I spent Wednesday to Friday at a seminar sponsored by the Charles G. Koch Charitable Foundation's market-based management initiative. The seminar was in Wichita. It was a first rate experience. Without exception, the speakers, mostly Koch executives, were enlightening. The audience was made up of talented libertarian academics from around the country.
On the first full day Mr. Koch spoke with a panel of executives. It was thrilling to listen to a business genius. He has built a medium size oil services firm into a $100-billion-in-sales nimble behemoth, the largest closely held corporation in America, using the principles outlined in his book, The Science of Success. Koch Industries' management style is more advanced than other corporations'. In contrast to billionaires like George Soros who live off the Fed and immiserate the public, Koch makes money by producing value. The legacy media therefore libels Koch.
Richard Fink, a former Rutgers economics professor and president of the Charles G. Koch Charitable Foundation, gave several talks about economic freedom. Charles's son Chase spoke on Friday morning about how one of the firm's subsidiaries applies market based management. As well, we heard from finance, operations and HR executives about how the firm implements Charles's market based management model. Besides being an innovative competitor Koch displays ethical standards that are beyond anything I have witnessed in academia or in the New York business community. Koch Industries is MORE ETHICAL than most higher education institutions.
The culture shock of going from upstate New York, which is devoid of industry, to Wichita, which has numerous thriving businesses including Coleman Lanterns, Cargill, and Koch, made me reflect on the reasons for New York's economic failure. In New York, state and local government spend 23.3% of gross state product while in Kansas state and local government spend 18.17%.
This was a great opportunity because academia excludes and discriminates against libertarian professors. The Koch seminar provided me with an introduction to colleagues who share my views. As well, I enjoyed learning about state of the art management practice.
Saturday, July 23, 2011
My Article on Accountants with Disabilities Wins Praise
I recently wrote a column for the AICPA Career Insider entitled "Hiring People with Disabilities." The editor, Sukanya Mitra, forwarded quite a few positive e-mails that she has received from readers, including one from an HR executive at one of the big four accounting firms:
As a past board member of a not for profit that served the disabled – I can attest these people are quite capable and in my experience they have enriched my life far more than anything I ever thought I could do for them. Sure it’s a risk to hire people outside the “norm” – and that is where the real return on risk will pay off; it is in fact the road less traveled – and it will make all the difference.
Bravo! Thanks for the article! I have been a CPA for 30 years and CFO for 20 of those. If not for my parents and brother with disabilities I never would have been motivated to do my best. My blind father, paraplegic mother and blind brother were my inspirations. They never let their disabilities get them down. We could use more people like them in the workplace. It's all about attitude and perseverance. Thanks!
As leader of disabilities efforts at ... huge kudos to you for bringing this issue before the CPA community. At ..., we have a deep commitment to creating an enabling (by which we mean the practical steps, such as accommodations and accessibliity needed to give professionals of all abilities the same access to tools, information, and opportunities) and a disabilities inclusive culture. Accounting needs more leaders thinking like you!
Since you're someone who obviously "gets it" and a role model, I did want to point out, however, that referring to people with disabilities as "the disabled, deaf...." etc. is not considered wholly respectful in the disabilities community. The admittedly awkward term "people with disabilities" is preferred, as it puts the individual before the disability, using what's generally called "people first language". Below is a link to the ey.com page on which we've shared many of our firm's educational tools and resources in hopes of helping the business community become more knowledgeable around disabilities in the workplace. You'll find quick guides on language, etiquette, things to say and not to say to people with serious illnesses, and inclusive work habits, as well as handbooks, quizzes, videos and posters.
If you're interested in learning more about what we're doing at ..., I'd be happy to speak with you.
Thank you for all you're doing to support a more inclusive profession!
As a past board member of a not for profit that served the disabled – I can attest these people are quite capable and in my experience they have enriched my life far more than anything I ever thought I could do for them. Sure it’s a risk to hire people outside the “norm” – and that is where the real return on risk will pay off; it is in fact the road less traveled – and it will make all the difference.
Bravo! Thanks for the article! I have been a CPA for 30 years and CFO for 20 of those. If not for my parents and brother with disabilities I never would have been motivated to do my best. My blind father, paraplegic mother and blind brother were my inspirations. They never let their disabilities get them down. We could use more people like them in the workplace. It's all about attitude and perseverance. Thanks!
Your article is so timely!. I have recently hired a deaf/blind CPA that works remotely.We are still trying to fine tune the technology needed to accommodate her work style and will go to your resources that you mention in your article. I also would be happy to discuss the challenges that we face, and the challenges that we have been able to overcome. Thank you so much for publishing this article.
As leader of disabilities efforts at ... huge kudos to you for bringing this issue before the CPA community. At ..., we have a deep commitment to creating an enabling (by which we mean the practical steps, such as accommodations and accessibliity needed to give professionals of all abilities the same access to tools, information, and opportunities) and a disabilities inclusive culture. Accounting needs more leaders thinking like you!
