James Kelley

Corporations and Exponential Growth

Written by James Kelley on Friday, 09 March 2012. Posted in Opinion, James Kelley

"Too big to fail" is a consequence of a corporate culture that always seeks growth, generating unsustainable expectations and resulting in economic dislocations.

Corporations and Exponential Growth

Last week a national talk show host mentioned the idea that greed and the resulting dishonesty was responsible for crashing the economy and was caused by the prevailing corporate culture of constant growth. This requirement by corporations, especially publicly traded corporations, that profit grow every year creates a requirement of exponential growth.

Tariff on American Made Goods

on Wednesday, 08 February 2012. Posted in Opinion, James Kelley

TariffsRecently there was a story in the news about a company that was fighting with the government over whether its product should be classified as a doll or a toy. It was important for the company to have the product classified as a toy rather than a doll because of the tariffs involved. If the product was a doll, then the tariff on it would be 12 percent. If it was classified as a toy, then the tariff would be 6 percent.

It is interesting that the tax on goods coming into the country from foreign lands is lower than the income tax on individuals who live here. Why is that so interesting? It is interesting because of the impact taxes have on the cost of products. 

Let’s consider a product that is made in America, which has a high income tax, versus a product that is made in a nation which has no income tax. Now let’s assume that half of the cost of the product is attributable to labor. If the effective tax rate of the workers who make the product is 20 percent, then the cost of the product will increase by 10 percent.

Let me explain further. The income tax on the workers increases the cost of the product because it increases the cost of labor. If not for the tax, the worker could accept a lower salary. This is true because, in a no income tax world, the worker would “take home” the same amount even if his base pay were lower. In our example, the worker would accept 20 percent less. Since half of the final cost of the product is attributable to workers’ salaries, the cost of the product would then be 10 percent less. 

When Business Gets Too Big

on Thursday, 20 October 2011. Posted in Opinion, James Kelley

Hank Williams, Jr. was fired from ESPN broadcast of Monday Night Football. Recently Hank Williams, Jr. was fired from the ESPN broadcast of Monday Night Football. You recall that he used to sing the opening song each Monday Night. He was fired because of some comments, an analogy really, that he made involving President Obama and Speaker Boehner.

Most of the discussion on this issue has centered around the Constitutional freedom of speech which is set out n the First Amendment. Hank Williams Jr. has said that he was simply exercising his freedom of speech. ESPN (which is controlled by ABC and Walt Disney Company) has released a statement saying that Williams can have his freedom of speech but he has to be prepared to suffer the consequences.  
   
First, let’s look at ESPN’s statement. The idea that you can be punished for exercising a constitutional right is absurd. If you can be punished for exercising a right, then it isn’t really a right. After all, prior to the American Revolution and the subsequent ratification of the Constitution, you could say anything you wanted as long as you were prepared to suffer the consequences. The point of the Bill of Rights portion of the Constitution was to eliminate the consequences when a right is exercised.

Cut the Scope of Government

on Wednesday, 27 July 2011. Posted in James Kelley

The scope of big government.I hear a great deal of talk in Washington about cutting the budget. It’s about time! That being said, cutting the budget is only half the battle.

Some in government have a hard time with the idea of cutting the budget. The reason is because they believe that government can’t do all the things they want it to do without lots of money. Strangely enough, they are right! Reducing the budget without a corresponding reduction in the scope of government will result not in less government but in bad government. In other words, instead of not having the government involved in your life, you will have an even more incompetent government involved in your life.

Let’s consider the regulation of firearms. Currently there is an instant background check performed every time someone tried to buy a firearm. If there is a reduction in the money that government controls but no reduction in the scope of government, your firearm buying experience will become a bigger headache than it currently is. In response to its lower budget, the government could stop funding programs like “Fast and Furious.” In case you have forgotten, that was the government program where agents of our government bought firearms and sold them to drug dealers in Mexico. The best part is, they used our money to do it. Instead of cutting out ridiculous operations like this, I anticipate that a poorer government would hire fewer workers to work the instant background check system. This would likely result in longer wait times for the “instant” background checks.

The Economy and the Debt Limit

on Monday, 27 June 2011. Posted in James Kelley

Government spending and the Debt Limit to stimulate the economy.Recently, Republican leaders walked out of negotiations on raising the debt limit. The Republicans were upset that the President was not involved in the negotiations. Also, Republicans were not willing to negotiate the issue of tax increases; instead they want spending cuts.

