QuinnsCommentary

The information on this site is copyrighted by Richard D. Quinn, LLC. Reproduction in any form of print or online publications is prohibited

Now! Quinn's Blog where you can participate in the discussion. Check it out.

Welcome, I hope you enjoy your time on Quinn's Commentary. Please be sure to view all of the sections and scroll down to view the various articles. I update the site frequently. The newest articles are shown first on each page.

I welcome your input and if you have something to say I will seriously consider adding it to the site. You can even disagree with me, how about that.

Have fun and let me know what you think. And remember, I may be observing you so be on your good behavior or you may find yourself a topic of my comments.

Thought of the Moment

You may comment on this article at Quinns Blog

Last Updated:

Check this one out Grandma and Harry

The Wedding Crisis

As I think back to my only daughters wedding it reminds me of the current economic crisis, strange uh?

My point is quite simple, my daughters wedding was a very emotional, once in a lifetime experience and we wanted to get it right, to make it “perfect” and memorable. We would have too except it poured rain all day. In today’s America a perfect anything usually means spending a considerable amount of money. While my frugal side tried to raise its practical head, other more powerful forces prevailed, forces in the form of my wife and daughter. We could have had a disc jockey, but we opted for a band. We could have had chicken, we had prime rib, we could have done a lot of things differently, but hey, this was my only daughter, my little girl and the bills could wait to be paid.

Thankfully that was all more than six years ago, the bills are paid and the economic crisis was not even in our imagination (and I was not retired). However, the mindset we may find ourselves in at times of great joy or sorrow where what we can really afford seems to fade into some distant future payment is not unlike the current mindset in our country.

I heard on the news this morning a women representing a food bank say they need a “federal bailout.” I suspect they will have to get in queue with banks, insurance companies, auto makers, the states, home builders and even average Americans. It appears the line is long and for some magical reason the supply of bailout money endless, for now that is. And, it’s a heck of a rainy day as well.

I am no economist, but it seems to me that sooner or later this crisis mentality largess will come due. I ask myself what will all this mean for my children and grandchildren, what if the rest of the world decides that it no longer wants to fund high living Americans, what if we find out that the long neglected Social Security and Medicare crisis is real, or worse Americans figure out that there is no Social Security Trust “Fund?” What if we have to dramatically raise taxes (if?) to pay off this debt and then find that higher taxes inhibit growth in the economy thereby prolonging our malaise?

It’s very easy to rationalize doing what you have to do today and worry about tomorrow, that is until tomorrow comes. You know something like buying a house you can’t afford with an adjustable rate mortgage. I wish someone would bail me out of my growing depression.

A Healthy Does of Education

We have all heard the story before, the sector’s costs are going up substantially above the rate of inflation, but few people ask why. CEO pay at many of the organizations providing services so important to Americans has risen beyond the rate of inflation and also beyond the trend for compensation in other areas. In fact, many would say these leaders are overpaid. And yet, Americans continue to pay with little question, it’s a very emotional issue after all.

Just look at some of these CEO pay packages:

E. Gordon Gee $1,346,225
Mark Emmert $887,870
John T Casteen III $797,048

The list goes on. How are they justified? Well, as you may suspect defenders say “pay increases are necessary to attract and keep leaders capable of overseeing their complex and often large institutions.”

Where have you heard that before,

that’s right out of the corporate America compensation manual, some excuse for high pay, uh?

What a mess our health care system is in.

Perhaps, but I am talking about colleges and the pay of college presidents. The above individuals are the Presidents of three public universities, that’s public state schools.

According to the Wall Street Journal, pay for college presidents increased by 7.6% between 2007 and 2008. Did you receive a pay raise of 7.6%? For 2008 the average raise in corporate America was about 3.75%.

College costs are similar to health care; they are justified by playing on emotions and the desire of parents to have the best for their children. Money is spent on big new buildings while tenured professors don’t’ teach classes under the guise of research and the requirement to publish while making small fortunes on side consulting deals.

And like health care, people donate to schools; leave them fortunes in wills enabling even more inefficiency and less accountability.

