RECONSTRUCTING AMERICA
Think back to when you were, lets say, 20 years old. Come on now, put your feet up on the old La-Z-Boy recliner and let your mind meander back to the days when you were an indestructible know-it-all that had all of the answers to all of life’s vexing problems. Perhaps a strong libation or two would help the recall process along, notwithstanding that the tasty chemical depressant might even help dull the edge of age-related embellishment of the actual facts and sharpen the honesty of the recollection as well. Are you back to the glory years yet? Ok, don’t dwell on that fantastic red headed babe you almost got next to or the muscled-up incredibly suave and debonair hunk that danced with you at the sock-hop, focus instead on what you thought life had in store for you. You know, perhaps you would be an airline pilot, with all of the prestige of flying happy people to and fro on vacation or powerful people to incredibly important business meetings that relied on your fantastic cool flying skill to save the day. Or perhaps, you would become a world famous female Medical Doctor that due to your incredible knowledge and expertise would not only cure the sick and balm the hurt, you would pave the way to expand the horizons of all females of great character to reach beyond the glass ceiling and fulfill their complete potential. Of course, there is the possibility that you were one of those who didn’t have a clue as to what you would become down the line, but you should had at least some sort of fuzzy vision of where you thought life would eventually take you. So the moment of truth has arrived, now that you have gotten “further down the line”, did you end up where you thought would be after gravity has taken its toll and too many brewskis have made their indelible mark? I would be willing to wager General Motors Corporation’s future that where you are now is probably not where you thought or hoped you would be when the blush of youth was on your cheeks. On thing for sure, how you and I got to where we are was not the result of some incredibly complex conspiracy by unknown people or entities. Instead, our life’s journey was facilitated and enabled by our heredity, parental training, formal education, personality, culture, society and the countless decisions made by us and others that affected the course of our journey into geezerdom. I like to think that our country, America, is very much like a singular citizen because, after all, a country is little more than the sum of its collective people. So the journey of our country into maturity (as reflected by our evolving culture) is no doubt similar to that of a singular citizen making his or her way towards maturity, aided and abetted by life’s circumstance and happenstance, i.e., the country’s journey into maturity is not as a result of an incredibly complex conspiracy by unknown people or entities, it is the result of the same forces that enables and facilitates its least indivisible part. Suffice to say, where our country is now is probably not what the founding fathers envisioned and codified into the Constitution when the blush of youth was on our country as well. When our country was young and vigorous, our culture reflected our youth by being a personally responsible and self-reliant people that resulted in a “Can-do” society that could do anything it believed in. The Constitution was the country’s holy foundation that enabled our youthful sprit to soar and was not subject to interpretation by the shifting winds of whim or fancy that has so transformed the holy document into what it has become today. Somewhere along the line, we have been transformed from a personally responsible and self-reliant people into a timid and hesitant people that can no longer build a highway system or pursue the cause of simple justice and has perpetrated an entitlement culture that now spreads responsibility for everything to everyone. (I will bet that if a scholarly study was done, it would be determined that the speed of a country’s decent into mediocrity is proportional to the number of lawyers it has.) The present day entitlement culture is now a fact and the likelihood of a return to our youthful culture and Constitutional foundations is as unlikely as an individual’s unwinding the years back into youth. So hang-on American, the reconstruction of America is in full force and the youth of today will inherit a American quite unlike what was envisioned in her youthful days.
