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Archive for the ‘Economics’ Category

A FABRICATED RECESSION?

Posted by Tim Bryce on August 29, 2019

BRYCE ON POLITICS

– Is the timing too much of a coincidence?

Click for AUDIO VERSION.
To use this segment in a Radio broadcast or Podcast, send TIM a request.

I have been hearing about an impending recession which my Democrat friends insist will happen either later this year or in 2020. The media reports likewise and I suspect these prognosticators will become louder as we get closer to the 2020 election. On the other hand, Republicans are at a loss as to what all the hubbub is all about, as our economy is still chugging along just fine. One cannot help but wonder if this is real or politically motivated.

First, let’s be clear what we mean by a recession. “The National Bureau of Economic Research (NBER) defines a recession as ‘a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product (GDP), real income, employment, industrial production, and wholesale-retail sales.’ A recession is also said to be when businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises, and housing prices decline.”

So far, none of this has occurred, nor are there signs it will.

The United States is currently the economic engine of the world. Our GDP is up, unemployment is down to record levels, and consumer confidence is up. It is true, people are concerned about a trade war with China, but this is something that needed to be corrected in any event, unless we prefer kowtowing to the Chinese. Some are suggesting Europe is behind, but the reality is only Germany is showing signs of changes in production. In Asia, there is concern regarding trade between Japan and South Korea, but it is likely these differences will be amicably resolved.

So where are the accusations coming from regarding a potential recession? One prominent source is Diane Swonk, the Chief Economist for Grant Thornton in Chicago. She recently told Fox Business’ Liz Claman, “I think (a recession) is highly probable. I do have a recession in 2020.” She sees Brexit and Japan/South Korea trade as contributing to it.

In sharp contrast, Sonal Desai, Ph.D., the Chief Investment Officer at Franklin Templeton Fixed Income claims, “the economic data show no evidence that either the United States or the global economy is approaching a recession.” She adds, “The markets and the Fed seem to be looking at each other, feeding each other’s fears, and completely ignoring what’s actually going on in the real economy.”

So, who are we to believe? One thing we should consider, Diane Swonk has made campaign contributions to Democrat candidates, and her father, Jim Swonk, was well known in the Livingston County Democrat Party, Michigan. In other words, she undoubtedly has sympathies for Democrats and the party may be trying to capitalize on her notoriety.

The biggest asset Donald Trump has going into the 2020 presidential election is our robust economy, and this is the Achilles heel of the Democrats. They have tried to gnaw away at his other accomplishments, but if the economy falters, they believe they can defeat him. This is why these rumors of recession are spreading, even though there is no factual basis to suggest it will occur. So, the drumbeat from the far-left and the media will be “Recession, Recession, Recession…” The Trump bashers believe if they say it enough times, people will believe a recession is actually in the works when, in reality, it is not. Meanwhile, American business will continue at a rapid clip, and workers will benefit from this prosperity.

For years, economics has had a role to play in politics, but I never dreamed it could be manipulated for political gain. It is rather sad when political strategists would rather put people out of work and cause misfortune for business, all for political gain. This goes beyond mere pessimism; it is just plain reckless and dangerous.

Interestingly, President Trump welcomes talk about a possible recession. He understands why the rumors are spreading, but it gives him a chance to tout how well his economic policies have worked. As usual, he fights fire with fire.

Keep the Faith!

P.S. – Also do not forget my new books, “How to Run a Nonprofit” and “Tim’s Senior Moments”, both available in Printed and eBook form.

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

Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb1557@gmail.com

For Tim’s columns, see:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2019 by Tim Bryce. All rights reserved.

Listen to Tim on WZIG-FM (104.1) in Palm Harbor,FL; Or tune-in to Tim’s channel on YouTube. Click for TIM’S LIBRARY OF AUDIO CLIPS.

 

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Posted in Economics, Politics | Tagged: , , , , | 5 Comments »

CAPITALISTIC CRABS

Posted by Tim Bryce on March 7, 2019

BRYCE ON POLITICS

– Even fiddler crabs understand the basics of our economic system.

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To use this segment in a Radio broadcast or Podcast, send TIM a request.

I went to the beach recently with my wife where we planted our umbrella and chairs in the sand as we usually do. It was low tide so we moved down closer to the edge of the water. Interestingly, we found ourselves situated in the midst of a colony of fiddler crabs who were busy digging holes in the sand and filtering the granules for some sort of nutritious treasure, whatever that might be. Although there were dozens of them around us, they took care to keep their distance from us and quickly buried themselves in the sand if we moved too quickly or stamped our feet.

They appeared to be quite industrious in their work and quite amusing to watch. Each dug a hole and mined balls of sand from it which they patiently picked through for nutrients. I noticed there were physical differences in the various crabs. Some were larger and possessed one rather impressive pincer claw which made it look like it was playing a fiddle (hence the name). Sometimes the claw was on the right side, others were southpaws. My attention focused on a particular crab which I called “Lefty” who seemed to have one of the more prominent holes in the sand. I was genuinely impressed by the amount of sand Lefty excavated from his lair. He seemed to be very concerned with keeping the area around his den neat and tidy. If a neighboring crab came too close, Lefty would ward him off by flashing his pincer. Most of the time though, he would simply push them out of his territory before retreating back to his hole where he would continue in his endeavors. Most of the crabs I saw seemed to follow Lefty’s lead whereby they worked hard and enjoyed the bounty of their efforts. Although they were rather territorial in nature, they allowed neighbors on their property only if they respected his domain.

