Thursday, September 15, 2011

Tough Business

I'm glad I'm not a business owner right now. You're facing a dwindling customer base with less money to spend, rising expenses and now, people in Washington who have never run a private business in their lives pressuring you to make really bad decisions--all in the name of "saving the economy."


Americans are falling into two groups: Those with no money to spend because they un- or under-employed and didn't put enough away while working to make it through a downturn--and those who have money, but are choosing to sit on it because it looks like things will be getting much more expensive for them in the future--or they fear falling into the other category. No matter how low you go with your prices, it's hard to convince people to part with their cash if what you are selling is not a necessity.

Adding to the struggle is the increase in energy costs as utilities are hog-tied and forced to abandon the cheapest forms of electricity in favor of more expensive renewable sources--and continued de-valuation of the US Dollar increases the price of oil and gasoline. And not only are you paying for your increase in energy costs--but you are also picking up the increase in your suppliers and manufacturers power and gas bills as well.

And now, the President is trying to tempt you into expanding your workforce by offering short-lived tax breaks. It's funny how Mr. Obama touts the temporary reduction in payroll taxes--but conveniently forgets to mention the increased rates that would take effect after the 2012 election. And the only way to get the highly-touted tax credits is to hire someone who has been unemployed for more than a year. Yes, some of those long-term unemployed are in situations where the specialized job they are qualified to do just isn't available in the "New, New, New Economy"--but more are people who lack the basic education and work skills to keep a job. That makes a business owner have to decide if the guy who misses a day of work every week because he is "sick again" is worth the cost of a tax-break.

i know most business owners in our area didn't study Keynsian Economics while attending Harvard--so they aren't qualified to know how things work--but those I do know don't hire or increase production in hopes that more people will start pouring through the doors. Usually in the real economy, you wait for demand to increase beyond the point where you can meet it economically--then you bring in more staff and ramp up production. If no one is buying snowthrowers, you don't keep making snowthrowers thinking that if they see enough sitting around for sale Joe Homeowner is going to suddenly want a new one.

And let's not forget about the "ObamaCare Penalties" waiting around the corner. For companies that do provide private health insurance, premiums will skyrocket at providers are required to take on high-risk, more-expensive employees that they could exclude in the past--while small firms not offering health insurance can look forward to the $2000 penalty. Every new employee added now is another two-grand to Uncle Sam down the road.

Of course, those business owners who pass on the short-sighted incentives and make fiscally-sound decisions face villainization as "not being willing to help the economy recover." Just look at the treatment banks are getting for not lending enough money after the TARP bailouts. "Greedy" and "Unpatriotic" are the terms being thrown around to describe them. Nevermind the fact pointed out by a friend of mine at a local credit union--that those coming in looking to borrow money right now are terrible credit risks--and giving money to them just puts us on the path to the same situation we were in before. Meanwhile, those of us who can actually afford to borrow money aren't doing it--because we realize that doing so in this economy is brining unnecessary risk into our lives.

So that is the decision Mr and Mrs Small Business Owner faces now: Take a giant leap of faith that things are suddenly going to turn around because Uncle Sam is going to spend even more money--and risk losing everything you worked hard to build....or exercise sound business judgement and hang on until people are ready to spend again and ride the wave back to success. Glad I don't have to face that decision.

Wednesday, September 14, 2011

The Worst of Minnesota

After a day of watery eyes, a raw throat and smelling like I was just sitting around a campfire in my office--it might be time to amend my Top Ten List of the Worst Things to Ever Come Out of Minnesota.

#10--Wildfire Smoke.  I'll put this at the bottom of the list for now--as it's possible it could be a one-day thing--unlike every other item on the list which has plagued us for years.

#9--The Mall of America.  Yes, mega-malls are the norm now--but this was the original monument to materialism and finding ways to waste as much of your money as possible.    I mean, do we really need to have four different Foot Locker stores in one building?  I'm still ashamed to admit that I worked there for almost a year.

