Deliver Magazine recently reported that the 2010 U.S. Census will find 309 million people living in the United States. The magazine, which provides insight for direct marketers, reports that the concept of the "Average American" is being replaced by a "complex, multidimensional society that defies simplistic labeling," according to demographics expert Peter Francese. Here are some of the facts about America's changing landscape:
In the two largest states by population, California and Texas, and in all of the 10 largest U.S. cities, no racial or ethnic category holds a majority.
Only 22% of U.S. households are made up of a married couple with children.
There are 50 million people of Hispanic descent living in the U.S. They are the nation's largest and most rapidly growing marketing category.
By 2015, white non-Hispanics will no longer account for a majority of the births nationwide.
85% of the nation's growth in population over the past decade occurred in the South and West.
5 million U.S. residents moved from the Northeast and Midwest to the South and West in the past decade. Is that why my roads and beaches are 300% more crowded than they were when I was growing up?
2/3 of the immigrants who arrived in the past decade (about 10 million) settled in the South and West.
3/5 of all U.S. residents live in the South and West today.
Wednesday, May 12, 2010
Monday, May 10, 2010
How Faux Is Your Faux Fur? Chances Are It's Not 100% Fake...
In 2000, the U.S. Congress passed a law that banned the sale of dog and cat fur in the United States.
This law was designed to stop Chinese manufacturers from a practice of sneaking in cheaper dog and cat fur into garments labeled as "faux fur".
While commendable, the problem is that the U.S. Congress, as it usually does, left a bit of a loophole. Any garment trimmed with $150 or less worth of real fur can be sold without any label, therefore, giving manufacturers in China the ability to substitute faux fur with real dog and cat fur and not have to put a label on the garment stating that they had done so. Without a label stating that a garment was made using real animal fur, American consumers just assume that the garment was made with faux fur.
Both the House and the Senate are currently working on bills that will close this loophole, stating that garments with ANY amount of animal fur must be labeled. Over 75 million animals are killed around the world for their fur each year, with 2 million dogs and cats being killed in China alone.
Hopefully, this legislation will help to reduce those numbers.
This law was designed to stop Chinese manufacturers from a practice of sneaking in cheaper dog and cat fur into garments labeled as "faux fur".
While commendable, the problem is that the U.S. Congress, as it usually does, left a bit of a loophole. Any garment trimmed with $150 or less worth of real fur can be sold without any label, therefore, giving manufacturers in China the ability to substitute faux fur with real dog and cat fur and not have to put a label on the garment stating that they had done so. Without a label stating that a garment was made using real animal fur, American consumers just assume that the garment was made with faux fur.
Both the House and the Senate are currently working on bills that will close this loophole, stating that garments with ANY amount of animal fur must be labeled. Over 75 million animals are killed around the world for their fur each year, with 2 million dogs and cats being killed in China alone.
Hopefully, this legislation will help to reduce those numbers.
Saturday, May 8, 2010
Ours Is Not A New Struggle...
What is the one thing that my Great-Grandmother remembers most about the family business my Great-Grandfather had in the 1940s and 1950s? You guessed it. The ridiculous amount of taxes they had to pay. Ours is not a new struggle, my friends...
Saturday, May 1, 2010
May 1, 2010
Not only does May 1 have a wide array of meanings around the world, the meaning of the day itself is continually being modified and changed, even today.
In recent years, America's labor unions have been using the "May Day" holiday to showcase the plight of illegal immigrants, attempting to stay relevant in an America where an ever-growing portion of the GDP is no longer controlled by union labor.
For those of us who grew up during the Cold War, we may remember May Day as the day the Soviet Union paraded all of its nuclear weapons through Red Square as the Soviets celebrated the might of their workforce and took advantage of an opportunity to show the evil capitalists of the world what would be waiting for them were the stupid enough to invade their territory. It's also functioned as a great way to showcase Kremlin power to anyone within the family who was thinking of questioning their power.
Were you around in America in 1886, May Day would most likely signify the day in which the workers rose up against the evil industrialists and sacrificed wages, and even some, their very lives, to bring the work day down from 16 to 8 hours.
As I personally plow well into my 13th hour on the job for the day, hoping to compile some blog posts for the coming week, I decided to spend just a few minutes researching a bit more about May Day in America.
The U.S. version of May Day can trace its origins back to 1884. That October, after having been unsuccessful in obtaining a standard 8 hour work day for laborers, the Federation of Organized Trades and Labor Unions passed a resolution that called for a general strike on May 1, 1886, should the 8 hour work day not be in place by then. When May 1, 1886 finally rolled around, the 8 hour work day was still not in place, so large numbers of laborers walked off the job. There were 10,000 demonstrators in New York, 11,000 in Detroit, another 10,000 in Milwaukee, and at the movement's center in Chicago, over 40,000 workers took the streets. Today, estimates put the May 1, 1886 walk-outs at close to 500,000 people.
Two days later, still on strike, a group of laborers met near the McCormick Harvesting Machine Company in Chicago. Most of them had been locked out of their jobs since February in a labor dispute, replaced by non-union workers. While some non-union workers joined the strike on May 1, on May 3, there was still a good-sized non-union work force working at the company. When the end-of-the-workday bell sounded on May 3, union workers surged towards non-union workers and were fired upon by police. Two union workers were killed.
Outraged at this police action, anarchists who had been inciting both sides throughout the past few days, distributed flyers for a rally to be held on May 4 to protest the action of police and strikebreakers. Remarkably, the rally itself was very peaceful, but unfortunately, as the last speaker was finishing up his speech, a pipe bomb was thrown at a police line, killing an officer and wounding a number of others. Police fired on the crowd and an all-out riot ensued.
Eight men were arrested as being responsible for the incident, known as the Haymarket Affair. Seven were convicted and sentenced to death. Two men had their sentences commuted to life in prison, one man killed himself in prison, and ultimately, four were hanged for the death of the police officer.
I've done my best to summarize the Haymarket Affair here, but urge you to read more about it. It really is a long and complicated part of American history.
Despite the setbacks to American Labor Unions with the May Day strike in 1886, the unions continued to fight and many laborers in a number of industries were granted shorter and shorter work days, until, in 1916, the U.S. Adamson Act established the 8 hour work day for railroad workers. This was the first federal law that regulated the hours of workers in private companies. Then, in 1938, the Fair Labor Standards Act under the New Deal, established the 8 hour work day for all Americans.
This is a truly fascinating story. I am more and more amazed with the more that I read. Most fascinating, clearly, is how the push and pull of outside influences helped to shape American labor policy. As many of you know, despite my interest in this segment of history, I continue to be troubled by the roles of labor unions and their leadership in the American landscape today.
As a six-month member of the United Food and Commercial Workers Union (1990, when I was 15 years-old) who gave well over 50% of the first paycheck I earned in my life to a labor union, let me be the first to stand up and say that while I understand there is a role for unions today in some circles, I tend to agree with the fact that, in many cases, they are just no longer needed.
Following my first job at Lucky's Grocery Store, during which I was required to be a member of the UFCW, I have gone on to what I believe to be a rather good career and a decent wage and decent work load, despite the fact that I have spent close to 20 years now as a non-union worker. I've watched strike after strike over the years and partially agreed with some, but honestly, for the most part, completely disagreed with most of them.
I think my biggest problem with labor unions is the political spin they tend to put on things. I think union members tend to believe that unions care much more about them and their families than they really do. Unions claim time and time again that strikes are not about the money, but I tend to disagree with that statement.
Unions use political posturing and political pressure to in turn get union members what they want so union leadership will appear to care, all the while, relying on the workers themselves for their own salaries.
The recent large May Day rallies that are put on by the labor unions, anarchists, and communists that sucker workers into marching for their "rights" have really helped to solidify my position on the labor unions and their May Day holiday. As I felt with the UFCW strikes over the years, these large May Day rallies are exploitation of a group of people and a cause for the political and monetary gain of union leaders. I just wish more people could see through the smoke and mirrors.
My research also led me down the path of another face of May 1. Did you know that in the United States of America, May 1 is officially Loyalty Day? The holiday was first observed in 1921 as "Americanization Day" and was intended to counterbalance the celebration of Labor Day in the US. Labor Day is an internationally celebrated holiday that was perceived at the time to be a communist threat to America. While May Day's modern origins were here at home in 1886, by 1921, the day was being celebrated around the world as Labor Day, particularly by the growing communist world.
Loyalty Day was enacted as an official holiday in 1958 by President Eisenhower and first officially observed in 1959. Today, Loyalty Day is celebrated with parades and ceremonies in several U.S. communities, although many people in the United States remain unaware of it. Although a legal holiday, it is not a federal holiday, and is not commonly observed. Well, guess who is going to start observing Loyalty Day today?
I join a host of Eisenhower's successors who issued official proclamations in support of Loyalty Day, including H.W. Bush, The Great Satan George Junior, Uncle Ronnie, Gerry Ford, and even...are you ready for it?....JFK and Willy Jeff.
So, this year on yet another exploitative May Day, as I have been up for about 20-and-a-half-hours (working close to 17 of them), I am already celebrating the second hour of Loyalty Day! Loyalty to these United States of America. Loyalty to capitalism. Loyalty to the values that built this nation. Loyalty to the law of the land, which I have been known to adhere to on 99.9% of occasions.
In recent years, America's labor unions have been using the "May Day" holiday to showcase the plight of illegal immigrants, attempting to stay relevant in an America where an ever-growing portion of the GDP is no longer controlled by union labor.
For those of us who grew up during the Cold War, we may remember May Day as the day the Soviet Union paraded all of its nuclear weapons through Red Square as the Soviets celebrated the might of their workforce and took advantage of an opportunity to show the evil capitalists of the world what would be waiting for them were the stupid enough to invade their territory. It's also functioned as a great way to showcase Kremlin power to anyone within the family who was thinking of questioning their power.
