Showing posts with label economic stimulus package. Show all posts
Showing posts with label economic stimulus package. Show all posts

Tuesday, September 7, 2010

Post No. 147: This Above All: To Thine Own Self Be True


We recently read an article about how President Obama became so unpopular in the short time since his election.

The Senior Fellow of the Institute, Laughingman, operates a couple of blogs. One focuses on marketing and advertising issues. We issued this challenge to his readers:

“What would ad professionals do to assist the President to improve his image / approval rating just before mid-term elections, considering he really can not do much about the economy?”

One of the participants responded with the following, which we decided to share.

© 2010, the Institute for Applied Common Sense

Simply put, President Obama has been poorly served by his political advisers. Some heads should roll, including that belonging to his Chief of Staff.

When newly elected President Clinton presented his first spending proposals, his economic advisers told him they were unaffordable, and that Wall Street would not put up with them.

This led to Clinton's famous lament, "Are you telling me that the future of my presidency is in the hands of a bunch of bond traders?"

Rahm Emmanuel's advice on the original melt down in Detroit is reported in Steve Rattner's book as, "[Muck] the UAW."

Considering the history of the Clinton administration's conflicts with Republicans in Congress, this was a strange and veracity-challenged approach to begin with. Considering that President Obama had represented himself as an individual capable of building bi-partisan coalitions with the opposition, his selection of Emmanuel boggles the mind.

From the beginning of the Clinton administration to the end of the Bush era, the share of national income trousered by the top 1% of earners increased from 9% to 28%.

To prevent a self-inflicted melt down of our banks, we are
lending the banks our money at less than 1%, and allowing them to lend it back to us at up to 15%, when they feel the urge to lend to us, if at all.

Housing prices, the engine behind the last recovery, are down by 30%, and are likely to fall even further while wages continue to fall, as corporations take advantage of a 9.5% unemployment rate, and a 16%+ underemployment rate.

In the mean time, CEO compensation for the 50% of companies which have dismissed the most workers has increased by better than 40%.

With two months left until the next election, and the President's approval numbers sinking faster than the Titanic (and about to explode a la Hindenburg), what is the best strategy to reverse the impending?

Simply let Obama be Obama.

And thus the title of this piece, which reflects the ultimate in personal responsibility.

A couple of years ago, the majority of voters elected a newcomer with some undefined, intangible quality which led them to say, “He’s our guy.”

It is his responsibility to lead using that same intangible which got him elected.

There is no way to change the opinions, however flaky and factless, of Rush Limbaugh's audience, or Glenn Beck’s parishioners. In this polarized society, the only path to Democrat survival is to get the Democrat faithful up off their asses and into voting booths.

Trying to defuse all of the disinformation floating around out there just
plays into the hands of the opposition, and the nation will be the loser in the long term.

On the announcement of the (equally ridiculed by Wall Street) $5/day wage,
Henry Ford explained he was trying to build a mass market product. "If my workers can't buy them, who will?"

That is not exactly the attitude "[Muck] the UAW" conveys.

Expanding Medicare and Medicaid to ensure that our citizens are protected
from health-borne economic disaster is not an extravagance - it is arguably part of the “unalienable right…” to the “pursuit of happiness.”

Last year, Humana, one of the nation’s largest health care providers, dismissed 700 health care professionals and replaced them with newly-hired accountants....

Can you spell "gaming the system?"

Our economy will continue to suffer until we find a way to rebuild consumer confidence which translates into buying power, which represents 70% of our GDP, and that’s not going to take place prior to the elections.

Giving members of Congress (the only class of criminals native to the
United States of America) something to be proud of may be beyond the powers of any president, but giving the voters a choice they can be proud of is part and
parcel of the president's Bully Pulpit.

At least that’s what I would do.

But in the next election, I’d rather be working for the Republicans. At least I would have a better chance of getting paid....

Friday, January 8, 2010

Post No. 143a: Re-Posting of Post No. 111: Been There; Done That


We first posted this piece in April of 2009. In light of the continuing debate about what should be done to restore the United States to its previous level of prominence, and extricate us from the current economic malaise, we are re-visiting some of our thoughts made at that time.


© 2009, the Institute for Applied Common Sense

We frequently suggest that in tackling problems, we examine history, starting with a minimum of 5,000 years, and as far back as 13,000.

