Blood diamond

Are your people rulers or slaves? There are two opportunities of wealth building and one inopportune option of meager existence:

1. Original asset discovery or creation.
2. Services to discovered/created original assets
3. A subset that does not create substantial wealth we will refer to as Non-Substantive Laggard deValued Employment (NSLVE), this term is to depict the opportunities of employment that feeds families and pays rents, yet rarely ensures wealth of future generations or purchases appreciating assets.

Once you discover the Original asset, you can then exploit it if you infuse intellectual capital, which is the intelligence to harness wealth from the asset. This is the Capitalistic race to the next best wave of wealth. The battle against this force of futuristic opportunity is the current wealth structure that tends to protect its market share by eliminating demand for alternative products and services. The best example of this is the oil industries resistance to alternative fuel sourcing.

William Randolph Hearst

Another example is George Hearst, a Mining engineer from Missouri who walked to California in 1850 as a part of the great gold rush to Northern California beginning in 1849. He eventually amassed wealth from mining gold. His son, William Randolph Hearst was born on April 29, 1863. The young William took control of the family newspaper business from his father in 1887, “The San Francisco Examiner”.  Back then, as today, he who controls the minds of the masses, controls the world. The formula for ultimate wealth is to first control the assets (MONEY), then for defensive purposes of longevity, control the minds of the masses (POWER). The less a population is educated, and the more they are propagandized, the easier the control becomes (RESPECT).

It is speculated that William Hearst defended his empire from competition from the Hemp industry. William Hearst was one of the nation’s largest users of paper, and he owned thousands of acres of woodlands. He supported the movement to tax marijuana out of popular use in the 1930’s. Marijuana is derived from a hemp plant, so by limiting the profitable production of hemp, he speculatively helped his paper pulp business from strong environmentally practical competition. Even though the hemp plant that is used to make paper was a different grade of hemp that is used to intoxicate smokers, the distinction was not made by the lawmakers.

Another example:
Through the production of oil, which was discovered in 1958, the city of Abu Dhabi generates 56% of the GDP of the United Arab Emirates. The UAE was formed in 1971 and is a united group of Arab nations, including Dubai. These countries have amassed wealth and as of recent years have aspired to build tourist and international business havens to parallel New York, London and Singapore.

The oil reserves translated into wealth, which is now being focused on building infrastructures. These infrastructures represent opportunities for firms to provide services and spread the wealth according to existing firms technical know how and connections to tap such demand. With the mobility and skills to generate revenue, family’s futures are secured. Architects, Engineers and scientist all receive a large portion of the infrastructure funds through offering expert knowledge. A lesser amount of funds go to the laborers who put hammer to nail.

Those who may be outside of the scope of experts or professionals may have the secondary opportunities to carve benefit by availing themselves to the status of NSLVE. If they have the proper training and experience on the lower levels of industry, they may create a life of economic sustainability. Yet, to evaluate this system with the intent to work upwards, a group must understand the process and infiltrate politically and socially by way of education and inclusion. The travesty of the historical and continual rape of the African continent should be a lesson to all world citizens whose identifying namesake carries a prefix of “African”. If there is to be one unifying posture of the Africans of the world, it should be based on this knowledge of harnessing. If not, we have learned nothing, and are doomed to a second class for eternity as our children’s resources succumb to the ill effects of double unemployment rate relative to the national average.

The next generation was being called to duty in World War II. This pulled us out of the depression as a shrinking Gross Domestic Product (National Income) turned into a rapidly increasing one. Government spending on the war fueled the rising GDP. Women replaced men in the work force. After the war, women’s unwillingness to return home from the work force began the popularity of the two income household. This continued the high pace of GDP growth. The 1950’s was a great time for the U.S. economically, due to the increased income as well as the lowest inflationary pressure of any decade of that century. It was the only decade of no double digit inflation (or deflation as the 1930’s).

So the country now was comprised of two generations, the first of which were the mis-trusters, and the second were the veterans who were busy creating the third generation of this era, the baby-boomers. The massive increase in income and family manifested a sense of financial responsibility and stability. This generation was the first consumers of many new innovations and electronic household modernizations. Yet they were still conservative because they were raised by the mistrusters. In the sixties and seventies this generation of mature adults began the popular mortgage burning parties. Many families were completely paying off their mortgage loans and held their homes free and clear. Their was a sense of pride in actually holding the free and clear deed to the American dream.

