May 192014
 

If you pay any attention to the news or any survey on the topic of safety, people feel less safe now than they did in the past. I believe the perception is seeded and watered by CNN and all the other all-news-all-the-time networks that sell fear, first-and-foremost. People tune in for “fear uncertainty and doubt” stories, and tuning in is what drives ad pricing power.

The truth is that the USA, and most of the countries of the world, are far safer now, than at a time only a few decades ago. But, because the networks must make money, they sell gloom and doom 24-7.

Consider these 5 facts:

1. In the 1920s, 1930s, and 1940s, an average of 433,000 people died each year globally from “extreme weather events.” That figure has plunged to 27,500 per year because we have better communications and better understanding of how to adapt and cope with difficult challenges like hurricanes. That’s almost 1,000,000 more people surviving every two years. The world is a safer place, even though the ABC weather man is always getting pelted by hurricane force winds.

abc hurricane coverage

2. No one has died from a new nuclear weapon attack since 1945. No political scientist from 1950 would have predicted that. Nuclear arsenals remain locked. The world is a safer place, even though Fox News keeps coverage going on Iran sanctions whenever a saber is rattled.

castlebravoblast

3. A flu pandemic in 1918 killed as many as 100 million people. Today, flu deaths are rare and pandemics don’t happen. The world is a much safer place although bird flu made for great ad sales at MSNBC. Could a pandemic happen? Perhaps. But does selling this fear, year in and year out, help us, or just contribute to the background stress?

flu pandemic

4. America averaged about 21,000 murders per year in the 90s. That rate has dropped nearly 20% to 16,000 per year in the 2000s. Give or take, that’s about 50,000 citizens not killed, but CNN covers every grisly, spectacular event, to ensure that we don’t feel one bit more secure, while simultaneously informing us about the power of the Ecoboost V6 engine in the Ford F150.

CrimeScene

5. In 1950, 23 Americans per 100,000 died annually in traffic accidents, according to the US Census. That traffic fatality rate fell to 11 per 100,000 by 2009, even as traffic has grown more challenging in our biggest metros. Due to the declines, nearly 350,000 more Americans would have perished from 2000 – 2009. CNN missed this good news story too, covering only the unfortunate events when a school bus is rammed by a train.

la_traffic

We are safer in so many ways than ever before, but CNN and the others don’t let us feel that way. If you want to be an optimist, you have to look at the news and see it for what it really is. It doesn’t cover the longer-term, slower moving stories of important progress and improvement, defaulting to fear and sensationalism.

I personally think its a terrible shame that a lot of kids no longer play outside because mom’s don’t feel safe. Keeping one’s perspective and situation awareness is crucial if you choose the enlightened path of the optimistic few.

I.M. Optimism Man

Mar 192014
 

We have an efficient society, but far from a perfect one. People like to think the the cream always rises to the top, makes the big bucks, deserves all the respect and accolades. Meritocracy theory rules the day.

The truth is that we do live in a time of extraordinary opportunity. The market for talent, ideas, and creativity does give some people a change to become overnight successes in just 5 – 10 short years. But, there are also many other factors in play. If you ask a few questions at the right time, most entrepreneurial success stories that I hear always have one or more “…and then I got a lucky break…” moments in them. When you dig deeply, you tend to find other moments of extraordinary support from a third party, whether financial, resource, or connections. I have yet to find a person who really went from no where to the top of the world without some good fortune and a bit of assistance along the way.

Meritocracy is good, but if you are wise, you must also clearly see and understand the issues that surround it. The dark side of the coin is that it gives rise to a certain snobbery, a lot of jealousy, and tremendous frustration for those who make the wrong decision when faced with a crucial crossroads moment.

Here is a great little video that delves into the idea of meritocracy and whether it is truly possible. Alain de Botton: A kinder, gentler philosophy of success:

alain_800x600

With all thy getting, get understanding.

I.M. Optimism Man

Mar 152014
 

Consider this little discussed fact:

Adjusted for inflation, the US Minimum Wage was less than $4 per hour as recently as the late 1940’s. Right now, politicos are wrangling about the $7.25 minimum wage and if it should be raised a lot. This seems to be a continuation of the recent wage growth of the top 1% in the last 20 – 30 years. The real truth is that nearly everyone has grown much richer during the last 60 – 70 years.

starbucks-bar

We need to keep things in perspective.

Minimum wage expenses are better than they have ever been, the costs of increases always funded by the consumers, and minimum wage will never be the path to a posh and comfortable life. Far better to teach people how to produce greater value. With greater value comes better pay. But, all in all, the situation is not dire at all — there are plenty of jobs that pay above minimum wage for those that choose to be more positive and hustle more than the average.

I.M. Optimism Man

Jan 272014
 

Much conflict occurs because two sides don’t truly “hear and fully understand” the other person’s perspective. When a debate gets heated, the combatants tend to spend the time that they are not talking reloading their next salvo in their brain. Each barely listens. They cannot wait to interrupt and machine-gun their next salvo as soon as the other takes a breath. This is the same, no matter if we are talking about loved ones at home, students on campus, or associates at work.

