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Archive for the ‘Economics’ Category

THE MYTH OF EQUAL PAY

Posted by Tim Bryce on February 19, 2014

BRYCE ON CAPITALISM

– In capitalism, there is no such thing; it’s what the market bears.

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

The president has seized upon the concept of “equal pay,” not so much from a gender equality perspective, but taking umbrage with CEO’s of big businesses making millions, while others struggle with minimum wage. Translation: the distribution of wealth. There is no doubt we are witnessing some rather obnoxious economics today, particularly by athletes, entertainers, the media, CEO’s and politicians. For example, I never understood how a backup catcher in baseball, who does nothing more than warm-up relief pitchers, can earn a million dollars. Nor do I understand why people pay exorbitant ticket prices for sporting events, particularly at the Super Bowl where it costs as much as $2,400 for the worst seat in the house. Then there is the matter of paying over $4M for a 30 second ad during the Super Bowl.

Although I find it disturbing people willfully pay for such obnoxious economics, I am fully aware of the concept involved, which is “capitalism” representing what the market will bear.

On a recent Fox News segment, I heard liberal commentator Bob Beckel champion the concept of “equal pay,” that CEOs should not be paid bloated salaries while the workers are paid much less. Beckle balked at suggesting a salary cap for executives, probably because he is reported to have a personal net worth of $10M. Naturally, this would preclude him from asking for more money for his media appearances and columns (see “hypocrisy”). In other words, he has no means for setting the bar as to what would be fair and equitable.

We may be born equal, but what we do with our lives is ultimately up to the individual. Some may become inventors, pioneers, writers, craftsmen, and captains of industry; others will become thugs and wards of the state, blaming their woes on others as opposed to assuming responsibility. Some people will succeed, some will fail, all of which is referred to as “natural selection” a la Charles Darwin. For example:

* If the minimum wage is raised, and jobs disappear, it is “natural selection” within the free market.

* If athletes and entertainers keep raising their salaries, and ticket sales fall off, it is “natural selection” within the free market.

* If the price of a product is raised to the point where people stop buying it, it too is “natural selection.”

“Natural selection” is capitalism in action.

Socialism is “unnatural selection” and the antithesis of capitalism. For example:

* If money is taxed from the rich and given to the poor, the rich will be less likely to invest in undertakings that will produce jobs and stimulate the economy.

* Likewise, if government bureaucracy inhibits companies with stifling rules and regulations, it too will have adverse effects on jobs and the economy.

* If prices are defined by the government and not the market, it is “unnatural selection.”

The concept of a “free market” is a capitalist concept, not socialist. It means the market can behave unfettered from artificial restraints as imposed by government. To make it work though, you must assume responsibility for your actions and understand the prospect of risk. The same people who endorse equal pay, are the same who refuse to assume responsibility and risk. They want it all without having to earn it which, of course, is socialism.

If you are concerned about obnoxious economics, as I am, please be mindful that every time you order expensive tickets or merchandise, or purchase $10 hot dogs and beers, you are endorsing capitalism. If the market fails to bear idiotic prices, they will inevitably go down, naturally.

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:  BRYCE’S LAWS ON LIFE – We’ve done management, systems, and project management, now how about Life?

LAST TIME:  THE TRUTH ABOUT PROJECT MANAGEMENT PACKAGES  – Do they truly support project management or are they glorified punch clocks?

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mon, Wed, Fri, 12:30-3:00pm Eastern), KIT-AM 1280 in Yakima, Washington “The Morning News” with hosts Dave Ettl & Lance Tormey (weekdays. 6:00-9:00am Pacific), and KGAB-AM (650) of Cheyenne, Wyoming. Or tune-in to Tim’s channel on YouTube.

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

MAKING BOOK ON YOUR INVESTMENTS

Posted by Tim Bryce on November 26, 2012

BRYCE ON ECONOMICS

– Some fundamental lessons on managing your portfolio.

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

Let me preface my remarks by saying I am certainly no expert in terms of financial planning, just an ordinary Joe who, like most of you, is trying to make ends meet and put some money away for a rainy day. As a rule, I generally do not trust financial planners. I’ve heard a lot of bad financial advice over the years and I am wary as a result. I look at most of them as car salesmen from the 1970’s when they wore polyester pants, white shoes and white belts. However, there are some good ones out there which can be typically found through word of mouth, certainly not those silly commercials on television.

The term “investment” sounds more like something connected with fashion as opposed to finances. Obviously, it refers to the purchase of an item or asset in the hope it will generate income or appreciate in value, but years ago it meant the act of laying siege to something with military force, which seems to be a more suitable description of my finances. One of the first lessons I learned over the years about investing was:

“If you are relying totally on your own expertise to make investment decisions, then you likely have a fool for a client.” If we were all experts, we wouldn’t all be working (and I certainly wouldn’t be writing these columns).

