Whose Bomb Will Explode First? North Korea? Iran? or The Fed?

Posted on September 23, 2013 by Tom Balek Standard Reply

atomic bomb Everybody is worried about THE BOMB. Will Iran build one? Does North Korea have one?

I’m more concerned that our economy will be blown to Smithereens first by the misguided Keynesian policies of our own Federal Reserve.

Ask any ten people you meet: What is the Federal Reserve? Who owns it? What do you know about the Fed’s power, policies, politics, leaders, and motives?

If you know anything at all about the Fed, you are a rare American, indeed. Although the Fed controls the value of our money and indirectly manages the economy of the United States and its 300 million citizens, most of us have no clue what it’s about. Since the Fed’s creation 100 years ago we have blindly trusted this mysterious organization with our hard-earned wealth and that of future generations.

Is it a government agency? Well, not exactly. It isn’t owned by the government. It was created by the Federal Reserve Act of 1913 and signed into law by the most progressive president in our history, Woodrow Wilson – Democrat, racist, proponent of eugenics, and enemy of the constitution. The Fed’s leadership is appointed by the sitting U.S. president, and its actions are supposedly under Congressional “oversight”, although it claims total independence from political influence.

The assets of the Fed come from privately-owned banks who allocate a portion of their depositors’ funds to the central bank. Do these private bankers own the Fed? Again, not exactly. But they are getting a pretty good deal out of the “partnership.”

The U.S. Government receives all of the system’s annual profits, after a statutory dividend of 6% on member banks’ capital investment is paid.

That 6.00% statutory dividend paid to the banks sure beats the heck out of the 0.05% interest you are receiving from your savings account. Meanwhile, the big banks use your deposits to buy risky derivatives and stocks, knowing that the government will be right there to bail them out with your tax money if their gambles don’t pay off. Not a bad gig.

For years the Fed has been “printing money”. While they aren’t actually cranking out dollar bills with a printing press, they have been regularly expanding the money supply by buying treasury and mortgage bonds with “credit” – a practice called quantitative easing. When the money supply (dollars) expands for no reason (no real wealth has been created) it obviously decreases the value of every other dollar that exists. The price of everything goes up. It’s called inflation.

At the same time the Fed holds interest rates to near-zero for years in the hope that it will spur economic activity. This misguided policy has had the opposite effect, as banks fear making long-term loans in what will surely be an extended period of ugly inflation.

So congratulations for working hard, earning money and saving it. You are not only receiving zero interest, but the dollars you have in the bank are worth less every day. And while the value of your dollar plummets, so does real family income and employment.

And who benefits from the policies of the Feds? It seems the big banks are doing fine. Fed Chairman Ben Bernanke announced last week that the Fed will continue to “print” $85 billion a month. That means the banks will buy more stocks and derivatives with wealth squeezed from your saved dollars, and the government will pay more entitlements in lieu of wages derived from earned profits. It’s clear to me that the Fed exists to protect the bankers, and lately that has been at the expense of the citizens and taxpayers.

I don’t know if Iran has the brainpower or the money to build a nuclear bomb. And I guess I’ll just trust Dennis Rodman to take care of the situation in North Korea. But if we don’t get the Fed under control soon, the Dollar Bubble is going to blow up, and it won’t be fun.

Tom Balek – Rockin’ On the Right Side

You turned me out, you turned me on
And then you dropped me to the ground
You dropped a bomb on me.

You Dropped A Bomb On Me – Gap Band

Aaron Rogers Cost Wisconsin 184,000 Jobs

Posted on September 8, 2013 by Tom Balek Standard 3

Aaron Rodgers_ Many people are demanding that the minimum wage be raised to $15 an hour. They complain that some people make too much money, and that’s why poor people earn so little.

You see, liberals believe that wealth is a zero-sum game. If one person gets more, another gets less. They think that raising the minimum wage would transfer wealth from the owner of a business, or its high-paid employees, to the poor, hard working lower-paid people. Simple.

My fantasy football team got clobbered this weekend. It didn’t help that my opponent’s quarterback, Peyton Manning, scored 7 touchdowns and passed for 462 yards . . . but anyway, some of my players’ terrible performances made me wonder how much they earn per hour, compared to their teammates.