Were you around in America in 1886, May Day would most likely signify the day in which the workers rose up against the evil industrialists and sacrificed wages, and even some, their very lives, to bring the work day down from 16 to 8 hours.
As I personally plow well into my 13th hour on the job for the day, hoping to compile some blog posts for the coming week, I decided to spend just a few minutes researching a bit more about May Day in America.
The U.S. version of May Day can trace its origins back to 1884. That October, after having been unsuccessful in obtaining a standard 8 hour work day for laborers, the Federation of Organized Trades and Labor Unions passed a resolution that called for a general strike on May 1, 1886, should the 8 hour work day not be in place by then. When May 1, 1886 finally rolled around, the 8 hour work day was still not in place, so large numbers of laborers walked off the job. There were 10,000 demonstrators in New York, 11,000 in Detroit, another 10,000 in Milwaukee, and at the movement's center in Chicago, over 40,000 workers took the streets. Today, estimates put the May 1, 1886 walk-outs at close to 500,000 people.
Two days later, still on strike, a group of laborers met near the McCormick Harvesting Machine Company in Chicago. Most of them had been locked out of their jobs since February in a labor dispute, replaced by non-union workers. While some non-union workers joined the strike on May 1, on May 3, there was still a good-sized non-union work force working at the company. When the end-of-the-workday bell sounded on May 3, union workers surged towards non-union workers and were fired upon by police. Two union workers were killed.
Outraged at this police action, anarchists who had been inciting both sides throughout the past few days, distributed flyers for a rally to be held on May 4 to protest the action of police and strikebreakers. Remarkably, the rally itself was very peaceful, but unfortunately, as the last speaker was finishing up his speech, a pipe bomb was thrown at a police line, killing an officer and wounding a number of others. Police fired on the crowd and an all-out riot ensued.
Eight men were arrested as being responsible for the incident, known as the Haymarket Affair. Seven were convicted and sentenced to death. Two men had their sentences commuted to life in prison, one man killed himself in prison, and ultimately, four were hanged for the death of the police officer.
I've done my best to summarize the Haymarket Affair here, but urge you to read more about it. It really is a long and complicated part of American history.
Despite the setbacks to American Labor Unions with the May Day strike in 1886, the unions continued to fight and many laborers in a number of industries were granted shorter and shorter work days, until, in 1916, the U.S. Adamson Act established the 8 hour work day for railroad workers. This was the first federal law that regulated the hours of workers in private companies. Then, in 1938, the Fair Labor Standards Act under the New Deal, established the 8 hour work day for all Americans.
This is a truly fascinating story. I am more and more amazed with the more that I read. Most fascinating, clearly, is how the push and pull of outside influences helped to shape American labor policy. As many of you know, despite my interest in this segment of history, I continue to be troubled by the roles of labor unions and their leadership in the American landscape today.
As a six-month member of the United Food and Commercial Workers Union (1990, when I was 15 years-old) who gave well over 50% of the first paycheck I earned in my life to a labor union, let me be the first to stand up and say that while I understand there is a role for unions today in some circles, I tend to agree with the fact that, in many cases, they are just no longer needed.
Following my first job at Lucky's Grocery Store, during which I was required to be a member of the UFCW, I have gone on to what I believe to be a rather good career and a decent wage and decent work load, despite the fact that I have spent close to 20 years now as a non-union worker. I've watched strike after strike over the years and partially agreed with some, but honestly, for the most part, completely disagreed with most of them.
I think my biggest problem with labor unions is the political spin they tend to put on things. I think union members tend to believe that unions care much more about them and their families than they really do. Unions claim time and time again that strikes are not about the money, but I tend to disagree with that statement.
Unions use political posturing and political pressure to in turn get union members what they want so union leadership will appear to care, all the while, relying on the workers themselves for their own salaries.
The recent large May Day rallies that are put on by the labor unions, anarchists, and communists that sucker workers into marching for their "rights" have really helped to solidify my position on the labor unions and their May Day holiday. As I felt with the UFCW strikes over the years, these large May Day rallies are exploitation of a group of people and a cause for the political and monetary gain of union leaders. I just wish more people could see through the smoke and mirrors.
My research also led me down the path of another face of May 1. Did you know that in the United States of America, May 1 is officially Loyalty Day? The holiday was first observed in 1921 as "Americanization Day" and was intended to counterbalance the celebration of Labor Day in the US. Labor Day is an internationally celebrated holiday that was perceived at the time to be a communist threat to America. While May Day's modern origins were here at home in 1886, by 1921, the day was being celebrated around the world as Labor Day, particularly by the growing communist world.
Loyalty Day was enacted as an official holiday in 1958 by President Eisenhower and first officially observed in 1959. Today, Loyalty Day is celebrated with parades and ceremonies in several U.S. communities, although many people in the United States remain unaware of it. Although a legal holiday, it is not a federal holiday, and is not commonly observed. Well, guess who is going to start observing Loyalty Day today?
I join a host of Eisenhower's successors who issued official proclamations in support of Loyalty Day, including H.W. Bush, The Great Satan George Junior, Uncle Ronnie, Gerry Ford, and even...are you ready for it?....JFK and Willy Jeff.
So, this year on yet another exploitative May Day, as I have been up for about 20-and-a-half-hours (working close to 17 of them), I am already celebrating the second hour of Loyalty Day! Loyalty to these United States of America. Loyalty to capitalism. Loyalty to the values that built this nation. Loyalty to the law of the land, which I have been known to adhere to on 99.9% of occasions.
Tuesday, April 20, 2010
Here's My Quandary...
Here's my quandary, guy at the gas station asking for money while I am paying a ridiculous amount of money to put gas in my car: If you didn't have enough gas to get back to Riverside, why'd you come down here in the first place?
My favorite of these many incidents that I have been forced to endure occurred during my Quietly Working days.
I had pulled an all-nighter and was really sick to my stomach at the time. I needed to go down to the office to get some stuff to work on later in the day and on my way to the office, I had to make a detour to get some gas.
Before I could even make it to the gas station, I am behind a strip mall, hurling into a dumpster. After gaining my composure, I then head to get gas so I can get to the office and get home for some sleep before getting back to work. Those of you who know me know that I won't let a little thing like a stomach flu get in the way of getting my work done.
So, as the sun just starts coming up and I stop at the Chevron on PCH in Newport Beach, this guy comes over to me and asks me if he can have some money because he needs to get back to Riverside.
I found myself instantly sorry that I had wasted a good hurling in the dumpster instead of doing so on his shoes. I work for my money, Mr. Beggar, and I do it while sick as a dog. How dare you come ask me for some of my money, especially when you look like a healthy, able-bodied person, obviously of enough whit and determination to try to scam me of out some of my hard-earned cash! I do, however, love the look on their faces when I, unlike I am sure so many of their other victims, say, simply, "Nope," and keep going on about my business.
My favorite of these many incidents that I have been forced to endure occurred during my Quietly Working days.
I had pulled an all-nighter and was really sick to my stomach at the time. I needed to go down to the office to get some stuff to work on later in the day and on my way to the office, I had to make a detour to get some gas.
Before I could even make it to the gas station, I am behind a strip mall, hurling into a dumpster. After gaining my composure, I then head to get gas so I can get to the office and get home for some sleep before getting back to work. Those of you who know me know that I won't let a little thing like a stomach flu get in the way of getting my work done.
So, as the sun just starts coming up and I stop at the Chevron on PCH in Newport Beach, this guy comes over to me and asks me if he can have some money because he needs to get back to Riverside.
I found myself instantly sorry that I had wasted a good hurling in the dumpster instead of doing so on his shoes. I work for my money, Mr. Beggar, and I do it while sick as a dog. How dare you come ask me for some of my money, especially when you look like a healthy, able-bodied person, obviously of enough whit and determination to try to scam me of out some of my hard-earned cash! I do, however, love the look on their faces when I, unlike I am sure so many of their other victims, say, simply, "Nope," and keep going on about my business.
Saturday, April 17, 2010
"Work," I Said...
Teresa asked me what I used to do during Spring Break. She wasn't surprised at the answer..."Work," I said.
Friday, April 16, 2010
Happy National Stress Awareness Day!
Did you know that April is National Stress Awareness Month? Did you know that today, April 16th is Stress Awareness Day? Does it stress you out that you didn't know that? Now that we have reached the point in this country where we are stressing about stress, I thought I'd share some interesting numbers from Fast Company magazine with you:
1/3 of American children ages 8 to 17 say they worry about their family's finances.
2 other major sources of childhood stress are homework and teasing.
To cope, 44% of kids listen to music, 26% eat, and 22% actually talk to their parents.
Americans spend $14 billion on stress-relieving products each year.
There are actually 2 kinds of stress. Distress, which we all know, and eustress, a positive form that improves productivity and performance.
The word we know as "stress" has had its meaning since the 20th century, but can trace its roots back the Old French/Middle English word "destresse" or "distress".
3/5 of doctor visits around the world are as a result of stress.
Americans spend $22.8 billion on anxiety-related healthcare each year.
275 million work days are lost in the U.S. each year because of people taking "stress" days.
These "stress" days cost employers $602 per worker per year.
62% of Americans claim to be stressed about work.
Eating 1.4 ounces of dark chocolate every day for two weeks has shown to reduce stress, of course, according to a 30-person study done by a team of researchers from Nestle.
A study completed in 1938 and re-given in 2007 showed that high school and college students were 5-times more stressed out going into the Great Recession than they were during the end of the Great Depression.
2/3 of spoken curse words are a result of stress (the other 1/3 must be just for fun!).
80 of the 15,000 words typically spoken per person per day are swear words.
1/3 of American children ages 8 to 17 say they worry about their family's finances.
2 other major sources of childhood stress are homework and teasing.
To cope, 44% of kids listen to music, 26% eat, and 22% actually talk to their parents.
Americans spend $14 billion on stress-relieving products each year.
