The College Education Scam

You don't really need a four-year college degree to be successful. Vocational education does pay off better for many of those who have lost jobs or are seeking entry-level positions in trades.

Even lower-level electricians today make on average $48,000 a year. Plumbers make $47,000. That's much more than the average American earns. And those jobs may be more plentiful.

But some people look down on vocational school. A degree from a four-year college is considered first class. A vocational-school degree is not. That should be a prejudice we must overcome.

College administrators and politicians should drop that promotional hype. Higher college enrollment and government loan programs and subsidies may be good for the college marketers, but they don’t produce the training needed to fill real, paying jobs in industry.

The Ethanol Fuel Alternative

About 6 million cars on the road today are “flexible fuel” vehicles. Some can run on fuel that is 85% ethanol and 15% gas. However, when using E85 you get about 15% fewer miles to the gallon.

E85 does burn cleaner and does not pollute as much but the overall benefits are questionable. And the cost exceeds that of regular fuel in time. And the use has increased the cost of corn, which is a basic food worldwide.

But ethanol has now become more of a political factor than a logical fuel for consideration as an energy alternative.

The difference Between Good and Bad Management

The old saying, good management makes money and bad management loses money always applied on Wall Street where analysts usually have no idea of how to evaluate those who operate corporations being analyzed.

But in a way, there is some truth to the adage. It is true that an executive must operate with the hand being dealt. If the business environment or the economy is poor, an excellent manager may do extremely well by just minimizing losses. But there are no real standards to go by.

Look at the techniques used and they are all the same. The same acronyms to describe managerial approaches. Those that worked in the past may not be working now. The ones that did not work in the past may be working today.

A lot of luck is involved. Maybe bits of persistence. You need an earnest game plan

Also an eye on protective management. Keep away from lawsuits, especially employee harassment and EEOC suits. Stick to the employee manuals you set up.

Could the Current Great Recession Have Been Avoided?

I have written on this before, starting over a year ago and I repeat it now, I was right then, I am even more correct now.

America has always had self-corrective economic cycles, but now we have more regulators than ever before, and they are doing their man-made damage, as never before.

Yes, we could have avoided the current Great Recession.

1) By avoiding the massive bailout by regulators offering the illusion of doing something. Probably, all that was needed was a federal agency guarantee of all bank assets, and the fee charged to the banks.

2) By avoiding “mark-to-market” accounting of mortgage assets, which had no market appraisal, and which wiped out assets of major banks almost overnight, aided by short selling this enticed.

3) By having a government agency buying up, at bankruptcy, empty tract homes in over-speculative states such as Nevada, Florida and California.

The government has repeated the same errors made by Herbert Hoover and Franklin Roosevelt during the Great Depression. In the process we have accomplished little for the economy but have revamped the form of government with state capitalism, a nasty type of socialism.

Prediction. The Dodd-Frank Act, in further attempting to get us out of this mess, will be a disaster beyond anything America has ever had.

Measuring Jobs Saved

The Obama administration is now faced with poor new job development numbers. So it has scrounged around for something new. The use of “What If” and “Would be” and “Could be” jargon to make its points.

And has come up with “jobs Saved”

This is a completely meaningless number. It is imaginary and gets circulation only from an unintelligent media, that elects to go along with the façade.

Economic research had thrown this thinking aside years ago. If you use actual Bureau of Labor Statistics figures from the government you never arrive at the hocus pocus, arbitrary politicized cant that this has become.

Unmeasurable Unemployment Problems

I have mentioned before in these columns the inaccuracy of unemployment figures. The standards for measuring the actual workforce are not constant. How many folks are actually looking for work can be a matter of debate because many have given up seeking employment.

The truth is, the current official unemployment figure of just under 10% is far below the actual.

But that is not all there is to the unemployment problem. The critical factor is loss of jobs after about six months of being out of work. That number is not easily offered up to the public.

Long-term unemployment involves the loss of skills or results in less-sharpened skills. Along with poor on-the-job psychology and poor spending psychology. That is never reflected in a number.

Companies will hire less and spend less. A vicious cycle then occurs.

Rating Business Management Techniques

You constantly hear of the best management techniques that are being successfully developed and implemented. Every year or so, another business management guru comes to the fore with ideas or a book on how to increase sales, or reduce costs, or enhance productivity.

