Monthly Archives: December 2012

Magic! We’ll Never Have To Work Again!

Posted on by Standard 5

Readers of my blog have often heard me proclaim my faith in basic economics.  I still have that faith.  At it’s most basic level, here’s what I believe:

  • every person on earth wants to improve his or her family’s standard of living
  • the more scarce something is (goods, talent, labor), the higher its value
  • we obtain things that we want by providing somebody else something they want
  • rather than exchanging chickens for gasoline, and labor for nails, we use a “medium of exchange”

IOUMacroeconomics makes sense as long as we have a medium of exchange that we can trade back and forth with each other, and we all agree on its relative value.  Here in the United States we use dollars.

Sam’s employer will give him twenty dollars for loading a truck for an hour.  Sam will give twenty dollars to the pet store for a bag of dog food.  The store will give twenty dollars to the utility company for an hour’s worth of electricity.   It works great as long as we all agree on the relative worth of twenty dollars.

Here’s where it gets tricky.  Twenty dollars is a piece of paper in your pocket.  You can’t eat it.  It won’t keep you warm.  It has no intrinsic worth at all.  There was a time when that piece of paper could be exchanged for gold (a scarce commodity) at our national treasury, but those days are gone.  Now a twenty-dollar bill is nothing more than an IOU – a promise to pay.

Unlike you, the government does not create any wealth.  It can take IOUs from one person and give them to another person.  And if that’s all it did, the economy would still work.  But the government now gives out more IOUs than it takes in.  It can do that, because it can print IOUs.

Stick with me now.

It should follow that the more IOUs that are out there, the less each one is worth.  Supply and demand, right?

If this were not true, NONE OF US WOULD EVER HAVE TO WORK AGAIN.  We could just print as many IOUs as it takes to buy whatever we want, just like our government is doing now!

But our government continues to tell us that there is no inflation, they don’t expect inflation, and everything is under control.

You’d have to believe in magic . . .

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

You have to believe we are magic
Nothin’ can stand in our way
You have to believe we are magic
Don’t let your aim ever stray
And if all your hopes survive, destiny will arrive
I’ll bring all your dreams alive, for you

Magic – Olivia Newton-John

 

You Paid $3,652 For My Short Flight. Thanks!

Posted on by Standard 7

Silver Airlines*update 6/13/2013 – common sense prevails as Essential Air Service subsidies for Lewistown and Miles City are finally cancelled! 

 

Thank you, taxpayers!

I just booked a flight from Lewistown to Billings.   I fly frequently out of Billings, and usually I just drive to the airport – it’s only a two-hour trip.  I often stay overnight at a Billings hotel so I can leave my vehicle there until my return, because long-term parking at the airport is pretty expensive.  But last week I read in our local paper that we are only averaging one passenger per day through our Lewistown airport.  That’s one passenger for two flights in and two flights out.  Per day.  Kind of embarrassing.

So I thought I would check it out.  My airfare was only $71!  Heck, I would spend that on gas taking my truck to Billings and back, plus I would have to pay for a hotel or parking.  Why not?

How, you may ask, can air transportation from a little town like Lewistown be such a bargain?  It’s called Essential Air Service.   You wonderful taxpayers subsidize our tiny airline to make sure we don’t have to buy gas from a greedy privately-owned gas station and spend money at some evil, profit-hungry privately-owned hotel.  It’s one of those programs that our federal government says we just can’t live without.   In fact, they absolutely must raise our taxes because programs like this are . . . well, essential.

I am just overwhelmed at your generosity.  I looked up the Essential Air Service subsidy for Lewistown to see how much you are paying for my trip.   Let’s see, the most recent annual contract provides a $1,325,733 subsidy to Silver Airlines for serving Lewistown.  One passenger per day for 365 days, that’s about 365 passengers per year . . .  hmm, according to my simple math, you taxpayers are paying about $3,632 for my short trip to Billings.