There are actually 2 kinds of stress. Distress, which we all know, and eustress, a positive form that improves productivity and performance.
The word we know as "stress" has had its meaning since the 20th century, but can trace its roots back the Old French/Middle English word "destresse" or "distress".
3/5 of doctor visits around the world are as a result of stress.
Americans spend $22.8 billion on anxiety-related healthcare each year.
275 million work days are lost in the U.S. each year because of people taking "stress" days.
These "stress" days cost employers $602 per worker per year.
62% of Americans claim to be stressed about work.
Eating 1.4 ounces of dark chocolate every day for two weeks has shown to reduce stress, of course, according to a 30-person study done by a team of researchers from Nestle.
A study completed in 1938 and re-given in 2007 showed that high school and college students were 5-times more stressed out going into the Great Recession than they were during the end of the Great Depression.
2/3 of spoken curse words are a result of stress (the other 1/3 must be just for fun!).
80 of the 15,000 words typically spoken per person per day are swear words.
Wednesday, April 14, 2010
The Grandparent Economy
Grandparents.com, a site which is dispelling the myth about grandparents and computers, recently commissioned a study that it coined the Grandparent Economy. Here is what it found:
3 out of 10 adults are grandparents - an all-time high.
Grandparents spend $100 billion a year on entertainment and $77 billion a year on travel-related expenses.
The average net worth of households by 55- to 64-year olds (66% of which are grandparent led) is $254,000. This is the highest of any age group.
Grandparent spending has grown 7.6% per year since 2000 - nearly double the annual rate for other consumers.
Grandparents spend $2 trillion on goods and services each year, roughly 1/3 of all spending.
The grandparent population is larger then either the African-American or Hispanic population segments.
A recent article by Deliver Magazine urged marketers to get away from traditional advertising that showed grandparents sitting docile, staring off into the horizon and appeal more to the active lifestyle of today's early Baby Boomers. "Be authentic and honest," says David Martino, president of Martino and Binzer, a Connecticut-based agency that caters to direct mail clients. "Showcase a product's benefits and try an ageless marketing approach combined with hyper-tartgeting."
3 out of 10 adults are grandparents - an all-time high.
Grandparents spend $100 billion a year on entertainment and $77 billion a year on travel-related expenses.
The average net worth of households by 55- to 64-year olds (66% of which are grandparent led) is $254,000. This is the highest of any age group.
Grandparent spending has grown 7.6% per year since 2000 - nearly double the annual rate for other consumers.
Grandparents spend $2 trillion on goods and services each year, roughly 1/3 of all spending.
The grandparent population is larger then either the African-American or Hispanic population segments.
A recent article by Deliver Magazine urged marketers to get away from traditional advertising that showed grandparents sitting docile, staring off into the horizon and appeal more to the active lifestyle of today's early Baby Boomers. "Be authentic and honest," says David Martino, president of Martino and Binzer, a Connecticut-based agency that caters to direct mail clients. "Showcase a product's benefits and try an ageless marketing approach combined with hyper-tartgeting."
Tuesday, April 13, 2010
Socialist Dreams Not Working Out In Venezuela
Venezuela and Hugo Chavez are on the ropes. Chavez's dream of spreading "21st century socialism" throughout Latin America is being stalled by a sluggish economy both at home and abroad.
When Chavez came to power in 1999, he quickly mobilized to make the most of the country's state-owned oil production, but has reportedly blown most of the windfalls of cash buying the favor of the world's other socialist nations.
Chavez's runaway spending on social programs amid declining state revenue is further putting the nation's economy into turmoil. In 2002, following a failed coup, Venezuela's economy experienced a sharp downturn when the government-owned oil company went on strike for two months to protest Chavez's regime.
While rising oil prices in the following years would help the economy recover temporarily, declining oil prices in recent years have had a substantial negative effect as well.
Add to the mix the fact that in response to the strike, Chavez implemented a policy forcing 10% of the state-owned oil company's profits be put directly into his social programs, and you have a recipe for financial disaster.
Oil accounts for 80% of Venezuela's exports, 50% of the government's income, and about one-third of overall GDP.
In 2007, Chavez nationalized the country's electricity grid with the plans of expanding production output at Venezuela's two large hydroelectric dams that provide 70% of the country's electricity. The expansion, however, never came to pass, and the government was forced to order rolling blackouts. A lengthy drought is also further impacting electricity output at the dams.
The latest threat to Venezuela's economy is inflation. The country's economy shrunk by 4.5% last year and will shrink another 2% this year, making it the only Latin American nation still in full recession.
In Venezuela, the exchange rate between the country's bolivar and the dollar is also set by the government. It had been set at 2.15 bolivars per dollar in 2005, but in January 2010, Chavez set the rate to 2.6 bolivars for food, medicine, and other important imports, and to 4.6 bolivars for non-essential goods. This devaluation of the bolivar will have Venezuela seeing 45% inflation in 2010 and 27% inflation in 2011.
Chavez is trying to fight the inflation he caused by forcing 70 businesses to close for increasing their prices to keep up with costs, hoping to scare other businesses into eating the cost of his inflation, but panicked buying continues.
Chavez has also nationalized about 25% of Venezuela's banking system to try to get the economy back under control as well, but it would seem that nationalization of more and more of Venezuela's economy is not doing the trick.
Despite a rapidly failing economy, however, most likely driven by the country's growing social programs, Chavez's popularity rating remains close to 50%. Proof positive that popularity polls have no reflection on the true financial stability or health of a nation.
When Chavez came to power in 1999, he quickly mobilized to make the most of the country's state-owned oil production, but has reportedly blown most of the windfalls of cash buying the favor of the world's other socialist nations.
Chavez's runaway spending on social programs amid declining state revenue is further putting the nation's economy into turmoil. In 2002, following a failed coup, Venezuela's economy experienced a sharp downturn when the government-owned oil company went on strike for two months to protest Chavez's regime.
While rising oil prices in the following years would help the economy recover temporarily, declining oil prices in recent years have had a substantial negative effect as well.
Add to the mix the fact that in response to the strike, Chavez implemented a policy forcing 10% of the state-owned oil company's profits be put directly into his social programs, and you have a recipe for financial disaster.
Oil accounts for 80% of Venezuela's exports, 50% of the government's income, and about one-third of overall GDP.
In 2007, Chavez nationalized the country's electricity grid with the plans of expanding production output at Venezuela's two large hydroelectric dams that provide 70% of the country's electricity. The expansion, however, never came to pass, and the government was forced to order rolling blackouts. A lengthy drought is also further impacting electricity output at the dams.
The latest threat to Venezuela's economy is inflation. The country's economy shrunk by 4.5% last year and will shrink another 2% this year, making it the only Latin American nation still in full recession.
In Venezuela, the exchange rate between the country's bolivar and the dollar is also set by the government. It had been set at 2.15 bolivars per dollar in 2005, but in January 2010, Chavez set the rate to 2.6 bolivars for food, medicine, and other important imports, and to 4.6 bolivars for non-essential goods. This devaluation of the bolivar will have Venezuela seeing 45% inflation in 2010 and 27% inflation in 2011.
Chavez is trying to fight the inflation he caused by forcing 70 businesses to close for increasing their prices to keep up with costs, hoping to scare other businesses into eating the cost of his inflation, but panicked buying continues.
Chavez has also nationalized about 25% of Venezuela's banking system to try to get the economy back under control as well, but it would seem that nationalization of more and more of Venezuela's economy is not doing the trick.
Despite a rapidly failing economy, however, most likely driven by the country's growing social programs, Chavez's popularity rating remains close to 50%. Proof positive that popularity polls have no reflection on the true financial stability or health of a nation.
Monday, April 12, 2010
Time To Start Using & Measuring Social Media
If your organization is not Tweeting, Facebooking, YouTubing, or LinkedIn-in', then you are really behind the curve! I know you may not want to hear that, but it is true.
The 2008 Presidential Election showed that technology can have a real impact on campaigns, and the 2010 Mid-Term Elections will be no different. Republican National Committee Chairman Michael Steele has offered to teach Tweeting to anyone in his party who does not know how.
Businesses throughout the world are quickly clamoring to get Tweeting, get Facebook Fan Pages up and running, get videos on YouTube, and to quite literally, get LinkedIn. If your enterprise is not doing the same, you'd better get caught up quickly. Social media needs to start becoming part of all of your advertising and marketing campaigns.
You may be asking yourself what the value of putting your time into social media really is. Let me tell you right now, I'm not saying to stop paying for web site hosting, throw out your collateral, stop networking in person, and stop making phone calls, but I am saying that if you want to stay viable in your market, social media should be playing a larger and larger part of your advertising and marketing efforts.
With each passing day, more and more people are signing up on Twitter and Facebook and are bookmarking those pages as their home pages and/or using smart phones to check them as regularly as email.
Instead of starting out on a search engine to find your business, more and more often, web users are starting out with your Twitter or Facebook page. If you are not ensuring that anything of importance that you are uploading to your web site is also going onto the social media sites, you may be missing out on an ever-increasing segment of your potential customers.
Stop reaching potential customers and you are going to stop making sales. Sales aren't going to dry up overnight, but they may gradually over time if you don't jump on the social media bandwagon.
How do you get started? Get signed up. Go to http://www.twitter.com/ and http://www.facebook.com/ and start pages for your business. Start tweeting and posting any newsworthy events and start inviting your customers and prospects to follow you or become a fan of your Facebook page.
You will be amazed at how many of your contacts are not only using these sites, but are spending quite a large amount of time on them. If you have any business videos, go to http://www.youtube.com/, get a YouTube channel set up and get your videos posted.
Also, go to http://www.linkedin.com/ and make sure that you have a LinkedIn page set up for both you personally and your business. Customers will have greater confidence in you and your products and services when they see that you are in tune with the growing importance of social media.
It will be difficult to keep up with posting and you will be very tempted to just let it fall by the way side, but create a campaign schedule and set aside time each day to post, read and respond on the major social media sites.
