OMB: Owner-Managed Business

Fix The Tax System

Tue, 11 Dec 2012 03:55:53 -0100

There are a few major issues with the US income tax system as it currently exists. No proposal, not even this one, can fix all the existing issues, even before we consider that any proposal will have effects that negatively affect some segment of the population.

Progressive Tax Systems Promote Cheating And Nonproductive "Investments"

Tax systems in which the marginal rate increases as income (or most often income bracket) increases cause people to artificially avoid crossing rate-increase boundaries. They may do this by investing in enterprises where they expect to lose money (e.g., housing developments in the middle of Alaska, drilling for oil in areas where oil has never been found before, solar or wind electric-generation projects).

These tax systems promote resentment by high-income people, as they see low-income people who pay little (or even negative) taxes continually demanding more programs. Lower-income people see tax-paid programs as having no price, since—for them—they do not have any cost.

For this reason, I propose that the first US$20K of any individual's income should be tax-free.

"Family-type" Deductions And Credits Shift Taxes Onto Single And Childless

Deductions and credits for being in an approved relationship (i.e., married or parent-child) reduce tax collections. In order to make up for that, everyone's rates must be raised. The impact of the higher rates falls disproportionately on those who do not qualify for the deductions. In effect, single, childless taxpayers subsidize married people and parents.

Likewise, reduced tax rates for couples that file jointly is yet another way to subsidize married couples at the expense of those who file singly.

The Mortgage Interest Deduction Discourages Buyers From Performing Detailed Examination Of Terms

When someone is wavering on whether to borrow money to purchase a home, real estate sales people as well as lenders' representatives will point out that borrowers need not worry about the interest, because they will get it all back on their taxes at the end of the year. However, higher interest rates are likely to be accompanied by other terms that are harmful to borrowers.

Secondly, the deduction could induce people whose situations (not counting the deduction) make home ownership a non-sensible proposition to purchase property anyway. The buyers may then find themselves hard-pressed to pay normal repairs and maintenance, plus property taxes.

After the role that financial corporations' misconduct played in our recent (and continuing) nationwide / worldwide financial situation, I certainly do not wish to encourage buyers to rely upon the glib assurances of real estate brokers & salespeople, and those of mortgage loan "consultants". I want buyers to say, "reading the paperwork, I noticed that interest rises to X.Y% after two years, and that there is a balloon payment after twenty-five years. I am not comfortable with these terms, so I will walk out if you cannot offer me better terms."

Deductions, Credits, Exemptions, Alternative Minimum Tax All Distort Tax Rates, Confuse Taxpayers

In theory, taxpayers whose income places them in the top federal tax bracket pay a marginal rate of about 35% of every succeeding dollar. In reality, they use deductions, credits, and exemptions to lower their taxable incomes and tax rates significantly. The AMT is designed to cap the impact of deductions / credits / exemptions and prevent high-income people from escaping taxation altogether. If we would get rid of these distortions, the AMT would be unnecessary, and Warren Buffett would not pay a lower overall rate than his secretary.

Corporate Loans Should Be Repaid With After-tax Profits

Currently, other taxpayers subsidize corporate debt financing. This is because loan repayment is considered an expense and comes out of pre-tax revenues. Selling stock, on the other hand, involves paying dividends out of after-tax profits. The corporation (rightly) sees it as loans being less costly than stock, when the reality is that financial leverage (e.g., loans) increases the risk that the company will have one or more unprofitable years during the term of the loan. By moving loan repayment to after-tax income, we will increase tax revenues, but we will also encourage corporations to use debt financing only when and where that makes sense.

Corporate Taxes Should Use "Unary" Systems

In some states, notably California, corporations are taxed based on some prescribed formula for deciding how much of that corporation's revenue and profit was generated because of activities within the state. A large warehouse that does not bill or collect from customers might still be as important to the company's profitability as the sales office in Ireland. Federal taxes on corporations should reflect this recognition.

Tax Proposals Will Cause Damage

The recent and current tax proposals, both those of the Democrats and those of the Republicans, are not designed to prevent the very highest income taxpayers from paying lower overall tax rates than the rest of us. This despite the fact that both Congress and the White House know that deductions caused the problems and eliminating deductions will fix them.

For instance, the "tax the rich" proposals intentionally ignore deductions and the anti-deduction we call AMT. The "business-friendly" proposals pretend that cutting services and (especially) employees will solve the taxation problem.

