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Archive for March, 2011

POLITICAL LOGGERHEADS

Posted by Tim Bryce on March 8, 2011

One of the most fascinating aspects of the recent budget debates in Wisconsin was the delineation of political ideologies. Rarely have I seen it as clearly defined as exhibited in Madison, but this is just the start as more states are likely to propose similar legislation soon. Conservative Republicans are at a loss as to why their counterparts do not seem to grasp the significance of budget deficits. Liberal Democrats claim the Republicans are putting the burden unfairly on the backs of the working class as opposed to the rich and corporations. Both sides adamantly defend their opinion hence the confrontational demonstrations in Wisconsin with neither side budging. Both sides are speaking but nobody is listening. We’re at loggerheads, a stalemate, which will remain in effect for several years to come.

Democrats urge raising the taxes of the rich and corporations, while Republicans contend spending less and lowering taxes will be a more effective solution. Sound familiar? Actually these incompatible philosophies haven’t changed for a long time, but it has come to the forefront of public attention as governments have run out of money. It is now time to pay the piper and neither side can agree on the best approach to do so. Hence we are now witnessing political histrionics the likes of which we have not seen since the Kansas-Nebraska Act. Even old friends and family members find themselves at odds over this contentious issue.

As humans, we rely on the facts that appear to support our arguments. It is human nature to gravitate towards data that complements our interests, and away from that which we consider fraudulent or stilted. Consequently our political perceptions, right or wrong, are based on how we view the world. There are those who ardently believe in capitalism, and others who believe in socialism with the same fervor. Whereas one believes in opportunity, personal initiative, and reaping the benefits from assuming risk, the other believes in collective equality and sharing the wealth. Republicans identify with the parable of the Ant and the Grasshopper, while Democrats admire the tenacity of Army ants. We have grown comfortable with our belief system and, frankly, don’t want to change.

Despite the political spin of the media, we cannot ignore the fact that our state and federal governments are going broke. This is caused simply by spending more than we take in. As we should all know, the golden rule to profitability is simply to cut expenses and raise income. Obviously, governments have to cut spending which means all of the perks we have grown accustomed to may very well disappear. Hard and painful decisions will undoubtedly have to be made. Sorry, but the party is over. You can blame our politicians for promising us everything without the ability to fund it, and blame ourselves for abusing the system. But it’s over. Our way of life is changing, get used to it.

As to income taxes, just about everyone agrees they should pay their fair share. This would imply that both progressive or regressive taxes are unsuitable solutions, that a flat tax would be more equitable and go a long way to overcoming suspicions of the various socioeconomic classes. There are those who believe the rich do not share their wealth. First of all, under the free enterprise system if you assume risk you are entitled to enjoy the bounty resulting from your efforts. Second, the reality is that the rich already shares their wealth by creating jobs and opportunities through their investments. Saying the rich does not share their wealth is misleading and fraudulent. Regardless, establishing a flat tax would put this issue to bed once and for all.

As to corporate taxes, businesses should pay their fair share too, but we cannot saddle companies with a tax burden that stifles employment, capital improvements, and research and development. The economy stagnates when this happens. Instead of heaping on taxes which will cause companies to tighten their belts, tax incentives encourages companies to move in certain directions. Understand this, aside from financial institutions, companies are not in the business of hoarding cash, it doesn’t make sense to do so. Due to such things as tax limits on retained earnings, companies are fully cognizant of the need for modifying and improving their operations, it’s called “competition.”

As I got older, I thought I could start to slow down and enjoy the world around me. Unfortunately, I have come to the realization this is not going to happen. My generation, the Baby Boomers, is going to have to work longer than our predecessors just to make ends meet. As such, retirement is now regarded more as a luxury as opposed to a right of passage. The fact remains though, the American way of life is deteriorating whether we want to admit it or not. For example, our standard of living has dropped over the last few years (and will continue to do so), our trade deficit grows (we’re now the #3 exporter behind China and Germany), and we have become a service oriented country (70% service/30% manufacturing). This does not bode well for us.

The United States still has a substantial middle class which has been a powerful engine moving the world’s economy, but when this engine runs out of fuel everything will come to a halt. Those who have a sense of entitlement will have the hardest time adjusting to any form of government spending cuts as they believe it is their God given right to be taken care of, whether they earned it or not. Inevitably, they will rebel and create a fuss with considerable fanfare. Nonetheless, when your business starts running on red ink, it is time to make changes, difficult changes; the status quo simply will not suffice. So, whether you construe the government budget battles as “union busting,” attacking the rich, or whatever, you cannot ignore the economic reality of today, it usurps all political agendas. It is not going away unless “we” do something about it. And “we” means all of us.

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
http://www.phmainstreet.com/timbryce.htm

Like the article? TELL A FRIEND.

Tune into Tim’s THE BRYCE IS RIGHT! podcast Mondays-Fridays, 11:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

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EVERYTHING COMES IN THREES

Posted by Tim Bryce on March 6, 2011

Over the years I have learned to appreciate the power of “three” which is hardly a new concept. The ancient Egyptians coveted the “three” and exemplified its use as triads in their pyramids thereby providing a path for deceased pharaohs to transcend to the sun as the “King of the Dead.” Just about every religion and philosophy pays respect to the concept of “three.” For example, in the Christian world, we respect the Holy Trinity.

