Friday Five

Here are my Friday Five for March 21, 2014.

Good leadership starts with knowing yourself – at least this is what psychologist Sherrie Campbell asserts in her 2012 book. This is in keeping with my Christian Business Reference Architecture that first places an emphasis on who the business owner is before looking at what s/he can do. When you stop to think about it, running a business requires two core skills: competence in a given area and leadership. Publishing your leadership philosophy and then sticking to it is key to being a good leader – and that requires that you know yourself well enough to live out your philosophy.

Our national debt stands at $17,546,932,628,558.05. Assuming all my math is right (remember, I had two years of Algebra I in high school…), this represents an increase of $35,273,033,264.06 in the last 7 days. At 168 hours, this represents an increase of $209,958,531.33 per hour or $3,499,308.86 every second. By way of comparison, in 1950 – a mere 64 years ago, the entire Federal budget was only $42,562,000. We now borrow in roughly 10 days the equivalent of what we spent in an entire year in 1950.

Hawaii police want to keep their exemption to have sex with prostitutes while performing their job. I can’t imagine a situation in which having sex with someone who was probably forced into the sex trade to begin with even comes close to “doing their job” to protect and serve. Hawaii officials should recognize this for what it is and end the exemption.

The bootlegging of cigarettes is increasing as states apply higher and higher taxes to this vice. There are several principles in play here, some of which we, as a society, simply need to admit to ourselves and “deal with it”. First, the basic analogies remain true: if you want to encourage a behavior, then subsidize it. If you want to discourage a behavior, then tax it. Secondly, the latter principle has fulcrum that causes the board to fall the other direction *if* demand for the unwanted behavior remains high and the taxes to discourage that behavior become more costly than illegal means of engaging in that behavior. This is precisely what’s happening with cigarettes – some cartons are taxed as a high as $15/carton, so it might be cheaper to buy them on the black market. Thirdly, black markets always attract the criminal element which means that in our well-intentioned tax policies of trying to save people from themselves, we’re also creating a larger area in which the criminal element can thrive. The last principle is this: freedom is messy. I think freedom means that we allow people to make poor choices for themselves that might also harm other people. Freedom doesn’t relieve people of the consequences of their choices. Freedom means that we help each other, for sure, but such help is voluntary, not coerced. Forced charity is not charity – it is socialism. The states should recognize that those who smoke are going to do so either with legally or illegally obtained cigarettes. Taxing them to discourage the behavior is a good policy in my estimation, but it must be kept at a level that a black market isn’t created, which causes an even more set of problems for society than have some who smoke on a regular basis.

Lastly, telecommuting is a growing trend in American business. But the emerging results from this trend are mixed (here and here too). It seems that the best balance is for those who work some at the office and some at home.

Bill English, CEO
Mindsharp

Leadership Lessons Part VIII – Impacting the Quality of Leadership Through Righteousness

Continuing on in our study of David’s life from the time he was anointed King until he actually became King, we find ourselves now in 1 Samuel 18.10-30:

10 The next day an evil spirit from God came forcefully on Saul. He was prophesying in his house, while David was playing the lyre, as he usually did. Saul had a spear in his hand 11 and he hurled it, saying to himself, “I’ll pin David to the wall.” But David eluded him twice.

12 Saul was afraid of David, because the Lord was with David but had departed from Saul. 13 So he sent David away from him and gave him command over a thousand men, and David led the troops in their campaigns. 14 In everything he did he had great success, because the Lord was with him. 15 When Saul saw how successful he was, he was afraid of him. 16 But all Israel and Judah loved David, because he led them in their campaigns.

17 Saul said to David, “Here is my older daughter Merab. I will give her to you in marriage; only serve me bravely and fight the battles of the Lord.” For Saul said to himself, “I will not raise a hand against him. Let the Philistines do that!” 18 But David said to Saul, “Who am I, and what is my family or my clan in Israel, that I should become the king’s son-in-law?” 19 So when the time came for Merab, Saul’s daughter, to be given to David, she was given in marriage to Adriel of Meholah.

