Conscious Capitalism:The One Book Every Conservative Must Read

The motivating force behind the first tea party protests of February 27, 2009, was , in part, crony capitalism.

Across the country and on the steps of the Arch in St. Louis, signs and speakers denounced bailouts for failed businesses.

Rasmussen found that 68 percent of Americans believe Big Business and Big Government work together against the rest of us.

I think they’re right.

Since then, crony capitalism has only grown. Obamacare and Medicaid Expansion. Quantitative Easing. The government takeover of General Motors and Chrysler. State and local tax subsidies for businesses, like China Hub here in Missouri.

At least part of the reason we’ve failed to separate corporation and state is a conservative economics fallacy first articulated by our favorite economist, Milton Friedman.

Milton Friedman’s Error

In 1970, Friedman wrote a New York Times op-ed titled: The Social Responsibility of Business Is To Increase Its Profits.

Conservatives love the simple brashness of Friedman’s statement:

There is one and only one social responsibility of business— to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

On the surface, it makes sense, and business academics took it to heart. In 1976, two business professors, Michael Jensen and William Meckling of Simon School of Business, took Friedman’s theory one step further: the sole purpose of a business is to maximize shareholder value.

The Downfall Of Business Ethics

As Steve Denning wrote in Forbes last year, this is “The Dumbest Idea in the World.” The results of maximizing shareholder value have led to a popular mistrust of business. And it’s led leading proponents of so-called agency theory to question the idea that all’s fair in pursuit of profits.

In 2011, I had a chance to sit down to dinner with Harvard Business School legend Paul Lawrence just months before he passed away. Dr. Lawrence spent the last decade of his life undoing a lot of the damage he felt he’d done at Harvard.

After hearing great stories about John Wayne, whose Arizona ranch shared a mile long fence with Lawrence’s brother’s ranch, I asked him why he’s working so hard on advancing Four-Drive leadership when he should be enjoying his retirement.

“I watched a news program about corporate scandals around the time of Enron,” he said. “I realized that most of the men who were on trial for cheating and lying were former students of mine. I had to correct the thinking that led us here. I had been part of the problem.”

The Answer Is Conscious Capitalism

John Mackey’s vision of Conscious Capitalism might surprise his conservative critics. In his new book, Conscious Capitalism: Liberating the Heroic Spirit of Business, Mackey mirrors the idea behind the 5,000 Year Leap:

In the long arc of history, no human creation has had a greater positive impact on more people more rapidly than free-enterprise capitalism. It is unquestionably the greatest system for innovation and social cooperation that has ever existed. This system has afforded billions of us the opportunity to join in the great enterprise of earning our sustenance and finding meaning by creating value for each other. In a mere two hundred years, business and capitalism have transformed the face of the planet and the complexion of daily life for the vast majority of people.

And he gives us a remarkable litany of free-enterprise capitalism’s higher purpose:

This is what we know to be true: business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity.

The idea that business is good, ethical, noble, and heroic is breathtaking. I promise you, they don’t teach those ideals in most business schools today. They teach profit maximization and meeting Wall Street analysts quarterly expectations instead.

But people are human, not machine. We all want to serve a higher purpose, save for the five percent who are true psychopaths.

Mackey’s vision of business as good, ethical, noble, and heroic would lead the most idealistic person toward the pursuit, while the idea of maximum profits invites the selfish and the greedy.

The Evil Twins of Crony Capitalism and Regulation

The flip side of Conscious Capitalism is Crony Capitalism and government regulation.  On these points, John Mackey sounds like our speakers at the first tea party protests:

Crony capitalists and governments have become locked in an unholy embrace, elevating the narrow, self-serving interests of the few over the well-being of the many. They use the coercive power of government to secure advantages not enjoyed by others: regulations that favor them but hinder competitors, laws that prevent market entry, and government-sanctioned cartels. 16

Since the financial collapse in the 2008, crony capitalists and government have conspired to increase the wealth disparity in America to its highest levels ever. Obama’s rhetoric about level playing fields were hollow. His two most ambitious legislative victories—Obamacare and Dodd-Frank—all but competition and free enterprise from healthcare and banking. Obama didn’t reduce income inequality—he made it worse.