Higher education like health care needs to get back to basics.

My youngest of four children graduated from college ten years ago, before that I had one, two or three in college for ten straight years. I like many parents was determined to give my children more opportunity than I had, they were going to go to the best schools they could get into, and they did. They attended college at schools ranked in the top 25 in America and I am still paying off the debt in the form of a mortgage on my home, that otherwise would have been paid off ten years ago.

Did they get a good education, I suspect they did, three went on to receive Masters degrees (on their own dime), but did we all get our moneys worth, could that good education have been achieved for a lot less, I suspect it could have.

If I had to do it all over again, I would most likely do it again, I wanted the best for my children and I wanted them to be better educated that I am.

And if you have a loved one who is ill, you want the best for them as well, and who cares what it costs to achieve that? Therein lies the essence of the problem and why both higher education and health care are able to sustain what would otherwise be logically unsustainable.

Consider the following as well:

From: Why Does College Cost So Much? 2-12-07 By Mark HuffmanConsumerAffairs.com

The rate of increase has been sharply higher in some years than others. For example, in 1964, when the first Baby Boomers headed off to college, tuition inflation rose 4.61 percent, which was more than four times faster than the overall inflation rate. Between the years 1980 and 1982, when raging inflation in the economy increased a total of 30 percent, tuition costs surged by 40.3 percent, and have been steadily rising ever since.
Increases in tuition since 1992 have been steady, but comparatively tame, never rising above six percent, as the overall inflation rate has hovered around 2.5 to 3.0 percent.

But all those yearly increases have taken a toll.

In 43 of the last 49 years, college tuition inflation has exceeded the nation's inflation rate, with the cumulative increase pushing the costs beyond many students' ability to pay.

No Bailout for the Big Three

Somewhere in America there are a thousand small businesses employing ten people each. They are relatively low paid, they work hard and it is unlikely they have a pension or robust health benefits, let alone other benefits. They may be restaurants, florists, travel agents, auto repair shops, or any number of things.

Today they are struggling, the economy is bad, people are cutting back on their spending, especially on luxuries and even postponing what otherwise would be a necessity. The suppliers to these businesses are also having a difficult time and the snowball effect is rampant.

Ten thousand people are at risk for losing their job. Who cares?

Other organizations are also on the edge. Some of these have been around for decades and for much of that that time they were fat, dumb and happy. They built up long term liabilities for pensions and medical benefits, they sold inefficient products, they and their unions agreed to work rules and productivity measures that, well, are not very productive. Unions asked for and management gave away the store all the time ignoring or not understanding the future trends written on the wall. They inadequately assessed the competition; they were late in the game of offering the products people wanted to buy.

Who cares? Ooops, it appears politicians care. Here we go again, one more group of incompetent people shifting the results of their incompetence to the American public under the mantel of “we are too big to fail.” Well, no, you are not too big to fail; you and your unions deserve to fail. Do not tell me about all the concessions you made in the last five years; too little too late. You should have thought about that when you had people sitting around for a year with pay for doing nothing. You should have thought about that when the Japanese automakers began to kick your butts on quality and stole the American consumer right from under your nose.

Besides, a November 10, 2008 WSJ article notes: “United Auto Workers President Ron Gettelfinger has said more union concessions are out of the question, union lobbyist Alan Reuther said in an interview with Dow Jones Newswires on Friday. “We feel we've already stepped up" by giving ground last year on future workers' pay and benefits and retiree health care, Mr. Reuther said. The UAW wants assurances a bailout would help secure its members' retirement and health-care benefits.” Let us hope one of the conditions of any auto bailout requires the unions to accept work rules similar to the non union shops competing with GM, Chrysler and Ford…like that is going to happen.

The reality is that the Big 3 (or not so Big 3) automakers are not going away, at worst there will be major downsizing, consolidation and the industry will look quite different. Who knows, perhaps some smarter automaker say in Bangladesh, or Kuwait will buy them. Hey Hugo, do I have an investment for you; it fits well with your oil company. Between the Big 3, they sell about 17 million cars a year. That market is not vanishing so someone will have to make and sell those cars to Americans and they will need workers and suppliers to do it.