My starting tight end, Anthony Fasano, makes $1.2 million per year. That places him somewhere in the middle of the expense report for the Kansas City Chiefs. At the top of the Chiefs report is Tamba Hali, a defensive lineman who makes over $12 million per year.

Fasano had a pretty disappointing opening week, catching only two passes for 8 yards in the first game of the season. He doesn’t block much, so his value is based on his catches. My simple math (not the way it is taught in our government schools today) works like this: $1.2 million divided by 16 one-hour games per season is $75,000 per hour. Now I know, Anthony is working at practice, and in the off-season, and during time-outs too. But let’s face it, his value to his employer is only the 60 minutes he is on the clock on Sunday.

If Fasano is making $75,000 per hour, no wonder the kids at the car wash only make $7.50! Just think, if Fasano didn’t play football, they could divvy up his paycheck!

But darn, business is so complicated. Fasano was paid one-tenth as much as Chiefs lineman Tamba Hali. Hali didn’t gain any yards – he is a defensive player. Still, he got a couple of tackles and returned an interception for a touchdown. He anchored the defense, who shut down the Jacksonville offense, leading to an easy win. How do we compare Hali’s worth to Fasano’s? They both worked an hour.

My fantasy team quarterback, Aaron Rogers, is the highest paid player in the NFL, at $22 million per year (not quite up to Madonna’s pay rate, she earned $125 million). Using the simple (non-Common Core) math, that’s about $1,375,000 per hour. Just think, if the Packers owners – who are mostly season-ticket holders – let Aaron go tomorrow, they could hire 184,000 guys for each of their eight home games at $15 per hour to sell hot dogs at Lambeau Field!

But wait a minute . . . if Aaron was not playing, who would be there to buy all those hot dogs? Maybe it doesn’t matter if the Packers win, or if there is a game at all . . . People will just go to Lambeau and buy hot dogs from the 184,000 hot dog guys anyway, right? (hmm, we might need a bigger stadium to hold all of those hot dog guys . . . )

It just seems really unfair that Rogers makes $1.4 million per hour, and the hot dog sellers only earn $7.50. So, I guess let’s just pay Aaron $15 an hour and then we can hire 184,000 hot dog sellers at $15 an hour and that will even help reduce our high rate of unemployment. That’s fairness, and unemployment problem solved!

I think?

Tom Balek – Rockin’ On the Right Side

It seems to me
I could live my life
A lot better than I think I am
I guess that’s why they call me
They call me the working man

Workin’ Man – Rush

Here’s a different and really cool version of a classic – by one of the hardest working live performing bands in history – RUSH: Workin’ Man!

The Political Winds Are Changing

Posted on September 5, 2013 by Tom Balek Standard 1

CONSERVATIVE GOOD NEWS HEADLINES TODAY

“SENATORS CHALLENGE KERRY’S SYRIA CLAIMS – (McClatchy Washington Bureau) – Senators from both parties pressed President Barack Obama’s top Cabinet offices Tuesday to provide guarantees that no U.S. troops would be sent to Syria . . . ” We can’t afford any more lame attempts at nation-building or world-policing. Let’s build some infrastructure here instead of in the Middle East for a change.

“NC HOUSE VOTES TO OVERRIDE 2 VETOES BY MCCRORY – Charlotte Observer – The (NC) state House on Tuesday took little more than half an hour to override the governor’s vetoes of two bills, on immigration and drug-testing welfare recipients . . . The votes marked the first split between Republican lawmakers, who control the General Assembly with a veto-proof majority, and the new governor of the same party.” Isn’t it refreshing that Republicans are beginning to self-police? Those whose main interest is re-election must be replaced or overruled by elected officials who stand on conservative principles.

“CITY’S STREETCAR MISSES GRANT, SUFFERS SETBACK – Charlotte Observer – “. . . the city would use $63 million in reserve funds and also apply for a $63 million federal TIGER grant.” These federal grants are so out of control – why should taxpayers in Billings pay for a boondoggle streetcar project in Charlotte? Or vice-versa? Grant money does not grow on trees – it comes out of family budgets.

