Republicans are Soul Searching With the elections over, the Democrats are celebrating and the Republicans begin the long recovery process. The Republicans haven't been in such a minority status since the 1970s. You remember how wonderful those days were. Recently I heard interviews with several Republican congressional leaders and you can hear the pain in their voices as they begin some serious soul searching.
The Democrats and mainstream media are full of advice for Republicans. They are arguing that the party failed because it isn't like the Democrats enough. It has failed to fully embrace big government, isn't socially tolerant enough, and hasn't made enough concessions to foreign adversaries. The reality is, John McCain advocated border "reform" that undermines our sovereignty, campaign finance reform that weakens the First Amendment, and simply didn't understand the role of tax cuts in generating revenue and prosperity (no, not Obamas welfare plan in the form of tax cuts, but actual wealth generating fiscal policy). I have a contrarian view from the media and Democrats, I believe the GOP didn't act Republican enough. There is no question the Republicans need to make some changes. Here are a few suggestions:
- Restore the three legged stool. Ronald Reagan was the most successful Republican in modern history and his message was powerful but simple. He promoted traditional family values, economic freedom (less taxes and government), and a strong national defense. These themes -- often seen as "polarizing" by the mainstream media -- made the Republican Party the majority party through the 1980s and led to the restoration of its prominence in 1994 with the Contract with America led by Newt Gingrich. The GOP needs to restore these principles in its message.
- Appeal to the rank and file. Although my main passion today is economics, I got interested in the Republican party while in high school for different reasons. I became a Christian at the age of 16 and believed that my faith should play a role in every aspect of my life. The Republicans were strongly pro-life and that was clearly the Christian worldview, in my opinion. The stronger the GOP was in that arena, the more involved I wanted to be. The softer those positions, the weaker my interest. It is the same with other positions. Strong defense, free markets, and limited government. The more passionate the GOP is, the more passionate that base will be.
- The GOP needs to clean House (and Senate). Just this week the House elected new leadership and in a surprising move they kept John Boehner as Majority Leader. Until the final months of '08 Boehner had been the king of the "get along" gang and he went to extraordinary lengths to be accommodative with the liberal majority rather than represent the interest of Republicans. There was some good news at the House Republican Conference with conservative Mike Pence taking over that position. In his acceptance speech he indicated that he was going to do what he could to move the party back to its roots. Also, conservative Eric Cantor of Virginia becomes the new Minority Whip.
- Republicans should build on its strengths. The one silver lining in this electoral disaster is that the vast majority of the Republicans who lost were moderates. I would rather have a smaller group of conservative Republicans in the Congress than a larger one dominated by moderates. These moderates who lost should send a firm message to other members of what doesn't work for Republicans. If the voters have a choice between Democrats and Republicans who act like Democrats, they will always choose the former. We need real Republicans and need to promote a conservative agenda in Congress.
- The new GOP chairman needs to be a true conservative. There is a great deal of discussion about Michael Steele (former Lt. Governor of Maryland) running for the party's top post. Steele is treated as a serious conservative by the mainstream media. The reality is that Steele is eloquent and smart and very conservative by Maryland standards (I know, I lived there before). We need someone who is conservative by every standard. I love having someone like Steele on our side, but I would like to see a chairman who believes recruiting conservatives to run for office is a top priority. I am concerned that Steele won't share that objective.
- Efforts should be made towards ending open primaries that allow independents vote for candidates in the winter and spring whom they will vote against in November. If you had to be a Republican to vote in the New Hampshire primary, it is highly unlikely that McCain would have been the Republican nominee. We would have had a true conservative which would have improved our odds.
This list is just a beginning. The GOP needs to do an inventory of what works and what does not work and I am sure the latter would be quite long. The single most important thing it should do is be highly selective of where it gets its advice and should simply choose to ignore the opinions of the mainstream media and the Democrats, which both want the Republican party to stay the minority. Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. I've Heard of Cheap Deals, but this is Ridiculous In spite of how pathetic Michigan's economy has become, it still raised my eyebrow when I heard that a house was being sold for $1. I honestly thought I had seen it all in the world of transactions until I opened up my Mediabistro ezine today.
Bistro reports: "Yesterday, after hearing about OpenGate Capital's purchase of TV Guide we wondered why the company would buy the struggling pub, writing, 'Honestly, it's a little hard to understand what OpenGate sees in the magazine, even if the purchase was for an absolutely rock bottom price.'"
"Well, it turns out that was 100 percent the case. Advertising Age's Nat Ives found out that the investment company bought the mag for a grand total of $1. Furthermore, Macrovision — which owned TV Guide — will give OpenGate a $9.5 million loan at three percent interest, a great deal in these uncertain times."
"But still, the magazine lost $20.3 million in 2007. What is OpenGate thinking? Its managing partner Andrew Nikou told Ives his company's thought process: 'The reason we acquired this business is simple. It needed additional investment. We're investing in this company to take it to the next stage.' Good luck with that, guys"
Essentially, TV Guide has devolved into a venture capital deal. It is clearly more than an idea, since it has decades of history behind it. But it has such a terrible track record to stand on and is back to square one in making a case for its continued existence. TV Guide has all the elements of a free rag, but they are still trying to "sell it" as a viable subscription publication. Thanks to the large number of cable and satellite services, it is very difficult for a print publication to provide thorough information on specific programming. That leaves the Internet. Meanwhile, all of the companies that provide programming (like cable companies) gladly tell you what is on their systems. Better than a magazine or a website, they do it through the remotes they provide. It is simply too simple to use any other means.
I don't see how there is a market for a TV Guide and don't think there has been a need for such in years. But old business models die hard. Just ask the US automobile industry. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Link Between Poverty and Politics Several years ago I served on a panel in a televised debate in which three conservatives faced off against three liberals on how to solve poverty problems. The only person I remember on the other side was Congresswoman Sheila Jackson Lee. Over the years I have participated in a huge number of debates and other forums, but this was one of my favorites. I got to call one of the most liberal Members of Congress that she was a "poverty pimp" to her face. I doubt I will ever forget the look on her face.
Sheila Jackson Lee is one of many liberal politicians who survive off of poverty. If her constituents some how became affluent -- in spite of her best efforts to fight such -- they would throw her out of office at their earliest opportunity. This is because her high tax and big government worldview is opposed to the idea of wealth creation.
Lee is not the only one. The United States Census Bureau creates an annual list of the poorest cities in the country. It is pretty easy to notice the link between the cities economies and their politics. The following list is in their proper order and includes the percentage who are in poverty:
1. Detroit, 32.5. Detroit has consistently been one of the most Democratic cities in the country for almost four decades and during that time, one of the most poor.
2. Buffalo, 29.9. This city has not elected a Republican mayor since the 1950s.
3. Cincinnati, 27.8. This poor city actually had Jerry Springer as a mayor and has not had a Republican mayor since the early 80s.