Most conflicts continue, and fester, far longer than they would if we deeply understood the other’s perspective.

Invest three minutes and watch this bit of video wisdom, as told by Stephen Covey:

drstephen_covey

Give it a try. I know, from personal experience, that it works. It will produce positive, optimistic resolutions to the thorniest of problems.

I.M. Optimism Man

Jan 132014
 

A key to solving any problem is to first understand the problem, and then take steps that address key factors that influence the severity and trajectory of the problem.

America, over the last number of years, has plunged into income re-distribution as though such policies solve income inequality and opportunity problems. Some people realize that re-distribution has been proven to not work for solving these problems; rather, re-distribution does tend to keep certain voters happy and not much else.

Below is an article from the Wall Street Journal that offers a startlingly clear statistic that does help understand the poverty problem. Yet one one running for office is talking much about it because it probably would not prove to be a popular tactic that helps one in the polls. If you don’t subscribe to the WSJ, I highly recommend it. Few publications present a clearer perspective.

How to Fight Income Inequality: Get Married

In families headed by married couples, the poverty level in 2012 was just 7.5%. Those with a single mother: 33.9%.

 By Ari Fleischer

If President Obama wants to reduce income inequality, he should focus less on redistributing income and more on fighting a major cause of modern poverty: the breakdown of the family. A man mostly raised by a single mother and his grandparents who defied the odds to become president of the United States is just the person to take up the cause.

“Marriage inequality” should be at the center of any discussion of why some Americans prosper and others don’t. According to Census Bureau information analyzed by the Beverly LaHaye Institute, among families headed by two married parents in 2012, just 7.5% lived in poverty. By contrast, when families are headed by a single mother the poverty level jumps to 33.9%.

And the number of children raised in female-headed families is growing throughout America. A 2012 study by the Heritage Foundation found that 28.6% of children born to a white mother were out of wedlock. For Hispanics, the figure was 52.5% and for African-Americans 72.3%. In 1964, when the war on poverty began, almost everyone was born in a family with two married parents: only 7% were not.

fleischer

Attitudes toward marriage and having children have changed in America over the past 50 years, and low-income children and their mothers are the ones who are paying the price. The statistics make clear what common sense tells us: Children who grow up in a home with married parents have an easier time becoming educated, wealthy and successful than children reared by one parent. As the Heritage study states: “The U.S. is steadily separating into a two-caste system with marriage and education as the dividing line. In the high-income third of the population, children are raised by married parents with a college education; in the bottom-income third, children are raised by single parents with a high-school diploma or less.”

One of the differences between the haves and the have-nots is that the haves tend to marry and give birth, in that order. The have-nots tend to have babies and remain unmarried. Marriage makes a difference. Heritage reports that among white married couples, the poverty rate in 2009 was just 3.2%; for white nonmarried families, the rate was 22%. Among black married couples, the poverty rate was only 7%, but the rate for non-married black families was 35.6%.

Marriage inequality is a substantial reason why income inequality exists. For children, the problem begins the day they are born, and no government can redistribute enough money to fix it. If redistributing money could solve the problem, the $20.7 trillion in 2011 dollars the government has spent on welfare programs since 1964—when President Johnson declared the “war on poverty”—would have eliminated income inequality a long time ago.

The matter is influenced strongly by decisions and values. The majority of women who have children outside of marriage today are adult women in their 20s. (Teenagers under 18 represent less than 8% of out-of-wedlock births.)

Rather than focusing on initiatives that might address this issue, President Obama, as well as Massachusetts Sen. Elizabeth Warren and New York City’s new mayor, Bill de Blasio, believe that the income gap can be closed by increasing taxes on the better-off and transferring the money to the poor.

Good luck with that. The tax code is already extremely progressive, as a December study by the Congressional Budget Office makes clear, yet poverty remains a significant problem. According to CBO, the top 40% of wage earners, those who make more than $51,100 a year, paid 86.4% of all federal taxes in 2010, the most recent data available. The bottom 40% of earners paid just 4.2% of all taxes. The top 40% paid virtually all of the income tax collected, while the bottom 40% paid a negative 9.1% of all income taxes. Paying “negative” taxes is possible because of the earned-income tax credit and other public-assistance measures that give the bottom 40% refunds for taxes they didn’t pay.

Given how deep the problem of poverty is, taking even more money from one citizen and handing it to another will only diminish one while doing very little to help the other. A better and more compassionate policy to fight income inequality would be helping the poor realize that the most important decision they can make is to stay in school, get married and have children—in that order.

Mr. Fleischer, a former press secretary for President George W. Bush, is president of Ari Fleischer Communications.

So, what is the solution? There are no simple answers, but I know where to start: Teach everyone what works and what does not work. Teach it in schools. Teach it on T.V. Get the message out. All parents want their kids to succeed, rich and poor alike.

