Good Economic News and Reading the Fine Print

Good news! A report in the paper a few days ago said that all of the wealth that was lost when the financial markets collapsed during the Great Recession a few years back has now been recovered. This occurred thanks to a large increase in the stock market, and to a lesser extent by a more modest increase in housing prices. Before you go hog wild and start investing in the market, or even engaging in a bit more consumer spending, please read the fine print. Most of the gain has come from rising stock prices. The wealthiest 10% of American households own approximately 80% of all stock. The rich are again getting richer. Yes, the wealth has “returned,” unfortunately, it went to fewer people than it came from. Increased wealth from the slight rise in housing prices (far more Americans have their primary wealth tied up in their homes) was much less, but still positive.

Here’s what will happen (if I had some extra money, I’d wager it all on this). The increase in stock market values will lure some of the marginal investors, the little guys, back into the stock market in order to share in the gains. It would be foolish to miss out on this rising tide of wealth after all. When enough of them have invested, the more savvy investors will start selling short, in essence betting that the market will go down. Then it will go down. They’re called “market corrections” but they really just divert money into the “correct” pockets (hint: it’s not your pocket). Those who have sold short will again see their wealth increase, while the little guys will again lose wealth. But the wealth didn’t really disappear; it just relocated to the bank accounts of those people who are wealthy enough to know how to game the system.

I first stated learning about our nation’s stock market at an early age, when I was taught that it was a mechanism that allows a large group of small investors to own shares of large corporations. We choose to invest in companies that have a bright future, so that our wealth can increase as the company profits from its good business practices and decisions. It sounded like a fine idea to me. I owned stock in a local manufacturer long before I was licensed to drive a car. Its stock price (mostly) rose steadily, and they sent me a little dividend check every three months.

It’s odd how as we get older, we begin to get a fuller picture of how things really work. When I was in graduate school, I was actively engaged in the full-time study of financial markets in pursuit of an advanced degree. In order to keep current on financial affairs I subscribed to The Wall Street Journal and looked it over daily for new nuggets of information that would further my education. One day I was reading the story of a man who had attempted to “corner the market” in potato futures. His plot was discovered and he was banned for life from trading in the commodities market. When asked for his reaction, it was reported that he shrugged it off, responding, “It doesn’t matter. We’re all just gamblers. I’ll find somewhere else to gamble.” He wasn’t an investor in his nation’s future but instead just played his hunches for profit, even if it required breaking the law.

That was an eye opening moment for me, but it didn’t quite open them wide enough. After I graduated, I wanted to get a job in the financial industry, so I applied at one of the largest and most prestigious brokerage houses. I was interviewed and tested. Turns out that while I was technically well versed in the subject, I wasn’t considered to be a top-notch salesman, which is the primary requirement of the job. I’m way too honest with people to be an effective salesman. A friend of a friend that I knew from college did get a job with the same firm. He had graduated with mediocre grades studying marketing, which is considered the lowest academic group on the business school totem pole. I was in the top ten-percent of my class studying finance (a more challenging discipline). I heard that he did very well in his career because he could sell.

I had an earlier experience in college that also proved eye opening. The first history class I took included the happenings in the Roman Empire under the first emperors. The information on debauchery and excessive over-indulgence was far more than I had ever been taught by our sanitized textbooks and old movies. I love history, especially when you can explore it in more depth and get to the root of issues. I was at my local library the other day and saw a book entitled Smuggler Nation that was written by a history professor at Brown University, so I took a chance and picked it up. It has been an eye opening experience as well.

I’ll probably be writing more about this book later, but for now I can say that illegal smuggling is heavily intertwined with our nation’s history. The Boston Tea Party is considered a primary seed of our nation’s quest for independence. But it had more to do with the population’s preference for lower cost tea smuggled into the country through the Dutch than for a desire for self-determination. The American Revolution was financed from profits made by smugglers. John Hancock is known for his prominent first signature on the Declaration of Independence, but the Hancock family fortune was derived in a large part from the profits made by smuggling. Another signer of the Declaration was Robert Morris, known to history as the “Financier of the Revolution.” Care to guess where his fortune originated? If you guessed “smuggling” then you’re catching on. In later years, Morris was financially wiped out by unwise land speculation and spent some time in debtor’s prison. Sometimes you’re lucky, other times, not so much.

During the War of 1812 (which has its primary roots in illegal trade) it might have been possible for the U.S. to conquer all of Canada because the defending British troops there were cut off from supplies and on the brink of starvation. They were saved by profit-mined Yankee farmers (who were also smugglers) when they drove herds of cattle north across the Canadian border and received three times the price that they could have gotten locally. It always pays to read the fine print, especially history’s fine print.

In other news, the number of Americans seeking unemployment aid fell again, driving the four-week average down to its lowest level in five years. We now have a rising stock market and increasing job growth. This follows closely on the heels of a tax increase on our nation’s highest wage earners. This is exactly opposite of the prediction made during the most recent election by those who pushed for a tax cut for wealthy “job creators.” Wouldn’t it be nice if voters could possibly retain this information for at least four years?

However, I don’t really see that much improvement in our local economy, especially among lower wage earners. This group of people also had a “tax increase” which was actually a result of a temporary cut in social security taxes that was allowed to expire at he beginning of the year. The result was that the group of people who could least afford to pay more taxes saw their take-home pay decline. Retailers that depend on this group of consumers, such as Wal-Mart and Family Dollar Stores, forecast that their sales would suffer. Despite this prediction, Wal-Mart stock has increased since the beginning of the year, while Family Dollar’s stock has actually fallen slightly.

Another recent story in the financial news details the return of American manufacturing jobs. Companies including General Electric, Hewlett-Packard, and Apple are relocating some of their overseas manufacturing back to the U.S. because of huge savings in transportation and logistics costs, combined with high productivity of American workers. But exploring the fine print tells us that the items being manufactured cater to the high end of the market. Of course, that’s where all of the money is. Our products designed to sell to our nation’s poorer workers are still manufactured overseas by even poorer workers.

Do yourself a favor and don’t stop learning. Dig deeper into the roots of stories. Explore historical contexts and above all, read the fine print.

Robert Morris, known as the "Financier of the Revolution,"

wealthy smuggler and unwise land speculator

 




 
         

Multitasking, Smart Phones...and Dumber People

My car magazine arrived in my mailbox yesterday. It was late (usually it shows up at the end of the month) and I was beginning to worry that it wouldn’t come at all. Magazines and newspapers seem to be on the verge of extinction, another victim of our instantaneous world of high technology. A glossy car magazine can’t embed a video of a new automobile racing around the track or carving up curves on a scenic mountain road like their online versions do now. We seem to demand that level of technology these days. We don’t need to read a book if we can see the movie. We can watch news on TV and get any relevant information in a matter of seconds instead of having to read about what someone else observed and get a more complete back story. We don’t need imagination to play games because today’s video game systems render action in real time, full color, high definition, and 3-D action. Watching a car go fast down the road has to be superior to just reading about it, right?

