interest for your second, third and fourth homes.
2) No deductions at the US corporate level rate.  Including health insurance premium deduction; oil and gas depletion allowances; and ...oh goodness gracious!  There are close to 10 million words in the US Tax Code right now detailing hundreds of thousands of special tax breaks and favors that would be

K Street lobbyists in Washington, DC will be joining the 'Occupy Wall Street' crowds in tents.  Not by choice but because they will be unemployed and their PACs will be dissolved.  No corporate tax code to find loopholes in/No lobbyists needed/No PACs to pay for incumbent-protection programs.

3) All current federal payroll, excise, estate (death), sales, gas taxes would be repealed.  You would have zero $ taken out of your paycheck ever again for FICA, UI, and presumably, for your share of the health care premiums provided by your employer because they most likely would stop paying for your insurance once this huge deduction is wiped out.

You would be on your own to find the best insurance plan you could on the open market.  Or you could join the purchasing co-ops supposedly being set-up by Obama Care....unless it is not funded by Congress, which doesn't appear likely at the point.

4)  No taxes on capital gains, investment or dividend income or other personal savings accounts.  You will be free to invest in whatever business, stock, real estate or gold program you want without ANY concern or regard for possible taxation down the line.

5) What happens to the employer matching share of the FICA payroll taxes and the health care premiums they no longer will have to pay?  Well, it being the free enterprise system and all that, presumably the corporations and company owners could try to just keep all of that sudden-found windfall for themselves in terms of retained earnings and profits.

As long as every competitor does the same, there will be spectacular profits on the order of which American business may not have seen for a century.

But what happens the day one competitor cuts his price to gain market share?  Everyone else will follow suit in short order.  Revenues and profits will start to compress down to some new 'normal' level similar to what they were before this new tax reform tsunami hit.

What happens the day one of your competitors decides to use some of that new-found wealth to pay one of your workers more money to come work for him/her?  You either match it or lose a great employee.  And if the others see that you are unwilling to pay more money to keep them, they will start to leave in dribbles and then in droves.

In short, no one really knows for sure what will happen when and if a seismic change in tax policy hits America after the Inauguration of our 45th President, Herman Cain in 2013. The preliminary very negative projections have been done by the self-professed and designated 'non-partisan' Tax Policy Center which is hardly such a creature.  It is comprised of tax policy wonks from the Urban Institute and the Brookings Institution, neither of which has ever been very kind to radical tax reform ideas mainly because they like the current one just the way it is.

Most economic and econometric forecasts used in Washington are not 'dynamic' but 'static' meaning they can only focus on changing one variable at a time and can't predict very well what changes in human behavior will be to different incentives and policy changes.  There is no way to accurately forecast what businesses will do with their extra cash.  There is no way to really know exactly what someone will do with the extra cash in their pocket after these changes are made.

Our gut tells us that this 9-9-9 Plan has all the markings of setting up a titanic national debate in 2012 that we desperately need to have out in the public.  On the one hand, you will have President Obama defending the old and archaic and sclerotic current tax system, when you would think he, as a young, energetic President would be for something 'different' since this one doesn't work very well.

On the other, you may have another African-American, Herman Cain, promoting the most drastic and dramatic tax reform effort in America since the Kemp-Roth tax cuts advocated by President Reagan in the early 1980's.

Let the games begin.

Friday, October 21, 2011

Herman Cain's 9-9-9 Plan: 'Is It 'Wacky' or 'Constitutional'?

We have heard some pundits say that Herman Cain's '9-9-9' plan is a 'bad idea'.

'Compared to 'what'?', you have to ask yourself.

And you have to ask the brain surgeons such as Chris Matthews of 'Hardball' who deify themselves as the arbiters of all that is good about this great nation of ours.

(Why do the images of the Pharisees and Sadducees come to mind on the rare occasions we happen to catch Mr. Matthews harrumphing on a channel hardly anyone watches anymore?)

'Just how flipping 'great' is the current US progressive income tax system working out for ya, Chris?  With all the loopholes and exemptions, it looks like a case of moldy swiss cheese that is crippling the ingenuity and vigor of the American economy, especially now when we need clarity and certainty to get our economy going again'.