Yes, We Do Need Unions

Sun, 9 Dec 2012 02:27:46 -0100

Why We Need Labor Unions After All | Daily Ticker - Yahoo! Finance

But now the pendulum has swung too far the other way. Now, it's all about stock performance--to the point where even good companies are now quietly shafting other constituencies that should benefit from their existence.
Most notably: Rank and file employees.
Great companies in a healthy and balanced economy don't view employees as "inputs." They don't view them as "costs." They don't try to pay them "as little as they have to to keep them from quitting." They view their employees as the extremely valuable assets they are (or should be). Most importantly, they share their wealth with them.

The view that labor unions are unnecessary is fatally flawed. Corporations are created to allow a small number of owners, managers, and financiers to act as cartels in the purchase of labor, supplies, services, and materials; and also in the provision and distribution of products and services. This gives them a much stronger hand in negotiating prices and terms with their counterparties, including the employees. At its core, a labor union is a cartel, meant to give employees a much stronger hand in negotiating wages, benefits, and working conditions.

The existence of corporations eventually requires the existence of unions. Even corporations in "workers' paradise" nations have proved to be unwilling to give employees' needs enough attention in the allocation process. Unless corporations are owned and funded and managed by their employees, they cannot be trusted not to put employees' lives and well-being at risk when it suits the organization or its leaders.

In my opinion as a pro-market, pro-smallbiz person, the only way to justify getting rid of unions is to get rid of corporation-type organizations (both for-profit and non-profit) and other group ownership/management schemes at the same time. This would have the side-effect of getting rid of the group-voice/group-power phenomenon. (Someone speaking for a group has a bigger political say than the individual members, even when all those members speak out.)

I do not know how long Y! leaves these things up, but this is one that you need to read in its entirety. Please go to the site and read the full article. Save yourself some aggravation and skip the comments.

The Health Care Law: When Is A Door Not A Door?

Thu, 28 Jun 2012 19:24:40 +0000

Originally posted in January 2010 on Xanga: When Is A Door Not A Door? | lnxwalt on Xanga

