The American Dilemma and How We Can Fix It

Posts tagged ‘Warren Buffett’

RICHARD HAYES SPEAKS (AND WE SHOULD LISTEN)

Perhaps the name Richard Hayes doesn’t ring a bell with you.  No doubt in the next few days that will change.  Mr. Hayes is a Sanitary Engineer (garbage collector) who apparently works on the route that includes Mitt Romney’s house in San Diego.

AFSCME (the American Federation of State, County and Municipal Employees) has produced a new attack ad featuring this gentlemen.  The copy reads:

“My name is Richard Hayes, and I pick up Mitt Romney’s trash.  We’re kind of like the invisible people, you know. He doesn’t realize, you know, that the service we provide, you know, if it wasn’t for us, you know, it would be a big health issue, us not picking up trash.”

“Picking up 15, 16 tons by hand, you know that takes a toll on your body.  When I’m 55, 60 years old, I know my body’s going to be break down. Mitt Romney doesn’t care about that.”

I’m not quite sure what the thinking was that AFSCME employed in creating this ad using one of their members.  I know that the going rate for salaries for people in Mr. Hayes’ profession range nationally between about $35,000 – $55,000 per year, depending on the area.  So Mr. Hayes would be required under Federal Law to file an income tax return and presumably pay some amount of Federal Tax to the Treasury.  Thus, he is one of the 53%  – not the 47% that Mr. Romney described as “committed to voting for the President,” – although I think that might well be his intent.

Perhaps we’ll find a little more about their thinking later as there are apparently two additional ads which are forthcoming – I presume with the same theme.  And what is that theme?  Mitt Romney is an insensitive, uncaring SOB who is out to rape the poor of the last dime of their entitlement dollars.

In truth, I wouldn’t want Mr. Hayes’ job if it paid three times the amount he earns performing his duties.  And I probably don’t have the physique to be able to discharge his responsibilities in a satisfactory manner.  I believe he makes a valid point about the potential health threat if he and his fellows were to walk off the job.  In fact, it was exactly for reasons of public safety that Sanitary Engineers in several major cities were ordered to cease and desist from the strikes on which they embarked during the last several decades.  On this point he is absolutely correct.

Furthermore, I believe his statement about having a broken body when he is older is also probably true, unfortunately.  We have seen the relatively short professional life spans of NFL players due to on-the-job related injuries, including brain traumas.  At least pro football players receive significant compensation for risking their bodies and their futures – a risk that I’m sure they evaluated before they made the decision to play the game.

Perhaps it is ironic but today, when I first saw this ad, it happened to be one of the semi-weekly garbage collection days in my neighborhood.  What is more ironic is that I actually had something at the curb to be picked up.  I had managed to accumulate one half of a medium-sized garbage can and had it out and waiting for the crew.  That was the first time I had placed any refuse outside in five pick ups.

I work diligently to buy things with minimum packaging and to recycle and compost as much as I possibly can – for environmental reasons.  The fact that this makes life easier for Mr. Hayes’ fellow Sanitary Engineers here in Las Vegas is a definite plus.  To me they are not invisible – as I always remember them with some homemade preserves during the Holidays and frequently offer them a cold beverage in the summer heat.

But let’s return to the point of the commercial – that Mr. Romney must be a hard-hearted and uncaring person because he doesn’t have an intimate relationship with those who provide scavenger service at his various residences.

Is there any reasonable person out there who believes that Madonna, Warren Buffett, Lady Gaga, Tiger Woods, Lee Saunders (the President of AFSCME who just won election over a reform candidate who pledged to reduce the salaries of the union’s top honchos), or Presidents Clinton or Obama are on a first name basis with those who provide the same service to them?  Let’s get real people.  I doubt that any of those I have named even knows when their garbage is collected.

However, despite the main thrust of the ad at disparaging Mr. Romney, there is an important lesson to be learned from it.  That is with regard to Mr. Hayes and all the others whom he believes have been “dismissed” by Mr. Romney.

If you’ve been a reader for several months you may remember that at one point in my life I had my own executive search and temporary help business.  The search business dealt with mid to upper management white collar individuals and the primary focus of the temp business was on support staff for people who held mid-level corporate positions.