The baby-boomer generation was the worst of the three generations in their narcissistic erratic persona. Their rebellion in the 60’s and 70’s began the deterioration of American Family value system. In 1970 7% of U.S. children were raised in a single parent home. In 2008, 40% of children live in single parent homes. After the free love of the 70’s, many of those who did get married begin to divorce frequently in the 1980’s.

The Hippy/yuppies of the 80’s had no mistrust of the banking system because they were too far removed from listening to elders. They had rebelled against the Government as young adults in the 70’s, broke their families apart in the 80’s and only had the American Corporation to call “daddy” by the 90’s. So when banks advertised, refinance that house that you bought with the proceeds of your parent’s free-and-clear home, they not only refinanced, but they opened a second line of credit.

See, Corporations knew that as long as the average American homeowner held 50% to 100% of paid-off equity in their home, that is the equivalent of sharing the wealth with the common folk. They viewed this high equity holding as untapped revenue. So by encouraging refinancing they could convince Americans to give up their “actual” wealth for the sake of spending to impress their narcissistic complexities.

The greater debt a society holds, the harder the work-force works. Opposed to the better the savings and investing habits a society has, the higher potential for competition for the current businesses. A corporation would rather have their key employees in debt and enslaved to the steady income, as opposed to being well capitalized to leave and start a competing firm.  This is why corporations continue to grow larger and more powerful.

This is how we turned away from being a saving nation to a consumer nation as our middle class disappears.  Now we are so individualistic. We don’t trust our Government; religious institutions; banking system; our corporate employers; not even our families (spouse, parents or children) to not become a burden on our pursuit of material superficial justification and false sense of self-worth.

Topics will be: The current economic crisis, Obamanomics, the Environment, Crime, Drugs, Education, Poverty, Discrimination and Healthcare.

Join me in figuring this mess out.
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We as humans, have “human rights”. We as Americans have the “right to life, liberty and the pursuit of happiness”. We as citizens have the right to self improvement through education for the purpose having a skill to contribute to society for a sustaining level of income.

Many of us who have chosen to not pursue the mastery of a skill that can bring us income may suffer a heavy burden of financial immobility. This group of ill prepared people struggle and wallow in their own defeat. They often times want others to carry their burden through taxation and income redistribution. Those of us who work hard for what we have, may tend to want to keep our earnings and not reward laziness with earned income credits, free cheese and subsidized $125 section 8 rents.

The people who may be called lazy will take offense and claim it is ill opportunities or misfortune secured in an unjust system. But I guess a good question to pose to the poor is why are they poor. I wonder who they’ll blame. Maybe they won’t answer because of the large roll they played by ignoring the rules at a young age. The greatness of America states that if you can build a community of teachers, mentors and active engaged parents, the sky’s the limit. If a community does not support nor has trust in its own business and social leaders, opportunity must be sought outside of that community. This begets fractures and a cesspool of limitations.

Regardless of the causes and effects, should anyone in American die of starvation? Should anyone in America die on the street curb of a hospital because they were not admitted? I say “sure, why not”. Being that this country is the main pillar of Capitalism, we have to take the good (wealth) with the bad (poor). The best thing a government can do for its citizens is provide a free and adequate education, coupled with healthcare for children to assist in a fighting chance. We are not doing so well at these points but we are trying. Yet if you teach a person to fish, and he chooses not to fish, he better not stick his hand in my bucket. If you teach a man to eat fish and he chooses to eat super sized #1’s from McDonalds, he better not wish for me to pay for his triple bypass.

My point is that every action has an equal and opposite reaction. You can’t fix reactions without focusing on the actions. We need a fair system that addresses not only the problem, but address the reasons for the problem. If you provide stitches on the skin, internal bleeding may still kill you.

The first problem with healthcare is that the cost continuously increases by nature of the business model. So there is no way of predicting future cost. Medical device companies and pharmaceuticals are in it for a profit, so they research improvements in equipment and techniques so they can capitalize on new sales. If we took away the profiteering, the investment for research would fall and our medical advancement would slow. So in addition to a government insurance option, they should compete with pharmacist and scientist to develop new medications, medical techniques and equipment. The government could provide these advancements without the profit seeking, which would lower cost across the board. This Government Medical Institute could be centered in a suburban area the way that military bases are funded. Strict nonprofit quality government construction of a Federal Medical school that produce medical professionals that have an option of deferring student loans until they have 10 years of medical experience, and then have the option of returning to this campus community to work in the governments interest while not having to pay for many private company profits on major purchases such as American fleet vehicles and high end government provided houses; in addition to student loan forgiveness.