We heard Mr. Matthews sniff and snuffle and look down his nose at those who 'dare disagree' with him about how the 'grand tradition' of American public policy has 'long been the progressive tax system where people who earn more pay more of their income in taxes for the privilege of living in this great country of ours.' (paraphrased)

Oh, really?

Where in the US Constitution does it say anything about the vaunted 'progressive income tax system'?


Where does the 'progressive income tax system' come into play in the Declaration of Independence, The Emancipation Proclamation or maybe even going back to the Magna Carta, all of which are 'freedom' documents of the nth degree?

Let's take a step back into time and think about what the early settlers of America and the Founding Fathers were thinking when they were forming this new great land that we have inherited from them and their sacrifice and labor:

'Well, after we pioneer our way from the East Coast into the Midwest and fight all the Indians and the French soldiers and conquer this land, let's make sure we institute the 'progressive income tax system' so all of the people who took those risks pay more of their income for the things the rest of us all want.'

(Overheard at the crossing of the Delaware on a freezing cold Christmas night in 1776)

'You know, George (Washington), after we surprise the British here on Christmas day, we think the best thing we can do for this new republic we are fighting to start is to institute the 'progressive income tax system' so primarily only the rich people will pay for most of the huge public sector we are sure we are going to need down the road.'

Nothing could be further from the truth. They were fighting for freedom, plain and simple.

Much of that freedom was tied into being freed from the capricious taxation decision-making of King George III who seemingly popped out new taxes on the colonists like popcorn from a Jiffy Pop Popcorn aluminum bubble.

You know what the very first order of business was in the very first Congress in 1789?

Finding a way to pay for the new Republic.

You can look it up in the Congressional Record in the Archives in the basement of the Senate Dirksen Building. Page 1 of Volume 1 starts out with the call to order and then dives right into the issue of instituting and raising revenues to pay for the new country through import taxes.

What are 'import taxes', class?

Right. 'Consumption taxes' based on the importation of goods from overseas.

And who would be more likely to buy expensive perfumes from France and fine linens from England in 1789 America?

Correct. The rich people. The more they bought, the more taxes that were collected for the young republic.

Talk about 'progressive'!  We have a feeling that the wealthy back then paid perhaps 75-90% of all import taxes whether they were consuming the goods or importing them and then re-selling them to the general public.

Here's an interesting 'fact' that many people, including the savant Mr. Matthews, don't know:

In 1805, President Thomas Jefferson reported to Congress that revenues from import taxes in 1804 totaled $11.8 million for the past fiscal year. Expenses totaled $8.7 million for the young nation.

The surplus in 1804 was $3.1 million. Which is about $80 billion in 2012 terms.

All of the revenue back then came from import taxes. It stayed mostly that way in America up until the Civil War when Abraham Lincoln instituted an income tax to help pay for the Union side of the things in that bloody war.

Which was summarily repealed in 1872 after years of heated debate. Income taxes were revived in 1894. The U.S. Supreme Court ruled the income tax to be unconstitutional in 1895.

Congress proposed the 16th Amendment in 1909 to make the income tax constitutional and it was ratified in 1913.

Here is the entire text of the 16th Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
It says absolutely nothing about the 'progressive' income tax system.  It could be a flat tax.  In fact, the first income tax system under Lincoln was a 'flat tax' of 3% on any income above $800 earned in a year so there is some precedent for the flat tax from one of our 3 greatest Presidents, yes?

So for over half of our nation's history, import 'consumption' taxes were the way we funded virtually all of our federal government's activities. 'Consumption taxes' have always been a part of the US landscape ranging from import taxes to excise taxes to sales taxes.

They all work the same.  And guess what?  They all produce far more income from people who buy more goods and purchase large consumer goods such as Bentleys than from people who purchase 30 year-old used Gremlins. If they were applied to new mansions as a true consumption tax would work if truly universal, a person buying a $10 million home might pay 9% in a consumption tax to the federal government at closing.

Today, he/she pays zero to the federal government for a purchase of a new home.  Or a Bentley.

More later on the details of the 9-9-9 plan as we get the chance to study it in more detail.

But the operative question we want to leave you with today is this:

'Are you willing to keep putting up with a bankrupt and corrupt current federal income tax system?  Or are you willing to try something simpler and more transparent and direct?