And he did so with a lot of help from big business and big banks. Dodd-Frank, you’ll remember, changed a lot because of testimony and lobbying from the finance and banking worlds. Same for Obamacare and healthcare and insurance corporations.

The corporate lobbyists did not push ideas that would keep you free and prosperous; they added provisions to put taxpayer dollars into their own pockets. 


Read Conscious Capitalism

There’s way too much great stuff in Conscious Capitalism for me to cover here. Whether you’re a business leader, entrepreneur, or concerned consumer, you’ll benefit from the ideas Mackey puts forward.

In the end, Mackey shows us two worlds. In the first, corporations use the coercive power of government to extract wealth from customers, employees, vendors, and taxpayers. In the second, businesses exist to create massive value that inspires people to buy from, work for, and trade with companies.

Which one would you trust? Which one won’t embarrass you? Which one would you happily defend?

If you believe in fair, open, and voluntary exchange, you’ll love Mackey’s book. If you don’t believe in those things, you need Mackey’s book.

The Bain of Newt’s Existence

Truth is, not all companies, not all business ideas, can make it on their own. 

It’s easy to say that a good idea will automatically lead to a successful business. But it’s a lie.

Apple did not become Apple without investors.  Sure, there are some examples of businesses that flourished without financial help.  But not many. We’ll never know the wonderful ideas that died in their owner’s garage for lack of financing. 

Markkula offered to guarantee a line of credit of up to $250,000 in return for being made a one-third equity participant. Apple would incorporate, and he along with Jobs and Wozniak would each own 26% of the stock. The rest would be reserved to attract future investors. The three met in the cabana by Markkula’s swimming pool and sealed the deal. “I thought it was unlikely that Mike would ever see that $250,000 again, and I was impressed that he was willing to risk it,” Jobs recalled.

Isaacson, Walter (2011-10-24). Steve Jobs (p. 77). Simon & Schuster, Inc.. Kindle Edition.

A lot of people with ideas turn to government for investments. Why a business person with an idea would go to government for funding is obvious: poor scrutiny, below market interest rates, and (seemingly) unlimited funds. Ideas requiring big investments and heavy risks tend to seek out government help.  (See Aerotropolis.)

But the private sector has its own method of bringing great, but risky, ideas to market: venture capitalists and private equity. 

Venture capital and private equity firms pool their money together and invest in start-ups or small businesses seeking to grow, or salvage existing companies that suffer from bad management.  These firms employ experts and risk-takers who help push ideas over the top. 

Most importantly, private equity firms are like Bailey’s Building & Loan—they give us an alternative to the Mr. Potter of government.


It’s absurd to criticize Bain Capital for its practice of salvaging failing businesses.  It’s absurd and silly to criticize Mitt Romney for laying off people from dying companies. Even some Democrats get this:

Should bad, poorly-managed companies be allowed to destroy value?  Should fast-growing, innovative businesses receive capital and support to accelerate their growth?  And should hard-working pensioners and retirees be allowed to invest their savings in an asset class that outperforms nearly every other one available?  Private equity has an important role and should be lauded, not lambasted.  The WSJ does a nice job of making this case here

I am a strong proponent of business considering all stakeholders, not just shareholders, as vital corporate interests.  I’ve written about Creating Shared Value in the past. I believe that mass layoffs shouldn’t happen simply to boost quarterly or annual numbers. 

When Bain Capital bought a business, the damage had already been done.  Bain didn’t buy thriving companies and gut them; it bought failing businesses and saved them.

Sometimes layoffs are necessary to avoid outright closure.  That’s why business leaders get paid big dollars—because we rely on them to save as many jobs as possible by making brilliant strategic decisions. 

While I have a lot of difference with Mitt Romney and with business executives who treat employees like pawns in their personal empowerment games, I believe that Romney’s actions at Bain were necessary and compassionate, not callous and self-serving.

Were it not for private equity firms like Bain and venture capitalists in general, ideas like the Apple II would die in Steve Jobs’s garage.  Entrepreneurs, inventors, and troubled companies would have nowhere to turn except government.

