Is Obama hostile towards big business?
To answer this question, we need to delve a little deeper. Note, I am neither condoning nor praising Obama’s handling of his regulatory efforts. However, I would like to point out certain corrections that do need to be made.
“The truth is that not even the Franklin Roosevelt administration was as hostile to and ignorant about free enterprise as this [Obama’s] administration is.”
–Steve Forbes.
But, is Obama really hostile towards business? Or, is he making needed corrections? There is a fine line here. This issue also points out a serious problem in politics today. That problem is, you guessed it, money. Without money, the world doesn’t work. Without money, candidates don’t get elected. Without money, businesses don’t sell things and make money. Back up the train.. Businesses make plenty of money without governmental help. The trouble is that businesses want to be able to make laws that enable their businesses to make more money and then have the government be lenient with them when issues arise.
The reality, though, is that like the separation of church and state, the government now needs separation of business and state. The two are oil and water, they don’t mix. Government needs to be able to make law without interference from any party. But, businesses have deep pockets and hefty lawyers. These two elements help elect officials and help sway these same officials into making good on promises they made towards these businesses during the election.
Obama’s corrections
While I don’t agree with every single thing Obama has done, I do agree that change is necessary. The change that he is making is intended to correct the issues that led to the economic downturn. The trouble comes with statements from people like Steve Forbes. Mr. Forbes believes that he is the end-all-be-all-know-it-all when it comes to all-things-business. The trouble is, he doesn’t. Yes, he runs a successful magazine, but that doesn’t make him an authority. That makes him a successful business owner.
Obama is walking that fine line. A fine line that shouldn’t even be necessary. But, there it is. The line that’s there to help Obama help the economy, help spur business and growth and reduce the chances of a repeated failure. At the same time, the line is there to show that government values business, but isn’t there to socialize it. The trouble is, this economic downturn was of our own making. By our, I mean Wall Street. The housing bubble was just that, a bubble. Bubbles eventually burst and this bubble was no exception. It’s not as if analysts and intelligent minded people couldn’t see the handwriting on the wall. When the mortgage interest rates got down to 1% and all of those ARM and specialty loans were being issued like water flowing down the Mississippi, trouble was inevitable. We just didn’t know that banks and insurance companies were tying their financial soundness to these extremely risky loans using credit default swaps.
Until the bubble burst, no one really knew just how deep the rabbit hole went. Then, everything came crashing down and all of the nasty subprime mortgage and credit default swap issues came into view in their all fugly detailed glory. The first evidence of that was Bear Stearns followed by AIG (and the subsequent governmental bailout). I still think they should have let AIG fold, I digress.
Government and Business
It’s high time that government distanced itself from corporate businesses. It’s high time congress made laws to separate government from business (including political support). It’s high time that government stopped being a pawn for corporate businesses. Forbes clearly seems to think that Free Enterprise requires socialism to function. Free Enterprise is not part of and does not need socialism. Free Enterprise means that businesses can do whatever they need to do (within the limits of the laws) to make their business succeed. Clearly, there have not been laws enabled that have dramatically impacted Free Enterprise. The laws that have been enacted have been placed there to prevent corporations from producing risky investment vehicles with a high likelyhood of crashing down again. If businesses are now floundering, it’s not because of laws. It’s because corporations have lost their way and are still expecting handouts. Well, you can keep your hand out, but don’t expect the government to be dropping any coin in it.
Corporations have relied, no… depended on the US Government for handouts. That time needs to end. Subsidies for business need to go away. Businesses need to fend for themselves just like Free Enterprise mandates. If a business can’t make it on its own, then let it fail. I’ll repeat, LET IT FAIL. Failure is also part of Free Enterprise. Businesses that will succeed, will succeed because they produce a good product or service. Businesses that fail, will fail because they don’t produce good products or services.
