Business & Politics: Expectations

Business & Politics: Expectations: I recently had an interaction with my employer that was less than favorable.   There was a discrepancy on yearend bonus #’s.   Without g...

Expectations

I recently had an interaction with my employer that was less than favorable.  There was a discrepancy on yearend bonus #’s.  Without giving too many details I’ll just say that there was a policy that stated X and what I received was not that because of a disclaimer at the bottom of the policy stating that everything is at the employer’s discretion.  My employer operated within the constraints of the law and technically the policy, but I felt by manipulating the information to their benefit that I was done a disservice.  Interesting decision seeing as I exceeded my profit expectations by over a hundred thousand dollars last year.

I’ve always said that the employee employer relationship needs to be mutually beneficial.  If the scales are ever out of balance both parties need to work to recalibrate or one of the parties needs to make a decision to end the relationship.  It’s kind of funny that in most cases really the only power the employee has is to quit.  It’s very rare that you have any recourse to challenge a decision, challenge pay, or challenge benefits.  But this is what we have come to expect, this is the reality for many people in the private sector, and there are many years of anti-labor legislation to support it.  More often than not though, if you ask someone how’s work the answer is “just trying to pay my bills” or some long countdown to retirement signifying that the scales have been out of balance for a long time.  So why is such a large workforce so complacent?  There are essentially two reasons.  One we are afraid of the unknown and two we have tempered expectations for our employers. 

I don’t want to get too utopian but it sure would be nice if we could raise those expectations.  That there could be revolt when pay increases, bonus pay outs, and stock awards are rewarded to senior mgmt and the majority of the workforce receive the same 1.5% annual wage increase each year.  Or if benefits are cut in efforts to save money.  Or if salaried employees making more than $455 per week could be overtime eligible (current law has that as the cap).  Corporations of all size spend millions of dollars each year in lobbying to maintain the status quo because they bank on the predicament of their employees.    

All of the available data shows wages are stagnant nationwide.  That is true for hourly employees making minimum wage and it’s true for employees of corporate America.  It’s an awful situation but recall the two reasons above.  We are afraid of the unknown.  So if things don’t go our way do we just quit and hope to find something better?  There is a lot of uncertainty out there and when macroeconomic wage figures show stagnation across the board then chances are you won’t find a more lucrative opportunity.  Secondly, we have tempered expectations.  Pay us on time, correctly, and don’t treat me too poorly.  That’s about the extent of what we expect.  Employers know that and they use it to their benefit. 

I suppose the name of the game is to find one of the “good” employers or rather a less bad employer than the rest.  I’m lucky to say I have that despite of this recent issue.  Millions of people don’t though and that is a problem.

This idea of tempered expectations got me thinking and I realized they are not limited to our view on employers.  We also have tempered expectations for government and politicians.  When someone like Bernie Sanders gets on stage and talks about free college and free healthcare we dismiss him immediately because we don’t expect government can or will operate successfully in those areas.  We will dismiss the ideas without ever exploring the validity of the policy or the likelihood it would be successful.  Sometimes we focus too much on the ‘what’ and not enough on the ‘why.’  The ‘what’ is trivial, it’s the ‘why’ that is important. 

The ‘what’ is just the byproduct, the item you sell, the ‘what’ is never something that inspires you.  The ‘why’ is what inspires a movement.  Why do we need healthcare reform, student loan reform, college tuition reform?  Because the system is flawed right now and it’s having lasting negative effects on millions of Americans.  Why is income inequality a bad thing?  Because it’s stripping away class mobility and killing the American dream for everyone not in the 1%.  In the past bipartisanship has been inspired by the ‘why’ but in recent years the polarization in Washington has destroyed that effort. 

In no way am I endorsing Bernie Sanders but at the core I respect his ideals and what he envisions for the country.  I respect his ‘why.’  I respect him far more than any Republican that tells us about every program and department they plan on eliminating from the government.  Or any Republican that believes salvation lies within the private sector.  Government is not always the solution, but it’s needed and it’s far better than an unfettered private sector with more power than it already has now.

If we can take anything away from this election, regardless of the results, it’s that we need to make an effort to raise our expectations.  Start with government and our politicians, and maybe in time as the labor market changes or more pro-employee legislation is passed we can start to raise expectations for our employers.  And lastly don’t focus on the problems with the ‘what’ and instead allow yourself to be inspired by the possibilities of the ‘why.’