The second problem with healthcare is that demand is not predictable. As American’s diets fluctuate along with the changes in carcinogenics in our environment, we can not predict the quantity or level of sickness in the future. America is also aging (on average) and living longer lives, which guarantees an increase in the demand for healthcare. If we were determined to reduce the harmful affects of our consumption and waist, we would most definitely impact demand. Yet how many 99 cent meals we sell or illregards to emissions can create profit which appears to be more important than the health of America.

Who is going to pay the cost plus profits to the healthcare industry for those 45 million people with no health insurance? There is also a percent of the population that go bankrupt due to inadequate insurance during a serious medical condition. Remember, republican or democrat, black or white, you will get sick in your lifetime. Without adequate coverage you may lose everything you’ve worked for. So if sickness will eventually affect everyone directly or indirectly, why should we lock some people out? The answer is, like my man Smokey would tell you, “they didn’t put in on this….Man!”

I believe that a portion of healthcare should be paid by taxes on the products that are known to cause bad health. This increase in the cost of those things harmful will make healthier living relatively less expensive. Many people have unhealthy diets, given the low price of unhealthy foods. There probably is a positive correlation between uninsured and unhealthy. Hence, providing insurance for this group is disproportionably expensive.

Each person should have a medical file and a local doctor of their choice to administer preventative exams and lifestyle advice. Each person will have a co-pay associated with their healthcare. This co-pay increases if certain prescribed preemptive measures are not followed by the patient. So that each of us have choices that equate to differing levels of financial burdens.

Currently, if you don’t work and contribute, you don’t have healthcare coverage. There must be a trap door that we can drop those high risk citizens out of if they don’t do their part to not be such a burden on the system.

Our problems stretch across so many industries because of the rapid business growth. Businesses are currently bigger than U.S. households can support with cash or credit. As long as households were spending beyond their cash holding, due to increasing property values, businesses grew. Now if the government supports the current business model of over heated overhead to stave off layoffs, we will not fix the problem, just delay the inevitable shrinkage. Especially given the fact that the American people need to take a financial management course that emphasizes the killing only what you can eat and saving a strong nest-egg. 

People are not spending money due to fear of lay offs, hence the consumer sentiment index is lower than it has been in its 41 year history. Unlike Reaganomics of the 1980′s, which gave concessions to the wealthy and businesses in order to give them a greater ability to provide jobs, Obamanomics is a term created by political pundits that places the concessions with the majority of the American middle class. Instead of top down politics, Obamanomics contemplates a bottom up approach where the vast majority of Americans are empowered to create their own opportunity as opposed to waiting on the slave owners to have money left over from yacht and personal jet purchases to throw us a bone.   $400 billion should go directly to households…

What if President Obama solidified Obamanomics into an ideology by making policy that allows businesses to collapse or shrink if households do not value the excess of products and services they attempt to brain wash us into believing we need. Through our vote at the cash register we the people may hold the power.  So we should coordinate a campaign to notify the people to be diligent with their spending dollar and not fret the loss of income, as $400 billion dollars will be used as an unemployment insurance supplement for anyone who loses their job due to layoff (not firing or quitting). The government will pay them additional funds over and above normal unemployment insurance to equal a total of 80% of what their average income was for the past 12 months. This 80% would decrease by 15% every 5 months. Remember our net (take home) income is only 75% to 85% of our gross income. The rest goes to taxes and benefits. Also the current unemployment insurance rules are different for each State. Yet California unemployment payments are the lower of 50% of lost income or $450 per week.  The payments continue for 26 weeks, or up to one year during a national crisis such as this one. Most households use from 40% to 60% of their net income to pay for housing. So the fear of losing your job is real, even with unemployment insurance many people could end up homeless.

Regarding the banking system who first failed the American people with sub-prime loans, and later with getting Federal funds and still not helping customers, the Federal government should cut all bailout assistance and allow these banks to fold and merge. The Federal Reserve bank should offer loans directly to the people. The surviving banks can buy existing loans from the Government just as they buy money from the Government to loan to households. Remember, with the income guarantee by the Government supplementing unemployment insurance, credit extension will be simplified with reduced risk of default.

Regarding the Auto industry, see my article on the Auto industry posted on December 11, 2008. I may add, if any of the three companies file for bankruptcy, the bankruptcy court should grant the Government the first right to purchase assets. The Government paid funds will go to paying auto industry supply chain. Yet at the back-end of this issue, the Government should sell all of the assets to the strongest U.S. Corporation that bids with a business plan worthy of the U.S. trust. This plan should outline top management, labor relations and Green modernization with U.S. ownership and operation. This is similar to what the City of New York did with the bidding to rebuild the twin towers. The bidding was not based on price, but aesthetic benefit to the people of New York.