20 Now Saul’s daughter Michal was in love with David, and when they told Saul about it, he was pleased. 21 “I will give her to him,” he thought, “so that she may be a snare to him and so that the hand of the Philistines may be against him.” So Saul said to David, “Now you have a second opportunity to become my son-in-law.” 22 Then Saul ordered his attendants: “Speak to David privately and say, ‘Look, the king likes you, and his attendants all love you; now become his son-in-law.’ ” 23 They repeated these words to David. But David said, “Do you think it is a small matter to become the king’s son-in-law? I’m only a poor man and little known.” 24 When Saul’s servants told him what David had said, 25 Saul replied, “Say to David, ‘The king wants no other price for the bride than a hundred Philistine foreskins, to take revenge on his enemies.’ ” Saul’s plan was to have David fall by the hands of the Philistines.

26 When the attendants told David these things, he was pleased to become the king’s son-in-law. So before the allotted time elapsed, 27 David took his men with him and went out and killed two hundred Philistines and brought back their foreskins. They counted out the full number to the king so that David might become the king’s son-in-law. Then Saul gave him his daughter Michal in marriage.

28 When Saul realized that the Lord was with David and that his daughter Michal loved David, 29 Saul became still more afraid of him, and he remained his enemy the rest of his days. 30 The Philistine commanders continued to go out to battle, and as often as they did, David met with more success than the rest of Saul’s officers, and his name became well known.

We have one lesson and one difficult aspect that we need to discuss. But let’s start with this: David is described as experiencing great military success in several different passages (18.5,14,30 & 19.9). It is against this backdrop that we will learn our lesson.

Problem of Evil

An evil spirit from the Lord is sent on Saul at least two times: 18.10, 19.9. If we are to interpret the Scriptures correctly, we find that God uses evil agents and evil in general to accomplish His purposes as well as using angels and those who follow Him. The number of passages in the Bible are numerous enough and the problems presented with trying to find an explanation that fits other than the plain reading of the text are so difficult, that it seems best to simply say that God can use evil for His purposes and yet He is never to be charged with doing evil nor is He the source of evil. This would fit with His absolute sovereignty: nothing is outside God’s control – including all of evil. While this does present its’ own set of problems, I would rather serve a God who is fully sovereign and powerful over all that is evil and good than I would to serve a God for whom some evil is just too strong or too great to be within His control. Happily, the Bible presents God in this light.

So, given this: what is the relationship between God and Evil?

As we see in this passage, God may use evil to fulfill His purposes. Yet God Himself never does evil. God uses willing, moral agents to bring about the evil that fulfills His purposes and yet God holds those agents responsible for their choices. God never takes pleasure in evil, God is never to be blamed for evil and yet God uses evil deeds to fulfill His purposes.

Consider the story of Joseph. His brothers hated him, wanted to kill him, did wrong when they cast him into a pit, sold him into slavery and lied to their father (Gen 37). Yet Joseph says that God sent me before you (Gen 45.5) and that God meant it for good (Gen 50.20). consider that God hardened Pharoah’s heart numerous times in the story of the Exodus (chapters 4-10). Both God and Pharoah caused his heart to be hard (Ex 8.15, 32, 9.34). In addition, the Lord hardened the Canaanites hearts (Josh 11.20). Samson’s demand to marry an unbelieving Philistine woman was from the Lord (Judges 14.4). We know that King Saul was tormented by an evil spirit sent from the Lord (1 Sam 16.14) and God used evil to punish David after his sin with Bathsheeba (s Sam 12.11-12). Later on, the Lord used Satan to incite David into sin (2 Sam 24.1 with 1 Chron 21.1) and yet God still held David accountable for His sin. The Bible tells us that the Lord raised up evil kings to punish Solomon (1 Kings 11.14, 23) and that God gave permission to Satan to torment Job (Job 1-2). He put a lying spirit in the mouth of Ahab’s prophets (1 Kings 22.23) and He sent the wicked Assyrians as “the rod of my anger” to punish Israel (Isa 10.5). Even though He sent the Babylonians as his instrument of punishment on Israel (Jer 25.9), God punished the Babylonians for their evil acts that He caused them to do (Jer 25.12). A false prophet with a deceiving message is brought by the Lord (Ezek 14.9) and evil befalls a city by the hand of the Lord (Amos 3.6). Then in Amos 4, God reminds the people that the disasters were brought by His hand, “yet you did not return to me”.

