Tag: business

Dan Price, CEO who pays all employees at least $70K, adopts business model at odds with human nature

August 1, 2015August 1, 2015by Douglas Ernst10 Comments

The CEO of Gravity Payments in Washington state announced a few months ago that he was going to pay all of his employees a minimum of $70,000 per year — regardless of what position they held in the company. Dan Price was going to be part of the vanguard in the fight against income inequality. If all went well, then history would record him as a leading general in the war against human nature.

The New York Times caught up with Mr. Price, and it appears as though human nature is a worthy adversary. The newspaper reported July 31:

Two of Mr. Price’s most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle’s close-knit entrepreneurial network were also piqued that Mr. Price’s action made them look stingy in front of their own employees. …

“Income inequality has been racing in the wrong direction,” he said. “I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”

If someone is “entitled” to a “middle-class lifestyle,” then how does one define “middle-class lifestyle”?

Why does Mr. Price seem to believe it is his role as CEO to play God by defining the kind of material comforts humans are “entitled” to receive?

Why does Mr. Price — a businessman — seem to mistake the wages he pays as a representation of an employee’s value as a person instead of the value their labor brings to the company?

Mr. Price’s intentions are well and good (he took a large pay cut to try and make the numbers work), but they are clouded by intellectual gobbledygook, economic ignorance, and a fundamental misunderstanding of human nature. To make matters worse, he violates his own litmus test for the middle-class lifestyle “entitlement” by issuing a blanket $70,000 minimum wage to employees who may not be “hard-working.”

The Times continued:

Maisey McMaster was also one of the believers. […] She helped calculate whether the firm could afford to gradually raise everyone’s salary to $70,000 over a three-year period, and was initially swept up in the excitement. But the more she thought about it, the more the details gnawed at her.

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said. To her, a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.

A couple of days after the announcement, she decided to talk to Mr. Price.

“He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

Already approaching burnout from the relentless pace, she decided to quit.

The new pay scale also helped push Grant Moran, 29, Gravity’s web developer, to leave. “I had a lot of mixed emotions,” he said. His own salary was bumped up to $50,000 from $41,000 (the first stage of the raise), but the policy was nevertheless disconcerting. “Now the people who were just clocking in and out were making the same as me,” he complained. “It shackles high performers to less motivated team members.”

The reason why many “intelligent” and “hard-working” individuals do not live a “middle-class lifestyle” is not because CEOs make a lot of money — it’s because humans are complex, spiritual beings with free will.

Some people invest their cash in fancy cars or expensive vacations, while others obtain human capital. One man puts in 70 hours a week at his job while a team member clocks out a 5:00 p.m. every day. One woman decides to raise children and work part time from home, while another devotes herself solely to her career. One man spends $1,000 per year on Starbucks coffee while the other puts it into an IRA so he can start his own coffee empire by the age of 40.

The businessman’s job is not to try and put a dollar sign on someone’s worth as a person, but instead to try and figure out how valuable their work is to the company.

Mr. Price’s compassion may give Gravity Payments short-term branding as the company with a big heart, but the biggest heart in the world is of little use if warped ideas swirling around the brain bring about an untimely death. Regardless, I am looking forward to a follow-up by The Times that takes place five years down the line.

Janet Yellen: We sprayed your house in gasoline. When is a good time to light the match?

September 21, 2014September 21, 2014by Douglas Ernst2 Comments

This blog spends a lot of time covering foreign policy, terrorist organizations, and the threat they pose to national security, but one can certainly make the argument that the Federal Reserve is much more of a danger to the long-term health of the nation. These days I typically leave it to others to talk about the implications of printing dollars as if they were Monopoly money, addictions to artificially-low interest rates, and the use of inflation-as-stealth-taxation. However, Federal Reserve chairman Janet Yellen spoke earlier in the week, and it deserves mention.

The Associated Press reported Sept. 18:

Record-low interest rates will be around for at least a few more months, the Federal Reserve made clear Wednesday. Enjoy the easy money while it lasts.

By mid-2015, economists expect the Fed to abandon a nearly 6-year-old policy of keeping short-term rates at record lows. Those rates have helped support the economy, cheered the stock market and shrunk mortgage rates. A Fed rate increase could potentially reverse those trends. …

“Borrowers should see the writing on the wall,” said Greg McBride, chief financial analyst at Bankrate.com. …

Investors, in particular, might recall that mere speculation about the end of the Fed’s stimulus shook global financial markets in May 2013. In coming months, as the prospect of higher rates nears, traders might once again dump stocks and bonds and send prices tumbling.

The Jenga Economy will eventually tumble and fall on the heads of retired people, young people, and a whole host of Americans whose lives will be turned upside down when the “easy money” ends.

Former Office of Management and Budget Director David Stockman sat down with Yahoo Finance Sept. 17 and said the following about the Federal Reserve:

David Stockman: I’m worried that we’ve got the greatest bubble created by a central bank in human history. We have been shoving zero-cost money into the financial markets for six years running. This is the 68th month of zero-money market rates. We’ll that’s the kerosene that drives speculative trading. The carry trades. That’s what the gamblers use to fund their position as they move from one momentum play and trade to another. So we have basically created — the fed has created — the bubble, which is unsustainable. Everything is massively overvalued and it’s predicated on zero-cost overnight money that continues these carry trades. You can’t continue. And so, when the trades begin to unwind because the carry-cost has to normalize, you’re going to have a dramatic repricing and dislocations in these financial markets, but especially in tech.