Lefty became bored with the routine after awhile, and decided to survey the world around him. Unlike others who remained at home, Lefty traveled far and wide looking for new opportunities (at least ten feet away). Inevitably, he would have to cross over the territory of other crabs who quickly rebuffed his advances, regardless of his size. Nonetheless, Lefty continued on his trek until he found himself outside of the colony. He eventually found a new spot on the beach which evidently had a better view of the ocean, not to mention nutrients in the sand, and began to dig a new burrow. Never satisfied, he moved on to another location after he exhausted the nutrients. Interestingly, the other crabs didn’t seem to have his adventurous spirit and stayed home while Lefty saw the world.

After studying the habits of the fiddler crab for a couple of hours, I came to the conclusion they were a perfect example of capitalism in practice. Everyone worked hard for their food; freeloaders were taught to work if they wanted to eat, but some were allowed to graze on private property if the tenant was so inclined. The crabs were also free to roam and explore new endeavors, as exemplified by Lefty who enjoyed the bounties of success after leaving the colony, a very risky proposition. I don’t think Aesop could have made a better analogy.

I found this all rather intriguing and wondered if I could simulate this phenomenon on a larger scale. To do so, I purchased a dozen sand shovels and left them on the beach near a group of children who eagerly used them to dig holes and make sand forts. Each worked merrily to carve up their small piece of the beach which they were all very proud of. At the end of the day, they left their shovels in the sand and watched as the incoming tide reclaimed their creations. Again, this was another fine example of capitalism as each person was allowed to work as hard as they wanted and enjoyed the fruits of their labor.

Next, I obtained a dozen trowels, along with four shovels, and placed them near a group of conservatives on the beach. They eagerly picked up the tools and started to create some rather inspiring structures, including a six foot high sand castle complete with turrets, bridges, a moat with water, and the inside was large enough to hold a small child within its walls. It was pretty impressive. Other participants sculpted some interesting shapes, including a sea serpent, a ship, and what appeared to be a submarine. They took turns using the shovels as there were only four of them. Although a few people worked independently, most paired up into teams to create their structures and some friendly competition ensued. At the end, they congratulated each other on the job they had done. It was so impressive, curiosity seekers stopped by to admire their work and praised them accordingly. All of the tools were cleaned off and returned to the spot where I had brought them.

Finally, I took the same utensils and dropped them near a group of liberals. Frankly, they weren’t too impressed with them. Having watched the conservatives work and the adulation they received, instead of building something new, they complained to the media who filmed them tearing down the work of the conservatives. They complained about the heat and the working conditions and fought each other over territory in the sand. They then sold the tools and pocketed the money, and blamed the conservatives for defacing the beach.

Frankly, I was disappointed with the results of my experiment. I hoped the liberals had been at least as smart and industrious as the tiny fiddler crab, but I guess I was wrong.

Originally published: June 27, 2012. Updated 2019.

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&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb1557@gmail.com

For Tim’s columns, see:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2019 by Tim Bryce. All rights reserved.

Listen to Tim on WZIG-FM (104.1) in Palm Harbor,FL; Or tune-in to Tim’s channel on YouTube. Click for TIM’S LIBRARY OF AUDIO CLIPS.

 

Posted in Economics, Politics, Social Issues | Tagged: , , , , | Leave a Comment »

CAPITALISM VERSUS SOCIALISM: REFERENCE GUIDE

Posted by Tim Bryce on March 6, 2019

BRYCE ON POLITICS

– What every young person should know.

Click for MINI-POSTER.

REFERENCE GUIDE

                                                              CAPITALISM                                SOCIALISM

WHAT IS IT? Socioeconomic system based on PRIVATE ownership of the means of production and operates for PROFIT.

Encourages independence and the rights of the INDIVIDUAL over the group.

The individual is allowed to try any endeavor, including the development, marketing and support of products and services for public consumption.

The individual is allowed to keep and enjoy the fruits of his/her labors.

Socioeconomic system based on STATE ownership of the means of production; not driven by profit.

Encourages state dependency and the rights of the GROUP over the individual.

The state dictates what products and services are to be developed, and who shall produce them.

Each person works for the state, not individually, and receives compensation in the form of shared wealth and free services.

A pseudo-Utopia.

ECONOMY Free economy; based on private buyers and sellers.

Competition flourishes and causes natural evolution of products and services through market demand (akin to Darwin’s “Natural Selection”).

Consumers free to choose the products and services they want.

Economy is controlled by the state; little, if any, competition.
Buyer has fewer choices to make.
CLASS STRUCTURE 3 levels – Upper/Middle/Lower classes.
Middle class powers economy through purchasing power.
2 levels – State/Worker classes (aka, “Master/Slave”).

No middle class, no economic engine, a redistribution of the wealth.

Workers become wards of the state.

THE INDIVIDUAL Independence encourages personal initiative and work ethic.

More earning power, but individual assumes risk.

Enjoys protection of Intellectual Property, e.g., patents, copyrights, trade secrets, etc.

Employment will experience ups and downs due to economic conditions.

