To Heck with Entrepreneurship…. Profits are Bad

Okay, the my title is heavily laced with sarcasm and I certainly don’t believe this but if you watch the video enclosed below you’ll find that this sentiment is something that some people do believe. Me… well I’ve kept silent as long as I can. When I saw this video in a brief flash I got a picture of what our country might be like in another decade unless the silent majority starts stepping up to the plate and helping to lead. My next comments are neither Democratic or Republican in nature – they are squarely American… as in I believe in freedom, free markets and personal responsibility (novel idea).

Thanks to a friend, I saw this YouTube video post included below from a gentlemen that went to one of the recent national political conventions and talked up a bunch of people about an idea he had to ban or cap corporate profits. His commentary on the front-end of the video I could have done without but the overall Q&A was pretty startling. When I saw this I thought that’s crazy, who could possibly support such a crazy idea. But guess what, people agreed….

As a business owner now, and at varying times in the past, sometimes successful and sometimes not, the necessity, the imperative, one of the base-line goals was to always turn a profit. In my lexicon profit is a good thing. Profit shouldn’t be a bad word. After watching the video I feel like somewhere along the line this word has become ammunition in a nasty political fight that tries to boil down the nation into have and have-nots.

I could drone on but any half-way intelligent person is going to quickly grasp the concept that corporate profits are the life-blood of our economy. Anybody that argues otherwise doesn’t understand economics or probably needs to head back to school. Healthy businesses that are able to make profits from their efforts, risk, good management and well paid team members (i.e. employees) is what our nation not only needs but wants.

In a properly functioning corporate entity that is market incentivized to innovate and deliver great products and services, the company wants to invest, innovate, grow, and hire the best talent. When these things happen our nation benefits in a variety of ways, some of which includes:

  1. Jobs – Companies growing with profits can hire more people, duh…?
  2. Community Growth – New jobs in communities have a cascading effect and drive the local economy
  3. Investment – Companies use corporate profits to build infrastructure (materials, equipment, contractors, etc.)
  4. Dividends – Companies growing sometimes distribute earnings in the form of dividends
The idea that people could be so uneducated or so jaded to believe that corporate profits are evil shows that whatever path we are on as a nation needs to be calibrated back to reality.  I’m sure in North Korea and other places the idea of centrally planned enterprises might work just fine but not here.
I hope that each voting person in the US can put aside the partisan politics and realize that when corporations and individuals do well that’s a good thing.
Here is an example of 2 large corporations and how they spent their profits in 2011.  Imagine if the government capped their profits?  What would then happen?  Let me know your thoughts via comments.

EXXON
2011 Fiscal Profits: $40 Billion
Full Time Employees: 82,000
2011 Profits / Cash in 2012 Spent On:
*Inventory ~ ($2.2 B)
*Capital Projects ~ ($31 B)
*Dividends ~ ($9.3 B)

APPLE
2011 Fiscal Profits: $25.9 Billion
Full Time Employees: 60,400
2011 Profits / Cash in 2012 Spent On:
*Inventory ~ ($275 Million)
*Capital Projects & Investments ~ ($36.8 B)

The Affordable Health Care for America Act (HR3962) Trades Our Collective Liberty for Security (FYI…that’s bad)

No matter where you stand on the political “aisle” of life, be it Republican, Democrat, or Independent the current bill that was just recently passed by Congress is an absolute disgrace.  In fact, let us start on the right frame work from which to view this abomination.  Instead of pigeon holing ourselves into a nice category like conservative, republican, etc. how about we try a new name for our collective selves.  Guess what that name is?

A-M-E-R-I-C-A-N !

USA
“He who trades liberty for security deserves neither and will lose both.” (picture courtesy of USAA)

With that common understanding now well established let’s proceed.  The disgraceful part of the current bill is that is throws out the common themes and ideals that have identified us as the greatest nation on Earth for the better part of two centuries.

Ideals and values such as freedom of choice, hard work, honest day’s pay for an honest day’s work, entrepreneurship, and oh by the way did I say freedom & liberty? If not let me say it again…. FREEDOM…LIBERTY.  You see in today’s mass media market values like FREEDOM & LIBERTY have been watered down and commoditized.  Some how these words are now just part of the common toolkit of career politicians and political hacks, used to fight battles of popularity and power.