4. Cleveland, 27.0. This city has not had a Republican mayor since 1989,'
5. Miami, 26.9. This city has never had a Republican mayor.
6. St. Louis, 26.8. This gateway to the west hasn't had a GOP mayor since the 1940s.
7. El Paso, 26.4. This town has never had a Republican mayor.
8. Milwaukee, 26.2. You have to go to the turn of the last century to find a time this city has elected a Republican mayor.
9. Philadelphia, 25.1. Not since the 1970s has this town been able to produce a Republican mayor.
10. Newark, 24.2. Like Milwaukee, you have to go back to the beginning of the last century to find a GOP chief executive for this city.
Democrats consistently promote policies that are hostile to business, gives incentives for people to be poor, and punishes success. They simply don't understand that the behaviors that people promote on the micro level -- rewarding good behavior, discouraging sloth, and encouraging achievement -- work equally well on the macro level.
This may be why so many businesses are concerned by the rise of a Barack Obama. He grew up as a "community organizer" (which is a politically correct euphemism for "poverty pimp") and made his money helping people be comfortable in their economic condition rather than encouraging them to get out of such. This unique background and his stated economic policies may be the exact reason why we are seeing the massive layoffs today. Yes Mr. Obama, business gets the message and so are millions of other Americans facing poverty.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.
US Businesses Vote with Their Pink Slips Before President-elect Barack Obama had a chance to resign from the US Senate there was an out pouring of pink slips through out US industry. Some may argue that they would have happened regardless of who won, but I found it interesting that these businesses held on to these many employees until after the election either to boost Republican hopes for reelection or to make a protest statement if things didn't turn out favorable for business.
We already knew that the job creators -- businesses of all sizes -- were supporting McCain and it wasn't even close. According to CEO Magazine's survey, over 80 percent of CEOs favored McCain over Obama. McCain's support or the fear of Obama was overwhelming.
However, a majority of Americans didn't seem to care. They desired a "tax cut" over a job (although we are now told that being employed will be a requirement for such a cut). It appears that many of them will enjoy neither.
Barron's notes that "A week ago, we got word that the number of unemployed Americans in October shot up by 603,000, the second largest increase in 28 years! Today, the Labor Department tells us the deterioration actually accelerated in the first days of November. The number of people seeking unemployment benefits surged by 516,000 in the week ended Nov. 8. This is the largest weekly increase since immediately after Sept. 11 and the second biggest in 16 years. At this point, more Americans are collecting unemployment insurance than at any time in a quarter century, with some 3.9 million on the dole as of Nov. 1, a 51% increase from a year ago."
The timing of these layoffs and the elections are more than coincidental to me. They are directly connected. I have been told by business owners for months that if Obama was elected, jobs would have to go. We don't know if the new President will keep his promises, but business owners certainly have. Businesses through out the country are having a second election and it is costing Americans their jobs. I don't blame American enterprise, however, but the new Administration that has a predatory view of it.
The current scenario reminds me of a mild version of Ayn Rand's Atlas Shrugged. In the Objectivist philosopher's book, she describes a scenario where the "men of the mind" go on strike and stop contributing to commerce, art, culture, inventions, etc. In that book the people that drive the economy grow tired of being mistreated by the excesses of government and they simply stop working. No, we are not quite there yet, but give us time.
Who knows, Obama might be the pragmatist he claims he wants to as he has stated in a recent interview. The media, however, isn't buying it and in light of his rhetoric and record, I cannot blame them. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Could Democrats Reverse Capital Gains Increase? Although the Stock Market closed today with a dramatic high in single day totals, the market itself is in a continued state of decline. This decline can be attributed to several factors, I'm sure, but one that has been largely neglected in the business banter of today is the looming capital gains tax that will go from zero to 20 percent in January 2009. Ask people on Wall Street and they will be the first to point this out to you. That increase provides enormous downward pressure on the Dow.
We are less than three months away from a significant cut in profits, thanks to the capital gains increase. In the mind of investors, the value of stock is declining on virtually a daily basis. As each day goes by people are reminded that the stock they own is going to see a twenty percent drop overnight. This increase is one of the single biggest jumps in history. It is happening because the capital gains portion of the Bush tax cuts that contributed to historic prosperity will come to a screeching halt on New Year's 2009 and the level will retroactively return to those earlier highs. Candidate Obama and his Democrat cohorts could easily argue against the horrors of Wall Street and make their case against wealth creation when they were in the opposition, but now they are about to control the White House and both Houses of Congress. Their commitment to wealth distribution and opposition to capitalism will now under go a serious test.
Don't be surprised if Obama and company blinks. I could see him quietly ask the Congress to suspend the capital gains tax increase or (at least) reduce the increase even before he takes power. I wouldn't be surprised if Congress complies and Bush passes it into law. It would make sense for it to happen now, under Bush and the timing of some level of improvement could be linked to Obama's Inauguration (the media would certainly help maintain the Messiah persona through such an association). Meanwhile, if Obama waits until he becomes President and pushes a suspension of the capital gains taxes, he would be exposed as a very serious hypocrite. Bottom line, Obama's philosophy is facing a very serious dose of reality. He might very well find it useful to test the power of free markets and the use of incentives in tax policies.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. The Price of Business and the "Syndication Effect" One of my objectives is to get the media that my company is developing in front of as many ears and eyes as possible. That is, after all, the purpose of media. The Price of Business Show is the longest running program on CNN 650, which is in the Houston market. Lately, I have been getting calls and emails from all over the country. Florida, Michigan, New Jersey, Pennsylvania are just a few of the states that have been taking a part in the program (you will get an example by clicking the image above). Thanks to the Internet, the show may already be "syndicated." I like to call this phenomenon the "syndication effect." We are nationwide, even thought the program is broadcasted locally.
CNN 650 is a partner with AOL radio and as a result, many of my listeners are listening to my show in their car, on the bus, and at the restaurant on their Ipods. Furthermore, with the ease of finding our media through Google searches (with over 150,000 unique visitors each month) and our growing business media platform (including USBusinessDaily.com, ChicagoBusinessDaily.com, etc.), our reach is only expected to expand.
The syndication effect doesn't end with AOL radio. Rarely does a day go by that I don't see an article of mine from BizPlusBlog.com in Reuters.com, USAToday.com, ChicagoSunTimes.com, or other major media. Blog syndication services, such as Blogburst, is continually changing the way people get seen and heard.
A very popular concept these days is the effort to become "almost famous." With some solid and consistent content and strong efforts to get your information seen, it is easier than ever. Furthermore, with websites like ours enjoying visitors measured in the hundreds of thousands monthly, it is very feasible to be a player in media today.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Domestic Drilling, Barack Obama, and Executive Orders Executive Orders are a favorite tool of Presidents to promote their political agenda. Some times they actually alter policy because they address issues that have no specific legislative limitations. In other cases, they are a form of protest or persuasion, because they go against the current law of the land. An example of this was President Bush's Executive Order to lift some of the restrictions on domestic drilling. Congress had prohibited the areas the order covered, but Bush wanted to make it clear that the Executive Branch supported such. That protest and the outcry of millions of Americans finally led to Congressional action in which they reversed the ban.
