Friday, April 10, 2015

The Embezzler

I’ve written on this before, but this time we will examine another avenue of deceit. Imagine we have a billionaire with a very corrupt money manager embezzling his employer’s wealth. In most cases, neither party would probably spend more than a million a year. And if no one got caught, it would take 50 years to go through 10% of the billion. Basically you have two people that share the same billionaire lifestyle. The person being embezzled from has no idea of his losses until they are discovered; his death could trigger an audit that would discover the crime.

Pretty much when we get to wealth above a billion dollars, the owner has wealth that they will never even have the time to spend. That could be argued, especially if they get married to a real gold digger.

Now imagine the 9 to 5 worker that saves 5,000 a year in his 401k for 40 years. He now has a nest egg of from 500k to maybe 2 million. So if he started at 20 years old, that makes him 60. So he has about 7 more years before retirement. Notice one thing here, if someone has embezzled his savings, he still won’t know about it for another 7 years at the earliest.

Then if we reexamine Bernie Madoff, he only had a problem when the economy was in the tank. Incoming deposits couldn't cover his clients withdrawals. The Federal Reserve and Treasury will never have that problem.

Something else can happen that changes everything. Bankers loan dollars to investors in the stock market. A stock gets bought and the seller buys a Treasury bill. If the stock market were to drop a hell of a lot, the buyers would get margin calls they couldn’t meet. At this point, interest rates have to rise to attract funds for the margin calls. Sell Treasury bills to get the higher interest paid on the stock exchange to cover margin calls. The neat thing here, is that Joe Taxpayer gets to bail out the bank.

Remember back to when we were talking about the Billionaires and how little of what they had, they really used and about the retirees with all of their savings still 7 years out of reach? As long as you don’t need it, you would have no idea that it is already gone and spent.

Here is the simple math, the population as a whole decided not to consume 18 trillion dollars of their income so they could enjoy it at retirement. The government spent those dollars and consumed product that the population had made an effort to save, for retirement. Now as retirement rolls around, the retirees are starting to spend the dollars that they had saved in the past. There is only one problem, there isn’t 18 trillion dollars’ worth of product for them to consume. I would hazard a guess that maybe there is 4 trillion of product to match the 18 trillion saved for later consumption. As long as receipts exceed outflow from the fund, there is no problem. During difficult times, more people tap into their retirement funds. And as Bernie learned, it’s a game of musical chairs waiting for the music to stop.

Consumption is different at retirement. You have worked hard and saved for the golden years. The funny thing is, the government already borrowed the cash and consumed what you would want to purchase. 43 million people on food stamps is one a hell of a free lunch. Your money is safe, they can always print more. I'm wondering what sort of salad dressing goes well with crisp one dollar bills? Or whether a ten dollar bill has more flavor than a five dollar bill?

Monday, March 30, 2015

Ethanol Dosen't Work

Looking at the price of gas dropping, I was wondering if we could get rid of the 10% ethanol additive. It costs more to add it to our gas. Plus when you make ethanol out of corn, it is the steaks and hamburger we eat that cost more. The idea of raising food to make gasoline is an absurdity in and of itself.

Economically on the financial, there are a lot of people getting subsidies for making ethanol for gas.
From Forbes 4/20/2014 “It's Final -- Corn Ethanol Is Of No Use”

In 2000, over 90% of the U.S. corn crop went to feed people and livestock, many in undeveloped countries, with less than 5% used to produce ethanol. In 2013, however, 40% went to produce ethanol, 45% was used to feed livestock, and only 15% was used for food and beverage.

In 2014, the U.S. will use almost 5 billion bushels of corn to produce over 13 billion gallons of ethanol fuel. The grain required to fill a 25-gallon gas tank with ethanol can feed one person for a year, so the amount of corn used to make that 13 billion gallons of ethanol will not feed the almost 500 million people it was feeding in 2000. This is the entire population of the Western Hemisphere outside of the United States
Kind of tear jerking, but it does explain why I can’t afford to buy steak anymore. Why should the price of oil dictate the price of beef? We use to eat beef every day, now we eat chicken every day and I am starting to get used to it.

The big thing about ethanol in your car, is that it reduces the miles you get per gallon. Plus the caustic effects of alcohol on your fuel system eats the hell out of the plastic fuel lines.