I have been watching this health care bill with both anticipation and some dread. I have to say that the dread now tops the anticipation.
It all starts about sixteen years ago. William J. Clinton was President, and a commission led by his wife Hillary R. Clinton was working on a proposal to bring health coverage to nearly all Americans. There was a loud roar, "let the market solve the problem, private industry will do a better job for a lower price". Clinton's health bill collapsed, and we got the medical insurance industry of today.
Did this solve anything? Not really. You see, health care insurance is generally too expensive for those who are not covered under an employer-sponsored plan. Those who are covered find that their insurer's cost-control processes are illogical. There are a number of Americans who are no longer with us whose demise should be blamed on insurance company "death panels".
The health bill, as covered in the press, has these characteristics:
(1)No "government option". This means that only the same companies whose incompetence and greed keeps 1/3 of Californians away from medical care are going to be the sole beneficiaries of this policy. Unlike the right-wing, who think this is "socialized medicine", I recognize this as 1940s-style fascism. Requiring people to patronized a favored group of privately-owned businesses is not only wrong, it is scary. What industry will be next? Will we soon be required to buy automobiles, even in places like DC, where it makes no sense to drive? Will the dairy industry require us to buy milk products?
(2) Mandatory insurance. One would think that our experience with mandatory auto insurance would show people that this is a bad idea. Lower-income employees, including younger workers, will face the choice of whether to pay their rent and buy food or pay their insurance. Unless they are already in poor health, most of them will make the (wise) choice to pay their rent and buy food. Using the IRS to punish the young and the lower-income worker is not an acceptable answer when coverage for some level of "BasiCare" should be be available without any direct reference to the patient's wallet.
(3) Insufficient attention to preventive care. Sixteen years ago, insurance companies promised that "health maintenance organizations" would focus on preventing illnesses, that this would be the way they would ration care... by making much of our medical care unnecessary. I ask you, where is the emphasis on diet, exercise programs, addiction-management (including smoking, prescription drugs, recreational drugs, and so on), management of chronic illnesses (e.g., diabetes, obesity, hypertension), psychological counseling (which can help avoid domestic violence and other violent crime)?
(4) Leaves up the dividing line between on-the-job medical coverage (worker's compensation, disability insurance) and off-the-job coverage. As long as that line is there, people on both sides will continue to try and cheat the other side's coverage. It is said that people come to work concealing an injury in order to "get hurt at work" and get treatment. It is also common for someone who really has been hurt at work to use their personal medical coverage because they fear retaliation by their employers. What is needed is a single, overall coverage.
(5) No workplace / classroom ergonomics requirement. Have you seen the little seat-desks that have a little area for a right-handed student to write upon? How often have you seen a lefty dealing with a seat that isn't designed for him / her? What about office chairs and desks whose height cannot be adjusted properly for the employee assigned to them? When this kind of design violation affects workplace machinery, it can cause killing or maiming accidents. Even when such accidents don't occur, human-centered design can reduce the number and severity of repetitive strain injuries.
(6) Exemptions galore. There are exemptions from the national plan for members of Congress, for those covered under government employee plans, for those covered under Medicare and Medicaid. There needs to be a single plan that provides "BasiCare" to everyone. Extended coverage (beyond what is contained in BasiCare) can be handled by today's dizzying array of medical payment solutions (e.g., privately-owned or government sponsored health insurers or even Visa / MasterCard) separately from BasiCare, but some basic level of care, including preventive and chronic illness care, should be handled through a central BasiCare system.
(7) Constitutional violation. No, I'm not a lawyer. But I can read, which is more than can be said for most judges, congress-members, or presidents. Continuing to overload the interstate commerce clause of the Constitution can subject us to easy takeover by a "Roman emperor"-style tyrant. Instead, this should be something where Congress approves of a "joint operating agreement" by the states, territories, DC, and the Commonwealth of Puerto Rico, but without any direct federal involvement.
In this, I see echoes of Massachusetts' failed plan. Their plan was based on persuading "I'm invincible" young and healthy workers to pay premiums, so that older and sicker workers' costs would be lower. The problem was that younger workers don't avoid joining health insurance plans because they don't believe they'll be hurt. They avoid joining health insurance plans because they find it difficult enough to pay for all the things they need (food, clothing, housing, transportation, tuition), plus all the things they don't need but are required to pay for anyway (auto insurance). Adding another "you hafta pay me" to their overstretched budgets didn't work for MA, and it won't work for USA.
Is this the best we could do? A massive giveaway of your income and mine to the insurance companies? This could have been such a boon to our economy. Think about your co-workers who are coming to work sick and in pain, and how much more productive they could be if they received medical / dental / vision / hearing care.
Here are some things that a national health care plan should have included:
(1) All other insurers off the hook. Anything covered under BasiCare should be only covered by BasiCare. Other insurers shouldn't collect premiums for anything within that area. This would both reduce premiums and reduce insurance company costs.
(2) Medical price parity. Right now, if you walk in and pay for your treatment with your credit card, you pay the most of any patients. In effect, you are subsidizing the discounted rates received by insurers. Medical care providers should have one rate for everyone who pays for a particular treatment.
(3) Direct and speedy patient recourse against medical payment organizations (that is, insurers and other payment intermediaries). This would help avoid situations such as a transplant recipient whose insurer refuses to pay for regular liver enzyme tests or the person whose insurance is canceled once she is diagnosed with cancer.
(4) Treatment incentives: A person's need for care will be influenced by his / her lifestyle choices. I'd rather pay for someone to get a free slow-cooker and healthy menu choices / healthy cooking classes now than pay for treatment later. I'd rather see someone joining an exercise program now than having to be carried on a flatbed truck to the hospital. We have to ensure that cost is not an obstacle to healthy living, and that someone who chooses to live unhealthily despite the availability of assistance doesn't use up all our treatment resources.
(5) Centralize payments. There should be one third-party payer for all BasiCare treatment. This doesn't mean that direct patient payment will be prohibited, although they should get the same prices and payment terms as BasiCare does and that payment should be accepted as full payment, just as with BasiCare. (That is, no double-billing. Fraud should subject a treatment provider to permanent ineligibility for payment, including ineligibility to directly bill individual patients.)
(6) Universal coverage. Every individual in the country, whether young or old, male or female, citizen or not, should be covered for BasiCare. No exceptions or exemptions. This includes congress-members, military, state / federal employees, and even certain employees of religious organizations who are (for some curious reason) exempt from Social Security.
(7) Non-federal organization. It is time to start following the Constitution. States are closer to the voters, and present a more dispersed target for those who would corrupt the process (such as the major health care insurance providers).
(8) Premiums paid through state taxes, not federal taxes, and not directly by the covered patients.
(9) Co-payments encouraged. If it costs you nothing to go see the doctor, you'll be there when you get a scratch or when your toenail is about to come off.
(10) Personal responsibility. When you refuse to care for your new piercing, you should have to reimburse BasiCare for the treatment of your infection, or even better, be made to pay some portion of it up front and to repay whatever you didn't prepay. Personal choices have consequences, and you should pay for those, not everyone else.
Somehow, I doubt that the imperial Congress will hear my voice. They are too busy listening to big insurers and centralized government advocates. But they should be listening to me and millions of others like me, because we're the ones who will get stuck paying for their mistakes if they fail to hear our voices.
When is a door not a door? When the government shuts it and keeps you from using it.

