This & That
Today, for the first time in years, I helped host a garage sale.  We raked in the big bucks!  Over $300!!  What amazed me was the quantity of items for sale.  I would likely have as many or more items to sell if I were to sell my stuff the way my wife did.  Truly, one person's trash is another person's treasure.  Lots of people got lots of bargains today and we sold off a number of items we no longer needed.

Afterwards, I came home and watched college football (and napped!).  I love college football, but I found it interesting to compare the two best conferences, the SEC and the Big 12.  The SEC is a better conference, playing higher quality football, particularly on defense.  But, the Big 12 sure is entertaining!  I'm watching West Virginia-Texas, and it is a high scoring shootout!  Meanwhile, I was deeply impressed by both defenses (especially Florida's) in the Gators' 14-6 win over LSU.   Big 12 definitely has better offenses, but the SEC clearly has better defenses.  I do not think I will see any SEC teams score 63 points in a conference game and lose.

Debate Chatter
Most pundits called it for Romney, and it is easy to see why.  While I thought Obama factually made his points, but there is no question Romney spoke with more passion and authority.  And this is what made the difference.  I figure both candidates lied equally, and both candidates made good points.  In the end, it probably didn't make any difference in the outcome of the election

Jobs, Jobs, Jobs
The good news is that 114,000 jobs were created and the unemployment rate fell to 7.8%.  However, the data in this report was strange to say the least.  Do I think there was some kind of conspiracy theory?  No.  The same people who are crying conspiracy are the same ones who were thrilled with last month's report.  I thought this article in Fortune really did the best job of explaining the strange data.  Likely just evening out of some seasonal data.  What we ultimately find is that the economy is still sluggish, growing slowly.  I do not see this report as a game changer.


I Want My Money
How would you like to be this guy?  He wins 7.3 million GBP at London's oldest casino and now they will not pay him.  I would want my money! 

Until next time...

The Need for Balance

"A word to the wise isn't necessary, it's the stupid ones that need the advice." - Bill Cosby

It Is All About Balance

In light of Mitt Romney's "47 percent" comments last week, was thinking about all the ways I have depended on the government in my life.  First, I received a public school education through high school, courtesy of the taxpayers.  Second, I have received Social Security survivor benefits for the past 13 years, courtesy of the American taxpayer.  Of course, I have also received other benefits such as roads (some obviously better than others!), national defense and others that I cannot think of at this moment.  And I am one of the 53% of income tax filers that pays an income tax.  It is not just the 47% of filers that do not pay taxes that are dependent upon the taxpayer.

Surely, we do need a safety net for the most unfortunate in our society.  However, there is a balance to all things.  President Obama says we need to strengthen the middle class.  I agree with this statement.  We create a stronger middle class by creating a favorable business environment, so that employers will be inclined to hire more workers.  We need a strong private sector that creates wealth so that we can provide for the "47 percent" and more.  We need a strong private sector that incentivizes innovation and entrepreneurship.  Business start-ups have fallen dramatically in the last five years, and this needs to change.

Breaking down the economy to its most basic element, nothing happens in our economy until someone sells something to someone else.  Until something gets sold to someone else, there is no revenue out of which to pay an employee (who then pays his/her own income tax), a supplier or to pay for basic business services.  Until something gets sold to someone else there is no profit to tax for streets, roads, bridges, police and fire protection.  And this all emanates from the private sector.  Yes, we need to provide for the "47 percent", but we must also have a strong private sector, one with a favorable business environment. 

As an aside, my guess is that many of the "1%" have no problem paying a higher tax.  It is those that aspire to the 1% that are most likely to oppose it, since their growth opportunities are the ones most likely to get shut down.  Just an educated guess.

Washington DC versus United States?

Interesting article from Ross Douthat from the New York Times asking if it is good for the rest of us when Washington DC booms.  Washington has had quite the boom in the last 10 years, thanks largely to a larger government complete with the army of lobbyists and other sharks that come with it.  Seven of the ten richest counties in the country now surround DC, according to this article.  This article is a good read.