Other passages speak to the Lord’s use of evil to fulfill His purposes. For example, evil comes from the mouth of God (Lam. 3.38). God creates both prosperity and evil (Is 45.7). The crucifixion of Christ was ordained by God (Acts 4.27) yet the apostles clearly attach no blame to God and they held the willing choices of sinful men accountable (Acts 2.23). The greatest evil ever perpetrated in this world was ordained and planned by God Himself to fulfill His purposes.

As people stray from the Lord, He brings about evil and destruction on them through other evil people, yet he holds those who commit the evil accountable for their actions. God brings about his plan through the willing, sinful choices of men whom He then holds accountable for their sin. When evil comes into our lives, we can know the providence of God is at work to cause all things to work together for good (Rom 8.28).

God is so sovereign, He has even reserved some evil men for the day of judgment (Prov 16.4). Again, God never does evil and is never to be blamed for evil (James 1.13-14). Though God ordained that evil would come about, God is removed from actually doing evil and bringing it about does not impugn His holiness or render Him blameworthy. For example, Job didn’t blame God for the evil that came into His life, the Scriptures never blame God for evil’s existence and work and neither should we.

Any other conclusion doesn’t make sense. Either we would need to conclude that God is not completely sovereign because there was evil that He did not anticipate and cannot control, or, we must conclude that God does evil and therefore is blameworthy. But neither of those come even close to who God is and how He presents Himself in the Scriptures.

Because God is completely sovereign over evil, His promises of protection, to work all this together for our good and His offer of salvation have complete credibility. This same God who….

  • Directs the winds
  • Feeds the animals
  • Keeps this world and its institutions going
  • Who uses both good and evil to fulfill His purposes

…..ordained that His Son would be slayed for you and me so that we could have an intimate, personal relationship with Him! If we see His sovereignty over good and evil coupled with His love for us and His willingness to die for us, then we can see that His triumph over evil is grounded in His sovereignty over evil and His love for us is a complimentary characteristic which evokes our worship, praise, adoration, awe and wonder for what He has done for us!

We can know that the salvation He offers us is real, powerful and effective because His sovereignty gives Him complete credibility to claim that He has triumphed over evil (John 16.33: “In this world you will have trouble, but take heart, I have overcome the world!”).

Back to Saul and David

Saul tries to kill David at least three more times and his own son once in an effort to keep the Kingdom in his family: 18.10, 17, 25, 19.10, 20.31-33. Yet God gave David much favor with: (18.1-7)

  • The people
  • Jonathan
  • Other commanders
  • Michael (18.20)

Saul is the classic picture of a man living in sin, trying to hold on to power (authority) against the will of God. This opens Him to control by evil spirits and embroiled in anger and hatred, he attemptes murder at least 5 more times. Saul lives with a fear of losing what he has. He is afraid of losing authority and power. Saul is a picture of how the world handles power:

  • Power is mine
  • Power is “claimed”
  • Power makes it “about my agenda”
  • Loss of power is tantamount to failure
  • One’s Identity becomes tied to a position of power
  • So holding onto position and power is the ultimate goal
  • So holding onto power becomes the organizing principle of one’s life

Yet the Christian is supposed to handles power very differently. As Christians we:

  • View power is an entrustment from God
  • Power is stewarded
  • It’s about God’s agenda
  • We cannot lose power because we never really have it
  • Identity tied to Christ, not our position
  • Attaining heaven and seeing Christ face-to-face is the ultimate goal
  • Love for God & others is organizing principle of our lives

So, Saul is a picture of a man who knows his days are numbered, yet is without hope and realizes that his dreams will never be fulfilled. He is in bondage to sin, which leads to a life without peace. He is lonely, bitter and increasingly unstable. He is a picture of a man whose authority is less and less effective, more and more vacuous and more and more “losing it” mentally and emotionally. Saul once walked with the Lord but turned away from Him.

The qualitative difference between David and Saul is this: when David sinned, he turned back to God. When Saul sinned, He did not. As a result, David’s authority and his reign were far more impactful and better than Saul’s simply because of this one core difference.

When we look to find leaders for our businesses, organizations and nation, we should look for people who are not perfect, but instead, know how to admit when they have sinned or messed up and learn from their mistakes. This will give them a higher quality of authority and a higher level of respect among the population – even among those who disagree with them.