Denny Rehberg and Jon Tester and Max Baucus are all big supporters of Essential Air Service.   Some other stingy Congressmen tried to shut down the program, but your Montana buddies don’t have any problem with you guys paying $3,632 for me to fly to Billings.   Oh, plus $3,632 when I return.  I mean after all, heh heh heh . . . it’s not their money!

So thanks again, I’ll be thinking of you as I glide over the Rimrocks into Billings-Logan airport to make my connecting flight.  You know, the Rimrocks sure are pretty, you can look right over the fiscal cliff . . .

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right SideGimme a ticket for an aeroplane
I ain’t got time to take a fast train
Lonely days are gone, I’m a-goin’ home
My baby just wrote me a letter!
I don’t care how much money I gotta spend
Got to get back to my baby again
Lonely days are gone, I’m a-goin’ home
My baby just wrote me a letter!

The Letter – by the Box Tops

Don’t Cry for Argentina, Cry for Us

Posted on by Standard 4

All of this talk about “the fiscal cliff” sounds so sudden, so personal.  Like something that happens to you, and me, as individuals.  We fall off the cliff, like Wiley Coyote, and it hurts for a minute.  Then we are right back chasing the Road Runner.


The dirty little secret is we have screwed things up so badly for the next generation – maybe several generations – that it is beyond the point of repair.

Economics is not a mystery.  There is a ton of historical evidence about what happens when you try to goose the economy and stave off debt by printing fiat money – it’s called inflation.  Argentina wrote the book on how to create rampant inflation.

In the 1980s the inflation rate in Argentina ran in the triple digits.  When it hit 12,000% in 1989, suddenly everybody was broke – even those who worked hard, saved money, and played by the rules.  You have money?  Big deal!  It doesn’t buy anything!  All of the predictable ugly behavior occurred – stores were looted, violent protests  erupted, and politics devolved into a cesspool of corruption.

Argentina_158624432_620x350 In 2001 the IMF bailed out Argentina, preventing bloody revolution.  In exchange, there were strings attached:  you will manage your economy conservatively, and you will hold inflation to sane levels.  Twelve years later, Argentina is on the verge of being tossed out of the IMF, and perhaps the G20 for failing both dictums.  Stores are again being looted.  Argentine president Cristina Fernández de Kirchner is accused of “cooking the books” by reporting much lower inflation rates than actual.  While government reports claim inflation rates of 8% to 10%, life on the street shows a rate closer to 25%, and accelerating.

Sound familiar?

Our Federal Reserve, in cahoots with our administration, is pretending that we have no inflation in the US.  By holding interest rates to near-zero, they “think” they are stimulating the economy and tempering unemployment.  But it’s not working.  Banks, because of the risk of a rapid increase in interest rates down the road, aren’t loaning money to businesses.  Consumers who rely on interest from savings have puckered up.   And investors seeking decent returns gobble up riskier investments, building dangerous bubbles just waiting to pop.

Our government is trying the old “cook the books” strategy too.  While our administration claims success at creating jobs, our rate of labor force participation declines, and “real unemployment” takes a toll on American workers.  Last week 20,000 applicants scrambled after 1,500 available  flight attendant jobs at bankrupt American Airlines, who cut 2,200 higher-cost employees in a contract buyout.  And another 90,000 Americans chose permanent disability over the fight for jobs in December – breaking another record and holding unemployment rates conveniently and artificially low.

We are told that there is no inflation in the US.  But anyone who has been to a grocery store, a gas station, or any other destination not frequented by beltway-insiders knows better.  I freaked when I recently saw plain old hamburger at $6 a pound at a discount supermarket.

In 2001, Pat Buchanan wrote a blistering and revealing article about the debacle in Argentina.

It is a catastrophe for South America’s second economy and nation. Four years deep in recession, with unemployment at 18 percent, tax revenues vanishing and credit rating ruined, Argentina will now resort to the printing press. Fiat money – a “third currency,” the “argentino” – will be introduced in January.

