Friday, January 30, 2004

These are my five thoughts on a Friday morning

1. The New England Patriots are getting NO respect from the media as we approach Super Bowl XXXVIII. Here is a team that went 14-2, putting together one of the three best seasons of all time (’72 Dolphins and ’85 Bears being the others). They went 6-0 against Tennessee, Miami and Indianapolis. They beat Denver at Inevsco Field. They gave up only 238 points total this year for an average of 14.9 ppg, best in the NFL. They allowed an average of 89.6 yards rushing per game, fourth best in the NFL. And yet the Pats are getting ignored as Carolina becomes the trendy pick. The fourth best team in the vastly inferior NFC. A team that drew a pitiful Dallas in the first round, was gifted a victory by St. Louis in the second round and then could only beat a mediocre Philly team by 11 points. And that was after they knocked McNabb out of the game with a non-penalized late hit on his leg. What a joke. This game may start close, but it won’t end that way. Pats over Cats, 34-10.

2. The Democrats are really bereft of good candidates this year. The best one they have is Lieberman, and he’s getting no traction. Why? Because the primary system is dominated by the far wings of either party. Lieberman is a moderate. And there are a lot of people who would vote for him in the general election. But they won’t get the chance because he isn’t liberal enough for the Democratic hierarchy who control the primaries. Just as McCain wasn’t conservative enough for the GOP hierarchy in 2000. When you combine this with the current two-party system, what you end up with are candidates that pay lip-service to the moderates (who are the majority of registered voters) in the general election and then revert to the far left/right orthodoxy of their party once they take office. Meanwhile the true centrists are shut out with no viable 3rd party outlet (at least for now) to continue their candidacy from. The results are obvious.

2a. But the Democrats are in a real jam. Who do you pick? Dean? He alienates as many people as he attracts. He rails against corporate interests, but he opened up Vermont to the captive insurance industry, giving them massive tax breaks. And his entire campaign is, essentially, “Bush Bad!” Kerry is a joke, a slimy sleaze who constantly wants it both ways. He threw away his medals protesting the Vietnam War and slept outside. Except they weren’t his medals and he actually stayed in a Georgetown apartment. He voted for welfare reform. Except he tried to gut the reform by voting for numerous liberal amendments. He voted to authorize Bush to take out Iraq. Oh wait, he thought “war” meant “threaten with a lot of words”, so he’s against the war now. He let people think for years he was Irish (being a MA senator) until it came out he’s not Irish at all. You can’t believe a thing he says. Edwards? Not enough name recognition. Plus, he a trial lawyer. That’ll go over real well with Americans. I can see the debate now. “Why is medical malpractice insurance so high? Why are doctors having to close their practices? Let’s ask John, who’s helped spike those fees.” Lieberman is good, but as detailed above, liberal trumps electable in the Democratic race.

2b. The better question is: What happens in 2008? There are rumors that Chaney is getting dropped off the ’04 GOP ticket. For whom, you ask? Mayor Giuliani. Which would make him the probable GOP candidate (provided the far-right can handle it). And you’d have to be brain-dead to not realize that the other, more annoying, Clinton is going to be the Democratic nominee in ’08. Which sets up a rematch of the 2000 NY senate race that was called on account of prostate cancer. This will be the ugliest, nastiest presidential campaign of all time.

3. Martha Stewart is getting screwed. This entire case is a joke. Had it been you or me who did this, the worst we would face is a fine. By the government’s evidence, she sold her ImClone stock (only 3,800 shares!) based on the advice of her broker who spoke to Waksal. So she didn’t even get the insider information first-hand. More damning to the case is that she tried to sell her stock PRIOR to all this. What I don’t understand is this. Stewart, at WORST, engaged in a case of borderline insider-trading that hurt nobody and involved 3,800 shares of stock. Meanwhile, Kenneth Lay presided over the Enron debacle which simultaneously tanked the stock market, ruined thousands of 401(k) plans and put thousands more out of work. The company engaged in blatant fraud and theft of funds for personal gain. Ken Lay presided over all of this. Where is his trial? Why isn’t the government trying to take him down? What a joke.

4. In the state where I live (just north of MA and east of NH), the government recently instituted a smoking ban in all bars, ala New York City. Of course, no one asked for this law. The government simply decided that it was necessary b/c of the “dangers” of second-hand smoke. Plus, they said the bars will get MORE business from people who don’t like smoking… What a crock. First of all, if smokeless bars generated more revenue, some bar owner would have already done it. That’s just common sense. Second, the “studies” about second-hand smoke are flawed. I refer you to this excellent site to find out how much of this is simply done in the interest of health advocates, trial lawyers and government flunkies (i.e. people who make money off of this). Third, the government shouldn’t be legislating simple issues of choice. If the public didn’t want smoke in bars, they’d bring it up in the form of a referendum or they’d write many letters to their representatives. None of this happened. And I won’t even get into how they expect the police to enforce this law, which means they’ll have less time to devote to keeping people safe and stopping REAL crimes. If I don’t want to inhale someone’s cigarette smoke (and I don’t smoke, BTW), then I will move or leave. And if a bar owner wants to ban smoking, that’s HIS call as a business owner. We don’t need the government to be our nanny.

5. I thought all this productivity and technology was supposed to make our lives easier. So why am I working more hours?? I have never been so happy to see a Friday as I am to see this one. I am exhausted. I may not like much about the way Europe runs their economies, but they have the generous vacation time concept down to a science. I am fortunate in that I get three weeks, when I know many people get two or less. But compared to the Germans, who I believe average six weeks, we’re drones. I doubt it’d kill Corporate America to give everyone another week. But I won’t hold my breath.