Bill English, CEO
Mindsharp

Friday Five

These are my Friday Five for March 14, 2014.

Strategic threads to any business are usually not found as frontal attacks from competitors. Instead, most strategic threats to businesses come from the back door. Craig’s list is a case in point, where their success siphoned off billions of revenue from the newspaper industry, leading to crippling losses in the print industry.

Our long-term economic realities are well outlined in this paper by the Dallas Federal Reserve: “Deciding who should bear the burden of this fiscal adjustment is difficult, but this does not change the inescapable reality that the burden exists and must be borne by someone. And should that “someone” not be found in the current generation, the burden will be borne by future generations”.

The Urban Institute has an interesting report on the sex trafficking industry in the US. They studied eight cities and found that the trafficking was down from 2003 to 2007 in all but two of those cities. The industry is so large that law enforcement captures only a small portion of the illegal activities. My heart aches for the young boys and girls who are forced into this industry as slaves. Surely this is one issue that conservatives and liberals, businesses and churches can come together on to fight.

Americans top three problems: Jobs, the Economy and the Government. For the latter, let’s look in the mirror and realize that the folks we elect to Congress are the one’s screwing this thing up. What is customary is this: we tend to view our own representative or Senator as the “good guy” and everyone else as the “bad guy”. We’ll probably see less than 30 seats in the House change this year.

As of March 11, our national debt was $17,501,576,037,738.02. With an estimated population of 316,128,839, this amounts to $55,362 of debt for every person living in the US.

Bill English, CEO
Mindsharp

Pay Attention!

One core purpose of business is to create services and products that enable the community to thrive. This means that a Christian Business Owner should be focused on good product development, not just because it makes good business sense (it obviously does) but also because the Bible speaks to this part of business as well. When your product is your people, it becomes even more important.

Proverbs 27.23-24 says this: “Be sure to know the condition of your flocks, give careful attention to your herds; for riches do not endure forever and a crown is not secure for all generations”.  Two lessons jump out from these two verses regarding product development and more generally, about your business.

First, we are to be careful to know the condition of our business and its’ products/services.  It is something we are expected to pay attention to. As an owner, I’m in my checking account every day and am looking at the sales and financial numbers every day. To do otherwise is not wise and will lead to ruin.

One of the main reasons that businesses fail is because the owner doesn’t pay attention to the financial, legal and HR details that ensue with running any business.  Most entrepreneurs get into businesses because they have a talent in a given area and that talent is needed in the marketplace.  But when it comes to paying attention to the details of running a business, they tend to not do as well in these areas. For example, I know of one fast-growing company right now that is nearly 30 people and has roughly $4M/year in sales. (They are not in the same vertical I work in right now, so if you’re reading this and own a business, it’s probably not you). Their owner has a “results oriented” culture that at times, disregards the work-life balance of his employees. As a result, he does not have a vacation policy. So when people try to get permission to take time off, it is always denied because they don’t do vacations at his company: “Take the time off if you wish, but you’ll be expected to deliver results anyways.” I have friend who works 60+ hours/week in that business and found himself being called into meetings during his two week vacation in Hawaii. Needless to say, he wasn’t happy.

This is an owner who is out-of-balance in the purposes for business, prioritizing profits over people. And he isn’t paying attention to a core part of his company – his employee’s personal welfare. He would do himself a world of good to spend some time shoring up his Paid Time Off policy and showing some restraint when people are on vacation or are enjoying a Saturday at home, futzing in the yard.

When you run a service-oriented business, your people are your product. So paying attention to them is paramount to your success. If your product is something tangible, then you need to know the quality of your products and how the manufacturing process is coming along. Give careful attention to it and you’ll have a better business for it.

Secondly, we are reminded that riches (profits) do not endure forever and your position as a business owner is not secure forever either.  The obvious analogy is that if you do not pay attention to the condition of your business and its’ products/services, your profits and position will not endure. But even if you do, there will come a time when you won’t be an owner of any business. Understanding this will help you treat your business at an arm’s-length and gives room for you to treat it more as an entrustment from God than as an extension of your personhood.

Bill English, CEO
Mindsharp

Friday Five

These are my Friday Five for March 7, 2014.