While you may not get a phone call right away that says, "I saw your tweet and now I want to buy something," you will begin to notice that social media is helping to keep the buzz about your business going strong. It keeps your name out in front of customers, showcases your expertise, and adds just the right amount of icing to the cake.
To get a clear view of the value of your efforts, start tracking your results. Record on a daily or weekly basis, the number of followers, number of fans, number of video hits, etc. Record the number of posts that you are making and the number of times people are either re-tweeting, re-posting, or somehow sharing your tweets and posts with others. Be sure that you are using Twitter's hash tags and the other valuable tools the social media sites offer for tracking.
In a March 8 B to B Magazine article, Mitch Wagner stated, "Despite marketers' widespread use of Web analytics, social media remains largely unmeasured by b-to-b companies." This fact gives you a great opportunity to catch up to the herd by beginning your social media efforts, then to quickly move to the front of the pack by tracking your results.
Now, keep in mind, this is a high-level overview. You are going to have to set aside some time to spend visiting the social media sites, signing up, using them, and discovering what works and does not work.
Despite your reservations about spending the time it will take, I think you will be pleasantly surprised with the results of how well social media may work for you and your business.
The 2008 Presidential Election showed that technology can have a real impact on campaigns, and the 2010 Mid-Term Elections will be no different. Republican National Committee Chairman Michael Steele has offered to teach Tweeting to anyone in his party who does not know how.
Businesses throughout the world are quickly clamoring to get Tweeting, get Facebook Fan Pages up and running, get videos on YouTube, and to quite literally, get LinkedIn. If your enterprise is not doing the same, you'd better get caught up quickly. Social media needs to start becoming part of all of your advertising and marketing campaigns.
You may be asking yourself what the value of putting your time into social media really is. Let me tell you right now, I'm not saying to stop paying for web site hosting, throw out your collateral, stop networking in person, and stop making phone calls, but I am saying that if you want to stay viable in your market, social media should be playing a larger and larger part of your advertising and marketing efforts.
With each passing day, more and more people are signing up on Twitter and Facebook and are bookmarking those pages as their home pages and/or using smart phones to check them as regularly as email.
Instead of starting out on a search engine to find your business, more and more often, web users are starting out with your Twitter or Facebook page. If you are not ensuring that anything of importance that you are uploading to your web site is also going onto the social media sites, you may be missing out on an ever-increasing segment of your potential customers.
Stop reaching potential customers and you are going to stop making sales. Sales aren't going to dry up overnight, but they may gradually over time if you don't jump on the social media bandwagon.
How do you get started? Get signed up. Go to http://www.twitter.com/ and http://www.facebook.com/ and start pages for your business. Start tweeting and posting any newsworthy events and start inviting your customers and prospects to follow you or become a fan of your Facebook page.
You will be amazed at how many of your contacts are not only using these sites, but are spending quite a large amount of time on them. If you have any business videos, go to http://www.youtube.com/, get a YouTube channel set up and get your videos posted.
Also, go to http://www.linkedin.com/ and make sure that you have a LinkedIn page set up for both you personally and your business. Customers will have greater confidence in you and your products and services when they see that you are in tune with the growing importance of social media.
It will be difficult to keep up with posting and you will be very tempted to just let it fall by the way side, but create a campaign schedule and set aside time each day to post, read and respond on the major social media sites.
While you may not get a phone call right away that says, "I saw your tweet and now I want to buy something," you will begin to notice that social media is helping to keep the buzz about your business going strong. It keeps your name out in front of customers, showcases your expertise, and adds just the right amount of icing to the cake.
To get a clear view of the value of your efforts, start tracking your results. Record on a daily or weekly basis, the number of followers, number of fans, number of video hits, etc. Record the number of posts that you are making and the number of times people are either re-tweeting, re-posting, or somehow sharing your tweets and posts with others. Be sure that you are using Twitter's hash tags and the other valuable tools the social media sites offer for tracking.
In a March 8 B to B Magazine article, Mitch Wagner stated, "Despite marketers' widespread use of Web analytics, social media remains largely unmeasured by b-to-b companies." This fact gives you a great opportunity to catch up to the herd by beginning your social media efforts, then to quickly move to the front of the pack by tracking your results.
Now, keep in mind, this is a high-level overview. You are going to have to set aside some time to spend visiting the social media sites, signing up, using them, and discovering what works and does not work.
Despite your reservations about spending the time it will take, I think you will be pleasantly surprised with the results of how well social media may work for you and your business.
Tuesday, March 30, 2010
"This Things I Believe..."
I do not support raising taxes for the sake of fairness, regardless of the negative impact it is likely to have on the economy. In fact, I support equal taxation by percentage across the board, regardless of income levels.
I believe the federal government has gone too far in bailing out the auto, insurance and finance industries.
I do not support illegal immigration. I also realize that a solution that is completely in line with my principles and ideals is not practical. I support a registration program that includes a fine as penalty and requires the payment of estimated back taxes implemented simultaneously with a new guest worker program.
I believe that English should be the official language of the United States, though we have to give new arrivals a chance to learn the language, even if we help them on the government's dime.
I have not completely agreed with the large expansion in social spending and welfare that we have seen over the past decade and I believe that the time to start cutting back benefits is just around the corner. There should be length of time, education and work requirements for all able-bodied Americans on welfare programs.
I believe that if the effort that recently went into socialized medicine had gone into creating jobs, we would be better off today.
I did not support the creation of a national health insurance program administered by the U.S. Federal Government. While recognizing the need for reform, a completely partisan bill rammed through the congress was not the right solution, especially from a man who said he was going to unite the country. I believe that once the federal government is dictating prices and eligibility to doctors and hospitals, the quality and availability of healthcare will be greatly reduced. Those with no insurance will now have insurance at the cost of the 50% of Americans that actually pay income taxes and those who already had insurance will see the quality of their care decline. I also believe that the development of new medicine and treatments will greatly suffer under the weight of this new federal health insurance program.
I believe that we should eliminate teacher tenure and increase the use of performance standards and accountability.
I believe that our armed forces should remain an all-volunteer force.
I do not believe that federal employees should be allowed to unionize if they serve in positions critical to safety and security. I do believe that union elections and initiatives should have secret ballots.
I believe the federal government has gone too far in bailing out the auto, insurance and finance industries.
I do not support illegal immigration. I also realize that a solution that is completely in line with my principles and ideals is not practical. I support a registration program that includes a fine as penalty and requires the payment of estimated back taxes implemented simultaneously with a new guest worker program.
I believe that English should be the official language of the United States, though we have to give new arrivals a chance to learn the language, even if we help them on the government's dime.
I have not completely agreed with the large expansion in social spending and welfare that we have seen over the past decade and I believe that the time to start cutting back benefits is just around the corner. There should be length of time, education and work requirements for all able-bodied Americans on welfare programs.
I believe that if the effort that recently went into socialized medicine had gone into creating jobs, we would be better off today.
I did not support the creation of a national health insurance program administered by the U.S. Federal Government. While recognizing the need for reform, a completely partisan bill rammed through the congress was not the right solution, especially from a man who said he was going to unite the country. I believe that once the federal government is dictating prices and eligibility to doctors and hospitals, the quality and availability of healthcare will be greatly reduced. Those with no insurance will now have insurance at the cost of the 50% of Americans that actually pay income taxes and those who already had insurance will see the quality of their care decline. I also believe that the development of new medicine and treatments will greatly suffer under the weight of this new federal health insurance program.
I believe that we should eliminate teacher tenure and increase the use of performance standards and accountability.
I believe that our armed forces should remain an all-volunteer force.
I do not believe that federal employees should be allowed to unionize if they serve in positions critical to safety and security. I do believe that union elections and initiatives should have secret ballots.
Wednesday, March 10, 2010
As The Highest NASDAQ Closing In History Turns 10 Years Old...
Today marks the 10th Anniversary of the NASDAQ Peaking at 5,048.62.
An entire decade has passed and we are nowhere near the numbers when the tech bubble burst in 2000. Right now, the NASDAQ is at 2,431. Some things have changed since then, though. Fast Company has given us the following to reflect upon:
World's Richest Man Then: Bill Gates
World's Richest Man Now: Bill Gates
U.S. Cell Phone Penetration Then: 34%
U.S. Cell Phone Penetration Now: 89%
Number Of Daily Newspapers In The U.S. Then: 1,480
Number Of Daily Newspapers In The U.S. Now: 1,422
No. 1 Web Site Then: AOL
No. 1 Web Site Now: Google
Internet Users Worldwide Then: 360 Million
Internet Users Worldwide Now: 1.7 Billion
No. 1 Auto Manufacturer In The World Then: General Motors
No. 1 Auto Manufacturer In The World Now: Toyota
An entire decade has passed and we are nowhere near the numbers when the tech bubble burst in 2000. Right now, the NASDAQ is at 2,431. Some things have changed since then, though. Fast Company has given us the following to reflect upon:
World's Richest Man Then: Bill Gates
World's Richest Man Now: Bill Gates
U.S. Cell Phone Penetration Then: 34%
U.S. Cell Phone Penetration Now: 89%
Number Of Daily Newspapers In The U.S. Then: 1,480
Number Of Daily Newspapers In The U.S. Now: 1,422
No. 1 Web Site Then: AOL
No. 1 Web Site Now: Google
Internet Users Worldwide Then: 360 Million
Internet Users Worldwide Now: 1.7 Billion
No. 1 Auto Manufacturer In The World Then: General Motors
No. 1 Auto Manufacturer In The World Now: Toyota
Monday, March 1, 2010
Keep Your Eye Out For The Brown M&M's
A recent Fast Company Magazine article pointed out some different ways that people are looking at data for tell-tale signs of what the future may hold. For instance, Johns Hopkins University researchers took a look at the attendance patterns and grade patterns of students who had dropped out of high school and found that students who missed more than one out of every five days of class, or students who had failed either an English or math class were most likely to not finish high school. 78% of those missing one out of five days, and 75% of those who had failed either an English or math class were destined to drop out. By knowing this pattern, educators can begin to identify troubled students earlier and, perhaps, turn that student around before it is too late.