Bonus Sixth Thought! Today marks the 32nd anniversary of “Bloody Sunday”, the massacre of 13 innocent civilians in Derry, who were demonstrating peacefully against British rule in Northern Ireland. 32 years later, the unionists are now led by Rev. Ian Paisley, who makes a mockery of the title “Reverend” and is about as far from a man of God as one can be. Paisley will only be happy when every nationalist in Northern Ireland is either forced into the Republic or buried in a pine box. As long as men like him are helping to shape the debate in Northern Ireland, that land will never know peace.

Thursday, January 29, 2004

Back after a looooong break

I am rerunning the last post I made b/c I think it's important enough to run twice. The small businessman (or woman) is vanishing quickly in this country. And that is a silent threat that must be addressed...

There is a subtle change occurring in the fabric of American society, one that we may not immediately notice. But it is a powerful change, one that bodes ill for us if it continues at its current pace. And that is the replacement of small business in America by large corporations as the engine of economic growth.

That this is occurring is undeniable. According to records kept by the Small Business Administration, in 1988 small businesses (defined as having 500 employees or less) accounted for 54.6% of employment in the United States. In 2003, that number has shrunk to 50.1%. Never before has small business accounted for less that 50% of total employment in the United States. But if the current downward trend continues (as it has every year except for 2001, when it remained at 50.9%), then in 2004 large corporations will become the dominant employer in the United States.

This should not be taken as an attack on corporations. They serve an important function in society: creating economies of scale in high-tech and high-labor products. If I want a car, I want a Ford rather than Joe's Automobile. If I am looking for a new computer, I'll take a Dell instead of something slapped together in a dank basement. Thanks to corporations we have affordable computers, appliances, vehicles...the list can go on and on.

Rather, this is an attack against both parties, who, quite frankly, see it in their best interest to minimize small business employment. We'll get to that in a minute. Let's look at how each party attacks small business.

The Republican Party has reduced dividend taxes and the upper income tax bracket. The former benefits the large corporations who senior leadership holds large amounts of the company's stock. The latter benefits the top 5% of taxpayers in the economic food chain. It would also benefit small business owners, who are commonly taxed at individual rates as opposed to corporate rates. Except, that as individuals they become subject to the Alternative Minimum Tax (AMT), which has yet to be addressed by Congress or the White House. This regressive piece of 70s legislation effectively boosts the small business owner's taxes much higher, which is a major impediment to growth. Meanwhile the large corporation makes more money on the lower taxes, and apparently they are pocketing the cash since unemployment has risen steadily since Bush took office.

The Democrats are no better. They have relentlessly battered small business owners with minimum wage increases and tax increases. Minimum wage increases sound good, but are ultimately damaging to both the small business owner and the worker. The owner is suddenly forced to come up with possibly tens of thousands of dollars in increased wages. Where is that supposed to come from? Well, he can either increase the price of his product or he can lay off some employees to pay the rest. The first choice can result in lower sales and increased financial pressure, the second increases unemployment and forces the remaining workers to do more work to maintain sales income. And tax increases, like the AMT, unfairly target small business owners since they pay the high-end individual rate while corporations pay the lower business-tax rate. Small business owners pay the 35% tax rate on every dollar earned after $311,950. Corporations don't pay the 35% tax rate until they hit $10,000,000. Increasing the personal tax rate hammers small business but leaves the corporations in the clear.

The result is that the small business owner is attacked from both ends of the political spectrum. Add in the spiraling costs of both health and liability insurance (thanks to a lack of tort reform and frivolous lawsuits), and it is small wonder that small business owners are on the decline.

Which suits both parties just fine. The GOP's natural allies are big business. The more people that are employed by corporations, the more people that have an interest in corporations doing well. Democrats’ top allies are the trade unions and public sector services. There is little unionism in real estate, finance, professional services and other areas where small business dominate. Hence, the Democrats have little interest. As a bonus, if the shutting down of small business creates unemployment, then the Democrats can promise those people government assistance and try to tie them to the party in that fashion. People vote their pocketbook, regardless of whether it's a corporate paycheck or government largess that is filling it.

All this creates an environment that allows the Wal-Marts of the world to dominate. They move in and aggressively cut their prices, knowing they can make up the loss at their other stores. The small business owners, already hemmed in by spiraling insurance costs and wage increases, begin to lose business. They can't raise prices to make up the loss in sales. Eventually, they close down. Now there are maybe 100 or so people out of work. But hey, the new Wal-Mart needs people. So these people - who were probably making $10 an hour at least - are now making between $6.25 and $8.00. If they're lucky, they can work hard and move up to $9.15 an hour after a couple of years. But Wal-Mart is a corporation that has to answer to stockholders. It has a corporate policy for each store of limiting wages to a hard percentage of sales. So when the cashiers start making $10 an hour after all that hard work, they get dumped and new trainees come in at the $6.25 level again.

And even if you keep your job, you are making so much less, you can only afford to shop at one place: Wal-Mart. Which is the real evil behind all of this. Wal-Mart moves into a small community and destroys small business, scoops up the unemployed and gives them lower wages. These people then shop at Wal-Mart, buying Wal-Mart goods. So the company gets back a high percentage of the money it pays out to its employees. The same happens at Target, Costco and others.

And so it goes: Small business flounders and dies while both parties court their own special groups and mass-retailers fill the employment void creating wage slaves who earn just enough to buy the company's own products. Not exactly what I would call the American dream.

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