 

January unemployment numbers inched up to 6.7% while the economy added 175,000 jobs. This indicates that more people who have dropped out of the labor market and getting back in the game. We still have 11,460,000 people who are looking for work but cannot find a job. The U6 unemployment number – which I think is the better measure of unemployment in the US – is at 14.9%.

Our total Federal debt as of March 7, 2014 is 17,491,871,158,767.47 with a projected growth of our national debt to just under $25 Trillion over the next 10 years. And of course, to achieve this, we’ll have to average a 4.72% GDP growth – a rather optimistic assumption. GDP growth over the last 10 years has averaged under 3%. What we are doing to our children and grandchildren is immoral.

Apparently, there is a shortage of clowns in the United States (no jokes, please.). But that’s probably OK with the 43% of Americans who don’t like clowns. On a more serious note, Most Americans (66%) don’t want a religious freedom law in their state like the one vetoed this week by Arizona Governor Jan Brewer, but 73% support a private photographer’s right to not photograph a same-sex wedding for religious reasons.

Wow. There are over 37,000 people world wide who are worth more than $100M. That number is expected to rise by 25% in the next decade. That’s a lot of wealth concentrated in a few number of people, given that we have over 7billion people on the planet right now.

Finally, constructing the Keystone Pipeline seems to make sense to most Americans. Instead of shipping the oil by rail – which is what we’re doing now – it can be more safely piped to southern refineries underground. An approval by the President is past-due.

Bill English, CEO
Mindsharp

 

Leadership Lessons Part VII – The Lesson of Success

The worst thing that can happen to a person is to succeed before he is ready.
-Dr. Martin Lloyd-Jones

Thus far, we have seen David learn the lesson of being underestimated, the lesson of submission, the lesson of knowing when to risk and the lesson of authenticity. Now, he will learn how to handle public success in a Godly way. When David kills Goliath, he experiences a very public and very significant success. We can learn much from the life of David, so let’s get going. Our text today comes from 1 Sam 17.54 – 18.9:

54David took the Philistine’s head and brought it to Jerusalem; he put the Philistine’s weapons in his own tent. 55 As Saul watched David going out to meet the Philistine, he said to Abner, commander of the army, “Abner, whose son is that young man?” Abner replied, “As surely as you live, Your Majesty, I don’t know.” 56 The king said, “Find out whose son this young man is.” 57 As soon as David returned from killing the Philistine, Abner took him and brought him before Saul, with David still holding the Philistine’s head. 58 “Whose son are you, young man?” Saul asked him. David said, “I am the son of your servant Jesse of Bethlehem.”

18 After David had finished talking with Saul, Jonathan became one in spirit with David, and he loved him as himself. From that day Saul kept David with him and did not let him return home to his family. And Jonathan made a covenant with David because he loved him as himself. Jonathan took off the robe he was wearing and gave it to David, along with his tunic, and even his sword, his bow and his belt. Whatever mission Saul sent him on, David was so successful that Saul gave him a high rank in the army. This pleased all the troops, and Saul’s officers as well. When the men were returning home after David had killed the Philistine, the women came out from all the towns of Israel to meet King Saul with singing and dancing, with joyful songs and with timbrels and lyres. As they danced, they sang:

“Saul has slain his thousands, and David his tens of thousands.”

Saul was very angry; this refrain displeased him greatly. “They have credited David with tens of thousands,” he thought, “but me with only thousands. What more can he get but the kingdom?” And from that time on Saul kept a close eye on David.

David kills Goliath and hangs onto his head – the very sign that he has killed the giant. He takes it to Jerusalem, a fair distance to carry a large head. But he’s understandably proud of his success and carries Goliath’s head as a type of medal.

Saul’s question about David’s lineage is more focused on inquiring about his character and the status of his family’s pedigree than it is about the basic details presented in this text. Saul previously knew about David, but is now learning more about his family and what their connections to the crown, if any, exist.

