Christmas greetings and some trimmings

Merry Christmas and Happy New Year!

That's my traditional celebratory greeting for this time of year.  I'm good with Season's Greetings and Happy Holidays, too.  But my favorite is to say "Merry Christmas" combined with an optimistic look ahead.

My greeting is all-inclusive and not religiously-discriminatory.  Those of other faiths and backgrounds are entitled to other greetings with roots in their own religions, but for the most part I am unaware of what they should be.  To my Jewish friends, I know to say "Happy Hanukkah!"  But I can never keep track of Ramadan, and since it lasts a full month it doesn't lend itself to a slice-in-time greeting.  And I am clueless about what to say to those who are Buddhist, Deist, Humanist, Hindu, Shinto, Wiccan, Sikh, Tao, Confucian, Jedi (yes, it's for real), Baha'i, Rastafari, Unitarian, or adherents to any of numerous other faiths or non-faiths.  (Atheists and agnostics, take note:  I'm trying to leave a place opening for you here.)

Iraq war ends -- remember history, let's not do something like that again

Government officials from the United States and Iraq have held ceremonies, the American military forces have departed Iraq, and the war that began with an American invasion early in 2003 has finally come to an end.

There are those who have claimed and will continue to claim that the war was a failed attempt by America at imperial conquest.  They are wrong.  It was a different failure.

Shameful ignorance -- FFA and "All-American Muslim"

The Florida Family Association has brought shame upon itself.  And so has the home improvement retailer Lowe's.  Both have accomplished this by their actions regarding the television show "All-American Muslim."

Here's what is going on:  The Learning Channel (TLC) has aired a few episodes of its new show "All-American Muslim" which is intended to profile the lives of five Muslim families living in Dearborn, Michigan.  The organization called Florida Family Association (FFA; you can see their web site at floridafamily.org) has published an article on its web site stating its unfavorable views on Islam and Muslims, and advocates that people contact those companies that have advertised on the TV show and demand that they cease that advertising.  A news article in this morning's Los Angeles Times indicates that Lowe's has stopped advertising on "All-American Muslim" because the show has become a "lightening rod"--according to a statement by a Lowe's representative--and possibly in response to communications it has received that seem to have been inspired by the FFA web site.

America 1789 -- radical progressives triumphant

The Constitution of the United States of America was adopted and enacted in 1789.  As a governing document it embraces concepts and ideals that were considered radical in the late 18th century, and remain liberal and progressive here and now in the 21st century.

(To my Republican and other "right-wing" friends and readers:  You might disagree with some of what you are about to read, but do not be alarmed by it because you know that, as always, I will be factual, thoughtful and gentle.)

Creation of the United States began in the mid-1760s with the emergence of radical ideas of self-determination.  These ideas originated with politically-liberal thinkers in the thirteen English colonies in North America.  The conclusion of the Seven Years' War set the stage for the development of these ideas.  That conflict has been called the French and Indian War in this country; in fact it was a global war pitting Great Britain and its colonial possessions and allies against France and its territories and allies.

Mr. Gingrich goes to Washington. . .to consult on history

Perhaps historians should deliver a big "thank you" to Newt Gingrich.

Mr. Gingrich--candidate for Republican nomination for President of the United States of America and Speaker of the House of Representatives during some politically-significant years of the 1990s--seems to have elevated the value of historians to the American business world far beyond anything that was previously imaginable.  He has done this by revealing that over a period of eight years he has earned $1.6 million from Freddie Mac--the Government Sponsored Enterprise (GSE) possessing a business charter to participate in the funding of residential home loans--in his capacity as "historian" and not as a lobbyist.

Mr. Gingrich holds a doctorate degree in history.  Being awarded a doctorate is a significant accomplishment, and without doubt Mr. G. worked hard to earn his degree.  He has taught college history courses.  He knows a lot about history, and he is not shy about sharing historical snippets with his audience.

Never before in the history of history have Americans thought so much about history!  I love it!

Money/wealth/occupy/tea party/euro bonds/stock market/jobs/elections -- There's a lot to think about these days

We are less than a year away from the culmination of the quadrennial American hoopla known as a Presidential election year.  There are so many things on our minds these days that the 2012 election must be anticipated as critical to the country's future.  Some people talk about making political and governmental decisions on "gut instinct" or via other similar use of that part of the human anatomy.  In other words, ignore the facts and hope that it all goes away and things get better.  Ignorance preserves sanity.

Not here.  My gut is for digesting food.  My decisions are made with my brain.  Ignorance is anathema, and sanity is an afterthought.  Informed analysis of the issues must be a part of voting.

Here's a quick leftwing-ish capitalistic look at some of the things that are setting the stage for the election.

The Black Hole of Wealth

A comment on the prior posting--"Greece on Stage" on November 1--asks: 

"How about some discussion on the growing gap between the rich and the poor and the loss of influence by the workers?"

The literal answer to the question is -- "Because once you get me started on this it might get to a point where you don't know how to get me to stop."

So the discussion begins here and now.  It might be endless.