Host: So let me ask you why investors should care now, because looking back — you know, I went back and looked at one of the last times we spoke — when you were promoting your book and you had just written a New York Times op-ed on March 30th of last year. The stock market was hitting all-time highs, and you said “Instead of cheering, we should be very afraid. If this sounds like advice to get out of the markets and hide in cash, it is.” Well, the market is up 28 percent since then, David. If people took your advice, then they missed out on gains.

David Stockman: Well look it, it’s not over until it’s over. And if people think they’re smart enough to play it by the day and trade it by the hour and compete with all of these robotic trading systems that are driving the market, then more power to them. But no one can predict when the break is going to come, when black swan is going to arrive, but when it does there will be a sharp, violent and rapid repricing. Adjustment. And so the 28 percent can disappear as fast as it appeared. […] I think what the fed is doing is so unprecedented. What is happening in the markets is so unnatural. There has been so much liquidity — and you can give all the figures — almost $4 trillion dollars has been pumped into the market in less than 70 months by this central bank and has matched by central banks all over the world — this is dangerous, combustible stuff. And I don’t know when the explosion occurs. When the collapse suddenly is upon us, but when it happens, people will be happy that they got out of the way if they did.”

Most Americans don’t speak the language of Yahoo Finance hosts, Janet Yellen or David Stockman, so I asked a well-adjusted friend of mine to explain things in a way that normal Americans can understand.

Here was his reply:

I think the govt has used every trick in the book to keep wages high and the market high. The reason we have a 30 year trade imbalance is because wages didn’t come down to meet world demand, plus unemployment, it’s a real mess. The trade imbalance occurs because all his money is pumped into the economy, income is high though we produce little; and we buy extra stuff from outside sources. Now we are trillions in debt and the economy won’t grow out of it like years past (anytime soon).

Unfortunately we have to bite it at some point and either let the dollar devalue or interest rates rise, getting our short term supply an demand curves back from artificial highs. It won’t be pretty. China keeps their currency purposefully low, that’s why people keep manufacturing there…. Hmmm, I remember Romney mentioning that and being blown off. I’d imagine they are creating some sort of bubble too.

The “normal” growth rate for our economy is roughly 3 percent, when recession hits it obviously must grow more than 3 percent to get us back to the “normal” trajectory. That hasn’t happened this time around. We stopped recessing, but we aren’t back to the desired trajectory, hence unemployment still high. So pray for a natural resource boon or some dramatic new technology to save us.

Oddly, only one president in our lifetime saw and did something about the writing on the wall, that being the first George Bush. He went against his promise and raised taxes to get the debt to a manageable percentage to GDP and to alleviate the artificial highs I spoke of. Of course that led to a split in the party, and he was vilified. Obama really was stuck in a bad boat in 2008, and in his defense it was typical government response to a threatening depression. However, due to 30+ years of a “free ride” we can’t recover fast enough to lower the debt percentage. We really have ourselves to blame from both parties.

Now you have the baby boomers wanting to retire further stressing things… Get ready for a bumpy ride!

Get ready for a bumpy ride, indeed. While it’s important to pay attention to radical Islamic terror groups, it’s also important to remember that there are many ways a nation can lose its head.

Burger King merges with Tim Hortons; greasy politicians upset no one likes Whopper-sized taxes

August 27, 2014August 27, 2014by Douglas Ernst12 Comments

Burger King and Canadian coffee chain Tim Hortons have officially pulled off the kind of merger that Walgreen couldn’t quite complete with Alliance Boots (i.e., Walgreen’ operations will continue to be based in the U.S.) As a result, the new company is primed to rake in $23 billion annually. Even President Obama’s buddy Warren Buffett is involved, with Berkshire Hathaway handing over $3 billion in preferred equity financing for the deal. The usual suspects are not happy.

Perhaps the funniest quote comes from MSNBC “conservative” Joe Scarborough:

“They’ll keep their money and we all will have to pay their taxes,” an outraged Joe Scarborough said on Monday. “So, you know what I’m going to do so I can afford to pay Burger King’s taxes? I’m just not going to ever go to Burger King again.”

“I think a lot of American should not go to Burger King again if they’re going to cheat,” he added. “It’s wrong for them to do this. They are stealing money from us.”

Why do I get the feeling that if Mr. Scarborough’s accountant were to disclose the host’s tax records for the time he’s been raking in big bucks at MSNBC that viewers would find plenty of “cheating” and “stealing” (if one defines legally keeping more of your own money as “cheating” or “stealing”) going on? Besides, I doubt that Joe Scarborough has purchased a Whopper in the last five years unless someone spread foie gras on the buns. But I digress.

It rarely occurs to leftists and faux conservatives that perhaps the government is spending too much of everyone’s money and needs to curtail its size and scope — as opposed to spending money the nation doesn’t have at a lower rate than “politician X” wanted and then calling it a “cut.”

Instead of asking the question “Why are iconic companies that have been in the U.S. for years suddenly looking for ways to leave?” pundits and politicians want citizens to believe that finding ways to legally keep more of your own money is stealing from someone else.