“Printing money to satisfy the popular desire for spending unmatched by taxation is a recipe for chaos,” warns the Financial Times. “The new currency would then swiftly disappear into the hyper-inflationary flames.” Rely upon it. For the Peronists are less concerned with chaos than victory in the March elections.

For this disaster, Argentinians are, themselves, to blame. They have repeatedly elected demagogues and wastrels who misruled and looted their nation.

His scary prediction came true then for Argentina.  We’re next.

Who will write our epitaph?  And will our children and grandchildren forgive us?

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

Have I said to much?
There’s nothing more I can think of to say to you
But all you have to do
Is look at me to know
That every word is true

Don’t Cry For Me, Argentina (Evita) – Madonna

Herman Cain Calls Out the Racist NY Times

Posted on by Standard 1

I was reminded today why I am such a huge Herman Cain.   Here is a man with that rare gift of clarity – the ability to cut right through to the truth.  I call it “lazer vision”.  My wife has that gift too, and it’s why I don’t try to pull even a thread of wool over her eyes.

Just to be clear, I don’t favor Herman Cain because he is African American.  I abhor bigotry of any kind, in any direction, by anyone against any perceived or actual “group”.   I couldn’t care less what color Cain, or any other public figure, is.  What I like is his strong conservative values, his business sense, and his ability to filter out all the nonsense and get down to what’s important and what’s right, with a brevity that every writer or speaker should envy.

Today’s reminder is the response he wrote to a New York Times article by Professor Adolph Reed, Jr.

Professor Reed was critical of South Carolina governor Nikki Haley’s decision to name Tim Scott, a black Republican, to replace Jim DeMint as the state’s US senator.  DeMint is retiring from the Senate to take a post as president of the Heritage Foundation.  Reed cynically claims that “modern black Republicans have been more tokens than signs of progress.”  He says that Scott’s politics are “utterly at odds with the preferences of most black Americans. Mr. Scott has been staunchly anti-tax, anti-union and anti-abortion.”  Is he saying African Americans are required, because of their skin color, to be pro-tax, pro-union, and pro-abortion?

Most putrid of all is Professor Reed’s contention that all whites are racist:  “whites . . . are inclined to vote Republican but don’t want to have to think of themselves, or be thought of by others, as racist.”  If he were in front of me, I would punch him in the nose.  I don’t “have to” think of myself as a racist?

Clear-thinking Herman Cain nails Reed and all the other Democrats who just can’t remove the tired, old race card from their playbooks.  Cain says:

So it’s worth asking, then: What, exactly, are “black interests”? To hear Professor Reed tell it, blacks are a monolithic group of people whose best interests are served when they can be recipients of redistributionist policies at the hands of big government. Let me simplify that for you: He thinks black people need welfare, and can’t make it under the kinds of free-market policies advocated by the likes of Samuel Pierce, Clarence Pendleton, Clarence Thomas and Tim Scott.

When are black Democrats going to reject the continuing insults and humiliation hurled at them by their sacrosanct political leaders and media?  When will they stand up and protest their second-class status in the eyes of their “benefactors”?  While I’m punching noses, I would certainly tweak the beak of anyone who told me I am so stupid and unmotivated that I, like anyone whose skin pigmentation is similar to mine, am not capable of feeding myself and my family without their merciful help .

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

(What they do)  They smile in your face!
All the time they want to take your place,
The back stabbers (back stabbers!)
They smile in your face!
Smiling faces, Smiling faces sometimes tell lies (back stabbers!)
They smile in your face!
I don’t need low down dirty bastards (back stabbers!)

Back Stabbers – the O’Jays

The End of Football – and Hillary?

Posted on by Standard 2

nfl-collisionI played high school football in small-town Montana.  I wasn’t particularly good at it, but I loved the sport.  To this day I and my family, like most Americans, spend a good chunk of our time and money following the monsters of the midway.  Football has become more than a pastime – it is a juggernaut industry, and until recently its meteoric growth in popularity seemed limitless.  But I digress . . .