During the Presidential campaign and gasoline prices were pushing $4 a gallon, Barack Obama said he was open to any energy option to drive gas prices down. He was for nuclear energy (as long as it was always safe), coal (as long as he could tax it into bankruptcy), and domestic drilling (as long as you can guarantee there would be no environmental damage). This view was against all of Obama's historic policy statements and voting record.
Obama and Congressional Democrats have been philosophically for higher gas prices. The higher the prices, the better. He supports high gas prices as a way of conserving energy, to drive people to mass transit, and to force the development of energy alternatives. That has long been the primary position of Democrats for years, who describe our need for energy as "addictive" and that there is something fundamentally wrong with Americans because they demand more energy than other country in the world. I don't apologize for our quality of life or the technology necessary to maintain it, I expect our government to create the environment to get those needs met through free enterprise. Furthermore, many of his Congressional allies are singing a similar tune.
So why did Obama and company say they would support these traditional forms of energy? Because they needed the votes. In fact, for the last 60 days of the campaign, Obama ran as a moderate and even attempted more conservative positions than McCain (rightly describing the Arizona Senator's home bailout plan as "irresponsible").
The election is over, the real Obama is standing up and doing so tall with this bold announcement. I think it is being done immediately because he hopes that the adverse effects it will have on oil futures (projecting future demand effects gas prices today) will be seen as a remnant of the Bush Administration and he wants to get the liberals' bizarre conservation program of high prices back on track. Every day we are enjoying prices around $2.00 a gallon, we are wasting energy and destroying our environment according to the Democrats. Obama believes this must stop.
This is just the beginning. Many of the things you worried about Obama earlier in the race when he ran as a liberal, but saw fade away in his rhetoric as he worried about his electoral success, will come back in full force. Will the real Barack Obama please stand up? I hope not.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
AIG Is Begging for More I have long contended that the $800 billion bailout of financial institutions would not be enough. By the time the process was finished, it would be closer to $1.5 trillion. There is more evidence of that contention in light of the fact that AIG is about to enjoy a "do over." You remember "do overs," where you got a bad roll of the dice when playing a board game and you beg your friends to let you go again. AIG has done the exact same thing, but there is much more than monopoly money at stake.
CNN Money notes that "troubled insurer American International Group got a reworked $152.5 billion deal from the federal government Monday, as the Federal Reserve and Treasury Department made significant changes to the terms of the company's original bailout."
"The Fed announced that it will reduce AIG's original $85 billion bridge loan to $60 billion, cut the interest rate by 5.5 percentage points and extend the borrowing period to five years from two years."
"In addition, the Treasury will use its special authority under last month's $700 billion bailout law - the so-called Troubled Asset Relief Program - to purchase $40 billion in preferred stock."
So the burden on the federal government is to make sure its new investment -- banking and insurance-- succeeds. This slaps "moral hazard" in the face because the government, which is suppose to be an impartial referee, now has a vested interest in this and the many other insurance and financial institutions in which it has invested our tax dollars.
The reality is, some of these businesses simply need to go under. The government should allow such with almost cruel fanfare. Get the business to the point where it appears it is about to get a check and pull the rug right from underneath it and declare "no more." It should declare that if the business is worthy of an influx of revenue, people would provide such in their stock purchases. If it isn't, it would let the market speak and send a loud message to all businesses that are beginning to see the government as a safety net.
If businesses can't fail, they have every incentive to reach ever newer levels of mediocrity. Failure is as important a function of free enterprise as is success. Failure teaches businesses and individuals how to do things better, it maintains competitiveness, and drives economic and technological progress. Bailouts undermine this important factors in business and economic success. It is time to hold these businesses accountable, close the pig troughs, and restore capitalism to our economy.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
What's "Down" with the Stock Market? Wall Street is facing the biggest post election sell-off in US history. The big question, of course, is "why"? Clearly, there is no simple "cut and dry" answer to this question. It can't be attributed to any one thing, I'm sure. But one contributing factor that I think is being largely ignored by the mainstream media, is the election of Barack Obama.
Of course, we have always recognized the impact of a new President-elect on the market. Is the new President pro-business? Is he in the pocket of special interest? What about his relationship with labor? The positions the candidate had during the campaign, show up in the stock market's reaction shortly after elections.
With Obama, we have a new President that is hostile to wealth creation, saying in his nomination acceptance speech that he supports tax policies that helps work, but not wealth. In this country, the two have always been linked. Wall Street knows that, but it appears that Obama does not. Because the current Democratic controlled Congress did not renew the next year of the Bush tax cuts, Wall Street (and those of us on Main Street that own stock) know that we will currently make 100 percent of our stock sales if we do them by the end of the year, but only make 80 percent when the capital gains tax goes into effect.
Daily, our stock reduces in value because of that looming capital gains tax. Sellers know that reluctance is growing on a daily basis as we get to January 1, 2009 and the tax increase. As that reluctance grows daily, expect the market to grow south with it.
This, of course, is only one area of concern. Hours after Obama was declared President, Iran's radical leader called for the dropping of sanctions against that regime. Wall Street is concerned of how safe the world will be with Obama. Capital gains tax is only the beginning. Obama plans on dramatically raising the taxes of the most affluent. Obama has declared that he is going to try and regulate or tax some businesses into bankruptcy (e.g., coal). This too plays heavily on the minds of Wall Street. The point is, business has plenty to worry about and those jitters are showing up each day in the Dow Jones Industrial Averages.
The test for Obama is simple. Can you have policies that benefit Main Street, but are harmful to Wall Street, yet maintain a healthy economy? I have my doubts.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
For Barack Obama, Now the Hard Part The party is over and governing begins. Barack Obama has enjoyed the position of US Senator and candidate for President. These roles are all about criticism, not about governing. With a solid vote giving him a win, expectations are very high for him when he enters office in January.
One of my favorite quotes is from Teddy Roosevelt, who sait "it is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”
Being a "critic" is virtually the only job of a US Senator. Sure, they propose legislation, but they spend more time either dismissing the proposals of Presidents or trying to make the bills better, than actually making laws a reality. This may be why we haven't elected a sitting US Senator to the White House since 1960, when John F. Kennedy was elected. Since then, we elected a Vice President thrown into the Oval Office due to an assassination, than we elected a former Vice President. The next several Presidents included three former governors and a sitting Vice President. The US Senate had become a rather weak position to run for President. People were looking for leaders, not cheerleaders.
