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2016 Could Be a Very Bad Year

Reading Time: 6 minutes

People act according to what they expect.

And that, my friends, could be very bad news for the economy in 2016.

Social psychologists and usability experts both know that people’s words often conflict with their actions. This is especially true when asking people to predict their own behavior in a hypothetical.

For example, one study asked people to predict whether they would buy flowers for a charity. Eight-three percent of respondents said, “yes I would,” but only 43 percent actually did.

The play The Visit by Friedrich Dürrenmatt offers a great study in expectant behavior vs. self-prediction. In the play, a woman, Claire, returns to her economically depressed hometown after inheriting billions from her late husband. Before she arrives, the town prepares to ask her to bail them out.

And she does offer to save the town. But her money comes with a string attached.

Claire offers a large donation to the town and an equal amount to be divided evenly by all citizens. To earn the gift, someone must murder the town’s leading citizen and Claire’s ex-boyfriend, Anton.

The townspeople express their outrage at the request. From the mayor on down, people go out of their way to stop by Anton’s store and tell him they will have nothing to do with her evil scheme.

But Anton starts to notice something disconcerting. The people who come in to his shop to tell him they think Claire’s offer is horrible and offensive are suddenly spending a lot of money. On credit.

Walking around town, he notices more signs of expected affluence: kids with new toys and shoes, women in the latest fashions, men driving brand new cars, appliance and furniture deliveries on every street. For years, people of the town had made-do. Now it looked like they’d all won the lottery.

It’s pretty clear what’s going on: while the townspeople say “I would never kill Anton for money,” they’re also thinking, “but surely someone will.”

Expectations Drive Borrowing

When we borrow money, we assume we will earn more in the future than we do today.

When a company borrows money for a new machine, it does so in the belief that the machine will allow the firm to sell more products at a profit in the future.

These are both examples of borrowing on positive expectations.

Both individuals and companies also borrow when they expect very bad times to come.

Individuals who know they’re going to file for bankruptcy tend to stop paying their bills and start borrowing to their full capacity.

Business who know they’re going to face bankruptcy or failure borrow to drain the firm of assets.

Increasingly over the last 5 years, companies have been borrowing billions of dollars to drain their firms assets. Take a look at this chart depicting how companies have used loans:

loan survey

Hidden in the M&A and Debt Refinancing column is another sinister activity: share buybacks. Let’s look at share buybacks since 2000:

fig 9_0

Notice that buybacks were pretty flat from 2000 through about 2006. Notice, too, that 2006 was when the housing market started flashing warning signs.

Expecting bad times ahead, companies began buying back their own stock to inflate the price so insiders could get out at the (artificial) top and managers could earn huge bonuses tied to stock prices.

After the crash of 2007 and 2008, stock buybacks and dividends returned briefly to historical norms. But only briefly.

Executives soon realized that the debt bomb that triggered the 2007 and 2008 crash had not detonated. It actually became more powerful. The government and business did not fix the problem of trillions in bad debt–they simply kicked the can down the road.

[Find out what separates military leaders from civilian managers.]

These CEOs and CFOs are smart people. Smart enough to realize that trillions of dollars in bad debt–debt with no underlying value–must be settled at some point. Realizing this late in 2010 or early 2011, managers began borrowing money and removing it from the firm. Capital expenditures–new plant and equipment and research and development–dried up. Companies did not borrow to invest in the future; they borrowed to get their money out while they still could.

According to a study by Alleasing:

Capital expenditure (capex) budgets for the new financial year are being impacted by a lack of confidence in the economy. Seven in ten firms will leave their budget unchanged and a further one in ten will decrease spend in FY16, with an average intended reduction of 5%.

These are some of the findings from the latest Alleasing Equipment Demand Index, and they come despite six in ten firms being detrimentally impacted by a back-log of unproductive equipment. This figure has risen steadily over four rounds of research, up 6% over that period. For smaller businesses (micro firms and SMEs) the rise has been greater at 10% and 7% respectively. Seventy one per cent of micro firms and 73% of SMEs are indicating their operation is suffering because of unproductive assets.

You might be tempted to say, “But, Bill, why should we trust this survey? You just said people are bad at predicting their own behavior.”

Good point. But there’s a difference between predicting what we expect ourselves to do in a hypothetical scenario versus reporting what we have written in our plans. The Alleasing survey asks what’s written in your 2016 capex plan, not “what would you do if you suddenly found an extra billion dollars in your bank account?” In other words, this isn’t a hypothetical but an actual reading of 2016 budgets.

And look at the quote in bold. Despite record borrowing, companies are not replacing equipment that they know to be hurting their productivity and profitability. Companies have little faith in the future, so they’re borrowing money and handing it out as bonuses to managers and stockholders.

If my analysis is right, expect to see more stories like this ZeroHedge story on the downfall of Bed Bath & Beyond:

We have been following the slow at first, and now very fast-moving disaster that is Bed Bath And Beyond with close interest for years, at first with detached amusement (Bed, Bath & Beyond Buybacks Authorizes Another $2 Billion In Stock Repuchases) and increasingly with amazement, as the company launched an unprecedented stock buyback spree to mask the relentless deterioration in its underlying business.