If you answer affirmatively to the second question, you need to take a deeper look at Herman Cain's 9-9-9 plan.

Monday, October 17, 2011

'Occupy Chapel Hill: Be Part of Something Too Big To Fail'

We saw this sign in front of the US Post Office this past weekend on an absolutely glorious 'If God is Not a Tar Heel, then why is the Sky Carolina Blue' weekend.

And right off the bat, we wondered:  'What will happen when the skies turn gray and the temperature drops to 20 degrees? (for about the 3 days per year it does get cold in Chapel Hill)

But this sign does evoke a lot of emotions and thoughts so we thought we would share them with you:
  1. First of all, we agree with them 100% about the Wall Street and Detroit bailouts.
  2. But we also extend that sentiment to the state bailouts in the first stimulus package, the 'cash for clunkers' program, the Fannie Mae and Freddie Mac whitewashes and any other attempt by the Obama Administration. 
  3. 'Where do these people think the money comes from to pay for all these bailouts and the social programs they want more of in the first place?'
  4. 'Be part of something too big to fail' indeed.  Like the United States of America, the free enterprise system and the democratic republic that allows it all to happen.
Let's take these in order:

Wall Street/Detroit  We can, and should, all agree that any executive on Wall Street, in Detroit or in any management level decision that led to these egregious bailouts in the first place should have been fired, thrown into prison or hung in stocks on the Washington Mall like they did in colonial days to shame malefactors and criminals.

And none of them should have been offered any golden parachute, retirement package or any benefits after the companies they led essentially became bankrupt.

'Why? you ask.  'They had a contract.'

Their businesses went bankrupt!  Have American free enterprise mavens and hawkers forgotten what capitalism is all about in the first place? You make reasoned risks so you and your company can make profits so the company can grow and prosper.

You make the wrong guess or bet?  You lose.  You lose it all; you file Chapter 13 bankruptcy and try to reorganize and start all over again.

That is the 'real' American Way that Ronald Reagan and other conservatives such as Barry Goldwater talked about and extolled.  Not this 'run to the government for help' mindset that most of Wall Street and much of America corporate business has adopted over the past 25 years.

'Privatize the upside and socialize the downside' is the mantra for current business leaders in America.

Or more aptly put when speaking in private:
'Allow us (me) to take full advantage of the private enterprise system when things are going great so we (I) can get rich beyond the wildest dreams of Kings Croesus and Midas of yesteryear lore. When things go bad, we (I) will run to Washington to ask the government and the Federal Reserve and any other sucker to pay for our (my) mistakes. Oh, and pay ME a multi-million bailout parachute package with taxpayer support worthy of any parting gift from 'Wheel of Fortune'
One well-respected CFO and CEO we know well had this to say when asked if he would have ever gone to Washington hat-in-hand if his business had 'failed' in the 70's/80's:

'I would have rather had a hot poker from the fireplace stuck into both eyes!'

That must have been when men were men and business people of all genders recognized the ups and the downs of the free enterprise system. And respected them. Like the rules of golf.

You never see a professional golfer go whining to the PGA Commissioner appealing some ruling, do you? Golfers call penalties....ON THEMSELVES! 

Wouldn't that be wonderful to see in the business world of today?
'Members of the Board, shareholders and Members of Congress and President Obama, I screwed up. I made bets on the subprime mortgage markets with checks I could not cash and which went south pretty damned quickly in 2008. I hereby resign my lucrative position and will work for the rest of my life to try to repay every cent I lost...unless I go to prison first.'
Second, a bailout is a bailout, no matter how you slice it or what the government spends TARP money on. States across the nation have spent money like drunken sailors (which Ronald Reagan said was an 'insult to drunken sailors!) over the past decade and they were completely unprepared to handle the downturn in loss of tax revenues when the recession hit in 2008.

At least 50% of the Obama stimulus package was not designed to stimulate new investment and private sector job creation.  It was designed to satisfy the teacher unions and other public sector unions across the nation and keep them at work when the states could no longer pay their salaries. It is about to expire at the end of this year...and then what? In the absence of a healthy growing private sector, these jobs can not be sustained and will be cut back again next year at the state level.