No matter who won this race -- Obama or McCain -- we would have a Senator moving into the White House. The Kennedy Administration, in spite of all the romanticism that surrounds it, was one of the least productive in US history. I think the weakness that mark that Administration played a role in our view of Senators. It will be interesting to see if Barack Obama raises the profile of that office as a springboard for the presidency.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. 2008 Elections: Confessions of Small Business Owners With the time left in this campaign reflected better in hours than days, it will be interesting to see the total reach of an Obama presidency and Democrat control of both Houses of Congress. Every day, when I go on the air or view my email, small business owners are horrified by what this country will be like under a new administration. A fellow host of another radio show at my station told me that they have already identified who they will layoff if Obama wins. They will likely give them the walking papers before the week is over.
Each month, I give several speeches and people quietly whisper to me that "there is no way my business can survive Obama, I am thinking of selling before the election." Time has run out for many of these individuals, but there appears to be a great deal of doom and gloom in the works if Obama and company wins the day.
Recently, Barack Obama has gotten extremely specific about what he would do if elected. In a new TV commercial, the Illinois Senator said he intends to both "penalize" companies that export jobs over sea and provide a tax increase for the top 5 percent. So much for the old saying that "you can't help America's poor by making America poor." Obama seems more than willing to try such a policy. When Herbert Hoover raised taxes in the early days of the recession of 1929, we slipped into a depression. Obama intends to use the Hoover approach as a road map.
Meanwhile, instead of asking the question as to why jobs are being exported to other parts of the world, Obama prefers to penalize business owners who are looking out for their natural self interest. US Businesses are in the business of making money. Obama's plan will force those companies that are still corporately located here to simply move entirely overseas. That will help America's poor?
I go back to my mantra. Business don't pay taxes, they are tax collectors. If the cost of taxes on corporations are too high for them to collect and still stay competitive, they will move from the United States. We don't want to compete with developing countries by making labor cheap, but we can compete by cutting taxes. Business taxes are used by cowards in politics who are afraid to tax voters directly. Meanwhile, those taxes harm business and jobs. We need to cut taxes on job creators.
Businesses are telling me they are not "like sheep." They are ready to take care of their families and businesses. They will take the necessary actions to fend off the policies supported by Obama. Unfortunately, the middle class and working poor will be the ones who will suffer most from those actions. But don't blame the businesses, blame the policy makers who forced such choices. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Obama Concerned About Surprises According to the vast majority of the polls, this election is over and in spite of my own personal preferences, if I was forced to bet money, I would have to place my money on Mr. Obama. However, many (including the Obama campaign) are not yet ready to call this election in the bag and for several good reasons:
- The poll that was by far the most accurate in the 2004 election was by Investors Business Daily. In this election, they have McCain and Obama within two percentage points, well within the margin of error.
- The huge number of undecided, (most surveys have it at 8 percent) is a great concern to Obama. This late in the game, there should be virtually no undecided. When there are, they tend to vote against a candidate rather than for one. In light of the numerous issues being raised about Obama these last few days, most pundits (including Democrats) are projecting the majority of undecided to favor McCain.
- The way polling is done favors Democrat candidates. This includes many media polls that resemble "push questions" that candidates use (where they favor one candidate over another) and the fact polls tend to favor registered Democrats in their surveys. Furthermore, every poll is done on land lines only, when many of the most affluent don't even have such phones.
- Many have said that, with this being the largest turn out in history, the odds are in favor of Obama. They said the same about John Kerry in '04 when that campaign broke record numbers, and Bush won.
The Democrats clearly see this race must be contended. Historically, true front runners have spent the last two days doing photo ops. Barack Obama still sounds like an under dog on the stump and is doing serious campaigning through election day. This proves one very important fact -- the only poll that really matters is the vote people actually cast.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. Lessons from the Slightly Famous The pursuit of one’s “fifteen minutes of fame” is easier now than any time in history. No longer do the masses have to live in the shadow of the famous because they have the tools to cheaply make a name for themselves.
YouTube has been a significant driver in this effort. People are battling it out with mattresses in a college dorm, a kid jumps from a second story window on a trampoline (bad idea), a person cries out in defense of an actress taking a pounding from the media. These people become the talk of the web for a least a day or so. There are those who seeking fame for reasons other than ego and entertainment purposes and they are a growing breed of entrepreneurs.
In the old days the media drove information. Occasionally a person got his letter to the editor in the newspaper, he or she would get on the radio as the “person on the street.” Besides such scenarios, there was a huge chasm between the media and the average person. The Internet is changing all of that.
In the book, Get Slightly Famous, author Steven Van Yoder writes about the forces available online for the average person to leave his mark and to get noticed. They do so in order to set themselves apart as the expert and to get the notoriety and recognition of such. This becomes a way to attract new customers.
In the early days of the Internet people simply had a website. These domains were little more than 24 hour brochures. Now there are far more tools available.
Blogging. People create their own web platforms where they tell people their unique opinion on politics, finance, marketing, movies, and more. Whatever their passion, vocation, obsession, or all of the above. Recently an article I wrote had close to 120,000 impressions on one day on Reuters.com. An article I wrote on Neil Cavuto of Fox News and Business led to his office contacting me and wanting to find out if I would be interested in having him on my show. The reach of blogging is breath taking.
Podcasting. This includes video and audio. Audio is cheap to start, in some cases it is even free. Video costs more, but could leave a bigger impression. The web is about the convergence of media – bringing several types of media to one place. Essentially, individuals can create a media network of their own.
Social networking. Twitter, Plaxo, and LinkedIn are just a few of the tools that business leaders are using to tell others about their influence.
But the Internet is not the only vehicle available:
People are writing books like never before. With Print on demand technology, people can self-publish at a fraction of what it use to cost and not fill their garage with books that may or may not get sold. Such books are not typically being written in order to become rich, but to be semi-famous.
People are buying air time on the radio and TV. They are not buying commercials where they can be lost among the many who merely sell, buy are buying programs that demonstrate their expertise as a way to attract customers.
People are giving speeches. Most towns have numerous organizations that are looking for speakers. Chambers of commerce, Rotary Clubs, and networking groups to name a few. When you give a speech to such groups you further differentiate yourself as the expert and find it very easy to find the clients that create more business.
The only downside to such activities is that it is difficult to make your website the place to be found without traffic or to be identified as the person to give speeches. Furthermore, there is an opportunity cost to pursuing such activities. You are trading the thing you do for a living to pursue the opportunity to get more business.
There is a company I am working with that is making this transition easier for entrepreneurs called USBusinessDaily.com. They have a free white paper that is available for the asking at Info@HoustonBusinessShow.com. I strongly encourage you to request it today.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.
Lessons from a Financial Crisis It is a little over a month since financial mayhem hit both Main Street and Wall Street. Many, if not most, are still not exactly sure "what happened." In fact, it still may be a little too early to attempt to assess the "lessons" from this crisis. However, I am going to take a shot at it.
You can't lose money in stock, unless you sell your stock. This is exactly why Jim Cramer of CNBC was very dangerous when he announced to millions of Americans to "sell, sell, sell" on the Today Show. The argument he made actually has added to the erosion of the market.
