Category Archives: Fiscal Policy

THE DRAGON LADY AND THE BIG BAD DUCK

The Donald T

By John Jonelis

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“Tell me a story, Uncle Loop.”

“Okay Princess, that’s what I’m here for. First let’s get you all tucked in and ready fer bed.” Loop Lonagan sits back in the chair and opens the news app on his phone. “Let’s see what we got here.” He runs down the headlines.

  • “GANG SHOOTING ON HALSTED—No that’ll just get ya all riled up.”
  • “TERRORISTS ABDUCT CHILDREN—Nope. Too scary.”
  • “LOCAL REP ACCUSED OF EMBEZZLEMENT—”

“What’s ‘bezelment, Uncle Loop?”

“Ferget it kid. Way too boring . Here’s another one.”

  • “TRUMP IN BED WITH CLINTON—”

The small voice turns suddenly shrill. “That one! Read me that one, Uncle Loop. It’s a bedtime story.”

“I dunno, kid. It’s politics. Yer daddy and mommy’ll kill me.”

“Please, Uncle Loop. PLEEEEEEZE!”

Gimme a minute t’ think.” Lonagan goes silent and scans the article.

  • Trump runs a false flag campaign...
  • Third party run expected…
  • Speculation of collusion with Clinton…

Sheesh—Kren might have him up on charges for corrupting his sweet little girl with stuff like that.  Jonelis could sic the Business Plan Police on him and he’d never see the light of day again.  Isn’t this Trump bozo some kind of family—even if John can’t stand the guy and they never talked to each other?

Business Plan Police

At this point Loop’s 85 pound bull terrier, Clamps, saunters in and jumps on the bed. Princess hugs him tight.

“C’mon, Uncle Loop!”

“Yeah, yeah, pipe down, I’m still thinkin’”  So what’s he supposed to do?   Disappoint a kid?

20150825-The Donald - BusinessInsider

After all—are these two goons really the best we can find to run for President of the United States? Maybe beauty’s in the eye of the beholder but the thought gives him a headache.

20150825-The Hillary - The Marker Cafe

“Hurry up, Uncle Loop!”

“Yeah kid.” He licks his dry lips, then takes a tug of Scotch for inspiration. What grade are ya in at school this year?”

“Third!”

“Growin’ up so fast! Old enough to read this stuff all by yerself, arn’tcha? Okay, you close yer sweet little eyes and Uncle Loop is gonna tell ya da whole rotten mess.

A Loop Lonagan Bedtime Story

“Let’s say yer on da playground fer a free-fer-all soccer game. EVER’BODY plays! One team’s called da Jackasses—I mean the Donkeys. Other team is da Elephants. Okay?”

“Okay Uncle Loop!”

“Captain o’ the Donkeys is an older 5th grade girl. Kids call her da Dragon Lady. Captain o’ da Elephants is another 5th grader dey call Boring B. Bland—B3 fer short. Deeze is da biggest kids AND da best soccer players.

“Dey pick players one atta time from da heap, so’s both sides is even. Youse is hopin’ you don’t get picked last, cause dat’s a real disgrace. I seen it where some poor schmuck don’t get picked at all! But B3 calls yer name and ya feel real good. Ya trackin’ with me?”

“Um hmmm.”

Soccer Ball

“Okay, then dis big bully shows up. All da little kid’s call ‘im da Big Bad Duck ‘cause he wears a funny thing on his head, sticks out like a beak. He never played with da little kids before but now he wants t’ be an Elephant. Pretty soon, he starts throwin’ his weight around, sayin’ he oughta be captain. Claims he’s a better player den B3. He’s got a real regulation soccer ball instead o’ that cheap kickball they been usin’. A couple o’ da kids wanna go with him.  Ever see it work dat way, Princess?”

She smiles and nods.

“Okay, ever’body at school already knows da Dragon Lady ‘n’ da Big Bad Duck is pretty good friends with each other. What nobody understands is this: Before recess, da Dragon talked da Duck into playing fer da Elephants. It’s a special secret deal between dem two.”

“But that’s not her team! If he’s the best player, why does she want him on the Elepants?”

“Ah, yer a smart little one! Just wait ‘n’ see! Da game gets started.  After a while, an argument breaks out. Turns out mosta da team don’t want da Duck t’ be captain.  So he says he’s gonna take his ball ‘n’ go play his own game. Sound familiar?”

She nods again.

“And he takes a few o’ da kids from da Elephants with ‘im—summa da best players, too. So whaddaya think ever’body else does? Do they pick new teams?”

“No, Uncle Loop. They keep playing because the bell is going to ring and recess will be over.”

“Right, and who wins the game?”

She chews a finger. “I suppose the Donkeys, because they have more players.”

