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July 21, 2011

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GE CEO serves on the JOB Creation Commission---

The President's #1 supporter-- the CEO of GE-- serves on the President's Commission to create jobs in America. Yes, this is the same GE that reported a 20+ percent increase in profits last quarter. The same GE that earned $13B in profits last year and paid no tax. And, yesterday GE announced it is moving the Headquarters of it's X ray Division out of Wisconsin and into--Alabama?--no into China! It intends to invest $2B to expamd x -ray operations there. It also was reported they initially will not layoff any people in the US but will hire 100 engineers to work in China. Now I have no problem with GE going after emerging markets but I do have a problem with the company earning $8B in profits overseas last year and paying no tax. I also find it to be another version of the yo-yo policies of this administration to have the CEO of GE serving on the job creation commission while his company pays no tax and creates high tech jobs in China. Boeing was challenged when it wanted to open a plant in Alabama but GE is free to open in China. It pays to have buddies in high places.

US POST OFFICE-----

The US Post Office is rapidly losing market share. It is due for a complete new business plan. Can the government save it? The US Constitution gives it a monopolistic status and yet it lost $8B last year. Back in the late 80's and early 90's we contracted to implant US Post Offices in our nine Hallmark stores in Las Vegas. To do so we had to operate them at a significant loss. However, the traffic they generated more than offset the losses and made our stores destination centers. They also provided a form off security as robbery from a Post office is a Federal offense and the postal authorities are no criminal's desired interogator as several of our employees found out in the backroom after stealing from the cash register. One employee ran to West Virginia but was pursued, caught and prosecuted by USPS. So, it was a win-win situation for us and the USPS. It is no surprise to me that the USPS is considering closing their rural operations and replacing them with private businesses. However, this will not stop the move to electronic mail. Most businesses now bank electronically. Most people communicate by email. As retail businesses open online stores their adverising is delivered elecronically. As the newspaper and magazine industry is declining so goes the post office.
The USPS has to forecast what their mission is to be in the future to satisfy their role as defined in the Constitution and how to complete it. Should they be required to make a profit? Do they actually price the government's mail, the politicians' mail and the discounted junk mail to reflect costs? Should they compete with FEDEX, UPS and other Carriers? Should they be delivering overseas? In a survey surrently being conducted on MSN only 52% of the consumers say the need or would miss the post office? Would you? Is there a smaller postal model that makes sense? Can private business do it better? Should the USPS be in the electronic mail business? Is the USPS mission to deliver the mail or to employee the members of the US Psstal workers union? What is the annual cost of worker pensions?

I only bring all this up as an example of how long it takes the government to change. To decide what services they should provide? And, at what cost? UPS and FEDEX both make profits. It will likely not be long bfore a private US company will be making space flights while the government gets out of the business. At least publically. Cutting rather than growing government might just be good for America. It's a worthwhile debate.

WORRIED ABOUT THE DEBT FIGHT?----

Let's look at the positions and motivations of the parties involved. There are good things and disappointing things in what you see. The Republicans' majority is often thought to have come on the backs of conservative Tea Party supporters who are worried about their future and their kids future as a result of the debt. Those politicians are in the House and are up for reelection already. And, to satisfy the people who put them in there they MUST adhere to spending cuts, balanced budget targets and low taxes. (Ignore Obamacare for now) So, politically they are hostages to the people who put them in there--they think. The Democrats are pretty much free to do what they want because they are the old timers who win every time. They hold the Senate and their strategy now that Republicans have a blocking position is to retain as much of the gains as they can legislatively while Obama uses the administration to enact new regulations to enforce his liberal agenda. Obama is up for reelection and he is committed to his base to get the Bush tax cuts back on the people earning above $250k (income redistribution) to provide funds for his base. So, in the end the House freshman have to hold the line as does the President. In the meantime the Senate Dems led by Senator Reid can compromise and come up with a solution that minimizes the damage to the party taking the pressure off the President directly. Then if the President gets a bill on his desk at the final hour that does not include a tax increase but instead includes loop hole plugging promises along with spending cuts he can announce that in the interest of "saving the world" from this crisis he will sign it with reservations. This will likely make gains for him with the independents. IRONICALLY, IT WAS REALLY THE INDEPENDENTS WHO WERE FOCUSED ON THE ECONOMY AND HEALTHCARE WHO PUT THE REPUBLICANS IN POWER. I don't think the Dems have forgotten that and they have done a good job of getting the Republicans focused on the debt issue instead and have even made them to look like uncompromising conservative fanatics. Michelle Bauchmann has cast her lot with the Tea Party and is not likely to survive. Meanwhile Romney has stayed out of the trap and will likely come out firing after Aug 2nd to remind everyone that the economy IS THE ISSUE. But, be assurred these political games will not stop a solution from being found--likely short (18 months--post election) and being passed just in time to save the world.