Jobs, Jobs, Jobs

Last week I saw a commercial for Barack Obama that touts the 4.6 million private sector jobs created over the past 30 months.  The number is factually correct and it is definitely a good thing.  So, why does this still feel like a recession?  Total employment is still 3 million below the employment peak in December 2007.  Incomes have fallen by over $4,000 per household since then.  Much of the job loss occurred on George Bush's watch (I would blame much of the first year of Obama's presidency on Bush).  But overall job creation remains weak.  To put some perspective on this, in 1984, President Reagan stood before the Republican Convention and bragged about his policies had created 6.5 million private sector jobs in the previous 19 months.  With an employment base that was 40% smaller than today's employment base (85 million versus 140 million).  If you applied Reagan's results to today's economy (controlling for the size of the employment base and the amount of time), we would be talking about 16 million new private sector jobs in the last 30 months, not 4.6 million.  Just something to think about.

Football Results

Overall, not bad.  I called Kansas, Kansas State, and the Kansas City Chiefs.  I whiffed on Missouri, California and Michigan.  Maybe I should stick to the local teams!

Until next time...take care!

Redistribution, Apple and more...

Lessons on Redistribution

 

"If you give the employer the freedom to fire his workers, chances are he will hire more of them.  If a government subsidizes something, chances are you will get more of it than you ever counted on."

Dr. Edward Yardeni, President, Yardeni Research

I remember this quote above from a luncheon I attended sometime in the mid 1990's that was hosted by Dr. Yardeni.  I have always remembered, likely due to its simplicity, and also because of the profound truths that lie behind the quote.  I was reminded of this again as news headlines announced a video had been found in which President Obama, back in 1998, announced that he "believed in redistrubution."  Redistrubtion of wealth sounds great in theory.  Take excess wealth from those who do not need it, and use it to lift the fortunes of those who are trapped in poverty.  I only have a minor quibble with redistribution of wealth:  It does not work.  A terrific analysis on the actual consequences of redistribution came out earlier this week from Thomas Sowell.  I thought of the Dr. Yardeni's quote, because redistribution of wealth is actually subsidizing poverty.  If the government ever subsidizes poverty, through redistribution of wealth, I believe the inevitable result is poverty beyond anything we ever imagined.

Dr.  Yardeni's website (www.yardeni.com) is a treasure trove of economic information, although his commentary and analysis are only available to institutional investors at a hefty price.

Trivial Pursuit
In 1896, Charles Dow first published an index of companies that he thought were a good representation of the overall stock market.  This index, which had 30 companies in it, came to be known as the Dow Jones Industrial Average.  Of the 30 original companies in this index, only one of the originals remain.  Which original company is still in the Dow Jones Industrial Average today?

Answer:  General Electric, which was originally founded by Thomas Edison.

Continual Amazement
I continue to be amazed at Apple.  With today's release of the iPhone 5, once again we see long lines of people waiting to be among the first to have the phone.  I admit, I do not get it.  What is the appeal of getting the phone on the very first day it is released?  I applaud Apple as they are truly a great American success story.  They continue to command premium prices for their products, even with a struggling economy.  I remember being an analyst who followed this stock, thinking that when Steve Jobs temporarily left the company in 2007, that was the end of Apple's run.  Earlier this year, Apple became the highest market capitalization stock in US history.  Hard to believe this company was on the verge of extinction in 1999.  Microsoft had eaten their lunch in operating systems, capturing over 90% of the market, with MSFT domination in the corporate market.  I still look back to that time and remember that Sun Microsystems attempted a "takeover" of Apple by offering less than market value for the stock (more like a "take-under"!).  Where is Sun Microsystems today?  Oracle rescued it from the scrap heap.

Weekend Predictions
If you are a gambling person, this looks like a great weekend to bet on the underdogs.  It started last night with the Giants win over Carolina, after being a 2 1/2 point underdog.  Other underdogs I like to cover this weekend include Michigan, California, and closer to home...the KC Chiefs, the Missouri Tigers and the Kansas Jayhawks!  So just take all my predictions for what you paid for them.