On Re-Rooting

Sat, 3 Mar 2012 21:42:26 -0100

Sometimes, the best way to explain something is to skip the explanation and go straight to examples. This helps the reader or hearer to use induction to discover your meaning. If an explanation is then needed, it is frequently more about boundary conditions (x is included, y is not included) and the underlying principles.

Example 1: David after his sin with Bathsheba

God exposes David's sin through the prophet, in a way that makes it quite impossible for David to pretend he was not guilty or that he did not knowingly commit a murder to cover up adultery. David's response was to begin to seek to restore his relationship with the God who had chosen him and raised him up. He also sought to have God spare the child borne out of his sin from dying of its illness, but that was not granted.

Out of that time, we get one of the most intense portraits of confession of sins and request for restoration that we have anywhere. President Clinton's ordeal (when his infidelity was exposed) was probably pretty intense, but he wasn't faced with the possibility of death. He wasn't faced with losing a lifelong relationship with God over this. He, like David, could have lost his job as national ruler, but David was also their combat hero, and his fall from office could conceivably have given the Philistines the encouragement they needed to conquer and possibly even exterminate the Israelites.

Read Psalm 51, and you see someone who was desperate, not to hold onto the throne (or the White House), but to reacquire his lost relationship with God. David wasn't concerned with appearances any more, else we'd not be able to read his prayer. Psalm 51 is not a one-time prayer. It isn't the magic words ("pray these words once and you'll be saved forever"). Psalm 51 is earnest, agonizing, desperate prayer.

Example 2: Isaiah's trip to heaven

It is difficult to determine the time-sequence of many biblical passages. However, I feel confident in saying that Isaiah was already serving God as a prophet when he was taken to heaven and given a more intense and direct calling. He didn't have a lot of time to accomplish his re-rooting. He could only return to the earth and the people of God, with a new and more intense calling and a message that is rumored to have led to his death by being stuffed into a hollow log and then sawn in half.

If you think an experience like Isaiah's is sheer pleasure, or that you want what he had, you haven't been reading his book (in a modern translation--We need to stop pretending that a four hundred years-old translation accurately represents God's message to us today. It doesn't. It is the same tradition-holding that led Catholics to continue to hold their services in Latin long after no one spoke that language anymore). While I would love to be able to see God face-to-face (or rather, see him appear in a form like that of a human) and get some important pronouncement about the future from him, the truth is, no one I know would receive that message, and I'm not tough enough to willingly allow people to saw me in half.

If you are still wanting to patty-cake it, if you still want to play games (denominational, doctrinal, political, racial/ethnic/gneder/language-spoken, or whatever other games you've been playing), if you are not willing to allow God to shake your life to its foundations, you're probably not ready for re-rooting. And that's sad, because America's churches are playing games. America's church members are playing games.

We put our denominations, organizations, affilliations, positions, and histories before the activities necessary for re-rooting, such as sitting before God without pretense or precondition, praying and reading his message (the Bible, in any decent modern translation). We put our race, nationality, citizenship, ethnic group, or the language we speak before the activities necessary for re-rooting. We put politics, left-wing and right-wing, before re-rooting. We put our adoration for celebrities and politicians before re-rooting. All of that must cease. We as believers, living in the United States, as it slips from it position of world dominance, must know that letting things slip helped to accellerate the downward path of our nation.

But it is not just our nation that is in trouble now. It is our churches, our leaders, our next generation, and ourselves.

Get desperate for a new and vital relationship with God, through Jesus Christ. Place that ahead of your political party, your political views, your views on race, on the roles of the sexes, on church governance, and even on doctrinal purity. You'll not have the relationship you desire until you are willing. God, the Bible (in a modern translation), and you. That's all you need.

Changes Afoot

Sat, 3 Mar 2012 20:47:37 -0100

Forgive the mess. I'm closing several blogs. Most of the remaining blogs will go on a short hiatus while I do some infrastructure switching. I hope to archive and restore the content of the Christians in Business, Owner-Managed Business, and Free & Open Technologies blogs. The WCC LinkBlog, La Voz de la Revoluccion, my Writings blog, and Slingshot will not return.

I also have two blogs hosted on Google's Blogger site: OpenTech and Open Source REXX Blog, and two blogs hosted on Wordpress.com: Opportunity Knocks, and LAMPJR. I believe I want to merge Open Source REXX Blog and LAMPJR, at LAMPJR's address (at least, for now). I am not sure whether OpenTech will stay on its own, whether I'll merge it with Opportunity Knocks, or whether I'll merge it with Free and Open Technologies.

Tax Breaks For The Rich?

Sat, 18 Feb 2012 01:26:30 -0100

In the last couple of months, there has been a real push to repeal Bush-era tax cuts under the pretense that only the upper income benefitted from them. The funny thing is that I clearly remember that time. I was making about ten grand per year, which means that I ran out of money and food every pay period. Suddenly, the amount of money deducted from my paychecks changed. I could eat all month!