Had a friend who traded a clunker (in cash for clunkers) and bought a hyundai. We get the junk and the Korean's get the money

A FEW INTERESTING FACTS-----

Unemployment among blacks is 16%. Unemployment among hispanics is 11.2%. 40% of blacks are on Social Security as their only income.

Yesterday, the President met with black leaders. The result: "Everybody in this country is prepared to accept some form of compromise. But it cannot be balanced on the backs of the most vulnerable in our society," Jealous said. "We were assured today the president does not intend to let that happen and we are very pleased with that." Herein lies the basis for the President's call for income redistribution. However, we already have plenty of income redistribution.

Unemployment benefits are killing state budgets and were a large portion of the trillion dollar stimulus package adding to the debt crisis as unemployment was extended to 99 weeks. The major beneficiaries of Medicaid and the new healthcare bill are this same set of people. That really makes it difficult to think that we are about to solve the deficit problem on their backs. And, it further makes one wonder exactly why liberals call for more illegal aliens to be allowed in to this country. If 11.2 % of hispanics are out of work then why do we need more? And, it can be argued that hispanics have taken the jobs of many blacks contibuting to their 16% unemployment.

AND THEN----

Our route 3 highway project has been closed down. Evidently not all shovel ready projects used to stimulate the economy were as ready as thought. The project has been closed because the contractor did not properly locate the internet,cable and phone lines along several miles of highway they were widening and so after many incidents of cut cables disrupting commerce this "stimulus" project is closed for a while. I'll check on the way home to see if the "Brought to you by the American Recovery Act" sign is still up! The 41 Mexicans are no longer working there and the shovels--are still ready but inactive.

SHOOT YOURSELF IN THE FOOT AMERICA----

In another case of the Stimulus act in action I noted yesterday as I was going around the DC beltway that 100% of the heavy equipment I saw working on the 495 widening project were made by Japanese companies. Not Caterpillar. So let's try to understand this: The US gives the states American tax money for stimulus projects. The states hire contractors,hopefully American, who buy/lease Japanese heavy equipment to do the work. Meanwhile the US manufactures steel and heavy equipment but we don't even buy/lease American with our own tax dollars. And, then the President wants to make the case that we need to stimulate the American manufacturing indstries? Is there something wrong here? Wasn't it the CEO of Caterpillar standing with the President a couple years ago saying he would hire 10,000 workers if the stimulus bill was passed? (then, said he was misquoted when he actually laid off workers?)

AND THEN THERE's GE-----

The Presidents number one supporter the CEO of GE (which remember last year paid $0 tax on $13B in profits) announced yesterday that GE's profits are UP 21% this quarter. It pays to have your guy in the white House promoting "Green" or perhaps better yet buying "green". In actuality they made their money on interest on lending. I had two GE Money loans--the interest rates at 29.9%. I tried to get Congress to make them lower it but so far Congress seems to support them over me--wonder why?

Comments---

On Fly over State's---call for ingenuity.

America has a lot of ingenuity--more than any other country and it resides in the small businesses of America who, despite no support from the government, constant bombardment of new regulations/rules, frequent changes to the tax structure, moves by liberals to control their employee relationships and force them to higher social costs, etc. they survive, crate, promote, find new solutions to old and new problems. They continue to employ most Americans. recessions bring out the best in them as they defeat major problems. Avoiding the influence of government is one of the great traits of the small business leader.

On the Kindergarten nature of the administration's foreign policy choices-----Bill is right but it's not just in foreign policy.

YO YO diplomacy by amatuers. Obama's incredibly naive view of the world without nuclear arms, of a green driven world economy, of making friends with our enemies and of social welfare icme redistribution has come full circle to haunt our every move. Who could have ever thought that 12 days from a deadline to raise the Federal debt ceiling the Administration would have so little confidence in the Congressional leaders as to actually begin the have the Fed Reserve implement a plan for the US to default on it's debt. Congress is having a tough time coming to a solution especially with the lack of leadership the President has shown in the last 2+ years. BUT, those are some very smart men and women involved and they will not default on the debt or social security. If the President thought GWB was vulnerable in his fiscal mess--default will end Obama's Presidency for sure.

Great video. Heard someone say we need to get our individuality back - I say we need our self-repect and self-reliance back, Won't get it if we hand over our problems to someone else or to our government. American ingenuity is what we need back and then we will move forward. Government regulating every step-of-the-way is like me raising kids. I don't make decisions for them. They'll never grow up if I do.

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