As Business Insider reported Aug. 25:

The news gives Democrats another talking point. The potential departure of an iconic American company because of “corporate greed” will be trotted out on the campaign trail.

Talking about “corporate greed” may rile people up (How odd that the federal government’s insatiable appetite for money is never framed as “greed”?), but at the end of the day the hard reality is that the United States is no longer the world’s outpost of economic freedom. In fact, in the annual Index of Economic Freedom put out by The Heritage Foundation in partnership with the Wall Street Journal, Canada ranks sixth, with the U.S. embarrassingly holding on for dear life to the tenth spot.

The 2014 Index concluded:

The foundations of economic freedom in Canada remain strong and well-supported by solid protection of property rights and an independent judiciary that enforces anti-corruption measures effectively. While many large advanced economies have been struggling with the heavy burden of government and fiscal constraints that result from years of unrestrained public spending, Canada’s public finance management has been comparatively prudent, with efforts to downsize government made on a continuing basis.

Canada’s economy has been resilient, benefiting from a strong commitment to open-market policies that facilitate global trade and investment flows. Efficient regulations are applied evenly in most cases, encouraging dynamic entrepreneurial activity in the private sector. Steady reduction of the standard corporate tax rate has also contributed to global competitiveness.

Meanwhile, the United States continues to backslide:

Registering a loss of economic freedom for the fifth consecutive year, the U.S. has recorded its lowest Index score since 2000. Dynamic entrepreneurial growth is stifled by ever-more-bloated government and a trend toward cronyism that erodes the rule of law. More than three years after the end of recession in June 2009, the U.S. continues to suffer from policy choices that have led to the slowest recovery in 70 years.

Until Americans stop listening to greasy politicians and start eying ways to increase economic freedom, there will be more well-known companies that close up shop or move overseas. Once you begin telling businesses that their money is your money, it is only a matter of time before the men and women in charge look for friendlier environments. That is not “corporate greed” — that is common sense.

Jesse Jackson, Sr. to go after Silicon Valley: Shakedown Rainbows never end

July 29, 2014December 11, 2016by Douglas Ernst47 Comments

The Rainbow PUSH Coalition shakedown rainbow never ends, but everyone knows that there is the equivalent of many pots of gold in the bank account of Jesse Jackson, Sr. Regardless, it now it turns out he’s going after the tech industry.

USA Today reported Monday:

Desair Brown: Civil rights activists are turning up the heat on Silicon Valley, calling on major internet firms to release their diversity numbers. I’m Desair Brown for USA Today here with Reverend Jesse Jackson Senior from the Rainbow PUSH Coalition Calling, whose partly behind the campaign. So reverend, the numbers show that the tech industry is mostly white male and asian. How have companies been able to get away with that for so long?

Jesse Jackson Senior: The media has not exposed them. Those who have been locked out if not declared they should be let in under some notion it’s somehow Magic Kingdom, kind of economic rock stars. So they have a lot of H1B workers they bring in from outside the country. There’s no job that they do that we can not do in America. So there’s not really a talent deficit; there’s an opportunity deficit. […] This is the next step in the civil rights movement.

Notice Ms. Brown’s question: She asks how tech companies have been able to “get away” with having so many white and asian employees, as if the statistic alone is proof that there is some sort of weird conspiracy to deny black people jobs at Google, Twitter, etc. Mr. Jackson takes the bait and then references minorities (asians apparently don’t count) who have been “locked out” of Silicon Valley.

The liberalism of Jesse Jackson Sr. is one that is favored by intellectual sloths out to make an easy buck or the intellectually bankrupt seeking to enrich themselves materially. As already stated, the racial shakedown is a perfect vehicle for such a thing. In Jackson’s case he’s 2-for-2, being intellectually lazy and intellectually bankrupt.

The line of questioning adopted by Ms. Brown implies that there is no point to digging into the numbers; we don’t need to go beyond Stage 1 because Silicon Valley has already been tried and convicted in the Court of Diversity.

What if Google and Facebook and Twitter all want to hire more black people, but they just don’t have a large enough pool of qualified applicants? These companies are looking for the best and brightest in the world due to fierce competition — hiring mediocre applicants just to get a good grade on some “diversity report card” is, in the tech world, suicidal.

Instead of asking Mr. Jackson how companies “get away” with having so many white and asian individuals on the payroll, Ms. Brown should have asked her guest “What does the National Center for Science and Engineering Statistics tell us about the number of women and minorities potentially available for these jobs?” She didn’t do that because a.) Jesse Jackson Sr. is only good at coming up with bumper sticker lines about “opportunity deficits,” and b.) the numbers would take her story in a realm not favorable to Rainbow Push Coalition race-baiting campaigns.

Here is what NSF said in its report “Women, Minorities, and Persons with Disabilities in Science and Engineering: 2013”:

One online search highlights quite nicely that Ms. Brown and Jesse Jackson Sr. are either intellectually lazy or disingenuous when they imply that the technology sector is “getting away” with “locking out” minorities. The fact is that American minorities as a whole (at this time) aren’t particularly interested in pursuing math and science — and when they do go into the field it’s in a “soft science” like psychology. There is nothing wrong with that, but it’s not what tech companies are looking for in an applicant. In less than five minutes bloggers can find government data that suggests the problem is a lot more nuanced than the tech-companies-are-probably-racist story, but Mr. Jackson can’t? Telling.