Last weekend I attended the “Saving the American Dream Summit” in Orlando, where two potential Republican contenders for the 2016 presidential race learned that the Republican “base” has turned resolutely to the right. Sen. Marco Rubio was met with a strident chorus of “No Amnesty!” calls throughout his speech, and the large crowd erupted into applause when Gov. Rick Scott was admonished to “Stop Common Core”.

I sense a definite turn in the political winds, as lately we see incumbent liberals deflecting scandals and questions about their motives, and squishy Republicans facing a recharged constituency that demands adherence to true conservative principles.

Tom Balek – Rockin’ On the Right Side

The wind of change
Blows straight into the face of time
Like a storm wind that will ring
The freedom bell for peace of mind

The Wind of Change – the Scorpions

Government Employees: Join Us Conservatives!

Posted on August 25, 2013 by Tom Balek Standard 1

This message is for government employees.

I know most of you are thoughtful people who care about your families and their futures. You want our nation to be a better place for your children and grandchildren, and you want to be justifiably proud of our nation again.

As our economy has deteriorated, you have been increasingly cursed by conservatives. You may feel isolated and threatened. Since your paycheck comes from the taxpayers you can’t respond in public to the punches thrown your way.

It’s time for us to have a little talk – please stick with me to the end of this post.

I am a fiscal conservative. No shame, no hesitancy, no reservations. Our federal government, and many state and local governments, have been spending a lot more money than they have taken in for a long time, and this can not continue without devastating results. I know you understand this basic fact of life. At $17 trillion dollars and growing, our national debt is epic.

Still, there are grown adults who will not admit that we can not consume more than we produce. I doubt that the “grasshopper and ant” story is still shared with elementary students, but its lesson about industry and thrift, and the importance of saving for the future is no less true today than it was when our great-grandparents learned it.

A few selfish Americans only want to take, and never give. Aside from that, the only justification I have heard for government overspending is a misguided belief in Keynesian economics. It has never worked in the long-term, and we are living the proof of that right now. We are at the end of the line.

Liberals (and especially the corrupt mainstream media) continue to paint conservatives as stingy, cold-hearted, wild-eyed wing-nuts who don’t care about underdogs. Nothing could be further from the truth. Most of us are, or were, underdogs. Conservatives want a better world for all, and have learned from history what makes that happen. We know that nothing in life worth having is free.

Because I am a critic of government overspending, and because most tax dollars go to salaries, I complain a lot – and loudly – about government employees. Let me clarify that.

I don’t hate government employees. The people, I mean. You are American citizens who raise your families, support churches and charities, go to work and do your best. Many of you are extraordinarily brave, intelligent, and productive. Many of you are consummate patriots and put up with a lot of nonsense that most of us would not tolerate.

The problem is our government has outgrown our ability to control it. There are too many government jobs, many involving work that the framers of our constitution never intended. Some programs are obsolete, redundant, frivolous, or over-reaching.

Honestly, some government employees have little or nothing constructive to do – not because they are lazy, but because the “system” in which they operate has become dysfunctional. Corruption in government has grown to epidemic proportions due to the high cost of getting elected, and the profit potential. As a result, you government employees are forced to do things that you know are not right, and there are some bad actors in lead positions of your agencies and departments. Also, some of you have been steered by corrupt union leadership that does not always operate in your best interests.

Lately I am hearing from more and more of you honest, concerned government employees who “get it”. You understand the true state of the union and the extent of the danger, but you may feel you can’t stand up and speak out against the excesses and failures of your employer.

I’m here to wish you courage and strength, and invite you to the “Right Side”. Please join us. You can be a major contributor to restoring the fiscal integrity of our great nation. Support your conservative friends and neighbors. Teach your children. Do what you can to cut waste and corruption. It’s your home too, and your family’s future is much brighter in a free, strong and prosperous economy than in a corrupt, state-controlled society where the top priority is a perceived “fairness” that will ultimately require everyone to be equally miserable.