These fresh concepts are the life blood of the consulting and publishing industry.

A few years later, they are forgotten, as a fresh crop of gurus and authors arise. In fact, It’s a repetitive cycle. If you want, you can write a tome on that subject alone. or teach a course for a college degree.

If you save the data you find the concepts become regenerative fads. The same ideas regurgitate every so often. What becomes stale in a decade becomes fresh in the next. or the following.

The Courts and “Honest-Services” Obligations

I have commented before on the U. S. Supreme Court ruling on “honest-services” obligations and its effect on business executives with responsibility for operating a company.

Because the CEO has to be an optimist to prevent the proverbial corporate roof from easily falling in, and employees and customers fleeing, and losing jobs, the executive must retain legal leeway. He must be given some slack.

A top executive who is not a cheerleader is doing an extremely poor job. Unfortunately, too many jurors and judges are not aware of this business fact.

The public cannot holler “fraud” at the drop of a hat every time disaster strikes a company. That is a ploy used by plaintiff lawyers doing what they do best, and who always charge that the glass was half empty.

And that is what probably happened at the trial of the former Enron Chief Executive, Jeffrey Skilling. And other execs convicted of similar charges.

The Supreme Court and “Honest-Services” Obligations

The U. S. Supreme Court has finally adjudicated what I feel is an extremely important case. It was an appeal by the former Enron Chief Executive, Jeffrey Skilling and other business executives, those with responsibility for operating a company, especially where large groups of employees and the public are concerned.

The question: What constitutes “honest-services” to shareholders or the public?

The Court ruled that the laws regarding “honest-services” obligations are simply too vague to be constitutional. It has made running a corporation a high risk personal enterprise when plaintiff lawyers are given free access to the courts.

I will have more on this in a future comment.

Limiting Size of Legislation

The Dodd-Frank financial regulation bill will have an immense, adverse transformational impact on American society, as well as its economy.

It has over 2300 pages. I doubt if any of our House or Senate reps has read it entirely or ever will. Or whether President Obama will read it before signing it.

The Federal Reserve Act which set up our basic banking system had 31 pages. Most other basic financial legislation of the past had been composed with about a hundred or so pages.

ObamaCare ran over a couple of thousand pages and literally hides information the public or its representatives never realized exists. Which are are only now coming to light.

I will make a suggestion. Limit the size of any bill. If it is too big to be read in a couple of hours, it is too big.

Financing By Industry Leaders

The Dodd-Frank financial regulation bill will have an immense transformational impact on American society as well as its economy. It will take decades for its tentacles to be clearly defined.

One of its unintended consequences: Walmart and other companies can now do more openly the type of financing that banks will not wish to undertake, because of severe regulations now in place under the new regulations. In fact the large box stores would like to form banking subsidiaries. But competing banks in the past were afraid to let them and lobbied against the idea.

Large industrial companies have been giving small business loans where banks have not. Should this favorable trend continue, no doubt Uncle Sam will then step in under pressure from the anti-business Left.

Why Not Study FDR and His Actions

A great idea: Why not have the media relate what Franklin D. Roosevelt really did to get us out of the Great Depression in the 1930s. How he did not succeed at creating jobs. Though what little the general public does know, or thinks he did.

We ought to learn how his Treasury Secretary, Henry Morgenthau admitted in his memoirs at the end of his years of effort, and just before World War II, how we were still mired in unemployment. How 1937 and 1938 were particularly bad, after all the economic pump-priming after 1932.

Roosevelt believed in high taxes and Keynesian spending by government that did not work. The very philosophy being used by the Obama administration today.

Government Subsidies For Business

To prevent layoffs by companies, some states and the Federal government are making a political statement by subsidizing some small company payrolls. It’s a stupid populist attempt to show concern for workers at those jobs.

For at least three reasons.

One: Taxpayers must pay for small businesses who are not able to make a go of it for many reasons. Perhaps inefficiencies but also including barriers placed before them by government being restrictive in the first place with choking business taxes and fees.

Two, the assistance will inevitably be politically dominated. The funds will go to companies preferred by the politicians in office.