Then I thought, how did we get to be using ethanol? Congress comes to mind. It was supposed to curb our dependence on foreign oil imports. What we are really experiencing is the “unanticipated” consequences of that program. Any red neck farmer knew right away that his corn was worth a lot more to the government as a gasoline additive. Chicken feed is still chicken feed.

On a personal level, I’d like to see some deflation in beef prices, and the easiest way to do it is at the gas pumps. Let’s put the ethanol genie back in the bottle. I wouldn’t mind getting a half gallon of gin with every gas fill up (instead of being put in my tank)—I could give the bottle to the guy on the freeway with the sign “Will work for food.” That would certainly put a glimmer in his eye. Of course the way Congress works with subsidies, maybe they will get General Motors to make a car that runs on pot. The neat thing about a car that runs on pot, is that when you turn it on, you’ll immediately forget where you were going.

Somehow Congress has figured out what we need and passed a law to protect us from ourselves. Maybe we need to smoke some dope to understand where they are coming from. Sanity seems to be the issue, lead poisoning could be the problem or a pretty good excuse for what they have already done.

Saturday, March 14, 2015

The Middle Class Redefined

Government and Politicians always discuss the writ of passage in becoming part of the middle class. We hear it all the time “Everyone needs to be able to have a shot at joining the middle class in this country.” Boiled down into simpler terms, the poor are offered the opportunity to become rich albeit not rich enough to be in the “Tax the rich group.”

It’s a little like the “red neck” jokes. You know you’re not middle class if you get paid the minimum wage. Usually “flipping hamburgers” is substituted for “minimum wage.’ In reality, it doesn’t matter what the minimum wage is raised to, you are still flipping hamburgers. So if the wage is raised, it is still not enough and never will be no matter how high it is raised. The minimum wage will not support a family of 4, it never has and never will, but by God the bleeding hearts on the nightly news think that this is rank with injustice.

Owning a home and two cars with the bank and no savings also is not middle class. You look good, but you’re only two paychecks away from divorce and being homeless. You have all of the trappings of having made it to the middle class and as far as the government is concerned, you are a poster child for the poor who are looking in the window.

IMHO the real middle class comes from a three generation mix of one family, the grandparents, their kids and their grandkids. And the whole thing is predicated on the fact that the grandparents have enough savings to weather the storms of their children. Marriage tends to give the unit structure.

The government is selling the idea of education as a writ of passage into becoming middle class. The same thing happened after the civil war, you became an independent share cropper, working for yourself. And ended up owing your soul, to the company store for forever and a day, and they didn’t care if you were black or white, money is money.

So when Obama gets up and wants a college education for everyone, to allow graduates the ability to join the middle class, how is that going to work? The student loans are a debt that will never be paid by over 70 percent of the applicants. They will never earn enough to pay the debt and support their children at the same time. Notice a college education does not come with a guarantee of a better job with higher pay when you graduate. Especially if you are majoring as a librarian, astronomer, historian or any other degree in liberal arts. Nobody is claiming that the dream won’t work for you, but the odds are stacked against you.

We need to recognize what politics considers the “Middle Class.” It is a carrot on a stick. It is an abstract place we all want to be, and frankly I am only getting there now, when I am almost too old to enjoy it.

It was the middle class that fought England for our freedom from unjust foreign taxation in 1776. Fast forward to today, and we still have someone taxing everything, but there is no foreign power levying usurious taxes an ocean away rather it’s our own Congress. “Middle Class” is a Congressional euphemism for tax payer. You cannot tax the poor, they make too little, you cannot tax the rich; they’ve already paid the tax on what they have earned.

From a personal standpoint, the title, Middle Class means you have made it. The importance of the title means you feel somewhat obliged to pay taxes. The Middle Class is beginning to comprehend the new economic order; the poor deserve more of the wealth generated by the middle class. The real reality is a little like forcing a hooker to give discounts to the poor; she won't have her heart in it, let alone her body.

Tuesday, March 03, 2015

The Zero Interest Rate Policy (ZIRP) Sucks

I feel like kicking a big rock every time I remind myself that short term interest rates are so low and that the interest on your principle is absurd; you cannot afford to reasonably expect to live off of your retirement savings. Realistically many retirees have saved a million dollars for retirement when interest rates were a lot higher. But at 2 percent interest, that nest egg returns about 20 thousand a year. At 8 percent, it would be about 80 thousand dollars.