Which gets us to our third point: 'Where do these Occupiers think all the money comes from to pay for their IPhones on which they Twitter their 'Glorious Revolution'? (Google the Glorious Revolution of 1688 and see what that was all about)

Computer says: 'The private enterprise system!'

That is where all the money comes from to support the social safety net, the defense budget and Medicare and SS, NOT the government! American free enterprise capitalists and conservatives in general have done a spectacularly terrible job of teaching the next generation of the virtues of the free enterprise system. Mostly because all they have seen in their formative years for these past 15-20 years has been year after year after year of corporate giants taking advantage of every loophole in the law they can find and then paying their executives enormous sums of tribute in the form of compensation even after they fail miserably.

Companies need to closely tie compensation to job performance and success. Period. Stock goes down. Mr. CEO gets wiped out. Just like his shareholders. And then fired. That is fair and that is justice. And it will also help teach the next generation that life in the free enterprise system is not just a bed of roses designed for a select few elites.

But here is what we really agree with the Occupiers of Chapel Hill:  'Be Part of Something Too Big To Fail.'

It is called 'The United States of America'. Be a part of it. Don't run from your civic duties and obligations. Run TO them. As fast as you can. Run for office. Contribute lots of money to those souls who are braver than you who do decide to run for public office. Vote. Volunteer to help your cause or side of the argument.

And if you are a businessman, please. Please don't run to the government and ask for a bailout no matter how stupid your decisions have been. One analyst has said that if either of the two large banks in Charlotte had not bought either of the two major subprime mortgage companies, Countrywide or Golden West, their stock price would now be $500/share instead of in the low single digits or gone.


We, the American taxpayer, would have preferred that both had not made the same wrong fateful decision. Be a man, Mr. American Business Person, and do it on your own from now on, why doncha?

Stay away from Washington bailout money. Show some self-respect and respect for the free enterprise system you say you 'love' and which has been very, very good to you and yours.

Wednesday, October 12, 2011

Is It OK To Vote For A Mormon For President?

Well, since Pastor Robert Jeffress has opened this can of worms, we might as well put in our two cents about it.

So should you.Especially if you are a serious bonafide Bible-believing Christian.

Here's what Jeffress said when introducing Rick Perry at the recent Family Values conference:
'Do we want a candidate who is a good, moral person? Or do we want a candidate who is a born-again follower of the Lord Jesus Christ? (applause)
Rick Perry is a proven leader. He is a true conservative, and he is a genuine follower of Jesus Christ.  
Would you join me in welcoming the governor of the great state of Texas, Rick Perry?'
What is it about voting for a 'genuine' 'born-again' 'follower of Jesus Christ' that makes anyone more special to be President of the United States of America?

How about voting for a Jew for President?  He/she would be part of the Judeo-Christian heritage we all say we share.

A Hindu? A Rastafarian? A Muslim?

Was Jefferson a Deist or closet atheist? Was Catholic President John F. Kennedy going to take his marching orders from the Pope? Is Rick Perry going to become Elmer Gantry if elected to the White House? Does Mitt Romney’s Mormon faith somehow ‘disqualify’ him from running for President?

What a president thinks about creationism versus evolution is almost immaterial to his or her conduct as Chief Executive Officer of this great land. Is a 'President Rick Perry' all of a sudden going to be able to snap his fingers and mandate that every public school in this country drop any mention of Darwin or evolution and focus solely on the Biblical accounts of creationism?

Heck no! Why do you think every state has its own legislature and each community has its own elected officers? They get to make local decisions on things like public education, not the President of the United States.

We think a man or woman’s personal faith is important if they decide to get into the public arena. We think it is helpful to know if someone running for the elective office in our great land thinks ‘they’ are the source of all knowledge and reason on earth or if they are accountable to a ‘Higher Order’.

But we also think the Constitution is pretty clear on this subject. The First Amendment guarantees every person the freedom of religious expression as they see fit to choose. They can howl at the moon and worship the dung beetle in Africa if they so choose. (don't laugh, there are people who do)

Article VI clearly states ' religious Test shall ever be required as a Qualification to any Office or Public Trust under the United States.'

We should fear the state-imposed religion more than whether a non-Christian gets elected to be the Chief Executive of our nation.  He is not elected to be a 'king', no matter how much they want you to think they are the next incarnation of the Sun-King or a descendant of Zeus.