Credit card companies are now spending a good deal of money ensuring that they are able to track your "normal" spending patters because it helps them identify when someone is using your card, perhaps, even before you come to the realization that it has been lost or stolen.
The article also pointed out that data that can foretell the future doesn't have to be high tech, and in some cases, doesn't even have to be numerical. As the magazine points out, consider how Van Halen would determine whether or not their equipment had been set up properly during their 1980s-era heyday concerts...brown M&M's. Due to the large amount of equipment and minute details that were required to put on one of these extremely large, extremely costly, and potentially extremely profitable concerts, the band needed to ensure that their set-up instructions had been followed precisely by the venue. How did the band know whether they were good to go, or whether they needed to quickly avoid show disasters by having all of their equipment (nine full-size truck trailers worth, by the way) re-checked? According to David Lee Roth, all he had to do was look at the bowl of M&M's in the dressing room and see whether or not it had brown M&M's in it.
The contract between the band and the concert venues was often so large that required steps were often missed or skipped due to time constraints, so in order to give themselves a clear view of whether or not these instructions were followed properly, the band inserted what they called "Article 126," which read, "There will be no brown M&M's in the backstage area, upon pain of forfeiture of the show, with full compensation." So, if David Lee Roth didn't see brown M&M's, the band was confident the contract had been read and followed, but if he saw brown M&M's in the bowl, that meant it was time to yell at some venue reps because chances were, the band's equipment had not been set up properly.
Credit card companies are now spending a good deal of money ensuring that they are able to track your "normal" spending patters because it helps them identify when someone is using your card, perhaps, even before you come to the realization that it has been lost or stolen.
The article also pointed out that data that can foretell the future doesn't have to be high tech, and in some cases, doesn't even have to be numerical. As the magazine points out, consider how Van Halen would determine whether or not their equipment had been set up properly during their 1980s-era heyday concerts...brown M&M's. Due to the large amount of equipment and minute details that were required to put on one of these extremely large, extremely costly, and potentially extremely profitable concerts, the band needed to ensure that their set-up instructions had been followed precisely by the venue. How did the band know whether they were good to go, or whether they needed to quickly avoid show disasters by having all of their equipment (nine full-size truck trailers worth, by the way) re-checked? According to David Lee Roth, all he had to do was look at the bowl of M&M's in the dressing room and see whether or not it had brown M&M's in it.
The contract between the band and the concert venues was often so large that required steps were often missed or skipped due to time constraints, so in order to give themselves a clear view of whether or not these instructions were followed properly, the band inserted what they called "Article 126," which read, "There will be no brown M&M's in the backstage area, upon pain of forfeiture of the show, with full compensation." So, if David Lee Roth didn't see brown M&M's, the band was confident the contract had been read and followed, but if he saw brown M&M's in the bowl, that meant it was time to yell at some venue reps because chances were, the band's equipment had not been set up properly.
Friday, February 12, 2010
The Tulip Depression (1634-1637)
Holland experienced the first widely-recorded economic collapses of the modern western era from 1634 to 1637.
In 1593, tulips were brought from Turkey to Holland. The new flower was quickly one of the most sought-after items throughout the country. Soon after, a non-fatal virus rocked the tulip populations throughout Holland, altering the colors and shading of the flowers’ petals.
While already yielding a premium price before the virus starting altering the flowers' look, certain types of tulips eventually reached a point where some were more valued than entire large estates. The Dutch quickly began to believe that the sky was the limit for the tulip market.
Needless to say, as the market reached such ridiculous prices, growers began to over plant and stockpile the tulips that they expected to yield the highest prices. Speculators began to liquidate assets, including family fortunes, life savings, and their estates in order to buy and sell tulips.
During the ramp-up, tulips prices went up 20 times over in just one crazy month. Needless to say, a market price that put a single special tulip at a price equivalent to an entire estate were unsustainable, especially once the hoards of tulips that speculators had liquidated to grow and buy flooded the market. Once the selling started, prices went into a freefall and contracts began to fall apart. Dealers just could not pay the prices they had promised growers and speculators.
In a futile attempt to quell the market, the Dutch government began offering 10% of the face value of contracts that were no longer being honored, but as prices continued to fall, the government had to halt the program and let the market correct itself (There was no selling treasury notes to China like today).
The Tulip Depression would have economic effects upon Holland for decades into the future.
In 1593, tulips were brought from Turkey to Holland. The new flower was quickly one of the most sought-after items throughout the country. Soon after, a non-fatal virus rocked the tulip populations throughout Holland, altering the colors and shading of the flowers’ petals.
While already yielding a premium price before the virus starting altering the flowers' look, certain types of tulips eventually reached a point where some were more valued than entire large estates. The Dutch quickly began to believe that the sky was the limit for the tulip market.
Needless to say, as the market reached such ridiculous prices, growers began to over plant and stockpile the tulips that they expected to yield the highest prices. Speculators began to liquidate assets, including family fortunes, life savings, and their estates in order to buy and sell tulips.
During the ramp-up, tulips prices went up 20 times over in just one crazy month. Needless to say, a market price that put a single special tulip at a price equivalent to an entire estate were unsustainable, especially once the hoards of tulips that speculators had liquidated to grow and buy flooded the market. Once the selling started, prices went into a freefall and contracts began to fall apart. Dealers just could not pay the prices they had promised growers and speculators.
In a futile attempt to quell the market, the Dutch government began offering 10% of the face value of contracts that were no longer being honored, but as prices continued to fall, the government had to halt the program and let the market correct itself (There was no selling treasury notes to China like today).
The Tulip Depression would have economic effects upon Holland for decades into the future.
Tuesday, February 9, 2010
"Oh man, homie, Toyota's tryin' to kill me..."
Fans of the movie Fight Club will tell you that it contains an excellent explanation of the unwritten agreement you make with an automobile manufacturer when you buy their product. Flat out, they will not issue a recall until their legal and settlement expenditures in settling their accident cases from a defect are projected to be higher than the monetary and reputation costs of issuing a recall.
We are going to find over the coming months and years, as we are already starting to find out, that the first death that was caused by two major problems that Toyota is working to correct now occurred quite some time ago.
We will also hear that while Toyota was "investigating", more people were losing their lives. We will hear from accident victims (the ones that survived) that they knew something was wrong with the car and that they approached Toyota, but Toyota insisted, even after examining their car, that there was nothing wrong.
We will find that the accident victims that filed suits were offered, and usually accepted, an out of court settlement in exchange for keeping quiet and no longer holding Toyota accountable.
We will learn that, of course, as soon as Toyota came to the realization that there was a problem, they worked at lightning speed to correct it. We're already seeing the apology commercials telling us that of course Toyota loves its customers and are concerned about their safety.
America will be mad at Toyota for a little while, but soon, we will forget, stop questioning why it took years to get from the first death to a mass recall, and sales of Camries and Priuses will resume.
Toyota is the focus of my comments today because they just happen to be the manufacturer who is under the spotlight right now. Remember when Ford found out that the tires it was putting on its Explorers were falling apart while people were driving? Same thing. They did not come out and offer to fix it until legal and settlement costs were going to exceed the cost of replacing the bad tires.
While Firestone was the culprit in that recall, and some nameless part manufacturers are the culprits this time, it is the auto manufacturer who bears the brunt of the costs and losses. They all keep quiet until the recall becomes a cheaper alternative to the bad press and drop in sales. While it was Ford during that time, today, it is Toyota, and tomorrow, it will be another one of them. It is just a matter of time.
What Americans need to do, however, is to stop living in the delusional world where we think these huge auto conglomerates are going to come out and issue a mass recall as the result of one death. That is just not going to happen.
We need to be more aware as consumers of this unwritten agreement we are making with the auto manufacturers when we buy their cars. If their product kills you early on in the discovery of the problem, the best your loved ones can do is seek a cash settlement, sign the non-disclosure agreement, and accept the apology commercials. We all just have to hope that our car's problem doesn't materialize until further down the line, after mounting legal and settlement costs have led to a recall.
We are going to find over the coming months and years, as we are already starting to find out, that the first death that was caused by two major problems that Toyota is working to correct now occurred quite some time ago.
We will also hear that while Toyota was "investigating", more people were losing their lives. We will hear from accident victims (the ones that survived) that they knew something was wrong with the car and that they approached Toyota, but Toyota insisted, even after examining their car, that there was nothing wrong.
We will find that the accident victims that filed suits were offered, and usually accepted, an out of court settlement in exchange for keeping quiet and no longer holding Toyota accountable.
We will learn that, of course, as soon as Toyota came to the realization that there was a problem, they worked at lightning speed to correct it. We're already seeing the apology commercials telling us that of course Toyota loves its customers and are concerned about their safety.
America will be mad at Toyota for a little while, but soon, we will forget, stop questioning why it took years to get from the first death to a mass recall, and sales of Camries and Priuses will resume.
Toyota is the focus of my comments today because they just happen to be the manufacturer who is under the spotlight right now. Remember when Ford found out that the tires it was putting on its Explorers were falling apart while people were driving? Same thing. They did not come out and offer to fix it until legal and settlement costs were going to exceed the cost of replacing the bad tires.
While Firestone was the culprit in that recall, and some nameless part manufacturers are the culprits this time, it is the auto manufacturer who bears the brunt of the costs and losses. They all keep quiet until the recall becomes a cheaper alternative to the bad press and drop in sales. While it was Ford during that time, today, it is Toyota, and tomorrow, it will be another one of them. It is just a matter of time.
What Americans need to do, however, is to stop living in the delusional world where we think these huge auto conglomerates are going to come out and issue a mass recall as the result of one death. That is just not going to happen.