Lost our way
America, and specifically corporate enterprises, have lost their way. For far too long have big corporations depended on favorable governmental conditions (sounds like a weather report) to help them stay in business. Well, that train has left (and must leave). It should be solely up to you and your business practices alone to make or break your company. It is the quality of your products, services and support that makes people want to buy your products or invest in your company. Nothing has changed about this aspect of Free Enterprise.
We need to go back to a time when quality was the key. When providing a superior product was the answer to getting people to buy things. If that also means deflation, then so be it. Businesses need to find their way by learning how to do more with less. How to manage their staff better and stop over-hiring. At the same time, many of them need to stop under-hiring and also value the employees that they have right now.
The key to keeping your business flowing is by keeping your employees active, productive and happy. Morale is a big problem in companies during any downturn. Once fear sets in over the next reduction in force (RIF), then morale falls to all-time-lows. No, taking the employees on an outing doesn’t boost morale. The way to boost morale is to stop RIFing the staff out the door. Yes, I know it gives a temporary boost to the stock price and makes the shareholders happy, but that’s a temporary fix with limited effects. Once the dust settles, the employees who are left become disgruntled, unhappy and produce less. This is completely backwards thinking. Which is why business has lost its way.
Shareholder value vs quality products
I know, someone’s going to say that it is all about ‘shareholder value’. That may be the way things seem now, but it is wrong. Currently accepted actions that lead to improved shareholder value tend to undercut production, stifle innovation, reduce profit margins and lower productivity. Why would you intentionally do this to your business? So, while these measures may seem to help the stock price, it does nothing to help the company improve its quality of products and services. In fact, in the long run, these actions almost always negatively impact the bottom line. So, the fundamental question is, are you in business to make the shareholders happy or are you in business to sell quality products and services? This fundamental question must be answered.
The true answer to this question also shows that Free Enterprise priorities today are all wrong. It used to be that the customer is #1. Now, shareholders are #1 and customers are #2. This is both wrong and stupid. Until businesses go back to the idea that the customer is #1, corporations will continue to fail and need governmental subsidies. While shareholders are considered #1, there is really no such thing as Free Enterprise when it comes to multi-million dollar corporations… which is why they always need a handout from the government.
Newest Scam: Law enforcement agencies target unsuspecting motorists with bogus citations
I’ve long suspected that this is happening, but now I’ve been a victim of this exact situation. In the state of the economy, especially here in California, local law enforcement agencies are apparently under the budgetary microscope. As a result, it now appears that law enforcement agencies have now joined the ranks of the scam artists… with one exception, they are legally sanctioned entities. In my case, my car was stated to have been located near an expired parking meter and cited for this parking infraction when it was no where near the location on that date. I do drive near that parking structure. Near yes, but almost never closer than 2-3 miles near it. Close enough that a local cop could have written down my plate number, seen the make, model and color and then used that information to create the scam citation. Yes, I could have contested the ticket, but the main issue is that the citation had nearly every bit of information about my vehicle correct except the body style (which was conveniently absent from the notice to pay). On top of that, the citation was issued so late in the contest process, I basically didn’t have time to contest it. However, the license plate number was correct, plate expiration year correct, make correct, color correct. The only thing that wasn’t correct and, of course, wasn’t written on the notice to pay the citation was the body style… how convenient. The other two things that were conveniently missing from their ‘system’.. the VIN and the month of the plate expiration. Two bits of information that would have conclusively proven my vehicle wasn’t there, but this information was conveniently absent.
Worse, law enforcement agencies can dig through the state’s plate database and simply choose license plates at random, write a citation based on some random vehicle incident, throw the ticket away and collect the money. That is assuming you don’t contest. The issue, though, is that if the officer is thorough enough about the make, color and license specifics, then they have you regardless of what the body style says to be or where you claim to have been at the time. Of course, if you happen to have conclusive proof that your vehicle wasn’t where the officer claims it was on the citation.. like a date stamped photograph of your vehicle at that moment in time (and how likely is that to happen) or some other proof your vehicle was locked up, then you’re likely going to end up paying the scam citation. Even contesting it, you may still end up paying. As long as the vehicle is in your name and the citation is tied to your plate, you’re liable period.