The Founders saw the President as the tool to implement the policies they germinated and passed.  Not the other way around.

The Founders treasured religious freedom to the nth degree. And why shouldn’t they? Many of them were descendants of people who fled English and European persecution of them solely for their deeply-held religious beliefs.

Thomas Jefferson has 3 things inscribed on his tombstone:

‘Author of the
Declaration of American Independence
of the
Statute of Virginia 
Religious Freedom
and Father of the
The University of Virginia’

In that order.

It strikes us as overkill the amount of time and attention we collectively spend on examining any candidate’s religious beliefs or lack thereof.

Here's one area where someone's religious beliefs have not mattered very much when it comes to 'solving it', has it?

Balancing the Federal Budget.

As hard as it is to believe, just because someone is a person of faith is no indicator of whether they know how to vote to balance the federal budget, or any other budget for that matter.

We do have a very serious problem with is the misguided notion that just because someone is a person of faith (take your pick), they also know how to balance the budget.

How do we know this to be true?

As evidence, we present Exhibit A-1, Your Honor….the last 10 years of financial imprudence in the US Congress and around the state legislatures in the United States of America.’

It is sinful, truth be told and admitted and confessed to the Lord.  A great paraphrase of the Lord's Prayer might indicate our current attitude towards debt, both federal and personal:

'Forgive us our national debt, Lord!  But Not Just Yet!'  (with apologies to St. Augustine)

99% of all elected officials in Congress declare themselves to be Christian, Catholic or Jewish of some denomination, sect or order. The sole Muslim in Congress has only been there for 2.5 terms....and he has not done much better in terms of voting for fiscally sane positions either!

As long as each representative brings some real-world expertise education and experience to the table, we do not care if all of the Christians, Jews and the sole Muslim now serving in Congress hold hands and sing ‘Kumbaya’ around the Capitol flagpole every day at high noon as long as they can solve the very pressing public policy questions before them.

Such as balancing the federal budget and reducing the $14.7 trillion national debt before it explodes to $25 trillion. Just to name two.

Just because there is the Book of Numbers in the Bible does not mean that Christian and Jewish politicians know how to balance the budget. They obviously have no clue today, do they? The results speak for themselves.

Remember that as you evaluate the presidential candidates for the Republicans and the congressional candidates for 2012.

Mitt Romney might be the greatest president we could ever elect to help get us out of this economic and fiscal mess in which we are now mired neck-deep.  He has all the business background to do the job.

And if you know nothing about Mormonism, think on this: The unemployment rate amongst Mormons is probably close to zero.

Maybe we Christians. Jews, Muslims and Rastafarians can learn something from them.

Sunday, October 9, 2011

'You Want To Learn How To Create Jobs, Mr. President (and Congress)?'

Go see Ronnie Burleson and Wes Morgan in New London, North Carolina. They will not only tell you, but SHOW you how to create and sustain new jobs in the state and around the nation.

Please get out of Washington, DC and go see these guys before you do anything else to try to 'help' the economy. Please.

Ronnie Burleson is a true American hero. We don't know if he served in the military but he is a real American hero nonetheless because he is an American cotton farmer. What he grows out of his gravelly clay soil in New London in terms of the finest short fiber cotton in the world sustains the livelihood of hundreds of American families.

We went to Ronnie's farm yesterday to see where all the North Carolina-grown cotton for the t-shirts my wife and son sell is grown, harvested and ginned yesterday on an absolutely perfect North Carolina Indian summer fall afternoon. Their business, High Cotton Ties, is dedicated to making casual cotton bow ties and cummerbunds here in North Carolina, mainly for the college crowd, but also for any man who wants to look his best.

Our oldest son, Cameron, discovered TS Designs of Burlington, NC last year right before they were about to order hundreds of t-shirts as promotional items for the 75 college towns where High Cotton Ties are now sold. TS Designs is dedicated to re-creating the chain of cotton grown in the Carolinas through the manufacturing process that results in the end product available for sale such as t-shirts and hopefully, knit and dress shirts down the line soon.

But guess what? TS Designs is also primarily interested in making a profit. Otherwise they will go out of business. See, Mr. President? The profit motive and 'doing the right thing' usually work hand-in-hand to benefit everyone involved.