We all worry about our financial future. Some people do well, but I suspect most of us are in the dark as to what to invest in. There is, of course, the stock market, bonds, annuities, precious metals, gems, real estate, etc. You can even invest in commercial prison systems if you are so inclined. Certificates of Deposits and Money Market Funds used to be considered solid investments years ago, but I don’t think too many people gamble on them anymore. That’s just the point, it is a crap shoot as there are so many areas to invest in and enough variables to boggle the mind. It should come as no small surprise when people get caught up in a Ponzi scheme; this is when greed supersedes common sense. Consequently, we make some bad decisions along the way. This leads me to my next observation:

“There are no guarantees for success.” Even if the company or investment seems fine on the surface, there are many other external influences affecting it, such as a market dragging it down, changing governmental regulations, inflation, or the monetary exchange rate. This brings up my next point:

“You have to watch your money at all times.”

As a child, my mother opened a Passbook Savings account for me in order to teach me thrift and the need for saving money. I basically learned to put my money in the account and forget about it. When a bank statement came in, I was giddy with the idea of earning interest. It was simple, it was predictable, and I didn’t have to worry about it. However, due to the many types of investments available today and the rules associated with them, following your portfolio can turn into a full time job, which most of us cannot afford to do.

Over the years, I have learned a few other harsh realities:

“If you hear of a new stock or investment opportunity, it’s already too late to capitalize on it.” Others are already in on the ground floor and they will be the ones profiting, certainly not you.

“The moment you purchase a stock, you can count on it declining immediately.” Investments are somewhat Newtonesque in nature and rarely violate the laws of gravity when you purchase them initially.

“The moment you sell your stock, it will either immediately soar to new heights, split, or both.” You are dumbfounded by this as you held the stock for several years and it did nothing during this time.

Some would say I have a defeatist attitude about investments. Frankly, I think I am more pragmatic than most and recognize investments for what they are: legalized gambling. Just as in a casino, the only people who truly understand the odds are those who control the game. The rest of us are just little guys placing simple $5 chips on the Pass Line.

I wonder what my Passbook Savings Account would be worth today had I not cashed out years ago? Probably a small fortune. The last lesson of investing should be rather obvious: “Hindsight is always 20/20.”

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 © 2012 by Tim Bryce. All rights reserved.

NEXT UP:  THE DISPARITY BETWEEN CAPITALISM AND SOCIALISM – Do young people know the difference between the two?

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mondays, Wednesdays, Fridays, (12:30-3:00pm).

Also look for Tim’s postings in the Palm Harbor Patch, The Gentlemen’s Association, and throughout the Internet.

Posted in Economics, Life | Tagged: , , , , | 7 Comments »

CONSIDERATIONS FOR THE VOTING BOOTH

Posted by Tim Bryce on October 31, 2012

BRYCE ON POLITICS

– The variables we know about our current president.

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

In less than one week we will know who will serve as our president for the next four years. Forget the polls. As I have said all along, this comes down to a few key variables we have to keep in mind when we’re in the voting booth:

THE ECONOMY

It’s no secret our economy can be described as lethargic at best. Our Gross Domestic Product (GDP) is at a paltry 1.3% and only reached a high of 4.1% in the last four years. The federal debt is now in excess of $16 trillion ($6.4 trillion added over the last four years), and we’re now in excess of 100% of the GDP. Translation: we’re spending more than we bring in.

The United States has dropped to #3 in terms of exports (with China and the European Union ahead of us). The balance of International Trade in Goods and Services is now at -$42 billion.

The federal deficit has grown to $1.2 trillion over the last four years and we have been operating without a budget for the last three years which is inexcusable.

Other indicators of economic woes include:
– The country lost its AAA credit rating.
– In 2011 we experienced 1,410,653 bankruptcies (96.61% of which were consumer filings)
– College loan debt now exceeds credit card debt.
– Average gasoline prices have risen $1.85/gallon to $3.86/gallon over the last four years.
– Food stamp recipients have risen from 32 million to 47 million (+46%)

It is rather remarkable the president discarded the report of his own Council of Economic Advisers which basically concluded it was necessary for the government to cut spending.

UNEMPLOYMENT

Despite the president’s stimulus/bailout programs, there are still 12.1 million Americans unemployed (officially). Understand this though, another 2.5 million persons marginally attached to the labor force in September had not searched for work in the previous four weeks.

Those worker groups particularly affected include: teenagers (23.7%), blacks (13.4%), and Hispanics (9.9%).

The country experienced 43 continuous months of +8% unemployment. This represents the president’s entire term of office, almost.

Interestingly, the president failed to meet with his own Jobs Council for more than six months.

ENERGY

With U.S. oil exploration and drilling slowing to a crawl, Americans questioned why the president would throw the government’s weight behind Brazil, a country that also received a $2 billion loan for its state-owned oil company from the U.S. Export-Import Bank. Meanwhile he has turned his back on the Keystone Pipeline which would help the country become more energy independent while creating thousands of much needed jobs for Americans.

