Sunday, October 23, 2011

A More Perfect Union

For those of us who are in Ohio there is a big issue coming up for a vote in November regarding a law which was passed called SB5. It involves the public sector unions but some of the issues extend beyond just them and involve private sector unions as well. What follows are my major concerns, which sprang up as a result of a debate on Facebook, regarding collective bargaining and public sector union.

1) Who says collective bargaining is a right? I mean other than Karl Marx?

2) For public sector unions why do I as a taxpayer have to pay for all of their healthcare, pensions, etc. and them none? Especially when most of them make twice as much as I do?

3) Government employees shouldn't be allowed to strike because when they do they are doing so with the intent of harming the taxpayers. By the way, SB5 will still allow them to picket, which is distinctly different than striking.

4) Unions exist only to serve themselves and that is demonstrated in their actions. Ask your union leaders how much they make. I'll bet it's a hell of a lot more than you isn't it? Ask your union leaders if your pension is fully funded (it likely isn't) and then ask if his is. I'd bet it is. Your union leaders are only interested in themselves. They are rich off of your labor and sweat. And when the money is all spent and you have to take a layoff, they will walk away rich beyond your wildest dreams. The thing is that the union leaders and members, not being the people who put the company/government there which they are working for in the first place, are the only people on earth who are stupid enough to bite the hand that feeds them. And they pay for it every time they vote to walk away with their own money while screwing their friends and co-workers out of a job. But more on that later…

5) According to the department of labor statistics, union membership in this country totals at about eleven percent. If all unions were disbanded right now the total effect on the middle-class, of which I am one of, would be astonishingly negligible.

6) The thing about unions always voting to screw their brother and sisters out of a job to keep the money in their own pockets is true and demonstrated for everybody to see with the SB5 situation. With SB5 in place, the budget is balanced where it wasn't before, and nobody is getting laid off. Without SB5 the budget will go back out of balance and public sector employees will get laid off. So what I said is true and is happening right now before your very eyes.

In addition to that I know many people who are or have been in unions. The story is always the same. They will never vote to take a cut in their own pay. They will always vote to screw their brothers out of their jobs. And it's as predictable as gravity.

8) Unions are nearly insignificant and have become a bane on society founded on the erroneous principle that everybody is equal but some are more equal than others. At first they had some usefulness in improving safe working conditions and when that was the issue they had the public support. Now it’s only about power and greed. And when they don’t get their way tires get slashed, people get shot, property gets destroyed, and still the leaders walk away with loads of cash and political power.

One of my friends used to work for Foodtown. He was in the union. The company decided they could not afford the level of workers they had so they had to lay some people off. My friend’s name came up in that layoff. Fortunately for him a position in management opened up and he was asked if he would be willing to take it. Having a family to support he decided to take the position. A short time afterwards he went to his car after work and found his tires slashed. This is the mentality of unions. No individual is allowed to succeed. You forfeit your individual rights for the collective. You will be assimilated. Resistance is futile.

9) Public sector unions are a conflict of interest. The flow of money goes from the taxpayer to the government. The government pays the union members. The union members currently have their union dues subtracted from their paychecks by government accountants and so the taxpayer’s money goes to the unions. The unions donate to campaigns to elect union friendly government officials. The union friendly government officials sit across the bargaining table from the union negotiators who contributed to their elections and raise the pay and benefits of the union members who elected them. The government officials, elected by the unions, raise taxes on the taxpayer who pay more into the system. The bottom line is the tax payer gets screwed while the union leaders and government officials get elected and a truck load of money. SB5 fixes this conflict of interest which most would define as blatant corruption.

Sunday, October 16, 2011

Education

Today I feel like writing about education, which incidentally is an area in which I have some expertise. There is a lot of talk these days about how the United States’ educational system is failing which is an assessment I happen to agree with. There are also a lot of people pointing the finger of blame at an awful lot of other people and a lot of those people’s time might be better spent looking in the mirror.

Some people say we need to spend more money on new buildings with all of the modern accessories, computers, school lunches, higher paid teachers with better benefits, lots of teacher’s assistants, the school band, the extra-curricular activities, the football team, and all kinds of mental experts to try and figure out what could be wrong with our kids. All of this which would be backed up by a nice strong teacher’s union with powerful collective bargaining rights.

“Yes sir! That would fix it for sure!” they say. "How could we possibly educate our children without lots and lots and lots of money?"

Well, let’s take a look at that…not the education, the money.




Ironic that I should show you a five dollar bill here isn’t it?

What? You don’t think so?