“Three” is an important part of mathematics, particularly Geometry. In music, three notes in a triad is the basic form of any chord. In writing, it is common to build an argument based on three points. I frequently use the power of “three” myself to rationalize an argument. It helps me think through a hypothetical proposition. Within any paper or lecture there are three fundamental parts: the introduction, the body, and the conclusion.

The concept of three separate but equal branches of the American government establishes a set of checks and balances so that one part of government doesn’t overpower another. Not surprising, businesses tend to think in terms of threes as well; the triad of business is: the company, the customer, and the vendor (supplier). All business models can be subdivided into three fundamental areas of responsibility that can be subdivided into three levels of activity (operational activities, control functions as represented by middle management, and policy functions representing executive decisions).

There is a general tendency for the human mind to think in terms of threes. For example, we use the power of three to analyze a problem (cognitive reasoning), and we readily recognize the relationship of three objects, e.g., the Bermuda Triangle, the Molasses/Rum/Slave Triangle, and other trade triangles.

The power of “three” influences our arts and sciences and touches our lives in so many ways that it affects our perceptions and how we think. For example, the expression “three times is a charm” is generally regarded as something positive. However, there are negative connotations to “three” as exemplified by the expression, “Everything comes in threes.” When I was younger I used to dismiss this notion as an old wives tale, but I have found over the years there is a certain element of truth to it.

Airplane accidents tend to come in sets of three. I have seen this too many times to just dismiss it as nothing more than a coincidence. Disasters in general tend to come in threes. For example, I have seen it with major storms and hurricanes down here in Florida. It seems I attend funerals in threes, and see personal accidents coming in threes. I also seem to incur major bills which I inevitably have to pay in threes. Interestingly, everything that “comes in threes” seems to have negative connotation associated with it, rarely does it seem positive, like hitting the lottery or some other form of good luck.

Maybe because the number “three” is so impressed on us that disasters become a self-fulfilling prophecy. In other words, we’re not satisfied until we realize our third and final accident. Whether the concept of “three” is real or imagined, I take it rather seriously, as do a lot of people. As an aside, this is the third draft I have produced of this article; do you see what I mean?

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
http://www.phmainstreet.com/timbryce.htm

Like the article? TELL A FRIEND.

Tune into Tim’s THE BRYCE IS RIGHT! podcast Mondays-Fridays, 11:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

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STARTING THE DAY

Posted by Tim Bryce on March 3, 2011

As I was growing up, it was impressed upon me that breakfast was the most important meal of the day. We therefore always had something to eat before going off to school, be it eggs, oat meal, cereal, pancakes, etc. You have to remember this was well before the advent of toaster strudel or instant French toast or waffles. I don’t know which was more important though, eating the meal or sitting down with the family before we all scattered to the four winds. Breakfast was useful for me to wake up and converse with other human beings before I had to face the rest of the world. My parents made sure I was properly prepped for the day. I therefore concluded the value of breakfast was not so much the meal itself, but that it put me in the proper frame of mind to tackle my assignments for the day.

A lot has obviously changed since then, but I find we all have some sort of ritual we follow in starting the day. As for me, I shave and shower early. For some reason, the water invigorates me and I start thinking about what I have to do for the day. I also start to think about ideas for a column, perhaps resulting from a leftover dream I was just having. After I get dressed, I go out and retrieve the morning newspaper and, if I’m lucky, I’ll recover a leftover cigar that I’ve been saving, light it up, and smoke it on my way to work. Rarely, if ever, do I have breakfast anymore. I’m just not hungry, but crave a cup of coffee instead which I usually drink black.

It’s still nighttime when I drive to work. I like it this way as there are hardly any cars on the road, thereby allowing me to enjoy my cigar and think. I keep a handheld tape recorder nearby to record any pertinent notes or thoughts I don’t want to forget. After arriving, I start the coffee for the day, and open the office. It’s still nice and quiet. I then check voice mail and my backlog of e-mail messages. If I have a column ready, I post it accordingly. By 7:00am I have accomplished quite a lot and am now in the proper frame of mind to address the remaining items on my list for the day.

I don’t like it when my morning ritual is upset, and I don’t believe any of us really do. We have just arisen for the day and are trying to find our stride. If we don’t, the rest of the day can become rather miserable and convoluted. Consequently, we develop familiar routines that put us on autopilot until we can start to become productive. On commuter trains you see people sleeping, reading the newspaper, finishing the crossword puzzle, reading, listening to music, or reading their e-mail on their smart phone. It’s all rather quiet though.

For those commuting by automobile, you see people drinking coffee, shaving, touching up their makeup and hair, talking on their cell phones, or listening to their radios or CD players. The only problem here is if someone doesn’t pay attention on the highway he will likely disrupt the routines of a lot of other people, not just himself.

There is one custom I firmly believe you should do to start your day, and that is simply to pay a bill. It forces you to think about your economic situation, thereby influencing your priorities and points you in the proper direction for the day. Believe me, writing a check in the morning can motivate people a lot better than anything you can eat for breakfast.

Keep the Faith!

Note: All trademarks both marked and unmarked belong to their respective companies.

Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

For Tim’s columns, see:
http://www.phmainstreet.com/timbryce.htm

Like the article? TELL A FRIEND.

Tune into Tim’s THE BRYCE IS RIGHT! podcast Mondays-Fridays, 11:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

Posted in Finance, Life | Tagged: , , , , , | 1 Comment »