Wealth and income in this country are becoming increasingly concentrated in a smaller portion of the population.  That fact is an unfortunate experience for millions of Americans who have too little; for many of them it is downright tragic.  That fact is also tragic for the nation.  If not addressed, it will eventually eat away at our cultural, social, economic, political and governmental foundations.

Greece on Stage

My guess is that there was a teleconference earlier today that linked up the leaders of Greece, Germany and France so that they could discuss the Greek and European fiscal situation.  Without knowing any more about this than what is available in the general media, and with a generous amount of imagination, here's what might have been said--by using the English language as a common means of communication--if this were to be performed as one of those one-act plays:

(At the Greek Prime Minister's desk, his telephone rings, he looks at Caller ID and sighs loudly, then picks up the phone on the third ring and says):  "Hello, it's a bright sunny morning here in beautiful Athens, this is Mr. Papandreou, how can I help you?"

(He hears a peevish-sounding woman's voice respond):  "Mr. Prime Minister, I am so happy to have reached you this quickly!  This is Angela calling from Berlin; I have Sarkozy in Paris on the line with me.  We need to speak with you for a few minutes regarding your announcement late yesterday."

(And then he immediately hears an excited man's voice saying):  "George, this is SuperSarko!  Hey, man, we need to get some things cleared up!  Let's talk!"

Mission Statement

The mission and goal of LeftWingCapitalist is to conduct and publish critical analysis of political, social and economic issues that are important to the American people.  Comments--pro and con--are welcome and encouraged.

This will be done in a manner that is informed, respectful and without prejudice, while acknowledging the reality that I, the author, possess an existing political affiliation and governmental philosophy.  My analysis will rely on verifiable facts, historical context and the human condition that encompasses the issue of the moment.  A sense of humor is important, but this posting is no joke!

Scenes from Greece Part 2

Greece will probably default in some way on its sovereign debt.  Is this really important to us?  Yes, and here's why:  this default is going to be expensive.  It will be more expensive for European taxpayers and investors than it will be for anybody else, but it will still be expensive for American taxpayers and investors, and probably also for many others around the world.  And there are some lessons to be learned that have value in the American context.

By the time you reach the end of this posting you might want to pour yourself some of that potent Greek ouzo.  Drink it cold and neat and let it settle for a lengthy time before trying to get up and move again.

This is not going to be like Argentina defaulting on its debt a few years ago.  Argentina's financial system stood on its own, even though its debt was owned internationally; Greece's financial system is intimately and intricately tied into all of Europe's financial system by way of its sixteen partner nations in the euro zone, as well as having debt owned by banks all over Europe and perhaps elsewhere. 

And some of that debt--whether through direct ownership or indirectly via investments in institutions that themselves own that debt--will drag down American banks.

Scenes from Greece Part 1

This is all about people, specifically the Greeks, as seen against the backdrop of their unusual and unenviable position of possessing a potentially disastrous influence on the world's economy.  Here are some observations and intuitions gleaned from watching, speaking with, buying from, and occasionally seeking assistance from the people of Greece during our recent visit there.  Dry facts and conclusions will be offered at a later date.

Most current news and views about Greece are focused on that nation's "sovereign debt crisis."  For the Greeks we encountered, the crisis is a daily reality.  It is not all-consuming for them, but we saw how it has become a part of normal daily life in Greece in ways that are sometimes reasonable, sometimes shady, sometimes bemusing, and mostly understandable.  As always, additional insights, information and conclusions are welcome via the "comments" function at the end of this posting.

Our travels included Athens and three other cities in Greece, Dubrovnik in Croatia, Koper and Piran in Slovenia, and Venice, Italy.  There are so many great cultural and historical experiences to have in this corner of the world that even a visit whose duration is measured in weeks can do no more than just scratch the surface. Likewise, this writing about personal observations of, and interactions with, the Greek people during that time can provide only a superficial view of their attitudes and actions as they live their lives at the center of a world-wide economic morass that seems to have some of its deepest roots in Greek soil.

For the Greeks--as is true for people everywhere--these national cultural and historical heritages that are so remarkable to a visitor are mostly just a part of the daily background, and my guess is that they are usually a distant part of the background.  The debt crisis is mostly also a part of the daily background, but not quite so distant.  On that point, here are a few Greek scenes that we encountered.  These are observations to help bring personal and individual reality to the big-picture concepts of a sovereign debt crisis.  Draw your own conclusions before reading mine.  Here are the vignettes:

• Security preparations we observed in the morning prior to planned demonstrations in the vicinity of Parliament and Syntagma ("Constitution") Square in central Athens:  lots of police, complete with shields and gas masks, mostly standing in groups conversing among themselves; a well-armed soldier or two concealed in the off-street foliage (and probably a few more that we did not see, too); a crisp-looking contingent of the Greek Coast Guard; police buses and other vehicles in strategic placements.
• Security preparations late in the afternoon of the same day:  police, shields, masks and vehicles mostly as in the morning, but by this time many of the officers were engaged in several different card games; the soldiers seemed vigilant and (mostly) concealed, but the Coast Guard representatives were not in sight, and we learned upon reading the European Wall Street Journal the next day that the Coast Guard people were there to participate in the demonstration.
• Lots of graffiti on the walls and buildings:  mostly written in Greek, and so not understandable to us; some of it was in English, and that made it obvious that at least some of the messages were about social protest and targeted on the personal financial impacts of the debt crisis; my favorite graffiti was on the wall of an otherwise fine-looking building near the Acropolis--in big black letters it said "Eat the Rich."
• A 23% VAT:  in the United States we have state and local sales taxes on some of our purchases; in Greece and throughout Europe each country levies instead a national Value Added Tax (VAT); up until June the VAT on hospitality transactions in Greece had been 13%, and it had been at 9% as recently as a year ago, but is now 23%; this is one of the fiscal reforms imposed upon Greece as a condition for receiving the financial aid from the European Central Bank and the International Monetary Fund.
• Small merchant preference for cash transactions:  there's a very fine little restaurant on a street behind the new Acropolis Museum called Tokatiamo--if you are a fan of the Rick Steves travel books you can find a review of it in his current book on Greece--which accepts cash only, no credit cards; on Mykonos there is a tiny art gallery near the edge of town where the cash price is dramatically lower than is the credit card price; and so on with other similar experiences elsewhere in Greece.
• Cuts in current pension payments:  this is for today's recipients of pension payouts, as well as for those in the future; somebody who has been receiving a monthly payment is experiencing a reduction in that amount; it's another one of the fiscal austerity provisions being required of Greece by the ECB and the IMF.
• Athens is a very busy city, the rest of the country is mostly agricultural and quieter:  the Greek population is concentrated in a small number of urban areas; out of a national census of about 11 million, something like 4.5 million live in Athens and the immediate surrounding area, and another million live in the Thessaloniki metro area, which is the second-largest city in Greece; even with a 16% national unemployment rate and a rapidly shrinking government workforce that is centered in Athens we did not see much evidence of vagrancy or other social ills usually associated with high unemployment, whether in Athens or in the smaller cities and countryside areas; somehow, everybody either had something to do or their attendance was required at a street-side cafe.
• Athens is "walkable:"  on each day in Athens we walked the mile or so from out hotel to Syntagma Square and from there throughout the Plaka and the vicinity of the Acropolis and had no problems of any sort; one day we had planned on using the subway system, but that was the day of a general transit strike that was conducted as part of the general mood of protest against the government's acceptance of austerity measures.
• They don't trust their government:  this is probably not a surprise--and is, of course, far from unique to the Greeks--but some of the national chatter about their financial and economic predicaments seems to be pretty eccentric; for example, somewhere along the way we heard a story that some Greeks think that part of the cause of the problems is that the government allocated funding to buy four new submarines for the navy, but only three of them were delivered and nobody knows what happened to the money intended for the fourth.  According to defensenews.com there is a long-running Greek navy program for submarine construction and maintenance that has become bogged down and very expensive, but that reported story is not quite as ludicrous as the chatter would suggest.
• Athens has tourist police:  this was a nice surprise late one evening as we were walking around and needed directions--uniformed officers clearly designated to assist tourists needing guidance or help; they were professional and easily proficient in English and perhaps in other languages as well.
• Some people want to leave Greece:  our waiter at a restaurant one evening--this one accepted credit cards--was a very friendly, talkative and energetic young fellow whose primary employment seemed to be at a bank somewhere else in Athens, and he found that he needed the restaurant job in order to make ends meet (yes, they say that in Greece, too); at some point during the evening he commented that it might be necessary for him to leave Greece to find meaningful career employment opportunities; it sounded like Italy would be his destination of choice, though he wasn't clear on why Italy would be better than Greece.
• A euro doesn't go as far as it used to:  our experience with the exchange rate was that the euro was worth about US$1.36, give or take a couple of cents depending on the day; at this valuation things seemed to be pretty expensive to us, and I believe the locals have good reason to feel the same way.  For example, on Corfu we stopped at a McDonald's for some beverages and to do a spot check on The Economist's "Big Mac Index."  Granted that Corfu is a tourist destination, but the town is pretty small and everybody--tourists and locals alike--are all patronizing the same places.  The price of a Big Mac was 3,50 euro; even allowing for a "tourist premium" that seems like a pretty expensive Big Mac at the current exchange rate.
• Greeks have new discipline:  we also spoke with the waiter who might move to Italy about the next day's transit strike, which was set up to include taxi drivers as well as the public buses and trains, because we had a potential need on that day for transportation by taxi; he replied "no problem, let me check with my sister's friend who is a taxi driver because when there's one of these strikes some of the taxi drivers will always take rides for under-the-radar payments" (the radar metaphor is mine, but his message was the same) "and he can probably help out."  Well, our waiter friend returned a few minutes later with a somewhat puzzled look on his face and reported that for this particular strike there would be no exceptions--all of the taxi drivers throughout Athens would be a part of that day's protest.  Sure enough, on the next day we noticed that not a single public bus or train was operating, and the taxis were all locked and parked at the curbs throughout central Athens. 
• Most Greeks live in small spaces:  Athens is densely packed; we strolled for miles each day on streets in central Athens that were lined with apartments and small homes--in most cases these were occupying the upper levels of buildings that had shops and restaurants at ground level--and saw no evidence of expansive living quarters; the view from atop the Acropolis covers a city that extends over hills and valleys in all directions--from looking at the map, my guess is that we could see about 10 miles at all points of the compass--and nowhere could we see sights of the typical suburban sprawl that is so common in the USA.  Doubtless there are large and wealthy homes and compounds tucked away in places, but the overwhelming impression from looking over the entire city is one of the great majority of people living in a modest way.  