Tom Balek – Rockin’ On the Right Side

People, when things go wrong, as they sometimes will
And the road you travel, it stays all uphill
Let’s work together
Come on, come on, let’s work together
You know together we will stand
Every boy, girl, woman and man

Let’s Work Together – Canned Heat

Rep. Pittenger (R-NC) Throws In the ObamaCare Towel

Posted on August 21, 2013 by Tom Balek Standard 3

To his credit, US House Rep. Robert Pittenger (R-NC) is facing his constituents at a half-dozen town hall meetings this month while most of his counterparts in Congress are on vacation, stoking barbecues and fishing. I attended one of his meetings at the Mathews Town Hall this evening, and understood why most legislators are spending the month out of the public eye.

Pittenger was braced for confrontation even before the event began. He had prepared a brief two-part introduction: 1) he demanded that the audience be “civil”, and 2) he only wanted to spend a minute or so on any given topic. Pittenger knew there was one question burning in the minds of most attendees, and he knew his position was not popular with the group, which I would characterize as two-thirds Tea Party and Conservatives, and one-third Democrats and moderate Republicans.

The first volley was predictable, in light of earlier criticism leveled at the Congressman: “Will you vote for a House bill that funds the entire requested appropriation only if ObamaCare is defunded?” As the crowd roared its approval, Pittenger dismissed the issue with a wave of his hand. “No,” was the answer. “The political reality is that such a bill can’t be passed.”

“I voted against funding ObamaCare 15 times,” he repeated several times during the discourse. Critics noted that it is easy to vote for no-risk bills that clearly will not pass the Senate or be signed by the President, but much harder to take a principled stand that could result in shutting down the government.

He repeatedly called out critics with the line, “Do you really want to stop the paychecks of our soldiers in Afghanistan?” He did not ask if the group would mind emptying some desks in the nation’s capital, or cutting back on any of the numerous corrupt, obsolete, frivolous and costly federal programs.

Pittenger insisted that there is no chance to get such a bill through the Senate and the President, despite protests from the audience that it would be the Democrats who be risking public condemnation for “shutting down the government.” Several conservatives in the audience chided Pittenger for lack of courage. “We weren’t expected to win the Revolutionary War either,” said one. “But we kept fighting.”

Pittenger urged the group to support Republican candidates, instead of “standing around and beating your chests”. He exhorted them to express their frustrations to Senate Majority Leader Harry Reid, rather than to him. And he defended his conservative voting record, citing a 100% rating from the Heritage Action Scorecard so far this year.

Congressman Pittenger is opposed to Common Core and insists on securing the borders before considering any amnesty for illegal immigrants. He smacked all of the conservative fastballs thrown his way out of the park. Except one. And that one left conservatives filing out of the Mathews Town Hall shaking their heads.

Tom Balek – Rockin’ On the Right Side

So let’s leave it alone,
‘Cause we can’t see eye to eye.
There ain’t no good guys,
There ain’t no bad guys.
There’s only you and me and we just disagree.

We Just Disagree – Dave Mason

Got My Free Obama Phone Today!

Posted on August 18, 2013 by Tom Balek Standard 10

Tom Obama Phone A couple of weeks ago I reported to you Rockers on the Right Side that I was applying for a free Obama Phone. It came in the mail yesterday!

I ordered the free cell phone to make a point. Well, maybe several points.

Our Federal Government is out of control. Somebody please show me where in the Constitution it says the federal government must confiscate money from some people and use it to buy gadgets for other people?

What about our $17 trillion debt? How can we afford $2.4 billion for free cell phones and cellular service? Even while liberals wail that there are starving children all over the country? (the food stamp kids I see are pretty chunky)

Free market, my ass! I’m sure glad I don’t own a cell phone company, having to compete with my own government giving merchandise away. Well, unless I could be the one getting the $2.4 billion, I guess.

This program has nothing to do with helping the “needy”. It is just one more example of pandering for votes by elected officials — with our money!

The feds can’t get anything right. Although there are guidelines, I have proved that anybody who asks for a free Obama Phone can get one. I am not needy, I do not even remotely qualify to receive one, and my application was absolutely truthful. I didn’t even vote for Obama. But “hoop, there it is!” And we are supposed to trust these people to take over operation of the entire health care industry?