Newt Gingrich made a big mistake attacking Romney’s role in saving failing companies. In fact, his error was so big it might have sealed the nomination for Romney.

Generation Conflicted

In the tech world, I meet a lot of brilliant, ambitious, hardworking entrepreneurs. These folks are committed to their dreams, working 100+ hour weeks, and paying themselves as little as possible. They stretch investors’ dollars to the limit and hunt for more VC to make dreams come true. They want to create jobs and better lives for many. 

Over drinks, these young capitalists talk about three things:

1. Easier access to capital.

2. Lower taxes so they can reinvest in the next generation of their products.

3. An expansive, wealth-distributing, world government.


Yeah.  These people who are sincerely and devotedly capitalistic about their own businesses are totally socialistic about everything else.  Their top-shelf educations have thoroughly brainwashed them into believing that a start-up in Silicon Valley (or Cleveland) is not subject to Obama’s plan for unified world economic management. 

We can win them over.  Ask them if they would accept some professor’s point of view on whether or not their software idea was feasible.  (They would not.)  So why accept some History professor’s view of the world?

Make a deal:  I’ll support lower taxes on entrepreneurs, if you’ll support less government regulation on small businesses. (Make them think.)

America leads the world in technology innovation (if not production) because we are free to pursue happiness. The young geniuses in Silicon Valley have access to VC because America produces wealth and lets (for the most part) the people decide how to invest that wealth. 

As Obama’s policies worth through the economy, opportunities to start new businesses, to build new dreams, to design and create great stuff vanish. Let’s win the minds and hearts of the brightest, boldest innovators.  They’ll fix Washington so they can get back to their dreams.

8,000 Dow? *UPDATE*

So says Yale economist Nouriel Roubini in an interview today on CNBC.

“There are some parts of the global economy that are now at the risk of a double-dip recession,” said Roubini, head of Roubini Global Economics. “From here on I see things getting worse.”


Roubini’s comments came in response to a 376 point drop in the Dow Industrials. Nasdaq and S&P 500 were off significantly as well.  All three indices are at or near correction territory, having fallen about 10 percent from their peaks.

The reasons for the nosedive are pretty obvious:

In short, if the news isn’t uncertain, it’s bad news for economic growth.  Other economists see weakness in the US economy, as in this Yahoo News story:

“The economic recovery story has started to look like a mirage and the new reality is a return to credit crunch conditions” like those seen during the financial crisis, said Tom Samuels, manager of the Palantir Fund in Houston. “If that’s correct, stock prices are well ahead of economic reality.”

Buckle your seatbelts.  It looks like Obama’s second recession is on its way.


The stock sell-off continues in Asia on Friday.  Major indices are down about 2.5 percent from yesterday’s close.  The Senate tonight voted to place massive controls on banks and finance, a move sure to spoil investors’ appetites.  This Congress and this administration are bent on controlling every aspect of our lives.  Alexis de Tocqueville predicted this outcome 180 years ago:

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

Please read the rest of Democracy in America, Volume II, Section 4, Chapter VI.

Edward Whitacre Jr. Lies **Update: NYT Agrees**

No, General Motors did not pay back its debt to taxpayers. Edward Whitacre is a liar. Instead, Whitacre paid the Visa bill with his MasterCard.  But both cards were issued by the same bank.  So you, the banker, are still on the hook for the full amount.

Now we know why Obama hand-picked Ed Whitacre to “lead” GM: Whitacre will do the president’s bidding.

**UPDATE**  From  New York Times agrees that Whitacre and White House ain’t tellin’ the truth.  Look for this story to grow this week. Bottom line: you cannot trust the government. Period.  But there’s more.
GM’s false statements about finances could be a criminal violation of Sarbanes-Oxley, according to Ed Morrissey:
This kind of misleading statement would be actionable under Sarbanes-Oxley had it been made as part of a disclosure statement. It might still yet be actionable if the SEC concluded that GM intended to mislead investors into buying GM shares the same way Whitacre wanted to encourage car buyers to come back to GM by falsely claiming that they had repaid taxpayers in full.
Whitacre and the rest of the GM board should be under criminal investigation this week.  Demand justice.

