Tag: Obama

Quote of the Week: Obama’s Next Move Towards Socialism


Obama_0c245_image_1024w1-300x200From CNN's Breaking News:

"EXCLUSIVE: President Barack Obama told CNN's Jake Tapper on Thursday that some of the country's largest corporations have signed on to a White House plan to boost the hiring of the long-term unemployed.

'What we have done is to gather together 300 companies, just to start with, including some of the top 50 companies in the country, companies like Walmart, and Apple, Ford and others, to say: Let's establish best practices,' Obama said in the exclusive interview…

Obama's move is in line with his pledge to use executive action on his agenda items that he hasn't been able to get through Congress."

The Frustrated CFO Comment:

Alrighty then!  So, this is how we are going to deal with overpopulation and economic stagnation:  Instead of cutting down government spendings, ceasing the preposterous fueling of the financial sector, ending the subsidies to failing industries, letting the stock market to finally adjust to its real value, providing incentives to domestic manufacturers for repatriating their productions from overseas, and reducing business taxes in order to reignite small-business growth, the President proposes to create a new form of Welfare, i.e. to force big-time employers to absorb long-term unemployed people - in exchange for some tax credits, no doubt. 

Hmm…  Not that I'm concerned for the overgrown business superpowers with their blown out of proportion stock values and unjustifiable multi-million-dollar executive salaries, but if they don't experience a labor-force deficit, why would they accept extra employees?  That goes against every single principle of a market economy, even in its degenerative form we have right now!  And where they are going to employ them?  Walmart is planning on opening more super-stores?  They are everywhere already.  So is Apple.  And Ford?  Do you mean Ford Motor Company, the one that posts $5-$6 billion losses every year; the one in Detroit – the city declared bankrupt by US judge Stephen Rhodes two month ago?  You must be kidding!  

And how these companies are going to pay these people?  I can't imagine the execs will let their ballooned compensations to be slashed by 80%.  So, what then?  Everybody, except for a handful of the privileged, will take the same percentage cut to accommodate the unnecessary additions?  Let's make most people equally poor, so that everyone can be "employed" and  bring home something?  Wait a minute!   Didn't somebody already tried this experiment?  Oh, yes, communists in the socialist camp did!  Worked like a charm: destroyed their economies and created hordes of lazy, unmotivated, and unskilled workers!  Welcome to your future, people, courtesy of your elected leader!      

Tragicomedy of Obama’s Fiscal Cliff “Win”



A20120613_federal_spending_pigccording to common definitions, a tragicomedy is supposed to have both funny and sad elements, making you laugh and then cry, or the other way around.  For me personally, this genre achieves the strongest effect when it generates a subtle emotional shift: one minute you are laughing your head off and in the next moment, even though nothing drastic happens, you find yourself with a face full of tears; you don't even notice how it happens.  You know what I'm talking about…  All Russian "comedies" are tragicomedies and so are Salvador Dali's paintings.  Fellini was a master of the genre - that is because he understood that Life itself is a tragicomedy.  What a movie he could've made out of this fiscal "cliff-hanging" bullshit!

First I was chuckling softly to myself on account of the make-believe "impasse" antics so eagerly played out by the White House and the Capitol up until December 31st after more than 500 (!) days of supposedly diligent preparations.  We know we cannot take this seriously anymore – we've seen this happening before.  Why are they threatening each other?  What were they going to do if they didn't reach some sort of a half-ass decision?  Jump out of their windows?  We are not that lucky. 

I was roaring with laughter when our Nation's executives, who have US Treasury, the Federal Reserve,  IRS, Government Accountability Office, a bunch of Nobel Prize Laureates in Economics and what have you at their disposal, shyly admitted that for decades they've been forgetting about the goddamn INFLATION (!!!) whenever they tried to separate the middle-class from the wealthy or establish alternative-minimum tax (ATM) exclusions.  Now the stupid $250K mark of "the rich" I previously cursed is out of the window replaced with more sensible $400K.  The ATM scheme got eased up as well and it will be indexed to the value of money from now on.         

I hope you agree with me that the 5% increase of the capital gains tax rate from 15% to 20% for the upper class is also a laughable point.  Some commentators declare that the proverbial "1%" lost.  I say, "Bravo!  Great win, you, guys – just 5%!"  Apparently, it's Ok to tax the top tier of my earnings at 35%, while someone with $1 billion of assets and $100 million of annual gains contributes 20%!  Do we really think that additional $5 million will make that much difference in a life of a family that can afford anything they could possibly imagine?  I mean, Dolce and Gabbana just became billionaires on account of increased demand for luxury goods!   

