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Archive for September, 2011

OBAMA’S ECONOMIC PLAN – PREPARE 3 ENVELOPES

Posted by Tim Bryce on September 6, 2011

As I write this article, President Obama has just departed on his summer vacation to Martha’s Vineyard. Following Labor Day he is to return to Washington and make a major speech regarding his proposals for mending the economy and putting the country back to work. As of this moment, the scuttlebutt is he may announce some new tax cuts and reforms, construction projects to stimulate jobs, even a new “Jobs Department” in the government. This is all speculative at this time. Nonetheless, we are told it will be bold and fresh new ideas. Although we all certainly hope this is true, we have already been down this road with the president under the guise of “Change we can believe in.”

So far, the president has tried stimulus and bailout programs with questionable results; the federal debt is rising unabated, and; his proposals to raise taxes have met with stubborn resistance from the Republicans and the public. Frankly, he seems to be running out of options.

Should he propose a new department or agency to oversee jobs or construction projects, this will not be warmly received as it will be perceived as more government bureaucracy, not less. According to the U.S. Office of Personnel Management, there is now close to three million government employees, not including military personnel. I think the president would find Congress and the American public more receptive to “right-sizing” the government, anything less will be perceived as rearranging the deck chairs on the Titanic.

Should the president reaffirm his intent to raise taxes, this too will be rebuffed. He will likely find the Congress more receptive to discussing tax reform whereby major changes would be welcomed by the American people, something that would be fair and equitable across the board, such as a flat tax or value added tax to replace income tax, and corporate tax structures to encourage companies not to export jobs and money overseas.

He may even challenge the Congressional super committee to go beyond its goal of $1.5 trillion in deficit reduction, but this is not likely as it will cut programs he desperately wants. Hopefully, he’ll surprise us.

What Mr. Obama will propose after Labor Day is anyone’s guess; it may very well be a serious gesture to get our economic house in order, or it may be another instance where the economy has been politicized as we approach the 2012 elections.

Somehow this reminds me of the old joke whereby a new manager had been hired by a company to take over an operation. As the new manager was moving into his office he happened to bump into his predecessor who was preparing to leave. The new manager asked if there was any advice the former manager could offer on assuming his duties. The former manager said he had written his advice and placed them in three envelopes in his old desk and marked “1,” “2,” and “3”, and they should only be opened in the event of an emergency. The new manager laughed, shrugged it off, and went about his business.

The manager’s reign started off fine but inevitably ran into a problem for which he had no solution. Desperate, he happened to remember the three envelopes and opened Number 1 which offered the following advice: “Blame your predecessor.” The manager thought this was a clever way to get himself off the hook and used it to good effect.

Time went by until the manager was faced with another seemingly impossible hurdle. Not knowing what to do, he turned to envelope Number 2 containing a note that read simply: “Reorganize.” The manager thought this was a sound idea and set about reorganizing his operation. Organization charts were redrawn, job descriptions modified, and new office furniture and equipment obtained.

The reorganization overcame the manager’s problem but he eventually ran into a crisis challenging his abilities as a manager. At a total loss as to what to do, the manager turned in desperation to envelope Number 3 which included a note that read simply, “Prepare three envelopes.”

Obama has already opened envelope Number 1. I fear his post-Labor Day speech will be envelope Number 2. If it is, you can be assured he will be opening envelope Number 3 on election day.

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, 7:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

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REFLECTIONS ON LABOR DAY

Posted by Tim Bryce on September 1, 2011

I always thought Labor Day was an oddball holiday. It became a federal holiday in 1894 and is observed on the first Monday in September. Whereas holidays like Memorial Day and Independence Day recognized fallen veterans and the nation’s birth, I was never quite sure what Labor Day stood for other than perhaps another paid holiday for the labor unions. For most of us, it represents the end of summer and the start of a new school year. This has changed in recent times though as schools are now more inclined to start earlier, well before Labor Day.

As our Labor Unions have received considerable attention in the press lately, I decided to research their membership numbers on this occasion. To do so, I researched the annual “Union Members Summary” as produced by the Bureau of Labor Statistics (Friday, January 21, 2011). In it, I discovered union membership is in decline; to quote from the paper:

“In 2010, the union membership rate, the percent of wage and salary workers who were members of a union, was 11.9 percent, down from 12.3 percent a year earlier. The number of wage and salary workers belonging to unions declined by 612,000 to 14.7 million. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers” (representing a loss of three million members).

The report also differentiated union participation in the private and public sectors, to wit:

* “The union membership rate for public sector workers (36.2 percent) was substantially higher than the rate for private sector workers (6.9 percent).”

* “Workers in education, training, and library occupations had the highest unionization rate at 37.1 percent.”

* “Among states, New York had the highest union membership rate (24.2 percent) and North Carolina had the lowest rate (3.2 percent).”

* “In 2010, 7.6 million public sector employees belonged to a union, compared with 7.1 million union workers in the private sector.”

Translation: You are more likely to join a union if you work in government as opposed to the commercial sector.

The report also noted, “Texas had about one-fourth as many union members as New York, despite having 1.9 million more wage and salary employees.” Please keep in mind, Texas is a “Right To Work” state, New York is not. Also understand Texas has balanced their budget, New York has not. Coincidence?

“Right to Work” laws are implemented in 22 states, mostly in the south and west, and allows anyone to work without mandatory membership in a union (it prohibits “closed shops”). Labor Unions resent such laws as they perceive it as a threat to their survival. As America’s economy sputters, unions are now generally regarded as an excessive expense and a deterrent to productivity. This is why collective bargaining agreements with state government unions are being renegotiated, to at least get them in line with the benefits of unions in the private sector. Unions will, of course, fight this tooth and nail, as demonstrated recently in Wisconsin and elsewhere. As we approach the 2012 elections, union coffers will be emptied supporting candidates in any race that could have a bearing on their livelihood. In other words, everywhere. Should they lose, this would be a crippling blow to them and their numbers will dwindle even further. So much so, that maybe in the not too distant future we will celebrate Labor Day as nothing more than the end of summer and the start of a new school year.

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, 7:30am (Eastern).

Copyright © 2011 by Tim Bryce. All rights reserved.

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