It was a kickoff play, and I was the “contain” guy on the end.  My job was to make sure the kick returner did not get outside of me and have a clear path down the sideline.  He caught the kick near the sideline, on my side of the field.   I was barreling down the sideline, full speed, and the returner motored straight toward me.  Yep, it was a full-speed, head-on train wreck.

We were both seeing stars and, with assistance, wobbled off to our respective benches.  But the cobwebs cleared in a few minutes, and we were soon right back in the game.

And that is what will be the end of football.

A four-year study was recently completed on the effects of CTE (chronic traumatic encephalopathy).  Scientists studied the brains of 85 deceased athletes and soldiers, mostly football players.  They discovered that serious brain damage was not always the result of one or more major concussions; it is just as likely caused by repeated, smaller jolts to the noggin.

While professional boxers were commonly “punch drunk” after their careers, most of us were not aware of the devastating effects of CTE until we saw Muhammad Ali reduced to a mumbling zombie at a relatively young age.  There were sad stories in professional football, like Mike Webster, who suffered, among other injuries, amnesia, dementia, and depression from his later football years until his death at the age of 50.

As players get bigger and faster (largely thanks to steroids) the hits become progressively more devastating.   Many successful players have had their careers shortened by concussions, and the inevitable lawsuit barrage has begun.  Junior Seau, star linebacker with the Chargers, committed suicide in May, and CTE was implicated.

The “concussion crisis” is threatening the game itself, at every level.  Two Pop Warner kids’ coaches were suspended when five boys reportedly suffered concussions in the early minutes of one game.

While there is little doubt that CTE exists and has wreaked havoc on the lives of many sufferers, there is also the likelihood that it will serve as a handy excuse for a variety of bad decisions.  When Jovan Belcher of the Chiefs shot his girlfriend and then himself earlier this month, some were quick to blame CTE.

hillaryAnd when Hillary Clinton was called to testify before Congress about her baffling failure to prevent, mitigate, or correctly report the murder of our Libyan ambassador and those who attempted to protect him at Benghazi, she declined to appear, invoking the “concussion” defense.   She reportedly fainted from dehydration and hit her head, although she did not seek medical attention.

I’m going to miss football, but there’s a silver lining.  Next time I forget my wedding anniversary, or throw my socks in the laundry hamper inside out,  I’ll just explain, “Honey, remember that football game when I was a sophomore . . . ?”

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

Don’t you know it hit me like a hammer
Hit me like a ton of lead
You know it hit me like a hammer
You know it hit me, baby

Hit Me Like A Hammer – Huey Lewis

Bless The Beasts and the Children

Posted on by Standard 6

God bless our teachers, principals and school personnel.

The trust we place in them and the responsibility they shoulder when we send our children to them every day is monumental and never to be taken for granted.

When a deranged man began his assault on Sandy Hook Elementary school last Friday, principal Dawn Hochsprung ran down the hall and attempted to tackle the shooter.   She paid with her life.  School psychologist Mary Sherlach was also shot and killed running at the gunman.  Teachers Lauren Rosseau and Victoria Soto died trying to protect their kids.  20 innocent children were murdered in their school.

The shock and horror we all felt upon hearing the news is immediately followed by the questions.  How?  Why?

My immediate reaction was:  If only principal Hochsprung had something other then her body to throw at the killer.  If only the first person to run toward the madman were trained and armed to stop the terror then and there.

The Sunday news shows were all dedicated exclusively to coverage and commentary on the Sandy Hook carnage.  I watched George Stephanopolous’ ABC news program in despair as the talking heads gravely discussed more laws, more gun control, more psychiatrists and there was NOT A SINGLE MENTION of self-defense.  The school had a new security system which didn’t work.  The state has tough gun laws which didn’t work.  The school was in a “gun-free zone” which not only didn’t work, it may have contributed to the death count.