If you hear someone talking about "tax breaks for the rich", ignore them. They have just shown their ignorance of economic issues.

Does the US need to increase its tax revenue? Yes, certainly. But even more, we need to recognize that the continued expansion of federal agencies into areas that properly belong (via the plain meaning of the text in the Constitution) is the primary reason why state and local governments across the country are struggling to stave off bankruptcy (except in California and a few other big states, where a similar concentration of tax revenues and power is at the root of their troubles).

How would one raise taxes? There are some simple things that could be done to raise tax revenues.

Eliminate deductions and tax credits. Does anyone really believe that we should make people who are not married pay extra, so that married people can pay less? In a nation with a 50% divorce rate, do we really want people to marry for financial reasons, rather than for deeper reasons of personal commitment? Do we want people to have children or buy a home because they expect to receive a tax benefit? Because it seems pretty obvious to me that we want people to make most of their decisions without being tempted by tax benefits.

Make corporate loan repayments come out of their after-tax revenue. Currently, if a business want to raise funds to buy a piece of equipment, it has two main choices. It can raise equity, which means that the current owner have to contribute funds to the company or have their interest diluted by additional investors. Returns on equity are paid after taxes have been taken out. Or it can take on loans and pay interest. The interest is paid out of pre-tax income, meaning that the revenue used to pay interest on loans is deducted from the company's taxable income. Another way to describe this is taxpayers subsidize business loan repayment.

We should also institute a unary tax system for corporation-like entities. This is where the total pre-tax revenue of all of the company's affiliates & subsidiaries world-wide is used in calculating tax liability, based on the percentage of that revenue that is related to US activities. So that way, selling products to the US subsidiary at inflated prices will no longer result in lower US taxes.

But that is not nearly enough. The US was, until very recently, involved in three (3) wars. One of them, Afghanistan, was justifiable by the 9/11 terror attacks, but Iraq and Libya? Why are we sending our young to die in foreign lands where a sizable majority of the local citizenry was not already, prior to our arrival, engaged in fighting for their own freedom? Is it that we have too many young and wish to "cull" the ranks? Or is it that we wish to emulate the Soviet Union's model of imposing by force a system of government and politico-military alliance on nations too weak to protect themselves from us?

Secondly, we need to get the federal government out of K-12 schooling. Schools need to be funded and controlled as close to the local level as possible. Does it surprise anyone that the more we centralize funding and control of our schools, the less they are able to respond to the needs of the communities and the society they serve? Do you really believe that a pack of politicians and bureaucrats in Washington know more about what your kids should learn and how they should learn it and how much it should cost than local parents and teachers?

Thirdly, there are a number of other federal agencies that unnecessarily reproduce state-level functions exactly the way that the Department of Education does. We can trim such agencies. We have spent a lot of money on equipment to scan people's scrotums at airports in the name of security. We have spent a lot of money creating and publicizing the "rainbow of doom" terror alert level system and doing similar "security theater" activities. Isn't it time we stop wasting money on them?

Time to Stop Lying To Ourselves

Sat, 18 Feb 2012 00:33:26 -0100

It is time to stop lying to ourselves, and to stop letting our political and financial leaders lie to us.

What am I talking about? Well, many things, but let us start with a couple of the whopping big lies we're being told.

LIE: Youth must finish high school and go on to college, or they won't be able to get good jobs. In actuality, you mean corporate jobs in a higher-paying industry? High school, followed by trade school or possibly college is a requirement, but not a guarantee of obtaining one of those jobs. On the other hand, most of the jobs being created in our nation are not in higher-paying industries, but in low-wage service industries such as hospitality (hotels, motels, restaurants, fast food, retail, janitorial services). By telling students that they must attend college, we are burdening them with humongous student loan debt, which will take them most or all of their working lives to repay, yet most of them will not increase their earnings enough to make college financially worthwhile.

Actually, there is substantial doubt as to whether there are enough high-paying corporate jobs available for the number of college graduates anyway. As more and more people attend college, and as more and more corporations cut domestic (e.g., US-based) staff and rely on outsourced overseas labor, it gets more and more questionable whether your kids or mine should invest the time and the effort required to obtain a degree, knowing that they are likely to find that either "Gree-C Burger" or that big blue discount store are the only places that will hire them.

I would rather hire a "Liberal Arts major" instead of an inside candidate for any kind of management or supervisory position, all else being equal. No matter what education or experience someone has, the employer (or more accurately, the employer's staff) will have to train that person, and if that person's background within the field or industry is extensive, that person will have much to unlearn before being ready to start learning.