We need to be more aware as consumers of this unwritten agreement we are making with the auto manufacturers when we buy their cars. If their product kills you early on in the discovery of the problem, the best your loved ones can do is seek a cash settlement, sign the non-disclosure agreement, and accept the apology commercials. We all just have to hope that our car's problem doesn't materialize until further down the line, after mounting legal and settlement costs have led to a recall.
Monday, February 8, 2010
A Lesson In Capitalism & The Great Depression
It seems that America is undergoing a fundamental change in how we think about money, capitalism, and our economy. While conservatives are often accused of revisionist history and remembering the good ol' days to be better than they actually were, I refuse to believe that things have always been this way. I believe that in the past, when economic woes were at hand, America looked to hard work and ingenuity to get out of the hole, not reckless borrowing, increased spending in social programs, and an abandoning of our capitalist and democratic values.
We cannot afford these magic social programs, yet our government says that we have no choice. A majority of the American people are against undertaking these social reforms right now, yet the federal government says, shut up and support it anyway. These decisions go against the democratic and capitalistic ideals that a good deal of Americans hold dear.
As many of you may know, in my continual efforts to stay on top of what is going on throughout multiple industries, I read a lot of trade magazines. Too many, really, but I'll keep it up as long as I can. One of the magazines I get always puts a smile on my face because while the boats that are in it are way out of my price range (for now at least), I always like to dream and look to the future (as opposed to just sitting back, accepting my station in life and looking to the government to sustain me like it wants me to).
Having said all that, I want to share a story with all of you that puts a great perspective on what we should be doing right now...working hard.
From Showboats Magazine:
There's been a lot of talk from Washington recently about getting the economy moving again. Much of the chatter has been focused on stimulus plans, but there have also been quieter murmurs about redistribution of wealth. It may come as a surprise, but we believe that both are excellent approaches. It's just that the government is going about it all wrong.
Our plan is simple, and rather than put a few hundred dollars into the pockets of thousands of average workers on a continuing basis over a span of years, even decades, it builds real jobs and provides real wages. It doesn't require one red cent of taxpayer money and doesn't add a single dime to the federal debt. Better yet, our plan will work not just in the United States, but around the world to get the economy moving again on a global basis.
What's the secret? Encourage those with adequate assets to start building yachts again, and when they do, don't scorn them. Rather, commend them for their contribution to the common good. Instead of damning these yachtsmen - often epitomies of classic entrepreneurialism - as profligate examples of conspicuous consumption, we should be lauding them as economic heroes, and the reasoning is simple.
The tens of millions of dollars spent building a single superyacht turn into billions and billions when multiplied by the hundreds of yachts built in a typical year. Additional billions are spent annually on the existing world fleet of yachts, which runs into the thousands. Those dollars don't simply trickle down, they rush in raging torrents to workers and suppliers worldwide, and those workers and suppliers pass the money along to local stores, car dealers, movie theaters and restaurants that, in turn, pass them along to their own workers, who buy houses and send their kids to college so their grandchildren might enjoy a better life. What a magnificent system!
Politicians in the present hour of economic trial are fond of pointing back to the Great Depression for comparisons, so let's play along for the moment. Sea Cloud, at 316 feet in length, was the largest private American-owned sailing yacht ever built. She was completed in 1931 for Marjoire Merriweather Post, heiress to the Postum Cereal fortune and herself the founder of General Foods, and [married] to E.F. Hutton. She didn't need the yacht, but she considered it her civic duty to provide work for the unemployed, including desperate shipwrights, at the depths of the Great Depression. It was a private stimulus package of the best sort, and it didn't take an act of Congress and a plundering of the U.S. Treasury to accomplish it.
Amazingly, Sea Cloud continues in service to this day, nearly 80 years later, and for every day of all those years her succession of owners has funneled money into economies around the world for her maintenance, staffing, provisioning and operation. The next time someone mentions 'Tarp funds', think not of tax dollars, but of the money spent just to replace that fabulous clipper's vast spread of canvas every two years. She is no longer a private yacht, but is now a part of a cruise fleet, so who is it that's enjoying sunny days aboard? Perhaps it is that family of an auto machanic who repaired the car of the restaurant worker who was paid by the patronage of a welder from a nearby yacht yard.
We cannot afford these magic social programs, yet our government says that we have no choice. A majority of the American people are against undertaking these social reforms right now, yet the federal government says, shut up and support it anyway. These decisions go against the democratic and capitalistic ideals that a good deal of Americans hold dear.
As many of you may know, in my continual efforts to stay on top of what is going on throughout multiple industries, I read a lot of trade magazines. Too many, really, but I'll keep it up as long as I can. One of the magazines I get always puts a smile on my face because while the boats that are in it are way out of my price range (for now at least), I always like to dream and look to the future (as opposed to just sitting back, accepting my station in life and looking to the government to sustain me like it wants me to).
Having said all that, I want to share a story with all of you that puts a great perspective on what we should be doing right now...working hard.
From Showboats Magazine:
There's been a lot of talk from Washington recently about getting the economy moving again. Much of the chatter has been focused on stimulus plans, but there have also been quieter murmurs about redistribution of wealth. It may come as a surprise, but we believe that both are excellent approaches. It's just that the government is going about it all wrong.
Our plan is simple, and rather than put a few hundred dollars into the pockets of thousands of average workers on a continuing basis over a span of years, even decades, it builds real jobs and provides real wages. It doesn't require one red cent of taxpayer money and doesn't add a single dime to the federal debt. Better yet, our plan will work not just in the United States, but around the world to get the economy moving again on a global basis.
What's the secret? Encourage those with adequate assets to start building yachts again, and when they do, don't scorn them. Rather, commend them for their contribution to the common good. Instead of damning these yachtsmen - often epitomies of classic entrepreneurialism - as profligate examples of conspicuous consumption, we should be lauding them as economic heroes, and the reasoning is simple.
The tens of millions of dollars spent building a single superyacht turn into billions and billions when multiplied by the hundreds of yachts built in a typical year. Additional billions are spent annually on the existing world fleet of yachts, which runs into the thousands. Those dollars don't simply trickle down, they rush in raging torrents to workers and suppliers worldwide, and those workers and suppliers pass the money along to local stores, car dealers, movie theaters and restaurants that, in turn, pass them along to their own workers, who buy houses and send their kids to college so their grandchildren might enjoy a better life. What a magnificent system!
Politicians in the present hour of economic trial are fond of pointing back to the Great Depression for comparisons, so let's play along for the moment. Sea Cloud, at 316 feet in length, was the largest private American-owned sailing yacht ever built. She was completed in 1931 for Marjoire Merriweather Post, heiress to the Postum Cereal fortune and herself the founder of General Foods, and [married] to E.F. Hutton. She didn't need the yacht, but she considered it her civic duty to provide work for the unemployed, including desperate shipwrights, at the depths of the Great Depression. It was a private stimulus package of the best sort, and it didn't take an act of Congress and a plundering of the U.S. Treasury to accomplish it.
Amazingly, Sea Cloud continues in service to this day, nearly 80 years later, and for every day of all those years her succession of owners has funneled money into economies around the world for her maintenance, staffing, provisioning and operation. The next time someone mentions 'Tarp funds', think not of tax dollars, but of the money spent just to replace that fabulous clipper's vast spread of canvas every two years. She is no longer a private yacht, but is now a part of a cruise fleet, so who is it that's enjoying sunny days aboard? Perhaps it is that family of an auto machanic who repaired the car of the restaurant worker who was paid by the patronage of a welder from a nearby yacht yard.
Monday, February 1, 2010
Pessimistically Optimistic About 2010
I was asked recently what I thought of the coming year. I firstly replied, “Do you realize that is it already one-twelfth over?” I then added, “I am pessimistically optimistic about 2010.” I think it is going to be a much better year than 2009, though, as I have stated before, honestly, 2009 was a very scary period, but not what I would call a bad year for us. We’ve had worse than 2009, believe me.
But, as for 2010, I am looking forward to an even better year! In a recent B to B Magazine article, John Seifert, the Chairman-CEO of Ogilvy & Mather North America, said, “We are being very cautious this year. We were very tough on ourselves in terms of cost management in the last half of the year. We underestimated the severity of the recession and how long it would continue. We have conservative budgets, and my impression is that clients will be very cautious and determined to beat their forecasts for Q1. Doing well in Q1 will give them permission to spend in Q2.”
While we may never again see the same surge in the markets, home prices, and enterprise spending that we saw during the “lost decade”, the Dow has had more good days than bad, home values in Orange County are creeping up slowly, and it looks like it is going to be a far better year this year than last for some sectors if the I.T. market, among others. With the markets, housing and I.T. making the turn, other industries will not be far behind.
I say I am pessimistically optimistic because while I do have some optimism, I am keeping myself ready for the floor to fall out from underneath us again. I have assured that the rope tied around my waist is as tight as ever and will continue to do so, quite honestly, for the rest of my life.
While I considered myself a fiscal conservative before all of this happened, I would say I am even more one now. This recession has reminded me of those core fiscal principles that we should all live by. Most formidable of them is do not turn your nose up at a job during an up-economy because you will wish you had that job during a down-economy.
Another important lesson I hope to see more Americans live by now and for the rest of their lives is to not create new debt. While at times, we must take on so-called "good" debt when we need to buy a home, or buy a new car, I am personally hoping to get at least 300,000 miles a piece from the two cars that we own now – one at just over 10 years old and one at 8.
By 27, I’d had 9 different cars, two brand new, and seven used, but the one I drive now has been with me for nearly 8 years and I am hoping for another 8 years on top of that. Not having car payments and not taking on new debt by frivolously getting a new car on a whim is something that I do not think I will ever do again. I hope to see America following suit. My next car will be pre-owned off a dealer lot and I hope to be paid for with cash, not financing like all of those Cash-For-Clunckers fiascos that are going to come back and bite people later.