Finally, congratulations to the Shawnee Mission East Lancers varsity football team, which defeated defending state champion Olathe South last night 3-0.  Lancers are now 4-0 and have served notice that they are a real contender this year in the Sunflower League, and perhaps the state!

Until next time...take care!

The Week That Was

I know that you, my beloved readers, have anxiously been awaiting another installment from my blog. Without further ado, here it is:

Surprise of the Week
The biggest surprise of my week happened Wednesday night in Independence, Missouri. I attended the Kelly Clarkson concert at the (strong) urging of my wife. She really rocked it! Ms. Clarkson, that is (although my wife knows how to rock it too!). The lady can clearly sing, and the whole atmosphere was positive and uplifting. Ms. Clarkson was not up there urging the audience to defy authority, or slamming politicians or other public servants. Kudos to Ms. Clarkson and her band for putting on a good show. Especially awesome for my wife and daughter was when Ms. Clarkson wandered out into the audience, giving my wife and daughter an opportunity to see Ms. Clarkson up very close.

Tablet or Reader?

I have decided that I need to upgrade my technology a bit and have been looking at readers. Do I want to go with a reader like the Kindle or Nook? How versatile are these machines? Or a tablet such as the iPad? I figure I just want to read books. I have a laptop and a desktop to surf the Internet, email, etc... I have an iPod to listen to music, either on walks or in the car. Seems like I want the reader, but looking for other perspectives that I might be missing. Also, as an aside, are 4G phones worth it yet? And if so, which one is the best?

Home Opener

This week is the home opener for the SM East freshman team against the Olathe Northwest Ravens. I know that high school freshman football does not even begin to compare to the NFL or D-1 college ball. But there is little else I enjoy more than watching my kids play their sports and seeing their talent develop. Few things in life are more rewarding than watching your child take up a passion, whether it is dance, theater, music, athletics, etc..., and watching their talent grow. I want so much to see my children's dreams come true. I think this may be why I enjoy his games so much. And perhaps the dawning realization that this is a chapter in my life where the sun is setting. So, this week, I get to see Jeff wear his black jersey (which he says looks much cooler than the white jersey) to school for the first time on Wednesday. Go Lancers! And Go #18!

Until next time...take care!

A Fine Labor Day Stew

Labor Day Salute to Labor
It is the first weekend in September so that must mean it is Labor Day, which for many of us means a long weekend of R&R (rather ironic for Labor Day), family gatherings, picnics or cookouts, and one last summer fling, whether at the lake or around the house. But I do want to take the time to salute those who labor for the labor movement. I look at the workplace benefits I have enjoyed through the years, as many of us have. Perks such as paid vacations, paid sick leave, pensions, employer paid health insurance, and safer working conditions are all brought to us courtesy of labor unions, whether we belong to one or not. Ironically, labor unions may have done their jobs too well, which may account for only seven percent of private sector workers beloning to unions today. But, I lift a salute to those who risked their jobs, and more, esp on those days when I can take advantage of my perks without fear of losing my job.

Could Not Say It Better Myself
Here is a link to an interesting article by Janet Daley about the future role of government. She contrasts what is happening in Europe with what is happening in America. Read the article! I could not say it better myself.

College Football Season Opens
This weekend was the opening weekend for college football, which I truly enjoy. Being in Big XII country, and having graduated from a Big XII school, I will follow that particular conference most closely. Looks like newcomer West Virginia is the team to beat after Week 1. Things could change, but the Mountaineers were easily the most impressive Big XII team this weekend. Baylor might be the most under rated (picked to finish 7th), as their offense picked up where it left off last season, even without RGIII.

On the national scene, no team was more impressive than Alabama, which made mincemeat out of Michigan. There is no better big game coach in America than Nick Saban. Alabama in my book is better than #1 ranked USC. I see the championship staying in Tuscaloosa. Roll Tide!

Questions of the Week
When President Obama addresses the Democratic National Convention this week, will he do so from an empty chair? The President has taken Clint Eastwood's silly stunt in stride.

Will the "fact checkers" be as vigorous this week as they were last week?