LIE: The reason you should attend college is to get a better job. There was a definite connection in the first 20-30 years after World War II, when large, out-of-area corporations (LOOACs) were strong and growing, and export markets around the world were eager to snap up anything that was marked "Made in USA". Since the late 1970s, first high school diplomas, then many community trade school certificates, and finally college degrees (at the associate and then bachelor level) overtook the number of positions available for those who completed said schooling. The reality is that the best reason for attending college has always been the broad, general perspective that graduates bring with them once they hit the workplace.

I was a business administration major. I also worked my way through school. As part of that, I went through a number of supervisory and lower-level management training courses. In my experience, people whose training only includes company-specific "management" training are far less prepared when something unexpected comes up. Likewise, those whose work experience only includes one company or one industry are far less prepared to deal with the changing environment that is a reality for most businesses these days. A career-changer or someone whose college degree is in a completely different subject than the job being offered is likely to perform better than someone "reared-up" within a particular industry or enterprise?assuming, of course, that the person has the aptitude and motivation to learn the job and the industry, and to ask questions and tap the subject expertise of those who have been reared up in the industry and / or company.

The truth is, I would rather hire a "Liberal Arts major" instead of an inside candidate for any kind of management or supervisory position, all else being equal. No matter what education or experience someone has, the employer (or more accurately, the employer's staff) will have to train that person, and if that person's background within the field or industry is extensive, that person will have much to unlearn before being ready to start learning. The liberal arts major will have a broad background, but little specific knowledge of the company or industry. If he / she is motivated, he or she will be performing at the expected level in 90 days, where the insider will just be reaching the point where the employer's staff can begin teaching the person the specifics of the job.

That is not to say that an applicant without work experience but with a college degree would be worth hiring. If you send your kids to college, make sure they get at least a part-time job, and that they keep it all the way through school. Yes, they will find their employing organizations are not the love-and-kisses lands portrayed on recruitment materials. Yes, they will have to compete for more work hours during slow periods and find ways to prevent work schedules from interfering with their progress in their classes. They'll also have to learn to keep their hormones from affecting the workplace. Most importantly, they will learn (I hope) to apply themselves to the task at hand.

LIE: Not everyone is cut out for entrepreneurship. Some people are just worker bees. Back in the 1940s through the early 1970s, this may have been a reasonable perception. But with corporate loyalty to employees lower than it has been since the days of Teddy Roosevelt, even if you have a job, you need to treat it like you are an independent contractor?including keeping close track of work tasks, work training, compensation for work performed, being sure to obtain and document outside training and education, trends in available work opportunities in your local area and in your field of work, managing your reputation online and off (i.e., stop that repeated whining on Facebook about your life), and probably the most important, managing your financial life such that you forgo purchases that may later have a negative impact on your credit rating or ability to save money for the future?so that you are prepared for the day when that job is gone. I have read that the average American worker is now expected to have six "careers" during his or her lifetime. If you fail to prepare for the end of your current job and your current industry, you are being foolish.

In certain ethnic groups and certain neighborhoods, entrepreneurship is even more important. First of all, you have to understand what entrepreneurship really is. It comes from a French word that means risk-taker. But that does not adequately describe it. An entrepreneur is someone who attempts to take control of the supply side (that is, earning income) of his or her financial and economic life. I consider it even riskier to rely upon the LOOAC or government agency where you currently work to still have work for you at your current pay level or better (inflation-adjusted, of course) than it would be if you left to start your own business, but entrepreneurship is not necessarily starting or running a business. Entrepreneurship is taking control of your own income, whether that means starting a business, pro-actively leaving one employer for another, or starting / becoming active with a local non-profit.

Black and Hispanic Americans (US citizens, nationals, or residents) are the least likely to obtain employment, the least likely to earn at least a middle-class income, and the least likely to keep their jobs during recessions or corporate outsourcing / offshoring. It is the height of foolishness to tell young minority kids that their hope for staying out of poverty is to get in with LOOACs. LOOACs have been mostly eliminating people since the late 1970s, and few of them are in the impoverished urban neighborhoods where many members of ethnic minority groups live.

LIE: We'd be better off if only the were out of office. The fact is, Democratic policies hurt ethnic minorities in urban areas and Republican policies hurt those who work hard, save their money, and invest it in stocks and bonds. Democrats control the cities, and have huge bureaucracies that necessitate high taxes. They also enact insane numbers of regulations which prevent low-income residents from starting businesses in their homes. Republicans fight against regulations that help level the playing field for smaller, locally-owned businesses (SLOBs) in order to enable top executives of large, out-of-area corporations (LOOACs) more freedom to overpay themselves, defraud their investors, underpay their employees in the name of competitiveness, and to selectively use bundling and underpricing to lock out competition.