#8--Michelle Bachman.  She is still early in her political career so her ranking could "improve" in the future.  I can't think of anything that I have heard her say that hasn't made me roll my eyes and want to crawl under a rock.  Fortunately, her "media darling" status appears to be fading as far more qualified candidates for President have entered the race.

#7--Hamm's Beer.  You have to give a lot of credit to the marketing guys that came up with the cute Hamm's Bear mascot and the Indian-themed "Land of Sky Blue Waters" ad jingle for making this one of the most popular Midwest beers back in the day.  It certainly didn't attain that status based on taste or quality.

#6--Paul Wellstone.  The only Senator who could make Russ Feingold look like a moderate.  Nonetheless, his death in a plane crash remains a real tragedy.

#5--Brett Favre's 2nd Comeback.  Was it the continuous press coverage of the move, the former Packer teammates flying to Mississippi to "convince Brett to come back", "Chilly" going to pick him up at the airport, or the hype surrounding the two games against the Packers that made everyone the sickest?  All I will remember is an old, broken-down man huddled under a parka along the sidelines as his non-playoff team was getting pounded by the Bears in his "final, final game" in the NFL.

#4--Lutefisk.  Rotten fish soaked in lye--then spread on crackers or bread.  It's even more disgusting than it sounds.

#3--Al Franken.  It amazes me that someone with such contempt for every other human being on the planet can win election to a major post like the US Senate.  It must be his smugness that wins everyone over.

#2--Walter Mondale.  Where to begin here?  His early efforts to kill the Apollo Space Program because it was taking money away from programs for the poor?  His disastrous turn as Vice President during the first Obama--I mean Carter Administration?  The idea that voters in 1984 would want to return to those failed economic policies?  Or his "We don't negotiate with terrorists--so I'll go over there and do it myself" efforts in the 1990's.  (BTW, how many Minnesota politicians is that on the list now?  4 out of 10?)

And finally, the clear and forever choice at #1--University of Minnesota sports teams.  Your football team stinks.  You win Paul Bunyon's ax so infrequently that the "red side" of the thing is beginning to fade because its the only side that sees any light in the Badgers trophy case.  Your basketball team stinks.  Clem Haskins had to cheat to get you to the Final Four that one year.  And after Doug Woog got caught paying players, your hockey team hasn't won diddly poo.  The Badgers could lose every other game in every sport--but if they beat the Gophers in those one or two contests I would still consider it to be a very successful season.

Tuesday, September 13, 2011

The China Syndrome

Is anyone noticing how much debt the Chinese are racking up?  I don't mean the people of China or the Chinese government going into hock--but rather the amount of money that other countries around the globe are borrowing from China.  Their latest "investment" is going to be in Italy--which needs to come up with billions of dollars to head off the same debt crisis that threatens to engulf nearly all of the European economies.

The fact that China is entering into the Euro disaster zone must mean that Germany is tapped out in trying to help keep its neighbors afloat.  I know the German bailout of several other countries had to be approved by the nation's Supreme Court--as the conservative political minority was fed up with being the Continental ATM Machine.  And how could you blame them for having that attitude?  You don't see Germans taking the entire month of August off of work like Spain and Italy.  German seniors don't get full retirement benefits at 55 like in Greece and there is no acceptance of permanent unemployment for the younger generations like in Britain.  The term "German work ethic" didn't come about by accident--it was earned.

Anyway, a Chinese bailout of a European country is another sign of the decline of the US economic power in the world.  The US has always been Western Europe's security blanket, first with the Marshall Plan after World War Two and then by picking up the lion's share of operation expenses for NATO.  But now, the countries that we helped to free from facism and whom we protected from Communism for decades are turning to the very Socialists they once feared for help.

Maybe the Chinese will be benevolent creditors.  I know the Keynsian economists defending our own major borrowing insist that it is in China's best interest to see all of the countries that owe it money do well--since that is how they will get their money back.  But for some reason, I have my suspicions about a regime that still holds political prisoners--and has turned tanks on its own people more than once.