The interesting thing about “diversity” activists is that it’s not true diversity they want. Take for instance The Institute for Diversity and Ethics in Sport’s 2014 “Racial and Gender Report Card” for the NBA. The organization found that African Americans “comprised 77 percent of all NBA players while 80.5 percent of players were people of color.” The grade for NBA player hiring practices: A+.

From a true “diversity” point of view, that is horrible. How is the NBA “getting away” with having such a dearth of asian point guards? Why are there so few white people on the basketball court? If the field of play is supposed to be representative of the racial breakdown of the country, the Rainbow Push Coalition should be looking to reduce the number of black players (and by extension black millionaires) in the league. However, if the NBA’s goal is to have the best basketball players in the world, should it then do nothing.

Perhaps most bizarre about the Jesse Jackson Sr. worldview is that if I came up to his fans on the street and told them more black people should concentrate on science and technology, there’s a good chance they would say that I was trying to impose “white” culture on them. They would say that the history of black culture indicates that black Americans have always been attracted to the liberal arts. They would rightly note singers, dancers, musicians, comedians, etc. as all the reasons why I should just mind my own business and not worry about whether or not a black kid from Chicago wants to be the next Michael Jordan, the next Oprah Winfrey or the next Steve Jobs. The end result is that diversity activism boils down to “I want what I want when I want it.” What constitutes “diversity” is completely arbitrary. When numbers can be used as a racial cudgel, expect to be beaten. When numbers are inconvenient, it’s none of the white/asian guy’s business — stop trying to change my culture, Mr. Ernst.

If Mr. Jackson really believes that there is an enormous pool of black talent that isn’t being tapped, then he should start his own tech company with an all-or-mostly black staff just to prove a point. If Silicon Valley has really “locked out” black techie all-stars, then it has willingly denied itself massive profits. Mr. Jackson should have no problem finding recruits for a new company that will be based out of Chicago.

New York Times to Walgreen: You’re unpatriotic if you don’t love high tax rates

July 23, 2014July 23, 2014by Douglas Ernst34 Comments

A recent New York Times article by Andrew Sorkin is unintentionally hilarious from start to finish. He’s upset that a number of companies, such as Walgreen, AbbiVie, Medtronic and many others are all well on their way to moving overseas. I’d look for the Andrew Sorkin piece calling billionaire John Kerry “unpatriotic” for docking his luxury yacht out of state to avoid paying Massachusetts taxes, but I doubt it exists.

Mr. Sorkin wrote for the Times June 30.

Alarmingly, dozens of large United States companies are contemplating the increasingly popular tax-skirting tactic known as an inversion. Under the strategy, companies merge with foreign rivals in countries with lower tax rates and then reincorporate there while still enjoying the benefits of doing a large part of their business in the United States.

In Walgreen’s case, an inversion would be an affront to United States taxpayers. The company, which also owns the Duane Reade chain in New York, reaps almost a quarter of its $72 billion in revenue directly from the government; it received $16.7 billion from Medicare and Medicaid last year.

“It is unconscionable that Walgreen is considering this tax dodge — especially in light of the billions of dollars it receives from U.S. taxpayers every year,” Nell Geiser, associate director of Change to Win Retail Initiatives, a union-financed consumer advocacy group, said in a statement.

Frank Clemente, executive director of Americans for Tax Fairness, called it “unfair and deeply unpatriotic if the company moves offshore while continuing to make its money here, leaving the rest of us to pick up the tab for its tax avoidance.

The last time I checked, Walgreen provides goods and services worth at least $16.7 billion to individuals who utilize Medicare and Medicaid — it isn’t simply holding out its hands and asking for taxpayer cash. It would be an “affront” to American taxpayers if Gregory D. Wasson, the chief executive of Walgreen, refused to pay his water bills for a decade and then demanded someone else pay them when he was drowning in debt (i.e., the citizens of Detroit).

In terms of patriotism, Mr. Sorkin and Mr. Clemente of Americans for Tax Fairness have it backwards — the patriotic thing to do is for Americans to protest high taxation. I applaud Walgreen and any number of pharmaceutical companies for packing up and moving overseas. You can only demonize the men and women running businesses for so long before they get fed up and leave. Instead of asking, “How do we make America more attractive to companies on the other side of the globe?” the New York Times throws socialist temper tantrums.

Mr. Sorkin continues:

The current law allows a company to reincorporate abroad if it acquires a foreign company in a transaction that transfers more than 20 percent of the shares to foreign owners. President Obama has sought to raise the threshold to 50 percent. While many Democrats appear to support a short-term solution, some Republicans, arguing that a Band-Aid approach could have unintended consequences, instead want to address inversions only in the context of an overall corporate tax overhaul bill.

Whereas Republicans realize that perhaps the corporate tax code is a nightmare, President Obama just wants to force companies to withstand significantly more pain before they make the decision to move. The beatings will continue until morale improves.