And three, the whole process amounts to a drop in the proverbial bucket. Where will it all end, short of fed and state government winding up in business?

Leave companies alone in the first place, without abusive taxation and other restrictions and they will tend to do far better on their own.

Leftist Billionaires

There always are the REAL wealthy in socialist societies. The namenclatura in Soviet Russia lived like multi-millionaires, and probably had plenty more stashed safely abroad.

In the U.S., the policies of leftist-minded multi-millionaires when in office don’t necessarily create wealth for the public. These folks may simply believe in high taxes on public citizens; they may want to redistribute wealth of others.

Whatever it is they seek, they manage to make lots of money for themselves along the way. Perhaps they do consulting and advising, or have profitable connections. But they prosper enormously in the political process.

Look about and see how this is true among those who carry on battles for the “little guy,” while flying about in their private jets, and living in their many grandiose manses, both here and abroad.

Their stand for the poor never means they have taken vows for personal poverty. In fact, they have even managed to become billionaires while in pursuit of their left-leaning careers.

Private Capital Competes With Government

Here is an Economics 101 lesson. You will not learn it from the conventional media. Nor in basic economics from most college attendance these days.

I am referring to those who actually take formal economics courses at school, interspersed with whatever else colleges teach to keep their students entertained between winter, summer and spring breaks.

The basic economics rule is this: When the government spends a dollar which it must borrow or tax, there is one dollar less in the private sector with which to invest for public benefit in the form of jobs and earnings for consumer spending.

That government competition produces innate damage that government do-gooders overlook in their zeal to “help.”

A College Education For Big Earnings?

Going to private trade schools or two year community colleges, where trades are taught, will provide skills that more likely will result in better earning jobs than from most present-day college diplomas.

A college education that offers general knowledge that can just as easily be acquired in the public library might provide nothing practical that will assure a gainful living.

This is evident when you compare earnings of graduates of conventional colleges, private trade schools, and two year community colleges.

Those who have employable skills will earn top dollar at jobs that employers want, even in deep recessions. Others, with their fancy-school diplomas sit around depressed for the lack of opportunity, despite all their effort toward those impressive but impractical and useless degrees.

Unemployment Benefits as a Stimulus

Inasmuch as unemployment benefits have become a political football and Nancy Pelosi, the House Speaker, has recently announced that "top economists" and she have declared them to be an excellent economic stimulus, I have looked into the matter more fully.

And what do you know? The Left has got it all wrong again.

When you look back at statistics done by folks such as Laffer Associates who have looked at actual data going back to 1972, Eureka!. You find that unemployment benefits do seem to keep most recipients from actively looking for work until the time benefits are ready to run out. Other studies appear to corroborate this as well.

A safety net is necessary to tide the unemployed over their bad patch. A paid vacation until they get seriously looking, is another story.

Are the Rich Getting Richer at the Expense of the Poor?

Whether the rich are becoming richer and the poor even poorer depends on the observer. And what the left-slanted media suggests.

Example a November 13, 2007 report from the Treasury Department, entitled "Income Mobility in the United States from 1996 to 2005.” These are not the only data that tell a diametrically opposite slant from the usual political and media story that the rich are getting richer and the poor are poorer. A previous Treasury Department study showed similar patterns in individual income changes between 1979 and 1988.

Studies of same individuals show patterns different than the patterns the Left always suggest.

Similarly, a study conducted at the University of Michigan, following the same individuals over an even longer span of time, found most people move from one income bracket to another over time, especially among those who began in the bottom 20%.

The University of Michigan Panel Survey on Income Dynamics showed that, among people who were in the bottom 20% income bracket in 1975, only 5% were still in that category in 1991. Nearly six times as many of them were now in the top 20% in 1991.

The Left sneers at income mobility as a myth. But the facts speak for themselves.

Bankruptcy Law Disruption

Creditors have legitimate claims over a bankrupt’s assets. But not all claims are equal when dividing those assets.

Some lenders may have provided cheaper funds in return for a more secure claim over assets, Therefore, they rank above others, when funds are allocated among creditors, Then there are employees and stockholders to consider when disbursing funds in bankruptcy.