Today I am all for higher spending for our schools.  I would happily pay any school administrator or teacher a big bonus for taking a good self-defense gun class and for keeping a weapon secured but available for quick response.  If that is too unpalatable for the majority of parents, I would support hiring an armed security guard for every school.

Our schools have rules upon rules to keep kids safe.  None of which mean a damn thing to a maniac hell-bent on murder and mayhem.

Should we be teaching our children that we all must go through life in fear of, or victims of, any soul-less, suicidal psycho who wants his 15 seconds of fame?  Shouldn’t they grow up with the security of knowing that having the ability to defend one’s self, family, friends, and innocent others is a good thing?

Priority:  We must have armed and trained personnel at every school who are capable of saving the lives of our children when the unthinkable happens.

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

Bless the beasts and the children
For in this world they have no voice
They have no choice

Bless the beasts and the children
For the world can never be
The world they see

Light their way when the darkness surrounds them
And give them love, let it shine all around them

Bless the beasts and the children
Give them shelter from the storm
Keep them safe, keep them warm

Bless the Beasts and the Children – Karen Carpenter

Huh?

Posted on by Standard 12
  • question1Why do Detroit parents allow their teachers to take instruction days off to protest union matters when only 4% of their students are proficient in math and 7% in language arts?
  • Why does my small Montana town have “Essential Air Service” taxpayer subsidies costing thousands of dollars per airline ticket when we average only one passenger per day? (Lewistown News Argus 12/8/2012)
  • Why doesn’t the number of administrative employees decrease in government offices, due to improved technology and communication, as it does in the private sector?
  • How can our nation afford all the countless grants our cities and counties are receiving every day for frivolous projects in light our staggering debt?
  • Why is military pay so pathetic?
  • How can we expect citizens to make good financial and voting decisions, and contribute to our national standard of living, when our K-12 schools provide no economic education?
  • Why aren’t airplanes boarded in order by window seat, middle seat, and then aisle seat?
  • Why do liberals think it is abusive to expect women to buy their own birth control, but are okay with genital mutilation, oppression, and murder of women by Muslims?
  • Why don’t senators let our military close and sell base properties that they don’t need or want?
  • Why does the Obama administration consider a couple who makes $250k per year “rich”, yet an individual is not rich until he or she earns $200k per year?  (Fewer couples are married now anyway – shouldn’t single “rich” be “$125k?  Or shouldn’t married “rich” be $400k?)
  • Why does the federal reserve think that keeping interest rates near zero is a good thing?  Should people be punished for saving money?
  • Why are we concerned about minor skirmishes in the Middle East but we ignore deaths by the thousands in neighboring Mexico?
  • Why do liberals have no problem with actors and athletes making millions of dollars, but are indignant when a business owner or executive does?
  • If liberal rich guys think they should pay more taxes, why don’t they just write a check?
  • After labeling the Bush tax cuts as “only for the rich” for all these years, why do liberals now insist on keeping the Bush tax cuts mostly in place?  Are they admitting that the evil tax cuts helped everybody?
  • What is the benefit to the United States of giving more F-16 fighter jets to the Muslim Brotherhood in Egypt?

Just askin’.

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side

I’d like to know,
Can you tell me — please don’t tell me
It really doesn’t matter anyhow

Questions 67 and 68 – Chicago

Shrinkage: Our Embarrassingly Tiny Attention Span

Posted on by Standard 4

Have you heard anything lately about the September 11 debacle in Benghazi?  Me either.

In the weeks before the election, Obama and Clinton told us repeatedly that they would have to complete an investigation before they could explain why they lied repeatedly about the attack and the American deaths. benghazi_attack_us_politics_2012_09_12

Did they ever complete the investigation?  Is there an investigation?  Would they reveal what was learned if there actually was an investigation?