Tuesday, April 28, 2009
Thursday, April 9, 2009
Car Business
Car Business
On 5 December 2008 the first of several Congressional hearings about the automobile industry was conducted. The televised hearing was typical Congressional theater that had pompous Congressional finger-wavers in full throat about the awful Automobile CEOs who dared to come to the peoples Washington DC in their Corporate jets to beg for public money to survive. There were several things that struck me as important during the hearings. The first thing that struck me during all of the bashing of the domestic automobile industry was what was not addressed. There was never any analysis of how the foreign automobile makers had managed to capture so much of our domestic market other than foreign car makers all made far superior cars and the management of the foreign car makers were as close to Greek Gods as one could possibly get. Not once was it pointed out that most of the imported cars had an average of 19% VAT advantage over American cars. Here is how it works. Value Added Tax (VAT) countries like the EU, China, Canada and Mexico are rebated their VAT when their product is exported to a non-VAT country, like the USA. The typical VAT on a complex product, like an automobile, can be as much as 10%. So when a foreign VAT manufacturer exports to the USA, it enjoys a 10% discount that reduces the production cost, and therefore, the price of the car for sale in the USA. But wait, there is more. When a non-VAT country, like the USA, imports into a VAT country, a VAT of 10% is added to the import price at the border, voila, a typical 19% disadvantage to the USA when trying to sell cars on the foreign market (the foreign car maker gets 10% back while the USA gets tagged 10% when trying to sell in the foreign country, a 19 to 20% total disadvantage to the USA manufacturer.) This has nothing to do with quality, style or gas consumption, it a clear unfair trade practice. Another advantage foreign car companies get when they build a factory here in the USA is that the states fall all over themselves giving tax abatements, infrastructure, and God only knows what else that permits a Toyota to build a very modern, new and highly efficient manufacturing facility to compete with GM that has 90 year old inefficient plants that pay all kinds of taxes and is never in line for tax abatements. I could list many other disadvantages that our domestic manufacturing has to endure at the hands of our Government, but I think you get the idea. The most striking thing about the hearing was the universal condemnation that was heaped upon the domestic automakers for paying good wages and benefits to the employees. Think about it, our elected Government representatives, berating GM, Ford and Chrysler for being so dumb as to pay good wages and benefits to our citizens that are not in line with third world wages. What was not discussed at the hearing was the fact that current labor costs, inflated or not over foreign costs, contribute about 10% of the price of a automobile manufactured and sold in the USA (go online and conduct the research, it’s true, labor makes up about 10% of the price of a domestic car). Think about it, if one cut the labor costs to zero, there would still be a 10% disadvantage to the domestic car manufacturer’s due to VAT alone. This wage comparison thing got me to thinking about Henry Ford and how he managed to put together his magnificent company that brought personal freedom to all of America’s citizens by manufacturing affordable and reliable automobiles to the masses. Back when Henry Ford got going with his assembly line, the labor on the line was very hard and Henry could not hire people fast enough because of the attrition rate of people quitting. It was reported that for every 1,000 people working, Henry had to hire 960 more just to keep up with the attrition. The current rate of pay was $2.38 per day with no such thing as benefits other the benefit of having a wage-paying job. On January 5, 1914, Henry Ford announced to the nation that he was implementing a new minimum wage of $5.00 per day in addition to a profit-sharing plan for his employees. Henry was hailed as a friend of the worker and branded as an outright socialist. The result of the unilateral wage increase was that the company’s profits doubled in the next year. Henry Ford said of his wage increase, “The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made.” One has to wonder why we must continuously learn the same lessons over and over again like paying Coolie wages does not result in a viable business, regardless what brilliant and enlightened Government people think. One other thing Henry Ford got right. He said that another reason he arbitrarily raised wages was so that he could sell more cars as a result of people having enough money to buy a car. Brilliant. Lets do the math, when we all are making Coolie wages, how are we going to buy a $25,000 automobile, notwithstanding sending our kids to College and paying the ever increasing taxes? Brothers and Sisters, wages and benefits paid to our laboring autoworkers is not the reason for the current problems in our domestic automobile business.
On 5 December 2008 the first of several Congressional hearings about the automobile industry was conducted. The televised hearing was typical Congressional theater that had pompous Congressional finger-wavers in full throat about the awful Automobile CEOs who dared to come to the peoples Washington DC in their Corporate jets to beg for public money to survive. There were several things that struck me as important during the hearings. The first thing that struck me during all of the bashing of the domestic automobile industry was what was not addressed. There was never any analysis of how the foreign automobile makers had managed to capture so much of our domestic market other than foreign car makers all made far superior cars and the management of the foreign car makers were as close to Greek Gods as one could possibly get. Not once was it pointed out that most of the imported cars had an average of 19% VAT advantage over American cars. Here is how it works. Value Added Tax (VAT) countries like the EU, China, Canada and Mexico are rebated their VAT when their product is exported to a non-VAT country, like the USA. The typical VAT on a complex product, like an automobile, can be as much as 10%. So when a foreign VAT manufacturer exports to the USA, it enjoys a 10% discount that reduces the production cost, and therefore, the price of the car for sale in the USA. But wait, there is more. When a non-VAT country, like the USA, imports