“Right again. Da Dragon Lady got da Big Bad Duck to split da team. He ran a false flag, like it says here in dis article. Dat’s yer lesson in Chicago-style politics on da national stage—at least fer tonight. Hey, you don’t look sleepy yet.”

Clamps & Bone

Princess squeezes Clamps tight, like a big stuffed bear.  “Tell me another story!”

“Hmm.” Loop pulls out his phone and runs down the headlines. “Lemme see what else we got here…”

Read the rest of the story:

TRUMPED

 

Sources: Time Magazine and Black Bag

Image of The Donald courtesy Business Insider

Image of The Hillary courtesy The Marker Cafe

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2015 John Jonelis – All Rights Reserved

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UNDERESTIMATING THE COMPETITION

Olga of Kiev Tby Robert Jonelis

Ever face a crisis situation?  Raw panic?  Of course you have.  We’ve all been burned by miscalculation, greed, and shoddy research.  People have been making the same mistakes for quite a long time and a young woman from the 10th Century can teach us a pointed lesson about the importance of accurately sizing up the competition.

Miscalculation

Meet Princess Olga.  She lived in Kiev back in the 900s with her husband Igor, ruler of Kiev, and their young son Svyatoslav.  Igor was leaning on the Drevlians, a neighboring people, for tribute.

The Drevlians decided that killing Igor would be cheaper than paying up, so they assassinated him.  That left Olga, a young widow, as regent for her three-year-old son.

The Drevlians were now dealing with an angry leader that they had badly underestimated.

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Greed

The Drevlian ruler wasn’t satisfied with merely eliminating the payment of tribute.  He could do even better.  If he married Olga, he’d rule Kiev!  After all, she was a poor widow with nobody to protect her or rule her kingdom.  He dispatched a group of important Drevlians to make the pitch to Olga—something along the lines of, “We know you’re single since we killed your husband, how about you marry our leader?”

Olga’s response was not what they were hoping for.  She buried the envoys alive.

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Shoddy Research

Before news got out about the demise of the Drevlian ambassadors of love, Olga sent word to the Drevlian leader that she accepted his proposal.  However, she said, for her people to accept her remarriage, the wisest and most knowledgeable of the Drevlians must come to serve as an honor guard on her perilous journey.

When these men arrived, she burned them to death.

Undeterred by her delayed arrival and still blissfully unaware of events, the Drevlians send a huge contingent to a feast put on by Olga.  A large number of them became exceeding intoxicated.  Her soldiers then attacked the largely helpless drunks.  Several thousand more Drevlians perished.

Pieter_Bruegel_the_Elder_-_The_Dutch_Proverbs 500

Painting by Pieter Bruegal the Elder

The Drevlians finally caught on that Olga was less than happy with them, but by this time she was gathering her army.  Deprived of much of their leadership and a significant chunk of their manpower, things didn’t go well for the Drevlians, and Olga soon besieged their main city.

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Crisis Management

Sensing doom, the Drevlians tried to negotiate peace. Olga responded that all she required would be three live pigeons and three live doves from each Drevlian household as tribute. (Drevlian families commonly kept bird coops on the roofs of their homes).

The night after delivery of the tribute, Olga’s troops tied a piece of string to the leg of each bird, bearing a flaming material.  They released the birds, all of which immediately flew back to their homes.  Every building in the city caught fire at about the same time.

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Panic Mode

The Drevlians fled their flaming fortified city into the arms of Olga’s waiting troops.

The Drevlians underestimated their competition.  This is probably why you don’t hear much about them today.

Ω

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Bob Face 2

Robert Jonelis is a mathematician and history buff who knows how to tell a good story.  He spends his days programming automated machinery in search of the perfect robot.

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This article originally appeared in NEWS FROM HEARTLAND – The Journal of the Heartland Angels.    http://news.heartlandangels.com   Copyright © 2014 John Jonelis

Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2015 John Jonelis – All Rights Reserved

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IF WE BUILD IT, THEY WILL COME

BANANASMoises Goldman PhD – Resident Scientist

EDITOR’S NOTE–Everybody’s familiar with the phrase.  But is there a genuine application in industry for IF WE BUILD IT, THEY WILL COME?  Here’s one offered by a highly respected source:

Many in industry believe that logistics is now THE important field of study. Nothing could be further from the truth.

Logistics is simply a natural process that is part of any enterprise. It is inherent in any enterprise trying to minimize cost, maximize profits, or simply optimize its performance. (I am not talking about probabilistic or statistical studies.)

Moises Goldman 2

Let me clarify with an example: When Dole Foods or Chiquita Banana initially found that better fruit was grown in Latin America; they initially went down there, picked the fruit, and brought it back to the U.S. for processing.

Low Hanging FruitUltimately, common-sense logistics influenced their thinking and they moved their processing plants close to the source. This not only made economic sense but also being close to the fruit allowed them to be first in picking the best.