If your hair isn’t on fire yet, watch this video by Project Veritas:

Oh well, it’s only $2.4 billion. Not enough money to get the attention of, say, CNN or MSNBC. Or apparently our legislators in Washington, DC.

Next time you pay your cell phone bill, and cuss about those mysterious additional charges, maybe you want to give your senator or congressman a call. Or you can call me, any time. On my Obama Phone!

Tom Balek – Rockin’ On the Right Side

Call me! On the line!
You can call me, call me any time.
Call me! I’ll arrive
You can call me any day or night.
Call me!

Call Me – Blondie

Old rockers never die! Blondie wows a huge audience at Rotterdam, 1997.

ps – I don’t intend to use this phone and abuse you taxpayers / cell phone users. I just ordered it to prove that they are giving them out to anybody who asks without any scrutiny.

Montanans Used To Tell “North Dakota Jokes”

Posted on August 12, 2013 by Tom Balek Standard Reply

In the 1970s we Montanans thought we had it going on, and we snickered about our poor sister state to the east. The “North Dakota Joke” was all the rage back then, and we regaled each other with the latest North Dakota Jokes every morning over coffee. (Did you hear about the power outage at the University of North Dakota library? Thirty students were stuck on the escalator for three hours!)

A Great Falls radio jock made the North Dakota joke a staple of his programming and the focal point of his entertainment career. He even published books of North Dakota jokes. I still have one buried somewhere in my stuff. They were the same old jokes that have mocked every sub-group (Polish, Hillbilly, Ole and Lena, etc.) for generations, except now recycled with “North Dakotan” as the subject of derision.

Times have changed. North Dakota now occupies the top rung of the economic ladder, and Montana lags in the bottom quartile. How did that happen? Montana is richer in natural resources, with abundant coal, agricultural land, timber forests, mining, and tourist attractions.

All North Dakota has is some fertile black soil here and there, lots of snow, and the Bakken shale oil and natural gas reserve. But the Bakken extends into eastern Montana, too. And Montana has other proven reserves of shale oil and natural gas. So one still must ask, why is North Dakota doing so well while Montana looks wistfully over the fence?

I have a friend from my adopted Montana hometown who is not well-educated, but is good with his hands and industrious. He is a good mechanic, can weld, and is strong as an ox. But even these attributes are not enough to make a good living for his young family, so like many of his fellow Montanans, he is headed east for work. He said:

“I can make $12,000 a month in North Dakota, with no expenses. Room and board are provided in a man-camp, I work 28 days on and then get 14 days off. Pretty long days, but I get paid weekly and get a bonus just for showing up.”

The difference between the two states? Many would say it comes down to conservative values, work ethic, and plain-old common sense.

Montana changed dramatically over the 23 years from when I left the state for a corporate career to when I came back home to recharge in the beauty and character of the Big Sky. It was a place where miners, loggers, and ranchers worked hard and played hard. They loved the land and put it to good use. An honest, fiercely independent bunch, they had little use for government interference, preferring to solve problems and seize opportunities on their own.

When I returned, some of those people were still here. But I was astonished at the numbers and political reach of environmentalists, government bureaucrats, and zealous newcomers who wanted to recreate our state in the socially-conscious image of California or Washington. “Diversity” and “sustainability” were now the order of the day. As the federal government took a firmer grip on the administration of the state, as outside influence without benefit of Montana history and values grew, and as priorities shifted from creation of wealth to redistribution of it, Montana’s economy slid downhill like springtime snow in the high peaks.

Meanwhile, North Dakota just kept chugging along, taking care of its own and eschewing federal influence and controls. When opportunity arose, North Dakotans seized the day. “We’re very old-school pro-business here,” said Vicky Steiner, a Republican state representative who serves as executive director of the North Dakota Association of Oil and Gas Producing Counties. “In some states, people say ‘not in my back yard.’ Here, we believe that our resources should be developed.”

The political conflict in Montana continues, and the Big Sky state will take center stage in the 2014 federal elections. The Obama administration is adamantly opposed to fossil fuel development, and virtually all Democrat officials – state and federal – tend to fall in lock-step. Drilling, fracking, and pipelines are under assault. The leftward lurch in Montana has been not economically favorable over the last few decades, and it remains to be seen if Montanans will stop or reverse the trend.