My brother-in-law does a lot of business in China--and he strongly believes they will be the economic leaders of the 21st century.  Already, Chinese companies are farming out their work to countries like India and Vietnam--where the labor pool is even cheaper than in their own country--thereby increasing the profits they see in selling items to companies and retailers here in the US.    It's just a matter of time before they don't need Apple or Microsoft or Boeing to develop the new cutting edge (and most profitable) technology--they will have the resources to do it themselves.  And that is when the US will be pushed to the side--to join its European counterparts on the downward slide into secondary economic status.

Maybe it really was a good idea to start teaching our children Mandarin in elementary school.

Monday, September 12, 2011

9/12

The big question yesterday was "Do you remember where you were ten years ago today?"  Well today, I have another question for you: "Do you remember how you felt on this day ten years ago?"  9/12/01--the day after.  The day when the reality of what happened on 9/11 set in.  The day when we figured out who was responsible for what had just happened--and the day we vowed as Americans to stick together to get through this.

So, do you remember how you felt a decade ago today?  Were you angry?  Were you among those who said "We need to fight them over there--so we don't have to fight them over here."  Were you committed to doing whatever it takes to make sure that A) we find the people responsible for making this happen and either bringing them to justice or killing them and B) making sure that this never, ever happens again.

How does that compare to how you feel today?  Are you still committed to tracking down all of those involved in the plot?  Do you remain committed to eradicating terrorism and religious extremism wherever it might be breeding and creating a threat to the US?  If polls are any indication--then probably not.

When did you lose that resolve?  Was it after the first attacks in Afghanistan?  Was it after the first dead soldiers were brought back home?  Was it after we invaded Iraq?  Was it after we captured Saddam Hussein?  Was it after "Mission Accomplished"?  Was it after we opened Guantanamo Bay?  Was it after the Abu Graib prison pictures were released?  Was it on the first anniversary of 9/11?  The fifth anniversary?  Was it after we elected a candidate who promised to bring the troops home in his first 90 days in office?  Was it after we killed Osama Bin Laden?

I realize it is hard to remain committed to what has to be done--when it takes as long as this effort has.  There were many in America who wanted the US to settle for peace with Japan right after victory in Europe just to end the fighting after more than four years.  But President Truman knew that a job half-done in the Pacific would only lead to further problems--and American bloodshed--in the future.

77 soldiers were injured in a truck bombing in Afghanistan yesterday--further proof that the enemy is still out there.  And the tensions of yesterday's memorial services was heightened by reports of terror suspects in the US with the intent to detonate similar devices in cities here.  We didn't start this fight--but we sure as hell need to make sure we end it once and for all.   If we owe the 2,752 killed on 9/11 and the more than 4000 US soldiers killed in the War on Terror anything--it would be to make their sacrifice worth it.

Thursday, September 8, 2011

Packer Predictions

Last week I gave you my picks for the entire Wisconsin Badgers schedule (can I point out my 45-17 victory prediction against UNLV didn't miss the actual 51-17 score by much!).  Today, I've got my Packers predictions for the year.

Week 1 vs New Orleans--I know everyone is expecting an offensive shootout tonight--but I think the abbreviated off-season and training camp will set that side of the ball back early in the season.  I'll take the Packers winning on a late FG over the Saints 20-17.  1-0

Week 2 at Carolina--The Panthers will be starting over-rated rookie quarterback Cam Newton.  I'll take the Pack 38-10.  2-0

Week 3 at Chicago--I know Lovie Smith and the Bears will be talking all big and bad that week--but they still have Jay Cutler at quarterback--and we all know how small he plays in big games.  Packers win 23-17.  3-0

Week 4 vs Denver--I don't see Kyle Orton lighting up the Packers in this one.  Green Bay wins 27-10.  4-0

Week 5 at Atlanta--A rematch of last year's divisional playoff game--where the Packers steamrolled the Falcons at the Georgia Dome.  I don't think Atlanta is any better this year.  Packers win 30-21.  5-0

Week 6 vs St Louis--Aren't defending Super Bowl Champions supposed to have the toughest schedule the next season?  Packers roll again 38-3.  6-0

Week 7 at Minnesota--Assuming the Metrodome is still inflated, the energy level will be high--but the Vikings talent level will still be low.  McNabb chokes again on a potential game-winning drive and the Packers escape with a 28-24 win.  7-0.