I don’t think it is right at all. If an article is well written, I actually get to experience more of the feeling that driving the car imparts than I would just watching it drive by in a video. An insightful journalist has skills that a mere reporter of an event lacks. It is an important distinction that we are all too willing to toss aside as we rush to implement new features available on our smart phones and electronic tablets. It is also subtracting an important element from the equation: our ability to think and reason, and to exercise our imagination. There is also a simpler reason that I like a nice lightweight glossy magazine over a laptop computer, smart phone, or an electronic tablet: it’s much easier to take with you into the bathroom to read while attending to other business. I think of it as the original version of multitasking, and perhaps the only one worth attempting.

There were several things I noticed as I glanced through this month’s magazine. First of all, it seemed pretty slim. Advertising revenues are what make magazines profitable, and this one has far fewer ads for cars than it used to. In fact, I found something amazing as I leafed through this issue: there were no ads from American (Ford, GM, or Chrysler) car companies. This is a magazine with headquarters near Detroit, Michigan. In fairness, there was an ad from Honda, which despite being a Japanese-owned company, manufactures most of the cars that they sell in the U.S. here in Ohio. I also found out that two popular small cars sold by Ford and Chrysler's Fiat brand are actually assembled in Mexico. So much for “Buy American.”

The second thing in my magazine that interested me was an article about the new LED headlamps that will be used on the next generation S-Class Mercedes-Benz. These headlamps are a technological tour de force, incorporating daytime driving lights, turn indicators, fog lights, high and low beam lights, and cornering illumination in one unit, all while using much less energy than other types of lighting through the exclusive use of light emitting diodes. They also include movable masks, that are computer controlled to avoid blinding the drivers of oncoming vehicles, as well as vehicles being overtaken on the road. The article concluded by saying that vehicles bound for the U.S. market will not have the full range of features because our regulations will not permit them.

For many years, from the 1940’s through the 1980’s, cars on American roads were required by law to use seven inch round sealed beam headlamps. In other parts of the world, lighting was much more varied, and better. In Europe a Mercedes roadster like the one my brother drove was equipped with a stylish unit that incorporated all lighting needs in a single unit on each side of the car. In America, these cars had separated round sealed beam headlights for high and low beams, as well as separate fog lights. I had a Mercedes sedan from 1975 through 1983, and it used four round headlamps that were inserted into rectangular spaces on the front of the car. It also had two rectangular fog lights that hung under the front bumper, and were constantly being damaged by parking lot blocks and other road hazards. In Europe, the rectangular spaces on the front of a similar model car held all lighting, including high and low beams, and fog lights. It was a much more stylish, as well as a much safer solution. In Europe, studies said that their new lighting technology was safer, while studies in this country said that sealed beam headlights were safer, although the truth is probably between these extremes. Likely it depends on who funded the studies in the first place. In any event, U.S. laws have since been amended to permit greater flexibility in lighting design, but we still lag behind the learning curve by not permitting the newest designs, such as Mercedes’ new masked LED lights.

There are many people that decry our country’s extensive and sometimes inane system of over-regulation, claiming that if we could eliminate most of them, our economy would flourish. The free market would be used to determine what is best for everybody. The problem is that the free market wouldn’t stop someone from dumping poison into the air or water because it’s much less expensive than following EPA regulations. The free market allows far too much unscrupulous behavior before it theoretically adjusts to prevent unwanted behavior.

Where does the answer lie? It would be helpful to streamline our regulatory system and eliminate rules that don’t provide benefits, especially in terms of health and safety. But it isn’t really over-regulation by our government that results in economic inefficiency. It is time to use our imagination and our powers of reasoning. Start by enriching yourself by reading some books, then let’s use our empowered brains to elect representatives that will truly represent our interests, not the interests of their sponsoring corporations and special interest groups. In terms that free-market proponents will understand, we need to eliminate the economic incentive that causes our law makers to vote for those things that enrich the small portion of our wealthiest citizens while ignoring benefits for the entire population. Our politicians tell us that they must be masters of multi-tasking, and consider what is best for everyone, but these days it seems that all of their efforts go to protect whatever lobbying group is providing them with the most resources. We need some serious changes to laws regarding campaign financing and lobbying.

Recent behavioral studies have reported several interesting findings. Multitasking really means that you are doing two things at once and both of them poorly. Our smart phones are hindering us from making relevant observations about what is really happening in the world around us. In other words, smart phones are making us dumber. Exercising your brain is the best thing you can do for your health. Let’s all start trying to really think again. We can all imagine a better world than we live in now.

New Mercedes-Benz headlamp

Question: If a person from 1950 were to suddenly appear before you today, what would be the most difficult aspect of modern life to explain?

Answer: I carry in my pocket a device which allows me to instantaneously communicate anywhere in the world, and also offers access to the totality of mankind's knowledge. I use it to view pictures of cute kittens and puppies, and to get into arguments with strangers.

Brothers and Tribes

Yesterday morning, I read a little article in the sports section of our newspaper about a high school wrestler named Sam that was undefeated in his senior year and is now preparing for the state wrestling tournament. The story caught my eye because I used to work with his brother, and later his mother, and had heard about how talented this young man was in sports since he was a little kid, excelling in football and wrestling. His dad coached football and wrestling at the high school, and will retire at the end of the year when his youngest child heads off to college. In the story, Sam indicated that while it helped to have a father as a coach, he thought that he really owed his superior ability in wrestling to his three older brothers. He learned early on how to defend himself when the bigger guys picked on him.

I read a shocking statistic in the paper last week. A research study indicated that when siblings between the ages of 3 and 7 are together they fight at a rate of 3.5 times per hour, with each fight lasting about ten minutes. I grew up with two older brothers, and we were each separated by two years and five months from the next, so that when I was three, my oldest brother Rick was seven. One thought immediately comes to mind: Sorry Mom! This is followed closely by a second thought: my daughter’s three young boys are even closer in age to one another than we were. Sorry dear, but you’ve got a tough road ahead of you.

I suppose that these little nuggets of information shouldn’t surprise me. Growing up as the youngest of three boys, one of the things that I remember well is all of the fighting, and all of the times that, as the youngest, I was getting beat up. I don’t resent it. It was just part of being a kid. I got over it a long time ago, and hold no resentment. The truth of the matter is that it made me stronger. My oldest brother died when I was thirteen and he was eighteen, so we really never had an opportunity for an adult relationship. However, near the end, we sort of got along, at least most of the time. I also realize that it came about when I was old enough and big enough to successfully defend myself.

After my oldest brother died my brother Gary and I pretty much stopped quarreling altogether. It wasn’t that we were closer. In fact, we grew apart from one another. He had his interests and I had mine. We both worked for my dad’s companies, but Gary mostly worked at a different store than I did. We hung out in the same circles sometimes, but for years it seemed that I was closer to some of his friends than I was to him.

