THERE'S A FLAW IN THE OINTMENT

It's now 15 months since my own personal recession started. With the increased amount of time to watch our elected officials pull us out of the recession and the high unemployment rates comes greater clarity.

I remember Ronald Reagan once intoned on his radio commentary " Government in, of, and by itself has no wealth. The only wealth government can have is that which government has taken away from the governed.". In other words those who actually did the work to create the wealth in the first place. The late ex-President's remarks implied that government does not (should not?) create wealth. Further, government does not create anything that brings wealth. Not because it is without collective intellect, not because it is inherantly evil (that can't be true because government is made up of US), not because government is without justification in some form. Government cannot exist without "our" money to spend. Government by itself does not earn a living and pay the bills. It takes from us what it needs to survive.

This protracted recession has been plied with "stimulus" from the public treasury. Banks were propped up when they did not generate liquidiy on their own. Jobs are not being created in sufficient numbers to bring down unemployment. What's going on here?

The House and Senate are wrangling over passing or changing the Bush tax cuts. The biggest issue is what to about the wealthy. In fact, part of that debate revolves around what is wealthy? At least part of the debate of wealthy is how to include profitable existing companies and the small businesses that average Americans start from zero. How much do we tax the very people we all either work for or want to work for?

How about a short business lesson. First, the profit is not a luxury. It's evidence of greed. It's a requirement for any company to survive. That's becauase the legal definition of net income does not include all the spending required for that company to compete in it's market place. Profits go to develop new products, explore and penetrate new markets for existing products. Profit is also what pays for employee raises, cost increases in benefits, cost increases on inputs to the company's products, and the asset base the business requires. Bulldozers, flower delivery trucks, and vertical boring mills don't last forever but niether do they routinely wear in less than a year.

Profit is also what drives the hiring of additional employees, and one facet of convicing management to replace the ones that leave. What else gets paid out of profits? Federal, state, local..........governments, through taxes. Higher taxes mean lower profits, a shrunken pool of resources to continue the business in a healthy state.

Any business has a life cycle, just like its products. They start out as an innovation of some kind and conintue on a rising tide of sales volume. As the product matures (ages) adn competition develops, sales dollars level off. When that happens, other newer products take over the market and the original leader in the market place declines in sales volume. Eventually, the mature product becomes obsolete and sales revenue disappears.

That cycle describles the marriage between companies, profits, and a healthy a healthy job market. The mature comapanies' workforces go through layoffs and at the same time new jobs are created by the newer products and companies in the same economy. Profitable companies that successfully develop replacement products and processes as the maketplace requires maintain a stable or growing employee base. Those that don't, shrink or cease to exist.

Over time, the U.S. has lost jobs, mostly manufacturing, to foreign countries for a variety of reasons. Wage rates are the predominant reason, but also countries that have less developed governmental bureaucracies have been more attractive. Singapore offered a five year tax holiday to companies that would open offices there in the 1980's and 1990's. America has become a population of people trying to sell each other insurance or investments. Nothing against people who work in those pursuits, just a metaphor. We have ceased to be the planets chief innovator.

The debate in Washington is over raising more revenue. The federal government is trapped in to doing this due to the moutainous (even by federal standards) level of the deficit. The above narrative is to say simply this. How do we reduce the deficit? More revenue? Less spending? If government takes more moeny out of the economy (tax rate increases over 2009) less will be available to companies to stay competitve and growing. Are the rates limited to personal income rates? That includes a lot of people who put the self employment income on their 1040's. Those companies will be less likely to grow in to job creating engines.

The foundation of job creation is the relationship between companies on the rise and companies on the decline. Those on the rise come largely from sole propietor's that invest time, talent, and hard work to start what eventually become new enterprises. There is a flaw in the remedy politicans seem want for our economy. That's right, ours, the American citizenry. Just ask Cheter Cadieu Sr. (QuikTrip) or T. D. Williamson Sr. (TD Williamson Inc.) how that works, then pass on what you learn to Washington.

General thoughts (not random because my mind is so organized)

Tulsa's air quality took a monumental dive this morning. The city of Tulsa decided to burn the recycling we have all (about 50? of us) worked hard to put out on two Wednesday's a month. That's plastic folks. Plastic, isn't that one of the things environmentalists said was dangerous? That's why we recycle, to save the environment. Setting it on fire just puts the offending material in a different part of the environment.