If The Post Office Built Cars

Some good people work at the Post Orifice.  I know several.  One of my dad’s best friends and WWII paratrooper retired from the Post Orifice.  He was a great guy and good friend to my parents. 

On the other hand, the United States Postal Service is among the incompetent, bureaucratic, broken down, 19th century, poorly managed excuses for an organization since the Soviet Union went out of business. 

Case Study:  Christmas Gift

My wife ordered a handbag for my stepdaughter for Christmas.  She ordered it on December 16.  The seller shipped it Priority Mail from Overland Park, Kansas, the same day.  On the USPS web site, the tracking information indicated it should arrive in Ballwin, Missouri, on 12/19. 

On 12/19, my wife logged on to see if it was in town.  It was in the town of Warrendale, Pennsylvania.  For those of you who failed geographic (and for Postal workers who didn’t attend high school), here’s a map showing the relationships between Kansas, Missouri, and Pennsylvania:

Map image

   As you can see, the purse started out (left pin) much closer to Ballwin, MO (middle pin), than it was 2 days later (right pin).  Warrnendale, PA, is pretty close to the Atlantic Ocean.  Overland Park, KS, is pretty darn close to Ballwin, MO.  In fact, I could drive to Overland Park, get the purse, and drive back to Ballwin in a day without really exerting myself.  A trip to Warrendale, PA, on the other hand, would require a night in a hotel.

The geniuses at the Post Orifice had to carry the purse through Ballwin, MO, to get it to Pennsylvania.  But rain or snow or dark of night, these couriers loose our Christmas presents like the professionals they are.

My wife called the USPS on December 19, of course.  She was curious as to why they took the package 642 miles out of the way.  The postal worker said that Priority Mail can take up to 10 days.  Apparently, they intended to use all 10.  Still, the postal worker assured my wife the package would arrive by Christmas morning.

On December 22, the package was still in Warrendale.

On December 24, the package left Warrendale.

On December 26, the package returned to Warrendale.

On December 27, the package left Warrendale.

This pattern continues to today, January 3, 2009.  One day it leaves Warrendale; the next day it returns. 

Today our local Post Orifice called my wife to read to her exactly what my wife can see on their web site:  the package is "looping," the clerk told her. 

"Yes, I can see that," she said.  "When will you stop looping it and send it to Ballwin, Missouri, which is just 250 miles east of Overland Park, Kansas?"

"Well, we can’t say," the postal clerk told her.  "There might be something wrong with the address on the package . . . a torn label or something.  Hard to tell from here."

"Then why are you calling me instead of someone at the Warrendale Post Office?"

"Because this is your post office," the clerk answered, as if "Duh!"

"Well," my wife asked, "will it ever get here?"

"Eventually, they’ll just return it to the sender in Kansas," the clerk said.


"Yeah.  Eventually."

"When is ‘eventually?’"

"Hard to say from here."

Just Wait ‘Til They Start Building Cars

The reason the Post Orifice sucks golf balls through 200 feet of garden hose is because it is a government-owned corporation, like Fannie Mae and Freddie Mac. Everything the government does sucks.  Why should carrying a package a couple hundred miles be any different?

The government will apply the same standards of excellence to the cars it builds.  Anyone, therefore, who buys a Chevy or Chrysler after the bailout deserves the waste of steel he gets.  The last time a government tried to build a car and sell it in the USA, it became the gold standard of things that suck:  Yugo.   As in, "The Post Orifice is the Yugo of delivery services," or "Fannie Mae is the Yugo of financial institutions."   Shortly, the Cadillac will be the Yugo of Cadillacs. 

Another the reason the Post Orifice sucks will be a natural fit at GM and Chrysler:  unions that bar managers from firing drunk, drugged, lazy, entitlement-minded, and incompetent workers.  (Yeah, I know, "workers" is an exaggeration.)  Imagine the guy who loops my stepdaughter’s purse every morning at 2:00 a.m. adjusting the brakes on your Escalade. 

Oppose Government Action

If you make one resolution for this new year, make it this:  I will oppose government action of any kind because everything the government does sucks golf balls through 200 feet of cheap garden hose. 

And if you buy online, make them ship it FedEx or UPS.  Never trust the Post Orifice. 