And finally, we have Senator Dick Durbin of Illinois:

Senator Richard J. Durbin, a Democrat from Walgreen’s home state, Illinois, told The Chicago Tribune last week: “I am troubled by American corporations that are willing to give up on this country and move their headquarters for a tax break. It really speaks to your commitment.”

Poor Dick doesn’t realize that American corporations aren’t giving up on America — they’re giving up on guys like him.

If America is no longer capable of being one of the world’s few outposts of economic and political freedom, then corporations have a responsibility to search out countries that are willing to take on the role. If U.S. citizens are unhappy with the business landscape that takes shape in the years ahead, then the blame will rest squarely on the shoulders of men like President Obama and Senator Dick Durbin.

‘Maximum wage’: America’s Communist thugs deny they are Communists, sell tyranny as compassion

April 23, 2014December 13, 2015by Douglas Ernst29 Comments

Imagine there was this guy named Steve Jobs. He had a vision for a computer company that he wanted to make. He had all sorts of ideas for weird devices he just knew in his heart people would love. He would call them the ‘iPad’ and ‘iPhone’ and ‘Mac’ (people would love it like the McDonald’s Big Mac, but this would actually raise the standard of living for hundreds-of-millions — perhaps billions of people — instead of cholesterol).

In order to achieve his dreams in a limited amount of time (who knows when we’ll kick the bucket — we can all die at any moment), he needed to raise a lot of money. He needed the freedom to run a company as he saw fit. He needed to pay himself and his employes what he believed would bring that dream closer to fruition. In short: He needed to do what he wanted with capital he acquired through legal means.

Enter egg-headed American Communist thugs who deny they are Communist thugs while selling tyranny as compassion:

Nearly everyone writing on the subject [of income inequality] agrees that inequality is increasing, and growing numbers of Americans are troubled by the trend. The question is what can be done about it.

Increases in wealth, inheritance, and incomes taxes certainly might do some good.

But not as much as imposing a maximum wage.

No, this isn’t some Marxist fantasy. It’s a clear-eyed response to the fact that in 2012 the ratio of CEO compensation to that of a typical worker in the United States was an astonishing 273-to-1. …

CNN columnist John D. Sutter has smartly suggested a maximum wage set at 100 times the federal minimum wage of $7.25 an hour (or $15,080 a year based on a 40-hour work week). That works out to a maximum of roughly $1.5 million a year.

Or if that’s too harsh, how about making it 200 times the minimum, raising the maximum to $3 million a year. Hell, we could even peg the maximum to 1,000 times the minimum wage — $15 million a year — and still allow CEOs to be filthy rich while reining in the most obscene excesses at the very top.

Now imagine that you’re Steve Jobs. What would you do? Because you’re a visionary, you might still accomplish your dreams, but there is no doubt that a very low ceiling has been placed over your head. And that ceiling, thanks to tyrannical thugs at mainstream media outlets across the nation, might not be one you can bust through.

Here is what Mike Fossum of the International Space Station said of Steve Jobs upon his death:

In every generation there are great thinkers and people that have the vision of what can be and then have the energy, the skill, and the genius to make it happen. Steve Jobs is definitely one of those rare individuals, and the world’s gonna miss him a lot,” — Commander Mike Fossum of the International Space Station.

In an alternate reality, where guys like CNN columnist John D. Sutter and Marxists who deny they’re Marxists have had their way, Commander Mike Fossum of the International Space Station says this of Steve Jobs:

“Steve who?” — Commander Mike Fossum of the International Space Station; Communist Reality 616.

Everyone on earth has different dreams and ambitions. “Income inequality” can result from any number of things, and only greedy and envious losers who seems to think there is a giant money pot with a fixed amount of cash in it are interested in arbitrarily setting the wages a man can pay himself — at his own company.

Money does not matter to me. I honestly do not care about money, aside from being able to be my bills. I enjoy writing, and I’ve always said that I’d be happy working at Panera Bread as long as I could go home at the end of the day and write my blog, work on my book and dabble around in other creative endeavors.

However, because I don’t care about money, there is no doubt that I am making less than I would if I did make it a high priority. And yet, Communist thugs from ‘The Week,’ CNN analysts, and hacks like Paul Krugman use me — and others like me — in statistics to prove that I am “exploited” and that other men should be shackled from making large sums of money at their own companies. Why on earth would I care if someone like Mitt Romney makes millions of dollars a year in the private sector? Why should I care what men in the vein of Steve Jobs pay themselves in the finite amount of time they have to walk the planet? If a man’s goal is to experience what it feel like to make $10 billion while he walks the earth, I wish him the best of luck and do not want to see him hampered by envious individuals with less drive and determination than he.

There are many reasons why income may differ from person to person over time. None of them have anything to do with nefarious plots to keep “the poor” (as if “the poor” is a static group) poor. Fee markets — true free markets — are not zero-sums games. When one man profits, it does not necessarily mean that one man must lose something.

If a man makes his fortune through legal means, his hopes and dreams should not be encumbered by tyrants cloaked as compassionate saviors.

I posted Lee Doran’s take down of the ‘income inequality’ crowd before, but I think that it’s time to post his video again. I don’t like to throw the word ‘evil’ out very often, but a person who tries to convince others to voluntarily embrace tyranny and servitude is engaging in an evil act.