Actually, the problem will not even be solved with cash from Uncle Sam (or us if you prefer) simply because the cash does not change much at all. The cash will not change work rules, or get new products with higher mileage or make the UAW more amiable to change.

Frankly, I care more about those ten thousand people in all those small businesses who work 12-14 hours a day with no bonus and no fat pension unless they save for it when they can.

Congress and the feds in general seem more than willing to throw our money around to private firms under the guise there is no other choice. Nonsense, if there is no choice for a firm of a 100,000 employees (the automakers have far more employees) why is there no choice for 10,000 small businesses with 100,000 employees?

Moreover, what about the 100,000 plus Americans who work at auto factories not owned by the Big 3, do they deserve to be put at a disadvantage engineered by the federal government?

The workers at GM, Chrysler and Ford need jobs, but America doesn’t need to buy GM, Chrysler and Ford vehicles, we seem to be doing quite well with what we have been buying. Take a stroll in any parking lot and count the foreign made cars.

If you are inclined to be sympathetic to the auto industry, the answer is simple; Americans should not buy any car not made by GM, Chrysler and Ford…problem solved.

Comment on this article on my Blog at the link shown above.

I don’t agree with his politics, I fear the new direction he may take the Country more than I abhor what the Bush Administration has done, but I rejoice in his example that America is still a country where just about anything is possible. Mr. Obama’s rise in America is a mandate, a mandate for those of us who truly believe that hard work, education, grit, and all else that goes with success are things to be admired. Let’s hope the reality of his policies reflect those ideals much more than his campaign rhetoric.

I am sitting in a restaurant at the moment and the employees are arriving at work laughing, cheering out loud, and shouting, “I’m so happy.” and “yes we did.” Mr. Obama certainly sparked a flame of hope in many people. I am not certain what they expect to happen, but perhaps it is nothing more than seeing very different faces in the White House, and that’s ok too.

I truly believe that a left turn for America will have grave and long-term negative consequences, but I also believe that his presidency can serve as a model for millions of Americans who may have lost faith not only in our political system, but in the promise of America. It is very clear that after November 4^th, the status of America in the world rose just a bit and rightly so.

Let’s hope that the immigrants from around the world understand a little more that merely living in America is not being an American and that a common American culture built on a thriving democracy that can function in all directions and under any measure of distress is what is most important. Let us hope all Americans are prepared to be Americans first and that cultures left behind remain so. E pluribus Unum is much more than a slogan on coins. Look to countries around the world that are torn by strife and you will invariably find factions, cultures, tribes, ethnic groups, and religions that strive to maintain their singular identity within a country, it simply cannot be done, even in America.

Some Democrats in Congress will shout “mandate” and of course there is no mandate, some 49% of American voters did not vote for Mr. Obama, that’s a lot of people who did not agree with his politics, but in the end that all matters little as well because in America the next election generally takes care of those who misinterpret the true feelings of the American people.

Finally, looking at the faces of people in Grant Park, Chicago last night during Mr. Obama’s speech, seeing people crying at his words and his success, people like Oprah Winfred and Jesse Jackson along with a myriad of average people, I think I may just understand how important this victory of an African American was to them and even a little bit of why that is so.

I wish he were a conservative or at least middle of the road politician, and I still don’t want my taxes to go up, but hey, you can’t have everything.

Mediocre America

The Greatest Generation is passing away by thousands each month. This is the generation that generally embodied values of hard work, self-reliance and love of country, many were products of the great immigration at the turn of the 20th century and all were tempered by the great depression and World War II.

They are rapidly being replaced by the have it all, me too, live for today, I’m entitled generation who are rapidly finding out, at others expense, that it simply doesn’t work that way.