Oddly enough it was separation that brought us together. He went away to college for a semester in Florida. When the family came down for a visit, Gary was eager to show me around and share his favorite haunts. When I went to school in Columbus, he came to visit, and always welcomed me to his place on my frequent trips home to restock my pantry. Gary started a family, and I began my disjointed trek towards a career. We still worked together for a short time, and shared our love for boating and water skiing at our parents’ place at Lake Mohawk.

Things changed as things typically do, without rhyme or reason and in directions wholly unanticipated. Trying times found my brother unprepared, and I did something that I really didn’t want to do: I offered my home as his refuge. It was only going to be for a few months at most, just until he got back on his feet. It’s the kind of thing that brothers do for one another. I’m pretty sure I read that in the bible or somewhere like that.

Life moved on, again taking convoluted paths that no one anticipated. I bought my dad’s place at the lake and my brother came along. We had good times aplenty, and I got to share in Gary’s all too brief parenting episodes with his son and daughter. Some of those holiday experiences remain among my most cherished memories. However, after more than a decade of shared experiences, it was again time for changes. I got married and moved back to my first house with my new family.

Details of what followed are best left unexamined, but eventually I found myself in need of help. It was then that I realized that one doesn't need to share DNA to be a true brother. My close friends came to my aid, and it’s not unfair to say that they literally saved my life. It’s what brothers do for each other once they’re done with the fighting. In the most ironic twist of events, I eventually found myself as a guest in my brother’s home.

There are a few instances in my childhood involving my brothers that came as a complete shock to me, considering the near constant state of bickering that pervaded our relationships. When I was very young, we went to a farm north of town, where a friend of my grandfather’s kept his daughters’ horses. We were warned that one horse in particular was known to viciously bite strangers, yet curiosity got the better of us and we ventured into the corral. The evil equine shied away at first, but after my brothers had left the enclosure, he turned his attention to me and charged. I was paralyzed with fear as he closed on me, then something amazing happened. My brother Rick, who usually regarded me with casual indifference when I wasn’t busy being his personal punching bag, reached over the fence, picked me up under the arms, and lifted me to safety. By the way, I was always overweight as a child, ranging from a bit husky to way too fat, so this feat of strength is even more miraculous.

Gary amazed me as well when we went to YMCA camp as kids. I was in the group of younger kids in a separate area of the camp and had somehow acquired a somewhat older and larger tormentor who likely viewed me as easy pickings for his psychotic leanings. We were in line for lunch or dinner, and this bully was messing with me, eventually punching me in the back of the neck as he stood behind me in line. To his surprise, but even more to my surprise, he received a punch of his own from behind. I looked around and saw my brother Gary as he informed the bully that I was permanently off limits, or he would find out what is was like to be picked on by someone bigger. Yes, brothers fight among themselves all of the time, but become something completely different when a threat comes from outside the circle of brotherhood. I’m sure sociologists can explain the phenomenon, but it was a new and warmly welcomed experience for me at the time.

We are all members of tribes, no matter how civilized we think we have become. The closest knit group is usually the family, which typically endures no matter how frequently we fight among ourselves. We expand this circle to our friends and from there to our community of diverse and yet still like-minded fellow citizens. We still find common ground as we form states and countries, however, recent times have shown that as a nation this commonality is strained and fragmented.

It is when these groups develop ideologies that the troubles really begin. My plan for economic growth is superior to your plan; therefore my group is willing to allow the complete collapse of our nation’s economy in order to stay true to our ideals. Or worse, my god is superior to your god; therefore my group will do everything in its power to wipe your group’s existence from the face of the earth. The necessity of compromise, which is so clear in relationships between brothers, disappears when we shroud ourselves in our ideological cloaks.

What we must remember in order to survive is that we are all brothers and sisters on this planet, and as such we have to learn how to deal with our differences. We need to remember how to compromise. Like the young wrestler, my brothers made me stronger. I think of them often, and miss them every day. But I am blessed to have found other brothers, not biologically connected, but with a connection based love, caring and respect. Poets, priests and philosophers have told us that all men are our brothers. It’s time to remember those simple words, and take them to heart.      

Wrestler Sam (right) and his "brother" wrestler

as they head to the state tournament

My brothers and me from long ago

Blizzards, Tests and a Laughing God

In December, as the holidays approach, we sing songs celebrating snow and the glories of walking in the winter wonderland. But have you ever noticed that there are no songs about snow in February? The East Coast is now digging out from a massive blizzard that started as one low-pressure system from the northwest collided with an offshore storm coming up from the south, then merged into a giant snow machine that whirled and dumped snow from Canada to New Jersey. They give them names now, this one was called “Nemo,” but they used to be anonymous, at least until after the fact. That didn’t make them any easier to deal with. In this age of 24-hour news and weather services, a storm’s potential is often over-hyped, because the networks want people to tune in. More viewers mean more advertising revenue, and it’s usually all about money these days. Here in northeastern Ohio, we were spared from Nemo’s wrath, but in Connecticut one town got over three feet of snow and Boston came close to its record with just under two feet of the white stuff. That’s just the way nature tosses the dice. Sometimes you’re lucky, other times, not so much.

Earlier this week we observed the 35th anniversary of another storm. Ohio wasn’t so lucky that time, and that storm also had a name, but it didn’t receive it until after it was over. It is known as the Great Blizzard of 1978, and if you lived through it, you probably remember it. I was in my senior year at Ohio State, and Columbus wasn’t as badly mauled as much of state, but I remember it well.

The storm formed without significant advance notice when a low-pressure system laden with moisture from the Gulf of Mexico joined with an arctic system coming out of the northwest. In Columbus, the storm started as rain and strong wind. I was hibernating in my apartment northwest of campus where I enjoyed a lifestyle that wasn’t the typical student squalor. I drove a newer Mercedes sedan to classes each morning and paid to park in a parking garage close to the business school. Dad owned a supermarket and a chain of convenience stores in the Canton area, and my pantry was well stocked, since I frequently raced home on weekends to restock. I had signed up to take the GMAT (Graduate Management Admissions Test) on Saturday, but I wasn’t studying, since it was just another test of general knowledge, and I’d had a ton of such tests by then. Being an Ohio native I was well acquainted with the foibles of the local weather, so I turned on my stereo and relaxed as the wind howled outside.