Although I would be hard pressed to document it, I am guessing that during my twenty-six years in that business, I interviewed no less than ten thousand people, both for our clients and for my own staff.  After the first thousand or so, if I say so myself, I became pretty good at interviewing.

Now, if I as an interviewer were to review Mr. Hayes’ statement (transcribed exactly as it appeared on Yahoo News) as his introduction to our firm, I would give him the courtesy of a cursory interview, because I believe that we ought always to be courteous, but I would never have considered him for any positions which we had available.  I would probably have recommended that he would have better opportunities if he were to apply to a firm specializing in people who had greater numbers of job openings for which he might qualify – a firm such as Manpower or other day labor temporary help agencies.

This would not have been a dismissal of Mr. Hayes as a human being.  Rather, it would be a realization that the gentleman had either received or chosen to accept only a very limited and probably not very good education.  His speech told me that without needing to review his application.  I know because I have taken my time to interview many Mr. Hayes’ – and if I doubted that assessment I would only have had to look at their applications to confirm my conclusions.  I guarantee that basic words which we use every day would have been misspelled and that the handwriting would have been difficult to read.  I’ve seen it hundreds of times.

Does that make Mr. Hayes an “unimportant” human being?  I don’t believe that any of us has the right to make that sort of assertion about anyone.  But it does make him a poorly educated one – a man with few employable skills.  That is most likely the reason that he is doing the work he is doing – not because Mitt Romney “looks down on him” or has “dismissed” him.

There is a lesson we should all take from Mr. Hayes and all the other Mr. and Ms. Hayes’ in America.

Fundamental to our problems in America is that the quality of education for which we were once renowned has fallen – and it’s fallen dramatically.

We are willing to give movie stars and professional athletes millions of dollars a year to entertain us, paying them directly through the money we spend on tickets.  But we are not willing to recognize those gifted teachers who are educating the next generation by offering them incentive raises based on the quality of the work they provide.  That is because we apparently, as a nation, consider entertainment far more vital than education.  Could this be one of the reasons that so many American jobs have moved overseas to be done by workers who were better educated than our own?

I think that Mr. Romney is too much of a gentleman to “retaliate” with a similarly negative ad to the ones that AFSCME has produced.  But I can’t help but wonder what someone riding the garbage truck that services the White House would have to say to him, should he encounter President Obama.  That is, if the President weren’t attending to important matters of state on the golf course.

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RICH MAN, POOR MAN

“I’ve been rich and I’ve been poor.  Rich is better.”

-attributed to Mae West et al.

We may or many not subscribe to the doctrines of Christianity but it would be hard to dispute one statement that Jesus made as anything other than absolute truth…

“The poor you will always have with you…”

Matthew 26:11 and Mark 14:7

A similar statement appears in the Gospel of John as well.  Are there any who can dispute this as fact as we look around us and see what we have made of our lives and our world?

As we enter the final phase of our Presidential election campaign, the “poor American” looks at the “rich American” with anger.  “Why should he be entitled to all that he has when I have so little?”  That same statement was made by the Bolsheviks as they looked at the lives of the Russian aristocracy and by the Revolutionists as they viewed the court of Louis XVI.

They accuse wealthy Americans as being “out of touch” and insensitive to their situation, hard-hearted and mercilessly grubbing yet more money and power.  There is probably some truth to that statement.  The group of the wealthiest Americans, including Warren Buffett, a staunch Obama supporter, who has pledged to give away half his wealth only contemplates doing so after his death, lending credence to yet another old saw, “You can’t take it with you.”

Czar Nicholas II and Louis XVI presided over a society into which through genetic accident they happened to be born to the right parents.  They had “good genes” and a lot of luck.  They held their positions through an accident of birth.  Of course, considering the untimely end that befell both, once can only wonder whether the luck they enjoyed was good or bad.

The American experiment, proposing that “All men are created equal…” was a drastic departure from the way in which Europeans or for that matter anyone anywhere else in the world viewed life.  Whether it was the African warrior, subject to the tribal chief or the Chinese farmer subject to the Emperor or the Japanese fisherman subject to the Shoguns, the concept of the equality of man was a new concept – and one which threatened the status quo.