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A Bunch of Hooey

about_dellearth The silliness of companies knows no bounds.

The latest act of corporate stupidity comes from the computer maker Dell.

In its attempt to become the "greenest technology company on the planet," Dell made much of achieving some farcically theoretical "carbon-neutral" status.  But, like everything associated with AGW, there’s really no so thing.  WSJ points out in a wonderful examination today:

In fact, that’s only a small fraction of all the emissions associated with Dell. The footprint doesn’t include the oil used by Dell’s suppliers to make its computer parts, the diesel and jet fuel used to ship those computers around the world, or the coal-fired electricity used to run them.

Again, it’s difficult to criticize Dell for claiming to have achieved something that exists only in theory and is of little or no value to the planet or its inhabitants.

Moreover, while Dell is improving its energy efficiency, it is claiming carbon neutrality mostly by purchasing environmental "credits." These are financial instruments that bankroll environmental improvements made by others.

Hank Paulson, Al Gore, and George Soros are the masterminds behind these carbon credits.  Each reaps millions from environmental morons like Michael Dell who seek, not truth, but popularity.  And then only popularity with the shallowest, emptiest heads on the planet: the media and Hollywood.

Yet some of those improvements would have occurred whether or not Dell invested in them, according to some of the companies involved. That suggests Dell isn’t ridding the atmosphere of as much pollution as it claims.

Of course not.  Dell is ridding its investors of their feigned guilt. 

As thoroughgoing as the WSJ seems, there’s much missing.  For instance, if PCs make their owners more efficient, then the use of the PC may save more carbon-releasing activity than the manufacture, sale, distribution, and operation of the PC consumes.  Therefore, the mere existence and use of a computer may, itself, be carbon neutral or better.  We don’t know. 

Neither do Gore, Sorors, and Paulson know.  Nor Hansen and Mann.  No one knows.  No one really cares.  Instead, they wrap themselves up in a fantasy and call it concern.

I call it a bunch of hooey.

Predictions for 2009

After a 2 year hiatus from annual predictions, here’s what I see happening in the precarious Year of our Lord Two-thousand nine:

The Dow:  The Dow trades within a range of 1,000 points with a daily average closing of 8,500.

GDP and Economy:  By July, everyone pretty much calls the situation "Great Depression II."  Unemployment, which declines in the first quarter, increases to more than 12 percent by fall.  Gross Domestic Product by quarter:

Q1:  -.06

Q2: -1.5

Q3: -6.5

Q4: -2.0

US Treasuries:  Moody’s warns investors in US Treasuries that inflation could erode the real value of the paper dramatically but falls short of lowering bond ratings.  China and Japan sell over $1 trillion in long-term US debt.

Auto Industry:  The bridge loan isn’t enough and the UAW refuses major compromises, but Obama and Congress block GM and Chrysler from bankruptcy.  Instead, Congress authorizes $70 billion in exchange for voting stock and a seat on the companies’ boards.  The companies oblige, effectively becoming government agencies. 

Iraq:  The slow drawdown of troops will continue according to the plan approved by Iraq in 2008.  The net effect of Obama’s win on Iraq is zero.

Iran:  The Obama administration achieves a pyrrhic victory by signing a non-proliferation agreement with Iran similar to the one Clinton (via Carter) signed with North Korea.  By the end of 2009, Iran’s cheating is obvious, but both the US and UN ignore it . . . until it’s too late.  Israel acts alone.

Key Legislation: 

Fairness Doctrine returns requiring television and radio stations to provide equal time to all sides of any news or science issue with the exception of climate science.

Emission Standards increased dramatically by Congress and rubber-stamped by GM and Chrysler boards.  Ford sues claiming unfair competition and anti-trust violations.  Suit will take years to settle.

Unions can demand to know a non-union’s position on unionization votes.  Many shops turn union; many anti-union workers are assaulted and threatened. 

Medical workers are compelled to participate in abortions regardless of religious or personal beliefs.  Thousands of doctors and nurses quit in protest.  The Catholic church closes thousands of hospitals creating the greatest healthcare availability crisis ever in a post-industrial country.  Congress prepares, by year’s end, to take over the healthcare industry and all medical universities and colleges.