I.M. Optimism Man

Dec 092013
 

I listen to so many talking heads, all talking incessantly on talk shows on talk channels, news channels, satellite radios, and streaming internet feeds. Everybody sounds smart.

stern

Here is a point to ponder:

All of us are smart enough to know there are problems. Most of us are smart enough to point out specific problems in an eloquent way. Some of us are smart enough to ask the right questions to understand the true, underlying causes of a problem better. Few — very few — of us are smart enough to ask the right questions, at the right time, in the right way, so that the people who are in the position to act come to the right, logical conclusion, fueled with the motivation to move forward and solve the true problem.

McKinsey & Co is well regarded as the smartest guys in the room when it comes to business strategy consulting. McKinsey teams often propose “brilliant” solutions that can’t be, or are not, implemented, given a company’s situation, personnel, and organizational culture.

It is only brilliant when the smart solution makes it to the finish line and helps as designed.

Smart guys, like the bright stars at McKinsey hired from the best Ivy League schools, often don’t get the essence of the lesson. Solutions that get implemented are worth much more than solutions proposed but abandoned. It often comes down to asking the right questions, not telling people the solution to their problem.

Think for just a minute about the federal government in DC. Is anyone asking the right questions or is everyone, on both sides, simply trumpeting their “we should do this and we should do that” messages?

I.M. Optimism Man

Dec 082013
 

Here is an interesting quote from an decidedly unconventional source:

Simon Cowell

It’s the government’s job to encourage entrepreneurism and investment. Most importantly, it’s the government’s duty to inspire confidence.

Simon Cowell

You could say that the U.S. federal government — between a dysfunctional, sound-byte obsessed, and polarized Congress — and a “my agenda or bust” non-negotiating President — is now getting an F grade on all three counts from this quote.

We should not forget that the founding fathers of the country intentionally make it difficult to pass laws quickly. They set up a system that inherently was designed to turn the ship slowly, not quickly, after a lot of debate and wrangling. That said, it seems like partisanship has grown to polarized extremes, far more extreme on both ends than the general population of America really is.

I believe we should be optimistic that things can get better in Washington. There is always calm after the storm. The first step is to eliminate the incumbents that refuse to compromise. We, the people, need to apply some level of “clean-sweep” in the next election cycles. If you are one of those that refuses to work toward compromise, you don’t get elected.

It will take time, but these United States will overcome this quagmire too.

I.M. Optimism Man

Oct 222013
 

When has an entitlement program ever been discontinued in America? When has an entitlement program had its benefits cut in half? When has an entitlement program had its benefits cut by 25%? I believe the answer to all three of these questions is “never” but I’m asking my readers for input. Do you know of one or more example? Or just one?

In the last 30 years, entitlement programs have grown dramatically. Yet, we, the people, never turn one off. What does this mean for the future?

Its time to find one that we can reduce by 50%. Just one. You have to start somewhere. Borrowing 40 cents on every dollar the USA spends is a recipe for financial decay and disaster. Some people seem to think this is magical “government” money that is simply printed. It is not. It is our money, collection simply deferred.

Unlike some, I am optimistic it can be done if you start in one place. The Republicans want to take on every battle simultaneously and that is a non-starter. The Democrats want to buy more votes — why not — it is working. Lets fix one thing in Washington.

I.M. Optimism Man

Oct 142013
 

Continuous improvement is difficult but not impossible.

In almost every case, continuous improvement follows a formula of measurement, analysis, planning, practicing the new adjustments, implementation in real life situations, and then a return to measurement, as the cycle repeats. To achieve a long run of continuous improvement, coaches are always involved. Even the best of the best, dominant professionals such as Tiger Woods, Lebron James, or Lionel Messi, live within this never ending cycle of coaching.

We know this commonsensical truth in our role as parents. In today’s America, keen competition both in sports and in the classroom demands that many do whatever is needed to give their kids an edge. We hire many coaches for our kids. Our kids join “select” or “club” sports teams, primarily to learn the sport the right way, to get coached, so that they have a chance of success when they grow up to become high school and college level players. Other kids who are focused to excel academically are also coached, not only by teachers at school, but by after school tutors and academic tutoring enterprises. Many tutors specialize in coaching kids for entrance exams to competitive high schools and colleges.

Adults seek coaching as well when it comes to sports. Millions are spent on golf lessons and tennis sessions. The bottom line is when someone is looking for an edge, coaching is invariably involved.

But what about our careers? What happens at work?

If a critical path to your success is giving great stand-up presentations, does anyone, especially someone that is a true professional at presenting, give you hard biting feedback and demand that you incorporate the feedback next time out? Is your improvement measured and analyzed?

If you are a medical doctor, does anyone coach you on how to improve your bedside manner and really relate better to your patient?

If you are a corporate manager, does anyone watch how you interact with your key employees and give you great tips of how to improve, as a manager, to get better motivation and results?

If you are a preacher, do the churchgoers let you know if your message hit home, and will be remembered, this fine Sunday?