Bankruptcy law is specific in the way scarce funds are to be allocated. Until the Obama administration came along and set its precedent for the Chrysler bankruptcy, giving the unions favored status for its own political solution for what ordinarily would have been business contract law.

Most of the general media failed to adequately mark this American turning point.

Payroll Controls

What did pay controls accomplish at companies which accepted bailout funds? Have such caps solved any problem, aside from drawing attention away from Washington’s inability to do anything correctly to resolve deep recession and job problems?

When you hire and attempt to keep personnel, you pay market labor prices. Or you get inefficiency, with the best employees leaving for other opportunities.

Executive earnings were never a factor in the past financial meltdown. They were insignificant numbers, relative to overall financial problems. Executives were mostly convenient scapegoats for ignorant and crowd-pleasing politicians.

Other questions: Who hires these czars who cap salaries? Who are a czar’s friends? Who are his or her friendly lobbyists? What makes a czar qualified to judge?

Only politicians have 20/20 hindsight, to tell executives they are making too much money. That is, when and if everything works out well. How about actors and ball player income?

Many in the media are not conversant with how pay controls are an integral part of state capitalism, such as the type fascists operated in Italy, Germany and Spain in the 1930s. They started out meddling with business the same way left-leaning politicos in the U. S. are today.

Left-leaning Politicians and Profitable Business

If companies which are publicly owed, are making such outrageous profits, what is stopping the offended politicians or the public, directly or in the form of pension funds, from owning stock in them? So all can profit and not just the “filthy rich.”

After all, many of the liberal politicos are millionaires who own securities.

That does not add up amid all the business-baiting by the Left.

Then again, when big companies lose money, they can, and have been taken over by our current government. Think of the political favors down the road that politicians can create with such power?

Left-leaning Politicians Detest Companies

Left-leaning politicians love to castigate profitable companies. Recessions and the need for jobs need not impede their inbred efforts.

They may resuscitate the ones too big to fail, such as the banks, so they bail them out if necessary. While they berate them for being “greedy” and a menace to social welfare.

There is a reason for all this. Such companies fit into these demagogic politicians’ plans in their bid to suck up to voters.

In appealing to the lowest intellects, they conveniently overlook facts that companies making profits can be taxed to pay for social services being dispensed. They forget that such companies employ lots of people that such politicians supposedly champion.

The Liability of Being a Corporate Director

You have a potential liability if you are a corporate director. Even in a small corporation. What is more, you will not be able to easily buy insurance to cover that.

Worse, were you able to buy corporate director’s liability insurance, it would not cover accusations of fraud, the liability you will have to avoid the most.

Despite the steps you take to see that you never commit an act of fraud in any business you are in, large or small, you can still be liable. Any worthwhile plaintiff attorney will charge you with fraud, no matter how innocent you are. It’s a powerful weapon.

Also a business fact of life about risk you must take. You will be liable for any act other directors on the corporate board may be accused of, in relation to corporate activity. (Look up the subject of joint and several liability and its implications.)

Adjusting French GDP

This is the latest socialized governmental twist. If your country’s Gross Domestic Product or GDP is not high enough, just play around with the items that make them up.

In France, they feel they can improve their GDP in relation to other major countries. They attempt this by adding in their “leisure” economic factors. Thus they add industries that represent leisure and not conventional productive factors used by other major nations.

Of course, they will not be kidding anyone because the numbers represented would not reflect productive items of meaningful content or intent.

You cannot hide the fact that a nation with almost universal retirement at age 60 or less, and so much vacation time, can be productive.

The Europeans May Not Want U.S. to Follow Them

The Left in America want the U.S. to become more like Europe. That means socialized medicine and more governmental control of industry and society.

Despite the heavy spending and taxation for European-style socialism, the only real budgetary savings here come with defense issues. The Obama Administration and Congress can only give Americans this ultimate touch of Europe by reducing defense expenditures.

You would think the folks overseas would eventually be pleased with this. However, Europeans may not fully realize it, but the more America acts like them, the less secure Europe will be.

Europeans spend very little on defense, compared to the U.S. We are the ones they always have been able to rely on. In other words, we have been paying for their defense without much outlay on their part.

Who will defend Europe if the U.S. cuts its defenses to the bone?