The United States still imports over 341 billion barrels of oil, most of which from OPEC and Persian Gulf countries, thereby cementing our dependency on this dangerous part of the world.

While energy costs have nearly doubled as a percentage of the annual family budget, heavy handed regulations from the EPA are making what we pay for energy an even greater burden on our families and our businesses.

The administration’s “War on Coal” has forced the industry into retreat, eliminating 1,200 jobs and closing eight mines in Pennsylvania, Virginia and West Virginia. The president has created a regulatory environment that’s aggressively aimed at constraining the use of coal, America’s most abundant, reliable resource.

And there remains no policy or course of action for energy independence, despite having considerable gas, oil, and coal resources in our possession.

IMMIGRATION

It is no secret that 13 million illegals currently reside in the United States costing taxpayers an average amount of $1,117 per household. Efforts by states to stem the flow of illegals has been rebuffed by the federal government in the form of lawsuits against them. Interestingly, a new lawsuit was recently filed by federal immigration agents against Homeland Security for policies they say prevent them from doing their job of defending the Constitution.

Then, of course, there is the failure of “Fast and Furious” which cost the life of Border Patrol Agent Brian Terry, and destroyed the credibility of the president’s attorney general, the country’s first sitting member of the cabinet to be held in Contempt of Congress for withholding documents related to the scandal.

The attorney general has also been at the forefront of prohibiting states to secure their borders and implement voter identification programs. In addition, he has been an active proponent in implementing the Pretrial System which has jeopardized security by putting criminals back on the streets as opposed to properly processing them through the courts.

FOREIGN POLICY/NATIONAL SECURITY

True, the president is recognized for his approval to eliminate Osama Bin Laden, but the rest of his foreign policy can hardly be called credible. The Muslim Spring led to the rise of the Muslim Brotherhood in the Middle East, not democracy. It also led to our ambassador in Libya being killed and our embassies attacked, which is strongly reminiscent of the Carter administration. No matter how the president tries to spin it, we are still engaged in a “War on Terror.”

The Muslim Spring also marked a turning point for the United States as the administration adopted a policy of “leading from behind,” whereby we allowed other countries take the lead in determining policy in the Middle East, thus putting into question our country’s credibility as a superpower.

Defense has been significantly weakened. For example, we can now only fight in one major arena, not two. This is unlike when we were forced to fight in both the Pacific and Atlantic regions during WW2. There is now a strain in America’s relationship with two of its traditional allies, Great Britain and Israel. Should war come again, we may very well find ourselves alone. A recent Pew Research poll reveals the president’s approval ratings have dropped considerably among foreign nations, including Muslim countries.

The biggest concern though in foreign policy is our hands-off position regarding the buildup of Iran’s nuclear program, a potential powder keg in the making.

UN Agenda 21, which the administration has quietly embraced, is perhaps the biggest threat to the country’s freedoms as defined by the U.S. Constitution. This is a program the administration hopes will pass before the people recognize it for what it is, a genuine threat to the American way of life.

In these dangerous times of foreign intrigue, you have to question the wisdom of dodging the presidential intelligence briefings.

SOCIAL REFORM

The president’s Obamacare reform is his signature piece of legislation, yet it is still opposed by the majority of Americans. The complexity of the law has had an adverse effect on business who still doesn’t understand its ramifications. After it was studied by the Supreme Court, Americans were surprised to learn it represented the largest tax increase in U.S. history.

The president also touted gay rights, not only in terms of marriage, but in the military as well. Meanwhile, the existence of God came under attack.

More disturbing, this administration has fostered the cultivation of a Nanny State whereby freewill is supplanted by the will of the government. This has changed the face of America from “the land of opportunity” to “the land of entitlement.”

SO, WHAT IS WRONG WITH THIS PICTURE?

This sounds more like the work of an apprentice learning on the job as opposed to an experienced leader and manager. The next question is, do we stay the course or pick a replacement? Staying the course means you approve of the condition of the country as mentioned herein. True, there are people who will vote by blind devotion along partisan lines, but I would like to believe that voting for a person means you feel they are the most competent to do the job, not because of political ideology. Party politics are nice, but supporting job competency is more important, now more than ever.

Some would argue Governor Romney would not do as well as the president under the circumstances. One thing is clear, he cannot do worse. President Obama’s label as an “empty chair” president seems justified or, as I am reminded, “While Nero fiddled, Rome burned.”

I don’t want to give the impression the president is a complete failure. After all, he did succeed in making Jimmy Carter look like a star.

“If I don’t have this done in three years, then there’s going to be a one-term proposition.”
– Barack Obama, February 1, 2009

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 © 2012 by Tim Bryce. All rights reserved.

NEXT UP:  IN PRAISE OF SOPHIA LOREN – Why we still find her attractive at age 78.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mondays, Wednesdays, Fridays, (12:30-3:00pm).