Then I read a current CNBC article that stated that; “If you invested that $24,000 at 8 percent for 30 years, it becomes $91,000.” At the present ½ percent interest using the rule of 72, it would take 144 years to double your dollars and you are not even close to the $91,000 figure. So there are two trains of thought running here, before and after government intervention.

You have to ask one question, why are rates so low? The main reason, there is too much money in the banks and not enough people with good credit that want to borrow it. You can lower rates in the expectation that people will borrow. But the government cannot force people to take out loans. The net effect is like pushing on a string.

The housing market has not rebounded with the lower interest rates in California. People are still trying to sell crap shacks for 400K. One problem now, the banks don’t want to hold on to paper with low interest rates. Why? If rates go up they have to pay depositors on a monthly basis, whereas they are locked into a low loan rate that is fixed for 30 years. You can get an MBA in Stupidity if you are a politician, but not as a bank manager.

The government has to get out of the loan market. Of course you have to realize how they financed all of the real estate sales for the last 7 years. What happens is this; the Treasury issues four to eight trillion dollars of 30 year securities that are purchased by the Federal Reserve Board. So in 30 years, the securities mature and the Federal Reserve gets its dollars back. In the meantime, the Treasury has the funds to sell and finance property to everyone who has a pulse. Sell the defaulted property and support the artificially high real estate prices. What we can figure right now is that the Federal Reserve has between 4 and 8 trillion dollars’ worth of notes from the Treasury for real estate loans. Since the Fed turns over all interest on its transactions, a lack of interest generated means that there is nothing to transfer and at the end of 30 years. They don’t have to make money to stay in business. The notes will be redeemed and it will be a zero sum game.

What has happened in the meantime, retirees are screwed out of their real interest income. If the government was not in the mix, interest rates would not be at their current low rates. Housing prices on the West coast would have collapsed. And the market would have gone back to more normal interest rates. Bad loans would be bad loans and money would be lost, not guaranteed by the government. Risk would again be part of the market.

High risk loans at exorbitant rates are still around quite prominently. Just look at credit card debt. Credit cards offer cash loans at 25 percent. Your monthly interest rate is determined by your credit score. Bad credit, just how bad do you want the money? We are not talking 15 percent interest here, higher.

The banks are in the loan business and there are areas where they get a decent return. Government guaranteed student loans at 6 percent and credit card debt starting at 6 percent on up to 36 percent. The student loan borrower cannot default and the total amount is guaranteed by you guessed it, We the people.

But wait a minute, the super low rates allow Congress to borrow more without having to raise taxes. So let’s see now, the money that government is borrowing is for consumption. These are dollars that the private industry would use to invest in the future.

What we can deduce at the present time is that easy money at decent interest rates funded a real estate bubble. We still have bubble prices and very few buyers, real estate is no longer the road to fabulous wealth. We also know that buying T-bills or putting your savings in a bank is a losing proposition. We can pretty well tell where the dollars are not going. Bubbles are created when too much money is invested in the wrong place. It is called misallocation of resources.

Where are the next bubbles? Third world economies? The stock market? The health care market? Student loans? Credit cards? Cell phones? Solar panels?

Its only when a bubble bursts that it is realized for what it is. The last people in, are left holding the bag. The neat thing about bubbles, you can only see them in the rear view mirror.

The one thing not fully understood by those in charge, is that economic theory can only be used to explain the "Why" of what has already happened. It doesn’t work when applied to controlling future expectations. New economic policies force people to change their investment strategies in ways to maximize gain that aren’t necessarily prudent or productive. And that changes the expected results.

When Suze Orman tells seniors to avoid the bond market because it is a lousy investment that pretty much says it all. Interest rates are the key to a healthy economy. The reward for saving money has to be present for future investments. The more the risk the greater the return. You have a problem when all risk returns the same gain low gain; people vote with their feet and their pocketbooks.

It looks like the stock market is the last game in town. And there is only one difference with this game, it is out of the realm of political control and comprehension. The Government is not coming to your aid if the market collapses. But hey, the game is just starting, markets are on a new swing upward. Faites vos jeux! ---This could be a year to remember, unlike any other in recent time. The trouble is, after it is over, you might just want to forget what happened.

Monday, February 23, 2015

Wages, the Unleveled Playing Field

I was watching the news the other night, and they reported that Walmart is going to raise wages to $9 per hour. Later in the program they covered labor unrest in the S.E. Asian country of Myanmar with protestors complaining about being paid 17 cents an hour. I wondered how many times 17 cents went into 9 dollars. Hmm about 53 times.

