The Climategate Lesson Refusal

Global warming research has been corrupted by news of a number of newly revealed scandals. A major disclosure of what occurred at the University of East Anglia in the U.K. and the U. N. research debacle are cases in point.

Those who always disputed global warming contentions are finally, though only slowly, being given voice not available to them in the past.

Yet, there is still continued talk of climate-warming change. It has been a religious-like habit that many have invested too much of their careers in, for them to suddenly recant as having been a hoax.

This is not the same as the world need for clean air and water, but the old global warming mantra has truly become a secular religion to many on the left.

In fact, the SEC, influenced by the Obama administration, wants corporations to report how they are handling the problems of global warming. As if the hoax were never perpetrated.

A Plan for Real Health Insurance Change

A list of health insurance changes that will really make it cheaper to buy health insurance, while making health care more efficient. Remember, effective insurance is as important as mere coverage.

One: Do away with wasteful first dollar insurance. Too much costly paperwork is involved for small claims everyone can afford to pay. Have deductibles for small amounts but be sure to cover catastrophic losses.

Two: Make insurance portable from job to job and state to state. That is worthwhile change most folks need right away.

Three: Make coverage available to all, but not just when someone gets sick. That’s like buying fire insurance only when your house burns down.

Four: Have interstate insurance competition. You can be sure that will reduce cost.

Five: Eliminate junk law suits with tort reform, preferably with arbitration panels that eliminate the huge lawyer’s take. And wipe out health care fraud.

Buying a Franchise

Why should you buy a franchise? The main purpose in buying is to get a valued company name and expertise. But you can probably duplicate the same entity you seek and acquire that expertise at no franchising cost on your own.

I have discussed this many times in the past. Buying a franchise may make sense only if you get a highly recognized brand name and you get special management expertise.

You must realize that the usual upfront fees and the royalty you pay on sales, that cover whatever management training and materials received, will probably represent about half your net earnings.

Many franchisees eventually form groups with other franchisees, to sue over contract terms because they are unhappy with their arrangement.

So, think clearly before you make a franchising decision.

Management Risks

There are generally flaws in four types of serious management areas in finding and considering business risks.

One: Knowing what the possible risks actually are.

Two: The size, types and pitfalls of accounts receivable collections.

Three: Salary excesses, their fringe costs and how they can be controlled.

Four: Existing and potential production problems and where they can be regulated .

What compounds these problems in many organizations, large or small, is the inability to adequately recognize them early on. And to monitor them, while managing their potential risks on an ongoing basis.

“Too Big to Fail” Implies Another Problem

We hear the term “too big to fail” a lot in connection with banks these days. It brings up a thought.

If a business or bank is too big to fail, according to a government regulator’s premise, might it not be too big to manage in the first place? Perhaps the emphasis on size is misdirected when related only to the need for government oversight.

When corporate entities get that enormous, there usually are hidden management pitfalls that are almost impossible to recognize and avoid. Those resultant problems may involve more than conventional governmental regulation.

Example: Many commercial banks also are in the investment banking business. We know that. But there are aspects of investment banking that can veer off in varying directions, which I have always felt go beyond the normal skills of everyday managerial skills at those institutions. Those specialized skills are business-oriented and are wanting.

Problems encountered have little to do with the need for more regulation. In fact, the more regulation imposed, the more likely, management will fail.

Liberals Try Beating the System

It is amazing how liberals or those who profess to be liberals, love to beat the “system.” But by doing so, they generally attempt to get at or impugn “big business” or “profiteers” or anyone who has more money than they.

But that often means they can stick it to anyone who they have taken money from. I am speaking about sources who provide jobs to employ them. Even government jobs must come from taxes paid by the “rich.”

Sometimes their sense of entitlement will get out of hand. Examples of liberal entitlement misdirection:

Ads on credit card reduction where banks are abused for wanting to collect “YOUR money they lent you.”

Or where you have the sole right to change the terms of your mortgage from lenders, obligations that you never could afford and never should have taken.

Painful Productivity Gains

Many economic changes occur without public knowledge or fanfare. Yet, they affect the personal affairs of all of us.

I often suggest the public ought to get some basic Economics 101 education, so that they may more readily absorb information that has so much to do with their everyday lives.

Example: Positive changes in output per hour by industry often is made out, correctly, to be good during economic recessions; it helps recovery. Companies cut staff to do this to keep their labor costs low. It is happening in this deep recession. One of the few positive aspects.