Since you're someone who obviously "gets it" and a role model, I did want to point out, however, that referring to people with disabilities as "the disabled, deaf...." etc. is not considered wholly respectful in the disabilities community. The admittedly awkward term "people with disabilities" is preferred, as it puts the individual before the disability, using what's generally called "people first language". Below is a link to the ey.com page on which we've shared many of our firm's educational tools and resources in hopes of helping the business community become more knowledgeable around disabilities in the workplace. You'll find quick guides on language, etiquette, things to say and not to say to people with serious illnesses, and inclusive work habits, as well as handbooks, quizzes, videos and posters.
If you're interested in learning more about what we're doing at ..., I'd be happy to speak with you.
Thank you for all you're doing to support a more inclusive profession!
Monday, July 18, 2011
The Federal Budget and the Crisis of Democracy
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| This chart shows that there is little difference between Ryan's and Obama's budget proposals That the Ryan proposal created controversy is evidence of a moribund political and economic system. Chart courtesy of Chris Edwards of the Cato Institute. |
The American government has not been able to live within its means for 44 of the past 50 years. An excessively democratic constitution that permits the majority to loot from those who produce wealth will not permit rational management.
I would add to Filozoff's analysis that the two party system is like a casino in which addicted gamblers liquidate their holdings. There are two types of bettors. The conservatives, who bet on failed wars, and the progressives, who bet on failed social programs. Their wagers are colorful entertainment, but the casino owners are the only ones who win in the end.
The casino owners are specific special interests, starting with Wall Street. Wall Street and a host of other special interests benefit from deficit spending and will resist, through the legacy media and through political pressure, any attempt to manage the American state rationally. That is, Wall Street sells the financing on which government depends, directly profiting from deficits. It therefore pushes for deficits via the media, which legitimizes absurd federal programs. Wall Street profits from waste because the monetary expansion necessary to fund the waste is the sole reason that there have been consistent increases in the stock market since 1940. Wall Street's interests are linked inextricably to debt and to inflation because rising stock markets stimulate demand for their products.
In a free market when stocks go up new firms enter and profits (hence stock prices) decline. Stock markets have no reason to go up over the long term unless interest rates are artificially reduced over time and/or government regulation inhibits new firms. There is nothing in the theory of economics that predicts a consistently rising stock market. No economist has predicted stock market fluctuations based on economic theory (although some have used price earnings ratios and other indicators that have nothing to do with economic theory).
The Federal Reserve Bank has consistently expanded the money supply, reducing interest rates since 1932 to below market levels, and, since 1970, this has caused the real hourly wage to stagnate (due to inflation caused by the monetary expansion) despite productivity increases. There are, of course, short exceptional periods of rate increases to reduce inflation, but the chief trend-breaking exception was in the early 1980s under Jimmy Carter's and Paul Volcker's Fed.
Two effects of artificially depressed interest rates have been excessive expansion of Wall Street and bloating of stock and real estate prices at the expense of the real hourly wage. As well, there has been misallocation in myriad other ways, to include dislocations that have come about because of Milton Friedman's policy, implemented by Richard M. Nixon, of separating the dollar from the international gold standard and so expanding the dollar's role as a reserve currency around the world. This has made the dollar more valuable than it should be, resulting in the exodus of manufacturing.
A Historical Perspective
The Ryan proposal hearkens back to a proposal of the first secretary of the treasury, Alexander Hamilton. In 1795, right before he resigned, Hamilton wrote "Report on a Plan for the Further Support of Public Credit." In it he laid out a plan to extinguish the federal debt over 30 years. According to Hamilton's biographer, Ron Chernow (p. 480):
He wanted new taxes passed and old ones made permanent, and he showed painstakingly that he had striven to reduce debt as speedily as possible...Hamilton's proposals were rolled into a bill passed by Congress within little more than a month of his departure as treasury secretary.
In fact, the large federal debt incurred from the Revolutionary War was not extinguished within 30 years, in part because of the War of 1812. As the statistics on Treasury Direct show, the national debt did not come close to being extinguished until Andrew Jackson was elected president in 1828. Then, it took eight years for him to abolish the Second Bank of the United States, the forerunner of today's Fed. In 1836, the year Jackson abolished that era's Fed, the national debt had been reduced to $37,513. Abolition of the debt went hand in hand with abolition of the Fed. That did not end the federal debt, as subsequent presidents increased it. But the 19th century did not see consistent expansion of debt because Jackson abolished the Second Bank in 1836.
Conclusion
Currently, there is one candidate who favors abolishing the Fed: Ron Paul. In addition, there is a candidate who favors introducing competition into the monetary system: Gary Johnson. Unless Americans choose to think outside the box and elect either Ron Paul or Gary Johnson, the radical incompetence that we have been witnessing will continue to the bitter end. Meanwhile, I am betting on gold and silver.
Sunday, July 17, 2011
My Country My A**
Benjamin Franklin said, "Where liberty is, there is my country." America is no longer free nor liberal in the way that Franklin would have used the word. Mark Joppa posted this on Facebook. While it is probably advantageous to be considered loyal opposition, I'm not clear that America is now much better than the Hapsburg monarchy that my great-grandparents left in the 1880s. The Hapsburg Empire, like America today, was Progressive. It was a monarchy, not a republic, and the dictatorship was of an emperor, not majority rule. The differences are negligible.
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