We went to the 4th Annual Harvest Fest at the Rolling Hills Gin to see and hear their story up close and personal. All we can say is that every politician in Washington DC and Raleigh, NC should be forced to go spend a day on the farm with Ronnie and in the gin with Wes before voting on another 'jobs stimulus' bill or allowing any regulator to write 1 more regulation that affects businesses the regulators and politicians know nothing about.

Nothing. With a capital 'N'.

Here's what we learned:

Modern American farmers are true renaissance men. In the course of one day, these farmers are the following: entrepreneurs, mechanical engineers, business managers, chemists, soil scientists, disease management specialists, accountants, inventors, crisis management experts, salesmen, and perhaps most importantly in these tough economic times, 'job creators'.

They purchase $600,000 'cotton-picker' machinery combines from John Deere in Des Moines, Iowa. John Deere ain't ever going to manufacture these multi-ton behemoth vehicles that look like something out of a space sci-fi movie overseas. They are too big and too costly to ship over here from China or Japan. Plus the good people at John Deere have figured out how to make the best farm machinery in the world so why move it from where the people who know how to make them do it the best?

Every time Ronnie Burleson buys a new cotton-picker, the people in Des Moines cheer. Or at least they should. Because that is another couple of months work for the entire factory.

Once he plants his 3000 acres, and the summer takes its course to produce absolutely beautiful bolls of cotton over knee-high (meaning you are truly in 'high cotton'), these space-age machines pick and pack the cotton into rolls of cotton just like hay which is then sent to the Rolling Hills Gin where Wes takes over.

We have no idea how many millions of dollars have been invested personally by these people in New London in this modern cotton gin. If you think it is some sort of hand-cranked contraption that grinds the cotton seeds out of the cotton boll like Eli Whitney's invention in 1794, you are wrong. Rolling Hills Gin is a fully automated modern manufacturing process where tons of raw picked cotton are dumped into chutes on the front end and dried, separated and compacted into bales at the other end in about 90 seconds per bale of cotton.

You have to see it to believe it.

From there, 80% of Ronnie Burleson's cotton gets shipped to other countries where they treasure the high quality of the fine North Carolina cotton to turn into shirts by people who make $2/day and whose nations have virtually zero environmental protection laws or federal regulations and lower taxes to boot.

Business migrates to lower wage areas.  We 'get it'.  The textile industry migrated to the Carolinas when costs got too high in Massachusetts around the turn of the 20th century. Lower wages overseas plus a lackadaisical attitude of enforcement of existing trade treaties over the past 20 years has led to a massive loss of 250,000 textile-related jobs in North Carolina alone.

But here is what is happening today, Mr. President and Congress:

20% of Ronnie Burleson's fine North Carolina cotton is being turned into fine North Carolina American-made products by Americans for Americans. That is up probably double from several years ago.

A lot of that 20% is now being purchased by TS Designs and Eric Henry and Tom Sineath who buy the finished knit product after it has been spun into thread, woven into fabric and dyed and cut and sewn in towns such as Thomasville, Greensboro, Middlesex and Wendell, NC. They make it into the most comfortable t-shirt you have worn in 30 years which you can buy from Judy and James, also North Carolinians, at High Cotton Ties.

Let's see if North Carolina can regain its position in the world markets as a premier producer of specialty textile products much like Italy has retained its position as a manufacturer of fine silks and printed fabrics.

We think the elimination of corporate taxes might just accelerate the expansion of those new textile jobs in North Carolina and the return of many of them from overseas, a process that is now underway due to higher labor costs in Asia, political uncertainty in China and higher transportation costs.  Don't you agree that might help even just a little?

Know what the #1 problem companies such as Rolling Hills Gin and farmers such as Ronnie Burleson have today in America? It is not lack of credit. John Deere will finance anything Ronnie Burleson wants to buy on very favorable terms because they know he knows what he is doing.

It is not lack of demand. Ronnie and Wes can sell every fiber of their cotton production to anyone in the entire world. Everyone wants Ronnie's great cotton.

Their main problem today is an over-reaching and intrusive federal government that writes nonsensical EPA regulations on air quality particulate matter. Those regulations might mean something in an urban manufacturing setting.