If not, we may soon be hearing “Montana Jokes” on a Bismarck radio station.

Tom Balek – Rockin’ On the Right Side

Don’t think I’m being funny when I say
You got just what you deserve
I can’t help feeling you found out today
You thought you were too good you had a lot of nerve

Laugh, Laugh – the Beau Brummels

Here’s a very short video of a very solid Bay-Area band from the mid-sixties. Enjoy!

Obama and the Big Piggies

Posted on August 7, 2013 by Tom Balek Standard Reply

pigs_trough Yesterday President Obama made a speech denouncing Fannie Mae and Freddie Mac:

“For too long, these companies were allowed to make huge profits buying mortgages,” Obama said Tuesday, “knowing that if their bets went bad, taxpayers would be left holding the bag . . . It was ‘heads we win, tails you lose.’ And it was wrong.”

Yes, Mr. President, you’re damned right it was wrong.

In 2008 you were at the head of the Freddie/Fannie trough, sucking in a cool $165,000 for your campaign. In ten years Fannie Mae slopped over $100 million into that trough, quickly gobbled up by corrupt Democrats and Republicans alike. Nobody wanted to blow the whistle, for fear of losing their place at the trough. “Fannie and Freddie had Congress wrapped around their fingers,” said Guy Cecala, CEO of Inside Mortgage Finance, which publishes trade publications following the mortgage market. “They were untouchable.” (CNN-Money)

The top officials of Freddie / Fannie were caught cooking the books, and to this day the taxpayers are still footing their legal bills. Meanwhile Fannie’s biggest piggie, James Johnson, took in a cool $100 million in wages over nine years; ridiculous salaries and bonuses flowed throughout both organizations.

Ten years ago the Bush Administration, seeing the looming disaster, tried to step up the oversight and get Freddie and Fannie under control, but failed as Barney Frank and virtually every other pig at the trough circled the wagons to protect their interests. The Obama administration was sued by Judicial Watch in 2009 for access to records which would prove Congress did nothing for years, even while knowing the extent of the corruption.

The pig sty stench came to a crescendo when the taxpayers were forced to refill the trough with a $200 billion bailout, and that doesn’t begin to contemplate the liabilities still on the Freddie/Fannie books, which the Congressional Research Service estimated at $4 to $5 trillion dollars a couple of years ago.

So, President Obama, and all you other pigs who have gorged at the taxpayer-funded trough for all these years – DON’T YOU DARE act sanctimonious about finally taking baby steps to clean up your stinking pig sty. You should all be ashamed.

Tom Balek – Rockin’ On the Right Side

In their styes with all their backing,
They don’t care what goes on around.
In their eyes there’s something lacking,
What they need’s a damned good whacking!

Piggies – the Beatles

I Ordered My Free Obama Phone Today!

Posted on August 2, 2013 by Tom Balek Standard 5

cell_phones Update 8/7/13: Some of you are wondering how I ordered my Obama Phone when Assurance Wireless does not offer the program in Montana. I am currently in North Carolina, but I still have a home in Montana. I ordered my Obama Phone from Charlotte – I’ll let you know when/if I receive it. By the way, I ordered this just to prove a point, not to take advantage of you taxpayers!

Why are you paying for a cell phone? Don’t you know that you can get as many cell phones as you want, for free?

Of course we all know that nothing is really free, somebody has to pay for everything, but hey — my friend Barack was re-elected in 2012 because he says it doesn’t matter how much our government spends. Most Republicans are hiding under their desks in Washington, DC, so it is pretty clear that what we buy or how much debt we have doesn’t matter. Our buds at the IRS can just tax other people some more, and if we run out we’ll have our friends at the Fed print as much money as we need, right? Free is good! Get what you can! We’re all Democrats now!

Jillian Kay Melchior of the National Review heard that people in her city routinely obtain for free — and then sell — dozens of “Obama Phones”, courtesy of the taxpayers. She set out to see if it is really that easy to get free Obama Phones. Jillian learned that under Obama’s “Lifeline” program, pretty much anybody who signs up can receive one or more free Obama Phones from one or more cell phone vendors who aggressively seek out participants. There is little, if any, verification of eligibility. Commissioned phone salesmen give away as many as possible and the taxpayers pick up the tab. Jillian got three free Obama Phones without even really trying.