By moving industry to the source, it will remain close the best fruit it can pick. If we break ground close to the source, I am certain that: IF WE BUILD IT, THEY WILL COME.

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GO BACK TO PART 1

Contacts

This article was adapted from a paper for the Institute for Work and the Economy by Moises Goldman PhD. www.workandeconomy.org

Moises Goldman—Moises6@comcast.net

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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

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Copyright © 2013 Moises Goldman – All Rights Reserved

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THE CLIFFS OF INSANITY

Seven Solutions

VERBATIM – From storied business consultant, J. P. Pierogiczikowski—affectionately known as Joe Perogi,

as told to John Jonelis

Cliffs of InsanityJoe Perogi here. I’m listening to Peter Orszag speaking real clear on The Fiscal Cliff. He comes all da way from Manhattan to give this great talk to us at The Chicago Council on Global Affairs.

This guy’s real smart. Sure, he’s way left o’ my way o’ thinking but he’s got alotta ideas,  Ideas make money move. And he understands the politics as well as the economics – a rare combination.  So after the talk, I read a buncha his articles, put it all together, and here’s what I come up with:Chicago Council on Global Affairs Logo

He says $750 billion per year of income is already vaporized. That’s right—it’s down da tubes fer good. He says it’s as bad as the dot com bust but get this—this time we’re not bouncing back so fast.

Peter Orszag - Bloomberg

Peter Orszag – Bloomberg

Private lending is zilch. And the jobs are just gone. We lost workers permanently. Lotsa skills become obsolete. People give up.

Here’s something new to me: This mess has been going on long enough that disability benefits are rising. And as Orszag puts it, “Once people get on disability, they don’t go off.” While all this is goin’ on, global labor supply quadruples. So no wonder you can’t find a job.

According to Orszag: “People can sense that all this is happening and that nothing is being done to fill that $750B hole. They’re right.”

Bridge Out Ahead!

Now take that same broken-down train and drive it off the Fiscal Cliff. More than $600 Billion in tax increases and spending cuts by the end of 2012. We’re talkin’ a train wreck of epic proportions on a national scale. Probably push Europe over the edge too.

Budget Elements - American Enterprise Institute

American Enterprise Institute

A Little Comic Relief

It’s times like these we gotta keep our sense of humor.  Orszag cites some stats from his Bloomberg column and that takes my mind back to just before the talk. I actually watch Orszag post that article while we’re sitting together in da coffee shop. And I have some fun with that. My old friend, Ethan Sobriety invited me to this shindig and I get here earlier than he does. So I introduce Orszag to him and Ethan almost throws a coronary. Orszag was Obama’s top dog in Management and Budget and the Congressional Budget Office. But he goes back further. Senior economist under Clinton’s Council of Economic Advisors and the National Economic Council.  These days he’s bigtime at Citigroup.Bloomberg Logo

My friend Ethan ain’t no slouch neither. International currency investor who makes a home in England, Asia, Africa, and right here in Chicago, but when the color comes back to his face he says hello to Dr. Orszag and shakes his hand. From his reaction I figure Ethan’s got a whole lot of respect for this guy.

Posting Article

Orszag Posting His Article

Whacha Gonna Do?

But Orszag is still speaking and I snap my attention back to what’s going on now, right in front of me.  He asks, “Will we shoot ourselves in the foot again?”  He says we’re doing stimulus the wrong way. “We need to do specific, gradual, policy that’s hard to reverse over time.” Gradual and irreversible makes for stability. That way business knows what’s gonna happen and has plenty of time to plan for it. Lending opens up. Da economy starts workin’ again. So are we doin’ that?  No, he says, “We’re doing the opposite.” Not good.

Anybody’d think them bums in the White House, the Senate, and the House of Reps could work this thing out. But Orszag shows two simple charts that explain why it’s so hard to fix. The first one explains the way Left and Right thinking used to overlap. All the deals get done in that overlap area. (This guy’s an economist and uses bell curves to make his point. Ethan tells me Venn diagrams might make more sense to most people, so I’m giving you that version.) Here’s the way it looked in the ‘60s:

VENN 1

Now let’s fast forward to today. You see it? There’s no overlap at all no more. No consensus. Maybe no deal.

VENN 2

Polarization

Some say polarization is the natural result of gerrymandering and Orszag says that might be as much as 15% of it. But he thinks it’s driven by the polarization of the population itself. We’re doing it to ourselves,” he says. Then he explains how:

  • If you put like-minded people in a group, the group becomes more extreme. That rings true to me. It’s plain common sense.
  • Landslide elections in voting districts are getting a whole lot bigger. Lotsa candidates run unopposed or with token opposition. That means our neighbors are more like us. Again, more like-minded equals more extreme.
  • Nowadays we can all pick our own reality. Each of us can select our own news feeds and the like. Orszag talks about how he “unfollowed” a Twitter user who criticized him. So now that person is still criticizing him, but it’s not in Orszag’s world no more, so it’s got no impact on his decisions. Again, if you listen only to like-minded people, you get more extreme.