There are reasons why community banking has thrived, while major banks have largely suffered. National banks (such as WaMu and Wachovia) have found themselves as massive leviathans, with the left hand often not knowing what the right hand is doing. These national banks are typically publicly owned, which means they have enormous pressure to show higher profits. This made them tempted to jump into the sub-prime loan environment that has brought the economy down. Local banks could afford to be more steadfast in their growth and, as a result, have enjoyed a fifteen percent increase in their annual profits, on average. Because of national banks being "damaged goods", community banks will prosper even more.
Money doesn't disappear during a recession, it just some times requires more creativity in making sure it comes to you. You might have to make changes in the way you do business, but in most cases your company can still be successful.
We should pressure the government to lower taxes. Interest rates are certainly low enough, the big concern is taxation. Because the Congress didn't approve the continuation of the tax cuts that Bush pushed into law, Americans are looking at a tax increase in 2009. In fact, the Capital Gains tax alone is currently 0 percent for most Americans, but will rise to 20 percent in 2009. Are you still wondering why the market is gravitating so strongly towards selling?
The bailout package has done more harm than good. Things are fairly ominous when a senior Treasury official declares they asked for the enormous number of over $700 billion because they weren't sure what was needed. This plan, which prevented the market from finally capitulating and finding its true bottom, has raised fears of hyperinflation, have made people more alarmed because of the confusion that surrounds the situation ("it must be bad if it required such a huge amount of money"), and has created an unnatural buffer between the market and economic reality. Worse still, the banks that signed on to this rescue are going to be subject to a whole net set of rules because the government is in the process of converting the major banks into a utility.
The best advice when it comes to dealing with our current financial situation?
- Think more and feel less. Much of the damage on Wall Street is being driven by irrational fear.
- Focus on what you can do and not those things out of your control.
- Seriously consider diversifying (at least future investments if it is too costly to sell at this time). Remember, there are always opportunities for money to be made.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Obama Calls for Black Reparations Ever since the conversation between "Joe the Plumber" and Barack Obama, people have been up in arms over the Illinois' Senator and his socialist leanings. Obama declared he wanted to "spread the wealth" and do so with the earnings of those with higher incomes.
Now, John McCain and his allies are looking for examples of Obama's socialistic leanings at every opportunity they can find and, unfortunately, missing an equally alarming and dangerous story. Currently, McCain supporters are referring to a 2001 radio interview in which the then Illinois state senator was discussing the civil rights movement. During the interview he pointed out that: "The Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society… and one of the, I think, tragedies of the civil rights movement was, um, because the civil rights movement became so court focused I think there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalition of powers through which you bring about redistributive change. In some ways we still suffer from that."
The radio interview (click the image above) does make it clear that Obama supports the redistribution of wealth. He is a socialist. Socialism, unfortunately, has been a part of the liberal mantra for years. The list of Marxist sounding quotes by Obama's Democrat opponent, Hillary Clinton, is exhaustive in its own right. During her run for the Presidency, Clinton said:
- "We're going to take things away from you on behalf of the common good."
- "It's time for a new beginning, for an end to government of the few, by the few, and for the few..... And to replace it with shared responsibility for shared prosperity."
- "(We) ....can't just let business as usual go on, and that means something has to be taken away from some people."
- "We have to build a political consensus and that requires people to give up a little bit of their own turf in order to create this common ground."
- "I certainly think the free-market has failed."
- "I think it's time to send a clear message to what has become the most profitable sector in (the) entire economy that they are being watched."
Therefore, "socialism" has become a common Democrat agenda. Obama, in this interview, goes further. He is discussing the targeting of specific ethnic groups for payment to another ethnic group. He is a socialist that believes that the majority population today should be forced to pay for the treatment that black people received generations ago. This is ethnic and class warfare at its worst. In a culture that has become too comfortable with the redistribution of wealth, this largely missed story among the socialist rhetoric rampant today could actually make Americans think twice. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. How Much Will Barack Obama Pay for Your Vote? Free meals and movies have long been illegal devices to get your vote, but Barack Obama has figured out how to persuade you to give him his vote -- his "unique" tax cut program. It is against the law for him to buy your vote, so in a stroke of genius he is going to use "OPM" -- other people's money -- the tax system. He is not even subtle about it, but his campaign has created a "calculator" for you to be able to see exactly how much you will get back from Barack Obama.
If you are in the top 5 percent, you are not going to see savings. In fact, these work horses who saddle the majority of the tax burden are going to be asked to give more. Much more. Herbert Hoover taught us that tax increases during a recession creates a depression. This doesn't appear to be a lesson candidate Obama hasn't learned. There is nothing subtle about Obama's calculator. You put in a few pieces of basic information and you find out both how much you will get from the Democrats if they win and how much you will get from McCain in his plan. Since approximately half of the population doesn't pay income taxes and McCain has deemed money going back to groups that fit this description as "welfare," you will not find much (if any) return from the Republican. Obama, on the other hand, wants the bulk of the "tax cut" to go to those who don't pay taxes. I know, it isn't easy to understand. One of the most common concerns we have today is "influence peddling" by organizations trying to control public policy. But influence peddling is a two headed coin, in my opinion. The other side is made up of politicians like Barack Obama who want to spend money in order to buy votes. Barack Obama's "tax cut" seems to be an excellent example of such an approach. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Neither McCain Nor Obama Understand Taxes Barack Obama has been on the campaign trail reminding voters that John McCain opposed the tax cuts of George Bush because it was an "irresponsible" policy. Furthermore, McCain is now only supporting the idea of cutting taxes because he is trying to get elected, Obama argues. Looking at the history of McCain's views, Obama is probably right.
Neither McCain nor Obama understand tax policy. You can see this in several areas: - McCain opposed the Bush cuts because spending was out of control at that time. The reality is, the Bush tax cuts generated a massive amount of revenue (arguably far more than could have been garnered through increased taxes). The reason for this is simple and is seen every day at Walmart. Walmart makes less per product of virtually any company in the world. They shave their profit margins to extremely low level in order to make sure consumers buy as much as possible. In the same way, the lower the taxes on wealth creators (be it businesses or investors), the greater the stimulation on the economy, and the higher the revenue.
- Obama's opposition to the Bush tax cuts were based on ideology. Obama believes in class warfare. He could care less how beneficial tax cuts for the affluent can be on the poor (in the form of job creation), he just cannot stand the rich getting richer. Typical of a person who said he supports tax policies that "benefit work" but not "wealth." In free market countries, the two are inseparable.
