The Expensive College Scam

You don't need a college degree to be successful. Vocational education can pay off better for many 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. We must overcome that prejudice.

College administrators and politicians ought to drop 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. ( See the Earl J Weinreb NewsHole® comments.)

The Ethanol Bust

About 6 million cars on the road 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.

Slowly but surely we have found this has become an environmental boondoggle gone awry ( See the Earl J Weinreb NewsHole® comments.)

Distinguishing Good and Bad Management

In a way, there is some truth to the adage: Good management makes money and bad management loses money. It’s always applied on Wall Street where analysts usually have no idea of how to evaluate those who operate corporations being analyzed.

Nevertheless, it’s 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. Also an eye on protective management. Keep away from lawsuits, especially employee harassment and EEOC suits. Stick to the employee manuals you set up. ( See the Earl J Weinreb NewsHole® comments.)

The Recession Could Have Been Avoided

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

We could have avoided this 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, with a fee charged to the banks.

2) By avoiding “mark-to-market” accounting of mortgage assets, which had no market appraisal, 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, and destroying, empty tract homes in over-speculative states such as Nevada, Florida and California.

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

The Dodd-Frank Act, in further attempting to get us out of this mess, is a disaster beyond anything America has had. ( See the Earl J Weinreb NewsHole® comments.)

Measuring Jobs Saved

The Obama administration, faced with poor new job development numbers, had scrounged around for something of “What If” and “Would be” and “Could be” jargon and had come up with “jobs Saved”

This was a completely meaningless number. It was imaginary and got circulation only from an ignorant media, that elected 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 such hocus pocus, arbitrary politicized cant that this had become. ( See the Earl J Weinreb NewsHole® comments.)

Poor Unemployment Determination

Unemployment figures are misleading. The standards for measuring the 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 current official unemployment figure of about 9% 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. ( See the Earl J Weinreb NewsHole® comments.)

Business Management Appraisals

You hear of the best management techniques that are being successful and implemented. Every year or so, another business management expert is recognized for ideas, or his book on how to increase sales, or reduce costs, or enhance productivity.

A few years later, they are forgotten, as a fresh crop of experts 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. See the Earl J Weinreb NewsHole® comments.)

“Honest-Services” Obligations, Part 2

I commented in yesterday’s blog on a past U. S. Supreme Court ruling on “honest-services” obligations and its effect on business executives with responsibility for operating a public company.

A CEO has to be an optimist to prevent the corporate roof from falling in; employees and customers fleeing, and losing jobs. An executive must retain legal leeway and be given slack. A top executive who is not a cheerleader is doing a poor job.

Unfortunately, too many jurors and judges are not aware of this business fact.

The public cannot scream “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 that is what probably happened at the trial of the former Enron Chief Executive, Jeffrey Skilling. And other execs convicted of similar charges. See the Earl J Weinreb NewsHole® comments.)

“Honest-Services” Obligations

The U. S. Supreme Court has 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.

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. See the Earl J Weinreb NewsHole® comments.)

Legislation Size

The Dodd-Frank financial regulation bill has 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 read it before its signing.

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.

Limit the size of any bill. If it is too big to be read in a couple of hours, it is too big. (See the Earl J Weinreb NewsHole® comments.)

Financing By Industry Leaders

The Dodd-Frank financial regulation has 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.

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. (See the Earl J Weinreb NewsHole® comments.)

FDR's 1930s Actions Being Repeated

Did Franklin D. Roosevelt really get us out of the Great Depression in the 1930s. Actually, he never succeeded at creating jobs. Though the public 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. (See the Earl J Weinreb NewsHole® comments.)

Political Government Subsidies

Some states and especially the Federal government make political efforts by subsidizing some small company payrolls. It’s a stupid populist attempt to show concern for workers at those jobs.

One: Taxpayers must pay for small businesses who are not able to make a go of it. Perhaps inefficiencies but also including barriers placed before them by government being restrictive. Such as business taxes and fees.

Two, the assistance will inevitably be politically dominated. The funds will go to companies preferred by the politicians in office. Graft and corruption is always a consequence.

Three, the whole process amounts to nothing significant. Where will it all end, short of Fed or state government winding up in a failing 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. (See the Earl J Weinreb NewsHole® comments.)

Leftist Billionaires

How do you account for billionaires with left-leaning opinions?

There always have been the extraordinarily wealthy in socialist societies. The namenclatura of 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 and billionaires 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 mansions, 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.

Oh yes, they’re for higher income taxes but most of them pay little taxes the way their income is structured. (See the Earl J Weinreb NewsHole® comments.)

Government Competition for Capital

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.”

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. (See the Earl J Weinreb NewsHole® comments.)

College Earnings Prospects

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.

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

Going to private trade schools or two year community colleges, where trades are taught, will provide skills that more likely to 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. (See the Earl J Weinreb NewsHole® comments.)

Extending Unemployment Insurance

Unemployment insurance benefits have become a political football. The Left has got it all wrong again, saying once more it’s an excellent economic stimulus,

When you look back at statistics done by folks such as Laffer Associates, who have looked at actual data going back to 1972, 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. (See the Earl J Weinreb NewsHole® comments.)

Do The Rich Steal From The Poor?

The unwashed, uninformed mobs are demonstrating again despite facts. “The poor are being robbed by the rich” is the old refrain.

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

A November 13, 2007 report from the Treasury Department, entitled "Income Mobility in the United States from 1996 to 2005 reports an 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.