When David becomes “one with Jonathan”, this is not an indication of homosexuality or even bisexuality, since David clearly had many wives later on:

Sometime after David’s conversation with Saul that concludes chapter 17, Saul’s son Jonathan entered into a covenant with David (v.3). The ambiguous verb “loved” describes the relationship (vv.1, 3). Tom Horner (Jonathan Loved David: Homosexuality in Biblical Times [Philadelphia: Westminster, 1978]) asserts that the relationship between David and Jonathan was homosexual (cf. esp. pp. 20, 26–28, 31–39). But the verb ʾāhēḇ (“love”) is not used elsewhere to express homosexual desire or activity, for which the OT employs yāḏaʿ (“know”), in the sense of “have sex with” (Gen 19:5; Judg 19:22). The latter verb is never used of David’s relationship with Jonathan. Rather, as conveniently summarized by Thompson (“The Significance of the Verb Love” pp. 334–38), “love” has political overtones in diplomatic and commercial contexts. Indeed, “we may suspect that already in 1 Samuel 16:21 [NIV, “Saul liked (David)”] the narrator is preparing us for the later political use of the term” (p. 335). A clear example of the treaty/covenant use of “love” is 1 Kings 5:1, which says that Hiram king of Tyre “had always ‘loved’ David” (appropriately rendered in the NIV as “had always been on friendly terms with David”). To summarize: In vv.1, 3 the narrator probably uses “the ambiguous word love ʾāheḇ because it denoted more than natural affection however deep and genuine this may have been” (ibid., p. 336; cf. also vv.16, 20, 22 [NIV, “like”], 28; 20:17; 2 Sam 1:26). – The Expositor’s Bible Commentary, Frank Gaebelin, Editor, Eerdmans

The act of Jonathan taking off his coat and armor and giving it to David is a non-verbal way of demonstrating that he understands he will not be the next King – and he is giving his “kingship” to David in this act. Jonathan was a great #2, as we’ll see later on.

People always celebrate success and they often don’t care if some in the process are offended or overlooked. Saul is so insecure that he can’t stand it that David is getting more credit than him – even though David clearly demonstrated more courage, skill and leadership than Saul when he killed Goliath. Some believe they should get the glory simply for their position – but the crowds will always follow those who perform. Saul rightly sees that David could take over the kingdom. What Saul never came to understand is that David respects his position so deeply that David will never assert his anointing to be the next king prematurely? Over the next 15 years, David will do everything possible to stay away from Saul while he lives out his natural life. Saul never really “gets it”.

Success has its temptations. For example, when one is successful, he will be tempted to hold on to the power, prestige, money, status, position and so forth that comes with that success. I think this is one of the reasons that people try so hard to be re-elected to Congress: being in the club has its’ perks. Another temptation is to become arrogant: “I’m special……”, or to turn away from God: “I don’t need….”, or to think your success means its’ time to assert yourself outside your calling: “If I can do this, certainly I can…..” Many who become very successful end up disregarding their stewardship obligation to the Lord. They forget what it was like to be poor, so they use the resources God has given them in unwise and ungodly ways.

Very few can handle success. Even when it comes to spiritual gifts, many abuse them. Unfortunately, we wrongly view these gifts through American lens of status – “If s/he has this gift, s/he must be more spiritual…” God’s view is different: gifts are given to accomplish certain tasks – and those gifts are no more or less special than the other gifts that others have. And if you’re a teacher – like me – just remember that the teaching gift is the only gift that will incur a stricter judgment. Some gifts require one to be emptied of self, pride and have a fully yielded heart before you can begin to exercise them.

Godly leadership requires the ability to handle success in a Godly way. In our story, Saul is a picture of one who was given success and lost it all whereas David is a picture of one who was given success and stayed with God. Learning the Lesson of Success Means:

  • Holding the sources of success with an open hand
  • Realizing success is an entrustment: do not measure by American status standards
  • Allowing God to humble you through your success – no gloating
  • Staying focused on your calling

In most people’s lives, there will be times when you will experience success: material, spiritual, relational. It is incumbent on you to:

  • Stay humble
  • Stay connected to God
  • Stay the course
  • Enjoy God’s blessing!

Bill English, CEO
Mindsharp

2015 Budget from the President

President Obama has released his budget for 2015. As with all budgets in the last 40+ years, we can count on Congress to declare it “dead on arrival”. The budget claims that after “5 years of grit and determined effort, the United States is better positioned for the 21st Century than any other nation on Earth.” That’s tantamount to saying that we’re the best looking horse in the glue factory.