It seems that somehow overtime our country’s collective memory of how hard won our individual liberties and freedoms were have been forgotten.  Let’s face it getting the rights we have today and the lifestyle we enjoy was not a god-given right.  It was, and is, a gift that requires us to be vigilant and protect this wonderful thing we have been given.  I believe in America we have forgotten that liberty and security are two very different ideals.  The vote that was passed in Congress is a vote that by and large passed using persuasive arguments that appealed to constituents “security” side.  I like to be secure as well but not at the expense of my liberty.  To put this in extremely basic terms I’ve created a simple analogy: (see below)

You move in with your parents as a 35 year old adult after suffering a job loss, etc.  Your parents provide you “security” – roof over your head, food, transportation, comfort, conversation, etc.  However, it comes with a price.  You see your Mom is a strict Southern Baptist and doesn’t agree with your late night carousing, drinking, video game playing, farting, texting on your cell phone and she vehemently disagrees with this whole thing she calls the “world wide web”.  So guess what she does? That’s right, she restricts you.  Mom and Dad agree that you can no longer go out past 6pm, you can only drink Schwepps Ginger Ale (on special occasions you can have O’Doul’s), the only games you can play are checkers (good news is your Mom has a friend named Hilda that rocks at checkers), gaseous substance releases have to be done outside and last but not least she confiscates your laptop calling it the “gateway to hell”.

And there you have it folks.  You’ve achieved your security and in the process you have traded your liberty.  Sucks doesn’t it?

Make no mistake about it.  This is the path we are on.  You see, we can’t have it both ways.  I hope that sooner, rather than later, we as Americans understand the differences and the tradeoffs that are involved.

Thomas Jefferson nailed it a very long time ago when he said the following:

“He who trades liberty for security deserves neither and will lose both.”

On this Veteran’s Day let us not only honor those great men and women who have honorably served but also be reminded that their sacrifices were to guard the liberty and freedom of choice that we have today.

http://www.opencongress.org/bill/111-h3962/show >  Visit this link to learn more about HR 3962

Foreshadowing the Federal Path, Is New Jersey a Proxy for Extreme Democratic Policies?

Could there be any better example of government largesse than the great state of New Jersey?  Boasting one of the highest tax rates in the union and boasting an even higher amount of government hand-outs it has to be one of the poster children for what life may resemble in the rest of our beloved union if we continue to let this current Democratic power-grab continue unabated. Before you believe that I’m some Southern Conservative that doesn’t have a clue about life in the North let me preface my comments by saying that I met my wonderful wife in New Jersey and went to undergrad in New York.

Okay…with that being said as they like to say in baseball – “Batter Up!”.  Today, I came across an article that was discussing President Obama’s visit to New Jersey to lobby the states democratic base to vote Governor Corzine in for another term.  In fact, in this event it appeared the Dems were pulling out the heavy artillery and actually had to change the venue from Rutgers to PNC Stadium to accommodate the flood of people wanting to get a chance to see President Obama.  In a show of the popularity of Obama versus Corzine, they even gave Obama top billing on Corzine’s event (see picture below of the campaign poster).  All of this is somewhat laughable in a state that boasts some of the highest taxes in the union and has shown a continued propensity to operate its government machine on the backs of hard-paying property owners.

My key question, if Corzine and Obama are such great buds and have such an awesome thing going with their democratic policies then why is New Jersey in such a hole.  Property owners are getting the shaft and the state makes it very difficult to attract new businesses, and in turn new residents.

I think the challenge is expectations.  Like most things in life, and as my wife likes to tell me,  if you set expectations realistically it generally makes life more enjoyable.  It seems that some residents of New Jersey have an expectation that amounts to a hand-out.  Nothing in life is free. It is cleche’ but absolutely correct.  Can you have “free” healthcare ? can you live in nice accommodations without working ?- the answer is yes…  BUT …. it comes from somewhere.  The business owner, the land owner, etc. that has to support the “free” healthcare adjusts his cost of doing business calculations by factoring in this new cost.  He then looks for ways to adjust.  These adjustments include – shedding work force, raising prices on his products, moving overseas to a lower cost environment, etc.