The smell is extremely noticeable. I awoke this morning and had a frightening thought. Sometime in the night, someone (Mayor Bartlett's press secretary?), packed up the entire city and moved it to Cleveland, Ohio. That region was an industrial leader years ago (the 70's and before). Unfortunately, it also had the Cuyahoga River. That's the river that caught on fire. The floating chemical slick he had enter lighter than water. Rumor has it a passing fisherman created a spark when he tried to restart his outboard. The fire burned out eventually for lack of fuel. Anyone know a guy would be fishing in spot that smelled of industrial waste?

Mayor Bartlett has hired a press secretary. Lets see, we have already laid off police and are arguing about how they are going to come back. The firemen took a pay cut that needs to be restored. Seems a little suspicious. Is the Mayor hiring someone to go to the council meetings he(can't?/does not want to) attend, so that hear what the council is saying? That's what we have TGOV for. Is he clearing the board so he can paricipate more in the city's economic development effort? That would be appreciated by all of us that are out of work. Seems the Mayor might be trying to get the conflict with city council resolved. That's was what the mediators (two former judges) were supposed handle? Right?

City officials sell "quality of life" constantly. What do you say about a city who burns plastic overnight while they are supposed to be recycling it, creating a bigger stink than the elected officials. And a mayor who slashes the budget, including some from his own staff, then hires another body to speak for him. Surely not a Cleveland Ohio wannabe. Remeber. that city once called the "Mistake on the Lake" and was led by the ever (fill in you own blank) Dennis Kucinich (sp).

This will give you a bigger headache than Lebron James and Brett Favre.

Whose the captain of this ship?

The mayor and the city counsel are supposed to be an asset tp the city, not collective &^*!#&. They are the executive and legislative branches of the city government. They are nine men and a woman who have authority. They can lead Tulsa in everything from trash to economic development (spelled JOBS). Look at these samples of commeraderie.

June 16, 2010 -

"Attorneys for a majority of city councilors filed on Friday a motion in Tulsa County District Court to dismiss a civil lawsuit alleging the council violated the Open Meetings Act.

The motion states that the three citizens, who filed the lawsuit, do not have the right to do so because the cause is of criminal nature."

Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=14&articleid=20100723_11_0_Attorn343696&rss_lnk=11

July 27, 2010 -

But potential charges against Bartlett and Simonson or the lawsuit against the council should be separate discussions, they said.
Councilor John Eagleton, with whom Bullock did not meet, agreed.
“I don’t know how you repair a toxic relationship like what we have,” he said.
Bynum has suggested that the council and mayor meet to resolve their issues, and Christiansen said he met with Bartlett weeks ago for the same reason.

Read more from this Tulsa World article at http://www.tulsaworld.com/news/article.aspx?subjectid=16&articleid=20100727_11_0_LusBlo626547&rss_lnk=11

"Toxic"?, "potential charges against Barlett and Simonson"?, citizens suing the counsel?, "attorneys for a majority of city councilors"?

Let's ask this question. Would any company thinking about coming to Tulsa, while doing the normal due diligance locate in Tulsa? Certainly they would think twice about walking in to a city that has leadership that works against itself, even to the extent of employing lawyers against each other. Who coes that hurt?

Everone in the city looking for a job. Not only will this mitigate against jobs for residents of Tulsa, it will cause everyone to think about moving to greener employment pastures. How does that sound Mr. sales tax base>

Adrift in a sea of more qualifed people

Unemployment is a common phenomenom in today's economy.

There are three competing philosphies.

One focuses on personal contacts. According one expert I talked to, "everyone has 2,000 acquaintances." You contact them, get an appointmentfor 10 to 15 minutes and give them a sales pitch about yourself. THE PITCH can be no longer than three minutes.

Two focuses on the internet. Get on Facebook, write a blog, go to many job websites, find website of favorite companies, websites of headhunters (the human ones, not the meanies who dine on some of our closest friends). Get your name out in cyberspace.

The third, crawl in a hole and die (a Glen Beck favorite).

The truth is you are only as effective as that to which you are commited. If you're comfortable cold calling, jump in to number one. If you are an internet wizard and you have the hardware, assert yourself with the second option. Option number three is in this for "comic relief".

The biggest tools are dedication and patience. This economy is not producing new jobs. You're going to have to displace soneone who was retired, fired, or just got lazy. That takes time and luck. Find an opening at the exact right time, and impress the person in front of you asking questions you hadn't thought of. And take break each to watch "The Rifleman" play video games, play chess, etc. Eight hours a day will only make tired.