However, we’ve come to the conclusion that history alone may not always be able to help us out of jams.

Alan Greenspan recently lamented that those principles he relied on for 40 years no longer apply.

An historian once noted that we should always proceed with caution when we think that the policies of the past can be reapplied, and will generate similar results.

We might do well to consult physics, and better understand the laws of static and dynamic forces. (These are older than humankind and history.)

In order to assess or address anything within a dynamic system, one must freeze or suspend all movement or change, of as many variables as possible, or otherwise isolate the component at issue.

We also know that slight tweaks (no, not tweets) of a variable can result in dramatically different results.

Logic dictates that the larger and more complex the system, the more difficult it is to manage or affect any part of it.

As comforting as it may be psychologically, to resort to playing marbles and pick-up-sticks, it is of questionable value to return to many practices of the past.

Imagine trying to reconstruct that romance which you had with that guy or gal back in school (altered state of consciousness or not), and hope that those old moves lead to the same results.

As a nation, we can never re-create the circumstances extant when prior practices and policies were implemented and applied.

The world may have changed every year back then, but it now changes every nanosecond. We need to recognize this, and conduct ourselves accordingly.

It’s actually lazy and simplistic to merely repeat the practices of the past, even if they were successful. It requires far more energy, commitment, focus, and innovation to craft appropriate approaches to new conditions, everyday.

Sitting on the sidelines and simply watching changes occur without responding also may not be the best tactic.

To suggest that our enemies or competitors have been sitting still, or that the conditions in our country have been in suspension, is just plain science fiction.

For years, Corporate America used large, 100 year old silk-stocking firms to perform its outside legal work. The Logistician and his partners sought that same work, somewhat successfully, by offering a lower rate. They were smaller, more nimble, had lower overheard, and more importantly, hungrier.

Yet, many corporations were reluctant to make such a change. If things went awry, someone would undoubtedly question why the referring counsel did something out of the ordinary, and did not stick with the tried and tested firms.

Hollywood’s like that. It’s far easier to explain why “Men in Black 12” did not generate record box office numbers, than a new concept.

But consider this.

If you‘re surprised about a development over a span of 30 years, like the demise of our educational and industrial systems here in the U.S., you probably were asleep at the switch, and not paying close attention to changes on an annual, much less a monthly, basis.

We all have a tendency to go through repetitive motions. They’re safe, familiar, less subject to scrutiny, and require less effort.

UPS had a marketing campaign which referred to “moving at the speed of business.” Hong Kong is a 24 hour business city. Imagine what happens to others when their business communities are asleep.

It’s the nature of competition, and the nature of change.

There’s been much noise about returning to the policies of Clinton, or Reagan, or Kennedy, or FDR. Quite frankly, returning to those dated tactics, no matter which side of the ideological line they may fall, may not be particularly helpful.

Those circumstances no longer exist, and will never exist again. And that doesn’t take into consideration the efforts to revise history.

We can’t duplicate the economic variables. We certainly can not re-create the psychological and social variables.

Going forward, we need to craft new procedures, new principles, new tactics. Ones that fit our current conditions, which have never existed before.

So to all of our politicians and policy makers out there, please detach yourselves from your ideological goals and preferences, and repeating that mantra about what you think worked in the past.

Try to figure out what’s most likely to work, TODAY, going forward, based on current conditions, and those we anticipate.

The world is far flatter than we once thought.

Tuesday, June 9, 2009

Post No. 122a: Re-Posting of Post No. 90: Making Use of the Current Financial Mess


We frequently re-visit earlier posts to determine their continuing applicability. In February of this year, we generated a piece entitled "Making Use of the Current Financial Mess."

Since we continue to be in an economic "______ession" of some type, we thought that we would re-visit our earlier thoughts, and see if any of your thoughts have changed in the interim.


© 2009, the Institute for Applied Common Sense

Mark Twain observed that if a cat sits on a hot stove, she will never do it again. Unfortunately, she'll probably never sit on a cold stove either.

Everyone has their favorite villain for the current economic collapse. The Logistician sent me a list of 10 ways in which he felt consumers were responsible.

I told him that I did not buy into his premise, but in thinking about it further, I realized that if we only point the finger at the fat cats, we will have learned little. We all bear some responsibility.

We are behaving much like Mr. Twain’s cat. Despite our efforts to revive our financial system, we have little to show for it… yet. We definitely can’t sit at the starting line waiting for the next guy to say, “Go.”