It is painful, of course. Lost jobs produce the statistic. However, that is true only in private industry. The public sector, particularly those jobs which are unionized, are being added to, with the aid of past federal stimulus funds. And they are budget-busting.

Redoing the Corporate Image

Companies try to redo their image and management focus when fortunes turn bad. They do what individuals do on New Year’s Eve. Make resolutions. Most individuals do it as a lark because no one seems to take those resolutions seriously.

When companies do it. however, it’s an expensive undertaking. And it’s often a sign of desperation and poor management when it periodically and habitually occurs.

Customers and the public instinctively feel management may be hiding real problems and that it is all an indication that management is weak or dishonest.

There is a natural tendency not to believe what corporations say and do, thanks to populist left-leaning media and politicians. Corporate managers have to be doubly careful about image at all times. They can be damned no matter what they say or do.

The College Premium?

I see estimates of a college education being worth from about $800,000 to as high as $1 million. That is a common figure used by educators, comparing what someone can earn over a lifetime with a college degree, as opposed to earnings of a non-college educated individual.

But the numbers received on this subject from the College Board, for example, are for the average of such students and are based on a 1999 study. What the estimates do not take into account are a list of important factors. Some:

One: Student debts racked up in going to college ought to include those of their parents and weigh down college advantages. Interest on the debts are huge but so are the societal problems associated with those debts.

Two: An assumption is made that all non-college jobs are non-skilled. Many skilled jobs that do not call for a college degree, such as electricians and plumbers, pay far better than college-bred positions.

Eliminate janitor-type jobs from the conventional comparisons, and the comparison gets completely skewed.

Are Non-Profit Companies Preferred Over the For-Profits?

Generally, the public seems to get the impression that non-profit companies are good and for-profits somehow are not. That non-profits are there to be helpful, as opposed to those who may be greedy, seeking nothing for the public or consumer, but profit only for themselves.

The public have been taught by populist politicians and the media, that somehow profit is a dirty word. Unless, of course, a member of the public loses a job. In which case the boss has no profits with which to pay salaries.

But then again, somehow for-profits must have finagled to get their earnings, if you listen to the populist media exposes.

However for-profits have an upside, in that they are seen as more competent. Too many folks have had run-ins with the post office and motor vehicle personnel, I guess.

Rethinking Global Warming

Are we going to rethink the expensive global warming laws that have been based on what we are now learning are global warming hoaxes, being slowly uncovered?

If so, what about ethanol production? It is expensive because the fuel is not efficient. And it is the product of a source of food that is becoming more expensive because of its diversion to energy use.

The outlawing of conventional bulbs, and the buying of costly compact fluorescent light bulbs instead, is another instance of the need for rethinking some of the global warming nonsense.

What about green car manufacturing and the plans of companies who are going "carbon neutral." Lots of talk, and huge expense. Really over nothing.

The Chicago Climate Futures Exchange plans to trade in greenhouse gas emission allowances. Federal, state and local agencies have spent billions of dollars and created millions of jobs to deal in global warming. Are their workers going to become mere costly, unionized Zombies? Meaningless jobs leading to nothing productive but a drain on taxpayers?

Are schools going to stop teaching the kids the cataclysmic effects of climate change? Will their unions allow them to?

The Job Hunting Resume

There are plenty of books and pamphlets on how to write a job resume. Remember, however, the importance of that covering letter. It’s just as essential as the resume itself. Perhaps more so.

Place upfront what is most important about your skills, taken from your resume, on to the covering letter. Outline very quickly your professional skills. Tune the theme to what that skill is; technical. or leadership, or academic, whatever.

The covering letter ought to quickly reprise what you are really selling about yourself. That will make it easier for a prospective employer to scan yours from, perhaps, hundreds of other job requests.

Anti-Trust Laws and Jobs

Wouldn’t you think that the time the Obama administration’s Justice Department and Federal Trade Commission would start to get active against companies using the Sherman Antitrust Act would certainly not be now? Right during the Great Recession?

After enforcement of the Sherman Antitrust Ac has been relatively timid for over 120 years?

There is a huge debate going on about what actually is a monopoly. Many on the left consider size alone as the deciding factor, when in the past, the competitive effect on the consumer was always important.

The bottom line as to whether there is a monopoly or not should be the effect on the consumer. If the corporate situation being investigated helps the consumer, then there is no monopoly. The whole intent of the Act was in the interest of the public.