Greece is a beautiful and fascinating country, and as is true in every other country the vast majority of its people spend most of their energies in tending to the daily needs of life.  But it is also true that every place is different, and there is no doubt that Greece has its quirky characteristics.  Some of those characteristics just don't fit very well in today's financially-regimented world.  Greece will probably end up defaulting on its national debt in some way at some point in time.  That's for Part 2.

Greek Fire

It has been over a thousand years since Greece was this important in the world.  They probably had more enjoyment from their status of power in those earlier years than they are enjoying from their influence today.

Greece has a long and remarkable history that is chock full of accomplishments.  The world's first maritime merchant culture--the Minoan Civilization--was centered on the Greek island of Crete about 3500 years ago.  So, too, was the world's first indoor plumbing:  Minoan palaces contain remnants of indoor toilets complete with flushing water.  A thousand years later the Golden Age Greeks were debating politics and democracy, competing in the Olympics--competition was in the nude, logos having not yet been invented and so there was no compelling reason to wear something that might hinder an athlete's abilities--and they were creating all manner of arts, literature and science.  Business was important to them, too:  the Greek cities sent out expeditions that established colonies throughout the Mediterranean and Black Sea regions.  These colonies were formed primarily for commercial reasons; many of them became successful, powerful and wealthy in their own rights, and they enriched the mother cities through trade and commerce.

These accomplishments, and others, were merely foundations for success in the view of an enterprising young Macedonian named Alexander of the late 4th Century BC.  Fearing that there would be nothing left for him to conquer after his father had unified all of Greece under Macedonian control, he decided to forsake the advantages of higher education and instead used a Greek army to create the largest empire that the world had seen, thereby extending Greek influence far to the east over Anatolia, Persia, Mesopatamia, and parts of Afghanistan, Pakistan and India, and southward to encompass all of wealthy Egypt.  The Italian peninsula and the growing power of Rome probably would have been Alexander's next acquisitions if not for his untimely death.  Instead, Rome grew; soon, its empire absorbed Greece and much of Alexander's empire.

Eventually, the worm turned, and by the early years of the 4th Century (current era) a Greek city named Constantinople had become the capital of the Eastern Roman Empire.  Commonly called the Byzantine Empire--Constantinople was located on top of an old Greek town called Byzantium, and so we moderns have adopted the shorter and more evocative terminology to describe the resulting political organization--it picked up where the Roman Empire left off and by the middle of the 6th Century had become the superpower of Europe, North Africa and the Mediterranean area.

Superpowers need super weapons, and the Byzantine Greeks had one; it was called Greek Fire.  First used in combat during the mid-7th Century, Greek Fire was a combustible and semi-fluid mixture that could ignited and then hurled at the enemy over a considerable distance, and was especially effective in the naval warfare of the day (fire + wooden ships = ashes on the water).  Though the Byzantines successfully maintained the secrets of Greek Fire--even today its formulation is unknown--after a couple of centuries of frequent use it lost much of its superiority as others developed similar weapons.

With the benefit of 20/20 hindsight we can see that by the 11th Century the Empire--beset on all sides by belligerent and growing territorial powers and without a decisive technological edge--was toast (pun intended) and so Greece was forced to say "farewell" to its lengthy position of influence on the world's stage.

Until now.

Today the world is in thrall to the new Greek super weapon.  That weapon is Greek Debt.  It's exact composition is unknown, and it seems to be squirting everywhere, and it is definitely combustible.  The Greeks are accused by all around them of wielding this weapon without regard to consequences, and solely for their own benefit.  It seems to be an insidious weapon with sticky, icky, gooey and incendiary characteristics that has managed to seep into the financial underpinnings of Germany, France, Italy, Britain, the United States and perhaps even beyond!

And we Americans have been lately so self-absorbed that we thought our $14 trillion national debt was the world's biggest story.  It's a comeuppance for us to realize that a nation with a tiny fraction of our amount of debt might be able to cause the downfall of the mighty euro currency and then perhaps send shockwaves of financial panic rippling around the globe.

This is the influence that is now unintentionally wielded by a nation of about 11 million people, which makes it about the same size as Los Angeles County.  It's weight on the economic scales is smaller, as long as you do not count the value of all that gorgeous Greek island real estate.