into a VAT country, a VAT of 10% is added to the import price at the border, voila, a typical 19% disadvantage to the USA when trying to sell cars on the foreign market (the foreign car maker gets 10% back while the USA gets tagged 10% when trying to sell in the foreign country, a 19 to 20% total disadvantage to the USA manufacturer.) This has nothing to do with quality, style or gas consumption, it a clear unfair trade practice. Another advantage foreign car companies get when they build a factory here in the USA is that the states fall all over themselves giving tax abatements, infrastructure, and God only knows what else that permits a Toyota to build a very modern, new and highly efficient manufacturing facility to compete with GM that has 90 year old inefficient plants that pay all kinds of taxes and is never in line for tax abatements. I could list many other disadvantages that our domestic manufacturing has to endure at the hands of our Government, but I think you get the idea. The most striking thing about the hearing was the universal condemnation that was heaped upon the domestic automakers for paying good wages and benefits to the employees. Think about it, our elected Government representatives, berating GM, Ford and Chrysler for being so dumb as to pay good wages and benefits to our citizens that are not in line with third world wages. What was not discussed at the hearing was the fact that current labor costs, inflated or not over foreign costs, contribute about 10% of the price of a automobile manufactured and sold in the USA (go online and conduct the research, it’s true, labor makes up about 10% of the price of a domestic car). Think about it, if one cut the labor costs to zero, there would still be a 10% disadvantage to the domestic car manufacturer’s due to VAT alone. This wage comparison thing got me to thinking about Henry Ford and how he managed to put together his magnificent company that brought personal freedom to all of America’s citizens by manufacturing affordable and reliable automobiles to the masses. Back when Henry Ford got going with his assembly line, the labor on the line was very hard and Henry could not hire people fast enough because of the attrition rate of people quitting. It was reported that for every 1,000 people working, Henry had to hire 960 more just to keep up with the attrition. The current rate of pay was $2.38 per day with no such thing as benefits other the benefit of having a wage-paying job. On January 5, 1914, Henry Ford announced to the nation that he was implementing a new minimum wage of $5.00 per day in addition to a profit-sharing plan for his employees. Henry was hailed as a friend of the worker and branded as an outright socialist. The result of the unilateral wage increase was that the company’s profits doubled in the next year. Henry Ford said of his wage increase, “The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made.” One has to wonder why we must continuously learn the same lessons over and over again like paying Coolie wages does not result in a viable business, regardless what brilliant and enlightened Government people think. One other thing Henry Ford got right. He said that another reason he arbitrarily raised wages was so that he could sell more cars as a result of people having enough money to buy a car. Brilliant. Lets do the math, when we all are making Coolie wages, how are we going to buy a $25,000 automobile, notwithstanding sending our kids to College and paying the ever increasing taxes? Brothers and Sisters, wages and benefits paid to our laboring autoworkers is not the reason for the current problems in our domestic automobile business.
Monday, April 6, 2009
It's A Matter of Trust
It’s A Matter of Trust
Trust what I say
And do what you’re told
And surely all your dirt will turn into gold.
(Van Morrison, from the song, “The Mystery”)
Never trust a skinny Chef or fat Banker.
Never trust a sickly Doctor or poor Lawyer.
Never trust a loud musician or rich artist.
Never trust an eloquent Politician or tight-lipped executive.
Never trust a farmer in a business suit or a preacher in blue jeans.
Never trust an indispensable man or a man for all seasons.
Never trust a stampeding mob or solitary man.
Never trust a swaggering Captain or a man who kills animals for sport.
Never trust a man who is obsessed with his looks or a woman who cares little about grooming.
Never trust a man who considers himself a citizen of the world or a man fearful of life beyond his family.
Never trust a multinational business or a church with a worldwide reach.
Never trust a man who does not drink or a woman who does not cry.
Never trust a free lunch or 15% interest.
Always trust the wife who says, it really matters little or the husband who says, I’ll take care of it, somehow, someway.
Always trust the little girl with bouncing curls and giggling gate as she throws her arms around your neck and says, give me a kiss, grandpa.
Always trust the little boy with flashing sneakers and a dirty tee shirt and says, let’s shoot some baskets, grandpa.
Always trust an angry man and a vengeful woman.
Always trust your heart in matters of love and your gut in matters of finance.
A final quote:
“The world’s cemeteries are full of indispensable men.”
Trust what I say
And do what you’re told
And surely all your dirt will turn into gold.
(Van Morrison, from the song, “The Mystery”)
Never trust a skinny Chef or fat Banker.
Never trust a sickly Doctor or poor Lawyer.
Never trust a loud musician or rich artist.
Never trust an eloquent Politician or tight-lipped executive.
Never trust a farmer in a business suit or a preacher in blue jeans.
Never trust an indispensable man or a man for all seasons.
Never trust a stampeding mob or solitary man.
Never trust a swaggering Captain or a man who kills animals for sport.
Never trust a man who is obsessed with his looks or a woman who cares little about grooming.
Never trust a man who considers himself a citizen of the world or a man fearful of life beyond his family.
Never trust a multinational business or a church with a worldwide reach.
Never trust a man who does not drink or a woman who does not cry.
Never trust a free lunch or 15% interest.
Always trust the wife who says, it really matters little or the husband who says, I’ll take care of it, somehow, someway.
Always trust the little girl with bouncing curls and giggling gate as she throws her arms around your neck and says, give me a kiss, grandpa.
Always trust the little boy with flashing sneakers and a dirty tee shirt and says, let’s shoot some baskets, grandpa.
Always trust an angry man and a vengeful woman.
