Opinion Archives

Article 5: September 27, 2011

Even More Large Corporate Dominance: Stagnation 2

Even More Large Corporate Dominance: Stagnation 2

A largely unnoticed consequence of the current economy will be large corporations dominating an even larger share of America. Large corporations are sitting on mountains of cash. Due to low interest rates, some are borrowing large amounts and sitting on those reserves waiting for opportunity. Their managements are cautious about making new investments with such a hostile anti-business administration. I don't blame them, there's no telling what industry the administration will attack this week. Just to name a targeted few: automobiles, oil, insurance, investments, fast food restaurants, internet (sales taxes), tanning salons and drug companies.

So the wise corporate CEO waits for a real bargain or a change in administration. In the mean time, small businesses are struggling, many closing. The little guy who prospered when the economy was strong cannot compete with the large companies' advertising budgets and economies of scale. The large corporations have the ability to absorb regulatory cost, and have the advantage of well-known brand names and dominance in their fields. There is just not enough to go around anymore for the little guy to survive.

Now, the crux of the matter: when the time is right, the big corporations will be able to buy up the inevitable great deals coming as things grow worse, thereby significantly increasing the large corporate share of the GDP within the next five years. What is to be done? The answer is to not increase the Small Business Administration and other "government is your partner" programs. The problem started with government meddling in the economy, and the answer is political leadership that is willing to reduce regulations and bureaucratic red tape. Only big business can afford to deal with big government. Other solutions could include tort reform which also helps small businesses. Furthermore, ending corporate subsidies also helps to level the playing field.

I think most Tea Partiers have a sense of this in their hearts. I believe this is part of the frustration that many feel. We need to remember the American Dream and that the small business person embodies that dream. We need to fight to keep that dream alive by doing everything we can to eliminate government regulations.

The way to win that fight is at the ballot box. I look forward to the day when government is irrelevant to quality of life and business decisions. That's hope and change I would believe in.



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Article 4: September 13, 2011

Stagnation

One of the outcomes of this protracted recession (someday it will be known as The Greater Depression-- see Doug Casey's 2006 article The Greater Depression) is the lack of mobility for the average worker. We all know it is harder to find a job, but even once that job is procured, what about advancement. The lack of growth and expansion of most small businesses leaves little room for advancement, not to mention people are afraid to change jobs or retire early.

So your son or daughter graduated from college a year ago, they final get an entry level position; five years later they are still doing the same job. Yes they are one of the lucky ones to get a job but how happy are they? How's their "hope and change" now? The bigger question is how do we reach these 22 year olds with the message that real hope stems from free markets and capitalism? How do we get them to realize that they are unemployed or trapped in dead-end jobs because of government programs like Fannie May, the burden and uncertainty of Obamacare and the progressives' anti-capitalist agenda? With the liberal bias of the old media, and academia's disdain for free-markets and complete disregard of historical facts, how does the millennial generation come to understand the solution to their professional and economic depression? The answer is the individual taking the initiative to communicate to their kids, friends, neighbors and relatives whenever possible. That means conversation at dinner tables or at the local supermarket. It means texting and forwarding emails to those you don't usually think of. It means writing letters to the editor or commenting on blogs. It means becoming a Wikipedian and making sure that Wikipedia provides balanced information. It means running for local school board. It means complaining to your universities alumni association about the lack of balance on campus and then only donating when they can show that your funds do not support tenured leftist professors. It means not letting a liberal point of view go un-challenged. It means inviting someone who you know but never approached to the next Tea Party meeting or a candidate night. What it really means is getting outside of your comfort zone and speaking up. We are not going to save our country, (literally the world) without taking some personal risk.

It needs to be said with sincerity, not with anger, in as many venues and formats as possible. It is up to you to do something! I have already started.



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Article 3: August 30, 2011

A Simple Economics Lesson for My Liberal Friends

I have been thinking about my high school friend Debbie and my Aunt Lou. Both are liberals. I understand that they believe that liberal ideals "help" people. I want to say "Forgive them Father for they know not what they do" but that still doesn't stop the destruction, pain and suffering that liberals have inflicted on the world, especially the poor.

My frustration with liberals and statists is their lack of understanding of economics. For all their "compassion," their ignoring how the system works will cause poverty for even larger segments of the population. The lack of knowledge is understandable though – economic education in America has been corrupted by Progressives. Here are a few links to some video resources that I think are fundamental to understanding economics.

The Broken Window Parable is written by Fredric Bastiat. The Law which Bastiat wrote in 1850 is one of the best short, non- fiction books (originally written as a pamphlet) I have ever read. Go read the book and in the meantime, check out this video based on the Broken Window:
YouTube

This next video gives an excellent explanation of "The Invisible Hand" of the free market and why capitalism works. This video, "The Pencil" by economist Henry Hazlitt's as told by Milton Friedman:
YouTube

Lastly, one more video interview with Milton Friedman on Socialism vs. Capitalism:
YouTube

For my readers who already understand some of the basics in these videos share them with your kids. For those of you who are new to these ideas, I hope you will give them some thought. To my liberal friends, please think through the long term consequences of any policy you support. Take a close look at Greece to see the future of the socialized state.