- I wish both sides would understand that companies simply don't pay taxes. If politicians were serious about wanting to stop jobs from going to foreign countries, they would end the taxation of all businesses. Businesses collect taxes, they don't pay them. When a business is taxed, they pass the cost on to consumers in the form of lower quality products, higher prices, or both. If the taxes get too high where they are no longer competitive, they either go out of business or relocate to a more tax friendly environment. That is how we lose them to foreign countries. The US has the second highest tax rates of any industrialized country in the world. Raising taxes promises to make our situation worse. Furthermore, since businesses don't vote, cowardly politicians use taxation on business as a way to get companies to do their dirty work.
Daniel Webster said that “An unlimited power to tax involves, necessarily, a power to destroy." With that in mind, the government should be very selective in how it taxes and keep its destructive nature as limited as possible. A few possibilities include:
- Stop taxing corporations. For the obvious reasons above.
- Stop taxing wealth creation. Capital Gains taxes should be brought to a complete halt in this country as well as taxation on individuals.
- Tax consumption instead of wealth creation.
- If you insist on taxing individuals, make the tax flat (I don't like it, but it is better than the alternative). That would mean an equal percentage for all.
The bottom line is that we need to see taxation purely as a vehicle to effectively raise revenue. It isn't for social engineering, "spreading the wealth," or making up for past wrongs. It is about raising revenue. The best way of reaching that goal is by keeping taxes as low as possible, to generate the most economic activity, which generates the most revenue. We should stop punishing the engine of our prosperity.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. Media Week Takes a Blow Traditional media has been on a constant downward trend for over a decade. Particularly hard hit has been print media and in spite of efforts to bolster their presence through the Internet, most of these media are seen primarily as newspapers or magazines in the eyes of their audience. Furthermore, traditional media tries to market their online content in a manner very similar to their hard copy. If it didn't work in print, it most likely won't work online.
Media Week is an excellent case in point. Mediabistro.com reports "in what a tipster calls, 'a salary dump with older people making more money,' PRNewser reports that Mediaweek has laid off several high-level staffers: senior editor John Consoli, managing/interactive editor Lisa Granatstein, art director Paul Virga, and senior photo editor Kim Sullivan -- all of whom had been at the publication for more than 10 years. Brandweek also laid off executive editor Barry Janoff." Media Week is also among those publications guilty of trying to sell online the type of information that many believe they can find elsewhere at little or no cost. According to their website, people pay $19.95 a month for an online subscription and $24.95 a month for online and print. The prices go up for International readers. In describing the publication. MediaWeek.com states that its mission: "Mediaweek.com is the online extension of Mediaweek magazine. It is dedicated to serving the magazine's readership with the latest breaking media industry news and analysis, along with commentary that puts that news into perspective." Regarding the company, " Mediaweek.com is a Nielsen eMedia production. Nielsen Business Publications, Inc. penetrates and enlightens the media industry with print, face-to-face, and online information. Nielsen eMedia enables Nielsen Business Publications, Inc. to publish in the fast-paced online market." Traditional media thoroughly dragged its feet in response to the onslaught brought on by the Internet. The new media has won the war because it has been on the offensive. It had no vested interest in the old revenue models, but adapted new systems as it has grown and expanded. Traditional media, on the other hand, has been in a purely defensive mode trying to hold on to what revenues it has and largely ignoring the very large writing on the wall or, in this case, on the Web. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Jobs that Could Be in Trouble The economy appears to be in trouble and everyone is wondering what industries will suffer the most from the up coming recession. When dollars get tight, people focus on cutting costs and buying necessities. So, anything that can be described as "waste" are most vulnerable. Currently, unemployment is now above 6 percent and some fear it could reach double digits.
The following are a few examples of industries that could be hardest hit:
- Supermarkets and fast food establishments could be the first to see a negative impact. The latter is for obvious reasons, because people will simply refrain from eating out as often. Supermarkets, on the other hand, will find themselves in a battle over pricing that we hadn't seen in years. The large volume leaders -- Walmart, Costco, and Sam's -- will be the likely winners of that battle. AOL Money & Finance points out that "Aside from Supervalu, which has already said it is struggling, Kroger and Safeway could be affected as well. These three largest chains have more than 750,000 workers. If same store sales drop sharply and a large number of outlets are closed watch for as many as 50,000 people being out of work.This does not take into account the scores of smaller chains and tens of thousands of individual food retailers around the country." On the fast food front, 10,000 jobs have already departed from Starbucks. That will only be the beginning.
- An industry that has been perceived as some what recession proof -- the Internet and E Commerce -- could be falling on hard times. The way these industries will be hit is if the damage is widespread throughout the business market place and it has a ripple effect on these areas. To some companies, E commerce and web businesses are an option, not a necessity. If that is the case, they too could suffer.
- E companies could find themselves in pain. My company's own web platform of over 90 websites has seen a slight decline in pay per click advertising revenue (fortunately we have seen a rise of other advertisiers). People are getting their ads for less because there are fewer competing to place them. What type of business are vulnerable? Google, Yahoo, eBay, and Amazon, just to name a few. Combined, these four employ over 75,000 employees. Yahoo seems the most vulnerable and could easily layoff 20 percent of its 15,000 employees.
- Software firms are also very vulnerable and I am sure that Bill Gates and his friends at Microsoft are among the most concerned. The largest of these companies employ over 600,000 combined. If these firms start laying off, it will have a trickle effect through out the entire economy since so many businesses are dependent on them.
- The hot industry in my neighborhood is energy and even it is vulnerable to cut backs. The price per barrel has dropped from a high of nearly $150 to around $70. Those prices are still high, historically, but the days of the fatted calf may be fading. Some are projecting a cut of as many as 5 percent of the labor force in these industries.
- Not surprisingly, media companies are taking a significant hit at this time. Everyone seems to be trying to lower expectations, including Viacom and CBS. The six largest media companies -- including Time Warner, Disney, and GE -- employ over 400,000 employees. If they start laying off the ripple effect could be huge.
What over shadows these dire concerns is the fact that thing Wall Street loves to see it that, when a business hits a hard time, the decision makers are tough and willing to make unpopular decisions. This is often best demonstrated in layoffs. In fact, the Stock Market has a history of rewarding companies with higher returns as they let employees go.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here. When It Comes to Voting, It is Quality and not Quantity We hold the right to vote in such high regard that we now allow anyone, even Mickey Mouse, to vote in our elections. The attraction of voting is so powerful that untold numbers of dead people suspend their resting in peace to show up and make their choice for President. Yes, elections are very important.
I don't know about you, but the above references to scandals related to ACORN actually shows that voting is becoming a sham. It is not revered, but a vehicle to purely promote political agendas and not preserve our freedoms. Yet virtually everyone extols the beauty of the vote and the more voters the merrier. I think it is time to defend the quality of the vote.
Every state has limits on the campaigning that can be done during elections. For example, there is a distance that has to be maintained between where people vote and signs promoting specific candidates. You have seen this when you pulled up at your neighborhood elementary school with signs being displayed for virtually every candidate all the way up to the magical line where no more campaigning is allowed. After that, voters are protected from further external political influence. Or are they?