Always trust your heart in matters of love and your gut in matters of finance.
A final quote:
“The world’s cemeteries are full of indispensable men.”
Wednesday, April 1, 2009
Bend Down
Bend Down
Bend down. Bend down low and hear my lament:
Who will cry out and care for the forgotten when the fog of crisis blinds and frightens virtuous fools and unscrupulous mavens alike? The virtuous fools, who are now blinded and bewildered by the fog of crisis now becoming reality, are those who swooned and stampeded like ignorant children into believing that an effortless Nirvana awaited us all, if only we just believe. Yes, those virtuous fools who feasted upon “feel-good” ideas and soaring rhetoric that promised a new world of enlightenment that would educate the ignorant, bring wealth to the poor, justice to the downtrodden, healing to the sick and respect from the world at large, and all to be gained by just believing. The virtuous fools cannot cry out and care for the forgotten because they still believe in the carefully constructed hooey that was designed to bring power to those who strive to remake us into something that we are not. Could it be, Pogo, that we have met the virtuous fools and the virtuous fools are us? The unscrupulous mavens, who only worship greed and lust for power, are only freighted by the unfolding crisis because they must blindly hurry in the resulting fog to find a way to turn a profit and retain power from the very mess that they created and they care not one wit about the forgotten. And who are the forgotten and what is the crisis? The forgotten are our progeny, our children and grandchildren, who will inherit a broken country that renders freedom meaningless. The crisis that I am speaking of is unfolding before our very eyes and is the changing of our democratic Republic into a broken third-world wreck by the Educated Idiots (or the French, Idiot Savants, if you prefer) in the form of BHO and Company who are heel-bent to remake our country into some kind of Socialist thing and remake the world for good measure. My lament is that our innocent children and grandchildren will not benefit, as we did, from the careful husbandry of our magnificent country by those who preceded us that not only blessed us with freedom, wealth and unlimited opportunity, but also instilled within us, a sense of morality that was the envy of the world.
Fall down. Fall down and hear my despair:
The wrecking of our country will occur not from bullets or bombs rained down upon us by despots or fanatics, the wreckage will be perpetrated by the Educated Idiots we ourselves place into Governance over us. The cascading financial debacle, perpetrated by greed and lust for power, will be used by the Educated Idiots as a fortuitous vehicle to purposely debauch our money into worthless pieces of paper and thereby make us all beholding to the Government instead of ourselves for our livelihood and well being. What an inglorious legacy for such a glorious country.
Bend down. Bend down low and hear my lament:
Who will cry out and care for the forgotten when the fog of crisis blinds and frightens virtuous fools and unscrupulous mavens alike? The virtuous fools, who are now blinded and bewildered by the fog of crisis now becoming reality, are those who swooned and stampeded like ignorant children into believing that an effortless Nirvana awaited us all, if only we just believe. Yes, those virtuous fools who feasted upon “feel-good” ideas and soaring rhetoric that promised a new world of enlightenment that would educate the ignorant, bring wealth to the poor, justice to the downtrodden, healing to the sick and respect from the world at large, and all to be gained by just believing. The virtuous fools cannot cry out and care for the forgotten because they still believe in the carefully constructed hooey that was designed to bring power to those who strive to remake us into something that we are not. Could it be, Pogo, that we have met the virtuous fools and the virtuous fools are us? The unscrupulous mavens, who only worship greed and lust for power, are only freighted by the unfolding crisis because they must blindly hurry in the resulting fog to find a way to turn a profit and retain power from the very mess that they created and they care not one wit about the forgotten. And who are the forgotten and what is the crisis? The forgotten are our progeny, our children and grandchildren, who will inherit a broken country that renders freedom meaningless. The crisis that I am speaking of is unfolding before our very eyes and is the changing of our democratic Republic into a broken third-world wreck by the Educated Idiots (or the French, Idiot Savants, if you prefer) in the form of BHO and Company who are heel-bent to remake our country into some kind of Socialist thing and remake the world for good measure. My lament is that our innocent children and grandchildren will not benefit, as we did, from the careful husbandry of our magnificent country by those who preceded us that not only blessed us with freedom, wealth and unlimited opportunity, but also instilled within us, a sense of morality that was the envy of the world.
Fall down. Fall down and hear my despair:
The wrecking of our country will occur not from bullets or bombs rained down upon us by despots or fanatics, the wreckage will be perpetrated by the Educated Idiots we ourselves place into Governance over us. The cascading financial debacle, perpetrated by greed and lust for power, will be used by the Educated Idiots as a fortuitous vehicle to purposely debauch our money into worthless pieces of paper and thereby make us all beholding to the Government instead of ourselves for our livelihood and well being. What an inglorious legacy for such a glorious country.
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