Honestly though, would you actually be able to successfully contest this? I mean, you can, yes. But, is it worth the effort? Sure, you could retain a lawyer, but that would cost you much more than the $45-$90 just to pay the citation. You could do it yourself and go to court. Again, they know this is a hassle and they are apparently exploiting this fact. They know you’ll pay because the amount is too small for all that hassle.
Incidents like these are exactly what government and law enforcement don’t need or want right now. Setting up scams to bring in cash isn’t the answer. But yet, it is happening.. likely every day. Note that in my case and because my car actually wasn’t where the officer claimed it was, I never received an initial citation. The only notice I received was from the collection agency. One officer stated to me when I called about this issue. “It might have just blown away”. Uh-huh.. riiiight. Maybe I didn’t receive it because my vehicle wasn’t actually there. But, that doesn’t matter. As long as the officer is thorough enough to go through the license database or write down your vehicle as you drive around town, they can easily set up scam citations to collect between $45 and $90 for the city, county (or the University in this case). And worse, as long as it’s in your name and the majority of the information is correct, even a judge may still find you liable for the fine.
Government problems just beginning
These issues are the beginning of the end of the government as we know it. When cops are now involved in state legalized racketeering, then there’s really no hope that this government can continue to exist. We are about to head back to the old west of lawlessness. If the police can no longer be trusted not to scam individuals out of their hard earned money, the no one can be trusted. This is the era in which the US and local governments will collapse. It will collapse under its own weight and ungainly methodologies. By unscrupulously taking advantage of its own infrastructure for illicit monetary gain, the end of this government draws near. It’s only a matter of time.
Government was initially designed to serve the people. Unfortunately, now it’s just the opposite. It now looks like people are now forced to serve the government. As long as these scams continue unabated, there is no hope for law enforcement agencies to gain any respect or trust from the people, let alone the government. And then they wonder why people no longer trust cops. Hello? Looks like the lights are on but no one’s home.
Our governments were designed to help us (the people). Unfortunately, now government appears to be helping itself more than the people. Of course, this issue is not the beginning. In reality, we can consider sales tax, use taxes, income tax all forms of legalized monetary scams. Ways to part you from your money. Sure, it’s supposed to help us through programs, but the only thing it really does is help government remain in power. If the American people stood up and finally said no to paying government fees, taxes and assessments in mass, it would be all over for government agencies. They simply would not be able to function. But, that’s not going to happen. Too many Americans believe that government is still necessary. But, do we need a government like this? A government that is no better than your average street thug dealing dope?
I’m not saying that government deals in dope, but don’t they? Just look at the FDA. It’s supposed to help protect us. But then, big pharma companies just use the FDA to put their expensive and hazardous drugs onto the market. Some of these drugs make us highly addicted or, worse, the drugs become lethal. Again, it’s another ‘legalized’ form of controlled chaos. I guess it’s all really a point of view at this point. It can only be called protection, though, if people don’t die. When people begin to die because big pharma decides to push the latest pill, then that isn’t any better than the drugs being shipped in from outside the US. So, how is the FDA really any better than a big drug cartel?
Government rethink
I think it’s time to rethink our governmental system. It is now time to realize that what our forefathers put in place is now collapsing under its own weight. Is there a governmental system that could work? Good question. We already know that other governmental forms like socialism and communism don’t really work. A democracy could work, but I think we’ve put so many laws into place that it’s now simply collapsing. I think there’s a point at which there are too many laws and I think we’ve already reached and exceeded that number. Worse, our governments have bastardized the bill of rights to fit the criteria of their point of view instead of what they actually mean. So, for example, you can claim the right to bear arms as long as you’re in a state where it’s legal to do so. Huh? How is that possible? The right to bear arms is a given right and cannot be revoked by any state. Again, as for the fourth amendment, what’s actually considered an ‘unreasonable search and seizure’? Because our forefathers weren’t more specific on this aspect, it is left open to interpretation. Interpretation leads to modification. Modification leads to the law only being valid under specific conditions. These modifications were not sanctioned by the bill of rights. Of course, so when it comes down to whether or not it violates the Bill of Rights, then it has to go in front of the Supreme Court. And, oh yes, this court is appointed by the President. If that is not conflict of interest, I don’t know what is.