I find that the answer for most everyone answers “no” when asked about improvement and coaching in their career. Yet, the same career that is most critical to living a good live, educating one’s children, and retiring in comfort. At work, no one measures, no one analyzes, no one coaches, and no one is serious about making plans for improvement.

How do you get better if you get little to no feedback?

One path is to say “So what — I’m good at what I do.” That’s fine if you want to be within one standard deviation from the mean, but usually, becoming top 10% is needed, and the top 1% is where the serious money is made.

The truth is that you must become proactive, you must become creative, you must seek out ways to get valuable feedback and coaching. What gets measured gets improved. How can you measure how well you are doing? How can you get honest advice? What can you do to get continuous feedback?

You can become world-class at what you do. To get there, you must take initiative. Please send me an email and share what program you invented for yourself to become world-class at what matters most in your career.

I.M. Optimism Man

 

Aug 302013
 

Here is a great, first-hand account from the founder of Cypress Semi. It was published in the Wall Street Journal. It is well worth reading.

I strongly encourage you to subscribe to the Journal. It is one of the few newspapers on earth that sees things clearly in its reporting, not going to the extremes we witness with most other news sources.

I.M. Optimism Man

T.J. Rodgers:

Targeting the Wealthy Kills Jobs

My investment in my company helps maintain 3,470 permanent positions. What’s not ‘fair’ about that?

By T.J. RODGERS

One of the signature themes of the Obama administration is that the American dream is under attack due to “income disparity.” The words divide the country into haves and have-nots, suggesting a national condition that needs to be corrected—presumably by “progressive” taxation as a mechanism for income redistribution. The American dream has traditionally been one of individual success that is rewarded and admired. But we are now urged to become a zero-sum society in which those achieving the American dream are envied and even resented.

The American dream is not politically affiliated. The last time it was alive and well was the period from Ronald Reagan’s second term in office through Bill Clinton’s second term in office. In those 16 years, we enjoyed continuous low taxes, low government spending and economic prosperity.

Since 2000, the economy has staggered under the record government spending and deficits of two presidents, George W. Bush and Barack Obama. The result of that spending spree has been lower real wages and higher and more-persistent unemployment. The Federal Reserve has pushed interest rates to near-zero, and, for the first time ever in the U.S., that Depression-era medicine has not worked—a scary situation reminiscent of Japan’s decade-plus economic demise.

According to the latest 2012 IRS income-tax data, the top 1% of American taxpayers earned 20% of all income and paid 36% of all taxes. The top 5% earned 36% of all income and paid 58% of all taxes. Will even higher taxes help the economy? My experience in Silicon Valley tells me that high and so-called progressive taxes are a major cause of the country’s current economic problems, not the solution.

In Silicon Valley, the rich commonly reinvest their wealth close to home. For example, I have reinvested most of my net worth in 8.5% of the shares of my own company.

Since its 1982 founding, Cypress Semiconductor has been a net creator of jobs and wealth. We have returned $2.2 billion more to the economy through stock buybacks, share dividends and spinouts than we have taken out in total lifetime investments. That figure doesn’t count the $4 billion in wages the company has paid or the taxes paid on those wages. Currently, my investment helps maintain 3,479 permanent, high-paying jobs with good health-care benefits that are now threatened by more taxes.

A couple of years ago, I decided to invest in my hometown of Oshkosh, Wis., by building a $1.2 million lakefront restaurant. That restaurant now permanently employs 65 people at an investment of $18,000 per job, a figure consistent with U.S. small businesses. If progressive taxation in the name of “fairness” had taken my “extra” $1.2 million and spent it on a government stimulus program, would 65 jobs have been created?

According to recent Congressional Budget Office statistics on the Obama administration’s 2009 stimulus program, each job created has cost between $500,000 and $4 million. Thus, my $1.2 million, taxed and respent on a government project of uncertain duration, would have created about one job, possibly two, and not the 65 sustainable jobs that my private investment did.

On the other end of the capital-intensity scale, Cypress Semiconductor required huge investments to create jobs in its chip-manufacturing plants. Between 1983 and 2003, those investments totaled $797 million and led to the creation of 4,033 jobs at an investment of $198,000 per job created. Thus, my own experience on the cost of job creation ranges from $18,000 to $198,000 per job, compared with $500,000 to $4 million per job created by the Obama stimulus program.

This data squares with the broad numbers showing that private investment is more efficient than government spending in creating jobs. In other words: Every dollar that is taxed away from private investment and spent by government produces fewer jobs than the jobs destroyed by the loss of private investment.

Yet the politics of envy, promoted most notably by President Obama himself, continuously stokes the idea that the wealthy are not paying their “fair share.” This injured sense of unjust rewards was summed up on a radio show I heard the other day, when a caller said of the rich: “How much more do they need?”

How much more do I need? How many more jobs do you want?