On the other hand, someone who makes $100k a year will really miss the $2,000 that will be taken out of his net earnings due to the reversal of the Social Security tax rates after only two years of relief.  You cannot help feeling a little sad about it, especially when you consider that 77% of American households are affected by this change.  If each of these families loses on average around $1,000 of disposal income, it will translate into nearly $90 billion drop in consumption of goods and services.  I felt kind of embarrassed, though, shedding a tear about it.  After all, we've been contributing 6.2% into Social Security fund forever.  We knew that the 4.2% rate was only a temporary abatement.    

But now, three weeks later, I cannot shake off a feeling of  desperation.  Oh, there were no new developments or anything like that – everyone in Washington was too busy preparing for the inaugural celebrations.  It's just that the general public's hopeless ignorance became evident once again and it is tragic.  It appears that the immediate reduction of the paychecks is one and only concern for the majority of people.  The short-term loss is blinding - it works as a diversion from far more important issues.

People forgot that the fiscal cliff deal wasn't just about the government's revenues.  The other side of it, the one that deals with the federal spendings, wasn't and still hasn't been addressed at all.  If no solution is developed, the Nation will require to borrow again, even though the already raised Debt Ceiling has been (surprise!) reached. 

But I have much scarier questions.  Why the hell the government is using my Social Security contributions to plug their fiscal deficits?  Why are they funding somebody else's payments with my money?  What happened to the money current retirees contributed from their own paychecks?  Where did they go?  Oh, don't worry – I'm well informed.  These are rhetorical questions.  I know that my generation is the last one that MAY BE able to get federal retirement benefits and that our children do not stand a chance to get even 50% of what they shell out of their earnings.  But why are we not wailing about it on every corner? 

CNN Breaking News: President Obama Is Elevating SBA to a Cabinet-Level Agency


Get-attachmentIn my book "CFO Techniques" I praised the U.S. Small Business Administration agency (SBA) for its role in supporting small businesses, particularly with their loan-backing program, and the amazing informational gold mine that is SBA.gov site – literally, the best resource out there. It's no surprise that when CNN's news flash quoted in the title of this post has arrived into my mailbox last week, it immediately caught my eye.

You've got to admire the skills of the public relation specialists in Washington (I wish my publisher's PR department was as masterful, or at least as industrious)! Look at the words selection: "elevate to a cabinet-level." Wow! Sounds like the president is going to take the "lowly peasant" (never mind facilitation of over $30 billion in loans per year and $570-million budget) and magically transport it to Mount Olympus to reside there with gods. And how democratic! The whole agency is being "elevated," as if all of its 2000 employees can be members of the cabinet. Some people may even think that this will empower the small businesses and their interests will become "special" – just like the ones of pharmaceutical giants, auto manufacturers, big oil, and mining conglomerates.

In reality, the only person who immediately benefits from this move is the SBA's Administrator, Karen Mills. She has become a member (already listed on www.whitehouse.gov/administration/) of Obama's cabinet and now will rub shoulders with the likes of Hillary Clinton and Janet Napolitano.

Whether Ms. Mills' accomplishments at SBA (or credits she takes for her subordinates' accomplishments) justify her new status could be a subject of an investigative journalism exercise. If it's White House's conclusion that she is the best candidate for providing the President with the advice on the only opportunity to save this country's economy, i.e. cultivation and support of the small-business environment, then be it.

I am more interested in the actions that will follow this first step in what being hailed as a program for raising "international competitiveness of American companies." You see, SBA is not meant to remain a cabinet-level agency for too long. In fact, it's not meant to stay a government agency at all. The intention is to "merge" SBA, along with the Export-Import Bank (ExIm), the Overseas Private Investment Corporation, the Trade and Development Agency, the Office of the Trade Representative, into the Department of Commerce (already a member of the Cabinet).

Whether they will continue calling this newly formed government Chimera the Department of Commerce or find it a new name (the way it happened with the Homeland Security), it is obvious that the already existing ministry will absorb all those other entities and, as it always happens, with the loss of independence, their functionality will be stunted.

Look, what happened when HMOs started swallowing far more flexible smaller health insurance providers and formed such giants as Aetna, CIGNA, Health Net, and United Health? Did it make anything better for members? Of course not, we all know this: the premiums went up and the coverage got worse.

Do consumers and businesses benefit from the crazy wave of bank mergers we have experienced in the past 25 years? Again, no. The services get worse and the fees get higher (plus, the process contributes to unemployment).

Any type of consolidation cannot be considered an improvement. It's done for a show – to demonstrated that something cardinal is done. The results? Who cares?

In case of SBA, this is really a shame, because they have made already and could've continued making a significant positive impact on the struggling entrepreneurial business sector. Now, their good initiatives will be drowned in public policies, fiscal regulations, national directives, and all that other country-wide crap. Their micro-level approach will be gone forever.

I find it incredibly ironic that the entity dedicated to help small businesses will be remodeled as a part of a large-scale program.