This lesson with cars can be applied to just about anything that we buy. While we should not force ourselves into the “poverty chic” look, having a pair of shoes re-soled at 50% of the cost of a new pair when they look brand new anyway, is a tool I am going to keep in my arsenal, regardless of what the economy is doing. Little things like this all can add up to big savings and even more money to use to make money.
That leads me to the third important lesson I hope people have learned from this downturn. As a nation, we cannot simply spend everything we make on stuff that doesn’t either earn money, or make money, or provide a return on investment. That leaves you with no savings, no emergency fund, and in a heap of trouble.
Remember to work all you can and save all you can during the swingin’ times because you will have a much more solid foundation to stand on when the bad times hit!
B to B Magazine also states that “39% of B to B Marketers plan to increase their marketing budgets this year”, and that is a good sign. Marketing budgets are the first to grow, and the others tend to follow.
So, for now, I remain pessimistically optimistic about 2010. If things change, I am sure you will be the first to know.
But, as for 2010, I am looking forward to an even better year! In a recent B to B Magazine article, John Seifert, the Chairman-CEO of Ogilvy & Mather North America, said, “We are being very cautious this year. We were very tough on ourselves in terms of cost management in the last half of the year. We underestimated the severity of the recession and how long it would continue. We have conservative budgets, and my impression is that clients will be very cautious and determined to beat their forecasts for Q1. Doing well in Q1 will give them permission to spend in Q2.”
While we may never again see the same surge in the markets, home prices, and enterprise spending that we saw during the “lost decade”, the Dow has had more good days than bad, home values in Orange County are creeping up slowly, and it looks like it is going to be a far better year this year than last for some sectors if the I.T. market, among others. With the markets, housing and I.T. making the turn, other industries will not be far behind.
I say I am pessimistically optimistic because while I do have some optimism, I am keeping myself ready for the floor to fall out from underneath us again. I have assured that the rope tied around my waist is as tight as ever and will continue to do so, quite honestly, for the rest of my life.
While I considered myself a fiscal conservative before all of this happened, I would say I am even more one now. This recession has reminded me of those core fiscal principles that we should all live by. Most formidable of them is do not turn your nose up at a job during an up-economy because you will wish you had that job during a down-economy.
Another important lesson I hope to see more Americans live by now and for the rest of their lives is to not create new debt. While at times, we must take on so-called "good" debt when we need to buy a home, or buy a new car, I am personally hoping to get at least 300,000 miles a piece from the two cars that we own now – one at just over 10 years old and one at 8.
By 27, I’d had 9 different cars, two brand new, and seven used, but the one I drive now has been with me for nearly 8 years and I am hoping for another 8 years on top of that. Not having car payments and not taking on new debt by frivolously getting a new car on a whim is something that I do not think I will ever do again. I hope to see America following suit. My next car will be pre-owned off a dealer lot and I hope to be paid for with cash, not financing like all of those Cash-For-Clunckers fiascos that are going to come back and bite people later.
This lesson with cars can be applied to just about anything that we buy. While we should not force ourselves into the “poverty chic” look, having a pair of shoes re-soled at 50% of the cost of a new pair when they look brand new anyway, is a tool I am going to keep in my arsenal, regardless of what the economy is doing. Little things like this all can add up to big savings and even more money to use to make money.
That leads me to the third important lesson I hope people have learned from this downturn. As a nation, we cannot simply spend everything we make on stuff that doesn’t either earn money, or make money, or provide a return on investment. That leaves you with no savings, no emergency fund, and in a heap of trouble.
Remember to work all you can and save all you can during the swingin’ times because you will have a much more solid foundation to stand on when the bad times hit!
B to B Magazine also states that “39% of B to B Marketers plan to increase their marketing budgets this year”, and that is a good sign. Marketing budgets are the first to grow, and the others tend to follow.
So, for now, I remain pessimistically optimistic about 2010. If things change, I am sure you will be the first to know.
Thursday, January 21, 2010
What Is Wrong With This Country?!
What is wrong with this country? The three main headlines today are as follows – 1.) John Edwards Admits He Fathered Rielle Hunter’s Child - 2.) Conan Signs $45M Deal To Leave Network and - 3.) The New Heidi Montag. While most days when I pop open MSN for the first time (it’s my home page), I shake my head and think to myself, “…and we wonder why religious fundamentalists want us dead”, but today takes it to entirely new level.
The man who would have been Vice President and just as much a single heartbeat away from the Presidency as Sarah Palin had an affair while his wife was battling cancer, fathered a child with his mistress then took some very politician-like steps to cover up the whole thing, including a very Willy Jeff-esque denial with later denial retraction. It seems as if he even went as far as to have one of his staffers ready to take on the role as the baby’s father.
While John Edwards is the latest in a long line of disgraced politicians from both sides of the aisle, this again leads me to ask the question, “Why do we tolerate this type of behavior from our politicians? Why do they feel that they can continually get away with being on the very bottom step of the moral ladder?”
This behavior is unacceptable and we should hold our politicians to a better standard in this country, yet it seems there will be a good percentage of people out there who will not only defend this behavior but try to convince us that a politician’s actions in their personal life have no bearing on the job they do, or the person that they are. I, for one, beg to differ.
What has gone on with Jay Leno and Conan O’Brien and NBC is a fantastic example of how we view agreements and honesty in this country. While it is our right to change our mind here in America, I also think that we are too easily ready to let people out of their agreements. Bankruptcy is a fine example of this. You get to run up debt, promise to pay it, but then get to say, “Oh, no, I don’t want to pay it after all,” and come up with an excuse as to why you can’t. We, as a society, and as an economy, should be holding people to better standards than that.
If you look at the history of our government, you will see time and time again, this same type of back-tracking and revisionist history that we as Americans should not allow to be forced upon us. I, for one, do not believe that agreements are made to be broken. America, however, seems to feel differently. We allow people, businesses, and our entire government to back out of agreements that we have made way too easily.
Who do you think that Al Qaeda is thinking of when they form their description of the average American? Heidi Montag, that’s who. Poor troubled, vain, oblivious and self-centered Heidi, whose coming out party with her new ten plastic surgeries is taking up valuable space on my news page.
While I will be the last to condone the efforts of our enemies, we also must take a few minutes to try to understand where they are coming from. Think if every morning you had to wonder how you were going to eat, or how you were going to get medicine for your kids, whether your house would be standing when you got home from a job that paid you pennies a day, and/or if a rebel army, or even your own government was going to come and take you away, drag off your family, etc. etc. etc. – and then you turn on the TV and there is poor little Heidi Montag, the picture of America, talking about how she was teased as a child and how hard it was for her growing up, and how hard is to be poor little Heidi Montag. You’d want to wipe her off of the face of the earth, too, America. Don’t lie and tell me that you wouldn’t.
We have reached such a level of complacency in this country because we don’t have to fight for anything anymore. We have truly lost sight of what is important and what should be the main focus in our lives, and honestly, what should be the focus of our free press. Your children should be learning about all the wonderful things the world has to offer from arts to music to literature, but instead, the best that we can offer up as a nation is a two-part interview with Heidi Montag so that she can explain to us why she felt she needed a new look to the extent of spending 10 hours under the knife. Go America!
We can really do better as a nation and as a people…
The man who would have been Vice President and just as much a single heartbeat away from the Presidency as Sarah Palin had an affair while his wife was battling cancer, fathered a child with his mistress then took some very politician-like steps to cover up the whole thing, including a very Willy Jeff-esque denial with later denial retraction. It seems as if he even went as far as to have one of his staffers ready to take on the role as the baby’s father.
While John Edwards is the latest in a long line of disgraced politicians from both sides of the aisle, this again leads me to ask the question, “Why do we tolerate this type of behavior from our politicians? Why do they feel that they can continually get away with being on the very bottom step of the moral ladder?”
This behavior is unacceptable and we should hold our politicians to a better standard in this country, yet it seems there will be a good percentage of people out there who will not only defend this behavior but try to convince us that a politician’s actions in their personal life have no bearing on the job they do, or the person that they are. I, for one, beg to differ.
What has gone on with Jay Leno and Conan O’Brien and NBC is a fantastic example of how we view agreements and honesty in this country. While it is our right to change our mind here in America, I also think that we are too easily ready to let people out of their agreements. Bankruptcy is a fine example of this. You get to run up debt, promise to pay it, but then get to say, “Oh, no, I don’t want to pay it after all,” and come up with an excuse as to why you can’t. We, as a society, and as an economy, should be holding people to better standards than that.
If you look at the history of our government, you will see time and time again, this same type of back-tracking and revisionist history that we as Americans should not allow to be forced upon us. I, for one, do not believe that agreements are made to be broken. America, however, seems to feel differently. We allow people, businesses, and our entire government to back out of agreements that we have made way too easily.
Who do you think that Al Qaeda is thinking of when they form their description of the average American? Heidi Montag, that’s who. Poor troubled, vain, oblivious and self-centered Heidi, whose coming out party with her new ten plastic surgeries is taking up valuable space on my news page.
While I will be the last to condone the efforts of our enemies, we also must take a few minutes to try to understand where they are coming from. Think if every morning you had to wonder how you were going to eat, or how you were going to get medicine for your kids, whether your house would be standing when you got home from a job that paid you pennies a day, and/or if a rebel army, or even your own government was going to come and take you away, drag off your family, etc. etc. etc. – and then you turn on the TV and there is poor little Heidi Montag, the picture of America, talking about how she was teased as a child and how hard it was for her growing up, and how hard is to be poor little Heidi Montag. You’d want to wipe her off of the face of the earth, too, America. Don’t lie and tell me that you wouldn’t.
We have reached such a level of complacency in this country because we don’t have to fight for anything anymore. We have truly lost sight of what is important and what should be the main focus in our lives, and honestly, what should be the focus of our free press. Your children should be learning about all the wonderful things the world has to offer from arts to music to literature, but instead, the best that we can offer up as a nation is a two-part interview with Heidi Montag so that she can explain to us why she felt she needed a new look to the extent of spending 10 hours under the knife. Go America!