Even European socialist democracies are starting to understand that tax-and-spend policies kill jobs. For example, both Italy and Spain have repealed their incentive programs for solar energy (along with their “green jobs”) because the countries have calculated that for every job created by government investment in green energy, somewhere between 4.8 jobs (Italy) and 2.2 jobs (Spain) are lost because of the reciprocal cuts in private investment. I am aware of these figures because from 2002-11 I was a major investor in and chairman of SunPower, the world’s second-largest solar-energy company, also based in Silicon Valley.

Silicon Valley is today’s brightest example of the traditional American dream still at work. The investments for most startup companies must come from individuals who can wait 10 years to get a return on investment. Only very wealthy Americans can afford that.

Like many Silicon Valley entrepreneurs, I have reinvested in the next generation of entrepreneurs, in my case via the Sequoia Fund and Kleiner Perkins Caufield & Byers, two venture-capital firms that gave me a shot at the American dream. I also serve as a board member of their portfolio companies.

Does anybody really believe that moving investment decisions from Silicon Valley to Washington by raising taxes on venture capitalists and their investors would make Silicon Valley more productive? Consider the Solyndra debacle: It was obvious to most of us here that the solar-energy company had zero chance of survival. That’s why the company had to be government-funded near the end; no real investors were willing to step up.

During the 2012 presidential campaign, President Obama insulted America’s entrepreneurs by telling them: “You didn’t build that.” Progressive taxation is just another tool used by government to take over an ever-larger part of the U.S. economy. The horrible irony is that the government keeps telling the very people whose jobs it destroys that if we only tax the rich more, everything will be better.

Mr. Rodgers is the founder and CEO of Cypress Semiconductor

Jun 022013
 

Power is what the world wants. Specifically, power in the form of electricity, because it is efficiently transported and applied to nearly any required purpose. While the world’s 1 B greatest consumers are starting to worry about green power, conserving power, and the possibilities of running out of fossil fuel power, the other 6+ B of earth’s human inhabitants simply want more power and an affordable price.

Why are 6B people so power hungry? Because power transforms daily life for the better in so many ways. We take the empowerment for granted, just as our kids take the internet and Googling something for granted. Hans Rosling sums up the why in ten fantastic minutes here:

So, what happens when we run low on oil and the price of electricity rockets higher? What happens when solar power comes into its own, at a steep price too? Fracking and nat gas isn’t a permanent solution, although it helps the near-term energy independence outlook for the USA. Will the pessimists who are predicting the end of civilization as we know it, actually win? I think not, not if we embrace the young, new Optimistic Few, a generation of optimists who want funding to pursue new answers.

Consider Taylor Wilson’s ideas. He is one of the OptFew worth listening to:

To the Optimistic Few, there are always ideas, limitless opportunities, and plenty of silver linings. I believe that my kids — our kids and grandkids — will lead a much better, more promising lives than we enjoy today. Stop listening to the critics, naysayers, and doomsday gang. They are wrong, and it is worth the effort to speak up and correct them when you can.

Life is good.

I.M. Optimism Man

May 252013
 

Are you tired of all the bad news? I am. Between the Eurozone, the newest flu, North Korea’s sabre rattling, the burgeoning national debt, the partisan quagmire in Washington DC, the IRS targeting the Tea party and any organization with the word Patriot in its name, and the tragedy whenever a Kardashian breaks a fingernail, it is hard to watch any evening newscast or even late night parody of the news.

The news media is hopelessly biased, and not just in the liberal vs. conservative, Democrat vs. Republican kind of way. The media believes one formula sustains and accelerates it’s own financial success: Bad News Sells Newspapers (and drives TV ratings, and Internet banner ads). Sensationalism is the business model.

News Flash: The world — yes the entire world — is rapidly improving.

It is a big story. The problem is that few people realize it. It doesn’t sell ads, so the news conglomerates don’t put in on the menu. Instead, our teleprompted news media talking heads make sure that everyone worries on a daily basis and tunes in at 10 pm.

The big fret goes on, day in and day out, on whether we will have enough to send our kids to college; enough to travel the world like we always wanted to; enough to provide domestic security, defense, health care, and welfare; enough to buy our Lipitor, Crestor, and Norvasc; and enough to retire on. If the collective people were to awaken to all the positives, employers would invest more and hire more, which leads to faster innovation that creates more opportunities, which leads to an economy that grows more, which leads a greater haul of taxes skimmed from the people, which helps our representatives in government right our listing financial ship. Stop fretting.

Below are two related videos regarding some of the greatest news of this decade. Ask yourself why so few know the story — in our online, connected age, not being acutely aware of one of the biggest stories of the decade is clear evidence calling for the indictment of mainstream news companies. Watch both videos and you can’t help but become more optimistic:

Bono focuses on improvements in poverty:

Hans presents world health evidence that is quite clear, and coincidentally supports my overall belief that “whatever gets measure does indeed improve.” Watch this video:

Be optimistic. The world is not ending. We are not running out of power. We are not melting the ice caps. We are getting better. Progress that matters is all around us, but you must proactively look for it, because the media refuses to cover the long-term positive trends in favor of the short-term worries and sensationalism.