Well consider this; the man on the five dollar bill was likely educated on less than five dollars. Of course nobody knows the exact amount but it wasn’t very much and none of it came from the federal government also known as the taxpayer. Hmmm…a log cabin, an oil lamp or candle, no teacher, sometimes no mother, sometimes no father, sometimes no food, no band, no chess club, no glee club, no football team, no collective bargaining, no psychologists, no computers, no school system, and no teacher’s union.

Do you kind of notice a few minor little disparities between what we are being told is absolutely necessary to educate our children, and what a man who was as many would argue, one of the best presidents of the United States, actually had to get his education? How on God’s Earth did this man ever succeed in his education without all of this money? But a better question might be; how is it with all the cash pouring into the system that we get such a large number of students who can’t even read?  Boy they sure can toss a football though can’t they? Could it be that we’re missing something here?

Is an education a football team? Is an education a cheerleader? Is it a teacher, a union, a computer, good lighting, food, collective bargaining, good heath care for the teacher or any of the other things we’ve been told are necessary? I would think not. We have plenty of those things. So much so that we are about to go broke paying for them. Lincoln had none of the things people are saying are so important and he rose to the presidency. Now I’ll grant you that some of those things, like cheerleaders for example, are really very nice to have an abundant supply of. But I think it’s pretty clear that none of those things are an education. With the results the system is getting it could be argued that those things are more of a distraction.

As a person who earlier in this article claimed to have some expertise in education I’ve learned a most important thing. You have to understand the definitions of words or becoming educated is an impossibility. In that spirit I give you my own personal definition of what education is. Education is a communication to students, in a manner which makes the data understandable and usable to the students for the enhancement of their lives. If you haven’t accomplished all of the things in this definition you are not educated in spite of all the facts you can regurgitate or how far you can throw a football.

Don’t underestimate the value of a good education. Just be sure what is happening in the schools follows the above definition in spite of all of the other things going on and it will be a good education.

Some might say I'm against education. Nothing could be further from the truth. But there is something I hope you will always remember:

You can’t develop a good product without a formal college education.


You can’t make money if you drop out of college.


You can’t be successful if you don’t graduate from high school.


You can’t change the world without going through the public education system.


And nobody will ever take you seriously if you don't have an education that you are completely satisfied with.


Sunday, October 2, 2011

The Rules of Money

I’m going to say at the start of this post that I’m no financial expert. However, I can see some basic things very well. The basic things I see serve me very well and often enough when things are going very bad one of the basic principles has to be out of whack.

There is a lot of attention in our world being paid to the subject of money. I don’t know or care to comment on what other people think of the stuff but I can observe that there is a lot of confusion regarding it. What is it? What gives it value? Why do so many people depend on it? Why do so many people expect to get it for nothing? Why do so many other people think that other people have gotten it for nothing?

I often tell people that the best way to separate a rich man from his money is to sell him something he needs. In that spirit, I have written my own set of rules and understandings of money.

Some of these rules overlap quite a bit, but as such, each one expands on the others and depends on them as well.

1.      Money is of itself worthless.

Yes, that’s what I said. Money is worthless. A lot of people look at me kind of funny when I say that but it is apparently true. Let’s take the character Tom Hanks played in the movie “Castaway.” Suppose the crashed airplane would have been carrying huge bails of money, which washed up on the beach of his little island. Would that money be worth anything at all to him? He couldn’t buy anything with it could he? The most he could do with it that would be of any value would be to burn it to stay warm.

My book, “Vengeance” is not worth  the cover price of $16.95. The cover price of $16.95 is worth my book. The value is not carried by the money. It’s carried by the book. That is to say, the book gives the money its value. If this confuses you or goes against your understanding, I urge you to think carefully on the next couple of rules.

2.      Any value money has is an apparency derived from the considerations of the people spending it or receiving it.

Look at the financial websites from day to day and you will see a thing called the “Dollar Index.” From day to day the value of the dollar is tracked, from day to day the value of the dollar changes. If you study the numbers for a while, you will realize that nothing changes this value except that people think the value of it is changing. Prices of things go up and they go down. All that has changed is the consideration that the value of the money has changed.

3.      If you understand the considerations of people, you can understand money.

Since the value of money is based on what people are thinking if you understand those thoughts, you will understand where the value of money comes from. Here’s a hint; people are trying to survive!

4.      The considerations which give money value are:

a.      The considered survival value of the product exchanged for it. (demand)

This depends a lot on the circumstances of yourself and the world. Let’s take the “Castaway” character again. Suppose the bails of money on the beach counted out to a hundred-million dollars. Would he have paid the whole hundred-million dollars for a single solar powered satellite phone or would he have held out for a better price? That’s not a high valued phone. It’s low valued money because of the survival value of the phone. When he gets back to civilization, the phone might be worth a couple hundred bucks because its survival value has changed. Bail after bail of the money could wash up on the beach and it would only be a source of fuel for heat on a chilly night. The phone however is freedom!

b.      The number of people to exchange with.