Business & Politics: Tragedy in Charleston

Business & Politics: Tragedy in Charleston: I have no clue what would compel someone to commit such an unthinkable act of violence against innocent people.   The nine victims in Char...

Tragedy in Charleston

I have no clue what would compel someone to commit such an unthinkable act of violence against innocent people.  The nine victims in Charleston were not harming anyone, they were good people, they found comfort in faith and used the power of their faith to give back to their community.  They supported each other, they cared for each other, they were good people.  It’s an absolute tragedy that a young, angry, confused, and most likely mentally disturbed individual stole their lives from them.  This was a racially inspired crime.  Who’s to say how he developed this racist mentality, but I’m sure whatever had occurred was minor and the only explanation for his racist views is simply immaturity.  Mature and rational adults do not identify people by the ethnicity box they check off on for a job application.  They identify people by their actions, how they treat others, and how they live their lives.  I think it’s safe to say that mental state of the gunman is that of a child, even though he is 21 and is legally an adult.  News reports say that he was given the murder weapon for his birthday from a family member.  Shame on them for not seeing the transition to violence this young man seems to have made in his life.      

The nation is still mourning, but at some point there is going to be a legitimate call for action to legislate a solution to prevent events like this from occurring again.  Everyone is hypothesizing on what could be the root cause here.  One of the victims was a member of the SC state legislature and he voted against a bill to allow concealed carry permits.  The NRA shamefully has politicized this event already by saying that if concealed carry was allowed then individuals in the church would have guns and would have prevented the shooter from committing this crime.  This is an incredibly unlikely hypothetical statement, and frankly if the NRA is worried about an assault on the 2^nd amendment they should stop trying to use hyperbole as a legitimate argument.  All they are doing is alienating moderates and pushing them from being impartial on the 2^nd amendment to being against the 2^nd amendment. 

If you look at the mass shootings in the past five years there have been four that have a lot in common.  Tucson, Aurora, Sandy Hook, and now Charleston have been committed by individuals who fit similar profiles.  They were all mentally disturbed young white men with access to weapons. 

There are millions of responsible gun owners in the US.  Millions of Americans that choose to exercise their constitutional right to bear arms.  For all of the millions of responsible gun owners, like any large grouping, there are irresponsible gun owners.  We have triple the amount of gun related homicides than US, Canada, and parts of Europe.  Face value, this is a problem.

Pair those together, we have the most gun related homicides in the industrial world & we have seen a wave of mentally disturbed individuals using guns to commit acts of violence.  Hypothetically speaking, let’s say that the solution here is to ban the ownership of guns in the US.  Would we see the rate of gun related homicides go down?  I’m sure we would see some decrease, but would it be enough to justify such an overreach by the federal government?  I would say that the decrease would not be material enough to justify a ban on firearms.  And I’ve learned that if people want to be violent, they will be violent.  If people want to commit acts of evil, they will find a way.  If it isn’t with a gun then it will be something else. 

Reform in some manner needs to happen, but what should the focus be?  Where is there the most bang for our buck.  I believe that reform should be focused on two components.  First of which should focus on gun violence in low income areas where the majority of gun related homicides occur.  Second would focus on measures to keep guns away from the mentally ill. 

There are many low income urban areas that we have neglected for a long time.  No economic development, no decent paying jobs, poor schools, poor infrastructure.  Young people in these areas have never been given a reason to care about their lives.  Economic disparity knows no specific religion or ethnicity.  A poor white person and a poor black person that live in the same neighborhood have the potential to suffer the same fate.  If there is minimal opportunity to create a legitimate and prosperous life for yourself then people are compelled to search for illegitimate means to find prosperity.  This is the problem.  This would be a long term project, but there needs to be a huge push to develop low income urban areas.  It would encompass better funding for public schools, grants for community centers and community groups, preferential business loans for entrepreneurs with conditions that they must hire local residents, and preferential tax treatment for small businesses.  The solution lies with creating a flourishing and profitable community in which young people realize that they have a better chance of success by focusing on the legitimate route and not the illegitimate. 