I.M. Optimism Man

Apr 262013
 

Why is there such a partisan quagmire in Washington these days? It seems worse than ever before.

I can’t say that I often agree with blue state überliberals. In fact, I have a hard time with the fervent extremists at both ends of the American political spectrum, although I clearly lean toward conservative tenets. But, here is an issue, presented by a dyed-in-the-wool liberal, that does open one’s eyes.

It is well worth watching Lawrence Lessig with an open mind. Let’s start making some progress in America.

As a small side-note, if you enjoy studying the effective use of presentation aids and public speaking in general, as I do, Lawrence does a great job in keeping his audience engaged by using powerpoint / media effectively, something few accomplish well — there is a lot to learn for all of us that speak to groups, and he offers a glimpse of one way of doing it very well:

If you understand how things work — if you appreciate the underlying factors — you have a better chance of making progress on any problem. Today, bi-partisan constipation tops the list.

I.M. Optimism Man

Apr 152013
 

Many people have a hard time getting their arms around big numbers. Here is an interesting presentation that helps a person getting a better feeling for big numbers and big money. There is no doubt that it was created to be political, but my point is that both republicans and democrats need to stop the growing deficit and turn this around soon. Every family generally understands the concept that you must live within a budget or face inevitable ruin.

It shocks me that the sequester, which was modest, tiny even, freaked out so many people (and they were not so freaked out about the fact that sequester cuts where purposefully designed to throw out the baby with the bathwater). The law of numbers means we need more substantial cuts, plain and simple.

Watch this video to gain more accurate perspective of big numbers:

The first step to solving a problem is fully understanding it.

I.M. Optimism Man

Feb 132013
 

If you watched President Obama’s 2013 State of the Union, three things were evident:

1. Little hope for “working together” exists in Washington DC during the next four years. The President will do everything he can to beat the Republicans senseless at every turn. He wants to personal “win” everything possible.

2. The President will tax everyone as much as he possibly can, then borrow as much as he can, to then spend the money on big government programs, because he wants a BIG legacy of accomplishment. By the time we are done, everyone will foot the bill, not just the rich that the Democrats target.

3. The deficits of the USA will grow a lot for the next four years.

Given this reality, my message is simple. We the people, for better or worse, elected the President, knowing full well that it did mean higher taxes for all and greater deficits for the future. On a personal level, you have a choice — be a pessimist, complain about the result, watch the play-by-play of DC, and wait doing little until the outlook improves — or — be an optimist and “Get On with It” now, starting your business, or jumping on a new job. Losing four years of personal progress in your life is easy to do if you simply read the paper or watch the news far too often.

If everyone, especially the decision makers in corporate America “Get On with It”, economic growth and the country overall will be better off than it is today four years hence. One of the nasty issues of the current “Hate the Rich” campaign is that the people the Democrats target are also the people most likely to influence the investment of their company’s money in new plants, new locations, and new jobs. I’m sure its hard being a CEO, hearing the daily message that you are targeted by the government, even though you already pay much greater taxes than most. It is hard, given the situation, to invest and expand, because its hard to imagine the country improving when a target is painted on your back. But the CEO’s must rise above the common and all-too-popular politics employed by the President’s team. Being anti-business and pro-entitlements brought them to power. Why would they change their personal class-warfare winning formula now? The answer is that they can’t and won’t.

Any CEO that “Gets On with It” and invests wisely now will have seeds planted for the very probably turning of the weather in DC in 2016. When a regime leans far from the middle in either direction, the next chapter is almost always a return toward the middle ground. Success in business takes time. Plant the seeds in 2013 and 2014 to enjoy the harvest in 2016 and beyond. This is true no matter if we are talking about your personal outlook, your small business outlook, or your bug business career.

Be an optimist. Get On with It, and Prosper,

I.M. Optimism Man

PS. Marco Rubio’s response is worth watching. He summarizes the idea that smaller government is better than big government in 20% of the words. But, my point, more than any other is “Get On with It” — personally. Lets do our best, on a simple daily basis, to make our world better, our little slice of America better.

Jan 082013
 

You can’t solve a problem until you face it and understand it. We are lost in the politics and the excessive zeros attached to every number.

This is well worth watching:

I.M. Optimism Man

Dec 272012
 

In the hit movie The Fugitive, a greedy pharmacuetic company, Devlin MacGregor, fakes clinical studies of their new wonder drug, Provasic, in hopes of profiting from its sales. The fraud results in the death of Dr. Richard Kimball’s wife, and creates a great tale well worth watching if you have never seen it.

One of the reasons that plot works so well is that it might not be far from the truth. While I’m quite positive that big pharma companies are not killing off the wives of surgeons around the globe, the bias toward positive drug studies vs negative drug studies is very real, and is a very real problem. What it means is that quite possibly half of the $300 B the United States spends on prescription drugs is based on, well, fraud by another name. In even worse cases, some portion of those drugs might in fact be causing more harm than good.

Please watch this video, then take a look at your own medicine cabinet. Hard to know what is real and what is a mirage, isn’t it?