What will follow these generations? Well, if you listen to today’s political rhetoric, if you observe the philosophy many people seem to be embracing these days, I would say America is about to enter the age of mediocrity, a generation that somehow believes it is entitled to it all, that an omnipotent entity called government is responsible for their well being, that wealthy is bad and that averaging out prosperity is a right. In fact, some politicians are seriously talking about a new bill of rights where under we all have a right to a house, to prosperity and the general benefits that used to come with hard work, achievement and success. In other words, we appear to be headed toward rewarding mediocrity and if this philosophy prevails that is exactly what we will get.

If I recall the words correctly, our right is to “life, liberty and the pursuit of happiness.” If our right to life and liberty are preserved, than many of the ills facing society simply disappear. If our right to pursue happiness is preserved, than each person is free to achieve his or her goals, not by taking from others, but by maximizing their own worth, by their own effort.

We each define happiness in different ways, perhaps it is living in a cave and meditating all day, perhaps it is spending every penny we earn on the good life or perhaps it is success and wealth. They are all fine as long as we are prepared to live with our choices and not at some point blame the other guy for what we now want and don’t have. If I choose not to finish high school, to have a baby without a husband, to father children here and there, to accumulate unnecessary debt, to not pursue new training opportunities, to not take a second job to achieve a specific goal, to live beyond my means, then it is likely that my success in pursuit of happiness will be someone less than others.

Preserving the right to pursue happiness is sharing the wealth, redistributing it is simply saying that regardless of individual effort, or sacrifice we all must share equally. Taken to the extreme, that means that every American family should earn the average of about $50,000 per year regardless of the individual contribution. Is that what America means in the 21st Century?

We can preserve the right to pursue happiness by assuring there are no artificial barriers in terms of discrimination and such, by supporting the ability for every individual to have the education and training to maximize his or her happiness. Beyond that the individual must use those opportunities to the fullest in their quest for self-defined happiness. Today, as in many past societies on the brink we seem more focused on finding a scapegoat for our own failings, I lost the house I couldn’t afford because of those greedy Wall Street types, I don’t have a good job because jobs are going overseas, my retirement income is insufficient no matter I failed to plan and save for the last thirty years, I can’t pay my credit card bill each month because the interest rate is so high.

Incentives are funny things, they usual work, though frequently with unintended consequences. If you place a penalty on success, many will seek less success, if you remove the penalty or even reward mediocrity, then many will be content with mediocrity. If you pay a penalty for earning above some limit, why earn it? Of course, it is not all that simple, but the idea of pushing things down to the lowest levels and creating rights that do not exist as opposed to lifting to unknown levels is a long term recipe for a mediocre America.

My grandfather had only an eight grade education, yet he operated a business in NYC, wasn’t’ wealthy, but paid cash for everything. My father had a high school education and was among other things a railroad tower man, a ticket agent and a used car salesmen. He couldn’t afford to buy a house until he was sixty. I started after high school as a mail boy and the lowest paid employee in a company of 15,000, but I went to school for nine years at night while raising four children, I started a (very) small side business in addition to working 60 hours on the job so I could assure that each of my children had a good college education. Today I am far from the bottom of the pay scale and I enjoy the fruits of forty seven years of work. Do you see a pattern from generation to generation here? Call me naive, but I thought that was the way America was supposed to work?

I am no one special, there are millions of other Americans like me, we don’t deserve any medals or accolades. However, I do want an America that offers the same opportunities for my children and grandchildren, an America that offers rewards, not penalties for hard work, an America that encourages achievement that ultimately benefits all, not an America that assumes success (wealth if you will) is handed out to certain people the morning they roll out of bed after graduating from high school and thus must be shared by all.

Government is an entity that binds us into a country, with a purpose of helping society provide for common needs such as security, to assure a fair playing field, to manage those services best provided on a collective basis and to some extent protect us from those among us who feel compelled to not play by the rules in their pursuit of happiness. However, a government that attempts to redistribute the fruits of individual success, that plays one group of citizens against the other, that promises to some what society cannot afford, is a government that overseas a country mired in mediocrity with a dulled human spirit. And perhaps worse, those citizens who are not inclined to success through personal effort come to see that they are able to vote for the largess they seek and the snowball grows.