Ever been to New London, North Carolina, Mr. President or Mr. EPA Regulator? Didn't think so. The Rolling Hills Gin could shoot up particulate matter straight into the sky like a firework display on the Fourth of July and it would not hit one person on the way down for 10 square miles around the plant.

Every time President Obama and Congress has passed something in the last 3 years, guys like Ronnie Burleson and Wes run to cover their wallets because they know it is going to cost them something. Every time they are forced to spend $100,000 to put a new cap on their air blowing process, that is $100,000 less they have to hire new people to work on the farm or in the gin or invest in a new joint venture with Eric and Tom to maybe one day restore the weaving process back on North Carolina soil.

That is why there is so little business expansion and job creation in the private sector:  lack of confidence among business owners they can invest and make enough new profit to cover that risk.

Higher taxes will hit small town rural farmers and gin operators in their good years when their sales volume escalates.  ObamaCare? We didn't get into it but the cost of compliance to the new law plus the new regulations just add more burden and complexity to people like Ronnie Burleson who just want to grow great cotton and businesses like Rolling Hills Gin that only want to produce pure beautiful natural cotton.

These guys are true American Heroes, Mr. President and Members of Congress. Stop treating them as villains or criminals until proven innocent.

Most of all?  Leave them the heck alone so they can do their business and hire more people and help return this entire nation to some modicum of economic growth and prosperity.

That is what we want. Not another vaunted 'jobs bill' that fails to understand how guys like Ronnie, Wes, Eric and Tom have single-handedly created 700 jobs in North Carolina.

You can learn a lot from them.

Thursday, October 6, 2011

'Your Time Is Limited: Don't Waste It'

'Your time is limited, so don't waste it living someone else's life.
Don't be trapped by dogma — which is living with the results of other people's thinking.
Don't let the noise of others' opinions drown out your own inner voice.And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.'
Steven Jobs gave this speech to the 2005 graduates of Stanford University which is a must-read for anyone who is taking a risk every day and building a business and providing jobs for the rest of us.

But it also applies directly to how we all should look at the political world around us today and the public arena in which the battle of ideas are fought on a continual basis.

Just listen to the words as you sound them out above and imagine that someone at the Founding of our Democratic Republic such as Thomas Jefferson, James Madison, Benjamin Franklin, George Washington or George Mason were saying them at the signing of the Declaration of Independence in 1776 or the passage of the US Constitution in 1787.

We think the words might have sounded somewhat like this:

'Our time is limited, gentlemen.  The King of England tells us what to do, when to do it and how to do it. He taxes us without end and he spends our money in ways with which we vehemently disagree.
We are wasting our lives and freedoms by living the life he has chosen for us.
We came to America to pursue our dreams of freedom: religious freedom, freedom to think and speak freely, freedom to pursue the goals we we want to pursue, not be subservient to a centralized power such as this 'king' and his whims and wishes.
We consider the tyranny of the mind to be the worst of all imaginable sins.  When we are forced to live with the results of other people's thinking and by their directive, we will surely die an unhappy person.
We can not let the noise of others' opinions drown out our own inner voice. 
And most important, we must have the courage to follow our own hearts and intuitions. They somehow already know what we truly want to become. A free and prosperous yet generous nation.
Everything else is secondary.'
Why are we so content as a nation today to allow our duly-elected representatives, senators and Presidents to continually make repeatedly wrong-headed decisions on our behalf?  Does that reflect the collective intelligence of this nation?  Are we that 'stupid' as a country nowadays?

Or is it that the very best people we have in this country, those with massive amounts of brains, intelligence, charisma, charm, talent, ability, perseverance and guts, have simply chosen to live the 'life of leisure' and disengage from the hard work that a democratic republic such as ours takes to stay afloat?

We have heard it said many, many times:

  1. 'I am too busy at work'.
  2. 'I have worked hard for what I have and own.  I am not going to sacrifice any time at my various vacation homes or clubs to run for office and then, (audible 'ugh!' sound comes up from the diaphragm) 'become a (lowly) public servant!'
  3. 'I just don't care any more.'
  4. 'It is beyond hopeless.  The crazy, lazy people have taken over this country.'

