Are We The Only One's Paying Our Taxes?

Now let's get this straight. The person we pick to be in charge of the Treasury is so smart that he he failed to pay more than $34,000 in social security and medicare taxes while working at the International Monetary Fund. And that he didn't even pay the Social Security and Medicare tax he owed for 2001 and 2002 until after he just recently became a nominee for Treasury secretary. Smart guy!



And days later we learn that Tom Daschle, President Barack Obama's choice for secretary of Health and Human Services, forgot (is that the right term) to pay about $140,000 in back taxes and interest until he was being considered for his new appointment. Sure it is only natural to have consulting income and get confused about whether it should be reported or not.



What are we stupid? From now on it is Mr. Tax Cheat not Mr. Secretary.

Our new column will be an ongoing look at organizational growth in order to see if there is any similarity between how The Peter Principle as presented in Dr. Laurence Peter’s book with the same name described how Every employee tens to rise to his level of Incompetence and our own BIG is BAD theory that might apply to organizations growing to a size that almost guarantees failure.

Think about how, as a generalization, most companies focus on the “How do we get bigger” with the mindset that such automatically translates to Better. Perhaps it is an outgrowth of the Bigger is Better thought process we saw in the 1960’s and 1970’s. Bigger computer centers were better. Then we figured out how all that could fit in a box rather than a building. We also thought that Bigger car’s were better as evidenced by some of the largest tailfins imaginable. If it came from Texas, then the biggest state it was better. And I won’t even talk about body parts!

Probably the example of all time is Enron a great company in its early years that through wild unbridled growth simply got out of control to the point of where management didn’t even care about right or wrong. Just become the biggest and tell everyone you were the best!

How about the Big three automakers? Each year sell more cars to feed the old dinosaur. Don’t plan for what the market will need. Don’t sell what people will buy. Just keep pumping out more and more of what makes a profit for management. Keep making bigger numbers so that the shareholders will believe we are the best.

And talk about housing. Another market so insulated from real world conditions. You have a reasonably successful business building reasonable homes in a region of the country. Let’s apply the new theory of growth to our business. We will span out to a dozen new regional markets and build three times as many homes as before. In order to do that we will help finance anybody with a heartbeat. Sell them the stars and the moon. And in the meantime rather than build a corporate nest egg for the future we will pull tons of money out of the business and pay key management millions in dollars in compensation. Hey, they deserve it because they made bigger numbers. Now they go beg for a government subsidy.

And what about all those big box hardware stores. Same model. Start out with a manageable business employing construction experts that can help our customers. Then get bigger and bigger. In the process cut out most of the professional help, keep the store as clean as my dirty garage, reduce the variety of products, open one of twenty cash registers and then give the guy in charge a $200 million dollar payoff for making big numbers that don’t work. Let’s calculate how that $200 million could have paid the salary of some 6,000 people for the next year. Big didn’t work here either.

And finally need we talk about banking? The worlds biggest banks with the worlds smartest bankers pumped the bubble beyond what the imagination could dream. So big, so strong, so smart that simple people and even government regulators couldn’t even comprehend what was happening. They made The Notorious B.I.G. look small! So what do we have? A total collapse, lack of accountability, a taxpayer bailout and dismissed executives selling their homes to spouses for the price of an expensive waste basket to avoid the man.

My local baker didn’t do all of the crap. He’s pretty darn smart looking back at what happened. He’s small in size but big in performance. And so is my local hardware store. Been there for half a century or more. Always helpful with great service and unbelievable supply. Some people go there when they know the Big guys won’t have that particular item. I go there all the time to just to give him more business so that he can remain BIG in our little neighborhood.

Merrill Lynch paid Thain more than $83 million in 2007

Something is wrong when a guy can collect this kind of money while drivng a company into the ground. And what about his giving out all that money in the 4th quarter as bonuses. Government often imposes new taxes retroactively so that they hit previously earned income. How about a 50% tax on all Wall Street income earned in 2008 that exceeds $1.0 million for those employees working for firms that took TARP money. Yea those impacted might complain but isn't everyone else.

Digital TV Delay Could Cause Confusion

Now that's a statement even a dog can't understand. If the transition doesn't happen and you turn your TV on and it works like it always did you are most likely going to have a mental breakdown. WRONG! We have spent millions of dollars in every possible way to communicate the change to digital TV.
We've probably watched more commercials about the transition than commercials about erectile dysfunction. We even hear that Federal Communication Chairman Kevin Martin sponsored a NASCAR that got wrecked early out of the pits to the tune of $355,000. Talk about government waste.
Lets be serious. The only people that really care about changing over to digital TV are the companies that provide digital TV so that they can eventually charge you more each month. We really don't care if Cesar Millan beams in a bit more sharply focused than with analog. And just think about the millions of families that are figuring out how to pay the rent and how to pay for groceries that are going to have their TV's go black because of this stupidty.
What's confusing is how our government can waste so much money and then say "Everybody's Going To Have To Give" while departments like the FCC just keep pissing money away.

How to turn piles of $ into a true stimulus

The government keeps giving away money and the guy on the street keeps asking: Where did it go? Give billions to Wall Street banks so they can give their execs "retention bonuses". Give billions to the car companies so they can keep running bullshit adds about how their high-horsepower trucks can jump through hoops of fire while getting 22 miles per gallon. Give billions to the homebuilders (actually their just asking right now) despite the fact that each company's executive team pocketed millions while peddling over priced homes to people that couldn't afford them. And get this. Just today Larry Flint is asking for handouts for the porn industry. All of this is a waste. None of these activities get people spending or get people producing something and that's the problem. Everyone's simply pushing paper. Take that $700+ billion and instead give it to American Families in the form of purchase coupons. Do you want to stimulate people. Give each household a $5,000 check that's only valid for buying a new car. That will get tens of thousands of people buying new cars and put the auto industry back in motion. Give each household a $2,500 check only valid for buying hard goods. People will use it and manufacturers will reap the benefits. This approach gets the money out to where it can be spent and where manufacturing and sales can benefit from such. Right now credit is tight. Manufacturers can't get money(because lenders are uncertain). If 100 million households had the above checks to apply for a car purchase you can bet that we would quickly have an automobile shortage.

End of the World - Macy's to Shutter 10 Stores

It is amazing how the media can jump on an event and make it seem like the ever shrinking economy is burying retailers alive. Today we see articles talking about how the highly compensated executives at Macy's are now forced to close 10 stores. Sounds terrible doesn't it? But wait a minute. In 2005 Macy's acquired May Co. for $11.5 billion. Yes that's billion with a B. A part of the acquisition added 5oo stores to the 350 Macy's already had. Now if you added 10 stores for every state in the country wouldn't you think about shutting a few down where there might be overlap? And maybe wouldn't you do it in 2006 or 2007 or 2008? Ten stores out of 850 is less than a 1.5% cut back. Absolutely meaningless when looking at the big picture and anticipated consumer frugality.

Bank of America - What's Their Business Model?

We just don't get it. Big banks are in a terrible state right know and two things they need are money and good customers. We keep hearing horror stories about their treating good customers like deadbeats. Two weeks ago we received a letter saying our credit card rate would be raised from 10.99% to 24,99% and if we didn't want that to happen we could stop using the card. Recognize we had the card for years, used it regularly, were never late making payments and did not exceed our limit. By all measures perfect cutomers. Not being able to come up with any good reason to continue our relationship with Bank of America we called them, cancelled the card and smiled as we watched it travel through the paper shredder.