Also look for Tim’s postings in the Palm Harbor Patch, The Gentlemen’s Association, and throughout the Internet.

Posted in Economics, Politics | Tagged: , , , , | 11 Comments »

REMEMBERING BLACK THURSDAY

Posted by Tim Bryce on October 24, 2012

BRYCE ON THE ECONOMY

– And the lessons it provides pertaining to today’s economy.

(Click for AUDIO VERSION)

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

Today we commemorate an important day in history, namely “Black Thursday,” which occurred on October 24, 1929, just 83 years ago.

Today, the world is still reeling from “The Great Recession,” which put our global economy into a tailspin thereby affecting not just the United States, but all of the countries of the world. Blame can be placed on a compendium of variables, such as the credit boom, bad banking policies, bursting the real estate bubble, etc. This led to a global tsunami of unemployment, and a significant drop in international trade. There were few people who were unaffected by the recession. Business as we knew it, was gone, and remains so. As devastating as it was though, it paled in comparison to the grand daddy of economic meltdowns, “The Great Depression.”

On October 24th, the stock market lost 11% of its value at the opening bell on very heavy trading. Nothing this dramatic had happened before thereby earning the nickname “Black Thursday.” Wall Street bankers sought a way to stop the slide and opted to buy U.S. Steel and several other Blue Chip stocks well above their current market value, a trick used to stop the panic of 1907. Indeed, it halted the slide, at least until the following Monday (“Black Monday”) when investors opted out of the market in record numbers. Despite additional attempts to prop up stock prices, the market plummeted thereby triggering a worldwide depression.

The Great Depression lasted for over ten years. Companies closed their doors, unemployment was rampant, soup lines grew, and investors committed suicide by jumping out of buildings financially ruined. Our lifestyle changed radically, from prosperous to desperate. In the average household, all members of the family were expected to cut costs and chip in to pay bills, regardless of their age. No job was considered insignificant or taken for granted. A High School diploma was a prized possession as many people had to drop out of school to earn a wage to support their family. A lot of people were lucky to earn nothing more than a Junior High School diploma (8th grade). The Great Depression sent shock waves through our very sinew, leaving nobody unaffected. You learned to improvise, adapt, and hustle in order to survive.

Because of its scope and dramatic human impact, The Great Depression made The Great Recession seem like child’s play. There was little government support, certainly nothing like the entitlements known today, such as Food Stamps which weren’t offered until the 1960’s. Soup kitchens sprung up to feed the needy, sponsored by churches and other institutions.

Despite numerous attempts by the government to snap the country out of the depression, it was the industrialization of World War II that brought us out of it. Since then, safeguards have been installed in the stock markets to help avoid another major crash, but they are certainly not foolproof as we have seen with many slippages over the years, most recently:

DATE DROPPED PERCENT
2011-08-08 -634.76 -5.55%
2011-08-10 -519.83 -4.62%
2011-08-04 -512.76 -4.31%

Others within the last 25 years:

DATE DROPPED PERCENT
1987-10-19 -508.00 -22.61%
2008-10-15 -733.08 -7.87%
2008-12-01 -679.95 -7.70%
2008-10-09 -678.91 -7.33%
1997-10-27 -554.26 -7.18%
2001-09-17 -684.81 -7.13%
2008-09-29 -777.68 -6.98%

The big question though is whether it is possible to experience another depression on the scale of the 1920’s. The answer obviously is, Yes, although politicians and economists will resist the use of the word as it is considered political suicide. If the country’s debt rises above the Gross Domestic Product, as it obviously will, the dollar will weaken, as will stocks, thereby triggering a collapse. Another variable is the weakened European economy which affects our own. If Europe collapses, there is a good chance they will drag us down with them.

And when the money is gone, businesses will close, unemployment will rise to record levels, and our lifestyles will once again be dramatically altered. Some would argue this is just the tonic America needs to mend its economic recklessness.

The Great Depression may seem like a distant memory, particularly to young people voting in the upcoming elections for the first time, but we should all pay heed to the lessons it conveys. If you had trouble surviving the recent Great Recession, try to remember the Great Depression dwarfed it. We are by no means out of the woods yet.

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 © 2012 by Tim Bryce. All rights reserved.

 

NEXT UP:  WHERE DOES YOUR TIME GO? – How it adds up.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mondays, Wednesdays, Fridays, (12:30-3:00pm).

Also look for Tim’s postings in the Palm Harbor Patch, The Gentlemen’s Association, and throughout the Internet.

 

Posted in Economics, Politics | Tagged: , , , , | 9 Comments »

CAN YOU REALLY BALANCE A BUDGET BY CUTTING TAXES?

Posted by Tim Bryce on October 19, 2012

BRYCE ON POLITICS

– Yes you can. Here’s how.