Week 8--Bye week.--Needless to say at 7-0, Packers fans are already booking hotel rooms in Indianapolis.

Week 9--at San Diego--Finally, the Packers play another serious title contender--and they lose.  The Chargers will a shootout 41-38 in overtime.  7-1

Week 10--versus Minnesota--I'm assuming here that Brett Favre has not returned to supplant Donovan McNabb at quarterback in purple.  Packers get back on the winning track 31-17.  8-1

Week 11--versus Tampa Bay--Last year the Bucs challenged for a playoff spot.  This year they go back to being the Yucks--Green Bay wins 24-6.  9-1

Week 12--at Detroit on Thanksgiving Day--In 1962, an undefeated Green Bay Packers came into a Turkey Day matchup with the Lions and lost to Detroit in what was known as the "Thanksgiving Day Massacre"--with Bart Starr being sacked 10 TIMES--and Lombardi's bunch suffering their only loss of the season.  I'll take Ndomukong Suh to dish out the same punishment to Aaron Rogers and for Detroit to win by the same 26-14 final.  9-2

Week 13--at the New York Football Giants--The Pack recovers from their beating at Detroit and use the extra rest to roll the vastly over-rated G-men--40-14.  10-2

Week 14--versus Oakland--The Raiders will be slightly better this year--but they still get whipped at Lambeau--38-13.  11-2

Week 15--at Kansas City--The meaningless pre-season finale may have been close--but the Packers cruise in this one 27-10.  12-2

Week 16--versus Chicago--Santa delivers another Packers win over their rivals 17-0.  Jay Cutler misses the second half with strained mistletoe.  13-2

Week 17--versus Detroit--The Packers will have nothing to play for--having clinched the best record in the NFC and home field throughout the playoffs--while the Lions will be fighting for a playoff spot.  Detroit wins a snoozer 13-9, and finish 13-3.

After a bye in the first round, the Packers get the Lions for the third time at Lambeau in the Divisional Playoff at Lambeau.  It's ugly, but the Packers get the win 13-7.

In the NFC Championship game, Green Bay hosts Atlanta on a freezing night at Lambeau.  Both offenses stall in the elements and the Packers lack of a running game hurts them as Atlanta controls the clock and field position and gets out of Green Bay with an upset victory 13-10 on a last-minute field goal.  The Falcons then get taken behind the woodshed by the Steelers in the Super Bowl--and order is restored to the Universe.

As with my Badger picks, if the Packers lose Aaron Rodgers for an extended period of time due to injury--this 13-3 prediction could easily change to 5-11 and out of playoffs.

Wednesday, September 7, 2011

For Your Viewing Pleasure

I have a new money-making idea for someone looking to pull themselves up by their own bootstraps in this down economy:  Sell bumper stickers that say "My President is Mark Murphy".  I'm guessing you can sell them to all of the people who will be tuning into the NBC NFL Kickoff Pre-Game Show instead of the--ahem--"Major Jobs Speech" from President Obama.

The two NBC affiliates here in Packers Country have decided to stick with the pre-game show instead of airing the President's address to a joint session of Congress.  I'm sure a few of my journalistic peers will be raking WGBA and WTMJ over the coals for "abdicating their duty to cover such an important, newsworthy event"--but I will be very interested to see the ratings that come out of Tuesday's decision.  I get the sneaking suspicion that even though most of the show will be NBC talking heads and three overrated musical acts, the viewership will be more than the cumulative audience for the President's speech on all of the other outlets.