Given the reduction of property values, layoffs and reduced spending, States are financially strapped as well. I’m in favor of Federal money to States immediately to stimulate job creation, reduce State layoff threats and to affect Green initiatives. I feel that part of the funds should go to States with good action plans for the funds with a caveat to trim fat in the long-run.

If embraced with income confidence, consumption may increase to sustainable levels where business revenue will return and reduce the need for layoffs and bankruptcies.  But do you think the money grabers will allow money to pass by the CEO bonus pool?  “We the people” with the power of the cash register vote, coupled with good money management dollars and sense, are in the best position fix this problem permanently.

I have been sickened to my stomach at the rapid pace of retail outlet openings over the past 3 years. We as Americans have only received a maximum of 5% per annum salary increases, yet Target, Walmart, Bed Bath and Beyond and entire strip malls pop up like mushrooms on my lawn. They increased as the housing boom took hold. Now that housing has slumped, thus too shall they follow. How did they expect us to spend more money to sustain their growing overhead cost? As homeownership was increasing the percentage of household income that was earmarked from rents to mortgage increased. This leaves less for retail expenses. Yet refinancing gave households a boost of “spendable cash” that transferred to revenue for retailers. The long term effect is a further increase in the percentage of household income to go to mortgages in the long run. In addition to refinancing, credit cards made it possible for households making $40,000 net income to actually spend $55,000. This also contributed to the first industry collapse, banks. Shit flows downstream and now retailers must pay the piper.

As a business manager, you must first understand your consumer, a part of which is to understand the source of the wealth that you are targeting. If the source is temporary, don’t build long term plans around that source. A better business decision would have been to take advantage of internet sales and by marketing technological advances in internet shopping. So when the market corrected itself, businesses wouldn’t be so heavily invested in a long term position. They would only have to layoff a small force of shipping and delivery personnel.

In the second quarter of 2009 it will be deja’vu, with the auto industry banging on the door again. I feel Congress and President Obama will force two of the big three American auto makers to merge. That will leave either Ford or Chrysler to fend for self or collapse. The surviving company(ies) will be forced by the Government to stop production on cars that are not ever going to sell above cost. He will then order the 18 month re-education of the entire company. GM University will eventually become the top producer of hybrid and alternative transportation fuel efficient and environmentally friendly technologies on the planet.

In quarter 3, President Obama, State governments and thousands of grass roots organization will begin the largest campaign in the history of the human race. This campaign will usher in a new way of thinking regarding our Earth and our priorities in the preservation of life and the pursuit of liberty for most people across the globe. Obama will enlist many countries to this crusade as it will continue to grow in mass, scope and effectiveness. Global warming will be reversed and world hunger will be addressed in a way that is closer to efficient then ever before.

In quarter 4 we will begin to reap the last of the bad seeds that have already been sown. We will see a sudden and drastic drop in the value of the dollar. Unlike the economics of today where if you don’t have a sub-prime mortgage and you are not in danger of loosing your job, you are relatively safe. Q4 will see an onslaught of hyper-inflation that only homeless hobos will dodge. If you have cash in your pocket, you will be affected. You should put your money into oil for the near run. For long run investing you should buy gold, energy stocks and fixed rate real estate. 2010 will be the humbling of the U.S., we may or may not hold the title of the worlds super power, this is why we need to make new friends as fast as we can.

This is just a mouth full of my own predictions. Who really knows? Good luck…

Auto industry:
I’d suggest giving a set amount of loans to Ford and GM. Restrict the use of funds to salaries of lower management and below employees. This will build an additional incentive for the labor union to compromise on salaries and layoff numbers. Those decision will shape how far the government loans will stretch. Everyone from the assembly line workers to the CEO were all overpaid at the big three. Instead of being more efficient and developing innovation that consumers can appreciate, they were busy paying each other. That must stop in order to be positioned as a viable option for the American auto consumer. Despite their international sales and fleet sales to government agencies, they still are unable to muster a profit.            

Jobs are our National interest within the auto industry. If the companies collapse next year or beg for more money, we want to rest assured that our tax dollars were spend on households, not luxury items for top management nor technology or raw materials that will be wasted if the company doesn’t make it another year. We need a domestic industry to remain competitive globally, if we were to put either of these companies up for sale, the chances of a more effective management team buying the assets and technologies are pretty high.