Discourages personal initiative (“everyone wins”). No Super Rich.

Compensation is evenly distributed among workers.

Earning power is limited. Individual assumes no risk.

Intellectual Property is owned by the state, not individual.

Employment is guaranteed.

EFFECT ON GOVERNMENT Personal independence requires freedom and equal rights in order to function.

Requires less bureaucracy, smaller government.

Flourishes under a Republic with democratically elected representatives.

Creates dependency on state; Requires more bureaucracy (larger government) through regulation as the state controls everything, including food, education, housing, communications, health care, energy, transportation, etc.

Hinders rights and loss of liberty. Encourages autocratic rule.
Less freedom.

Click for MINI-POSTER.

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&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb1557@gmail.com

For Tim’s columns, see:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2019 by Tim Bryce. All rights reserved.

Listen to Tim on WZIG-FM (104.1) in Palm Harbor,FL; Or tune-in to Tim’s channel on YouTube. Click for TIM’S LIBRARY OF AUDIO CLIPS.

 

Posted in Economics, Politics, Social Issues | Tagged: , , , , , , , | 7 Comments »

THE MIDDLE CLASS: SEPARATING CAPITALISM FROM SOCIALISM

Posted by Tim Bryce on March 5, 2019

BRYCE ON POLITICS

– Why capitalism makes more sense.

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To use this segment in a Radio broadcast or Podcast, send TIM a request.

One of the fundamental differences between capitalism and socialism is in the area of class structure and, unfortunately, many people do not grasp this difference. Under capitalism, there are three levels: an upper class representing super successful people who have earned a fortune, the middle class representing John/Jane Doe who works diligently to put food on the table for their family, and a lower class representing the less fortunate of us. Influence is top-down based on the economic pecking order, thereby creating resentment by those lower in the chain.

Socialism, on the other hand, has just two classes: the ruling class, as represented by the state, and the working class where everyone is equal. I tend to refer to this as a “Master/Slave” relationship as the analogy to slavery is uncanny, where the Master micromanages everything and the Slave puts forth just enough effort to get by, but expects to be taken care of by the Master. There are many other nuances, but for the purposes of this article, the big difference here is the middle class.

A sizable middle class represents an economic engine for a country. Capitalism encourages people to work, to invest and to spend their money, allowing a country to collectively compete. The average person wants nothing more than to earn a respectable livelihood, so they can enjoy life and raise a family unencumbered by overbearing government regulations. As President Calvin Coolidge observed, “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of the opinion that the great majority of people will always find these the moving impulses of our life.”

Do people truly understand the power of the middle class? I think they’re starting to overseas. We may not have invented the concept of a middle class, but we sure perfected it, and everyone wants to emulate it. Since the fall of the Soviet Union, countries around the world have been re-configuring their economic policies in order to remain competitive in a global economy. In case you haven’t been paying attention, new middle classes have slowly emerged in such places as China, Belarus, Brazil, Russia, Vietnam, and among South African blacks. People in these countries now have spending power thereby causing a demand for products and services, not to mention a call for construction of new houses and businesses.

In order for capitalism to work, you need to be allowed to have certain freedoms, such as the freedom of expression, the freedom to innovate and invent, the freedom to choose your own path, the freedom to conduct legitimate business, etc. This is why it is rather ironic how some of our former communist foes are now embracing capitalism. Under socialism, there is no protection of intellectual property, such as patents, trade secrets, copyrights, etc. Everything is owned by the state, not the individual.

In the absence of a middle class, you have just the rich and the poor (the “have’s” and the “have not’s”) which lends itself to being a feudal state controlled by dictators or monarchies. Such a state does not operate harmoniously, corruption is rampant, and unrest is common. The “have not’s”, which is a sizable majority, have little to earn and spend. Consequently, the economy sputters and stagnates which our communist friends discovered the hard way.

As mentioned, in order for capitalism to work, certain freedoms have to be permitted to allow a person to work, earn, and save their money, not to have it redistributed to others by government decree. This means there is an explicit relationship between freedom and capitalism. Implicitly, it means capitalism requires a certain amount of democracy to allow the citizens to participate in how the government runs, which means capitalism cannot work under a dictatorship (see Cuba, Iran, North Korea, Venezuela, et al). As an aside, it is the middle class who elects government officials, not the upper or lower classes. The upper class may support politicians economically, but it is the middle class that casts the votes.

When someone asks me about my political leanings, I tell them I am an unabashed capitalist. This of course means I believe in liberty, and the right of the individual to lead a meaningful life, and I abhor any attempt by government to alter this or forcibly redistribute the wealth earned by the individual. I can understand government monitoring the legality of someone’s occupation, but aside from this they should not hinder a person’s right to earn a living.

Capitalism is our greatest export. It represents the seeds of freedom and economic prosperity. If it spreads, it could lead to world stability and peace which, of course, certain tyrants and crackpots openly reject. For example, Iraq will be an interesting experiment in capitalism. If Iraq succeeds, freedom and democracy will succeed, which is why Middle Eastern terrorists desperately want to see it fail as it represents a challenge to their authority. It’s not so much about religion as it is about control. Capitalism is a genuine threat to feudalism, a system which has no regards for the rights of the human-being and respect for the human spirit. Make no mistake, feudalism is barbaric.