On the morning of January 26th a barometric reading of 28.28 inches of mercury was recorded in Cleveland as the storm passed over the city, setting a record low for non-tropical storms in the United States. In Columbus, the storm grew worse, and the temperature began to drop. I wasn’t aware that the parking lot of my apartment complex had flooded, and now the biting northern air was freezing the water in place. Late that night, I heard a commotion in the hallway, and opened my door to find a friend from my hometown and fellow student named Greg, and his friends. His teeth were chattering uncontrollably and he was soaking wet from the waist down. As I fetched him towels and a blanket, he explained that when he stepped out of the car, he broke through a thin layer of ice that covered a warmer pocket of water hidden beneath. It was deep enough that he had to be hauled out by his companions. Greg later followed in his father’s footsteps and became a banker. As such, I’m sure “friends” have bailed him out again since then, but this was a more literal baptism into the world that he would soon enter, where loans are "underwater" and "bailouts" way too frequent. Upon hearing his story, we began to think that perhaps this storm was more than a little different from our usual experience. We got Greg dried off as best we could, and after a quick beer they decided that they had best get home. Outside, the snow fell harder.

I fell asleep to the sounds of howling wind outside, but by morning things had calmed down considerably. Friday morning, the radio told everyone to stay at home as they summarized the massive damage throughout the state and beyond. Everyone was urged to stay off of the roads, which were considered impassable unless your car had tire chains. The DJ chuckled when he was going to announce closings for the day, then informed his listeners that basically everything was closed or canceled through the weekend. Then he mentioned the one exception: the GMAT exam would still be held as scheduled Saturday morning on the OSU campus. I bundled up in my warmest coat and stepped outside to check on my car. The skies were gray, but the sun was trying to break through the clouds. Everything else was white, covered in undisturbed snow. No one was outside and nothing was moving.

My car was parked in a carport just a few steps from my apartment. It was protected by a roof and a wall to the front of the car, but it was wide open to the rear and sides. Overnight, the wind driven rain had been pushed against the wall where it froze in place as the temperature dipped. I knew things were amiss when I stood next to my chocolate brown sedan, because I was looking down on it from an unaccustomed height. Snow was piled up against the hubcaps and the bottom of the tires weren’t visible. I got in the door, although I believe that it took a few minutes since water had been blown into every crevice where it then turned to ice. The car cranked for a little bit longer than normal, but eventually roared to life. I put it in gear and gently pressed the accelerator. The engine revved, but the car didn’t move. I revved some more, but nothing was happening. I got out and tried to dig down around the tires, but discovered that beneath the thin layer of windblown snow was solid ice.

I tried to free the tires by pouring a canister of table salt around the wheels, then waited for the ice to melt. An hour later, I tried again. I think I got the drive wheel to actually turn, which was an improvement, but by then I was certain that the car wasn’t going anywhere. I had to get to the test. I had already paid for it, and while I can’t remember how much it cost, I believe it was a couple of hundred dollars (it costs $250 now). So I came up with a plan. It was only four or five miles to campus. If there is one thing you learn how to do at Ohio State it is how to walk to get where you want to go. So I packed a little bag that had a shoulder strap, bundled up as best I could, and headed toward campus.

My plan was to walk to the Holiday Inn on Lane Avenue at the north edge of campus, spend the night, and then go to the test site early the next morning. I didn’t want to risk waiting until Saturday morning since I had no idea how long it would take to get there, or how tired I would be when I arrived. I struggled through my parking lot, and out to the main road, then walked around the corner, heading east toward campus. It was amazing to discover that the normally busy roads were completely deserted. There was no traffic at all. As I trudged along the roadway on Ackerman Road (the sidewalk was nowhere to be found), I heard the sound of a car approaching. I turned and saw a white Ford Bronco with light blue trim that had chains on its tires. It was heading toward me.

In 1978, four-wheel drive vehicles were relatively rare. The Bronco was an early model that was essentially a pickup truck with a cap on the back. I did something that I hadn’t done since I turned sixteen and got my driver’s license: I stuck out my thumb and started hitchhiking. The Bronco slowed to halt beside me and I opened the door and climbed in.

Now I’ve had some experience with hitching in the past. I had done it on several occasions, and had also picked up quite a few hitchhikers, including a young lady hitchhiking by herself on the highway as I was heading up to see a girlfriend at Bowling Green University. Those were simpler times, at least less dangerous, or we were just oblivious to any threats. Anyway, the first thing the guy behind the wheel said to me was, “I don’t usually pick up hitchhikers.”

I chuckled as I told him that I didn’t usually hitchhike, then explained that my Mercedes was frozen in place at my apartment, pointing back toward the complex. At this point you may be calling me an arrogant little prick (it’s been said before) for mentioning my Mercedes. But I could tell this guy was not comfortable picking up a hitchhiker, and wanted to put him at ease, so I had let him know that I drove an expensive car on typical days. He asked me where I was going, and I explained my situation with the test, and told him I was headed for the Holiday Inn on Lane. “Well, I can get you to Hudson,” he told me, referring to a street well north of my destination. I assured him that I could easily walk from there. One mile in the snow was much better than five miles.

He drove slowly, but we didn’t slip or slide. Passing the shopping center on the corner, I noted an almost empty parking lot, although steam was rising from an exhaust vent in the McDonalds. His planned route would have taken him straight ahead, but he instead turned south on Olentangy River Road, which made it easier to get where I was going. It was probably a smart move, since the roads in that direction were in a little better shape. “I’ll just drop you off at the Holiday Inn,” he told me. “No sense in walking through this stuff if you don’t have to.” I thanked him. My plan was an arduous trek of several hours through deep snow. It became a ten-minute ride in a heated truck, with almost door-to-door service.

The Lane Avenue Holiday Inn was sort of a home away from home for me. I stayed there when I came down for Freshman Orientation in the summer of 1974. I lived there at the start of my sophomore year for two weeks in 1975 while waiting for my apartment to become available in October. Now, as the end of my senior year approached, I was home again. Getting a room was no problem. Seems they had only a handful of guests. I went to my room, unbundled myself from the heavy winter gear, stowed my meager baggage, and headed down to the bar for some refreshment and an early supper. Then it was back to my cozy little room to fall asleep watching news stories about the horrible devastation and death that had been wrought by the great blizzard.

I got up early thanks to the wake-up call that I had requested at check-in. I showered and dressed, then headed down to the dining room for a hearty pre-test breakfast. I don’t remember what I ordered, but it did include a large orange juice and coffee. Caffeine is just the thing to clear the cobwebs for a major test. The dining room was nearly deserted. I think only one or two other tables were occupied. Of course it was early on a Saturday morning, and we did just have that record shattering blizzard and all. The busboy tasked with refilling coffee cups had little to keep him occupied, so he made frequent trips to my table where I gladly accepted his generous pours. I finished breakfast, then arranged for a late checkout since the test wouldn’t be over until close to noon. I grabbed my coat and supplies and stepped outside to head to the test site located in a building where I had never been, just north of Ohio State’s famous “Oval” at the center of campus. Outside, the sun reflected brightly off of the layer of white that still covered everything.