Ethnic minorities and those who live in urban areas need to start building businesses. Smaller businesses. Locally-owned businesses. Locally-managed businesses. Businesses that are staffed by people in the local community. Businesses that can begin to pay their workers enough to make it desirable for local youth to come and work at those businesses instead of selling and consuming illegal intoxicants.

LIE: Minorities, especially in urban areas, get welfare and use it to buy illicit drugs. That's why there are so many of them in prison, and why so few of them have jobs. Before I answer that, let me point out that I don't like or use recreational intoxicants other than alcohol, and I probably consume about twelve beers each year. One time, I had a prescription for hydrocodone. I had never heard of it, but soon found that it had intoxicating effects I found unpleasant. Within a couple of days, I had flushed it down the toilet. I find the whole experience of not being in control frightening. So I am not a drug user, nor am I an alcoholic. I am also not in favor of drug abuse, although I do believe our drug laws have failed and we need to look at an alternative.

Anyway, the last time I saw numbers, whites were more likely to use illicit drugs and more likely to use hard drugs. It isn't blacks that fly bundles of pot across the border, and it isn't blacks driving the vehicles with all the secret compartments to hide dope. Having said that, there are a lot of blacks that use drugs, just as there are a lot of every other ethnic group that use drugs. There are also a lot of people in every group that do not use drugs. I should also point out that wealthier people (usually white) use white powder cocaine, while poorer people buy cocaine adulterated with baking soda, known as "crack". Last I heard, using cocaine with non-intoxicating baking soda mixed into it would bring a longer prison sentence than just using the original substance.

Furthermore, there are more whites on welfare than any other ethnic group. I am sorry to burst your bubble of racial pride and politics, but there are good people and bad people in every ethnic group.

LIE: The abortion debate is about women's reproductive freedom. It is pro-choice versus anti-choice. In the US and many other countries, legalizing abortion has always been about suppressing the growth of ethnic minorities. In the US, Planned Parenthood's founder wrote about using abortion and other means to suppress the propagation of unwanted groups, such as blacks, hillbillies, and those of Greek or Italian ancestry. Countries like China and the Soviet Union did likewise. Late in the USSR's existence, ethnic Russians were declining as a percentage of USSR population, as people in the southern (Islamic) Soviet Socialist Republics had higher fertility rates. In response, there was a campaign to limit population growth in those SSRs, while encouraging ethnic Russians to have more babies.

Pro-abortionists are better called exterminationists, since they would exterminate black babies until there were no more blacks here. Incidentally, this shows why it is a LIE that right-wing groups are racist, but left-wing groups are not. Both sides branched from the same rootstock in the early 1900s. Fascists got their name from the Italian name for "bundle"; a bundle of sticks being the symbol of the socialist labor movement at the time. Nazis got their name from a shortening of "national socialists" in the German language. There is little difference in their tactics and little difference in the end result of their rule.

If you want to stop lying to yourself and your offspring, where should you start?

Recognize that government is not going to take care of you. Social Security is a good example. It's original purpose wasn't to provide retirement, but solely to get older workers to leave the workforce, so that younger workers could be hired to replace them. Thus, the government never planned for things like the end of the baby boom, because it was never designed to last this long. Neither Democrats nor Republicans have the guts to tell us the truth, which is that the federal government has been spending that money since the 1930s, that there is no "social security fund" where the SS taxes that have been collected all these years accumulate. Instead, the government takes the money, spends it, and replaces it with a bond (an IOU) that is supposed to be repaid with tax revenues from future generations. Once the baby boomers all retire, it is expected that there will be three workers paying taxes for every two retirees. On top of paying into the SS fund for their own retirement, those workers are each going to be taxed an additional amount to cover 2/3 of a retiree's benefits. Face it: it is all a LIE.

Recognize that no LOOAC, no large corporation, no large bank, no large organization of any kind is going to take care of you and your family the way you want. You need to stop expecting it and to stop living like it. That means you have to start doing the things I mentioned above as entrepreneurial tasks. It might even mean that you will have to start a business. If you are a member of an ethnic minority group, starting a business, even if it is only part-time, on the side while you keep your existing job, is definitely something you should look into.

Recognize that the "American dream" stories where someone starts out on the bottom and works his / her way to the top are rare. If you are working for a large organization, your ability to receive a reward for your effort is constrained by the organization's pay policies, which generally attempt to cap pay levels within different job titles and ranks. If you desire to get paid more, to get more benefits, or to be sure you will have a job when hard times come, you will very likely have to change organizations at least once, and more likely, you will have to start your own (or help someone else start their own) organization. You will have to work hard, and you are accepting all the risks of failure. But it is mostly your own decisions that will make or break your own organization, while it is "those bozos in headquarters" who will decide your fate in an existing organization.