(Click for AUDIO VERSION)

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

As we have long known, the golden rule for making a profit is to maximize income and minimize expenses. Over the last few years though, government agencies at the federal, state, and local levels have violated this rule primarily by spending more than they take in. Such spending sprees are usually the result of campaign promises made to constituents. Let’s face it, it’s easier to get elected by giving things away as opposed to practicing fiscal restraint. Thanks to the Great Recession though, we have been given a wake-up call that we can no longer afford such giveaways and must learn to live within our means.

Following the golden rule though, in order to balance the budget, politicians should be raising taxes and cutting spending, even though this may place a burden on cash-strapped taxpayers and government officials accustomed to spending money unabated. So, is it possible for politicians to balance budgets while reducing taxes? As implausible as it may seem, Yes, it is not only possible, but the precedent was established a long time ago.

The trick is to reduce government spending more than the amount we lower income taxes. Translation: the party is over and the government has to go on an austerity program whereby services are reduced and the size of government is reduced. Lowering taxes has the added benefit of stimulating the economy by providing taxpayers with more cash to spend, and fill government coffers with sales tax in the process. When it is necessary to supplement income in the face of declining taxes, there are other vehicles for doing so, such as raising fees for licenses.

There are many recent examples where governments have been able to balance their budgets in this manner:

New Jersey Governor Chris Christie balanced his state’s $31.7 billion budget this way. He also used his power of the line-item veto to make final adjustments.

Ohio Governor John R. Kasich inherited an economic nightmare, yet was able to balance the budget and finish fiscal year 2013 with a surplus of $552 million, approximately $408 million more than originally planned.

Likewise, Virginia Governor Robert F. McDonnell also announced his state had finished the previous fiscal year with a surplus of $544.8 million.

During his tenure as Governor of Massachusetts, Mitt Romney was able to turn the state’s economy around by pushing the legislature to roll back the state income tax from 5.3% to 5.0% (Massachusetts has a flat income tax). He also proposed a “tax-free shopping day”, a property tax relief for Seniors, and a manufacturing tax credit, all of which did wonders for rejuvenating the Massachusetts economy.

The real proponent of this concept was President Ronald Reagan whose “Reaganomics” was another form of supply-side economics. The four pillars of Reagan’s economic policy were to reduce the growth of government spending, reduce income tax and capital gains tax (thereby freeing up money with consumers), reduce government regulation of the economy (to stimulate business), and control the money supply to reduce inflation. The rate of growth in federal spending fell from 4% under Jimmy Carter to 2.5% under Ronald Reagan. Many economists have stated that Reagan’s policies were an important part of bringing about the second longest peacetime economic expansion in the country’s history, and followed by an even longer 1990s expansion that began under George H.W. Bush in 1991 and continued through the Clinton administration with unemployment rates steadily decreasing throughout his presidency (7.3% at the start of his presidency and 4.2% at the culmination, with the lowest rate reaching 3.9% in 2000). Click HERE for more information.

Balancing a budget means having to make some hard decisions and living within your means. Unfortunately, spending can be irresistible to politicians, particularly those running for reelection. The stark reality though is when you fail to balance the budget, you go into debt, your credit rating falls, you cannot pay your bills, and a general economic implosion occurs. Sound familiar? This is why most states have a balanced budged amendment and line-item veto (the one exception is Vermont). Even with such legislation, there is no guarantee states will abide to the budget, which explains why states such as New Jersey, Ohio, Virginia, and Massachusetts got into trouble originally. The budget simply establishes the guidelines for government to operate under. If they violate it, as many have, it usually means there is either a financial emergency, or someone is spending money irresponsibly. As to the federal government, I would wager on the latter and not the former.

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 © 2012 by Tim Bryce. All rights reserved.

NEXT UP:  THE POWER OF APPEARANCE – A guide for how appearances affect you in the workplace.

Listen to Tim on WJTN-AM (News Talk 1240) “The Town Square” with host John Siggins (Mondays, Wednesdays, Fridays, (12:30-3:00pm).

Also look for Tim’s postings in the Palm Harbor Patch, The Gentlemen’s Association, and throughout the Internet.

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

REBUILDING THE MIDDLE CLASS

Posted by Tim Bryce on July 11, 2012

– Two distinctly different approaches for putting the country back to work.

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

There is a tendency in this country to label people in accordance with their political beliefs. Although we still say “Democrat” and “Republican,” we’re more inclined to say “Left” and “Right,” or “Liberal” and “Conservative.” Not too many people proudly proclaim themselves as a “moderate” or “independent” anymore. I have found those who call themselves such are actually closet liberals. And “progressives” fool nobody but themselves as “arch-liberals.” Nonetheless, I find such labels distasteful and only clouds the issue at hand. In the end though, we use such monikers to express how fervently we believe in our principles. I’ve often been accused of being a conservative in such a way as to malign my character; that being a conservative is a bad thing. Actually, I tend to identify myself more as a Capitalist as opposed to anything else, and, as such, possess a deep distrust of Socialism and Communism. To my way of thinking, the individual has the freedom to try and better his/her station in life. Hopefully they will succeed but there are no guarantees and the risks can be great, but I have seen Capitalism succeed more times than it has failed and has proven itself to be the lynchpin of American growth throughout our history.