What is telling is that the Obama administration’s position has the wholehearted support of lawyers, who overwhelmingly donate to the Democrat party. Lawyers are ready to sue, sue, those monopolists. But such plaintiffs do not always have the consumers’ interest at heart.

What about jobs? Any effects will be negative as a result.

What Industries Will Grow in the Future?

Getting to know what jobs will be plentiful in the future is never too easy to predict. In these difficult times it is yet tougher.

Consultants hired to make predictions are often wrong but earn good money prognosticating and getting clients, despite only rarely winning the accuracy sweepstakes.

We know that trends are hard to change overnight. In that respect, the health care services industry appears destined to continue its growth. There will be some bumps within the industry, however, depending on legislation and unionization activity.

Also, some aspects that require delicate skills, doctors, for instance, may be adversely affected, by legislation or continued lack of tort reform by government.

Where Are New Jobs Coming From?

Getting the unemployment rate down from where it hovers at the official 10% rate, to 5% and lower, is not going to be easy. Not as easy as the wan gestures we are getting from the Obama administration.

As a starter, the unemployment rate is actually over 17% when you consider the truly unemployed. Not only those who still haven’t given up seeking a worthwhile job or are on unemployment income while it lasts. The truth is, the official unemployment rate is skewed.

The basic needs that are not forthcoming are the jobs. To get that going, the economy must improve. That means psychology must get rosier. More money has to get into households. That’s not improving by a long shot.

Some improvement in household net worth occurred when the stock market recovered. But that was primarily from the Dollar Carry Trade. That is: The ability for major investor players to borrow at low interest and invest in higher-paying assets, which helped raise the value of the stock market. It boosted public psychology as well.

That sort of household wealth and outlook isn’t enough. You simply have to get more funds into the hands of the consumer.

What will do that? Lower income taxes, fast. And productive private industry jobs, fast.

To produce jobs you must get small business starts going by cutting their taxes. And you have to cut government debt. Servicing that debt makes it impossible to keep taxes low or to make a dent in their reduction.

It’s really simple. The White House says it is doing it. But saving 1% as it actually proposes in a multi-trillion dollar deficit budget is impossible.

The U.S.A. is Not the Freest Government

According to the 2010 Index of Economic Freedom from the Heritage Foundation and the Wall Street Journal:

On a scale of 1 to 100, of the world’s 20 largest economies, the U. S. had the largest drop from its previous ranking; from 80.7 to 78. Canada, Australia, New Zealand, Switzerland, Ireland, Hong Kong and Singapore are higher.

This means, in economic and bureaucratic terms, there is much improvement we can make to eliminate business red tape and restrictions. Unfortunately, in the past year, we have been heading away even more from free economic principles.

This, at a time when we desperately need to formulate new private industry jobs.

Selling or Buying a Franchises As a Panacea

Why bother to sell a franchise?

First question to ask yourself if you are thinking of franchising your business: Would you buy it yourself?

If someone has a successful business, it’s easy for him to think it can be franchised. But why should someone pay him for the company name and his expertise when they can probably duplicate the same entity at no additional franchising cost?

There are some questions you can ask yourself about the possibility and logic of franchising your business?

You cannot successfully franchise your operation if:

1) It is easily duplicated or entered into.

2) You do not have a highly recognized brand name.

3) You do not have special management expertise to offer.

4) It’s hard to service or manage operations, from your site.

You must realize, too, that the usual upfront fees and the royalty you take on sales, that cover whatever management training and materials you may offer, will probably represent about half a franchisee’s net earnings. That fact is bound to eventually infuriate them, assuming they become successful. There is no telling what their fury may be if they fail after investing in your advice.

So they may eventually cheat you or form groups with any other franchisees you may have, to sue you over contract terms.

Question: If you want to franchise your business, can you finance and constantly control the finances of your franchisees? That is most important, if you do decide to franchise. It is the most important binding link you can have to the prospective franchisee.

Fraud in Government

We occasionally hear about fraud in business. Most often, however, there are checks and balances in business. The boards of directors. Or the independent audits. When an Enron and WorldCom occurs, the publicity and media extravaganzas, along with government finger-pointing publicity, make up for any smaller, relative numbers.

We hear about fraud in government but the incidents are too often taken for granted. Nevertheless, it is far more prevalent where politicians and bureaucrats take it as a given that they are being underpaid on the job.