A major difference between the Greek and the American situations is, of course, that even as the rest of the world is aghast at our recent political brinkmanship with regard to the national security issues of US sovereign debt they continue in the belief that America can eventually grow its way out of its debt.  Greece, on the other hand, has a visibly shrinking economy--perhaps, at last reckoning, at the rate of 4% or 5% per year.

Many people believe that the Greeks caused all this mess through tax evasion, fraud, laziness, early retirements, too much government employment and ownership of businesses, and other shenanigans.  There is much truth in that.

And it is also true that vacationing Germans, for example, enjoy the beautiful Greek venues which are amply supplied with electricity by Greek government owned utility operations that seem to operate well and profitably.  And the outputs of German manufacturers can be sold without tariffs throughout the Greek nation.  And so on.

You probably wonder, as do I, what it is that the Greeks intend to do with this new-found power of theirs.

Perhaps they would prefer not to have it.  (Many smart and wise people are spending lots of time and effort to determine if it is even possible for Greece to give up this incredible power without causing a great amount of pain and suffering, financial and otherwise.  Power is the consequence of fear, in this case fear of default on the debt.  Once Greece defaults on the debt, or once a way is found to avoid default, then the fear and the power dissipate.)

You probably wonder, as do I, how they benefit from this. 

Perhaps some Greeks benefit, and others do not.  (Whatever it is they are to gain, or to be accused of gaining, must be accomplished prior to the resolution of the debt issue, because once the fear is gone then so too is the power.)

I will find out next week.

Taxes and Jobs

Everything is changing.  People are taking their comedians seriously and the politicians as a joke.

We see this happen every day, but this is not my original observation.  For one thing, I have never taken a comedian seriously.  Credit for the anecdote goes to the American actor Will Rogers.  His thought seems relevant and on-target today, even though Rogers died in 1935, making his comment most of a century old.

Rogers apparently had a sackful of these worldly observations; two others that I have dug out of that bag set the stage for today's writing.  Here they are:

• Everyone is ignorant, only in different subjects.
• The income tax has made more liars out of the American people than golf has.

The President's Jobs Plan

The plan gets a B+ grade.  Yesterday we heard a 30 minute speech by the President--some of which was political posturing, no doubt about that--so there will be many more details to be released over the next few days. Perhaps the grade will eventually change in one direction or the other.  It depends on the revealed details, as well as the quality and effectiveness of upcoming actions as follow-ups to the articulation of the plan.

Even so, the amount of content packed into the allotted time is impressive.  The White House released a transcript of the speech which forms the basis for this writing.  In the summary below, the terminology is extracted directly from the transcript as much as possible, while omitting the interpolated (applause) and (laughter).  Why do they put those things in there, anyway?  Thankfully, they leave out things like (yawn) and (burp) and (cough).

In case you haven't yet heard, the price tag is quoted as $447 billion, about half of which is attributed to a continued and expanded payroll tax reduction.  Those figures do not show up in the transcript of the speech.  Somebody with an MBA probably took the numbers that were included in the speech and plugged them into a spreadsheet to come up with the total.  Somebody else without an MBA--or maybe in wanting to check the spreadsheet's results, the MBA person did this, too--likely pulled out a calculator and did the mathematics using that tool and came up with the same answer.

Horsefeathers and American Government

We are being dragged down by all the horsefeathers in American government and politics these days.  It is certain that there will be even more horsefeathers after President Obama's address tomorrow evening to a joint session of Congress on the subject of the nation's economy and its need for the on-going creation of more jobs.  (Yes, "horsefeathers" can be used as one word in addition to two words.  Check out the entertaining article on the origin of this American slang expression at the British site The Phrase Finder , and for more go over to The Internet Movie Database for synopsis and information on the Marx Brothers' 1932 movie "Horse Feathers."  Something from the movie later in this writing.)

Since there is no point in trying to anticipate the content of the speech--let's just wait for it and then talk about it once the facts are known--this writing will set forth a framework in which to evaluate any such well-considered proposals, and also the entire political environment that will culminate in next year's elections.  The framework will probably grow and change over time, but this will be a good start.  Here it is:

DAMN the torpedoes, full speed ahead!

During the 19th Century, including the American Civil War, the word "torpedo" referred to any explosive charge.  Today--and since the end of that century--the word "mine" has replaced it when referring to explosives that are hidden in the ground or are mostly out of view by floating somewhere under water.

By mid-1864 Mobile Bay, Alabama was the last major seaport still in Confederate hands.  Admiral David Farragut, local commander of the US Navy, was determined to reclaim the Bay and the surrounding territory for the Union as part of the strategy to bring the Civil Way to its conclusion.  Confederate forces defending Mobile Bay had thoroughly saturated those waters with floating mines--"torpedoes" by the standards of the day.  The torpedoes were cleverly placed so that any ships entering the bay would have to pass directly under the guns of Fort Morgan in order to avoid sailing through the line of torpedoes.  Any ships able to successfully pass the fort would next encounter the powerful Confederate ironclad Tennessee.