If you are a young adult who is just beginning the trek through college, get a job while you are in school. Be aware that there will probably not be jobs available that meet the expectations you've been fed. Do not be afraid to start working somewhere that has nothing to do with your major. Neither should you become loyal to any employer, since you can be fired or laid off at any time. Instead, you should always be looking for your next gig.

Technorati Tags: economy, politics, college, entrepreneurship

Icerocket Tags: economy, politics, college, entrepreneurship

On SOPA, PIPA, and Copyright Maximalism: How We Must Respond

Sun, 22 Jan 2012 18:44:49 -0100

Joel Spolsky - Google+ - Two things about SOPA/PIPA and then I'll shut up :) (1) …

(1) The internet seems to ignore legislation until somebody tries to take something away from us... then we carefully defend that one thing and never counter-attack. Then the other side says, "OK, compromise," and gets half of what they want. That's not the way to win... that's the way to see a steady and continuous erosion of rights online.
The solution is to start lobbying for our own laws. It's time to go on the offensive if we want to preserve what we've got. Let's force the RIAA and MPAA to use up all their political clout just protecting what they have. Here are some ideas we should be pushing for:
Elimination of software patents
Legal fees paid by the loser in patent cases; non-practicing entities must post bond before they can file fishing expedition lawsuits
Roll back length of copyright protection to the minimum necessary "to promote the useful arts." Maybe 10 years?
Create a legal doctrine that merely linking is protected free speech
And ponies. We want ponies. We don't have to get all this stuff. We merely have to tie them up fighting it, and re-center the "compromise" position.

Mr Spolsky is expressing thoughts that all of us should be thinking. In fact, I've partially expressed some related concepts before. Only, now that they've been expressed, we need to discuss them, modify them as needed, and then implement them. I encourage you to go to his post on GPlus and read the whole thing.

Why Startups? Why Small, Locally-Owned Businesses?

Sat, 31 Dec 2011 00:44:37 -0100

I, Cringely » Blog Archive » Why big companies can't change - Cringely on technology

At the polar opposite position from big industrial companies sit startups, nearly every one of which begins with an effortless expression of why? Big companies ask What? then How? but almost never Why? according to Sinek, who I think has it absolutely right. But good startups are motivated from birth by Why?
Nearly every good startup begins with why? and that why? is traditionally quite simple — because the founders want one for themselves. A hardware device or software application doesn't exist and they'd really like one, so they invent it. For startups why is easy. If it isn’t easy then you probably don’t have a good startup.
If as a founder your answer to why? is "to get rich" you are in the wrong job.

This is one of the paradoxes of our time. We send our youth to college to prepare them to get jobs in large corporations. But overall, large corporations started laying off more people than they hired back in the 1970s, and that trend has not, to my knowledge, changed. We need to be preparing our youth to start, manage, and thrive within smaller, locally-owned businesses (SLOBs), instead of large, out-of-area corporations (LOOACs).

If you're working for a large organization, you know what it is to have a great idea, but not have the autonomy at work to enable you to try it out. Likewise, if you're like most people in large organizations, you are mostly just trying to hang on until you can retire, so you do not want to make waves and wind up in the next wave of layoffs. And yet, you know the resources are abundant, because the executive team are always getting bonuses.

On the other hand, in a smaller organization, at least one that isn't run by a miniature Idi Amin, you are likely to have the autonomy to try out things, but you might not have the desired resources.

SLOBs:

broader range of job tasks
more autonomy as to how you do your job
less formal policy
smaller chain of authority

LOOACs:

narrower, more specialized job tasks
less autonomy as to how you do your job; how and what you do is likely scripted by policy edicts
more formal policy, including written policy
deeper and broader chain of authority; more oversight; more intermediaries

Imagine yourself creating a product or service to be produced by your current employer. Is your boss (and your boss's boss, all the way up to the top) likely to approve of your ideas for new products and services if all you have is the why it should be done? Or is he/she more likely to block it?

If your employer is a big company (a LOOAC), it is likely that your answer was 'block it'. You do not want this for yourself, and you should not want it for your children. Encourage them to find a SLOB (small, locally-owned business) or start one. Their future--and our nation's future--depends on it.

Why Should Your Focus Be On Local Buying? This Infographic Explains

Sat, 17 Dec 2011 14:44:41 -0100

(Click to enlarge)

Source: eLocal.com

For the past few years, we've been talking about the advantages that SLOBs (Small, Locally-Owned Businesses) bring to their communities. Our plan is to continue doing this, and to highlight others who are doing the same.