One example: There is a formula for how government grants are used. There always is some allowance made for “waste.” Take that as an appropriate euphemism.

And there is always an understatement of projected cost. It is a rare government project that ever meets its original cost estimates.

Then there is usually some figure allotted to account for missing funds. Or at least a few percentage points devoted for investigation of fraud.

That is because of the psychological nature of government jobs. You do not have the same checks and balances than in private industry, despite the public image the media may afford.

Lastly, government projects are always begun and ramped up. Very few are ever terminated. Sunshine laws are passed from time to time but appear ineffectual. Once on the books, laws seem to have a life of their own. Along with agencies they breed.

Getting Venture Capital

Getting venture capital is not easy. It is often a case of being lucky, or knowing the right people. However, you do need basic planning to get into the lottery or game. To ask for funds, an adequate game plan or budgeting proposal is a must.

Incubators were a fad for a time, for the very early stage of venture funding. They proved to be a flop in the past. Incubators required lots of hand-holding, a sort of kindergarten for entrepreneurs. The problem was, there were too many infants and teachers often had no ability to instruct at the required MBA levels. The eventual dot com bubble showed how futile that effort was.

Angel capital is now used for real early-stage startups, Classic venture capital is for the level after you generally have some vestige of business operating.

Getting VC funds is usually a sort of lottery, should you have no connections. Those who get funds generally have those, or have gotten funds for earlier ventures.

There is a good reason why VC funding is so haphazard. The VC “experts” haven’t the foggiest idea of which budding entrepreneurs to select and fund. Those VCs who have made big money were often merely lucky in their winners; they also picked lots of losers.

The payoff for VCs is generally the ability to sell stock in the venture to others, even when there are no profits ever to be made.

Some deals have been referred to as legalized Ponzi schemes.

Country Differences in Caliber of Health Care

In the latest U.N. World Health Organization WHO ranking of countries, the U.S. does poorly. This has been used as an argument for a massive overhaul of this country’s present health insurance industry.

However, look at the report closely because of the terms used in the study. The latter represents what has become a typical U.N. report these days. That is, present an anti-American bias whenever possible.

Read carefully and you note the study points up only the difference between universal coverage and actual care or responsive care.

It thus becomes easy to see the difference the terms signify. Look at health care in Canada, Great Britain and France with universal coverage. A law on the books or government promise to cover a citizen with health benefits does not mean everyone will get TIMELY or ADEQUATE personal attention and care when necessary.

The U. S. still has the best health care in the world, though it can be tweaked to be made better.

The Liberal Corporate State Has Fascistic Symptoms

There is a major lesson to be learned in the U.S. today that is not being taught in our schools. Not in elementary classes nor high schools. And certainly not in those of so-called higher learning.

It has to do with the true nature of fascism. In this regard, a study of Benito Mussolini’s Italy is essential. Starting in the 1920s. Mussolini was a Socialist who advocated what we know as the corporate state.

The Obama government has now taken over General Motors. GMAC and Chrysler. It also controls banks to a greater extent than they have ever been, dictating salaries, and thus hiring policy.

The Obama government already controls the giant entities, Fannie Mae and Freddie Mac, whose collapse really were one of the bases of our financial meltdown.

Then you have the takeover of AIG, which I believe was a completely unnecessary step for several reasons I have discussed before, none of which have been adequately disclosed by our present administration.

Banking industry bailouts and resultant government influence are yet another example of the government’s undue meddling in the underpinnings of our economy.

The attempt to nationalize the entire health care industry, about one sixth of the economy, is yet another flagrant example of this parallel picture of what happened at another time.

Fascism and state corporatism are one and the same. They are facets of socialism. Read up on Benito Mussolini.

I am not saying the present U. S. Government is fascist. But I do say, we must continually, closely study history to be alert to the danger.

Production Improvement Systems

Production improvement systems in business have become more a matter of fashion and, unfortunately. less what they are intended to be. They are constantly marketed by consultants as business management break-throughs.

Famous more recent ones were known and are still referred to as Lean Manufacturing, and the Six Sigma system. They are simply just old-fashioned quality control procedures.

But doesn’t everyone believe in production improvement, or process improvement or quality control? Whatever label you put on them? A good business manager inherently knows this without the labeling.

The trick, however is in their implementation. Motivation is essential in sticking to such programs on an ongoing basis. Boredom always is the fly in the ointment, so periodic appraisals are essential. Furthermore, management needs to employ in-house or outside experts to check on processes and results.