When government gets in the gay wedding cake business, it’s a recipe for more rules, regulations

January 22, 2014January 22, 2014by Douglas Ernst43 Comments

With gay marriage comes the need for gay-themed cakes. Simple, right? Sadly, no. First there were stories of bakers denying cakes on religious grounds in Denver, and now we have a similar story in Oregon. The bakers who are refusing to bake cakes for gay couples seem to be fighting an uphill battle, but should the government be in the business of telling companies who they must cater to?

CBS Seattle reports:

ORTLAND, Ore. (CBS Seattle/AP) — An Oregon bakery stands by its decision to deny a cake for a same-sex wedding.

The owners of Sweet Cakes by Melissa tell KATU-TV that their religious beliefs have not changed after Oregon’s Bureau of Labor and Industries determined the Portland-area bakery violated the civil rights of a same-sex couple. Owner Aaron Klein says it almost seems as if the state is hostile toward Christian businesses.

“We still stand by what we believe from the beginning,” Klein told KATU-TV. …

Lewis & Clark law professor Jim Oleske says Oregon is one of 21 states that protect against discrimination based on sexual orientation.

“Based on cases in every other state that has confronted this so far, this business is likely to lose on its claim that it can be exempt from an anti-discrimination law,” Oleske told KATU.

If I owned a bakery and I had a competitor who didn’t like gay people, minorities, Muslims, Asians, white people — any group that has a population of cake eaters among its ranks — I would make a lot of cash. I would serve all of those groups tasty cakes like they’ve never tasted before and they would return to ‘Dough Ernst’s’ for all their confectionery needs. And then I would say: “God bless the free market!”

If my wife and I walked into a bakery and the owner said, “Sorry, we don’t serve interracial couples,” I’d say, “Awesome. Thanks, jerk.” I’d walk out the door, find another bakery, and then I’d spread the word that ‘Bakery X’ doesn’t take kindly to our willingness to “dilute” our races (or whatever it is that a bigot baker would say).

The free market punishes racism and bigotry, and if the cost of upsetting large swathes of the community is worth it for a company, in most instances they should be able to do that.

Exhibit A, the Bank of Italy:

In the early 1900s, Italian immigrants were denied loans because … they were Italian. A guy named Amadeo Giannini started the Bank of Italy in San Francisco. Without getting into the history of Bank of Italy, let’s just say that in 1930 the bank was renamed Bank of America. The point is, the Bank of Italy — and all the success that followed for Mr. Giannini — would not have unfolded the way it did if other bankers simply loaned money to Italian immigrants. Given a chance to work, the free market will punish bigotry.

Once the government gets its hands in an industry, however, it’s generally a recipe for disaster. Expect all sorts of strange and bizarre lawsuits in the years ahead as a result of the gay wedding cake conflicts. The end result will be a myriad of rules and regulations heaped upon an existing mountain of them.

Twinkie the Kidiot: Union greed kills Hostess

November 16, 2012November 16, 2012by Douglas Ernst10 Comments

twinkies 2 — Rest in peace, Hostess. If it’s any consolation, everyone knows who your murderer is. He did it right out in the open. It’s as simple as pie stuffing: murder by union.

The Twinkie is dead — and unions killed it. Correction: Hostess is dead — and unions killed it. 18,000 people are now well on their way to collecting 99 weeks of unemployment checks, and it’s because the Bakery, Confectionery, and Tobacco workers and the Grain Millers International Union never listened to Kenny Rogers: “You got to know when to hold ’em, know when to fold ’em, know when to walk away, know when to run.”

Well, now the dealing is done, and the people who provided food for their families by providing pie filling for Hostess confectionery treats (Or was that the union bosses who all look like they gorge themselves on Twinkies?) found out how the class warfare rhetoric of goons like AFL-CIO President Richard Trumka plays out in real life. The last Ding Dong hasn’t been purchased off the Target shelves and he’s already referencing “Bain Capital” in his Twinkie attacks.

No, Mr. Trumka, the problem is not Bain Capital. The problem is guys like you. And Howard Dean:

“I think the debate for the new generation, instead of capitalism or socialism, is we’re going to have both, and then which proportion of each should we have in order to make this all work,” (Howard Dean, April 5, 2009, Paris, France).

There it is. Like the vampires they are, unions and their liberal allies suck the lifeblood out of companies as much as possible, while leaving just enough to continue to keep them alive. In the case of Hostess, they sucked on the jugular for far too long, and now the company is a corpse. The union bosses will move on to the next company in the next state.

Ask yourself: How do you simultaneously have capitalism and socialism? Answer: You don’t. It doesn’t work if your goal is to maximize individual liberty. The two are fundamentally different worldviews, and when you try and come up with some magical mixture of the two, like Howard Dean, you end up with $16 trillion dollars in debt, entitlement programs on autopilot and politicians who don’t have the courage to confront economic ticking time bombs in the making.

In the past few days I’ve heard multiple liberal outlets try to make the case that the Bush era tax rates are primarily to blame for our national debt. It’s blatantly dishonest, and if one agrees with the premise that these are intelligent human beings, it is hard to come to any other conclusion than that these people are diabolical bastards. They would rather doom future generations to a lower standard of living and back-breaking debt than discuss economic realities that threaten their ideology.