This concept was so attractive to the poor and down-trodden that they made a pilgrimage to this new land in wave after wave, emigrating from their native countries to have a shot at the opportunity for a better life.  And by and large their lives were better in America than they would have been had they stayed in the land in which they were born.  But there were no free passes issued at our borders – no guarantees of success handed out to these immigrants.

They were given the opportunity but not the assurance to make something of themselves.   Many were successful – others were not.  And therein lies the problem of “equality,”  which might have been better phrased “equality of opportunity.”  And therein lies the rancor which rattles the chains of those in America who consider themselves poor and threatens the bastions of those Americans whom they consider rich.

So now we have embarked on a new plan – “wealth redistribution.”  In order to have true equality – we must all have equal resources.  There is only one minor problem with this program.  It doesn’t work.  If you question the truth of that statement you have only to look at people who became very wealthy, lottery winners, hip hop and rap stars, movie celebrities, sports icons, to see how so many of them have ended their lives tragically and no better off financially than before they acquired their money.

You see money doesn’t guarantee you happiness.  It merely guarantees you the opportunity to spend it foolishly or to do something constructive with it.  How you use it once it is in your possession is solely your choice.  And if you have made bad choices in life before you acquired wealth, it is likely you will continue to make the same bad choices, but will now have the ability to do so at a level which may well result in personal destruction.  The “Nouveau Riches” often become the “Nouveau Dead.”

It is interesting that our view on “equality” is selective in its focus.  Those who are being held up as the poster children for incarnate evil, people who have built businesses and acquired wealth as a result of their efforts, seem to enjoy that abusive distinction within a vacuum that many of us have created.  That view of equality doesn’t, for example, extend itself to our view of professional athletes.  In the interest of fairness, let’s consider MLB if teams were forced to be equal so that the playing field was even between each team.

With the World Series just over the horizon, I wonder how much interest it would hold for us given a revised sense of the “equality of all baseball players.”  So I have created a newer and far more equal scenario for the way in which professional baseball should be played.

First, there is the selection of members of the team.  We must ensure that there are no teams who have “star” athletes on them.  They, of course, are an aberration – far richer in talent than your average Joe, and they have a tendency to make the game much too exciting and provide an unfair advantage to the team who has him on their roster to the disadvantage of their opponents.  So we will not allow anyone who carries a higher batting average than .100 to play the game.

Second, should one of those equal and average players start getting too good, raising his batting average to .150, we will require that the team remove him from their roster and send him down to the minors for re-training.

Third, it seems unfair that there are pitchers who are better than others and as we know that this is an imperfect world, we must insure that we do not allow anyone to pitch a perfect game.  Therefore, the minimum requirement for our pitching staff will be that everyone must carry an ERA of at least 10.0.  Lower than that, back to the minors for re-training.

Fourth, we must eliminate private vendors from hawking their wares at the games.  They simply charge far too much for a “dawg” or a beer or peanuts.  Let the government be put in charge of concessions and subsidize them for those fans who want to come out and spend an afternoon enjoying a game.  After all, the fans are entitled, aren’t they?

Fifth, the high price of tickets to watch a game is outrageous and the profits go in the pockets of those “fat cat” owners who already have too much money.  Fortunately, this problem will soon resolve itself.  Since we’re now only employing mediocre players, we will only have to pay them (equal) but mediocre salaries.  And since the game will become extremely boring fan attendance will diminish.  Fewer people will stop watching MLB on television as well, thus reducing teams’ revenues (and owners’ profits).  Thus, based on the law of supply and demand, ticket prices will naturally decrease in an effort to fill as many seats as possible for what promises to be yet another “ho-hum” game.

This scenario has many benefits to it for those Americans who consider themselves oppressed by the current capitalist system.  It will make them feel good that now everyone has a shot at becoming a professional baseball player – including them.  It will have the effect of reducing the profits of those who are already wealthy, the team owners, thus making them feel good that they have struck out against the fat cats.  It will strike a blow at those rich companies which provide the junk food that we so eagerly consume at a ball game – reducing their profits as well.  While the game will become far less interesting, certainly it can’t be any worse than the reality television shows that the fans would  alternatively have viewed.