The second portion would be more of an overreach by the federal government.  The mentally ill simply cannot have access to guns.  If this means banning families who have a mentally ill child from owning guns, then that is what needs to happen.  As long as the parents are declaring the mentally ill child on their federal tax reform, then they cannot own guns.  The way I see it, if they want the tax relief of claiming him/her on their return then they can deal with the regulation that follows.  Another portion of this reform would focus on providing care for the mentally ill under Medicaid.  A lot of times these people receive medication when they are under their parent’s healthcare or they receive counseling at school.  Once they graduate though, they fall off the radar.  They sometimes lose access to counseling, and quite often they lose access to medication.  This is a raw deal for them, their parents, and anyone who is adversely affected by a mentally ill individual who isn’t receiving the care that he/she needs.  Perhaps this could have prevented Aurora, Tucson, Sandy Hook, and Charleston.   It’s impossible to know, but I do know that providing some level of state sponsored long term care is better what we are doing now which is nothing. 

For the time being though, we are still mourning.  We are angry and confused on how a seemingly normal individual can commit such a crime.  The fact that this was a racially charged crime has brought a lot of attention to race relations in the US.  It’s shocking that in this day and age we have regressed to this point.  Government can’t mandate public opinion to change, so all we can do is effect change on an individual basis.  Try showing compassion to those that are different from you.  Get to know people and don’t jump to conclusions and stereotype people because of how they look, how they dress, or what they do for a living.  I think as a country we should pay attention to the leadership the community of Charleston is showing right now.  As a community they are coming together to comfort each other.  I believe in something called the national community, so as a nation we need to comfort each other and take a step back and reassess where we are at as a country and what each of us can do to improve it for the better.  Gun reform addresses a lot, but it doesn’t address the need for all Americans to show compassion and love for each other.  That is what we are missing, and that is what we need more than anything.    

 

Business & Politics: The Iran Deal is Complete, so What Now?

Business & Politics: The Iran Deal is Complete, so What Now?: The framework of the Iran deal is complete and agreed on by all parties.   After reading the details of the deal, I believe the objectiv...

The Iran Deal is Complete, so What Now?

The framework of the Iran deal is complete and agreed on by all parties.  After reading the details of the deal, I believe the objective of stripping Iran’s ability to manufacture a nuclear weapon is a success.  It’s an acceptable start to a series of tough conversations that the West is going to have to have with the Iranian regime.  To name a few, stopping their ICBM program, their financing of global terrorism, their illegal holding of Americans in Iranian prisons, and their human rights violations against their own people.  A nuclear armed Iran and an impending arms race in the Middle East is a direct threat to the national security of the United States.  Thus this is the priority, the other issues will be addressed in time but they are not on the same scale. It was wise to sequester those items from the nuclear negotiations, but just because we have a deal doesn’t mean that we can turn our focus away from Iran. 

Iran still isn’t to be trusted.  They made a smart political decision that has bought them time.  We are yet to see their sincerity in actually dismantling their nuclear program.  The United States needs to focus on three things to ensure compliance with the deal and must be prepared to hold Iran accountable if they do not comply with the agreed upon terms.

 Strict adherence to the language of the deal along w/ periodic inspections of all items related to their nuclear infrastructure

The deal focuses on three major areas.  The three facilities used to enrich uranium, the amount of centrifuges in those sites, and the amount of enriched uranium already manufactured. 

Out of the three nuclear facilities only one will remain, Natanz (the other two will be converted to non nuclear facilities).  Periodic inspections will occur to ensure that the enrichment does not surpass the 3.67% needed for nuclear power plants.  (90% is needed for a nuclear weapon)

The centrifuges which are used to enrich uranium will be decreased to 1/3 of its current inventory.  Lastly they will decrease their stockpile of low-enriched uranium by 97%.

Face value says that these are all good things.  We still are giving them the ability to modernize their power grid, but we have measures in place to ensure they do not enrich uranium to the level of producing a nuclear weapon.  It’s important to note that all of this is useless unless we have inspectors ensuring Iranian compliance.  The US also needs to increase clandestine operations in the region to keep tabs on what the Iranians are not making public.

The international community cannot simply take Iran’s word that they will comply.  We need to have access and verify for ourselves that they adhering to the terms of this deal.