There is no true problem solving, no real progress, until we actually face the brutal realities of it all. When billions and billions of dollars are at stake, there is plenty of motives to not act in the best interest of Joe Patient. I believe optimistic problem solvers can solve many issues, including this one, but we need to wake up to the realities of the problem first.

I.M. Optimism Man

 

Dec 072012
 

Much was made out of who to tax and how much, in the last election. Those who voted for President Obama, at least the ones that I personally ask, generally said they supported him because they were comfortable about where and how he was spending “the money.” Since the election, the call for bi-partisanship has grown in volume as both sides try to work out a deal.

Anybody that has been a reader of my blog knows by now that I believe in spending reduction first and foremost as the solution to America’s fiscal issues. But, to solve any problem, the first step is to ask the right questions and face the brutal facts. Right now, it seems that few in Washington, especially those that support few reductions in spending programs, are facing the realities of the USA’s accounts.

Here is an article from the Wall Street Journal well worth reading twice. Facing reality must be step numero uno. First understand the problem, then discuss how we take steps to solve it:

Why $16 Trillion Only Hints at the True U.S. Debt

Hiding the government’s liabilities from the public makes it seem that we can tax our way out of mounting deficits. We can’t.

By CHRIS COX AND BILL ARCHER

Mr. Cox, a former chairman of the House Republican Policy Committee and the Securities and Exchange Commission, is president of Bingham Consulting LLC. Mr. Archer, a former chairman of the House Ways & Means Committee, is a senior policy adviser at PricewaterhouseCoopers LLP.

A decade and a half ago, both of us served on President Clinton’s Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama’s recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.

Eighteen years later, nothing has been done. Why? The usual reason is that entitlement reform is the third rail of American politics. That explanation presupposes voter demand for entitlements at any cost, even if it means bankrupting the nation.

A better explanation is that the full extent of the problem has remained hidden from policy makers and the public because of less than transparent government financial statements. How else could responsible officials claim that Medicare and Social Security have the resources they need to fulfill their commitments for years to come?

As Washington wrestles with the roughly $600 billion “fiscal cliff” and the 2013 budget, the far greater fiscal challenge of the U.S. government’s unfunded pension and health-care liabilities remains offstage. The truly important figures would appear on the federal balance sheet—if the government prepared an accurate one.

But it hasn’t. For years, the government has gotten by without having to produce the kind of financial statements that are required of most significant for-profit and nonprofit enterprises. The U.S. Treasury “balance sheet” does list liabilities such as Treasury debt issued to the public, federal employee pensions, and post-retirement health benefits. But it does not include the unfunded liabilities of Medicare, Social Security and other outsized and very real obligations.

As a result, fiscal policy discussions generally focus on current-year budget deficits, the accumulated national debt, and the relationships between these two items and gross domestic product. We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government’s true liabilities.

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet. But it is possible to discover them. Included in the annual Medicare Trustees’ report are separate actuarial estimates of the unfunded liability for Medicare Part A (the hospital portion), Part B (medical insurance) and Part D (prescription drug coverage).

As of the most recent Trustees’ report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.

Were American policy makers to have the benefit of transparent financial statements prepared the way public companies must report their pension liabilities, they would see clearly the magnitude of the future borrowing that these liabilities imply. Borrowing on this scale could eclipse the capacity of global capital markets—and bankrupt not only the programs themselves but the entire federal government.

These real-world impacts will be felt when currently unfunded liabilities need to be paid. In theory, the Medicare and Social Security trust funds have at least some money to pay a portion of the bills that are coming due. In actuality, the cupboard is bare: 100% of the payroll taxes for these programs were spent in the same year they were collected.

In exchange for the payroll taxes that aren’t paid out in benefits to current retirees in any given year, the trust funds got nonmarketable Treasury debt. Now, as the baby boomers’ promised benefits swamp the payroll-tax collections from today’s workers, the government has to swap the trust funds’ nonmarketable securities for marketable Treasury debt. The Treasury will then have to sell not only this debt, but far more, in order to pay the benefits as they come due.

When combined with funding the general cash deficits, these multitrillion-dollar Treasury operations will dominate the capital markets in the years ahead, particularly given China’s de-emphasis of new investment in U.S. Treasurys in favor of increasing foreign direct investment, and Japan’s and Europe’s own sovereign-debt challenges.

When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.

Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws.

In short, if the government confiscated the entire adjusted gross income of these American taxpayers, plus all of the corporate taxable income in the year before the recession, it wouldn’t be nearly enough to fund the over $8 trillion per year in the growth of U.S. liabilities. Some public officials and pundits claim we can dig our way out through tax increases on upper-income earners, or even all taxpayers. In reality, that would amount to bailing out the Pacific Ocean with a teaspoon. Only by addressing these unsustainable spending commitments can the nation’s debt and deficit problems be solved.