To summarize:

1. In order to effectively compete in a world economy, you need capitalism.

2. In order for capitalism to flourish, you need freedom and democracy.

3. A byproduct of capitalism is a sizable middle class with spending power.

4. Therefore, any attempt to change capitalism is a threat to freedom, democracy, and the middle class.

No, I am not a proponent of government sponsored bailouts, stimulus packages or the creation of artificial jobs. Such devices does a disservice to capitalism and is unnatural. It is not government’s role to tamper with capitalism, only to establish the environment for capitalism to flourish, namely assuring freedom and protecting rights, serving its constituents, and providing incentives to encourage new avenues of business.

I am also of the belief that capitalism is very much akin to Darwin’s “natural selection” whereby goods and services evolve and improve in order to effectively compete. Under socialism, there is no competition as everything is controlled by the state. From this perspective, it is not “natural.” In other words, capitalism recognizes change through competition; in order for it to succeed, you must allow for the right to failure. By doing so, you assure our right to succeed.

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&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at timb1557@gmail.com

For Tim’s columns, see:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2019 by Tim Bryce. All rights reserved.

Listen to Tim on WZIG-FM (104.1) in Palm Harbor,FL; Or tune-in to Tim’s channel on YouTube. Click for TIM’S LIBRARY OF AUDIO CLIPS.

 

Posted in Economics, Politics, Social Issues | Tagged: , , , , , | 1 Comment »

WHAT INFLATION?

Posted by Tim Bryce on October 10, 2016

BRYCE ON THE ECONOMY

– Are prices going up or is it just my imagination?

(Click for AUDIO VERSION)
To use this segment in a Radio broadcast or Podcast, send TIM a request.

I wish I lived in Washington, DC. It must be very inexpensive to live there. I say this because I noticed our inflation rate dropped over the summer from 1.3% to 0.84%. The rate is calculated using the current Consumer Price Index as published monthly by the U.S. Bureau of Labor Statistics. The index is “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”

The Commissioner for the bureau is Dr. Erica L. Groshen who manages a 2,500 person organization which is the principal fact-finding agency for the Federal Government in the broad field of labor economics. Translation, they are number crunchers. It is Dr. Groshen’s group that is charged with sampling the prices of consumer items and calculating the Consumer Price Index. I therefore presume they are sampling products from around the Washington, DC area which must be pretty cheap if the 0.84% inflation rate is any indication.

This is all well and good for Washington, DC, but I suspect the rest of the country is operating at a much higher inflation rate. For example, have the prices at the grocery store been going up or is it my imagination? I have a friend who owns a restaurant and complains he is now being charged $30 more per month to have his grease trap emptied. His produce, bread and coffee bills are up as well.

At my local supermarket, steaks are $13-$15 a pound, bread is about $2.50 a loaf, and shellfish is prohibitive. Just about everything else is $5 each, including fruit. I realize we no longer live in the 20th century, but don’t try to tell me the rate of inflation is descending.

Dr. Groshen, please send your minions to the Tampa Bay area of Florida and test our prices. We must be operating on a different wavelength than Washington, DC, and I suspect the rest of the country. Don’t insult us though by stating unequivocally that inflation is a mere 0.84%.

I will wager that the people who calculate our inflation rate are the same knuckle heads who claim the unemployment rate is down to 4.9%. Gallup’s “Real Unemployment” rate of 9.7% is a much more credible figure.

The problem is such statistics have been politicized to con the American public to believe that things are better than they actually are. I’m just wondering what the purpose of the U.S. Bureau of Labor Statistics is if they cannot provide statistics the American public can believe.

Also published with News Talk Florida.

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&JB Investment Company (M&JB) 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:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2016 by Tim Bryce. All rights reserved.

Also read Tim’s columns in the THE HUFFINGTON POST

NEXT UP:  PROACTIVE VERSUS REACTIVE MANAGEMENT – We have plenty of time to do things wrong.

LAST TIME:  WAITING ON DOCTORS  – Why can’t they meet you on time?

Listen to Tim on News Talk Florida (WWBA 820 AM), WZIG-FM (104.1) in Palm Harbor,FL; KIT-AM (1280) in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

 

Posted in Economics | Tagged: , , , , | 2 Comments »

THE COUPON SHELL GAME

Posted by Tim Bryce on November 6, 2015

BRYCE ON ECONOMICS

– A clever way to conceal inflated prices.

(Click for AUDIO VERSION)
To use this segment in a Radio broadcast or Podcast, send TIM a request.

Our weak economy is cause for concern for just about everyone. It is difficult to avoid the subject in either personal or professional settings. We’re all looking for creative ways to survive in these difficult times.

Recently I was talking to a merchant in my area who complained how the vendors who serviced his store were slowly and quietly raising their prices as if nobody was paying attention. My friend certainly was. When he confronted them about their escalating prices, they all claimed they had to do something to offset the customers they had been losing recently. In other words, they were making the merchant pay for their problems. For my Liberal friends, this is what is commonly called “Inflation.”