On August 5, 1864 Admiral Farragut's naval force entered the channel leading into Mobile Bay.  The lead ship in the line of battle was quickly disabled after colliding with one of the torpedoes, and all of his remaining warships slowed, lost headway, and began drifting under the guns of Fort Morgan.  As disaster loomed for the attacking Union squadron, Admiral Farragut shouted out to the captains of the surviving ships "Damn the torpedoes, full speed ahead!"  The torpedoes encountered by the first ships failed to explode; the remaining ships in the line followed in their wakes, overwhelmed the defenders and soon took control of Mobile Bay for the Union.

He was bold.  He got lucky.  He won.

A Consumer's Confidence

Today's release by The Conference Board of its monthly "Consumer Confidence Index" made for a very depressing read.   Click here for the press release in all of its miserable detail.  If you prefer to limit your misery intake for the day but still get the gist of the thing, the Los Angeles Times has a readable summary that can be found by clicking here.  In either case, it might be worthwhile to check out the same paper's comics page first--or after reading the news, or both before and after--for some diversion and amusement.

After reading the press release, the article, and some other information regarding The Conference Board and the survey behind the Index, these questions came to mind:  Who gets surveyed for this Index?  What are they saying to yield such a negative view of the future?

The Index showed a very large and unexpected drop from the previous month.  Apparently, the only time in recent history when the Index showed a lower result was in April 2009.  At that time, as we will all remember, the Great Recession was in full flower in the aftermath of the Great Credit Crisis and the Great Housing Bust, and the prior month of March had us all experiencing the finale of the Great Stock Market Collapse that came in the wake of the aforementioned-Greats.  Naturally, in April 2009 we did not yet know that the stock markets had reached their lowest point for that pricing cycle, and there was little in the way of positive news to make us feel better about the future.

Economic Salvation Prescriptions du jour -- The Frustration of Thrashing About

Here we are, almost at the end of the month of August, and it seems like this country and its economy are pretty much right where they were at the end of last year.  During these eight months we--that is, you and I, the "typical" or "average" or "middle class" or "non-politician" or "not-an-elected-official" or "not-a-captain-of-industry" type of person who comprises about 98% of the population of this country--have been suffused on a daily basis with competing ideas on how to best improve the American economy.  These "prescriptions du jour" for our economic salvation have apparently produced little in the way of tangible gain, as evidenced by the U.S. Commerce Department's report this morning which reported that real GDP growth for the second quarter of the year was 1% over the first quarter.

So many ideas, so much debate, so much noise, so much chatter, and yet so little to show for it.  That's a lot of thrashing about, and it is very frustrating.

In reflecting on this, it seemed to me that Mark Twain might have said or written something that could be an appropriate comment, and maybe even provide a hint of guidance.  Sure enough, after a little searching this dandy passage turned up:  "Soap and education are not as sudden as a massacre, but they are more deadly in the long run."  (From The Facts concerning the Recent Resignation Sketches New & Old (1900), p. 350.)

These "prescriptions du jour" are like the massacre.  They are described with embellishments of urgency, finality and calamity.  Soap and education is what you are getting if you have read this far, and especially if you continue reading:  it is analysis.  It is the process of cutting through the puerile posturing of the petty, pugnacious and pusillanimous from among those of our pundits, politicians and prophetic prognosticators of labor and industry who consume the nation's oxygen in order to out-speak the others; it is a process conducted with informed, thoughtful and critical analysis.

Business Operations: Emergency Preparations

Yesterday's moderate earthquake in Northern Virginia fortunately produced no injuries and little damage, although apparently the National Cathedral and the Washington Monument in Washington, D.C. sustained some small amounts of structural damage.  The quake measured in at about 5.8 on the Richter scale, and was felt over a huge area from Ontario, Canada in the north to Alabama in the south.

Probably a small number of unfortunate individuals and small businesses suffered some loss from this earthquake.  On a national scale, though, the economic impact of this event is nil.

Which causes a recollection of the massive earthquake and tsunami that hit Japan earlier this year.  Thousands perished at that time, many additional thousands had their personal lives upended in ways that will be felt for years yet to come, and the world's economy suffered greatly from the ripple effects that reached out to touch businesses in all corners of the world.

Businesses of all sizes in all locations would be doing themselves a favor if they were to look at this event as a catalyst to update their emergency preparedness plans.  Many organizations, especially the larger ones, will already be doing this; probably so, too, will large numbers of smaller ones.  However, far too many small and mid-size companies are not able to devote time and resources to activities that do not directly contribute to the growth or profitability of the business.  So, this writing is directed primarily at those business leaders of smaller companies who realize that making preparations to keep themselves in business in the aftermath of an emergency is important to the long-term success of the company, but who do not have time or staff to make a quick and comprehensive job of it.

Here is a list of design points that can be helpful in making business plans for actions that could be taken either prior to an emergency event or as a result of such an event:

Tom Campbell's "Jobs Plan"

Tom Campbell's "Jobs Plan" as presented in his recent opinion piece in the Los Angeles Times has merit and should be given respectful consideration by leaders in government and business.