The best most of their armed forces can now deliver is meals-on-wheels.

Misrepresenting John Maynard Keynes

I want to repeat what I have noted before. Left-leaning Democrats love to claim they are following the tenets of John Maynard Keynes whenever they say they are attempting to spend their way out of a recession with government outlays. This is only their exclusive version of Keynes economics.

Keynes did not believe you stimulated an economy by CONSTANTLY spending and spending to stimulate. The current administration does not look at the futility or lack of success of what it has been doing. But it is dedicated to repeating much of the same. Despite the fact the public debt has us right on track to be the next Greece, or worse.

Inept Government Job Creation

Government liberals have their idea of creating jobs: Make work. Whether at a government office or at a construction site. Hand out a pick and shovel, if that is what it takes. Their House Speaker, Nancy Pelosi, just announced her best method: Place them on unemployment insurance.

Getting down to reality, left-leaning politicians have no concept of creating jobs, that of using the psychology of entrepreneurial spirit. That is why they will tax small business in the depths of a severe downturn. Why they raise minimum wages for small business during economic recessions.

Through the use of such dampening forces to see that jobs are not created by what they consider questionable private business.

Basically, the Left does not like business. They look at profits as criminal, to be taxed away for redistribution back to the community by wise governmental bureaucrats.

Unequal Pay For Women Pay Levels

Women pay levels have been the subject of controversy for some time. There is no doubt they had been discriminated against in the past. The question is whether they still are, when anti-discrimination laws have been around for decades and penalties are severe.

True, women still tend to earn less. But there can be valid reasons. Because many women do leave jobs in mid-career for maternity reasons and that distorts statistical averages. Others prefer to spend more time to family.

Still, there are more variations in certain professions than others which makes this not the sole explanation for income variation. . Hostile environment may often be be possible. The discrepancy varies by profession.

Women’s needs may vary within those jobs, especially where measures of hostility may actually exist.

Misleading Unemployment Figures

It is worthwhile repeating that fallacies appear when reporting on the number of jobless.

This is particularly true these days when the conventional media chooses to overlook the missteps this administration attempts with various employment “stimuli.”

Example: There are those, who once jobless, find new employment within reasonable time. Then, there are those with in-between jobs that may be just temporary or part time. And others during a recession, who go off for work in totally different areas, for lesser work hours.

The number of weeks someone is unemployed is an important statistic. While many unemployed give up seeking work and if able, retire earlier under Social Security at reduced benefits.

New job creation figures are important. Look also to see the type of jobs created. Government work is not creative. It does not have a multiplier effect as do private industry jobs.

Pharmaceutical Exorbitant Charges?

The media give the impression that drug prices are too high in the U.S., compared to prices, for example, in Europe.

Prices for the same pharmaceuticals are certainly much lower overseas. But the reason is simple. Pharmaceutical companies are blackmailed into selling there below true cost.

To do that with the knowledge of the governments holding guns to their heads, they must raise prices in the U.S, to make their profit. No profit, no business. And if there is no business, no drugs can be produced.

A company spends as much as a billion dollars to find and research a new drug before it’s on the market.

Think about this the next tine you get an economics lesson from a politician on the enormous profits drug companies make. Furthermore, if they are so profitable, why are not all the geniuses on Wall Street falling over each other buying drug stocks?

You will notice that pharmaceutical securities are not investor favorites. They are merely left-leaning politician scapegoats.

Read Employment Agreements

You may be agreeing to more than you want when you take a job, when you overlook employment application fine print,

For example, many companies include a mandatory arbitration clause. That means you agree to give up your right to take disputes to court, even when the employer has broken the law.

When the case goes to an arbitrator, the grounds for appeal are limited. The National Employment Lawyers Association estimates that more than 30 million Americans are bound by arbitration clauses at work.

Employers in financial services, health care and pharmaceuticals usually favor arbitration because it keeps costs down. It also prevents cases from being out in the media.

A recent study found that arbitrators decided in favor of employees about 30% of the time, and when the individual arbitrator had worked previously on a case with the employer, the employee won only 12% of the time. Employees can often fare better in court because jurors are more easily swayed.

I am not saying arbitrators are prejudiced. They may be wiser than jurors. But employees do not always have the better case