Furthermore, misinformation feeds on the mob scapegoating of the rich and “The poor are being robbed by the rich” street slogans. (See the Earl J Weinreb NewsHole® comments.)

Why have Bankruptcy Law?

Bankruptcy law is specific in the way scarce funds are to be allocated. Until the Obama administration 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.

Creditors always have legitimate claims over a bankrupt’s assets. But not all claims are equal when dividing 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. (See the Earl J Weinreb NewsHole® comments.)

Government Pay Restrictions

Have government payroll controls at companies which accepted bailout funds solved any problem, apart from drawing attention 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 past financial meltdown. They were insignificant numbers, relative to overall financial problems. Executives now are consistently scapegoats for ignorant and crowd-pleasing politicians.

Only politicians have 20/20 hindsight, to tell executives they are making too much money. How about actors and ball players? And reporters? Are they next?

Many in the media are not conversant with how such 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. The media is not concerned about the slippery slope. (See the Earl J Weinreb NewsHole® comments.)

Business Knowledge Escapes Politicians

If politicians believe publicly owed companies are making 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.

On the other hand, think of the political favors down the road that politicians can create with such power to berate industry? (See the Earl J Weinreb NewsHole® comments.)

Anti-Business Politicians

Recessions and the need for jobs never impede anti-business politicians. They may resuscitate the ones too big to fail, such as banks, while they berate them for being “greedy” and a menace to social welfare.

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

In appealing to the lowest intellects, politicians 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 politicians supposedly champion. (See the Earl J Weinreb NewsHole® comments.)

Graduate M.B.A. Degrees

M.B.A. degree evaluations have come up for critique in business news again. I personally have always felt, from my own experience, that much of it is useless, a waste of tuition, and time extravagance.

It may be great for networking. But then there are better ways to accomplish this.

It’s entirely useless in business. You can get an outline for administrative guidance from books. But, again from my own business experience, I can tell you M.B.A. case studies are useless in practice and the real world.

Unfortunately, M.B.A. is a great tag for lazy recruiters looking at a resume. Job applicants, however, can acquire that tag without years of expensive study, online and part-time. ( See the Earl J Weinreb NewsHole® comments.)

Corporate Director Responsibility

You have responsibility with 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 have to avoid the most.

Despite never committing 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 may be, because it’s a powerful weapon.

Also, you will be liable for any act other directors on the corporate board may be accused of, in relation to corporate activity. That’s called joint and several liability. ( See the Earl J Weinreb NewsHole® comments.)

French GDP Manipulation

If your country’s Gross Domestic Product or GDP is not high enough, and you are allowed to openly manipulate the statistics, just play around with the necessary numbers to make up what you need.

In France, they have felt they can improve their GDP in relation to other major countries. Why not? 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, capitalistic 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, cannot be productive. ( See the Earl J Weinreb NewsHole® comments.)

Unusual and Unneeded Business Worries

Big Business worries include the usual assortment. high taxes and excessive regulations. Small business has those and more, particularly the obnoxious and unnecessary local and state licensing requirements.

Can anyone truly explain why, during a deep recession, an administration in Washington would pass regulatory laws for even more tight regulations that reduce the prospects of creating jobs?

Outside of the fact the bulk of these politicians have never operated any business, not even a pushcart. (See the Earl J Weinreb NewsHole® comments.)

The European Government Template

The Left in America always wants the U.S. to become more like Europe. That translates as more governmental control of industry and society.

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

You would think overseas citizens 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. (See the Earl J Weinreb NewsHole® comments.)

Billionaires and Income Taxes

Notice rich billionaire liberals don’t mind high income taxes. At least in their public comments, when they attempt to curry favor with liberal politicians for pet business projects of their own.

But they never mention charitable deductions or foundation benefits that the vast majority of these billionaires enjoy. They are not too concerned with income taxes that sap the creation of wealth most already have. .

They do worry about capital gains because they pay little taxes on income but have more capital gains to report. Or they have income protected to an extent by holding company exemptions. (See the Earl J Weinreb NewsHole® comments.)

Why Business Keeps Avoiding Expansion

The administration in Washington and its bureaucrats miss a common thought that’s familiar to anyone who has run a business, any business, even a street stall or pushcart.

You have to make a profit. Not just today, but tomorrow, or it doesn’t pay to start or invest your money and your time.

You cannot make a profit if your expenses today or tomorrow are going to wipe you out. No matter where those expenses come from; higher wages or taxes or regulations. The mere threats of increases will thwart any ideas of business you may entertain. ( See the Earl J Weinreb NewsHole® comments.)

The Keynes Economic Theory

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 constantly stimulate an economy by spending and spending to stimulate. The current administration does not look at the futility or lack of success of what it has been doing. So it attempts to repeat much of the same.

Despite the fact the public debt has us right on track to be the next Greece, or worse. (See the Earl J Weinreb NewsHole® comments.)

Expanding Big Business

Folks are always impressed by top executives who constantly expand their business. Fine, if the execs are aware and experienced in the field they’re in.

Unfortunately, many vaunted CEOs are constantly entering new industries, egged on by the so-called financial community gurus. Expansion for expansion’s sake is the motto. It makes headlines, along with the promises of future massive earnings.

But be careful of ever-diversifying, expanding business plans. I have found from my own experience, it often pays to stick to what you do best. Like race horses, top executives and management often need blinkers on, with which to concentrate efforts for success.

Furthermore, some business plans do not accommodate other aspects of business. (See the Earl J Weinreb NewsHole® comments.)