Several major professional sports teams fold as advertising dollars disappear.


No one really cares after reading the list above.


Newt Gingrich prepares a presidential run in 2012 by quarterbacking a team of more than 200 Republican Congressional candidates on single agenda to win back Washington and capitalism. 

Climate Change:  2008 was the coolest year in almost 20 years, and 2009 looks to be even cooler.  A major flaw is revealed in the most sophisticated models.  James Hansen refuses to admit he was wrong, but even the media stop covering climate change.  Environmentalism shifts to potable water, an actual problem that will affect the US in 20 years as the Ogallala Aquifer dries up.

Linux Approaching Tipping Point

Rarely does a single factor cause a paradigm shift.  For one example, look at the election of Ronald Reagan.  Sure, Reagan had a great message, expert delivery, and that presidential look.  But without Carter’s bungling incompetence, excesses by liberals in Congress, a runaway Supreme Court, Soviet expansion, stagflation, the Iranian hostage crisis, and seventeen thousand other annoying problems, Reagan would not have upset an incumbent president in 1980. 

Revenge of the Nerds

Since 1999, my IT friends have been predicting the rise of the Linux desktop.  Since 1999, they’ve been wrong.  Being IT professionals and excellent programmers, they failed to realize that the average home user does not have the patience nor the inclination to learn sudo apt-get nonsense.   They want single-click installation.  (Actually, they want to merely imagine something and have their computer make it so.)  Linux had no product managers to demand ease of use.  The Linux community didn’t understand that they were not their (potential) users.

A Linux Distribution People Can (almost) Use

Ubuntu might soon change that.

Last week I installed Ubuntu 8.10 on my wife’s laptop.  (It dual-boots Vista Home Basic for her Zune and a few other incompatible activities related to her job.)  After getting both systems working smoothly, I went the extra step of setting up Ubuntu’s Gnome desktop system to work and look like Mac’s OS X.  I friggin’ love it.

The reason for installing Linux on this machine was economics–and that’s one of the factors that could put Linux on a lot of desktops in the next 2 years.  My wife’s laptop is limited to 1.25 GB RAM.  It has a barebones video card.  I just replace the 60 GB hard drive with a 160 GB one because the 60 GB was 90 percent full even though all of our User files (docs, photos, music, videos, downloads, etc) are stored on an external HD. I used an out of the box install of Vista–not the OEM disk from Toshiba–so that I could install the minimum crap necessary to run the computer. 

Running Out of RAM

When I fire up Vista, it immediately consumes 600 MB of the 1.1 GB of RAM available after the video card steals its share.  Open a browser (we use Google Chrome, the best browser ever made) and RAM usage is up to 700 MB.  Browse an image-happy site, and the damn thing starts swapping! 

Boot into Ubuntu, though, and the OS uses only about 212 MB of RAM.  Open a browser and 10 other programs, and you’re up to about 500 MB. 

Moreover, there’s no anti-virus software inspecting every 0 and1 because Linux is pretty much immune to viruses.  And it’s free.

Six-Factor Tipping Point

But the tipping point toward Linux requires a few other factors that have also come to pass:

  • Google Docs and Google Apps give most users all the word processing, spreadsheet, collaboration, scheduling, messaging, and email functionality they’ll ever need–for free
  • Ubuntu keeps your system up-to-date with just about any application you’ll ever want–for free
  • The economy makes the bells and whistles that drove Windows to the top of the market seeem pretentious and embarrassing
  • Every year, the computer skills of the world’s users increases rather dramatically so that more people can deal with unforgivable terminal commands like ‘sudo apt-get epiphany-browser’
  • Companies looking to cut their IT costs will begin moving more and more software out of their in-house data centers and into the clouds (Google Apps instead of Exchange server and Microsoft Office will be a major theme for enterprises in 2009)
  • Companies will figure out that with Linux desktops, they can get more years from cheaper PCs for zero cost of desktop applications and operating systems

If I were Microsoft, I’d be worried.  And I drank the Redmond Kool-Aid many years ago when Steve Balmer gave me a free copy of all of Microsoft’s business-related software in order to help my fledgling book publishing company.  In return, I helpd convert 2 companies into Microsoft shops.  I still love Microsoft, but with an almost or actual depression staring the world in the eyes, I’m not sure I can afford their stuff any longer.