The sad thing is, there are tens-of-millions of Americans who will buy the Trumka line that “Bain-style vultures” are what doomed Hostess. I would argue that the truth is something more akin to “San Bernardino-style vultures.”

The city’s decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America’s largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.

Little by little, over many years, the salaries and retirement benefits of San Bernardino’s city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

$16 trillion. $17 trillion. $18 trillion. $19 trillion. $20 trillion. At what point will the economic “big one” occur? The fault lines are obvious. The ground is rumbling. And yet, the American people just re-elected a guy who is willfully downplaying the seismometer readings. If you haven’t been practicing, get ready to duck and cover.

Hostess shelf — I went to Target after dinner tonight to see if there were any Twinkies left. Sadly, the shelves were picked over. Somewhere, there is a zombie apocalypse bomb shelter that is stocked to the hilt with Twinkies. See you on the other side, Twinkie the Kid. I’ll see you on the other side… (Sniff.)

Gawker attacks wealth creators in smorgasbord of stupidity

August 9, 2012August 9, 2012by Douglas ErnstLeave a comment

pg-22-gates-AP_100149a — Bill Gates is scratching his head, mainly because he doesn’t get why liberals are so envious of him. His products have raised the standard of living for hundreds of millions (perhaps billions) around the globe, and yet writers at Gawker think his annual income should be capped at $5 million. How do you run the Bill and Medlinda Gates Foundation on a few million bucks a year, you ask? Don’t ask Gawker — they haven’t thought about that.

Every once-in-awhile liberals say what they really mean, and when they do it’s grand because the average American recoils at unbridled statism. Sometimes it comes in the form of the President of the United States saying things like “there are plenty of smart people” or “you didn’t build that.” Those instances are golden. Unfortunately, most politicians are too disciplined to do that sort of thing, and what we’re left with are sites like Gawker, where writers convince themselves they don’t sound like incredibly scary, elitist snobs when they say:

“Let’s have a maximum annual income of, oh, $5 million, pegged to inflation. All income above that would be taxed at 99 percent. Our precious national sports stars, celebrities, and corporate executives could still be fabulously wealthy. The daydreaming poor could still have a nice big number about which to hopelessly dream. Five million dollars a year. Five million! … It’s everything that any reasonable person could ask for, financially speaking. …

I defy the slickest PR firm in America to explain to a nation of struggling, underemployed working class people with a median household income of just over $50,000 why an already-wealthy person felt the need to leave the country [France, which is raising taxes on earnings over $1.2 million a year to 75 percent] — taking money out of the taxpayers’ pockets in a very literal sense — rather than donate, to the common good, earnings over one hundred times the nation’s median household income. …

This is not primarily about raising our total national tax revenue. That’s a far broader issue. This is about inequality. It’s about what type of nation we want to be—what level of inequality we are willing to tolerate in order to protect a vague and twisted notion of “freedom” that most people cannot even fully articulate, and that was created by the rich to serve themselves,” (emphasis added).

Where does one start with a smorgasbord of stupidity? A blog post on statistics alone (e.g., mean, median and mode) would do it, but that’s too dry. Let’s just consider that homework.

Who defines “reasonable” in the leftists’ ideal world? What a coincidence: They do. If you’re a writer for Gawker, it’s 5 million dollars. If you live in Maryland, it’s $100,000. Either way, self-righteous masterminds think they have to right to tell you when “you’ve made enough money.”

Conservatives have this crazy notion that when you make money through legal means that it’s your money. Liberals like Hamilton Nolan believe money you made through legal means is a.) “the taxpayer’s money” or b.) for “the common good.”

See where the disconnect is? If not, here’s an example:

Say there’s this guy named Bill Gates, and he starts making a lot of money with a product that he thinks could raise the quality of life for hundreds of millions, if not billions of people. He has big ideas — really big ideas — but he knows he’s going to need to raise a ton of cash to do it. In the conservative world, Bill Gates makes billions of dollars with Microsoft and then goes off to start the Bill and Melinda Gates Foundation and he’s cheered for all the wealth and joy and comfort his contributions have brought to society. No one begrudges his wealth, and parents tell their kids, “One day you can be the next Bill Gates, although I think you’ll be better than Bill Gates if you put your mind to it.” In the world of the liberal mastermind, Mr. Gates is “greedy” because he wanted to keep what was rightfully his to begin with. Bill never really helps the “common good” unless his money is first funneled through a government bureaucracy and then doled out to whatever groups or organizations the Sovereign deems worthy.

One lesson down and one to go: History. Gawker needs it.

Not too long ago I pointed out that Chris Rock was an ignorant boob, whose public statements suggest he doesn’t even realize that the founding fathers literally risked their lives — and often depleted their life savings — by becoming an enemy of the Crown in their quest for freedom. Regardless, it doesn’t stop men like Mr. Nolan from saying that the “rich” set up a system that only served “the rich.” They ignore the fact that we went from being a fledgling republic to the world’s lone super power in just over 200 years. They ignore the fact that President Barack Obama exists. Where is the Italian Barack Obama or the German Barack Obama or the French Barack Obama? They ignore Ford Motor Company, Sears, McDonalds, Apple, Bank of America, and many, many other success stories that highlight just how exceptional this nation is.