We can really do better as a nation and as a people…
Friday, January 15, 2010
Some Thoughts On U.S. Relief Efforts Around The World
As you read this, U.S. war ships are on the move again, but they're not doing what is typically laid upon the Great Satan as the only action that America takes in the world...war. The U.S. military machine has been mobolized to take the lead in providing disaster relief in Haiti. Quite literally, millions of Americans have also been mobilized in making donations, providing relief supplies, and even getting on planes to go down there and do what they can to help save lives and stave off the coming famine and civil unrest.
I am very proud of, and fully support the efforts of both or government and our citizens in the endeavor. Throughout Haiti's entire history, which began in 1804, relations between our two nations have been strained, and I hope that we can show our true colors in the face of this tragedy and change the course of our relations with our neighbor to the south (If you have some spare time at some point, read a bit about the history between the U.S. and Haiti and you'll see that we actually started the relationship off on a very bad foot).
I spend a good deal of time writing and speaking out about what is wrong with America, but, in my opinion, what we are seeing right now is one of the things that is right with America. Despite our strained relations with Haiti, we still have sent over $3 billion in aid to the country over the past two decades. This is a perfect exampe of how the U.S. government can object to the policies and practices of another country's government, yet still wield our power and industry to help the very people that are being mistreated by that government. While I will be one of the first to argue that at times we have no choice but to enact policy through force, I also think that we need to continue to positively affect the lives of people around the world.
There are, however, two exceptions to this rule. One, is that I whole-heartedly believe that we should take care of those who are in need here at home before we look to the rest of the world, and we should do more to ensure that our aid dollars are actually going into the hands of the people and not into the corrupt governments that we are trying to help the people survive under. A good example of this would be the fact that Saddam Hussein was able to pocket billions in U.N.-funneled U.S. aid dollars that were meant to provide food and aid to the Iraqi people.
Another change I would most definitely like to see is a more concerted effort by America to let the rest of the world know how often the U.S. military machine is used to do good in the world. Yes, we use it to wage war, and that is a debate that we should continue to have in America, but perhaps if those who relish in seeing us killed by terrorists had a better understanding of all of the good the Great Satan America does in the world, they'd be a little less apt to want us dead. I know that for some people, we just can't change their mind because of how absolutely dedicated they are to wiping us off the face of the Earth, but I think there are some who would stand against us that we could convince otherwise.
I hope you will join me in supporting the Obama administration's efforts in Haiti, as long as he stays on the straight and narrow, of course, and in thanking the brave Americans who are already in country and those that are in line waiting to go help. They are our best line of defense in the world, winning hearts and minds during people's time of need.
I am very proud of, and fully support the efforts of both or government and our citizens in the endeavor. Throughout Haiti's entire history, which began in 1804, relations between our two nations have been strained, and I hope that we can show our true colors in the face of this tragedy and change the course of our relations with our neighbor to the south (If you have some spare time at some point, read a bit about the history between the U.S. and Haiti and you'll see that we actually started the relationship off on a very bad foot).
I spend a good deal of time writing and speaking out about what is wrong with America, but, in my opinion, what we are seeing right now is one of the things that is right with America. Despite our strained relations with Haiti, we still have sent over $3 billion in aid to the country over the past two decades. This is a perfect exampe of how the U.S. government can object to the policies and practices of another country's government, yet still wield our power and industry to help the very people that are being mistreated by that government. While I will be one of the first to argue that at times we have no choice but to enact policy through force, I also think that we need to continue to positively affect the lives of people around the world.
There are, however, two exceptions to this rule. One, is that I whole-heartedly believe that we should take care of those who are in need here at home before we look to the rest of the world, and we should do more to ensure that our aid dollars are actually going into the hands of the people and not into the corrupt governments that we are trying to help the people survive under. A good example of this would be the fact that Saddam Hussein was able to pocket billions in U.N.-funneled U.S. aid dollars that were meant to provide food and aid to the Iraqi people.
Another change I would most definitely like to see is a more concerted effort by America to let the rest of the world know how often the U.S. military machine is used to do good in the world. Yes, we use it to wage war, and that is a debate that we should continue to have in America, but perhaps if those who relish in seeing us killed by terrorists had a better understanding of all of the good the Great Satan America does in the world, they'd be a little less apt to want us dead. I know that for some people, we just can't change their mind because of how absolutely dedicated they are to wiping us off the face of the Earth, but I think there are some who would stand against us that we could convince otherwise.
I hope you will join me in supporting the Obama administration's efforts in Haiti, as long as he stays on the straight and narrow, of course, and in thanking the brave Americans who are already in country and those that are in line waiting to go help. They are our best line of defense in the world, winning hearts and minds during people's time of need.
Wednesday, January 6, 2010
California's Runaway Spending Continues!
Please allow me share some very alarming, and quite infuriating numbers with you.
The California Legislative Analyst's report about fiscal outlook for 2010 is out, and while we all know that we are in a bad spot, even this year's numbers are a bit of a surprise.
The Great State of California is set to spend 14.5% more in 2010 than it did in 2009. That's right...a spending increase of 14.5% in the midst of the worst economic crisis in 100 years.
Now, mind you, that some of this increase is because the fudging of numbers that the governor and the legislature were able to pull off in 2009 is not repeatable this year, and Federal Stimulus money for 2009 is not being sent to California again this year, but there still is an actual substantial spending increase as well.
Would you not agree that the state should be spending less money this year than last year? That would make sense, wouldn't it? Not in Spend-o-land where you need to spend money to make money, Lou!
So, this year, while the state continues to legally borrowing money from your paycheck without your permission, there will, however, be no borrowing from cities, no stealing from development agencies, and so shifting of the last state employee payroll pay date for the year to next year because it was just a day later.
Here are some further comments on this issue from State Board of Equalization Member Bill Leonard:
To put this into perspective, consider these figures distilled in a recent issue of Political Pulse: In 1990-91 the state spent $1,350 per person. By the current fiscal year, that was up to $2,644 per person. Have you seen double the benefit from the state since 1990? Political Pulse says that if the state had limited its spending in those years to the average Consumer Price Index and population growth, our current surplus would be in the neighborhood of $15 billion. Instead, that figure represents just a portion of our deficit.
I came across some other numbers that help explain how such an insane situation developed. According to my estimates, only about 34% of California residents pay income taxes. So if you look at your neighbors on either side of you, only one of you actually paid into the state coffers via income tax. Unbelievably, there are 4.4 million MORE people registered to vote than people who paid income taxes. Now, not all of those registered actually cast ballots, but it provides insight into the dynamic that is crippling our state. When there are more takers than givers, the system cannot work and California's system is not working in many, many ways.
Some people look at these numbers and facts and lament that there is nothing to do but wait for the inevitable collapse of the state. But that is not only extremely unlikely, it is irresponsible. It is as irresponsible for an individual who cannot pay his current bills to run up all his credit cards figuring that he will "just" declare bankruptcy and be done with it, sticking someone else with his bills. We know that debt service has first call, then education, on all state funds, but to continue to accrue debt is reckless because that debt will be paid even if we shut down every state spending program. We simply must cut spending and programming and services or whatever you want to call the outflow of money. We must stop the budget smoke-and-mirrors that allow one year to look okay while pushing the pain into the next fiscal year. Cut first, cut now.
The California Legislative Analyst's report about fiscal outlook for 2010 is out, and while we all know that we are in a bad spot, even this year's numbers are a bit of a surprise.
The Great State of California is set to spend 14.5% more in 2010 than it did in 2009. That's right...a spending increase of 14.5% in the midst of the worst economic crisis in 100 years.
Now, mind you, that some of this increase is because the fudging of numbers that the governor and the legislature were able to pull off in 2009 is not repeatable this year, and Federal Stimulus money for 2009 is not being sent to California again this year, but there still is an actual substantial spending increase as well.
Would you not agree that the state should be spending less money this year than last year? That would make sense, wouldn't it? Not in Spend-o-land where you need to spend money to make money, Lou!
So, this year, while the state continues to legally borrowing money from your paycheck without your permission, there will, however, be no borrowing from cities, no stealing from development agencies, and so shifting of the last state employee payroll pay date for the year to next year because it was just a day later.
Here are some further comments on this issue from State Board of Equalization Member Bill Leonard:
To put this into perspective, consider these figures distilled in a recent issue of Political Pulse: In 1990-91 the state spent $1,350 per person. By the current fiscal year, that was up to $2,644 per person. Have you seen double the benefit from the state since 1990? Political Pulse says that if the state had limited its spending in those years to the average Consumer Price Index and population growth, our current surplus would be in the neighborhood of $15 billion. Instead, that figure represents just a portion of our deficit.
I came across some other numbers that help explain how such an insane situation developed. According to my estimates, only about 34% of California residents pay income taxes. So if you look at your neighbors on either side of you, only one of you actually paid into the state coffers via income tax. Unbelievably, there are 4.4 million MORE people registered to vote than people who paid income taxes. Now, not all of those registered actually cast ballots, but it provides insight into the dynamic that is crippling our state. When there are more takers than givers, the system cannot work and California's system is not working in many, many ways.
Some people look at these numbers and facts and lament that there is nothing to do but wait for the inevitable collapse of the state. But that is not only extremely unlikely, it is irresponsible. It is as irresponsible for an individual who cannot pay his current bills to run up all his credit cards figuring that he will "just" declare bankruptcy and be done with it, sticking someone else with his bills. We know that debt service has first call, then education, on all state funds, but to continue to accrue debt is reckless because that debt will be paid even if we shut down every state spending program. We simply must cut spending and programming and services or whatever you want to call the outflow of money. We must stop the budget smoke-and-mirrors that allow one year to look okay while pushing the pain into the next fiscal year. Cut first, cut now.
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