Forget the titles that you assign the project.

Choosing Boards of Directors

How do you choose your board of directors? I’m assuming now the reader is running a small or medium size business, but the following advice can apply equally to the biggest companies.

Many corporations are guilty of resorting merely to using friends, relations and acquaintances to fill open spots on the board. But ability is strongly needed. For any number of valid reasons.

The board of directors has the actual legal responsibility for the proper function of the corporation. Moreover, each director has joint and several liability for any sins of omission or commission, in this pursuit. That means he or she can be sued individually for neglect of responsibility of the entire board, in the event of any board errors or conceived fraud by board members. In other words, the board member with the deepest pockets or most to lose may get the brunt of a lawsuit.

Do you need diversity in choosing an effective board? Do you choose by race, by gender, or by culture? Definitely not, but these days, societal pressure and anti-discrimination laws may, and do enter into consideration. To the detriment of many corporations who still discriminate by quotas despite laws on the books.

What about real business experience? Most important because that ought to be the number one requirement for board membership. However, that too often gets short shrift.

What are Risk Odds?

Most folks have no idea of risk, certainly as they apply to business, or finance, or health; whatever.

Risk numbers vary by enterprise and endeavor. They cover too many areas to be covered here. I would suggest you go to an Internet search engine, just to get a hint of the vast range of risk possibilities in all areas of interest you may have..

List a subject in which you may be interested. Add the word or a phrase with risk next to it.

The results will be amazing. Google the phrase health risk odds and you will get 1.6 million web pages to search. Google the phrase risk odds calculations and you get over 1.0 million web pages to browse.

The various odds on subjects of risk can be enlightening.

The Government Stimulus or Slush Fund, Part 2

In my recent report on federal, state and local government unionization and how total outlays are about triple what they are for comparable private industry jobs, I mentioned how these unions control government. What, with their political contributions and the ability to close down government operations, along with their control of budgets because of their size.

I had not mentioned the powerful teachers’ unions. They have particular influence because they always have a good marketing ploy. Who wants to turn down funding when “it’s for the kids.”

But a good portion of that cost does not go to kids, it’s for teachers. And those costs can be budget-busting. Yes, the public probably knows how much is spent per student. But how about salaries and pensions? For a part time, nine months of actual total work?

I’m not picking on teachers. The same holds for other government employees. Especially the ones who retire well before age 65, and are double dippers on grandiose pensions.

There is a solution. As a starter, publish wage and pension scales, along with fringe benefits of all unionized government workers. List only job description, for the public to see. Let voters know how private earnings and pensions compare to public earnings and benefits, that they, the tax-paying voters earn for comparable work.

If there is to be open government, why hide a major cost of government? Yet, this part of the budget is always hidden from voters.

Unionized Government Employees

I have always felt there is a particular problem when government workers are unionized. This started on the federal level without Congressional approval and has grown like Topsy in all layers of government.

It was a JFK executive order 10988 in 1962 that started what has grown into a political-influenced monster, taking over our states and city governments as well. Unionization controls whatever it touches.

The unions now influence state and big-city government bureaucracies and, therefore, too many state and local political machines.

The public will be shocked to find out that public employees are being unionized at a rapid pace when private employment is only about 7.2% unionized.

Mind you, union wages run much higher than comparable wage scales. About one third, and more beyond private earnings. Pension funds and terms usually far surpass that of private industry. In some instances, five or more times. In general, total government unionized pay packages are about TRIPLE those of comparable private industry jobs. All of which have been budget-busting, and almost impossible to control.

The two major public employee unions have thus tremendously influenced left politics on a national scale. In fact, a good portion of the Obama administration’s so-called stimulus went to states for budget gaps that had to be filled to safeguard those states' unionized jobs.

That supposed government aid to the economy proved to be more a slush fund than a stimulus.

Tax Credits to Business For Hiring.

Experience shows that the idea of giving business tax credits for hiring does not generally work. Businesses would eventually hire anyway in most instances.

What is important and damaging to business, is recurring taxes, not the need for credits. Research has shown this time and again. But left-leaning politicos love to hand out tax credits under pressure, as they cannot abide permanent tax relief. It’s apparently against their secular religion.

So they continually talk about temporary tax credits, to impress the public and potential voters. Moreover, if the public is unfamiliar with business, the politicians get away with the ruse.

At least for a while. Because that tax credit policy simply does not work.