Uphold the US oil export ban of 1975

After the 1973 OPEC oil embargo, Congress passed a law stating that any domestically produced oil cannot be exported.  In past years this hasn’t been a huge issue, but now that domestic reserves are increasing we are seeing an excess supply in the market.  This paired with a regression in global demand has caused a severe drop in the price for crude oil.  For the first time in a long time, the oil companies are struggling.  In response to this they have stepped up their lobbying campaign to repeal this law.  President Obama has refused to repeal thus far.  This is absolutely the right move.  It would be negligent to allow a short term deflation of crude oil to dictate policy.  Our energy policy has national security implications, this must trump any demands by the private sector.

We need to start planning on all fronts for a failure of the Iranians to comply with this deal.  An energy independent America provides us more maneuvering room in the event we have another war in the Middle East.  Stability in the domestic oil markets is an absolute necessity when initiating a military campaign overseas.  An energy independent United States nearly guarantees that.

The United States needs to make budgetary preparations for war

The way I see it there are two potential outcomes of this deal.  One, Iran abandons the deal and continues to enrich uranium and they produce a weapon.  All while reaping the benefits of the removed economic sanctions.  They will use that influx of economic activity to further finance terrorism across the Middle East especially through Hamas towards Israel.  The other outcome is that Iran does adhere to the terms of the deal, but will still use the increased economic activity to finance terrorism.  Both outcomes call for American action, but it’s just a question of when and of what scale.  The latter outcome is the most likely but it’s imperative that we prepare for the more severe outcome to ensure that we are prepared to hold them accountable.   

A preemptive coalition should be formed including the US, Israel, Saudi Arabia, Jordan, and Egypt with the goal of communicating to Iran the consequences if they elect not to comply with the deal.  Our national budget should include appropriations to each of these countries, if needed, for further growth and advancement of their militaries.  To do this though, we must adequately fund our defense budget and reverse the damages caused by mandatory sequestration cuts. 

For the first time since WWII our military is not prepared for war.  Lifers at the Pentagon, military think tanks in Washington, and former military leaders are all in consensus that sequestration cuts have put us in a bad position.  In 2012 Robert Gates, former Secretary of Defense, provided a baseline absolute minimum military budget for 2016 of $612 billion.  The Obama administration has proposed a budget of $534 billion.  The National Defense Panel says that this decrease in funding will destroy core elements within all branches of the military.  In the Reagan years, military spending accounted for 27% of the budget but under this new budget national defense only accounts for 18%.  An increase in military spending is needed and should surpass the baseline Robert Gates proposed, but this spending should be net neutral.  Meaning we should not increase taxes, but instead find savings elsewhere.  The black hole of entitlement spending would be a good place to start looking.

It would be wise to also examine revenues and pass a revision to the current tax code.  Congress needs to provide a simplified tax code that eliminates loop holes and deductions as a means of increasing revenues without raising rates.  Tax reform should tackle the issue of US corporations holding profits earned overseas to avoid paying taxes in the US.  It’s estimated that currently over $2 trillion in profits are being held offshore.  If taxed at 30% that would provide $600 billion in new revenues not to mention the long term increase in revenues annually from closing this loop hole.  I would hope that an influx in revenues of this magnitude would inspire a bipartisan effort for tax reform. 

The old adage of hope for the best and prepare for the worst has rarely been more relevant.  Our short term success of this deal with Iran is exactly that, short term.  Preparation to act militarily though is a task that isn’t short term.  It will require years of planning and a reallocation of the federal budget.  Our national debt must be addressed so that if we do have another war in the Middle East it doesn’t break the bank.  Aside from the budget, we need to learn from our past mistakes of leaving ourselves susceptible to giant price fluctuations of crude oil when we are involved militarily in the Middle East.  An energy independent America is essential in our preparations for a possible war with Iran.  Lastly, we need to be incredibly vigilante to ensure Iranian compliance with the deal.

It shouldn’t be confused that I want Iran to dissent causing a war with the West.  What I want is for Iran to understand that if they do dissent, that we are prepared to hold them accountable.  If our military is underfunded and in disarray, if our national debt is ballooning and we are flirting with default, and our energy expenditures are up 50% then it doesn’t matter what rhetoric we throw towards Iran.  They will know that we do not have the power to act, and if they know there are no consequences then they will reinstate their efforts to produce a nuclear weapon.

A strong America is our best bet to peace and stability in the region.

 

Business & Politics: 2016 Strategy

Business & Politics: 2016 Strategy: I’m concerned that the Republican’s success in the midterm elections is distracting the planning for 2016.   Midterms are a different an...