The campus of The Ohio State University is one of the physically largest college campuses in the world (around 1,700 acres). There is pastureland on campus where cattle graze for the School of Agriculture, but that’s on the other side of the river. The size of the student body at OSU is also numbered among the top ten in the nation, with over 40,000 students at the time. Walking toward my destination, I was struck with just how few people I saw. It was early on a Saturday morning, so I guess I shouldn’t have been surprised, but I had the strange feeling of being almost alone as I walked to the test.

We filed into the test room and each found a desk. There was little conversation, but most of it was about the blizzard and what a bitch it had been to get here. The proctor told us about the test and the rules. In most tests like this, one can get up and use the bathroom anytime you need to. Not this time. There was one break at the midpoint of the four-hour test. All papers and pencils had to be turned in before you left the room. Apparently they were afraid that the one janitor who had managed to show up for work in the middle of a multi-state blizzard would be passing out test answers in the bathroom. I never saw him if he was doing this and might have been skeptical about the usefulness of such advice in any case.

The test started, and I got down to work. Many people suffer from test anxiety, but I was an old hand at tests of this type, and didn’t worry. During the first section of the test, I began to get messages from my bladder, reminding me of the copious amount of coffee that I had consumed at breakfast. I focused my attentions on the work at hand and carried on, as my leg began to bounce in an effort to hold off relief. The second section of the test was the math section, and it was a royal bitch. By then I had to pee so bad that I couldn’t concentrate. I no longer really cared about the test or its implications for my future. You see I wasn’t planning to go to graduate school after I got my Bachelor’s Degree. The fact was that as graduation loomed in five months, I had no idea what I was going to do for the rest of my life, or at least what to try first. Perhaps it had to do with my brother’s death almost a decade earlier, in late 1969. I wasn’t much of a planner, and thought skeptically about the future. After all, we could die at any time, right? Man plans and God laughs. I knew exactly what that meant. I began to randomly mark down answers, willing the hands of the clock to move to break time.

I finished the section before anyone else and waited with my leg bouncing in time to music that didn’t play. As the proctor announced the break, I was already on my way to his desk to turn in my test materials, then raced off to find the men’s restroom. I unzipped in front of a urinal and finally experienced the nirvana of relief that I had yearned for. The room filled up (the vast majority of would-be MBAs at that time were male). The porcelain receptacles on either side of me were occupied, used, and relinquished to the next man, and still I whizzed on. I think I finished when the second guy to use the urinal next to me did, but it might have been the third one. I was fairly overcome with blissful release at this point, and didn’t really care. I returned to the test room and finished the exam, able to concentrate once again, but with the horrible feeling that I really blew the test, big time.

The test finally wrapped-up and I made sure to visit the restroom again before trudging back to the hotel to retrieve my things. Outside, things were beginning to move again. I saw more people, and cars were able to travel the main roads. I don’t actually remember how I got back to my apartment, but I think I took a taxi. It would be several more days until I got my car out of the carport.

During the Great Blizzard of 1978, fifty-one people died as a result of the storm in Ohio alone. The National Guard was called out to help with rescues. The entire Ohio Turnpike was completely shut down for the first time in history. People perished in their cars waiting for help that couldn’t get through. I had to hitchhike to a nice hotel, then take a test where I couldn’t go to the bathroom when I needed to. Man plans and God laughs. Some people are luckier than others are. All in all, I’ve been pretty lucky. After a short stint in the restaurant business, I returned to The Ohio State University where I learned to fly an airplane and enrolled in the Graduate School of Business. I didn’t have to take the GMAT again because I did pretty well the first time around, even in the part where I guessed. Sometimes you’re lucky, other times, not so much.

As a postscript, there’s one aspect of this story that I had never thought about until I started writing about it. Near the beginning of Winter Quarter in 1981, I was about to finish the MBA program at Ohio State. One of the requirements was the successful completion of a comprehensive examination, which was held on a Saturday morning. I’m not sure, but it had to be late-January or early-February, although the weather was clear, sunny and mild, unlike three years earlier. I made certain not to drink too much coffee before the test, and finished it without incident. I was confident that I passed, and having no other pressing assignments for the rest of the weekend, I was on my way home to party and relax.

I was coming out of campus on a road I rarely used, near Olentangy River Road and the State Route 315 overpass. I was proceeding straight north through the intersection with a line of cars waiting to turn left to my west, and the traffic light was green in my direction. As I entered the intersection my Mercedes was struck in the left front fender, just in front of my driver’s side door, by a white Ford Bronco with light blue trim. I later found out that because of the sun’s glare, the woman behind the wheel couldn’t tell if the light was red or green for her. She chose incorrectly and ran a red light. No one was injured in the accident (thank you Mercedes-Benz, for building such a safe car, because it was a similar accident that took my brother’s life), but it did put a whole new spin on my day. My car was in the shop for at least a month, and I drove a rented Ford Granada (advertised at the time as being “just like a Mercedes”- they weren’t) almost until graduation. I don’t think it was the same Ford Bronco that had come to my rescue before, but it was pretty similar. The Lord giveth and the Lord taketh away. Coincidence can be a bitch.
 

The author and his car, with the infamous carport visible in the background

(Pre-blizzard)

The vehicle I really needed when the snow hit

Are We Having Fun Yet?

“Nineteen fifty-six,” the bearded twenty-something clerk told me as the digital display from the cash register confirmed the $19.56 that I owed for my rather meager purchase. I was a regular at this convenience store, one of a chain that my dad had started with two other partners in the late-60’s. Back then C-stores were small neighborhood grocery stores, with a deli counter and a little bit of every kind of grocery item, including fresh produce. Now they’re gas stations with attached stores that mainly sell snacks, beer, wine, sodas, and a very limited amount of groceries. I had already exchanged “hello’s” with the kid (as I thought of him). We weren’t really friends, but we had talked some and had a cordial albeit time limited relationship. I had surprised him a few days ago when I came back in the store after I figured out that he had undercharged me $2.00 for some lottery tickets that I bought and handed him two singles, explaining his mistake. I try to be honest, and was secretly hoping for a little good karma to spill over on my lottery tickets. It hasn’t helped (so far).

“Ha,” I laughed without any real joy, “nineteen fifty-six was the year I was born.”

“Really,” the kid answered. Then to my surprise he added, “I wish I was born in 1956.”

“No you don’t,” I assured him, thinking of my increasingly sore muscles along with various other aches and pains that resulted from an hour or so of furniture moving and cleaning that I had just completed. Getting old is not really any fun at all.

“Oh yeah,” he contradicted. “You guys had a lot more fun back then.”

A smile spurred by unsought memories spread across my face. “That’s true,” I confirmed, “we did have lots of fun…a whole lot.” I was almost laughing as I left the store and walked to my car as the happy memories flooded my mind.