Last September when looking at the chart showing BBBY’s buybacks vs its capex expenditures, shortly after Q1 BBBY issued $1.5 billion in senior unsecured Notes promptly using $1 billion of this to buyback its own shares, we presented the following three questions:

  1. WTF
  2. Is the entire management team about to quit, but not before cashing out of their equity-linked securities first?
  3. See 1.

Reading between the lines, what we asked was “what glaring business weakness is the management team covering up so earnestly with this constant stream of buybacks?”

Last week, BBBY announced disastrous same-store sales combined with failure to invest in capex meant future pain. Plus, the company has taken on billions in debt to finance stock buybacks.

Or, in return terms, since the start of 2011, BBBY’s management spent $6.5 billion to repurchase its own stock, while leverng up to the hilt. It has so far generated paper losses of $1.7 billion: a return which would have gotten any trader or hedge manager not only fired but expelled from the industry for ever.

Putting these numbers in context, BBBY repurchased 80% of its current market cap, which as of this moment is $8.1 billion. One wonders where the stock price would be without this Fed-enabled feat of financial engineering…

And BBBY is only one company that’s been borrowing money to spend on stock buybacks, executive bonuses, and dividends. The only thing these companies have in common is a degree in confidence that the business will fail in the near future.

The sad thing is that if (or when) BBBY fails, its executives and insiders will make a fortune while its employees, suppliers, and retail investors will get stuck cleaning up their lives.

It would be nice if business people believed and behaved as if creating a customer was the purpose of business, not financial engineering.

When companies borrow money, they’re telling you what they expect of the future. If they use the loans to invest in people, equipment, and new products, they expect growth. If they use the loans to line their pockets, they expect to go the way of Bear Stearns and Lehman Brothers. Think about that looking that chart of dividends and share buybacks:

fig 9_0

 

I realize that not all buybacks are mere financial engineering. For example, Apple has been borrowing to buy back stock in order to reduce future costs of dividends. That’s a sound move, especially for a company like Apple that’s continuously innovating and improving. But Apple seems to be a rare exception among the buyback crowd which is why the example is so easy to spot.

Companies investing in people, equipment, and products expect a future that’s brighter than their present. Companies “investing” primarily in dividends and share buybacks expect to be headed for bankruptcy or bailouts.

Conscious Capitalism:The One Book Every Conservative Must Read

Reading Time: 4 minutes

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

Reading Time: 3 minutes

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.

bain-mitt

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.

UMSL Killing American Males

Reading Time: 2 minutes

David Brooks—the former conservative—skewered the University of Missouri St. Louis yesterday.  Brooks wasn’t aware, and UMSL administrators don’t read. But some of us caught it.

Brooks wrote of The Missing Fifth. Did you know that 20 percent of American men in their primes don’t work?

Americans should be especially alert to signs that the country is becoming less vital and industrious. One of those signs comes to us from the labor market. As my colleague David Leonhardt pointed out recently, in 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work. [Emphasis added.]

How sad. How embarrassing. I’d say “how shameful” except the Supreme Court ruled shame unconstitutional, or so it seems. We’ve had that feeling, shame, removed from our souls.

Men who do nothing are deadbeats, much more so than people who try to pay their bills and can’t.  We’re talking about able-bodied men who simply choose to sit on their asses and sponge of others—off of foolish women, in many cases.

Brooks errs in his proposed solution, of course.  Brooks thinks American education the solution. He hasn’t been paying attention. I have some other ideas.

Higher education isn’t the solution to our problem; education is the problem.

The University of Missouri’s wing schools, UMKC and UMSL, offer the course “Introduction to Labor Studies.”  This course is why 20 percent of men believe that sitting on their brains is their right—nay, their duty—as young, able-bodied American men.

Leaving aside the communist party recruitment activity for a moment, UMSL’s Labor Studies course is a lesson in lying, lazy, and license.

In Labor Studies, professional derelicts Don Giljum and Nancy Ancel teach students how to avoid work, how to destroy a company’s profits, and how to harass and intimidate managers.

Think about this: the state of Missouri uses tax dollars to teach Missouri students how to rip off employers.  Knowing that, why would you hire someone who went to a public university in Missouri?  Why would you open an office or business in the state?  What could be more foolish than to expect Missouri to encourage business?

Here’s a solution.  It’s a tiny, tiny step, but it’s a step in the right direction: Shut down the damn Labor Studies course in the University of Missouri system.

An alternative solution if that’s too radical for our legislature: rename the course “Introduction to Deadbeat Studies.”

But do something before "Men at Work" becomes nothing more than a trivia question.

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Generation Conflicted

Reading Time: 1 minutes

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.

Huh?

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*

Reading Time: 2 minutes

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.”

unemployment-line-nyc-depression

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.

*UPDATE*

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**

Reading Time: 1 minutes

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 Hotair.com:  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

Reading Time: 3 minutes

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.

"Eventually?????"

"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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