This and That

I have not written in awhile, much to the delight of many, but here to share a few thoughts on this and that today.

Marriage and Blending Families

I have been married for a month now, and the hardest thing for me is blending families. My boys are at a different stage of their lives than Candice's daughter, so this makes coordinating schedules and getting family time difficult. Plus my boys and me are not used to having girls around, just as Candice and her daughter are not used to having boys around. For me, having a woman around is certainly a change of pace. Learning each other's quirks, habits and preference is an adjustment. Learning to work with her as a team is both fun and challenging. But these are challenges that can be overcome. I would much rather face this challenge than be single. Like I said in an earlier entry, marriage is not for everyone, but it is for me.

Paul Ryan's Speech
After reading the text of Rep. Ryan's speech last night that he hit all the points he needed to hit. Of course, the commentary on the speech was quite predictable. Conservative pundits loved it, liberal pundits hated it. Click on this link for a complete text of the speech. The best line from the speech, in describing the Obama presidency was, "(n)ow all that’s left is a presidency adrift, surviving on slogans that already seem tired, grasping at a moment that has already passed, like a ship trying to sail on yesterday’s wind." I like Paul Ryan. I like that he had the guts to put out a plan as a valid alternative to what the Democrats were offering. However, his speech did not tell the whole truth. For instance, in talking about Medicare, he said, "You see, even with all the hidden taxes to pay for the health care takeover, even with new taxes on nearly a million small businesses, the planners in Washington still didn’t have enough money. They needed more. They needed hundreds of billions more. So, they just took it all away from Medicare. Seven hundred and sixteen billion dollars, funneled out of Medicare by President Obama." While this statement is factually correct, Ryan's original plan (since modified) called for cuts in Medicare to finance a tax cut. He did not mention this, as you might expect.

This was consistent throughout his speech. From the Bowles-Simpson debt reduction committee, "He created a bipartisan debt commission. They came back with an urgent report. He thanked them, sent them on their way, and then did exactly nothing." Which is factually true. He did not mention that he was on the committee and voted against the committee final report since it would be seen as his endorsement of ObamaCare. (Click here to see what Erksine Bowles, Bill Clinton's White House Chief of Staff, thinks of Ryan). I think Ryan could have been more forthcoming with some of his statements. Overall I give his speech a B. It hit the President in a fair and firm manner, but some more disclosure was required.

Tax Cuts

After some pondering, which I am prone to do, I do not believe the tax cuts advocated by the Republicans at this time will have a beneficial economic impact. I believe that tax policy should simultaneously do two things: 1) maximize government revenue, and 2) maintain a prosperous economy. Tax cuts today would reduce revenue, and there would be no economic benefit. With S&P 500 companies holding record cash, there is already plenty of money available to invest in new businesses and plenty of money available to create jobs. Why are theses companies holding onto the cash? The answers all point back to the Obama Administration and its policies, and to the lack of confidence the business community possesses regarding the Administration. A tax cut on upper income people would be more productive if there was a slew of great ideas waiting to be unleashed on the market with no capital available to make that happen. However, there is plenty of cash available, but risk investors are clearly waiting for a more favorable environment in which to invest. Once businesses and investors have a more favorable outlook for the economy, we could see a terrific recovery.

Campaign Rhetoric

I get a kick out of liberal commentators that can recite scripture and verse why Romney/Ryan should be not elected. Some reasons are valid, some are absurd. But I cannot find one that can tell me why the President deserves re-election. What has to be even more depressing for liberals and Democrats is that the President's main focus seems to be....his opponent's tax returns! Really? He does realize his own Secretary of the Treasury (and IRS regulator #1) is a confirmed tax cheat? You would expect the tax return rhetoric from low level partisan hacks (re: Swift boats), but not from the President. He is the imcumbent. He has a record. He should run on his record and state his case for re-election based on that record. The fact that he spends so much of his time trying to define his opponent says two things: 1) his record is not worth running on; 2) he and his Administration are intellectually bankrupt. They have no answers and no solutions.