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Article 2: August 8, 2011

We Have Just Begun To Fight

God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.

The Boston Tea Party happened on December 16, 1773. The Treaty of Paris was signed on September 3, 1783. It took our forefathers almost ten years to free themselves of British rule. To the patriots of today, who call themselves the Tea Party, don't be disappointed by the small gains you've made during the debt limit fight. You won an important battle in the continuing mission to free America from the tyranny of big government.

The mid-term elections of 2010 were the first major victory. Ousting Nancy Pelosi from her position as Speaker of the House was the first step forward in the long journey ahead. John Boehner as Speaker is no picnic; he has been part of the problem for a long time. But Boehner has to contend with solid conservatives and Tea Party freshman within the GOP that will not let him be a "yes" man for President Obama. Without the Tea Party influence, we would not even have had a national conversation. The old guard would have raised the debt limit with no conditions – end of story. Because of the Tea Party, no longer will accountability be a word only used during campaigns and never practiced. Thank you Tea Party!

The debt ceiling debate was just another win in the long battle ahead. Was it decisive? No. Did it let the world know we are a force to be reckoned with? Yes. Just as Lexington and Concord were not huge battles, it put the world on notice of our commitment. The political establishment in our great nation knows there is a new sheriff in town and he/she displays a Gadsden flag as a badge.

Don't get me wrong. I'm glad you're not happy with the outcome of the debt limit ceiling vote. We shouldn't be. There is so much more to do. But we must also remember that we sent a message.

FDR was elected in 1932. That is 79 years of a left-leaning government- growing agenda in America with only a few short breaks. Rick Santelli's rant from the floor of the Chicago Mercantile Exchange happened on February 19, 2009. I believe we will be able to declare victory in this battle for fiscal sanity in the fall of 2019. Until then, never give up!



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Article 1: June 6, 2011

Follow The Money

As a small business man and a Bachelor of Science in Finance I have always been fascinated with money as measure and conveyor of information. If a business is profitable it means that the business must be providing a good or a service that someone wants. If a government is running a country in a fiscally sound way, the currency further stabilizes or further appreciates in value against other currencies. Yes there are other factors, but big picture that's how it works.

In 1966, I read a book called Anyone Can Make a Million by Dr. Morton Shulman. Shulman was a Canadian physician who made a million dollars in the bull stock market of the sixties.  The book was about how to get rich in the stock market, yet what I found the most fascinating was the last chapter, which was about currency trading. Shulman basically said he was not in interested in the stock market any longer, that he would be focusing on trading currencies. He said it was easier to make money in currencies than the stock market.  It was easier, because when a government says it won’t be devaluing their currency, it is a sure sign that they are about to.  It was that simple. Shulman’s premise: always bet against what the government is saying and you will profit handsomely. Our government says we have no inflation. Do you believe that? $5 gasoline and the prices at the grocery store are sending a different signal.

Unfortunately I did not become a currency trader. As a fiscal conservative, who likes to say I told you so, I track currency values as a measure of government policies.  In January of 2008 it took 0.907558 US Dollars to buy a Swiss Frank, the average of May 2011 was 1.15586 US Dollars to buy a Swiss Frank. Very simply put it takes almost 25 cents more to buy a Swiss Frank. One of the oldest forms of currency is gold. (We can of course thank the Greeks for this. There probably was some other civilization that did it first, but being Greek I will reference “My Big Fat Greek Wedding” as a credible source that the Greeks invented everything).

Gold, when Obama took office, was trading below $800 an ounce. Gold is now above $1500 dollars an ounce. Below is a five-year chart of gold.Why does someone buy gold? It is seen as a safe haven for instability in the world or to protect value when inflation debases a currency. What does this tell us? There must be large-scale instability or inflationary fears starting in late 2008 and persisting through today.

Prediction: Gold will continue to rise (with minor corrections) until some fiscal sanity is restored.

So I can hear someone saying what about the stock market, it was up wasn't it? That was a vote of confidence in the administration. The stock market was up in part due to the Quantitative Easing 2 (QE2). But with QE2 ending this month, the stock market is declining. If you don't understand how QE2 works check out this fun video http://www.youtube.com/watch?v=PTUY16CkS-k

Prediction: There will be a QE3.

The stock market declined in (2008) as Obama's poll numbers rose and finally turned around when it became clear that the Republicans (2010) would win the house and at least create grid lock. That is when the stock market started to come back.chart

I believe the market also rallied when it became clear that the Republicans would win control of the House. The current stock market rally started in July of 2010. At this point it was clear that Republicans would gain control of the house; all that was in doubt was the number of seats they would gain. Control of the house was interpreted as slowing down the administration's anti business agenda.

As the 2012 election nears, look for the Dow to have an inverse relation with Obama's polling and chances of winning reelection. Watch gold prices decline if a Republican is elected and as more Republican control of the house and senate materialize. The dollar will continue to decline until the Federal Reserve changes course and we get fiscal sanity in Washington. 



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Interesting Videos

"An I Want Society"

Economic Freedom in America

Archives

September 27: Stagnation 2

September 13: Stagnation

August 30: A Simple Economics Lesson for My Liberal Friends

August 8: We Have Just Begun to Fight

June 6: Follow The Money