When I was younger, the old-timers who would endlessly prattle on about the “good old days” always annoyed me. I promised myself that I would never do the same. Live for the moment was my creed. Focus on the here and now, forget the past, and embrace the future. I’ve tried my best to keep current with new technologies, enjoying the benefits of the computer age. But technology has outpaced me, I’m sad to say (although I do know that it wasn’t really a “cash register” but rather a fully integrated “point of sale system” that indicated my year of birth on its digital display).

As I drove away, memories of many of the fun things that I experienced flowed easily through my head. Maybe the kid was right, although some of those things resulted in the pains that I was feeling from my recent exertions. The twinge in my right leg was a constant reminder of pulling my hamstring one evening after work when I tried slalom skiing without stretching first. But I’ve got to say that living in a house fifty feet from a lake had a host of other benefits and contributed greatly to having fun. The ache in my shoulder is a constant reminder of the broken clavicle I received from a high-speed bicycle run down a grass covered hill that was a bit more steep than it appeared from the top (I arrived at the bottom before my bike). However, I don’t really associate pain with fun; that’s just crazy. Although it is funny how something seems like such a cool idea right before it slips sideways into something else entirely.

I’m not really sure what the young man was referring to as “fun” although I am sure that I’ve experienced it. Did he mean that we had better recreational substances to abuse (he looks like he could dabble)? We probably did, although my best memories of fun don’t involve those things with which I had considerable exposure. Perhaps a cold beer, or a good bottle of wine or champagne was present at times, or even a pina colada or two (or four, or five) were involved, but my best memories of fun are relatively unclouded by chemical enhancements.

It could be that he meant that going places and doing things was so much less expensive back in the day. I don’t mean it was relatively less expensive as a percentage of income, but it seems that many things were cheaper even when inflation is figured into the equation. I went to concerts in Canton to see big-name stars for only a few bucks, like the Elton John concert that I took my girlfriend to when I was fifteen. Just try getting into one of Sir Elton’s Las Vegas shows with a date for under $10 today. Nowadays, the big shows don’t even come to Canton, and the tickets cost more than a week’s wages for most kids (if they can even find a place that hires people under age eighteen). Dining out has experienced similar hyperinflation. I’ve eaten at some really nice restaurants and had a great time with friends or family in the past doing just that. Today, the cost of such feasts means indefinitely postponing retirement.

But having “fun” at dinner isn’t really directly correlated to how much money you spend. Eating Maine lobsters at Testa’s Restaurant in Bar Harbor was a cool experience, but I had more fun eating Maine lobsters on my deck in Ohio with a few friends (they didn’t allow us to hose down ourselves and our dining area at Testa’s when we were done). I’ve eaten at some really nice places throughout the country, but we had more fun outside on a patio in Key West with a basket of peel-and-eat shrimp and some cold beers. It was an all-you-can-eat deal, and I think Mike had three, or maybe four, baskets of steamed rock shrimp. Probably not a big profit maker for the owners, but the waitresses seemed pretty amused after a little while.

Many things have changed since I was a kid, and perhaps the entire concept of fun is one of them. Most of the people I grew up with had part-time jobs after school, but it’s much harder for youngsters to find employment these days, since many places require them to be at least eighteen. We had our own cars and usually paid for them ourselves, along with our gas and insurance. The workplace was a different experience as well. I can remember leaving work at noon on a Saturday and heading out to a diner for a sit-down lunch with a group of guys from the store. We had an hour for lunch, and time to talk and joke and laugh. You don’t find that at most retail environments these days. You’re lucky to get thirty minutes, and they don’t really want you to leave the building. It is also likely that you have to take your break alone. It is much harder to have fun without the fellowship of others.

Today, technological advances allow for super-realistic video games, and most kids seem to have them. Video games didn’t really exist until I was older, and they were pretty simplistic when they first appeared. Although it isn’t really clear to me that such modern systems really produce a significant amount of “fun.” Certainly there is a sense of accomplishment in having your personal video avatar wipe out whatever group of terrorists, mutants, or zombies are invading your digital world, but the games are so gruesome that I’m not sure they really provide enjoyment. They may, in fact, provide unwanted twists to easily manipulated young psyches. We did spend many hours playing pinball at the bowling alley or an arcade, but it was usually with a friend or two. Again, the fellowship added to the fun (but I’d still like to have a vintage Bally “Fireball” in the garage, right Bob?).

Like video games, there are many other things that are better these days than when I was a youngster. Modern cars handle better, are safer, and faster than the ones we grew up with, and the roads we travel are generally safer. However, rattling around in an old convertible on a warm summer night was lots of fun, as were those bench seats that allowed your girlfriend to slide right over next to you in the driver’s seat. Not that it was really safe of course, but no one who has grown up with bucket seats can comprehend the profound bliss that this simple act could bring to a teenage boy.

Roadside restaurants were a mixed bag back then, but occasionally you found a real gem. Today’s eating choices are the same set of identical outlets of fast foods and chain restaurants across the country with consistent quality (or lack thereof) but no surprises. Airliners are better, but air travel isn’t really any fun these days. When I first flew, almost every male on the plane wore a jacket and necktie, and ladies wore dresses. Everyone checked his or her luggage. It was a more elegant and refined experience than cramming all of your belongings into the overhead compartment and squeezing past the unwashed masses. Boats, from little runabouts to cruise ships, are better these days, but again, at a much higher cost.

Sound systems are better these days, but digitized music tends to lack warmth and depth. If new musicians have superior talent, they tend to hide it. Why are so many new songs remakes of a classic rock songs from our youth? Maybe because they really are destined to be classics. Amusement park rides are way better these days, but again, the cost of going to the park makes it a once a year experience at best. Smaller parks are mostly gone these days, places where you would go and ride some rides, then have a picnic with your family. They were victims of the need for bigger thrills as well as the high cost of liability insurance. Big parks would much prefer that you sampled their refreshment stands and restaurants than indulging in a picnic with your family. Disney has such a large group of restaurants and entertainment venues in Florida, that it is a park unto itself.

Some of the things I’ve tried in order to have fun, didn’t really turn out to be fun. Learning to fly an airplane started out to be a blast, until I realized just how serious and focused I had to be to survive the experience. When the door of the aircraft pops opens by itself during a steep-banked turn, and you are looking straight down to the earth’s surface a few thousand feet below you, it’s exhilarating, but not really fun. Softball or volleyball games with family and friends were fun, but the organized sports that I participated in were not that much fun. I suppose there was too much emphasis on winning, but winning is fun.

So was the kid right? Did my generation really have more fun than his generation experienced? The real problem, as I see it, is that it takes time to recognize that we had fun. Constant texting, tweeting and posting our experiences as they happen may be cool, but it tends to take you out of the experience as it happens. Perhaps we don’t understand that we’re really having fun until long after the event has occurred. Perhaps we had more fun because our parents didn’t have the technology to phone us at anytime, no matter where we were. Cell phones are a true blessing, but not always, if you are young. I hold out hope for the young clerk. Some fun things have become horrendously expensive, but money cannot by itself purchase enjoyment. The passing of time may yet reveal to him just how much fun he’s had. Maybe it will turn out that he had more fun than I had (but I doubt it). My advice: seek out the small things that make you smile, and whenever you can, treat yourself to a good laugh.