Neither the public nor policy makers will be able to fully understand and deal with these issues unless the government publishes financial statements that present the government’s largest financial liabilities in accordance with well-established norms in the private sector. When the new Congress convenes in January, making the numbers clear—and establishing policies that finally address them before it is too late—should be a top order of business.

Mr. Cox, a former chairman of the House Republican Policy Committee and the Securities and Exchange Commission, is president of Bingham Consulting LLC. Mr. Archer, a former chairman of the House Ways & Means Committee, is a senior policy adviser at PricewaterhouseCoopers LLP.

I suggest subscribing to the Wall Street Journal. Too much of the media just don’t print reality in their quest to support their philosophies.

I.M. Optimism Man

 

Nov 302012
 

Be kind.

How often do we give this advice to our kids as we send them off to school or to win the big game? Not often I’ll bet. Do we, as a society, admire the kind CEO, the kind football coach, the kind Hollywood superstar? Do we, as parents, insist that our kid help the other kid up after a foul in sport? Do we let the person in a hurry cut in front of us in traffic or do we block his path, enjoying the moment of silly triumph? Are there any reality T.V. shows following the lives of kind stars, or just Kardasians and tyrannical Abby Lee Millers of the world?

Should we then be surprised that kindness and respect for others seems to be disappearing in our society?

I believe kindness, to be kind and considerate, is very important to becoming a well developed member of a family, a community, and society as a whole. At the root of it all, I think there is a misguided perception that kindness and respect somehow leads to weakness and failure. This is not true. I wish to be kind this year, and kinder the next. Ultimately, I will be a very kind old man, not a cranky one yelling about the kids cutting across my grass.

Consider these five observations about kindness:

Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.
Franklin D. Roosevelt

As much as we need a prosperous economy, we also need a prosperity of kindness and decency.
Caroline Kennedy

To practice five things under all circumstances constitutes perfect virtue; these five are gravity, generosity of soul, sincerity, earnestness, and kindness.
Confucius

And as I’ve gotten older, I’ve had more of a tendency to look for people who live by kindness, tolerance, compassion, a gentler way of looking at things.
Martin Scorcese

There is overwhelming evidence that the higher the level of self-esteem, the more likely one will be to treat others with respect, kindness, and generosity.
Nathaniel Branden

A great idea would be to decide to have a personal quota of just one kind act each day, and record what you did in your journal. Great habits start with small daily steps.

I.M. Optimism Man

Oct 152012
 

A lot of people are dismal on the American and global outlook. They see the huge fiscal cliff that is looming. President Obama has tried to borrow > spend & stimulate his way — correction, our way (since he won’t have to pay the bill later) — out of an anemic economic recovery. It hasn’t had the desired result. We just let him run up America’s liabilities to more than 60% of GDP. Yes, that’s getting uncomfortably close to the Greece and Spain neighborhood.

The Treasury Department said Friday that the deficit for the 2012 budget year totaled $1.1 trillion. Tax revenue rose 6.4% from last year to more than $2.4 trillion, helping contain the deficit. Translation: We are spending $3.5 Trillion with tax “income” of $2.4 Trillion and borrowing $1.1 Trillion to get to a total debt of about $16 Trillion smackers. If the interest rate on $16 T is 2% a year, we need $320 B just to pay the interest. Imagine that the interest rate could climb to 6% as it has in the past. America would then pay $1 Trillion a year in interest alone!

There is plenty of evidence that current policies are just not resulting in the hoped for economic comeback. At the same time, the rest of the world is in an economic funk. China is slowing, the EU is in sad shape x-Germany, Japan is not pulling it together, Russia suffers Putin-political-cronyism strife, and even the emerging markets such as India and Brazil are not ready to pop. Global anemia we have.

What an opportunity global anemia is for an optimistic America!

America is positioned to solidify its global leadership position as “the” superpower if we take steps to put our fiscal house in order. No other country is ready to step up. We need an optimist in the White House to make the great first step. The President and Joe Biden are pitching more of the same — its not our mess, we want bigger government, more taxes, less free enterprise, less capitalism. Yet capitalism is what makes America great and business is what will simultaneously drive our comeback and reduce the employment worries.

CEOs need a reason to believe better days are ahead. If they believe, they will hire and they will build and they will invest. Reagan showed how powerful America’s momentum can be once she believes in herself. American business has the dry powder on its balance sheet to make it happen but we will not get the mojo back with the “stay the course” Obama Biden ticket.

I hope the voters can see that there has never been a better time to elect an experienced, successful, ethical business man to our highest office. We have a great opportunity to shine because no one else is prepared to take the lead. More of the same borrow-then-spend-spend-spend is not the right play.

The solution is not to tax more and more. The solution is to spend less and live in a budget again. It is nuts that the government keeps kicking the cans down the road without solving anything. Lets solve one thing at a time, starting with social security. The people want one thing solved so that they can once again believe in Congress.

Elect Romney and Ryan. We can’t afford four more years of this — the opportunity to regain “shining city on the hill” leadership status won’t wait four more years. Another country will rise if we refuse to take the opportunity before us.

I.M. Optimism Man