College Football

College football starts this weekend, and it certainly marks an exciting time on the calendar for me. I truly enjoy college football, but this season sure feels different. Conference realignment has taken some terrific rivalries off the schedule this year. Missouri, for example, could play the next 100 years in the SEC and not come close to the rivalry they shared with Kansas. Same with Texas A&M and Texas. These type of regional rivalries are fun, and part of what seperates college sports from their bretheren in the professional ranks. College football, and college basketball, will not be the same without these rivalries.

Mom of the Year Award...NOT!

A recent contestant on the show "Toddlers and Tiaras", a four-year-old named Destiny came out on stage smoking a fake cigarette, a la Olivia Newton John from "Grease". Huh? First, I find it appalling that a four-year-old is even in a beauty pagent. Second, said four-year-old is glamourizing smoking? And Mom is proud of all this? And we wonder why it is a screwed up world. Let the kid be a kid. If she wants to dress up, let her play with Mom's clothes but do not put this on display for the world to see. It is unfair to the child, and no parent should be allowed to put their own stupidity on display.

Stupidest Politician of the Year Award

This is not even close. Rep. Todd Akin (R-Mo) takes the cake for his "legitimate rape" and "the female body has ways to shut these things down" comments. I thought the President's "you didn't build that" comment was a classic. And it was. But Akin takes stupidity and insensitivity to levels never before imagined. And he even stayed in the race! Does Rep. Akin really thinks he will win? Akin does not just win Stupidest Politician of the Year Award, he has earned a lifetime honor in this Hall of Shame.

Thoughts on Freedom

"Give me liberty or give me death!" - Patrick Henry, March 23, 1775

This week, the United States of America will celebrate its 236th anniversary of Independence from Great Britain. We will celebrate the freedom that to this day is still unique to America. It is a freedom that came to us at a great cost, and I thank the courage of those who stood against the greatest empire of their day.

Roots of Revolution

The idea of an American revolution was really, I believe, an intersecting of the Enlightenment thinkers and a series of unpopular taxes imposed by the British Parliament on the colonial Americans. The Seven Years War (between France and Great Britain, which included what we know as the French and Indian War) concluded in 1763 with a decisive British victory, but an empty British treasury and a huge national debt. The British government felt they needed to impose more taxes to raise the necessary revenue needed to house British soldiers in the American colonies. The soldiers would be needed to protect the American frontier from hostile Indians. Since the soldiers were there to protect the colonists, Parliament felt it necessary to tax the colonists for such protection.

The British Parliament passed the Sugar Act of 1764 as a first step to taxing the colonists. This tax was actually a revision of the Molasses Act of 1733, and the Sugar Act actually cut the tax rate versus the Molasses Act. The colonists objected on economic grounds, but soon they realized that the Sugar Act was unconstitutional under British law. The British constitution forbade taxation without parliamentary representation. Since the colonists did not have the right to elect members of Parliament to represent their interests, they felt that Britain could not impose taxes. The constitutional question came to a boil with the passage of the Stamp Act of 1765. The colonists fiercely protested this law, and it was repealed in 1766. However, Parliament also passed the Declartory Act, in which it expressly gave itself the power to tax the colonists as they saw fit. The colonists saw themselves as British subjects, and therefore, privileged to the same rights as their fellow Englismen across the sea. However, it was clear that the English government did not view the Americans as having the full rights of English citizens.

As the British government imposed more and more taxes on the colonists, the tide turned from "taxation without representation" and gaining the Rights of Englishmen to political independence. The presence of British soldiers on the streets and in their homes became revolting and hated. This ultimately led to the First Continental Congress in 1774 to address grievances with the British government. However, open rebellion flared up in 1775 in Massachusetts. A Second Continental Congress was convened in 1776 with the express purpose of seeking political independence from Great Britain.

Classical Liberalism and Natural Rights

While the American people were rising up against the British, an intellectual movement known as the Enlightenment was taking place in Europe which embraced "classical liberalism". While there were several leading Enlightenment thinkers, John Locke was likely most influential in forming American political philosophy. Classical liberalism respected the natural rights of man which were originally defined in John Locke's Second Treatise on Government (published 1689) as life, liberty and property. Classical liberalism, as applied to government included limited government, due process, seperation of powers and the freedoms of speech, press, peacable assembly, religion and freedom in the market place. Under classical liberalism, government served three main purposes: protect against foreign invaders, protect citizens against the taking of life, liberty and property and build public institutions that the private economy could not provide profitably.