Regardless of your classification, everyone is cognizant this next election cycle is about rebuilding the economy and getting the country back to work. Ultimately, it is about rebuilding the middle class and there are two distinctly different visions being offered as to how this should be accomplished. First, understand that the American middle class is the economic engine not only for the United States but most of the world. Until a few years ago, it enjoyed a high standard of living not simply because it could spend more, but because it could earn more than most of the world. Outsourcing jobs overseas and the recession though changed all of this. According to a recent study by the Fed, the median family net worth dropped a staggering 40%(1). Suddenly, the middle class realized they couldn’t earn as much as before and, consequently, couldn’t spend as much, thereby affecting their standard of living. Life as they knew it changed; they could no longer afford to send their offspring off to college, retirement plans had to be put on hold, and in general they had to make do with less. Most learned to tread water for the first time, lucky to have a job and a roof over their heads, surviving paycheck-to-paycheck. Others were not as fortunate and home foreclosures and bankruptcies soared.

To solve the problem, the left wants to offer the middle class more stimulus money, and more unemployment benefits such as food stamps, all of which requires more massive government programs and control. To pay for this, taxes are to be raised and regulations tightened on business. In reality, American business is already paying the highest tax rate in the world (in excess of 39%) and increased regulations are still scaring jobs offshore. This approach may give the middle class money to spend but does nothing in terms of enhancing the earnings of workers. Entitlements also have the tendency of creating dependencies and discourages the incentive to work. In a nutshell, entitlements are supplanting the concept of earnings which is a dangerous development, both psychologically and economically.

On the other hand, the right wants to solve the problem by expanding the middle class’s earning potential by putting them back to work, not on unemployment. By having more money, they will be able to resume the standard of living they are familiar with and spend accordingly. It will also have psychological benefits as opposed to creating a society of government dependents. To do so, they propose lifting the government regulations that stifle business and encourages the deportation of jobs overseas. They also wish to lower the tax rate thereby stimulating job growth by allowing companies to invest at home. This, of course, will result in a smaller government.

Both sides, left and right, understand the need for a middle class, but they cannot agree on how to cultivate it and herein lies the ideological rift polarizing the country. Whereas the left wants to enslave it through massive government and more regulations on business, the right wants to free it through less government and less regulations. So far, history is on the right’s side. Only by freeing business can you rebuild the middle class. Somehow, I am reminded of the old expression, “The business of America is business.” Government does not create business (or jobs for that matter). Instead, it should plow the way to allow business to flourish. By encouraging business, the government helps its citizens earn more, thereby causing the middle class to grow.

As I said, it’s not really about Democrats versus Republicans, left versus right, or liberals versus conservatives. In reality, it is about socialism versus capitalism. And as any confirmed capitalist will tell you, don’t give the middle class more entitlements, give them jobs, and the economy will take care of itself. Give them a purpose in life, not an addiction.

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 © 2012 by Tim Bryce. All rights reserved.


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FRIDAY THE 13TH – Why some people are afraid of it, while others love it.

Posted in Economics, Politics | Tagged: , , , , | 8 Comments »

CAPITALISTIC CRABS

Posted by Tim Bryce on June 27, 2012

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

(Click for AUDIO VERSION)
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.

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 © 2012 by Tim Bryce. All rights reserved.


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HOW ARE WE EVOLVING AS A SPECIES? – And what role does morality play?

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

WHY JAPAN DROPPED THEIR CORPORATE TAX RATE

Posted by Tim Bryce on April 29, 2012

– Why are the tax rates of other countries going down, but not the United States?

(Click for AUDIO VERSION)
To use this segment in a Radio broadcast or Podcast, click HERE.

As high as American corporate tax rates have been over the years we could always count on the Japanese to post higher rates thereby making us look not too bad. Unfortunately, this all changed recently when Japan announced they were dropping their rates leaving America alone at the top with the highest tax rates in the world. Actually, most corporate tax rates in other countries have been retreating over the last ten years in order to attract talent to their shores and promote existing businesses. To illustrate, consider how the “Combined Corporate Tax Rates” have changed over the last decade in these key countries:

COUNTRY 2001 2011
Canada 40.5% 27.6%
Germany 38.9% 30.2%
Japan 40.9% 34.5% 2012
UK 30.0% 26.0%
USA 39.3% 39.2%  

Source: OECD (Organization for Economic Co-operation and Development), Centre for Tax Policy and Administration

Canada’s reduction has allowed them to escape the recession and resulted in boom times for the country. It is no coincidence that Canada’s drop in unemployment (from a high of 8.7% in 2009 to 7.2% as of March 2012) parallels a decline in the corporate tax rates for the same period (from 31.02% to 27.6%). Likewise, German manufacturing has grown and surpassed the United States as the #2 exporter in the world (behind China at #1). It should therefore come as no surprise that Japan finally followed suit in an attempt to unshackle business and encourage commerce.