You can’t have money or make money unless there is somebody there to trade the money with. This would be a lack of customers in your store. Just like our castaway, there is nobody to give the money to in trade for the product or nobody to take the money from in exchange for a product. Therefore, money without people is worthless.

c.       The supply of product to be exchanged.

If you were a chicken farmer and had ten times as many chickens as you could afford to feed you would lower the price of the chicken you were selling before they ate you out of business wouldn’t you? This raises the value of the money because now the customer can buy more chickens with it.

d.      The supply of money.

Let’s do a little mental exercise for this one. Let’s imagine that you’ve got a house with three large extra rooms. Imagine those rooms filled with bails of hundred dollar bills. Now fill half of the remaining rooms with hundred dollar bills, so much so that it’s difficult for you to move about the house. Now fill the basement and garage with hundred dollar bills. Now have the back and front yard filled with hundred dollar bills piled up to ten feet high. Now imagine all of the yards of all of the houses on your whole block filled with bails of hundred dollar bills. Imagine that the whole world is totally awash with bails of hundred dollar bills piled ten feet deep. What’s that money worth in your mind right now? It's just litter that is worth just a little bit more than the Zimbabwe one hundred trillion dollar bill, which by the way, really does exist.




Now imagine you have only one dollar. There is our chicken farmer in front of you with some chickens he’s willing to sell and you are negotiating the price of the chickens. That is the only dollar you’ve seen in a month. Your child is standing there next to you and is hungry. What’s that dollar worth? If you said, "as many chickens as the farmer would sell me for a dollar," you've got the idea.

5.      The survival value of products is one of the most important considerations concerning the value of money.

Continuing with our previous scenario, that one dollar would be worth all of the farmer’s chickens in your mind, or at least enough to feed your child until you can find another dollar wouldn’t it? And if the farmer agrees that the dollar is worth five chickens, it's worth five chickens. If the farmer agrees that it's worth one chicken, it's worth one chicken.

6.      Scarcity of survival-valued products always equals desperation, because of this; excessive need lowers the value of money.

If it’s been a month since you’ve seen your last dollar and you don’t know when your next dollar is coming you’ve likely been short on food for a while. Look at this though; you will likely take as many chickens as that farmer will sell you for a dollar wouldn’t you? Hopefully he’s got too many chickens and is looking to get rid of them and so you will get more for your dollar. What if he doesn’t have a lot of chickens though? What if his family is hungry too and they’ve had to eat their stock just to survive? You won’t get many chickens from him. Therefore, your dollar isn’t worth as much to him is it?

7.      Time can be a survival value product so paying interest on a loan is buying time.

You want the house right now. Your family needs a place to live. You only have half the money you need for it so you go to the bank and borrow the rest at five percent. If you would have been able to save the rest of the money in ten years to pay for the whole house at once you could consider yourself to have bought ten years of house for five percent interest.

8.      Above the minimum survival level of prosperity aesthetics and entertainment can enter in as a survival consideration of a product. This is why people buy art and jewels, etc.

So things have been going well. The house is caught up and ahead on payments. The cars are running fine. The kids are fed. You are several paychecks ahead in your bank account. Why not go see a concert? Take the kids to Disney? Buy a big-screen HD television? Or a diamond ring?

9.      The amount of money in an economic system has to be close to the amount of valuable product in the system or the value of the money will inflate or deflate.

It’s just as bad to have too much product with no money to exchange for it as it is to have too much money and no product to exchange for it. The happy spot is in the middle. There aren’t too many or too few chickens. There isn’t too much or too little money. If both of these conditions are true values of them both would remain stable.

10.  People who have a lot of money spend a lot of money. Their spending a lot of money causes other people to have a lot of money to spend. This is how an economic system is perpetuated.

Look at rule #8 again. You are several checks ahead and bought a brand new HDTV. The guy who sold it now has money. He can now go out and buy that new car he’s been needing, assuming enough other people have bought HDTVs as well. So he does. The guy selling the car bought it from the guy who made the car. Now they can take the kids to Disney.

So what if Big Mister Gotbucks wants to buy fifty-seven yachts? He has to buy them from somebody doesn’t he? The guy he bought them from had to build them didn’t he? The materials he built them with came from someone didn’t they? Somebody has to maintain them and crew them don’t they?