One of America's leading Enlightenment thinkers of that day was a young Virginian named Thomas Jefferson. Jefferson was already established as a leading thinker of his day when he was handed the primary assignment by the Second Continental Congress of writing a declaration of independence from Great Britain. Jefferson was heavily influenced by Locke's Second Treatise. Jefferson starts the second paragraph with a phrase borrowed straight from Locke (with a slight modification..."pursuit of Happiness replaces "property"): "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed..." To think that Jefferson was a mere 33 years old at the time!

The ideas that men are created equal, with unalienable rights to life, liberty and the pursuit of Happiness (or property if you will) were new ideas at the time of the Enlightenment. Europe was ruled by monarchs, with entrenched aristocracies and a rigid social structure. The idea that a person could, through education and hard work, advance his social or economic status to the highest echelons of society was unheard of. The ideals that Jefferson put forth in this document were truly revolutionary.

Freedom - The American Ideal

America was the first nation founded on the ideal of freedom. The British were finally defeated in 1781, with the final treaty signed in 1783. It would take another four years, but in the summer of 1787, the United States would announce a new constitution based on the classical liberalism of the Englightenment. The government would be divided into three branches, with each branch's power checked. Then, with the help of Patrick Henry, 10 amendments to the Constitution, known as the Bill of Rights, were added that ensured the individual freedoms that so many people fought and died for.

Today the freedoms that we take for granted, such as freedom of speech and freedom of the press are still way too unique in this world. The United States was truly blessed to have a generation of leaders who understood the benefits of enterprise and the evils of tyrants and worked tirelessly to ensure the survival of this republic. Today, the world still looks to the United States as a beacon of hope, as a place where you can better your life.

Warnings

Freedom is not free. We have all heard this before. Thomas Jefferson gave us many warnings to heed regarding our freedom.

“Those who surrender freedom for security will not have, nor do they deserve, either one.”

“The Price of Freedom is Eternal Vigilance.”

“If people let the government decide what foods they eat and what medicines they take, their bodies will soon be in as a sorry state as the souls who live under tyranny.”

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."

“A government afraid of its citizens is a Democracy. Citizens afraid of government is tyranny!”

“My reading of history convinces me that most bad government results from too much government.”

There are others, too. He warned us to look out for the government that wishes to take care of us. They have the best intentions, but eventually, they chip away at our freedoms ever so slowly until they take it all and manage our lives from a central location. The inevitable result of this government, according to Jefferson, is tyranny. The tyrant chips away at our freedoms, grabs more and more power for himself. Then he announces his tyranny as a victory for the people.

As you can see, I am a big fan of Thomas Jefferson's political philosophy. More than anyone, he embraced freedom. I find it interesting that he wanted what he considered his three greatest accomplishments carved on his tombstone: Author of the Declaration of Independence, Author of the Statute of Virginia for religious freedom, and Father of the University of Virginia. He did not consider being President of the United States worthy of being remembered for.

The American Dream

Embrace freedom. Realize this is what the American Dream is all about. I have defined the American Dream as building a life for yourself and your family that is rich and rewarding, however you choose to define it. It may be through the pursuit of financial wealth or it may come from the collective effort, along with your fellow citizens, to make your community a better place to live. And realize that freedom is a precious gift. Life, liberty and pursuit of happiness are our natural, unalienable rights. No government can confer these. But a government can take all these natural rights away. Embrace your freedom of speech, freedom of the press, freedom of peacable assembly, freedom of religion and freedom to pursue your dream in the market place. And be wary of the government that would chip away at any of these freedoms.

Celebrate America this Independence Day! Celebrate the splendor of her freedom. Enjoy the cookouts, the family gatherings, and especially the fireworks. Give thanks to God for the richness of His blessings in allowing us to live in freedom!