What about America? It is highly unlikely corporate tax cuts are in the offing as the country is saddled with an administration who vilifies American business as greedy and corrupt. If anything, the President and his party want to raise taxes thereby stifling businesses from world competition. What about all of the corporate “loopholes” we’ve heard about? Actually, such deductions mostly consist of research and development, along with expansion of facilities, which naturally encourages business and jobs. Even after all of these “loopholes” though, American businesses pay more in corporate taxes than their counterparts in other countries. That is a fact regardless of how you spin the numbers.

The new #2 behind the United States is France with a corporate tax rate of 34.4% (36.43% in 2001), almost five full percentage points less than the United States.

As these other countries have come to realize, the world is a competitive place and you cannot succeed by taxing people and companies to excess. In fact, their message is simple: unshackle them from the tax burden and stand out of their way.

“Common sense told us that when you put a big tax on something, the people will produce less of it. So we cut the people’s tax rates, and the people produced more than ever before.”
– Ronald Reagan

For an interesting video on this subject, click HERE.

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 © 2012 by Tim Bryce. All rights reserved.


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UNDERSTANDING POLITICAL BRAINWASHING – how mind control is implemented in America.

Posted in Economics, Politics | Tagged: , , , , | 3 Comments »

COLLEGE LOAN DEBT: DIGGING A DEEPER HOLE

Posted by Tim Bryce on November 8, 2011

Most Americans are familiar with the vast debt our country has compiled ($14.8T as of this writing and growing steadily). We are also acutely aware of the burden of mortgages and credit card debt, particularly in this age of high unemployment. As if things weren’t bad enough, a new statistic has emerged courtesy of the College Board who reports student loans are about to cross the $1T threshold as students are borrowing twice as much as just a decade ago and the outstanding debt has doubled in the last five years alone. The debt is growing so rapidly that the Federal Reserve Bank of New York recently calculated this will make Americans owe more on student loans than credit cards, which is a frightening thought (see Northern Voices Online, 10/21/2011).

Not surprising, among the demands made by the young “Occupy Wall Street” protesters is to have their college loans expunged. Such loans are typically sponsored by the federal government and private financial institutions. To expunge them would mean the taxpayers and private financial institutions would get stuck with their bill which would obviously compound an already overbearing debt. Plain and simply, it wouldn’t be fair; not fair to those who paid for their education, and not fair for taxpayers to pay a tab which others incurred.

Americans place a lot of emphasis on education but we should be mindful of the fact that attending college is not a right, but a privilege. During the Depression years prior to World War II, there was no more than 1.4M college level students attending approximately 1.7K institutions of higher education. Today, according to the Digest of Education Statistics, over 19.1M students attend 4.4K colleges, a quantum increase. Since the 1960’s alone, when colleges experienced an influx of students seeking refuge from the Viet Nam war, enrollment has more than doubled. Back in the Depression, money was scarce and, as such, it was common for all of the members of a family to work, often sacrificing higher education in the process. Back then, a High School diploma was considered a prestigious achievement. Even a Junior High diploma was prized as some people could not afford to rise above this level.

Unless something radical happens to our economy, I suspect enrollment has peaked in this country and will likely begin to diminish sharply. This will inevitably lead to downsizing of faculty and administrative staff and some campus doors will be forced to close. We’ve already started to see this here in Florida and I suspect we’re not any different than the rest of the country in this regard.

So, am I a fan of expunging college loans? Hardly, nor am I a proponent of waiving credit card debt. I can appreciate the dilemma people face in paying off such bills, but a deal is a deal. Where I come from, people who renege on their debt are called “deadbeats,” and I fear we are grooming a generation of them, people who do not understand what it means to live within their means. The only benefit I see emerging from this is that people will begin to realize attending college is a privilege, not a right, and a college education will no longer be taken for granted.

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.

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

IN DEFENSE OF CAPITALISM

Posted by Tim Bryce on November 1, 2011

As the country grows increasingly frustrated over its worsening economic condition, the public points an accusing finger at the super rich, and capitalism which is often vilified as the principal cause of the problem. Frankly, capitalism is getting a bad rap by its detractors and, unfortunately, there are naive people who gullibly believe it to be guilty of a number of sins. The fact is, capitalism propelled America past the rest of the world by creating a substantial middle class thereby creating an engine to power the world’s economy. Unfortunately, capitalism is misunderstood. Some see it as nothing more than focused on profits at all costs. True, the goal of capitalism is to be successful and profits are a measurement of success, but there is more to it than just profits, much more.