Yes, it’s time to consider a new government. One that goes back to our roots. One that doesn’t try to save every business in the US. One that focuses on the people as people, not as a business. Free enterprise and entrepreneurship will survive no matter what. Businesses can fend for themselves. We no longer need businesses putting politicians in their back pockets simply to help keep the revenue flowing. This isn’t a nanny state, yet I believe that’s where we are fast heading, if not already there. Businesses don’t need any government officials ‘on their team’. But, big business will always argue that it does. That’s only because they want laws passed that benefit their ability to continue to make money. Truth is, no one looks out for an individual. Why should any third party look out for a company?
Government has sewn the seeds of its own destruction with situations such as all of the above. It’s now time for us to find another fundamental way to continue our society (and the human species). In the grand scheme of things, the government is probably the least important thing we have today. What’s most important is Earth and ours, the human species. Clearly, where we are today isn’t the answer.
Ponzi Schemes and Wall Street
I hope that everyone who invests money knows that entrusting your money to someone else is risky. It doesn’t matter if the yield is 0%, 2% or 5%. The act of handing your money to someone else involves risk. So, is it then no surprise when someone like Bernard Madoff, who once the chairman of the Nasdaq Stock Market, is arrested for an alleged ponzi scheme that bilked people out of billions?
Hello, no! Wake up people. When times are good, no one delves into such corrupt Wall Street vehicles because they are self-sustaining. It’s only when times become bad that these schemes fall apart. The way a ponzi scheme works is by paying old investors out with new investor money. The fund itself is not self-sustaining (and probably was never intended to be). So, as new investors dry up, the older investers can no longer be paid. The whole thing then falls apart.
But, the question isn’t so much that this one person did this. It’s the loss of trust and of faith in the system. It’s the question of how many more people are doing it? When respected people of the invesment community end up operating such scam vehicles, what does that say of Wall Street as a whole? Clearly, this is not and will not be the only ponzi scheme to turn up. It’s the first major case of it recently, but it certainly won’t be the last.
Is investing a bad idea? Not necessarily. But, it is risky. This is why diversification is part of the answer. Do not put your money into one fund or even two or three funds. Spread the money out into many funds. Granted, it’s harder to keep track of, but the chances that every single investment fund being corrupt is unlikely. However, we all know that money corrupts. So, you have to take the good with the bad when you give someone your cash to manage.
These are the kinds of problems that shake the foundations of investing to the core. These are the kinds of trust issues that the investment community needs to avoid like the plague. Yet, here we are. These are also the kinds of problems that America itself has been fostering for the last 10-15 years. Why is greed, power and corruption such a big part of the American dream today? Only a historian will be able to look back and fully answer this question. Today, these problems appear to be unrelated. But, is this problem systemic? Is it only likely to get worse? When well respected Wall Street investment professionals, such as Madoff, can bilk so many out of their money, this is much more than isolated and, indeed, does appear to be systemic and a symptom of a much bigger issue.
At this point, America needs an overhaul and perhaps this downturn and the financial sector upheaval is the beginning of that overhaul. The corporate and financial system on which this country is based is near completely broken. When 20 year veterans of Wall Street can turn to Ponzi schemes to keep their lifestyle afloat, anything can happen. So, watch your money closely when you invest. But, even doing so is no guarantee that you aren’t investing in a sham. One quote is more salient now than ever… “Caveat Emptor” (Buyer Beware).
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