Nonetheless, my friend agonized what to do. He had cut costs as much as possible, tried different types of advertising, experimented with changes to his product line, etc. Regardless what he tried though, he still suffered from fewer patrons visiting his shop. Desperate for ideas, he came up with an idea that went against conventional wisdom, he raised his prices. Actually, he devised a rather slick idea whereby he doubled his prices but introduced a coupon program whereby customers could save 25% if they redeemed the coupon within a certain number of days. This worked remarkably well. More and more customers started to frequent his store thinking they were going to save a lot of money. The reality though was they were actually paying 75% more than before.

This hunger by the consumer to “save” money worked so well, my friend couldn’t print coupons fast enough. After awhile, he didn’t even have to print his coupons in the newspaper as word quickly spread customers could pick them up in the store. Then, my friend had a stroke of genius, he arranged a 50% sale on Mondays which were normally his slowest day. This resulted in a tsunami of customers flooding his store causing him to hire some additional help.

As a postscript, I visited my friend not long ago. He claims his store is doing fine now and is able to laugh about it. To hear him tell it, coupons are nothing more than a clever shell game to conceal inflated prices and driven by consumer greed. You know what the scary part is? It works.

Originally published: October 7, 2010

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&JB Investment Company (M&JB) 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:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2015 by Tim Bryce. All rights reserved.

NEXT UP:  UNDERSTANDING BUSINESS PROCESS DESIGN – A primer; it’s not what tools you use, but rather knowing what you are doing.

LAST TIME:  RASMUSSEN: FEDERAL GOVERNMENT TOO BIG  – 60% of Americans think their government is too big.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern); WZIG-FM (104.1) in Palm Harbor,FL; and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

Posted in Economics | Tagged: , , , , | 6 Comments »

THE DISPARITY BETWEEN CAPITALISM AND SOCIALISM

Posted by Tim Bryce on September 30, 2015

BRYCE ON POLITICS

– Do young people know the difference between the two?

(Click for AUDIO VERSION)
To use this segment in a Radio broadcast or Podcast, send TIM a request.

I was recently invited to give a talk at a business conference designed to help high school seniors in our county who have an interest in pursuing a business career. Specifically, I was assigned two sessions to describe what the young person should expect as they make the transition to adult life, which was based in large part on my book, “MORPHING INTO THE REAL WORLD – A Handbook for Entering the Work Force.”

I wore a suit and tie for the occasion to express my credibility and out of respect for my audience, even though none were older than eighteen years of age. This was going to be an unusual talk for me as I normally address adults, not youth. Because of this, I wanted to know a little about my audience. So, using a show of hands, I inquired where the students were from, such as their high schools, but I also flippantly asked how many were capitalists and, conversely, if there were any socialists present. I received a lot of blank stares on both accounts. This caused me to deviate from my planned program and deliver a mini-dissertation describing the differences. I contended in order to be successful in business, the students would be wise to know what each meant.

Interestingly, some were brainwashed into believing capitalism was evil and simply represented another form of greed. I contend greed is a human emotion, and can be equally applied under either system. Therefore, capitalism is not greed, it is a celebration of the individual’s right to try and succeed. Whereas capitalism focuses on the rights of the individual, socialism concentrates on the rights of the group overall.

I explained, under capitalism the individual has the right to try his/her hand at anything they are so inclined, thereby representing freedom. They simply have the right to try, nothing more, nothing less. If they are lucky, they may succeed, but they also run the risk of failure. Failure is an inherent and important part of the system. There are no guarantees for success. This is why risk is important, to force the individual to work harder and smarter to avoid defeat. As such, capitalism encourages entrepreneurship (innovation and invention). If the person is successful, they are entitled to enjoy the fruits of their labor. If they are not, they must suffer defeat. This should force the person to redouble his/her efforts and try again which, of course, is evolution in action.

To encourage entrepreneurship, our founding fathers took steps to safeguard the intellectual property of the individual. This specifically includes Article 1, Section 8 of the United States Constitution, wherein the powers of Congress are defined. It states, in part, “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;”. This led to such institutions as the Patent and Copyright offices which were specifically designed to safeguard an individual’s intellectual property. As early as 1790, the first patent and copyright were approved. At the time, safeguarding intellectual property in this manner was rare to the rest of the world. By promoting the entrepreneurial rights of the individual, our forefathers were embracing capitalism.

As mentioned, the focus in Socialism in on the group, not the individual. Here, the rights of the many take priority over the individual. Because of this, personal initiative is discouraged and the individual cannot endeavor to do better than the next person, and failure is prohibited; the group will always bail you out. There is no notion of assuming risk and being held personally accountable for your actions. All compensation is equitable among workers with no rewards for outstanding achievement or penalties for inferior workmanship. Intellectual property belongs to the group, not the individual. Consequently, this approach discourages entrepreneurship and tends to promote apathy.

The Achilles’ heel of Socialism is the belief everyone is equal and, as such, should be treated and compensated on an equitable basis. On the surface, this sounds like a fair and noble notion. The assumption though is everyone works at the same level of effort and expertise which, of course, is simply not so. Restraining the individual from achieving higher levels of workmanship or striving for higher goals is unnatural and discourages the worker.

To summarize:

FOCUS –
Capitalism: The rights of the individual; the right to “try”; requires freedom.
Socialism: The rights of the group; collective decision making; regulations restrain the individual.

ENTREPRENEURSHIP –
Capitalism: Yes, encourages risk; enjoys fruits of labor; individual assumes personal responsibility; promotes evolution.
Socialism: No, discourages risk; individual cannot fail; encourages apathy, discourages change; unnatural.