Vice President Joe Biden countered the argument concerning the President’s involvement by saying that the President has been briefed every day on the negotiations. Being briefed on the negotiations  is really just a fancy way of saying you have been told about the negotiations. This is not the same as actually being involved in the negotiations. If the two were the same, then we could say that the President was involved in the death of John F. Kennedy, since he has no doubt been told about it. That would be ridiculous.

Now let’s look at the issue of raising taxes. It is well settled that raising taxes tends to slow down the economy. Sometimes this isn’t necessarily a bad thing. Sometimes the economy, more specifically demand, is growing so quickly that inflation starts to become a problem. When inflation is a problem because of a rapidly growing economy, raising taxes can be a good thing. The higher taxes slow the economy and bring inflation under control. Once things slow down too much, taxes can be lowered back to the previous level. This will then stimulate the economy. This type of adjustment allows the government to keep the economy stable.

They Died to Protect Freedom

on Friday, 03 June 2011. Posted in James Kelley

The Patriot Act, Surveillance, airport scanners are proof of our disappearing freedoms that we celebrate every Memorial Day. Recently we all celebrated Memorial Day, where we paid tribute to members of the military who have died to protect our freedoms. Dying to protect freedom is perhaps the most noble thing a person can do. That being said, I must point out that most of the people who celebrated, don’t really appear to value freedom at all.

Why do I say that? After all, they came out to the parade. They had tiny American flags to wave. Their cars and trucks had bumper stickers that indicated that some member of their family is or was in the military. They talked about how they lived in the land of the free as they exercised their freedom to watch sports and drink beer. So why do I say that they don’t seem to care about freedom?

People who really value freedom would never allow the government to do the things that the American people have allowed their government to do. For example, they let the government put them through a scanner at the airport that looks through their clothes. Think about that for a minute. The people who founded this nation made it the law of the land, in the form of the 4th Amendment, that the government can not search you without a warrant. Now, the descendants of those same people willingly allow themselves to be viewed with a machine that sees through their clothing.

Thinking About Healthcare Reform

on Monday, 16 May 2011. Posted in James Kelley

Healthcare reformJust the other day former Governor Mitt Romney spoke about his thoughts on the Healthcare Reform Law. This brought to the forefront the debate about the reform of the healthcare system. There are many arguments on both sides of the issue. One thing that everyone agrees upon however is that healthcare costs are on the rise. Both sides claims they want to keep the cost of these healthcare services from rising further. The problem is neither side has come up with a good way to do this.

Recently, yours truly connected the dots on some pieces of information. These pieces of information seem unrelated at first but they are actually all links in the chain that is the healthcare crisis. The following is  a description of how it all went down.

First, while having lunch with a friend of mine, who is a doctor; I learned that the local hospital has been trying to purchase his practice. If they purchase the practice, my friend and all the other doctors and employees would keep their jobs. The only difference would be that instead of the practice being owned by the doctors, it would be owned by the hospital. The doctors feel a certain amount of pressure to sell because they need the hospital in order to properly do their jobs. They need to be able to admit patients to the hospital so they must maintain their hospital privileges. Also, many doctors’ offices are located in the hospital or in buildings that are located near the hospital and in many cases are owned by the hospital. These and other factors give the hospital a certain leverage over the doctors.

Burning the Koran

on Monday, 04 April 2011. Posted in James Kelley

Some claim that Pastor Terry Jones burning the Koran is the cause of the uprising in Afghanistan.Recently there has been increased violence in Afghanistan. The perpetrators of the violence have said that their actions were the result of the Koran being burned by Pastor Terry Jones. The Chief of the UN Mission in Afghanistan has indicated that he blames the pastor for this violence. Strangely many other people seem to share this view.

Let me see if I understand this. If I exercise one of my rights and someone else gets violent because they don‘t want me to exercise that right, I'm responsible for their violent actions? That is so crazy, I almost don’t know where to begin.

Since I have to begin somewhere, let's look at an example from our past. When the colonists exercised their right to bear arms, it brought a violent reaction from the British. Specifically, the British sent their army to take away those guns. When the colonists refused, the American Revolution began. Now, let’s compare that to the current situation. Back then we had the colonists exercising their right to bear arms. Now we have a pastor exercising his freedom of speech and religion. Back then we had a violent reaction from the British army. Now we have a violent reaction from some people in Afghanistan. Were the colonists to blame for the violence that resulted from their right to bear arms? Of course not!

Production Not Spending

on Wednesday, 02 March 2011. Posted in James Kelley

Production workerThe world economy continues to flounder. In fact, economic trouble, including rising food prices, has been a huge factor in the protests in the Middle East. Economic malaise has also been the trigger that set off the protests in Wisconsin and other states. Many people are asking themselves: why is the economy still so bad?