We simply need to use some Common Sense, on which the left and right should be able to agree.

According to the Scientific Method, bad ideas and experiments that don’t work are as valuable as those that do, provided we learn from the experience, and use that knowledge productively.

So, with 2/3rds of our economic well-being based on our own behavior, we would like to suggest a few topics for discussion, the results of which may assist us in finding our way out of this financial wilderness.

1. If a deal sounds too good to be true, it probably is.

You don’t need a Ph.D. in economics to realize that markets don’t always go up. The observation that a few people are making great sacks of money, and violating the rules of Common Sense, does not relieve us of the obligation of doing our own home work.

If you can’t make the numbers work within your current income, don’t bet on massive increases in the value of your investment to bail you out.

You have a better chance in Vegas than in a financial commodity you do not understand. (And the truth be told, few of us really understand them.)

2. Don’t bet your home on things you don’t need.

Contrary to the Logistician’s mantra, there is nothing wrong with wanting a better, more luxurious life, but not at twenty percent interest. Here there are demons…like bankruptcy…and acid rain falling on your childrens' heads.

Save the money 1st; then buy the Lexus. It’s only Common Sense.

3. Ignore herd instinct.

When everybody agrees on the direction of a market, guess what…?

4. Be careful when building and buying things which are more than you need.

Advertising not withstanding, buying an Escalade won’t make you an NBA star. There is a reason why the Toyota Camry and the Honda Accord are the 2 best selling cars in the country.

5. Particularly avoid using credit or going into debt to build or buy things which are more than you need.

We went into debt, both individually and collectively, based on the assumption that the party would never stop.

Pick up any book on history…it always does. And, you don’t want to be the guy playing musical chairs when….

6. Remember that gluttony and greed are 2 of the 7 deadly sins.

Really want to make a 20% return on your income? Pay off your credit cards.

7. Carefully weigh the impact of retirement on an individual and societal level.

The Logistician and I differ on this point. The Logistician feels we got lazy and retired too early. My take is that we took the money and ignored our inherent desire for a more worthwhile job… and after 30 years we couldn’t wait to get out.

With our most experienced workers, although still productive, leaving the workforce early, all of this experience went to waste… and it is experience we can ill afford to waste.

8. Avoid being seduced by the short-term Sirens.

There was a time when we bought things to last. Next time you are in the park, look at the number of people taking pictures with manual focus SLR cameras.

This desire to last drove a subsequent demand for quality… producing a pride of workmanship that represents the essence of “Quality of Life.”

9. Don’t leave the education of your kids to the entertainment industry.

Not wanting to engage them, we abdicated our responsibility to the likes of Nintendo, Disney, and MTV, as long as they didn’t interfere with our pursuit of the “good life.”

If you don’t want children, don’t have them. You can not experience the sense of wonder children project, as they learn about the world via remote control.

You have to be there… and evolution suggests that this is one of the few primal pleasures we have inherited undiminished.

10. Lend a helping hand.


If you know someone in need of a job, through no fault of his own, ask around. Do what you can to help him get re-employed.

Want to raise the “quality of your life,” watch the face of a man or woman you have helped put back to work. Government can’t do that.

You see, we do most of the spending. No income, no spending. No jobs, no income.

Is there anything on this list which defies Common Sense?

After all, we should be smarter than Mr. Twain’s cat.

© 2009, by the Laughingman for the Institute for Applied Common Sense

Wednesday, February 25, 2009

Post No. 91: Tell Us What You Thought



Last evening, we all watched as President Obama delivered a speech to the world. The “talking heads” have had much to say during this relatively brief Obama Administration.

We here at the Institute for Applied Common Sense have no political agenda.

We simply believe that, by encouraging the exchange of ideas in a civil forum, where the views of each person are equally respected and valued, we will ultimately arrive at better solutions through consensus. Through this process, a Common Sense approach will emerge.

We have several questions of you, the American citizen:

1. What did you think of the President’s speech?

2. What are your thoughts about the first 30 days of the Administration?

3. Did the President’s speech make you feel better or worse about the Economic Stimulus Bill which he recently signed?

Go for it.