Truly, this will deliver to the world an updated version of that earth-changing American statement that “All men are created equal…”.   America will once again change thinking on planet earth with our new mantra, “All people are created mediocre .. and the more mediocre you are the better.”  (Just don’t get too much better).

TO YOUR GOOD HEALTH, SIR

Regular readers of this blog will recall that I have, on several occasions, taken Warren Buffett, the “Oracle of Omaha” to task for his political statements and actions.  Several weeks ago, the 82 year old chairman of Berkshire-Hathaway made the announcement that he has been diagnosed with first stage prostate cancer.  He reported this as part of his fiduciary responsibility of disclosure as the chairman of a publicly traded company.

The good news, according to Mr. Buffett is that his doctors have a positive view of his ability to overcome this malignancy as it was caught early and are hopeful that he will make a full recovery.  I hope that they are correct.

I don’t approve of Mr. Buffett’s politics – but I wish neither him nor anyone else but the best that life has to offer.

Having said that I will continue my position of withholding my spending dollars from companies which Berkshire Hathaway owns – including GEICO Insurance; See’s Candy; Dairy Queen; Fruit of the Loom and R. C. Willey Home Furnishings.

To your good health, Mr. Buffett.  I hope that you make a full and speedy recovery.

ON BUFFETT BALONEY

If you had your choice of accepting a similar position with Eastman Kodak or Apple, Inc., which company would you choose to work for? (To help make your decision easier, after 130 years in business Eastman Kodak filed for bankruptcy a few days ago).

Eastman Kodak will soon release their remaining employees to join the mass of the unemployed already in the marketplace. The reason is that their management did not have the vision to adapt to the technological changes which have occurred in the world of photography. They were failures.

Apple on the other hand has innovated products that resonate with consumers and has experienced exceptional growth. They will no doubt hire more people from the ranks of the unemployed, thus reducing the stress on the economy. They are successes.

Well, Tuesday was the day we found out how successful one of the Republican presidential aspirants, Mitt Romney has been. According to his tax returns, Mr. Romney has done very well – having reported approximately twenty million dollars in income during each of the last two years. That puts him in an earnings class shared by a very few – including some Hollywood and professional sports celebrities.

Good for Mr. Romney. I love a success story. It leaves me with a warm and fuzzy feeling that if I only apply myself I too might one day be one of those stories. (Perhaps as a child I read too many books by Horatio Alger, Jr.).

But now the flak begins – and into the fray enters Warren Buffett – stage left. Although his attack was directed at Congress over the inequities in all sixty-two thousand pages of the Internal Revenue Code and not at candidate Romney, the casual observer – with the help of the media – will find this distinction minor.

Let’s be clear – when expressed in terms of the effective fourteen percent of his income that Mr. Romney paid, that number seems low (Mr. Buffett’s point being that millionaires should pay a higher percentage of their income for the common good). When expressed as a payment to the Internal Revenue Service of nearly six million dollars – that number takes on a different meaning.

We have talked about tax reform in this country for decades – the result being that we have merely added pages and chapters to the IRC and reformed or deleted very little. I enjoyed reading “War and Peace” – but it finally came to an end.

As we saw from the confirmation hearings for Treasury Secretary Timothy Geithner, when you have a code that is so complicated that the person who now heads up the Internal Revenue Service cannot understand it and “misfiles” his own return – how are the rest of us supposed to cope with it?

The tragedy is that the Congress will not do anything substantive – this being an election year and all. Which means we will kick the can of tax reform down the road for yet another year. Our elected officials have perfected this technique to the point that it is a science. (I refer you to the last thirty years during which we have failed to enact a real energy policy).

Given that likelihood, I would like to offer Mr. Buffett a suggestion that may, in the short term, help ease his conscience and angst. If he feels that he is being under-taxed – let him “donate” an amount that he believes is appropriate to bring his percentage of payment up to the level that he thinks is equitable. (There is no provision in the tax code to prevent him or anyone else from doing so).

If Mr. Buffett sets that example, I promise to throw in a few extra bucks myself this April 15th.

The power to tax is the power to destroy.”

– Chief Justice John Marshall

 

 

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