That prompted me to research what the wages were in China for building cell phones. It looks like it is around $70 per week but the number of hours had to be more than 40 but less than 67 depending on what you read (6 days a week 11 hours a day). Figure a 66 hour week,labor costs about $1.06 an hour. It takes about 7 hours to assemble a cell phone in China by one estimate and another suggests that in cost terms figure about $12 in Chinese labor per phone. So somewhere between 7 to 12 hours to assemble each unit. US labor at $9 per hour with employer costs of $6 we get $15 per hour. At those rates cell phone labor here in the US would run about $150 per phone. And if you take into effect the quality of work provided by the minimum wage worker, cell phone productions costs would probably be closer to $350 per unit Stateside.

Suppose you are sewing shirts in Myanmar at 17 cents an hour, 53 employees is a hell of a workforce at 9 dollars and hour. Can you imagine having to supply Obama health care to them? Worker Comp or Social Security? Nah, no worry there. I’m tempted to buy 25 sewing machines and set up a shirt factory in Bangladesh.

Labor is cheap in the rest of the world and we enjoy its benefit. The trouble is, it is affecting our employment rates in the US. 16 million people are unemployed (9 million full and 6 million with part time jobs). For the price of a Walmart greeter, you can have 53 people sewing shirts for you 11/6 in Myanmar. I can meet that payroll. These used to be American jobs.

And if that isn’t bad enough, from the Associated Press: "More than half of America's recent college graduates are either unemployed or working in a job that doesn't require a bachelor's degree." That doesn’t bode well for the government student loan program. A college education does not guarantee a well-paying job. But, to keep the ball rolling, Obama might probably offer College grads on the student loan program, a nothing down Fanny Mae home loan as a bonus. Give them more “free” stuff--let them sell their souls to the company store.

Then there is the growing underground economy. It’s called, "Businesses without addresses.“ If you don’t have a business location, the government can’t tax or regulate you. A lawn or pool cleaning business is invisible. The Uber cabs are under the tax radar, as is every business running out of a garage. With the advent of cell phone and the internet, many more services exist without a taxpaying address --part of our hidden economy. The net effect; as government controls increase, taxes collected will decrease, with more people appearing to be in need of government help.

Single and make 40K cutting lawns? - - figure you save 12k in taxes and Social Security not paid, you qualify for food stamps and free health care. And for God’s sake don’t get married if you plan to have kids, your partner will lose her welfare benefits. And if you are here illegally, what are they going to do to you if they catch you? They’re certainly not going to deport you.

The pitiful hourly wage in Myanmar suggest that religion could be the only escape people have, from the economic shackles of slave like poverty. Christianity held the world together during the dark ages, with the promise of a better life in the "Hereafter." For the “I want it now generation” the promise 70 virgins and heaven tomorrow (if you’re in a hurry) sure beats the reality of working for 17 cents an hour.

So here we are with people making 17 cents an hour in one country and college graduates in another that can’t find a decent job. If a couple in Myanmar find true love, they’ll be making 34 cents an hour together. If two college grads find true love, they’ll have a baby just looking at their combined monthly student loan payment.

Wednesday, February 11, 2015

Greece to Repudiate Debts

February 28 is when Greece has to refinance its debts with the EU. I think Merkel of Germany has already been enlightened by Greece’s new leader when he probably told her something like; “Take a long walk off a short pier.”

Bankruptcy will not kill Greece, any more than it did Iceland. It looks as if people will start bailing out of the Greek crap starting about Friday the 13th (if you are in the know) and about 7 days later Feb 20, if you weren’t paying attention.

The basic thing about Greece, is that bankruptcy is a one time event, which makes life worth living again. The scary thing is that the rest of the world cannot see the reality of the action. Greece will leave the Euro and rise up out of the ashes like the Phoenix.

Greece does not need the Euro, the other EU nations need to keep Greece in the union to give the Euro legitimacy. The EU is offering a country drowning in debt, a cinderblock as a life preserver.

Germany is the loser if Greece packs it up. Europe is expecting Greece to kowtow to the bankers. Funny, I don't think it is in the cards. They have a choice, repudiate the debt or go back to a military dictatorship. 26 percent unemployment is a lot of frustrated people drinking beer with not much to do, other than riot.

Sunday, February 08, 2015

Restaurant Menu Prices From 1938

Here is a reprint from two years ago for some of you that might have missed it.