At the end of the day, New Jersey helps to serve as a window into what our federal government and other states may resemble if we let these “expectations” go unchecked.  Business owners, workers, citizens, legislatures – we all have a choice.  One a decision is made we also have a choice.  I hope the citizens of New Jersey exercise their choice and vote Corzine out of office.  However, caution exists.  The new person filling his shoes has to be like the doctor – delivering realistic news, setting realistic expectations and making us take the right medicine which may taste bad but will have the appropriate effect.

Obama gets top billing at Corzine event

http://www.nj.com/news/index.ssf/2009/07/president_obama_link_to_gov_co.html

Video Clip of the crowd arriving at PNC Bank Arts Center for President Obama

Cap and Trade Legislation- Bad News for America

Okay, I have a huge ax to grind with our Federal government for the latest bill proposed, HR.2454 – American Clean Energy and Security Act of 2009.  In this act, the federal government has once again figured out how to do what they do best… suck more dollars from our free-enterprise system to fuel their rampant and most-often, ignorant, mis-allocation of capital.  I am an ardent believer in the need to preserve our environment, however, this piece of legislation helps to steer more dollars into the Federal coffers and does very little to bring about the true “security” that the bill’s name implies.

I have provided a link below that will provide more background on the bill and its intended aim:

H.R.2454 – American Clean Energy And Security Act of 2009

As of June 26, 2009 the measure had passed in the House by a  wide margin but appears to be up against significant resistance in the Senate.  A recent article from mid-August details the less than likely affirmative vote needed from the Senate to make this law.  [article in American Thinker]

Ultimately, my primary issue with the legislation is that it works on the same premise that so much of Washington revolves around, that premise is very simple – “TAX IT”. Don’t like it > “Tax it”…. can’t pay for it, no worries let the Federal government handle it and we will “Tax it (i.e. You)”….Want “security” (i.e. Social Security, Energy Security, Health Security)….guess what – you are correct – “Tax it”. Look the enterprise and power hungry machine called Federal government has proven that they couldn’t manage a corner grocery store budget, let alone the trillions they are siphoning out of our economy right now.  Free market theorist like me eschew a simple ethos … stay the hell out of the way.  (i.e. guide / don’t force).  We have all seen the impact of government intervention, that case study was called…”let’s increase home-ownership rates, skip-ahead five years and we have a collosal housing melt down.  I am being extremely macro in my comments but you get the idea.

My second ax to grind is with the ardent Democratic voters who came out in droves to express their support and enthusiasm for Obama.  I applaud their enthusiastic exercising of their right to vote and becoming involved in the political debate.  Although I don’t agree with their vote I applaud their enthusiasm.  Jump eight months later and those same Obama zealots when asked about cap and trade…. reply – “Cap & WHO??”.  Long story short, many of these people got involved, purchased some T-shirts, decaled their car up like they were going to Woodstock – and after the election forgot about it.  Literally, they turned the switch off and went back to the daily grind trusting that our Federal government machinery would stay finely calibrated and not abuse the historic Democratic majority that had been achieved.  The right to vote is a priviledge with responsibility.  That responsibility is to stay engaged in the process.  I could go on – but I think you get the picture.

Below is a good video for those of you who need a quick primer on Cap & Trade.

Barbara Boxer – Fighting Opposition with Race Card

Okay, I’ve seen my fair share of strange things.  I once actually interned for a summer in Washington, DC and got to sit through hearing, testimonies, etc.  Generally, these affairs are more prose and posturing than rubber-meets-the-road execution.  However, recently, I came across the following video that was the testimony of Harry Alford, the President of the National Black Chamber of Commerce.  His testimony was before the Environmental Committee and his position on a piece of legislation opposed that of Senator Boxer.   Mr. Alford had came to the committee to assert facts, figures and research so that a true discussion could take place regarding the legislation that was in front of the committee.  