INTELLECTUAL PROPERTY –
Capitalism: Yes, belongs to the individual.
Socialism: No, property belongs to the group.

Before closing my talk, I encouraged the students to become familiar with the works of author Ayn Rand, particularly “The Fountainhead” (1943) and “Atlas Shrugged” (1957). Rand’s work touted the need for individual achievement and capitalism, and saw them as two intertwined concepts.

In business, we have to be mindful of encouraging individual achievement and teamwork equally. We realize our team is as good as its weakest player, hence the need to encourage workers to strive harder for perfection. However, there will always be those people who will rise above others and it certainly wouldn’t make sense to impede their growth.

“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.”
– Ayn Rand

UPDATE: IS AMERICA A SOCIALIST STATE?

America may not have embraced Socialism as fervently as Cuba, China, North Korea, Viet Nam, or the old USSR, but make no mistake, America has been moving in a Socialist direction for quite some time. Whereas, the country used to embrace capitalism, and was repulsed by the very idea of socialism, now we are just as tolerant of it as marijuana. Young people today are more amenable to accepting it, probably because they were never taught what it was in school. Liberals market it as “equality for all,” while conservatives perceive it as repressive slavery.

Seventy five years ago I would have described the country as 75% capitalist, and 25% socialist. Today, I believe it is just the opposite. Socialism has been in the country since the 1820’s, but was not widely embraced until the country was faced with the Great Depression and had to rethink its economic policies under Franklin D. Roosevelt. FDR’s social programs may have been noble in intent, but did not eradicate the problem. Only World War II brought America out of it. FDR’s legacy was continued by Kennedy, Johnson, Carter, Clinton, and now Obama. It is manifested by labor unions, welfare entitlements, economic bailouts, and handouts to friendly countries around the globe, some for humanitarian reasons, others as a bribe.

Today, approximately one third of the country is on some federally subsidized program. This includes illegal immigration. Another one third is paying not only for their own family, but those on welfare as well.

318.9M – people in America
109.6M – on welfare

58.7% – pay income tax
43.3% – do not

The socialist way of paying for entitlements is through heavy taxation, including personal, corporate, and foreign. The capitalist way is to reduce tax rates, stimulate the economy, and put more people to work.

Socialism represents a redistribution of the wealth. When you hear politicians say, “free education,” “free health care,” and “free” everything else, without having a way to earn it yourself, that is the voice of slavery, not freedom. This explains why the federal debt is so high.

So, Yes, I believe the country is at least 75% socialist and 25% capitalist. It also appears the Democratic Party has turned socialist. Even DNC Chairman, Cong. Debbie Wasserman Schultz, cannot discern the difference. Further, there is the distinct possibility the Democrats will elect Senator Bernie Sanders, an admitted Socialist, as their candidate for president. The only difference between Sanders, and the other Democratic candidates, is Sanders is honest about his position, the others are not.

First section originally published: November 28, 2012

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&JB Investment Company (M&JB) 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:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2015 by Tim Bryce. All rights reserved.

NEXT UP:  WHEN HAVOC STRIKES – What to do when someone loses their cool at the office.

LAST TIME:  MANAGING COMPLEXITY  – It’s really not difficult as long as we use a little common sense.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern); WZIG-FM (104.1) in Palm Harbor,FL; and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

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WHY WE NEED A MIDDLE CLASS

Posted by Tim Bryce on August 28, 2015

BRYCE ON POLITICS

– An argument for capitalism.

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Do people truly understand the power of the middle class? I think they’re starting to overseas. We may not have invented the concept of a middle class, but we sure perfected it, and everyone wants to emulate it. Since the fall of the Soviet Union, countries around the world have been reconfiguring their economic policies in order to remain competitive in a global economy. In case you haven’t been paying attention, new middle classes have slowly emerged in such places as China, Belarus, Brazil, Russia, Vietnam, and amongst South African blacks. People in these countries now have spending power thereby causing a demand for products and services, not to mention a call for construction of new houses and businesses.

The rise of middle classes around the world is significant as it is a recognition that capitalism works as opposed to socialism or communism. A sizable middle class represents an economic engine for a country. Capitalism encourages people to work and to invest and spend their money and allows a country to collectively compete. The average person wants nothing more than to earn a respectable livelihood, so they can enjoy life and raise a family unencumbered by overbearing government regulations. As President Calvin Coolidge observed, “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of the opinion that the great majority of people will always find these the moving impulses of our life.”

In order for capitalism to work, you need to be allowed to have certain freedoms, such as the freedom of expression, the freedom to innovate and invent, the freedom to choose your own path, the freedom to conduct legitimate business, etc. This is why it is rather ironic how some of our former communist foes are now embracing capitalism.

In the absence of a middle class, you have just the rich and the poor (the “have’s” and the “have not’s”) which lends itself to being a feudal state controlled by dictators or monarchies. Such a state does not operate harmoniously, corruption is rampant, and unrest is common. The “have not’s”, which is a sizable majority, have little to earn and spend. Consequently, the economy sputters and stagnates which our communist friends discovered the hard way.