First, capitalism coupled with America’s interpretation of freedom means the country is the “Land of Opportunity”; that everyone has the freedom to try and improve their position in life by working at any endeavor of their choosing, either as an employee of a company or to start their own business. Either way, capitalism means you have a “right to try”, nothing more, nothing less. You may be successful in your efforts or you may fail, and both extremes are essential for capitalism to succeed. Failure is every bit as important as success. Without failure, or at least the threat of it, you will not appreciate the concept of risk and it is unlikely you will change how you conduct business. Risk, therefore, is an essential part of capitalism.

Today, we hear of such things as government sponsored “bailout” and “stimulus” programs which have saved American banks, mortgage lenders, and the automotive industry. Under capitalism, these mega-companies should have been forced to either close their doors, restructure their operations, or find alternative financing. As executives of their businesses, it is their responsibility to steer the ship, nobody else. Having the government preempt failure of these businesses is unnatural and anti-capitalistic, simply because they have eliminated failure from the equation. If these companies had closed their doors, new ones would have doubtless emerged, and much smarter than their predecessors.

As an analogy, I am reminded of the game of Craps as found in casinos. Understand this, in all casino games, the house enjoys a winning percentage. They are certainly not going to offer a game they know will consistently lose money. So the trick is to find the game with the lowest house winning percentage. Me, I’m a Craps shooter. I understand the odds and the risks involved; I will either win or I will lose. If I begin to lose, I will change my strategy and play the game differently, but one thing is for certain, when I’m busted, nobody is going to bail me out, least of all the casino. I am solely responsible for my wins as well as my losses. That is as vivid an analogy to capitalism as I can think of.

The golden rule of any business is to maximize productivity and minimize costs. Failure to do so will naturally result in failure. This brings up an important aspect to capitalism, everyone participating in business is responsible for his/her actions and decisions, and must be held accountable for them. There is no free ride. Accountability is an inherent property of capitalism. If you are successful, you reap the rewards; if you fail though, you lose. This naturally scares people who are afraid of risk. Others thrive on it, particularly those with an entrepreneurial spirit. Regardless if you are successful or a failure, capitalism requires people to be personally responsible for their own actions, and nobody else.

Regardless of the equipment and advanced technology available, we must recognize all work is performed through people. The smart capitalist, therefore, respects the dignity of the human spirit and the importance of each person to lead a worthy and productive life. After all, if companies invest heavily in the tools of their trade, it would make sense they also invest in the people who will be operating the tools. The challenge becomes devising a suitable corporate culture for workers to productively work and thrive in, a culture empowering workers to excel and create superior work products at competitive prices. This means cultivating workers in terms of their training and education, working in accordance to high standards of excellence and moral values, and to compensate them with a fair and competitive wage. Plain and simply, investing in people is good business, as any successful capitalist can attest to.

When a company begins to cut corners and sacrifices workmanship, not just to save money but to increase profit margin instead, then in all likelihood greed is slowly creeping into the organization. True, capitalism is not impervious to greed and corruption, but neither is socialism as greed is a human frailty. As long as management makes smart business decisions and maintains high moral standards, greed can be kept at bay.

In my travels through the corporate world, I have seen capitalism do some great things in just about every field of endeavor imaginable. It produces products and services the public openly embraces, it has built impressive buildings and other structures we take pride in, and it has created the standard of living we are all familiar with today. Capitalism has proven itself as a viable economic engine time and again, and is rapidly being embraced throughout the world, even in Communist states, both former and current.

The only thing that can adversely affect capitalism is when the government intercedes and tampers with the underpinnings of it, such as inhibiting failure or piling on regulations choking it from behaving naturally. By its sheer nature, capitalism is an evolutionary approach to business whereby the strongest survive and the weaker companies disappear. When unleashed, capitalism promotes innovation and invention naturally. When inhibited by government though, capitalism stagnates and businesses face extermination. Government’s role should be nothing more than to open doors and check for unscrupulous business practices. Other than that, they should stay out of the way.

No, capitalism is not the problem. It is a proven economic system if it is allowed to behave naturally. So, when casting aspersions as to who is at fault for our current economic woes, the fingers should be pointed at the nations capitol, not Wall Street. We also share a piece of the blame ourselves as we have become apathetic and, in the process, allowed the country to morally deteriorate before our eyes.

I am proud to call myself an unabashed capitalist. The fact that our small business has survived for over forty years, has serviced customers all over the world, and made money in the process without cheating anyone is a testament to capitalism.

“No politico-economic system in history has ever proved its value so eloquently or has benefited mankind so greatly as capitalism—and none has ever been attacked so savagely, viciously, and blindly. The flood of misinformation, misrepresentation, distortion, and outright falsehood about capitalism is such that the young people of today have no idea . . . of its actual nature.”
– Ayn Rand, “Capitalism: The Unknown Ideal”

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.

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

 
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