Let's be honest, tomorrow night's speech will be anything but "a major announcement".  It will start with a series of "America is facing a crisis" generalities.  Next comes the "I heard from Billie Mae Dawson of Waycross, Georgia--who has been without a job for nearly three years now--despite having a bachelors degree and putting out more than 500 resumes" line the speechwriters got by choosing one letter from the thousands that come in to the White House that the President never actually reads.  That will be followed by the real purpose of the speech: Candidate For Re-Election Barack Obama blaming Republicans in Congress and Former President George W Bush for the economy not turning around in the last three years.  The speech will wrap up with a proposal to borrow another $300-Billion dollars to pay for projects that will be required to hire union workers only--along with the usual "hope and change" platitudes and we're out of here right before kickoff of the Packers game.  The other networks will follow with their liberal talking heads calling it a "watershed event in American history sure to turn things around in time for the 2012 elections" and their conservative talking heads calling it "a complete failure of vision that will only deepen the hole Rick Perry will have to dig out of in 2013."

If Republicans really wanted to make the President squirm, they should do all they can to guarantee the speech goes past game time.  As the President enters the House Chambers, stop him for a conversation as often as possible as he walks down the aisle.  Welcome the President to the podium with a five-minute standing ovation.  Cheer wildly--and for as long as you can--after every single sentence.  And feel free to point out errors in fact as often as possible with outbursts from the gallery.  I can already see the consultants in the production booth telling the Teleprompter operator to increase the speed of the scroll to make sure the President is done by 7:30--to the point where he sounds like the speed-talking guy who did the Federal Express ads back in the 1980's.

I should probably mention that you can hear President Obama's Address to the Joint Session of Congress live here on WOSH--with ABC Radio coverage beginning at 6:00 Thursday night....if you can tear yourself away from the three hours of Packers GameDay coverage on all of the other AM stations.

Tuesday, September 6, 2011

Dinosaurs Walking

Today, we find out just how bad things are for the US Postal Service.  By all accounts, the USPS is on the verge of insolvancy--unable to make a $5.5 Billion payment to its retirees if Congress doesn't provide a major bailout--and approve reduction in services. 

According to the New York Times, personnel costs account for more than 70% of the Post Office's operating expenses.  That compares to less than 50% for its main competitors--UPS and FedEx.  If you consider the average public sector employee's health insurance plan to be a "Cadillac"--then the folks at USPS have the "Bentley" packages--and you can imagine what that costs.

So Postmaster General Patrick Donahoe heads up to Capitol Hill today to propose a solution: a big federal subsidy, cutting Saturday delivery, closing smaller post offices and combining sorting facilities across the country.  Sounds like a good plan--considering the sharp reductions in mail volume in the electronic age.  But here comes Cliff Guffey--the head of the American Postal Workers Union--to derail the whole thing.  Guffey points out their contracts have no layoff guarantees in them (there is a fine example of long-sited negotiation). 

Guffey is backed by the head of the Association of Letter Carriers--Frederic Rolando--who predicts "disaster" if service is cut back.  The Times quotes Rolando as saying "This is about one of America's oldest institutions.  It survived the telegraph, it survived the telephone and we have to do everything we can to preserve it and adapt."

So Mr. Rolando, did AT&T continue to operate telegraph offices in every town and city across the country when people stopped sending telegrams?  Were there protests in the streets when those telegraph offices closed?  Does AT&T still have operators in every town and city to work switchboards--helping to connect landline phone calls?  If everyone dumps their landline phones someday and goes exclusively to cell phones, will AT&T continue to spend billions to maintain phone lines and poles?  Of course, the answer is "NO" because AT&T was willing to adapt to the changing times--and provide services that people actually wanted.

The time has come to admit that the Postal Service is a dinosaur still roaming the earth.  Unless there is a major devolution of technology on the horizon, it will become as relevant to our lives as the telegraph and the printed newspaper.  Now is the time to plan for a graceful (and economical) demise.