    

 

Gaming the System and Our Dysfunctional Democracy

When I was studying business methods in college there was an old joke that circulated in the halls outside the accounting classrooms. It seems that there were three experienced accountants applying for the job of controller for a major industrial conglomerate. At the end of their interviews, the director of Human Resources gave each of the three all of the raw financial data for one of the company’s subsidiaries with the instructions to prepare income statements, balance sheets and tax returns based on the data. The results were collected several hours later. The first candidate turned in a well-documented set of figures, strictly adhering to all relevant laws as well as all Generally Accepted Accounting Principles. The director acknowledged the candidate’s knowledge and thoroughness. The second candidate produced a set of documents that pushed deductions to their extremes, playing fast and loose with the data, and producing a higher bottom-line return for the company. The HR director smiled at the second candidate’s resourcefulness and willingness to take a certain amount of risk. The third candidate turned in a set of blank pages.

The Human Resources director stared at them for a moment and then stated the obvious: “You haven’t written anything.”

The candidate gave him a clever smile then explained, “You haven’t yet told me what you want them to say.” Guess which candidate got the job?

There are some lessons that stick with you long after the mechanics taught in classrooms are forgotten or pushed aside by more relevant current procedures, and the above story is likely one of those things, based on what we observe in our society today. It is important to understand concepts like laws, or the principles of your chosen profession. However, there is one thing that trumps everything else. In order to succeed, to reach the very top, you must become adept at gaming the system.

The case of HSBC bank is a glaring example of how corporations have become adept at arraying things to go their way. Among the many sins uncovered in this worldwide banking conglomerate (and this probably wasn’t even close to being their worst), it was found that the bank’s Mexican subsidiary was laundering money for drug cartels. The U.S. government fined the bank a record $1.92 billion, but decided against prosecuting the bank based on the fear that it would harm worldwide financial markets. The bank is considered too big to fail. The fine is about equal to what the U.S. government has sent to the Mexican government since 2007 in the ongoing effort to eradicate the illegal drug trade. It also equals about four weeks of earnings for HSBC. They will likely weather this storm with ease.

The U.S. Justice Department also decided against prosecuting any of the individuals involved in the money laundering scandal, apparently reasoning that this too would undermine the global financial system. The officers of the bank are too important to prosecute. This is a dangerous precedent that goes against every concept of right and wrong that has ever been formulated, whether in religious doctrine, ethical teachings, or just plain common sense. I can understand it from the financial point of view, but it is very troubling from an ethical perspective.

Across the globe, our society is full of individuals who are both clever and resilient. Clearly some, their numbers apparently dwindling, are more kind-hearted than others. We say that we reserve our greatest rewards for our best and brightest, but the fact is that these rewards go most often to our most devious individuals, the ones who have learned how to best twist the system to their benefit.

The recently renewed debate on the issue of gun control is another example of how the system gets gamed. President Obama proposed a series of laws the other day aimed at reducing the chances of yet another tragedy like the recent Newtown school shootings or Aurora theater massacre taking place. No one, from the President on down, thinks these laws will completely prevent a future incident, but it is possible that the probability of occurrence could be reduced. One life saved would make the effort worthwhile, the President said. In addition, President Obama signed a series of executive orders, many dealing with mental health issues, which could also help reduce the chance.

 As Obama predicted, the opposition was both immediate and vicious, with concerned citizens crying out that the President was trying to take away all of their guns. Of course, our right to own guns (which are statistically more likely to cause harm to ourselves or loved ones than phantom bad guys) was not only not mentioned, but it was explicitly stated that it was not the case. Our constitutionally protected rights to own firearms would remain in place under any version of legislation passed in this regard, however unlikely, despite widespread support by a majority of voters.

Let the gaming begin. Members of congress and NRA spokesmen cried out that there are already 20,000 gun laws on the books, and more effort should be made to enforce those laws. But those laws have already been gamed. The majority of the laws lost their teeth in an obscure amendment made to an unrelated spending bill several years ago. The amendment was proposed by a former Congressman who later received an award (what other reward was included is not available) from the NRA for his services. The Bureau of Alcohol, Tobacco and Firearms (ATF) has not had a director for over six years, because the job requires Senate approval, which continues to be withheld. Background check information must be destroyed within a day, preventing any chance to discern a pattern of purchases that may point to a future tragedy. Leaders of both parties in both houses of our legislature came out and said they doubt if the support could be found to pass anything like the proposed assault weapons ban. This is despite polls that indicate a majority of Americans favor such action.

There was a young man in the audience at the President’s announcement the other day. He was a survivor of the Virginia Tech massacre in 2007 that left 32 dead victims (excluding the suicide of the mentally unstable perpetrator). The young man was shot four times and still carries three of the bullets in his body. He was present, as quoted by the President, not because of what happened to him, but because what happened to him continues to happen to others. It is a noble sentiment. He’s probably way too nice to make it to the top in a big bank.

To all of my friends and family members who have already loudly voiced their opposition to any type of gun control, I offer my apologies, because I think a ban on assault weapons is a good idea. It’s not perfect, but it just might help. President Reagan supported a ban on assault weapons and Supreme Court Justice Scalia said that it was constitutional. These guys aren’t exactly left-wing extremists.  Expanding background checks to all gun buyers is also definitely a good idea. I personally don’t think either idea will infringe on our rights to own guns. My coworker, who is an avid hunter, agrees. No one uses assault weapons to hunt deer. Few people even consider that type of weapon to be the one of choice for home protection since it would be way too easy to cause collateral damage with one, such as injuring the family that you are trying to protect.

The sale of bulletproof backpacks and child-sized bulletproof vests has skyrocketed in recent weeks. The gun lobby has proposed arming teachers and other school officials, and putting armed police in every school. Is this the kind of traumatic future that we wish to bestow on our children? Who really thinks that a janitor with a pistol is the best person to protect our youngsters? Isn’t there a great deal of inherent danger in having loaded guns in our classrooms, even if they are in the hands of teachers who have been instructed in their use? Remember the law of unintended consequences. Whatever could possibly go wrong in that situation probably will go wrong.  

Our founding fathers established our Second Amendment rights under the guise of allowing for a well-regulated militia, which was deemed necessary for the security of a free state. There was no significant standing army at the time. Protection of our country rested in the hands of an armed population that were prepared to go to war to protect our country. It will never be clear that the founders’ intent was for anyone to own a gun since at any time any individual could be called on to protect our rights. That issue will not be called into question here, although I think the founders might recoil at what passes for a militia these days (aside from our fine National Guard). We have the right to own firearms. No one is trying to change that. But many people are trying to game the system and make you think that you are in imminent danger of losing this sacred right. That is not the case.