This is not to say that I agree with all that he wrote the other day.  Mr. Campbell is a law school Dean and former Republican Congressman from California.  By any measure he is a highly-accomplished individual with a lengthy career in law, scholarship, politics and government, but apparently with scant--if any--business experience.  Nonetheless, his ideas to encourage job creation in the nation's economy deserve attention by business leaders and by our nation's governmental leadership.

Briefly, Mr. Campbell is suggesting that the Federal Government provide businesses with salary subsidies for hiring new workers from among the pool of people who have been out of work for at least six months.  He suggests certain conditions and requirements be attached to the subsidy so that it is properly used.  According to his logic, the goal is to have more people gainfully earning money so that they are able to become more active consumers once again.  Increased consumer spending begets increased demand for more services and products which begets a need for yet additional employment, thereby creating a positive feedback loop for the economy.

Business: Leadership to Grow the Business

Businesses will not hire more employees until they see more demand for the things that they sell.  Consumers--the biggest part of the US economy--will not spend more until they are more confident in their employment and financial security.

Which comes first:  the chicken or the egg?

This is a column about capitalism, free enterprise and business.  So let's look at a business idea that for most of the last sixty years has been considered mundane; today it might almost seem bold.

Here's the idea:  businesses should try a little harder to sell something, instead of waiting for somebody to come in and buy.  Business leaders:  go hire another sales person, and do something professional to help your sales team be more successful so that your business grows and it, too, becomes more successful.

Business exists to make a profit.  That is a "given."  However, selling is the one business activity that can most directly pay for itself, and that is also a "given."

During my selling career one of the professional foundations of the job, and one of the key leadership themes of the business, was to not wait for the customer to ask to buy; instead, it was to have us sales professionals reach out to the customer and learn what they would need to make them more successful, and then figure out what to sell in order to meet that need, and finally make the offer and close the sale.

And that is a short, simple description of something that is very complicated.

There is no "one size fits all" solution to accomplishing this, but many enterprises--especially the small and medium sized ones--can benefit from some guidance on how to most effectively hire additional sales people, and on how to get the most out of the salespeople who are representing the company.

Jobs: Getting and Keeping One -- Advice from One Boss

You looking for a job?  Or know someone who is, and you want to help?  Then read on.

(Potential employers are welcome to read this, too.)

America seems to be stuck with an unemployment rate of 9% or more.  But most people do not realize that even with so much unemployment there are still millions of job openings that are going unfilled.  Apparently, one of the big reasons that companies are not able to fill these openings is because they are not able to find enough qualified candidates.  Bloomberg Businessweek magazine has a current article profiling this situation; click here to read it.


When a business is hiring, the manager or owner usually wants to hire as quickly as possible, and hire somebody with the best possible qualifications to be successful in the new employment. Also, it is usually to the employer's advantage to choose an employee who will remain in that position for an extended period of time.  Most job seekers probably want to find a job sooner rather than later, and stick with it as long as possible.

So far, so good.

The Fed: Why Was It Created?

In 1873 President Andrew Dickson White of Cornell University refused permission to the Cornell football players to meet Michigan at Cleveland by stating "I will not permit 30 men to travel 400 miles to agitate a bag of wind" (from The Encyclopedia of American Facts and Dates - 6th edition).  President White seems to have possessed an ample ability to clearly express his decisions, and apparently he had no great regard for the sport of football, which at that time bore a close resemblance to today's game of soccer.  However, it is possible that fiscal prudence also freighted his decision-making, as the same source states that the "Panic of 1873" was triggered by the failure of the great banking house of Jay Cooke & Company on September 18 of that year.

The Panic resulted in a Depression.  The Encyclopedia of American Facts and Dates tells us that 5000 businesses failed during that time.  Think of that as seeing a headline a year or so after the Lehman Brothers bankruptcy in September 2008 yelling out "40,000 business failures!" since the nation's population in 2008 was about 8 times what it was in 1873.  (The US Census of 1870 recorded a population of about 38.5 million, and the US Census Bureau's population clock shows a current US population of about 312 million, for an approximate population ratio of 1 to 8.)  My guess is that the 5000 failures were among businesses that were of substantial size for the time, since the actual enumeration of very small businesses is a 20th century development.  So the 40,000 contemporary businesses would probably be from among those that are primarily larger than sole proprietorships or individuals acting as service companies or affiliates of much larger companies.

What is "The Fed" and Who Owns It?

"We shall deal with our economic system as it is and as it may be modified, not as it might be if we had a clean sheet of paper to write upon, and step by step we shall make it what it should be."  With these words, President Woodrow Wilson signed into law the Federal Reserve Act of 1913.  This Act created the Federal Reserve System, the central banking system of the United States that is commonly called "The Fed."

Earlier this week I was engaged in a political and business conversation with a good friend.  At one point, he asked the question "Who owns the Fed?"  Not having a ready and concise answer at the time I committed to doing research to answer his question.

The answer to the question he asked is this:  the US Government owns the Fed, and banks have a unique and limited ownership stake in the regional Federal Reserve Banks.

But the research revealed to me that my friend's question leads to another question covering a broader spectrum; the question is this:  Just what is the Fed?