We don't think Thomas Jefferson or James Madison or Benjamin Franklin would have fit very well into your circle of friends.  They would have been too busy saving the Republic right now.

They were among the most brilliant and successful people this nation has yet to produce, although Steven Jobs and Bill Gates and a few others will be remembered in the national history books in about 200 years as being almost of their equal in terms of positive impact on our national life together.

They sacrificed everything, and we mean everything, from their fortunes to their spacious homes to their reputations to their very lives, and put them on the line to fight and then secure our very freedoms that we so lackadaisically take for granted nowadays.

"Freedom isn't 'free'!" is the old adage people use to salute veterans of foreign wars who have defended our physical freedom.

'Free Enterprise Ain't Free!' either.  It has to be defended and protected just like our freedom of speech, religion and right to assembly have to be protected from repeated attacks.

It is your choice.  You can either rise to the challenge and help protect and defend the ideals of America by either running for political office or vigorously supporting like-minded candidates with your generous financial support on an annual giving basis.

And that is just about it, truth be told. Your vote means something and your opinions amongst your friends and in the occasional posting on Facebook, Twitter or in the newspapers that are somehow still hanging barely to life by a thread, also 'matter'.

But our words don't move mountains, do they?  Our 'actions' do.  Our actions speak more thunderously than any words we can speak.

Take Steven Jobs' words to heart as you consider what you are going to do with the rest of your life and the current political situation right now.

The answer has already been revealed to you in his Stanford commencement speech.

Saturday, October 1, 2011

The Rotational Presidential Primary System

If you ever want to know why our current political system is so crazy, think no further than this important fact:

For the past 50 years, any serious candidate for President of the 'United' States of America has had to basically camp out with the 'good folks of Iowa' and sip tea with the 'good folks of New Hampshire' for days, weeks and months on end in sub-zero freezing temperatures.

Here's our question:

If we are truly the 'United' States of America, not the 'Black or White America' President Obama so eloquently spoke of long, long ago in a galaxy far, far away now it seems, then why do two of the least populated states get to make this humongous, momentous decision every 4 years for the rest of us?

On top of that, the demographics of Iowa and New Hampshire harken back to the good olden days where America was a predominately white WASPY society where Ward and June Cleaver raised two rambunctious son in a bucolic, tree-lined neighborhood in Everytown, USA.  Iowa has a less than 3% African-American population and New Hampshire, well, good grief! Let's just say New Hampshire is 99% not African-American.

Don't you think that maybe perhaps there is at least some tiny degree of probability that there is some other state out of 48 of them that might be just a teeny-tiny bit more 'representative' of the entire US population here in the 21st century?

Florida just decided to move their primary up to January 31, 2012.  Good for them.

Instead of waiting for the results of the Iowa Caucuses on Februrary 6 and then the NH primary the second Tuesday in March, they have just decided to jump the field and bring one of the largest states in the Union into prominence before the die is cast for the most part by remaining the 4th primary just behind South Carolina.

Here's a common-sense solution:  Why not just rotate the presidential primaries around all 50 states so that each state has a chance to be in the top 5 every 4 years to pick our next presidential candidates from both major parties?

The order for the top 5 every 4 years could be determined by a random ping-pong ball being chosen. Heck! we choose the NBA #1 draft picks that way and people become mega-millionaires every night when some state holds their lottery number picks on television.  Why not set our state's ranking order the same way to choose our Very Most Important Person every four years?

Otherwise, we would argue for a return to the days of smoke-filled rooms (although nowadays it would probably be the 'non-lethal' vapors of electronic cigarettes) at our national conventions where guys like Abraham Lincoln and FDR were chosen before the primary system took root in the early 1950's.

Whatever we did before 1952 seemed to work, didn't it? For the most part?

The current presidential primary system has deteriorated into an ESPN-esque, cartoonish version of democracy where candidates can't say what they really feel or want to do for the nation. When they do, they get mercilessly ripped to pieces by people in the media that none of us would ever vote for to represent us in the local PTA at our local school.

Seriously....can you even imagine listening to Chris Matthews in a PTA meeting?  You would never be able to say anything!

Support the Florida Move to January 31.  Maybe it will crack apart this archaic sclerotic primary selection process we now tolerate.