Our democratic process is far too easily influenced by special interests that are based on personal greed rather than what is truly good for our people. Laws are passed and amendments are made to unrelated bills that have far reaching consequences that are given little thought at the time. The mere threat of filibusters can indefinitely postpone votes on people appointed to fulfill important executive positions in government agencies. It's the little things we need to focus on before we can address any important issue. Unfortunately, even those who would like to benefit their country are going to have to learn how to game the system.

In order to protect our troubled financial system, which was plunged into the Great Depression after the stock market crash of 1929, President Roosevelt nominated former Ambassador Joseph P. Kennedy, Sr., to head the newly created Security and Exchange Commission (SEC). Kennedy was one of our nation’s wealthiest citizens with a fortune based in large part on his ability to manipulate the stock market. Observers at the time called it a case of putting the fox in charge of the hen house, but FDR reasoned correctly that he had to put someone in charge that knew what he was doing, someone who was an expert in gaming the system. Kennedy was considered mainly successful at his appointed job (he redirected many of his own investments into the real estate market after the financial markets became regulated). Only recently, as banking regulations have again become more relaxed, have we experienced problems in our financial markets, with significant risks in banks and other financial institutions deemed too massive to allow to fail.

It is time we face some hard truths about our government. It has become dysfunctional. We have let the little things, procedures, policies and influence peddlers, prevent us from achieving the goals we desire for our nation as a whole. Why not make our government less likely to be derailed by gamesmanship, and more responsive to the needs of everyone? Let’s do away with influence peddling. Let’s make it a requirement to have immediate votes on presidential appointments. We need to be a little less willing to succumb to the greed of a few individuals in control of way too much power, and prevent tragedy for many. Above all else, we need to protect our children.
             

Adult Education

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility  provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Do you recognize these words? I added the bold print and I’ll get to that in a minute. It is the preamble of the Constitution of the United States of America. It’s a pretty important document. When our founding fathers came up with it, they didn’t think it was the perfect solution, but they needed something better than what they had, because our new country was in pretty bad shape under the Articles of Confederation. So they came up with the Constitution; in order to form a more perfect system of governance than what they had. Not the perfect system, just one that was better. There really isn’t a perfect system. They did a pretty decent job. Not perfect, but better than it was.

I consider myself to be fairly well-educated, and I like to think I’m also pretty well-informed. Don’t get me wrong, I’m not tooting my own horn here. I also know that the world is full of people who are smarter than I am, including people who are way, way smarter. I’m also positive that there exist people who are not so bright. I was mostly educated in a public school district, although I spent a couple of years in a private school. My public school district was well regarded academically when I attended, and it is still highly ranked today. But there is a problem that I see in my early education, both public and private: we never studied economics to any major extent. It wasn’t until I started studying business in college that I had any real exposure to economics.

I remember walking out of an Economics class in graduate school, where we had just discussed how the federal budget was derived. It’s an ugly process by the way. A friend of mine, Steve, was so upset that he vowed to devote his life to becoming President of the United States in order to change the system. It was a noble thought. I think I would have considered voting for Steve, but I’ve not seen his name come up in political circles. I told him that the problem as I saw it was that by the time he had risen through the ranks of government that he would be swayed by the status quo, and wouldn’t be able accomplish his ultimate goal. We were surprised to find our professor walking behind us and apparently eavesdropping. He was grinning and nodding his head. “That’s right,” he told Steve, “by the time you reach a position of power in the system, the system will have co-opted you.” I don’t know why he was smiling about it. It seems to be a pretty sad indictment of our political system.

Now we as a nation have just been through some difficult times from an economic perspective. We continue to suffer through a major recession (by the way, do you understand the difference between a ‘business cycle recession’ and a ‘financial market recession’? *), and have been brought to the brink of a “fiscal cliff” by lawmakers eager to force their personal beliefs on everyone. By now it should be obvious that what everyone really needs in this country is a clearer understanding of economics.

The place we should start with this economic education is with our elected leaders. I had to look up the part of my state that is represented by the current Speaker of the House of Representatives. I don’t really know what the public school system is like in his district, but if it’s anything like the one here, they aren’t teaching enough Economics. The Speaker attended a private high school, and studied business in college, so he should know a little about what is considered to be the most important issue of the day, but his recent actions might suggest otherwise. Over and over again during the debate we heard the standard rhetoric spewed out that we must maintain adequate income for the “job creators” (that’s political shorthand for “the really rich dudes that pull our strings”) and not raise taxes on the wealthy. Unfortunately, this is flawed logic. The Congressional Research Service conducted one of their fact-filled scholarly reports that showed no relationship between the size of the top tax rate and job creation (by the way, the CRS works for Congress. You would think that the employers would listen to their hired experts). In fact, history tells us that more jobs were created when top tax rates were higher. Respected billionaire investor Warren Buffett laughed out loud at the notion that investors would stop investing if they had to pay a few extra cents on each dollar earned. He went on to say that he and other wealthy people should be paying more taxes, not less.

What I think we should do is to require by law that every Representative, Senator, Federal Judge and senior member of the Executive Branch take a comprehensive course in Economics. There should also be a test, with grades posted so that we can see just how bright (or dim) our elected representatives are. Maybe they might make some better decisions for our country. Perhaps we might make some better decisions about those people we choose to represent us too.

Now I know that some of you might be quoting Ronald Reagan at this point and saying that the government isn’t the solution to our problem, the government is the problem. Yes, I know the government has screwed things up before, but maybe they just lacked a certain base level of knowledge. I recently read Bill Clinton’s book, Back to Work: Why We Need Smart Government for a Strong Economy. You may not agree with the former President politically, or philosophically, but he makes some very strong arguments for the things that can be accomplished by a smart government. Throw in the fact that he is the only guy that has held the job in many years that had three years of budget surpluses. Not even the Gipper can say that. Do yourself a favor and read the book. Your library probably has a copy. Whatever you do, don’t throw up your hands and say it can’t be changed, because it has happened before.

So how do we get a smart government? Let’s start with that required course in Economics for our elected officials. Maybe if Representatives and Senators have to share notes or form a study group, they’ll be able to do something useful, like cooperate enough to make decisions to get our country back on track. Too much time is spent in Congress raising money for reelection, and too little time is spent in formulating ideas to raise the standard of living for the people being represented. That’s not just dumb government, that is a recipe for corrupt government. While we’re at it, let’s beef up the teaching of Economics in our school system. We’re never too old to learn, or too young to start. Educate yourself (Note: watching the news on TV will not make you better educated) and try to interest others in educating themselves.      

*Answer: Read the book, it’s in there. Please note that financial market recessions, such as our current economic situation, as well as that period in our history known as The Great Depression, require a much longer recovery period than the more typical business cycle recessions that are more familiar to us. Just in case you were wondering what the heck was taking so long.