Be the First on Your Block to Know This: The Business Case for Federal Stimulus Spending

It is within the power of the US Federal Government to increase the growth of the nation's economy through the use of selected governmental spending programs.  This was the goal of the American Recovery and Reinvestment Act (ARRA) of 2009, and there is ample evidence that this was achieved.  The evidence is available for all to see by visiting the web site of the Congressional Budget Office at http://www.cbo.gov/ .

The Congressional Budget Office (CBO) has a well-earned and much-deserved reputation for accuracy and bipartisanship.  During the period leading up to the agreement to increase the nation's "debt ceiling" that was enacted early last week, the CBO analyzed the competing budget proposals and identified errors as appropriate.  Both the Republican and Democratic sides of Congress, and the Obama Administration, accepted the CBO's critiques and reissued their proposals with the errors corrected.

Since November 2009 the CBO has issued a series of reports on the results of the stimulus program known as the ARRA.  Each report is entitled "Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output . . ."  The most recent report was issued in May of this year.  As indicated by the title, the reports provide the CBO's analysis of the effects on GDP and employment due to the stimulus spending of the ARRA.  The figures provided in the reports are all positive.

S&P downgrades US debt. . .but who actually looked at the announcement?

Today was a painful day to be a capitalist--either of the left wing or right wing variety.  Stock markets all over the world--and especially here in the United States--suffered terribly in the wake of Standard & Poor's announcement of its first-ever downgrade of its assessment of the credit-worthiness of US Treasury debt.  The financial carnage was so great that just about the only asset class that gained in value was that of US Treasury debt.

Wait a minute--that can't be right, can it?  The financial instruments that have now been deemed by a major rating agency to be more risky than they used to be are actually now more attractive to investors than had been the case before the announcement?

Yes and yes.

No jokes or entertainment here today; this edition is all in earnest.

Capitalists can lose money, too, and still love Lucy

In the 18th episode of the 3rd season of I Love Lucy--the episode is named "Oil Wells"--Lucy arranges for some stock market dabbling, but she and Ricky and Fred and Ethel end up holding the bag while others walk away with the winnings.

After this week's action in the financial markets, many--probably most--of us will feel that we have ended up holding the bag and somebody else, somewhere, has the winnings.  It's worth taking a few minutes to view the end of the show before reading the rest of this article.  See it at http://www.tv.com/video/10542494/i-love-lucy--a-bunch-of-dopes.  (Lucille Ball was born 100 years ago tomorrow.)

Wealth seems to disappear faster than it can be created, whether the disappearing act is caused by a "business failure" or a "stock market crash" or a "stock market correction" or simply by some kind of accident.  But none of those events by themselves means that building a business or participating in a business or investing in the stock market is an act of futility.  We use these endeavors as tools to help us get what we want in life.  This is honorable.

Add education and educators to help the nation's economy

"The inherent vice of Capitalism is the unequal sharing of blessings; the inherent vice of Socialism is the equal sharing of miseries."  So said Winston Churchill, according to a book in my library.  Maybe so; in any case, it's pithy.

The June 2011 issue of Smithsonian magazine contains a great article on some folks in the Columbia River Gorge area who are in the business of developing and producing aerial drones; this is a story about entrepreneurial small business, and it's a good one, currently available at http://www.smithsonianmag.com/science-nature/Drones-are-Ready-for-Takeoff.html.

Stick with me; there's a connection here.  By the time you reach the end, you might even agree with my case for increasing public funding for education!

More is needed

Here's a description of a thing called a "Congressional virus" which could infect your computer:  The computer locks up, the screen splits erratically with a message appearing on each half blaming the other side for the problem.

That's a modestly funny comment on the nation's political and governing environment.  But the most entertaining thing about this is when I first saw it--in November 1995!  Political dysfunction in the US Congress at that time caused short-term shutdowns of certain parts of the Federal Government.

Our recent--and perhaps current--episode of similar dysfunction has not produced any similar events because the Congressional passage and Presidential signing of what is apparently being called the "Debt Bill" has avoided the near-term possibility of the US Federal Government defaulting on payments which it is obliged to make.

So far, so good.

Warning signs

Let me be clear about this: Today's DC political events continue to be a diversion from the really important actions that must be done. This is hurting the country.

Ultimately, and despite whatever Congress decides to do on the budget and the debt ceiling, there is no hope for long-term reduction of the Federal debt without economic growth.

You saw my comments yesterday about our nation's economic growth. And perhaps you saw or heard this morning's GDP reports convey this message: The recent recession was worse than we thought it was, and the recovery from that recession--especially in the first half of this year--has been weaker than expected, and weaker than prior reports had indicated.

Needed: rational actions in DC to support growth

From my perspective the current acrimony in Congress over raising the debt ceiling and structuring an affordable Federal budget has plenty of irrationality about it.

There's plenty of blame to go around everywhere on this: the House of Representatives, the Senate, the Administration, the Democrats, the Republicans and the so-called Independents and Decline-to-States all deserve a share. With that said, I'm going to avoid partisanship for the moment and try to substitute with rationality and logic.