I was searching through some picture albums of my parents from way back and ran into some restaurant menus  from the depression era of late 1930's.. The first 3 pictures are from the Manhattan  Restaurant



 

The Second menu (three pictures) is on the Union Pacific Railroad from 1937 somewhere in Wyoming.






This last menu is from the Hotel Windermere in Chicago 1937.


Double click on the images to see what the prices were back then.   Did you notice that the Manhattan offered a broiled (Whole) lobster for 65 cents?  In today's world, you'd be lucky to get half a lobster for $30.  Bear in mind, the people that read these menus in real time are probably dead by now.

The pay raise that everyone gets each year because of inflation is just an allusion. Look around, the new hires are starting out a few pennies less than what the seasoned workers are making.  The neat thing about inflation is that Congress doesn't have to raise the tax rates, you earn more, you pay more.  That's the real difference between the Democrats and Republicans; print as you go verses pay as you go.

The real odd thing is that the average person does not connect the dots. The relationship between government spending and inflation does not exist. Rumor has it, we've always had inflation-- I guess we're supposed to get used to it.  My wife bought a new battery and asked me to guess how much she paid for it, and I said $40.  Her answer; "That's the price you would have paid 20 years ago, the battery was $100."

Let's see,(from top menu third pic red part) I'll have the broiled lobster with coffee and a slice of cake--that's about 85 cents total, plus 15 cents for a tip.  The trouble is, 76 years of inflation have raised the prices a tad.

Saturday, January 24, 2015

Currency Adjustments (The Collapse of the Euro)

Switzerland gave no notice when it stopped supporting the Euro. People were surprised that the message wasn’t telegraphed like the Federal Reserve does. Think about it for one moment. Why give any advanced notice? England in 1967 denied that it would devalue the Pound up to the minute it did it. We went off the gold standard in the blink of an eye. When it comes to currency, countries are ruthless.

Right now, we probably have several European countries printing the first of their new currency. A new currency could take from about 3 to 8 months to produce before any announcement is made. Notice one thing, this all has to happen under extreme secrecy. It will be a sudden and swift conversion from one currency to another. Figure a three day weekend with a holiday sandwiched in so the currency can be distributed to the banks.

Europe is going off of the Euro. It is a little like a divorce. Each side thinks their significate other has no idea of what is about to happen. The trouble is, the shoe doesn’t fit any better for you than it does for her. I would hazard a guess that the following countries are now printing a new currencies; Spain, Portugal, Italy, and France. This is all about the failure of Euro.

Travel on to oil related problems, and any country that has an economy supported by oil at $90 a barrel will soon repudiate its debts and issue a new currency. Of course the basket cases like Venezuela, Greece, or Nigeria, are more likely to witness a regime change first and a new currency second. In this case you lose your life savings.

What we will be facing is the rise of dictatorships where one individual can get things done; replacing a Democracy smothered in bureaucracy. Adolf Hitler’s rise to power wasn't so surprising, Germany of the 1930's was today’s Greece, smothered in debt.

The European commonwealth is going to buy back over a trillion Euros as a Quantitative Easing package. They looked at what the Fed did in the US and it appears to have worked. The trouble is, the effect was cosmetic. It moved future demand into present demand. Politicians that manipulate the financial system too much, will end up losing the confidence and support of their citizens.

At some point in the future, gold silver and platinum will have to be a part of any world monetary system. The present system is a political solution to a financial problem. Increasing the amount of currency that a government can print to pay the bills, over time loses all perspective. You end up paying more for less. Savings is defined as the option to consume later what you produced today. Printed dollars are the product of zero production, but they spend just as well as those that were earned and saved.

Look for France to exit out of the Euro in the coming year, followed by Greece, Spain and Portugal. The reason I picked France to be first, is that there used to be a saying that the French devalued the French Franc every time they changed their underwear. Let's give them an excuse to change their underwear.


Monday, January 19, 2015

They Have Tiped Over The Apple Cart

The financial fiber of the world economy got a jolt when Switzerland announced that they would no longer peg the Swiss franc to the Euro. They had been buying Euros to support the parity by printing Swiss francs. The volume of money involved forward into the future was a blank check and they didn’t like the concept. They already owned 480 billion Euros that they didn't even need. I have often stated that the Euro will die, only for one reason, the politicians cannot print Euros. Guess what, they are about to print Euros over someone’s dead body and it doesn’t look pretty. Gone is the Swiss backing of the Euro. Everyone wants to hold Swiss francs, but spend Euros. Bad money always chases good money out of circulation.