As mentioned, in order for capitalism to work, certain freedoms have to be permitted to allow a person to work, earn, and save their money, not to have it redistributed to others by government decree. This means there is an explicit relationship between freedom and capitalism. Implicitly, it means capitalism requires a certain amount of democracy to allow the citizens to participate in how the government runs, which means capitalism cannot work under a dictatorship (see Cuba, Iran, North Korea, et al). As an aside, it is the middle class who elects government officials, not the upper or lower classes. The upper class may support politicians economically, but it is the middle class that casts the votes.

When someone asks me about my political leanings, I tell them I am an unabashed capitalist. This of course means I believe in liberty, and the right of the individual to lead a meaningful life, and I abhor any attempt by government to alter this or forcibly redistribute the wealth earned by the individual. I can understand government monitoring the legality of someone’s occupation, but aside from this they should not hinder a person’s right to earn a living.

Capitalism is our greatest export. It represents the seeds of freedom and economic prosperity. If it spreads, it could lead to world stability and peace which, of course, certain tyrants and crackpots openly reject. For example, Iraq will be an interesting experiment in capitalism. If Iraq succeeds, freedom and democracy will succeed, which is why Middle Eastern terrorists desperately want to see it fail as it represents a challenge to their authority. It’s not so much about religion as it is about control. Capitalism is a genuine threat to feudalism, a system which has no regards for the rights of the human-being and respect for the human spirit. Make no mistake, feudalism is barbaric.

To summarize:

1. In order to effectively compete in a world economy, you need capitalism.

2. In order for capitalism to flourish, you need freedom and democracy.

3. A byproduct of capitalism is a sizable middle class with spending power.

4. Therefore, any attempt to change capitalism is a threat to freedom, democracy, and the middle class.

No, I am not a proponent of government sponsored bailouts, stimulus packages or the creation of artificial jobs. Such devices does a disservice to capitalism and is unnatural. It is not government’s role to tamper with capitalism, only to establish the environment for capitalism to flourish, namely assuring freedom and democracy, serving its constituents, and providing incentives to encourage new avenues of business.

Yes, the failing financial companies and automotive manufacturers should have been closed. They were corrupt, made bad decisions based on greed and stupidity, and do not deserve any sympathy for their plight. If they had been allowed to fail, new institutions would have surely been created to replace them which would have been leaner, stronger and smarter. It’s called “evolution.” By bringing back our right to fail, you assure our right to succeed.

Originally published: August 4, 2010

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&JB Investment Company (M&JB) 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:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2015 by Tim Bryce. All rights reserved.

NEXT UP:  THE FINAL ROUNDUP – What I learned during the years I spent on the Board of Directors for nonprofit organizations.

LAST TIME:  PROTECTING INTELLECTUAL PROPERTY  – Copyrights, trade secrets, patents, trade marks, and other things that go bump in the night.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern); WZIG-FM (104.1) in Palm Harbor,FL; and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

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THE BUDGET BATTLE

Posted by Tim Bryce on April 22, 2015

BRYCE ON POLITICS

– Just how badly do we want to manage the budget?

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We are finally coming down to one of the pivotal differences between Democrats and the Republicans, namely the federal budget. This is something the GOP has wanted to address for a long time, and now that they control both chambers of Congress, a confrontation is finally at hand. Most voters understand the overwhelming amount of debt we have incurred over the last seven years, that deficits and government spending is out of control, and to fix the problem certain cuts have to be made, like it or not. We certainly do not want this to be a legacy for our grandchildren to address. Now is the time to clean it up, but we face the problem of a divided nation over ideological differences.

President Obama, the Senate and the House have assembled three different budgets. Of the three, the Senate’s and the House’s are similar and represent the Republican’s proposal to straighten out our financial mess and work towards a balanced budget. The president’s represents the Democrat’s point of view and is not concerned with a balanced budget.

According to a recent analysis by the Associated Press (AP), there are significant differences between the three:

In terms of REVENUE:

President – “Would increase taxes on wealthy people, corporations and smokers.”

Congress – “Tax hikes do not figure in either GOP budget, though both Republican blueprints call for a tax code overhaul — with details to be worked out later. Curiously, the Republicans make repeal of the Affordable Care Act a key provision of their blueprints, but they still assume the tax revenues created by the law will still flow to the Treasury.”

In terms of SPENDING:

President – “Increases spending on public works, education and defense, and would eliminate the automatic cuts imposed under a 2011 budget deal.”

Congress – “Boosts defense spending but makes cuts to domestic social programs like Medicaid and food stamps. The House plan would convert Medicare to a voucher-like program, and both GOP budgets would repeal the Affordable Care Act, Obama’s signature domestic achievement.”

In terms of THE DEFICIT:

President – “Sees deficits stabilize at about 2.5 percent of GDP.”

Congress – “Seek $5 trillion in reductions over the next decade.
Both Republican plans bring the budget into balance in 2025 – a modest $3 billion surplus for the Senate plan, a $33 billion surplus in the House plan. Democrats accuse the GOP of using shady accounting practices.”

In terms of THE PUBLIC DEBT:

President – “Debt held by the public does not fall appreciably, declining from 75 percent to 73 percent by 2025.”

Congress – “Both GOP budgets project a debt below 60 percent of GDP by 2025.
Public debt is still expected to exceed $20 trillion in 2025, with interest reaching $857 billion. Under the GOP plans, interest be less than $625 billion in 2025.”