The Positions

So here are the positions on da Left and da Right:

  • DA LEFT—Let the Tax Cuts Expire for the Rich– This is the plan to tax the $250K+ crowd. Problem is, it really doesn’t raise much money and it kills jobs.
  • DA RIGHT—Entitlement Reform – Everbody agrees we gotta do this, but gimme a break. If the country was ready to bite da bullet, Obama wouldn’t be in the White House again.

If there’s no deal, we go over The Cliffs of Insanity and da country goes into another Great Depression.

The Cliffs of Insanity from The Princess Bride - Wikipedia

The Cliffs of Insanity from The Princess Bride – Wikipedia

Seven Solutions

Even with no consensus, Orszag sees a number of possiblities:

  • Two-Stage Agreement – A 9-month temporary deal to give the bums in Washington time to work it all out. This is one of the president’s proposals.  Give him what he wants now and he’ll talk about the rest later.  But Orszag asks a good question: “If either side gives in now, why believe the other party will change later?”  So nobody budges. 
  • Tax Reform Refund – Let the tax cuts expire.  Replace them with a $1,600/year tax refund.  Do that till a deal is reached or the economy recovers. This way negotiators start with a clean slate. Both sides might find it easier to swallow. This is one of Orszag’s interesting ideas.  Maybe it works. I dunno.
  • Cut Spending – Orszag points out spending cuts are easy to say but hard to do. The more vague the proposal, the more popular it is and the more useless. When he was in government service, he’d give out a list of tax cuts but nobody could agree on anything significant.  But we gotta cut spending somehow.
  • The 50K Limit – If we limit itemized deductions to $50,000 for everybody, we can raise the same $700 Billion we’d get from taxing the job creators. But 90% of that is deductions from just three things: local taxes, home mortgage interest, and charitable contributions. Of those three, charity is the only one a taxpayer can do anything about. So charities would get clobbered. Not a good thing.
  • Raise the ThresholdExtend the tax cuts for everybody under $1 Million insteada chopping it off at $250K. So far nobody’s hot on this, but who knows? It’s the natural place to reach a compromise.  And as I see it, anybody earning $1M is likely to be runnin’ a corporation, not a mom and pop proprietorship or LLC. Regular corporations are taxed separate from personal income so I figure it shouldn’t oughta hurt jobs too much. But taxing corporations hasta raise prices. We all pay fer it, so either it’s a hidden tax or it’s inflationary.  I think one ‘o these days we’re finally gonna see summore inflation.
  • Scale Back Tax Breaks – Don’t raise rates at all. Chop off deductions the $250K-and-up earners. House Republicans might bite. But the White House hasta make a concession here and this commander in chief hasn’t shown any ability in the art of compromise. Also, the downside is this could hurt any housing recovery big time.
  • Social Security Reform – Orszag is big on this one and it’s real interesting stuff: Lift the $110,000 cap on payroll taxes. He says Democrats will leap at the chance to make Social Security solvent without private accounts. And, this one’s stable ‘cause it can be done in an orderly manner over several years. Again, he’s big on a plan that can’t be reversed and phases in over time. That means everybody knows what’s coming and has time to plan for it.

O’course, we can always kick the can down da road again like Obama did last term.  Orszag don’t raise this issue ’cause it ain’t a permanent fix.  We got a looming debt crisis and it’s only getting a whole lot worse.  

Optimism

Orszag sees some good coming in spite of all this suffering:

  • He sees shale gas and shale oil and a pipeline from North Dakota to Texas because there’s no way around it. So oil prices will eventually plummet.
  • He seems to like the way healthcare is headed because he likes defined contribution and national healthcare. Well, I figure ya gotta make allowances for people’s opinions.
  • He says there’s a lot more to come from the tech revolution.

At least that last one’s for sure.  I hope them bums figure this mess out before New Years Day.  And thanks Ethan for the great invite.  This was worth da trip.

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GO TO – THE FISCAL CLIFF – A SURPRISINGLY SIMPLE STORY

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts in full or in part accompanied by attribution and a web link are welcomed and encouraged. This is not investment advice.  I do not guarantee accuracy.   It’s not my fault if you lose money.

.Copyright © 2012 John Jonelis – All Rights Reserved

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Filed under Chicago Council on Global Affairs, Chicago Venture Magazine, CORE Insight Story, Economics, Entrepreneurship and Politics, Fiscal Policy, Innovation and Culture, Taxes