Thoughts Before The Alarm Sounds

      There is a saying that the success of a business is dependent upon three things: location, location, location, and for many businesses that is true. For example, if you are managing a restaurant or a retail store, your establishment needs to be located where customers can easily find it.       But no matter what your business, whether you are a drug dealer, an aircraft manufacturer, or anything in between, there are three things even more important than location: customers, customers, customers. Especially with the increasing use of online buying, if you have a good delivery service available, your business could be located way back in the mountains. But without customers, you may as well be selling buggy whip sockets or antimacassars (look it up).       There are very few people who can afford to be a customer without having a job. So it is extremely important for the economy to include a large number of...

      If a water pipe bursts inside your house, whom do you call, your plumber or your pastor? As ridiculous as this question sounds, it is a metaphor for the problem facing President Obama at this time. I am afraid he is going to call the pastor.       We are in the midst of a partial recovery from a reasonably deep recession, and the question for him is from whom to get advice - economists or ideologues. Should he seek advice from men who have devoted a lifetime to studying economics, or from conservative Democrats, Republicans, Tea Partiers and others who got us into this position during the reign of King George (2001-2009)? Should he trust the guidance of pilots who know the waters, or should he let the ones who steered us unto a sandbar take a second run at the beach?       In 1929 the economy was bustling along, and the Gross domestic Product value was at an all time high of $103.6 billion. Then the depre...

      When Bill Clinton was running for the presidency against George H. W. Bush, the catch phrase for his campaign was “It’s the economy, stupid.” Just as James Carville hung a sign containing that slogan in Clinton’s campaign headquarters, so should Barack Obama have the same reminder on banners all over the White House.       Obama’s campaign promised change and hope, but change has gotten out of control, and hope seems to be retreating into the hills. Every poll indicates that healthcare is way down on the list of voters’ concerns. Now the primary focus is on jobs, jobs, jobs.       Presently there is a bill in the Senate which would grant an exemption to an employer for each new hire during 2010. In addition, if the employee stays on the job for 52 weeks, the employer will get a $1,000 business tax credit in 2011.       I have a bit of trouble understanding how this will do much t...

      Yesterday I wrote that although Barack Obama needs to be prudent about how he spends the federal dollar, attempting to reduce overall spending would be a bad mistake at this time. Today I will attempt to expand that thought.      It is true that every dollar spent on either goods or services creates a job somewhere along the line, whether it is spent for prostitutes or Air Force tankers. However, not all dollars spent produce the same number of jobs. To the extent possible, the President should spend the money on those items which will produce the most “jobs per buck.” The following is a chart of jobs created by industry per million dollars spent:       In an interview on CNN days before the election, Mr. Obama explicitly ranked his priorities, starting with an economic recovery package that would include middle-class tax relief. His second priority, he said, would be energy; third, health care; fourth, tax ...

Lately we have been hearing some very large numbers bandied about – so large, in fact, that I am not sure we understand just how large they really are. Some examples: Bill Gates’ net worth is $40 billion, the population of China is 1.17 billion people, the U.S. national debt is limited to $12.1 trillion, etc. How can one picture that much of anything? Let’s imagine we have a machine which can take us back in time as far as we want to go. We can set it for any amount of time we choose, go back that far, and see where we land. Suppose we start with one billion seconds. Will we open the door on last week, last month, five years ago – When? Close the door, set the dial, push the button, and when the shaking stops, open the door. Welcome to April, 1977! Jimmy Carter became president in January, Star Wars will open next month, a gallon of gas will set you back 64 cents, and Elvis has about four months to live. Suppose we set the dial for one billion minutes and try again. Will we m...