Monday, February 23, 2009

Post No. 90a: Articles of Interest: When Consumers Cut Back: A Lesson from Japan



Much has been made recently about the contraction of credit and the reluctance of consumers to part with their hard earned dollars because of their uncertainty about our economic future. The following article appeared in the February 22, 2009 electronic edition of the New York Times. It is most definitely food for thought. To view it, you need simply click here.


Since the original posting of this article, we came across another article expressing similar concerns about the reluctance on the part of the consumer to spend, albeit with respect to the automotive industry. To review Dave Leggett's article on his blog, Just - Auto, click here.

Friday, February 20, 2009

Post No. 90: Making Use of the Current Financial Mess


© 2009, the Institute for Applied Common Sense

Mark Twain observed that if a cat sits on a hot stove, she will never do it again. Unfortunately, she'll probably never sit on a cold stove either.

Everyone has their favorite villain for the current economic collapse. The Logistician sent me a list of 10 ways in which he felt consumers were responsible.

I told him that I did not buy into his premise, but in thinking about it further, I realized that if we only point the finger at the fat cats, we will have learned little. We all bear some responsibility.

We are behaving much like Mr. Twain’s cat. Despite our efforts to revive our financial system, we have little to show for it… yet. We definitely can’t sit at the starting line waiting for the next guy to say, “Go.”

We simply need to use some Common Sense, on which the left and right should be able to agree.

According to the Scientific Method, bad ideas and experiments that don’t work are as valuable as those that do, provided we learn from the experience, and use that knowledge productively.

So, with 2/3rds of our economic well-being based on our own behavior, we would like to suggest a few topics for discussion, the results of which may assist us in finding our way out of this financial wilderness.

1. If a deal sounds too good to be true, it probably is.

You don’t need a Ph.D. in economics to realize that markets don’t always go up. The observation that a few people are making great sacks of money, and violating the rules of Common Sense, does not relieve us of the obligation of doing our own home work.

If you can’t make the numbers work within your current income, don’t bet on massive increases in the value of your investment to bail you out.

You have a better chance in Vegas than in a financial commodity you do not understand. (And the truth be told, few of us really understand them.)

2. Don’t bet your home on things you don’t need.

Contrary to the Logistician’s mantra, there is nothing wrong with wanting a better, more luxurious life, but not at twenty percent interest. Here there are demons…like bankruptcy…and acid rain falling on your childrens' heads.

Save the money 1st; then buy the Lexus. It’s only Common Sense.

3. Ignore herd instinct.

When everybody agrees on the direction of a market, guess what…?

4. Be careful when building and buying things which are more than you need.

Advertising not withstanding, buying an Escalade won’t make you an NBA star. There is a reason why the Toyota Camry and the Honda Accord are the 2 best selling cars in the country.

5. Particularly avoid using credit or going into debt to build or buy things which are more than you need.

We went into debt, both individually and collectively, based on the assumption that the party would never stop.

Pick up any book on history…it always does. And, you don’t want to be the guy playing musical chairs when….

6. Remember that gluttony and greed are 2 of the 7 deadly sins.

Really want to make a 20% return on your income? Pay off your credit cards.

7. Carefully weigh the impact of retirement on an individual and societal level.

The Logistician and I differ on this point. The Logistician feels we got lazy and retired too early. My take is that we took the money and ignored our inherent desire for a more worthwhile job… and after 30 years we couldn’t wait to get out.

With our most experienced workers, although still productive, leaving the workforce early, all of this experience went to waste… and it is experience we can ill afford to waste.

8. Avoid being seduced by the short-term Sirens.

There was a time when we bought things to last. Next time you are in the park, look at the number of people taking pictures with manual focus SLR cameras.

This desire to last drove a subsequent demand for quality… producing a pride of workmanship that represents the essence of “Quality of Life.”

9. Don’t leave the education of your kids to the entertainment industry.

Not wanting to engage them, we abdicated our responsibility to the likes of Nintendo, Disney, and MTV, as long as they didn’t interfere with our pursuit of the “good life.”

If you don’t want children, don’t have them. You can not experience the sense of wonder children project, as they learn about the world via remote control.

You have to be there… and evolution suggests that this is one of the few primal pleasures we have inherited undiminished.

10. Lend a helping hand.


If you know someone in need of a job, through no fault of his own, ask around. Do what you can to help him get re-employed.

Want to raise the “quality of your life,” watch the face of a man or woman you have helped put back to work. Government can’t do that.