Economists often look at consumer spending as the key to whether or not an economy is improving. We often hear them say that our economy is driven by consumer spending. Lay people in the media and in shopping malls often interpret this to mean that if they spend a great deal of money, the economy will improve. This could not be further from the truth. A close look reveals that an economy, in its most basic terms, is really simply the amount of stuff that we have. This can be measured in a number of ways, but the stuff you have is what determines your wealth.

The confusion of lay people comes from the fact that when an economy is good, consumers have extra money and they do spend more. They spend more because the economy is good. In other words, consumer spending is the result of, not the cause of, a healthy economy.

World War or World Government

on Tuesday, 08 February 2011. Posted in James Kelley

World War or World GovernmentWhat if you had to choose between world war and world government, which one would you choose? Before you answer, let’s look at things in greater detail.

First, let’s consider why I would ask such a question. I ask the question because we may soon face that difficult choice. Events in Egypt have recently raged out of control. Similar things are unfolding in other nations as well. Couple that with the violence that erupted all over Europe last year and you have a very dangerous situation. This could even be the very early stages of a world war.

Give Me Liberty or Give Me Death

on Sunday, 16 January 2011. Posted in James Kelley

Patrick HenryGive me liberty or give me death. Those were the words Patrick Henry used to convince the legislature in Virginia to send troops for the Revolutionary War. It’s only been about two hundred years since Patrick Henry uttered those words. For years many have thought those words, and the sentiment captured by them, were immortal. I am not so sure. Two hundred years is a short time in the grand scope of man’s time on earth, yet in that time, we Americans are an eternity away from the man who uttered those words.  

Last week Congresswoman Giffords, and many others, were shot in Arizona. This crime has exposed how far Americans have fallen from our days as the freedom fighters of the world. Consider the fact that, within a few hours of the crime, there was a call by many to restrict freedom of speech. Specifically, there was a call to limit political arguments so they are not too intense.

Holiday Gifts For This Year's Newsmakers

on Wednesday, 29 December 2010. Posted in James Kelley

Christmas giftsWith the holidays this year I wanted to do something a little different so I decided to get gifts for some people that have been in the news a lot over the last year.

The first gift is not a Christmas gift but is instead a Kwanzaa gift. It goes to a blowhard who claims to be a reverend and who goes by the name Al Sharpton. You may know him as the man with troll hair who seems to suggest that other people are racists. Anyway, my Kwanzaa gift for Mr. Sharpton is a big roll of duct tape. My hope is that he will use this to tape his own mouth shut so that given enough time people may forget what a demagogue he is.

Up next is a Christmas gift for Lady Gaga. You may know her as the pop star who likes to wear outrageous outfits. Earlier this year she made headlines for wearing a dress made entirely out of meat. Appropriately, my gift to her this Christmas was a couple of new dresses. The first was made entirely out of baked potatoes loaded with butter, cheese, and bacon bits. The second dress was one made of dinner salad. Some of you are wondering why I would get Ms. Gaga such a gift. Well, I figure it this way, when the music industry eats her alive the way it has eaten Britney, Christina, and many others before Gaga, at least the industry will get a balanced meal.

Fire in a Crowded Theater

on Thursday, 16 December 2010. Posted in James Kelley

Al SharptonRecently, Al Sharpton called on the FCC to regulate talk radio. Specifically he said that the FCC should regulate what talk radio hosts say. In other words, he’s not asking for time, place, and manner restrictions; instead he is asking for content restrictions. Worse still, shortly after Sharpton’s comments, the FCC proposed a new “public values test” for radio broadcasters.
   
Restriction on the content of speech by the government has long been held to be prohibited by the First Amendment to the Constitution, with few exceptions. Mr. Sharpton — notice I do not call him “Reverend” because I have never heard him mention God or the Bible so I am not convinced that he is a man of God — went on to say that anyone who offends groups of people based upon race, gender, or sexual status should be taken off the air. This will likely become a common refrain in the coming months.                          

Some will argue that the government owns the airwaves so the government can and should regulate radio. Let’s take a look at government ownership of the airwaves. If the government owns the airwaves, then do they also own the air that we breath? What about the sunlight that we absorb? If we concede that the government can regulate who can use the airwaves based upon that person’s political views, then what is to stop them from regulating who can breath air based upon the same criteria? That being said, obviously radio airwaves are a limited resource and the government does have to regulate that area. On the other hand, to suggest that the government should not renew a radio broadcast license because of the content of the speech coming from that station is totalitarian and unacceptable under the First Amendment.