So this morning I web-searched “Obama Phone”, and here is the number one listing:

ObamaPhone

I filled out the Assurance Wireless on-line application, providing my name and address, and indicating that I would prefer to communicate in English rather than Spanish. I checked a couple of boxes, answering with complete honesty, and then printed and mailed my application. Can’t wait to get my new free Obama Phone, along with 250 minutes and 250 text messages per month, forever! What a deal! It should be here in a week or so, I’ll give you a call when I get it.

I do feel a little bit guilty, knowing that you taxpayers will pay over $2.4 billion for phones for me and Barack’s other friends this year. You know, I still get an e-mail from Barack or someone in his office every day asking for $5. Here’s the one I got today:

Obama Letter

I should probably send Barack a five-spot today, as a thank-you for the cool phone. Happy Birthday, buddy! What a guy. Why would I vote for anyone else?

Tom Balek – Rockin’ On the Right Side

No more lonely nights
Will you be alone
All you got to do is
Pick up your telephone
And dial, now
634-5789 (What’s my number)

634-5789 – the Blues Brothers

Detroit Autopsy – Defined Benefits, Union Paybacks

Posted on July 22, 2013 by Tom Balek Standard 6

Back in the 1980s I was CFO for a family-owned chain of lumber yards and home centers. The company had grown to about 300 employees, and was making the transition from a small, easy-going operation to a more fast-paced, modern corporation.

Like most companies of that age and size, mine provided its employees a defined-benefit pension plan. A defined-benefit plan is one in which employees are guaranteed a specific monthly check at retirement.

There were several problems inherent in these defined benefit plans. The amount received by the employee after decades of service was actually pretty minimal. The insurance companies who ran the plans quietly took a huge slice of the pie for their participation, and paid minimal interest on the funds they held. If an employee changed jobs before he was fully “vested”, he lost most, if not all, of his pension. And many of these plans were “overfunded”, meaning the company had paid more money into the plan than the employees would ever be able to receive – this cash should be used by the company for some purpose other than making the insurance company richer.

We made the decision to terminate our defined pension plan and convert to a new 401(k) defined contribution plan, which had just been authorized by Congress. Employees were encouraged to save some money, tax deferred, from every check, and the company generously matched the employee’s contribution. Employees chose how they wanted to invest their savings, and in no time we all had considerable accounts to look forward to in retirement, which we could take with us if we changed jobs.

The difference between “defined benefit”, which promises security but not prosperity, and “defined contribution”, which offers rewards based on saving and investing, is the difference between “communism” and “capitalism”.

And it is what killed Detroit. It will kill more cities and states, and perhaps our nation, if we don’t learn this difference and take action now.

Our government union employees are about the only workers left in our country who are promised a guaranteed, and in most cases very lucrative, income at retirement. Virtually no businesses operate this way. Our government officials have promised their union employees a great deal more money than they can extract from the taxpayers. The result is economic disaster.

Maelstrom_of_Money How did this happen? Simple. Elected officials control the compensation paid to their union employees as well as the revenues extracted from taxpayers. Union employees promise to help (with cash and labor) elect the politician. When elected, the politician pays the union back with higher compensation, using money that is extracted from the taxpayers. It goes around and around until the government is broke.

We must guard against government growth with every breath. The framers of our constitution were trying to create a system that would not be subject to the corruption that has eventually destroyed every government in history. Government must be restricted to only strictly necessary spending, according to the constitution, and let the miracle of free-market economics build our wealth and improve the standard of living for all.

The only way out is to elect officials who will eliminate government employee unions, and stop the unholy cycle of pay-backs. Government employees should be compensated fairly based on actual performance, and compete for their jobs, just as employees in the private sector do.

Before you vote for any elected official, ask him or her for a statement of position on government employee unions.

Tom Balek – Rockin’ On the Right Side

Too many people need me
I’ve got so much, so much to do
But when my traveling is over
I’ll pay you back with interest
I’ll pay you back with interest

Pay You Back With Interest – the Hollies