You see, we do most of the spending. No income, no spending. No jobs, no income.

Is there anything on this list which defies Common Sense?

After all, we should be smarter than Mr. Twain’s cat.

© 2009, by the Laughingman for the Institute for Applied Common Sense

Wednesday, February 11, 2009

Post No. 86: A Few Thoughts about Corporate Responsibility Elsewhere


© 2009, the Institute for Applied Common Sense

Earlier today, on Public Radio International, we heard an interesting discussion between a public radio talk show host and a New York Times reporter. They were talking about corporate responsibility in Asia.

The broadcast reminded us of how self-righteously myopic Americans can be. We tend to view our way as the right way, believing we’ve attained the right to call ourselves the greatest country in the history of humankind.

We often fail to take into account that our history was preceded by several great empires, many of them strong enough to last hundreds of years.

We suspect that this hubristic attitude may have contributed, at least to some extent, to our current economic difficulties. That is why we frequently suggest that we “step outside of ourselves” in analyzing issues.

We stumbled upon this broadcast after it started, and at a point where the discussion was about corporate responsibility in Japan.

Apparently base Japanese CEO pay is only 15 times that of the average Japanese corporate worker, whereas in America CEO pay is 40 times higher. While sitting CEOs in Japan do receive other benefits, such as company vehicles, there is nothing even remotely close to bonuses in the 20 million dollar range. Moreover, corporate jets are a rarity.

When Japanese CEOs are relieved of power, according to the broadcast, a ritualized script is followed, and it is ceremonial in nature. It is recorded for the citizens to see. The CEO bows and transfers the reins of power. Although formally relieved of responsibility, he or she is kept on as a consultant, never actually leaving the fold. In the background, they continue to be of value to the company.

The reporter told of a Japanese CEO who stepped down last year, after only a couple of months in his exalted position at the top of a company. He had been brought in to turn things around, but was unable to do so in the short time allowed.

While addressing the public in his farewell speech, he began weeping. He asked that some other company take just 1 or 2 of his workers, inasmuch as it was his people who would bear the brunt of the company’s difficulties. The Japanese public noted his sincerity, because his gesture was apparently unprecedented in Japanese corporate circles.

(We recall an earlier PBS program about the differences between businesses in Japan, Germany, and America. It was noted that major Japanese corporations, during the Japanese heyday in the 1980s, continued to acquire loans from Japanese banks, even though they were flush with cash. They wanted to thank the banks for assisting them while they struggled to emerge from the ashes of World War II.)

During the public radio conversation, the reporter switched the discussion to China. He began, “The Chinese, well…” and realizing that he was trying to sugar coat it, simply said, “It’s pretty well acknowledged that they execute CEOs who fail.” He was referring to the executions of CEOs associated with the poorly constructed school buildings, which collapsed during the massive earthquake last year, not to mention the heads of companies who paid for the recent tainted food scandal with their heads.

The reporter noted that South Korean practice was a blend of what we see in America and Japan.

It occurred to us, as we thought about the whole issue of corporate responsibility, that while we here in America think of ourselves as being the best at most things, it’s quite likely that the one thing we may be better at than any other country is pointing our fingers at others. We choose to blame others for what has and is going wrong. It’s always the other guy. The last CEO. The last president. The other political party.

As our regular readers well know, this is not a religious blog. Still, the admonition in Proverbs 26:18 is worth remembering: “Pride goeth before the fall.”

If we weren’t so arrogant, and if we opened our eyes to the world beyond our borders and finally paid more attention to the practices of other cultures, might we not benefit, even just a little?

All systems have limitations. None is perfect. None is or can be all things, to all people, under all circumstances.

All approaches to solving problems have limitations, too. These days, with the world spinning topsy-turvy on so many fronts, and the economy being the most urgent issue on the table, “tried and true” solutions are as valuable as yesterday’s newspaper.

As our leaders go forward, searching for good answers, let’s hope they remain flexible and open to change if and when circumstances warrant it, which they no doubt will. If they wed themselves to rigid philosophy or point their fingers accusingly at the other side in their discussions, we’re all sunk.

That’s only common sense.

© 2009, the Institute for Applied Common Sense

"There Are More Than 2 Or 3 Ways To View Any Issue; There Are At Least 27"™

"Experience Isn't Expensive; It's Priceless"™

"Common Sense Should be a Way of Life"™