Seemingly this should have be just another committee hearing on just another day in Washington.  However, on this particular day, instead of having a discussion regarding the actual data and research, Senator Boxer reverted to adding documents to the committee record from other black associations that countered the position of Mr. Alford.  Let’s say this didn’t sit well at all with Mr. Alford and he actually let Senator Boxer know that this was a “racial” approach and the wrong “path” to be going down. 

I posted this video because I think in this day and age to have this type of political posturing going on indicates a true lack of intelligence on the part of Senator Boxer.   Honestly, the basic argument she was forming went something like this…”Mr. Alford, all of these other black associations like my position – so you must be wrong because you represent a black association.”  I would hope in her time in Senate, Senator Boxer has learned the proper and improper way to form counter points. However, based on this display in her own committee I was both frightened and reminded how we truly need good old fashion reform in Washington.  The problem with the status quo that we have today is that no matter what the so-called impetus is for a senator, congressman, etc. to pursue their political offices,  many times the real underlying impetus is hubris, power, money, etc.  Senator Boxer is just another in a long line of professional politicians that just don’t get it.   She is clearly out of touch with the majority of Americans and also living in a long past era where persons of color are expected to follow the same exact believe system. To lump the African American community into one large “group” as she did during this committee does an incredible disservice to African Americans, freedom of choice and my basic intellect.  In closing, Senator Boxer, we are now in the 21st century – don’t use the NAACP and 100 Black Men to advance your causes – instead try using data, facts, figures and a common sense approach.

Video: Courtesy of Youtube.com and www.ChuckDevore.com (running against Sen.Boxer in 2010 election)  

US Needs to Go on a Budget Diet

Whether it is losing that spare tire, giving up that daily latte, or taking that prized ten year old flannel shirt to good will, losing and the idea of doing without is never one that is very easy.  Let’s face it most of us are programmed in almost the same way. Give us something that we didn’t need and we say thank you.  Try to take it away and good luck.  Our US economic policy has proven this phenomenon transcends personal borders and actually manifests on a national scale as well. 

This phenomenon has never been more apparent than in the face of the current economic crisis that the United States faces.  President Obama has rallied his troops, and politicians from Seattle to Secaucus have all sung the praises of budget cutting and fiscal responsibility.  Interestingly enough though it appears that all politicians are on board for budget cuts at a macro perspective, but when it comes to actually cutting “THEIR” budgets – the consensus and collegial penny-pinching bureaucrats seem to lose it.  Effectively, all are ready for budget cuts so long as they don’t have to sacrifice any of their hard earned federal hand-outs. 

Take for instance the case of Mayor Pagliughi who is fighting proposed federal and state budget cuts to his tourism budget for the Cape May, New Jersey area.  It seems Mr. Pagliughi believes that proposed federal and state budget cuts will slow the nearly $5 Billion annually that is spent in Cape May County each year.

I’m certain that both state and federal funds have helped to ensure job stability and continued tourism revenues to Cape May County but the real question is what is the demarcation line for “have to have” versus “nice to have”.  

My approach to the issue of federal budget belt-tightening is quite simple, I parallel the budgeting process to my own simple family budgeting process.  If we only have X amount of income in a month and I know that we are going to have X+10% in expense…then guess what?  That’s right, like most American families I scour through the budget and cut the fluff for that month to ensure that we don’t spend ourselves into oblivion.  This expense cutting is certainly not pleasant but it is the responsible thing to do.  Often times the things that get cut are those that are most fatty in nature and are not core to keeping our household operating. For instance, maybe we cut back on our entertainment budget and don’t go to a museum or zoo, or maybe we eat out a few less times that month.  

Certainly I’m not naive, and I recognize that cutting jobs and federal programs is not as easy as cutting my daily latte, but, at the end of the day the approach is the same.  The idea that we can continue to spend without cutting back is flawed.  Cutting back by its very nature is a painful process and one that makes all involved uncomfortable and sometimes anxious.  However, the alternative to not cutting back now is that current politicians put an even greater weight on our future generations in terms of debts and delaying the very real, and hard decision making that is required by persons in power. 

So, let’s get real with ourselves and call a family meeting, sit-down, talk about it and get it done.  The current turf-protecting that is taking place in Washington and elsewhere is a recipe for more years of the same and a continued bloated and flawed federal budget.