The reality is, the single most important political information is in the room where they vote. Not, it isn't on the wall or in fliers handed out on the instructions used for the machines. The most important political information is on the ballot itself. Every office has the party affiliation clearly labeled on each candidate. Furthermore, you can typically press one button and vote straight party ticket.
Removing party affiliation would be a very significant step that the government could take to reduce voter fraud and abuse. With the elimination of straight ticket voting, there is no longer "press seven and go to heaven" or "press nine and all is fine." People would actually have to know who they are voting for before casting a vote. What a novel idea!
This idea will have any of its proponents seen as elitists and anti-democratic by the media, I am sure. The truth is, there is nothing about it that should make voters feel disenfranchised. Are there those who are saying that voters are casting ballots, but they do not know for whom? Are those the ones that will be punished by a system that requires a little knowledge and accountability before they actually cast a vote? In my view, if they don't know a candidate by anything but party affiliation, they are not qualified to vote.
A few candidates for major offices will not be affected by this simple reform, but the quality of voting in general would be much higher in a system such as this and would lead to a decided increase in the quality of voting. That is exactly what our country needs.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. "Joe the Plumber" to Become a Trademark? In an effort to try to locate "Joe the Plumber" in the Toledo, OH area in order to do an interview, I spent some time visiting with some of the people from the Toledo Regional Chamber of Commerce. They had no idea on how to reach Joe Wurzelbacher, but did tell me that the aspiring plumber (he isn't one yet, but works for one and intends to be one some day) did contact the Chamber through his father. The reason for the call? He wanted to know how to trademark the name, "Joe the Plumber." It appears that Joe is trying to make his fifteen minutes of fame last several hours.
Joe will face challenges, of course. There are numerous companies that describe themselves as "Joe the Plumber." Just check it out in a Google search.
Other observations about Joe the Plumber:
* His presence reminds me of the impact Sarah Palin had on the McCain campaign. Those "every day values" so absent from politicians today. You would think one of these campaigns would continuously surround themselves with such people, let them speak to the media about the issues of the day, and get away from the slick individuals who drive politics.
* Typical of Obama and his colleagues, they are now attacking Joe in the media. "He doesn't make $250,000 a year" we are told, "he had an ugly divorce" (and liberal bloggers are writing about it online), and "he has a tax lien against him" (which may prove his point that taxes are too high). This type of ugly attack is going to be perceived by millions of Americans as an attack on them. It is very elitist, which has killed many Democrats' campaigns before. Interestingly, as they attack Joe, McCain's numbers are going up nation wide to where he is well within the margin of error nationwide at this time.
* Joe reminds those who are not in the "top five percent" why they should worry about redistribution. Joe doesn't make $250,000, but wanted to know how it impacted people like that. Obama's supporters scoff as if he had no business asking the question. But Joe is like most Americans who aspire to make more some day. He wants to be in a higher income bracket and not pay those who haven't achieved such. The politics of envy has its limits. Obama has yet to learn that.
* Obama should learn a lesson from both Joe and George McGovern. Joe showed the sentiment of million of Americans. George McGovern learned the same thing the hard way. In the early part of 1972 McGovern was doing very well in his race against Richard Nixon, until he placed on his platform the redistribution of $1,000 to individuals who made less than $5,000 a year. That described a majority of Americans at the time. But the vast majority of them believed they would make more than that some day. It sunk McGovern in the polls.
The big question for McCain is will Joe have "staying power"? McCain needs to surround himself with average Joes and Janes who want to harness the American Dream and are suspicious of politicians who "want to take care of them." After all, they are a better reflection of a majority of Americans than the elitist that tend to surround most political campaigns. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media.
Are Democrats Declaring Capitalism Dead? This is one of those posts that are very hard to write. It is the kind of thing that I would prefer to "rant" about rather than approach with calm, because the situation really is quite upsetting. Things that is so important to our culture, our history, and our affluence is being declared dead by members of the Democratic Party. Free enterprise, limited government, and private property are being treated like old and dead ideas. Democrats see them as concepts that didn't work and should be swept away.
In the early 1990s I traveled several times to Eastern Europe and the former Soviet Union conducting seminars on how to convert their economies to free markets while I was a Fellow with the American Economic Foundation. Today, all of the economies in the countries I addressed with the exception of Belarus have lower tax rates than the United States today. It appears our universities and political leaders need similar seminars in our country.
Governor David Paterson of New York told Fox News today that it is time to begin the public works programs similar to what we had under Franklin Roosevelt. He joins numerous Congressional Democrats making similar proclamations. In a candid encounter with a man on the streets, Presidential candidate Barack Obama said that he believes that "spreading the wealth" is a "good thing."
Historically, the purpose for taxes is to pay for those programs that were designed to be beneficial to all and provided special privileges for none. During the Great Depression, the idea of helping those due to extraordinary circumstances came into practice after early attempts by the Supreme Court to stop such policies, failed (Roosevelt out lived enough members of the Court and appointed those with a similar worldview to take their place and the majority). This was soon followed in the 1960s by a "War on Poverty" that became more like an assault on the poor that led to an increase of economic despair annually until the policies began to be reversed in the 1990s (which has led to a reduction in poverty). We are right back at the point of going back to the government creating a paternal relationship with its citizens. Are we like sheep? You bet!
Irresponsible organizations like ACORN fund individuals that include Sen. Barack Obama, who in turn "organized" his "community" to pressure local banks to back loans that lead to our subprime crisis. As a result of the efforts of people like Obama, the unaccountable banks gave more money to his campaigns than any member in the history of the Senate with the exception of the Banking Committee Chairman, Chris Dodd. Obama leads the effort to undermine the fundamentals of our financial system and he will be rewarded with the highest office in the land. People are "entitled" to home loans we are told, let the standards that keep banks operating healthy be disregarded. Now we are being told to bailout the banks that have taken such a route.
This massive push towards socialism isn't entirely the Democrats fault. In fact, John McCain has done an excellent Democrat impersonation by saying he wants some of the $800 billion to go directly to home builders who are struggling so they can pay off their loans. Let's reward those who bit off more than they can chew, he argues, but there will be no benefit to those who had adjustable rate mortgages and figured out how to maintain their obligations. Talk about moral hazard!
Republicans aren't losing the election today because voters have denounced free enterprise, it is because they can't find a serious candidate that is promoting such. Republicans have done a terrible job of defending economic freedom since Ronald Reagan and voters are lost as to where they can find those who will support economic liberties. I have said for a long time that if Republicans are going to act like Democrats, you might as well vote for the genuine article. Republicans need to get prepared for that probability as we approach the election.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Job Creators Cast Their Votes CEO Magazine, a leading publication of the nation's business leaders, has recently done a survey of the nation's Chief Executive Officers about the up coming race for the White House. The survey did an assessment of their view of how Barack Obama and John McCain would help the country's economy and support job creation.