Even if Big Mister Gotbucks doesn’t want yachts he’s not usually going to keep all of his money in cash under his mattress is he? No, of course he isn’t! He’s going to put it in the bank to lend to you so that you can build your house ten years earlier. Well somebody has to be paid to build your house don’t they? They have to buy the materials from somebody else don’t they? Great! Now he can afford to take his wife to the Rush concert and watch Geddy, Alex and Neil play “The Big Money” so they can pay the people to set up their stage for them who in turn can take their kids to Disney or buy an HDTV.

11.  The apparent amount of money a person, business or economic system has can be increased by the velocity of the money moving in and out of it, or within it, without needing to increase the amount of physical money.

Let’s say I make tens of thousands of dollars a year. Yet very rarely do I have tens of thousands of dollars on me. So if I had ten thousand dollars and spent them all, soon after which I got ten thousand more. Then I spend that. I would have made twenty thousand dollars right? Okay what if I did that ten times a year? I would have made a hundred thousand. What if I did it a hundred times a year? I would have made a million dollars right? Well what if I did that ten-thousand times a year? I would be rubbing elbows with the likes of Bill Gates wouldn’t I? However, at no time during this whole thing would I have more than ten thousand dollars!

That’s strange isn’t it? It’s not an amount of money it’s a velocity, how fast the money is moving from hand to hand. It could be the same ten thousand dollars moving into and out of my bank account ten thousand times and it wouldn’t make a bit of difference would it? My account would show that I had made and spent a billion dollars in a year.

One thing to keep in mind here…if money is taken from Big Mister Gotbucks through too much taxation it slows the system down and thus reduces the amount of money in the system. While some people might think this is a good way to compensate for their irresponsible spending, what it really means is “No Rush concert for you!”

The moral of the story is, “Don’t bash someone who makes a lot of money for the money that they make. Look at how much of it they spend and thank them for doing so!”

12.  Any money that is transferred without an adequate an exchange of product has less value and will tend to destroy an economic system.

Let’s suppose I walked up to and handed you a hundred dollars for nothing. Then you hand it so someone else for nothing. Then he hands it to someone else for nothing. What is that hundred dollars worth? Nothing, of course! So supposing on a larger scale everybody in the world gave all of their money away for nothing and received nothing in return for it. What would the world have? Nothing, of course!

It would be a lot like our castaway stranded on the island with bails and bails of money except this time he’s with a hundred other people. They could trade the money all day long and never buy anything of value. There’s nothing there to trade it for!

So if a government prints, and prints, and prints, and prints, more and more, and more, money then gives it away in exchange for nothing, what does that do to the value of the money?

13.  A person has to contribute survival value products to an economic system to consider himself to be of value.

People who are given money for nothing over long periods of time consider themselves to have no value to society. Look at the areas of any country where welfare has been a family tradition for several generations. Talk to them for a while about things they might do to change or improve their lives and count how many times they answer with the words, “I can’t…” or something similar. They’ve lost their ability to create a product which they can exchange for money, even if it is their own labor, and think themselves worthless. People who have been treated in this manner for a long time are a liability to have around you.

Look at it this way…the money flows from a place of value to a person who has nothing to give in exchange for it. Over and over again, year after year, value to nothing, value to nothing, value to nothing. It’s a very short leap from “I have nothing of value to give” to “I am nothing of value,” isn’t it? After a while, that’s what the person receiving the money thinks he is. Nothing. Why should nothing care about something?

14.  Any survival products which are transferred, in excess, without the exchange of money, which was earned through the production of other survival products, are considered worthless by the receiver. These products will likely be unappreciated, taken for granted or destroyed.

Let’s look closer at the welfare state as in #13 above. I urge you to take a close look at the neighborhoods that were paid for by welfare checks. Is anything there well maintained? Look at the welfare apartments, projects and such. They aren’t just run down. They are overtly or covertly destroyed. Graphitti , litter and piles of junk abound. That stuff doesn’t just spring up from nowhere; it has to be put there by somebody who doesn’t care. Nobody owns them, nobody has worked for them and nobody considers them to be of value. As a result, that is how they are treated.

These are high crime areas and no amount of money thrown at them is ever going to change that. It will make it worse. These areas happen because of the basic misunderstanding of money in society. The thought that the money is the value, is the problem. The thinking that all you have to do to improve the value of something is to put more money into it is false. You don’t add value to something by putting in more and more money. You add value by increasing the ability to get products out. If you can arrange the area so that something productive comes out of it, money will flow into it, almost of its own accord.

15.  Scarcity of money in and of itself does not equal desperation.

If you had no money and had not eaten for three days and somebody gave you a ten-dollar bill the first thing you would do is get rid of the money and get some food. It’s not the money that causes the desperation it’s the lack of food. If you were the chicken farmer and raised enough chickens you would never worry about buying them would you? No matter how little money came in you could still find food. There would be no need for money if you could create everything you needed and wanted for yourself.