Why should liberals from Gawker magazine get to determine how much money our star athletes and musicians and businessmen make? Michael Jordan filled arenas with his talents and indirectly created countless jobs (e.g., Nike, vendors, clothing companies). The idea that the federal government should be able to tax any of his earning over $5 million dollars, at a 99 percent rate, is morally repugnant. Likewise, the same goes for the talented entrepreneur who stays up late for days and weeks and months figuring out how to get their business off the ground. The guy or girl who takes huge financial and personal risks to realize a dream is not greedy for wanting to keep the returns on their investment, and even if they were who cares because it’s their money.

We have one life. One. And in that life we have a very limited amount of time with which to pursue our passions and dreams. For the men and women who work hard, play by the rules and are financially rewarded for doing so, using the coercive force of the federal government to confiscate those returns and redistribute it to a third party based on the caprices or political favors of politicians is wrong.

Conservatives have a duty to stand up to leftist whiners who write for websites and suddenly feel as though they’re entitled to the monetary rewards of the businessman who turned a vision in his head into a small business and ultimately a cash cow of a corporation.

Now if someone would just say that to President Obama on the campaign trail…

Telling: JPMorgan probed while the U.S. Postal Service loses billions

May 16, 2012September 22, 2012by Douglas Ernst13 Comments

It is extremely interesting that JPMorgan Chase — historically a solid investment bank — makes some dunderhead investments and loses $2 billion, and suddenly it’s getting investigated by the Department of Justice. Meanwhile, the United States Postal Service loses billions every year and nobody bats an eyelash.

As Reuters reports:

The Postal Service said its loss widened to $3.2 billion in the first three months of 2012 and repeated on Thursday its warning that it will likely default on payments to the federal government unless Congress passes legislation offering some relief. …

The agency, which does not receive taxpayer funds and has been losing billions each year as Americans communicate online, said it lost $2.2 billion in the same period in 2011. …

The Postal Service lost $5.1 billion in fiscal year 2011 and was unable to make a massive annual payment for future retiree health benefits, which is required by law. The agency said much of the loss during the second quarter of 2012 came from setting aside funds for the $11.1 billion that is due this year.

So it “does not receive taxpayer funds” but yet it requires “legislation offering some relief.” Am I living in the Twilight Zone? It doesn’t require taxpayer money, but yet it does to the tune of $5.1 billion dollars if it’s going to survive? How does that work? If someone can tell me how this so-called independent agency can simultaneously be independent from and dependent on the federal government for its survival, please let me know. Has the USPS ever turned a profit in the past decade? If the answer is no, then its “independent” status is moot.

As our good friends at The Heritage Foundation note:

While the focus right now centers on the pre-funded pension benefits, the real reason for the USPS’s dire financial straits is the steady decline in mail volume as customers increasingly use electronic communications. Times and technology have changed; the USPS has not.

Regardless, the point is, why is JPMorgan Chase being singled out for bad decisions when the United States Postal Service made 5.1 billion bad decisions in a single year?

The FBI has opened an inquiry into the multibillion-dollar trading losses at JPMorgan Chase, stepping up pressure on the bank after key U.S. agencies said they were looking into high-risk trades that first drew regulators’ attention last month.

Do you know what happens when you stop people from taking risks in a capitalistic economy? Answer: You stop people from being rewarded for those risks. JPMorgan Chase, again, has a good track record of making money for its shareholders. The federal government has a great track record of losing trillions of dollars and then telling you not to worry about it. They do that because the politicians in charge now will be dead or long gone by the time you and your kids get run over by a debt-Zamboni the size of a house.

But you should worry about it, and Exhibit A is Greece. The country is imploding before our very eyes, there’s a run on banks and they have no one to blame but themselves. The difference between Greece and the United States is that no one can bail us out. No one. We’re too big, and if we fall it will be the crash heard ’round the world. And like the Greek tragedy happening overseas, it will be our own fault.

In short, White House Press Secretary Jay Carney inadvertently spelled out the limits of the federal government when he admitted reams upon reams of regulation “can’t prevent bad decisions from being made on Wall Street.” Most Democrats are actually calling for more regulation, which does nothing to fix Carney’s astute observation of the human condition and everything to highlight why liberals are incredibly scary; in their insatiable quest to control the uncontrollable they are willing to use any excuse to consolidate more power. They truly believe that if only they have their hands on more levers of power they’d eventually find the right combination of pulls and pushes and tweaks to get their desired result: total equality.

But human beings are complex. Some are smart. Others are dumb. Some are ambitious, while others are lazy. Most are honest, but many are devious. And so, the liberals’ plans always fail, but instead of ceding power to capitalism — that beautifully imperfect system that sorts through all the madness better than any other that has ever been devised — they double down. Again and again they ask for more power and more money, and every failure of theirs is attributed to a JPMorgan Chase or Bain Capital or Mitt Romney or some boogeyman that can distract from the failures of centralized planners run amok.

Don’t be distracted by their attempts to draw attention from their abysmal performance. Our elected leaders have composed a national disaster to the tune of $16 trillion dollars. They should be the object of our disdain at this time. An investigation of JPMorgan Chase, you say? I can think of 535 other investigations that would be more worth your time, Attorney General Eric Holder. Hint: They’re all local to Washington, DC.