The low interest rates around the world are beginning to take a toll. Very low rates tend to accelerate the miss allocation of resources to nonproductive ends. Normally, interest rates play a big part in whether a project will get built or not. Very low interest rates force the flow of cash to investments that pay a higher return. So if the banks are paying 1 1/2 interest and the stock market returns 12% guess where money is going? The current chicken coming home to roost is oil exploration investments. Canadian tar sands which has the consistency of very thick molasses (after heating) can be pumped through a pipeline if someone thinks that it is a good buy at $100 a barrel. Whoever financed the tar sands project is probably standing at a freeway exit holding a cardboard sign saying, "Will work for food."

Some people are claiming that the economy is out of the woods now because there isn't the hint of a recession. I’d like to point out to them that a recession and a depression are two different animals. We are in a full blown depression and have been since 2006. A recession is an economic statistical calculation. In a depression, you have terms like Quantitative easing, high unemployment, ZIRP, high enrollment in government programs like food stamps, and extreme government waste (economic stimulation) trying to find solutions like Solyndra. We can't stop printing dollars and we don't dare let interest rates set their own level (if we expect to pay the interest on what we printed).

The real trouble right now is the trust of government, and I suggest that it is misplaced. Fanny and Freddie have resumed writing 3% down low interest, home loans. The house is way overpriced, but this will make it easier for minorities to purchase a home. Common sense suggests that if these homes were such good deals, there wouldn't be any left. Isn’t this what started the housing mess?

The government ZIRP (zero interest rate policy) stimulates borrowing and encourages people to take on more debt and consume product. Couple that with Quantitative Easing (printing money) and this is what the world is dealing with. We used to put money in the bank and talk about compound interest being the 8th wonder of the world. Now it’s all about consumption and seeing how many dollars you get back on your credit card purchases. You don't have to wait and save up to purchase what you want, you can have it now. Kind of makes you wonder, isn't this what bubbles are made of?????

Switzerland just tipped over the apple cart by saying “no” to printing more francs and the funny thing is that nobody is quite sure what will happen next. The sanctity of the Euro has been challenged by the oldest successful banking country in the world.


As a post note:

In Switzerland
Step one: Foreign depositors face a 7 ½ percent tax on Swiss bank deposits
Step two: Swiss Franc unpegged from the Euro 1/15/2015

In Denmark
Step one: Foreign depositors now face a 2 percent tax on Danish bank deposits 1/19/2015
Step two: Hmmmm

Saturday, January 10, 2015

Congressional Idiots

I had a day off from work the other day and decided to listen to a live session of the House of Representatives. The discussions revolved around taxing the rich and stemming the flight of corporations to foreign shores.

The Democrats normally pull out an example of some corporate CEO making millions while his workers make very little. You never see this “rich“ (high income earner) person being a basketball or football player who makes millions but pays very little in taxes. It is always the rich against the middle class. Did you ever notice the difference between the two? The rich don’t have to work and if you don’t work, you pay no taxes. In the process of getting rich, you pay taxes. Once you make it, you have no more taxes to pay. Middle class people have taxes to pay and if you have enough deductions to escape taxes, you’ll be classified as poor. From a basic point of view, the rich and the poor pay no taxes and the middle class is stuck with the bill. So we get a two hour Congressional litany on why Congress should tax the rich, great vote getter, rah rah, rah.

Congress also wants to stem the flow of companies moving offshore. Have you ever asked yourself the question, why all of the new startup companies, start in a garage? Answer: the government cannot control what you do in your garage. Want to start a business? The paperwork is ridiculous, not to mention the extra money needed to satisfy all of the state laws that needed to be observed. Before you even open, you have to open up accounts with the state for unemployment insurance, workman’s comp, Social security, employer tax ID and so on. They will send you forms 4 times a year that threaten you with fines if filled out wrong or sent in late. I can guarantee that you will not even comprehend how to fill out the forms unless you are a lawyer. And if you become a success, the lawyers will feed on your company as if it was dead carrion. No wonder manufacturing has moved to a safer less restricted havens.

You really don’t have to think too hard to realize that Congress has dug itself in a deep hole and hopes passing a few new laws will somehow change things back to the ways they were. Their approach is a little like walking down the stairs with both shoes untied. They know where they are going, but its going to be a little different this time.