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America, you just bought yourself 3 car manufacturers

Apparently Bush’s plan to socialize all of America before leaving the White House is alive and well.  Some sort of a crappy deal has been reached.

The plan includes a car czar–something that Toyata, Nissan, and Honda miraculously do not need–to run the auto industry like a DMV license office.  

The last time a government designed, built, and sold an automobile like, it was called the Yugo.  I’ll keep my SUV, thanks.

Once again, our last hope is the Republican Caucus–this time in the Senate.  Write today.

American Auto Industry Doomed

If you own US auto stock, sell.

If you work for a US auto maker, find a new job.

If you own a US-made car, start shopping.

The government is about to destroy the US auto industry, and it will cost billions of dollars.

Apparently, the White House and Congress are trying to invent an auto czar position to “oversee the restructuring of the industry [Wall Street Journal].”  That means that the problems that led to the current crisis will get worse and the possible solutions to the crisis will be outlawed.

Here are the problems contributing to GM’s problems, in particular:

  • Union auto workers make more than doctors, MBAs, college professors with Ph.D., research scientists, or small business owners
  • Retired auto workers make even more than working auto workers
  • Laid-off auto workers make 80 percent of what a working auto worker makes
  • Idled plant workers make 70 percent what active auto workers make
  • State laws prohibit closing auto dealership even though GM has 4 dealership for every Toyota dealership
  • Idled US auto plants cannot be sold or leased
  • Rick Wagoner is an idiot

Each of these problems was caused by a Democrat special interest group, and the Democrats will not permit the problems to get fixed.  Bank on it. 

The solution to the US auto problem is simple:  bankruptcy.  A well organized bankruptcy will void UAW contracts, sell off idle capacity (to start-ups, if we’re lucky), and tell the retirees to live like other retirees instead of like the idle rich.

I am writing my Congressional delegation to tell them to oppose any bailout of autos that does not include bankruptcy.  Do the same, or the US auto industry is toast.

*UPDATE*  Larry Kudlow has more:

We will not bailout our way into prosperity. Nor will we spend our way into prosperity. Somebody has to stand up and yell: It’s time to cut tax rates on the supply-side. That will reinvigorate growth and infuse new spirit into a demoralized economy.


Homes for the Rest of Us

Homes for the Rest of Us is my response to the mess that is the finance industry. 

The Harvard MBAs screwed up the whole finance thing. So how are people supposed to get houses?
We’ll just have to take care of ourselves.  And each other.

I don’t know exactly how this will work, but I am pretty damn sure we can make it happen.

There’s this great program called that allows people to make micro-loans to entrepreneurs, mostly in emerging or plain dysfunctional economies. These entrepreneurs use the loans to buy baskets for their laundry business or seeds for their half-acre “farms.” They pay back the money the best they can.

This is America, though. Comparatively, we’re rich as all-get-out. We can give much bigger “micro” loans to people who can’t get mortgage financing any other way. And, besides, have you read paper? The whole world is a dysfunctional economy.

So here’s what I’m looking for:

* Some honest lawyers who know what kind of non-profit corporation we have to set up
* Some honest lawyers to help us (volunteers)
* Some finance or banking people (volunteers)
* Some lenders to get the ball rolling (volunteers, sort of)
* Some borrowers who need money to buy a home (these shouldn’t be difficult to find)
* Many passionate people who want to help in any way they can

We’ll need to create some basic rules and set some return rate. The loans will probably very high risk, but the interest rates probably won’t reflect the level of risk compared to other investment options. That’s okay, though. People are good and want to help each other.

I don’t want to put banks out of business–they have their job in society. But I think it will take a generation of grad students before we really trust that group to finance home mortgages again. And I know a lot of people who don’t want to wait that long.

If you want to help, forward the link to this site to everyone you know. Just getting some eyes on the page and ideas on the forum will help.

Great movements start with tiny actions, and this is about the tiniest action I could think of. So it will have to work.

Who says conservatives won’t help their fellow human?  Did I mention that this is a non-profit?