Maybe citizens think that Obama won, so there’s no point investigating any further, or even discussing what has been uncovered.  Congressmen Issa and Chaffetz appeared to be very interested in getting to the bottom of the disaster.  What happened?

Certainly the mainstream media will not besmirch their anointed ones.   In the absence of any news, we Americans will either assume the matter has been satisfactorily resolved, or will forget it ever happened, our tiny attention spans distracted by the latest “crisis dujour”.   The story would be buried forever but for reporting by bulldog conservative blogs such as Brietbart.com.

Here is a great synopsis and reminder of the severity and importance of the Benghazi story, and the cold-blooded complicity of our administration:

Let’s not let this important story, or the memory of Christopher Stevens, Sean Smith, Glen Doherty, and Tyrone Woods, fall victim to attention span shrinkage.

Thanks to EG Pettis

Tom Balek – Rockin On the Right Side

Rockin' On the Right Side

Ba de ya, say do you remember
Ba de ya, dancing in September
Ba de ya, never was a cloudy day

September – Earth Wind and Fire

We Were Takin’ Care of Business

Posted on by Standard Reply

beatrice_memorialI spent a good part of my early career working for one of America’s greatest businesses – Beatrice Companies.  For most of us in Montana and the western U.S., the face of Beatrice was Meadow Gold Dairies.   While the Meadow Gold brand still exists in some areas, Beatrice is long gone.

The Beatrice story is classic, from its birth in 1894 as a small creamery in Beatrice, Nebraska, to its zenith in the 1980s as a huge multinational corporation encompassing companies and brands such as Avis, Playtex, Culligan, Tropicana, Airstream, Peter Pan, and many other household names.  The company’s ultimate demise was rapid, and the cause has always been pretty much a secret.

A Beatrice manager with a stellar record became CEO in 1980.  According to my very reliable sources at the corporate office in Chicago, he became mentally unstable shortly after taking the reins, and the rock-solid management corp at the top crumbled rapidly.  His actions were erratic, his decisions bizarre – certainly not consistent with the buttoned-down, well-disciplined playbook that had worked so well for almost a century, or with his own management record.  The company’s consistent growth and profits began to wane, and in 1986 Beatrice was acquired in a hostile takeover.   In a leveraged buyout funded by the sale of “junk bonds”, it was split up and sold, and the over-funded defined benefit plans were plundered.  I left the company just as the final axe fell.

There are many life lessons to be learned from the Beatrice saga.  The Beatrice business methods and philosophy were “old school” and tremendously effective.   Every Beatrice manager learned:

  • Hire good people, and treat them well.   Allow them to share in the success.  They will be loyal, responsible, and productive.
  • Promote and move your managers between locations.  They will take the best attributes of their previous company and add them to the strengths of their new company.
  • There are no short cuts.   The details of the business are where the money is made.
  • Accounting and controls are vital.  Count everything.  Never allow an opportunity for someone to get in trouble.
  • Quality is never sacrificed, but the path to profitability is to be the low-cost producer.
  • Competition is a good thing – it allows those who work the hardest to succeed.  And profit is the result of planning and hard work, not luck.

Using these guiding principles, the company grew and thrived.  We were always challenged to improve performance, and were rewarded when we did.  The lessons I learned from Beatrice served me well for the rest of my business career.

In today’s dismal economic environment, when we all question whether our nation’s best days are behind us, I take comfort in my memories of Beatrice Companies.  Profit is not evil, it is the life blood of our economy, and the source of wealth.  The “old school” business formula worked – for employees, for employers, and for the nation.  It will still work, if we don’t screw it up by throwing roadblocks in the way.

Tom Balek – Rockin’ On the Right Side

Rockin' On the Right Side
And we’ve been takin’ care of business, every day!
Takin’ care of business, every way.
We’ve been takin’ care of business – it’s all mine!
Takin’ care of business, workin’ overtime.

Takin’ Care of Business – Bachman Turner Overdrive