The results weren't even close. Eighty percent of all participants voted for John McCain over Barack Obama. This shouldn't be a surprise to anyone. Barack Obama keeps talking about "tax cuts" for 95% of the economy and only the top 5 percent will be saddled with a tax increase. CEOs know, however, that half of that 95 percent don't pay any taxes and that five percent group pays far more than any other sector. In fact, the Wall Street Journal reports "As it happens, the top fifth of earners currently pay 67% of all federal taxes -- including not just income taxes, but payroll taxes, corporate taxes and death taxes. The top 1% of earners pay 26% of all federal taxes." In other words, the economics simply does not add up.
But the issues covered by the survey are not limited to taxes. The publication's report card breaks down policies to include energy, economic and fiscal policy, foreign policy, defense, environmental, education, tax, and health care. The over all grade for Obama was C- and the grade for McCain was B-. Neither candidate scored an A, but Obama scored Ds while McCain's lowest grade was a C.
Obama's biggest weaknesses according to the survey are economic and fiscal policy, foreign policy, defense, and (as seen before) taxes. CEOs believe that Obama's policies would put significant upward pressure on spending, his lack of experience will find the US in conflicts that could undermine economic stability, there are similar concerns about defense policy, and we have already seen the business view of Obama's tax policies.
McCain's lowest grades were in energy, the environment, education, and health care. McCain is very new to being serious about pursuing domestic drilling (which is the fastes way towards lowering prices), furthermore he is one of the most ardent supporters of extreme environmentalism (which make businesses concerned about the economic impact). Furthermore, most business leaders have long felt that policy makers don't understand the educational demands of America. This includes McCain. Finally, business has been rightly concerned about the impact of proposed health care policies on the economy. In this, McCain's policies raise many questions (especially the taxing of benefits).
So what about the 20 percent that would vote for Obama over McCain? I would assume they are part of the group of leaders representing mega businesses that have consistently supported Democrats because their companies can afford to do so and often see government as a means of regulating their competitors out of business.
What is most interesting about the article is that the focus is on job creation more than any other area. People can talk about helping the middle class all they want, but there is no better benefit to anyone than opportunity created through job creation.
Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Understanding the Stock Market Following the Bailout Today it appears that the market has capitulated. Investors believe that the market has hit bottom and it is time to rebuild and to buy and is in the 9,000 points area and moving upwards. But people want to know, does this relate to the bank bailout? Why did the market perform so poorly immediately after the bill passed in Congress? Are we about to see the light at the end of the tunnel?
I suggested on my radio show that the market would probably stop its free fall in the low 8,000s and that appears to be the case. But, I have also suggested that this event wouldn't necessarily signify anything more than Wall Street catching its breath. Yes, it could mean it begins its mending process (as seen with the market up around 500 points at this writing), but it could be a short term euphoria from European and Asian markets that responded more favorably than expected over night or just a strong desire to give itself a break from the drama. In other words, the market is being driven by emotions at this time more than anything else and interpreting what is happening is no small task. Here are a few observations about the current market landscape: - Members of Congress supported the spending of more than $800 billion to bailout financial institutions with much of the specifics of how it would be spent to be determined later (Obama and McCain each have very different approaches). This approach raises as many concerns as it placates.
- The amount proposed, $800 billion plus, was pulled completely out of the year. A high level Department of Treasury official said that this figure was chosen because it "needed to be real high." They had no idea how much was needed, because they weren't sure how it would be fully implemented. Again, this has raised more market concerns.
- Much of the drama surrounding this event -- most recently seen in the emergency meeting of members of the G7 -- is a mixed bag that could end up heightening fears rather than calming them. On the other hand, because of the interdependence of the international financial markets, some are seeing such an approach is crucial in getting back to normal.
In addition to the financial issues, there are the political aspects. Many in the media are treating Presidential candidate John McCain as if he were among the "walking dead." Wall Street believes that the economic future of this country is in better hands under McCain than Obama. Is McCain's chances begin to decline, I project a continued drop in the stock market. So are we on the rebound? I certainly hope so, but smart investors are going to find themselves taking a "one day at a time" approach to their investing. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here. How to Determine Gas Prices in a Year
 I don't want to mislead with my title. I don't own a crystal ball and can't predict exactly what fuel will cost at certain times. However, we have all been studying fuel prices rather closely the last few years and have begun to be able to see linkage between certain events and gas prices. For example, as prices hit an all time high and hovering around $4.00 a gallon in the early part of the summer, House Republicans declared they were have a "staycation" like many other Americans and taking care of business by focusing on energy. The theme of the ad hoc Congress was "drill here, drill now" and the public and media took notice of the action. So did the oil speculators who lowered the price of oil per barrel, which showed up in our gas prices.
Another example was Senator John McCain declaring that he was changing his historic position of being opposed to domestic drilling and stating that everything should be brought to the table for consideration (biodesel, coal, etc.), including exploiting oil in the United States. He placed particular emphasis on the latter because of how that view stood in contrast to the Democrats position of avoiding all domestic drilling. The results was the further lowering of gas prices. So, oil futures are based on projected consumption (demand) and projected supplies. The lack of oil in this country is not based on scarcity (which is created by nature), but because of shortages (which is based on government policies). With that, the single biggest factor about future supplies and prices of oil is the government. Oil speculators are convinced that the Democrats are hostile to domestic production (just look at their voting record and stated postions) and that the Republicans seem to take the pursuit seriously. With that, here is a quick breakdown of the future of prices: - If the Democrats win both the Congress and the White House, expect gas prices to grow exponentially. I project them to more than double the current $3.00 a gallon level by the elections of 2010. That $6.00 a gallon rate could be rather conservative.
- If the Republicans win both the Congress and the White House, expect a rather significant drop in gas prices as long as the Legislative Branch makes domestic drilling a top priority. If they do that, you could see prices back around $2.00 or even less within two years.
- If you have divided government where different parties dominate the Legislative and Executive branches, you will likely see prices remain about the same with a continued upward trend.
Don't be fooled by arguments that passing legislation that encourages domestic drilling won't immediately lower prices. We know that serious discussion alone can achieve that. If Americans are concerned about lowering gas prices, they should be very deliberate about the way they vote. A few weeks ago gas prices began to rise at a rapid rate. This was about the time the media began to declare that it was unlikely McCain would win. It is largely based on futures. So what about the recent drop in gas prices? Everyone is thrilled with them going below $3.00 a gallon in many parts of the country. Why this is happening is the "bad news" to this otherwise exciting news. The current financial crisis is now having a direct impact on gas prices. Oil futures project that we are going to have people driving less, companies transporting fewer goods less often, and factories demanding less energy because of projected manufacturing declines. The good news of lower fuel costs is actually an omen of bigger economic problems. Watch the headlines and observe gas prices. You will see the link. Think carefully how you vote, because it could profoundly impact your financial future. Kevin Price articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. |