In a nutshell, to reduce the debt without raising taxes is good news for both the wealthy and the middle class (not to mention smokers). Not surprising, the GOP plan is an open attack on the Affordable Health Care Act, Obamacare, a plan that Americans still do not embrace (see Gallup). All three budgets make use of the GDP (Gross Domestic Product) which, frankly, is limping along (currently 2.2%) and reflects a sluggish economy. If we had a robust GDP, the country would feel its effect through more money from taxes. Finally, the president’s plan openly does not support a balanced budget, but raises spending instead. As another AP report contends, “While his (Mr. Obama’s budget) leaves a projected deficit exceeding $600 billion 10 years from now, the Senate plan claims a surplus of $3 billion.

So, the question comes down to: Do we compromise again or do we really want to address our economic problems? If we want the latter, we must surely move beyond the status quo and take corrective action. However, the battle lines have already been drawn. According to a statement by the White House press secretary, Josh Earnest, the Senate-passed budget “relies on top-down economics and gimmicks,” and “refuses to ask the wealthy to contribute a single dollar to deficit reduction.” He goes on to say, the Senate bill would lock in severe spending cuts “to investments in the middle class like education, job training and manufacturing,” and it fails to “responsibly fund our national security.” As to national security, this is simply not so, as the GOP proposes more money for defense as opposed to the president’s plan. Further, we would generate more money for education, job training, and manufacturing by simply lessening the regulations and taxes on corporate America, thereby allowing them to thrive.

The next step is to have the two chambers of Congress negotiate a compromise budget in mid-April. Interestingly, the legislation is non-binding, meaning that it will not require the president’s signature, but will inevitably lead to veto fights with Mr. Obama in future bills.

It will be interesting to see if we truly have the fortitude to manage our finances responsibly. If we do not, God help our grandchildren.

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&JB Investment Company (M&JB) 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:   timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2015 by Tim Bryce. All rights reserved.

NEXT UP:  THE MEANING OF LIFE – It is ultimately about good versus evil.

LAST TIME:  BUSINESS WRITING  – A crash course on writing for people in a business setting.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern); WZIG-FM (104.1) in Palm Harbor,FL; and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

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WHAT DOES CORPORATE ‘INFUSION’ MEAN?

Posted by Tim Bryce on October 10, 2014

BRYCE ON POLITICS

– Or is it a misnomer?

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To use this segment in a Radio broadcast or Podcast, send TIM a request.

One of the latest $3 words invented by the media is “inversion” and is used to describe the transfer of corporate headquarters, and jobs, to another locale outside of the United States. When I first heard the expression, it conjured up an image of an office turned inside-out, but that is not exactly what is meant. Perhaps the best example for describing the concept is the recent merger of Canadian based Tim Horton’s restaurants (coffee and donuts) with fast food giant Burger King of Miami, Florida. In doing so, Burger King opened the door to move their headquarters from Miami to Toronto, thereby escaping America’s high corporate tax rates.

A handful of Senate Democrats cried foul when they learned of the move and accused Burger King of being unpatriotic and not paying their fair share of taxes. Patriotism has nothing to do with it. This is a smart business move in these troubled economic times and, frankly, I’m surprised we do not see more of it.

The impetus for this, of course, is America’s high corporate tax rate. Of all of the modern industrial countries in the world, America has the highest tax rate at 40%. By comparison, Canada offers a paltry 26.5%. Since Canada began dropping their tax rate in 2008, the Canadian economy has rebounded and turned into a dynamo.

Likewise, Japan, who had higher rates than the United States, began lowering their rates in 2012 and is experiencing a resurgence in their economy. In 2008, Germany also dropped their rates from 38% to 29%.

Today, the United Kingdom is at 21%. Switzerland is at 17.92%, and Ireland at 12.5%, which explains why a lot of companies are moving to these countries. It’s not unpatriotic, it is called survival. However, in doing so, a lot of jobs leave our shores and unemployment rises. One would think the Democrats do not understand the situation, that lowering the corporate tax rates would ignite the economy. Actually they understand the concept quite well, but are unwilling to drop the rate in fear of losing tax income. By keeping America’s corporate tax rate high, they are encouraging businesses to leave. The hard truth is “inversion” is not about corporate greed as it is about government stupidity.

Even the public understands what is going on better than government officials. In a recent Toronto Sun poll, when people were asked, “Should Burger King move to Canada?”

76% – Sure
19% – No
05% – Maybe

Then again, most of the people responding were likely Canadians and fully cognizant of the benefits derived from lowering corporate tax rates.

With all this said, I tend to believe the expression “infusion” is a misnomer. Perhaps it should be called a “transfusion” as overseas tax rates provide the means to survive.

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&JB Investment Company (M&JB) 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:
timbryce.com

Like the article? TELL A FRIEND.

Copyright © 2014 by Tim Bryce. All rights reserved.

NEXT UP:  HONEST DEBATE (OR THE LACK THEREOF) – Our lack of tolerance has a lot to do with it.

LAST TIME:  WHO SHOULD BE RESPONSIBLE FOR CHARITY?  – The government or the individual?

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern), and KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific). Or tune-in to Tim’s channel on YouTube.

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