I’d hesitate on giving Chrysler any funds, but would consider it if the funds were restricted to to salaries.  Chrysler is a private company owned by a private equity firm (which is another name for a small number of very rich individuals) who I would not want to give a dime of my tax dollars to. Their plans have been to sell Chrysler as soon as they can, and if they do not get assistance it will force them to sell the company at a discount. As of lately Chrysler has improved demand substantially and I believe Chrysler will be a great buy for a management group who knows what they are doing.

Obamanomics:
I may be a little bias, but Obama has made all the right moves. His cabinet is stellar; he has not made too many large commitments due to the fact that he has 39 days until he is in the driver’s seat. In the mean time, he is working with all the players to design his position to be most effective come January. People still embrace the hope of him being a savior to this situation. So he wants a large impactful push so there is optimal effect in economic course change.

The information he has divulged is on par with effectiveness. By working with cash strapped States to create jobs is the best move possible to dig us out of this crisis. Job creation is a very important factor in changing consumer sentiment. This sentiment is what queues household spending. The down side of this plan is the slow way in which these projects began. Obama must get States and counties to streamline this process by eliminating the bid process in public works. On my 9 to 5, I insure architect, engineering and contracting firms all day long. Many of these firms are suffering due to the real estate crisis. If we reduce the long biding and planning process on straight forward projects, we can get blue prints, city permits and construction underway within 6 months as opposed to the normal 18 months. Within the 6 months, we can hire and train a quality workforce of construction, management, environmental and energy efficiency team employees to turn the economic wheels a little faster.

Real estate market:
The Government has tried to repair the banking system as it currently exists. It has not worked. Homeowners have suffered in the mean time due to investors being unwilling to take a loss. So let the banks have their profits. The government through their current organizations should refinance homes of foreclosing homes that are owner occupied. The banks will get their full amount and be very pleased as Senator McCain recommended during his campaign. Most citizens were against allowing the banking industry to get off scott free. In response, banks stopped lending due to uncertainty of their own balance sheets as well as the future income of customers. We need them to begin to lend to customers to lubricate this economy with credit transactions. As for the homeowners, they’ll have to qualify similarly to my first report on how TARP should work. Once the government has a large pool of loans, they can bundle them and sell them to just as the real estate industry did to get us in this mess. The difference is that the participating homeowners will be better qualified and the terms of the loan will not be predatorial in nature.

Two years from now the people who will benefit from the 2009 stabilization of the real estate market, namely the rich investors and mortgage lenders of 2007, will be displeased with the new tax code when it will be time to pay the piper.

The Future issue:
The problem of the future will be the devaluation of the dollar. By this time next year we may be in a hyper inflationary spiral due to the printing and release of this additional cash. The more money in the system, the less value each dollar carries, that is why we have continued hikes in the cost of living. In order to reduce this exposure, the Government must take back as much of the newly lent money as quickly as possible. This will prove to be a difficult balancing act. High inflationary pressure will be difficult to impossible to avoid.

The best thing we can do is to spend now to stimulate the economy. Create jobs and enhance the feeling of job stability. Yet as soon as we see light at the end of the tunnel, we should have a national initiative to save money. This will stave off inflation and show that America has learned its lesson of living off of 110% of its income. Companies and households alike need to learn to spend 80% and save 20%. So that the economy will not get over heated, while companies and households have no emergency funds to ride out future storms.

We have learned our lesson right? Right?

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On Sunday morning the Jordan’s lost their home to what they called a great big firey monster. With a news reporters oversized microphone in their face, they answer one of the many stupid questions posed, “What are we going to do?, we are going to start a new beginning.”

We in America have tussled with crisis after crisis as of lately. We’ve chosen sides, we voted, debated and worried. Often we reserve worry for ourselves without serious consideration for those who are less fortunate than us, even though our fortune is luck that can be burned to an unrecognizable crisp. With the wave of Democratic voting, I believe that America may be finally maturing into the Country that the world needs to emulate. The kind of place where family means everything, profit is second to neighbor and community.  A place where concern for others blanket a wide geographical, economic and sociological area. We will get there, we are getting there. No one knows the distance, no one knows the amount of backsliding in our future, but for right now God is slapping us in the face and screaming “Wake Up!” as in the final scene of Spike Lee’s “School Daze”.

Our material wealth means nothing, our greed, discontent and disrespect for the Earth and all it’s people is catching up to us. When you are left with only the clothes on your back, you must eventually wipe your eyes and say, thank God I’m alive.

Like the Jordan’s, can you wake up with nothing and say “we are going to start a new beginning”?