Here are the broad outlines of his budget:

  • $3.9 Trillion on spending – up from $3.6B for 2014 (For an agency by agency review, see this Washington Post article.)
  • $564 Billion in deficits
  • Projection that deficits will be in the $500B range for the next 10 years
  • By 2024, projected growth of the debt would be up to $25 Trillion from $17T today
  • GDP will grow at an average rate of 4.72% with our projected GDP being over $27T in 2024. (Nominal GDP is the value of production at current market prices, measured in millions of US Dollars. Real GDP is the value of production using a given base year prices, measured in millions of US Dollars.)

I think their projections of a 4.72% of GDP average growth over the next 10 years is overly optimistic. I believe our debt, increased regulations and imposed health care taxes and mandates is a growing drag on our economy.

Looking back from 2003 to 2013 (an 11 year period), exact comparisons are difficult to do on an agency-by-agency basis because of the way agencies have been broken up or combined. But overall spending, according to this same gpo.gov site was $2.157T in 2003. In 1996, overall spending was only $1.560T. Since 2003, our spending had skyrocketed to a total of $3.455T. That’s an increase of 60% in a 10 year period and an increase of 221% in an 18 year period. This spending cannot be blamed on one party or the other – it has occurred under Presidents of both parties and Congresses controlled – at one time or another – by both parties. Frankly, I lay the responsibility at the feet of the American people – us. We have voted for these spending levels via our elected representatives.

Just the sheer fact that President Obama sends a budget to Congress with a $500B+ deficit tells me that he’s really not serious about balancing our budget and stopping the bleeding. The fact that there will be little outcry will betray our comfort with these deficit levels. We are our own worst enemy. Conventional wisdom is that our growing debt isn’t a real problem since as a percent of GDP, the deficits are not increasing that much. My take: the sheer volume of raw dollars owed will one day catch up with us, regardless of % ratio of overall deficits to GDP.  It’s the total debt that is my concern.

I realize I’m in the minority in my clarion call for our government to stop deficit spending. From where I sit, our goal should not be to be the best economy in the world when compared to other economies. We should strive to be the best economy when compared to ourselves and common-sense fiscal policies, such as ensuring we don’t spend more than what we take in.

Just because we’re the best looking horse in the glue factory doesn’t mean the fact that we’re in the glue factory can be ignored. I hope someone, someday, from somewhere, rises up to lead us to a land of financial independence and solvency. Otherwise, it’s just a matter of time before we’re made into glue.

Bill English, CEO
Mindsharp

 

Friday Five

Here are my Friday Five for February 28, 2014.

In his annual letter to shareholders, billionaire Warren Buffet warned of the coming (and long-term) crisis that exists in the state and local pension systems (see representative reports on Chicago, Pittsburgh and Torrence, CA – one can find many stories like this without much effort in the internet search engines). In his letter, he writes “Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford. Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made that conflicted with a willingness to fund them.”

While not good news, this isn’t the entire story. Our society is, in my estimation, addicted to debt. Back in 2012, the National Center for Public Policy released its’ report indicating that unfunded promises represent $84 Trillion in additional commitments: “Overall, the fiscal imbalance is equal to 5.7 percent of the present value of all future GDP, which translates into about 31 percent of the long run federal revenue estimate,” the report states. “Thus federal revenues would have to rise immediately and permanently to 24.1 percent of GDP to cover the fiscal imbalance.” A tax rate of 24% of GDP would make it more difficult for the economy to grow, which would mean that under current policy, more government spending through social and unemployment programs would rise, increasing the debt and requiring higher taxes. It’s a fiscal death spiral.

We must stop the bleeding. The longer we go incurring more and more debt, the more likely it is that our entire republic is put at risk. No one in either part is doing anything serious about this frog-in-the-frying-pan problem. The President doesn’t even believe we have a debt problem and the Democrats are openly comfortable with deficit rates in the $600B+ range each year. The Republicans give only lip-service to reforming our tax system, preferring to put off until after the 2014 elections any introduction of legislation that would address these problems. And if they win, they will put it off again out of political fear for losing the 2016 Presidential race – at least that’s my prediction. I have little faith that either party will act in the best interests of the nation and say “No” to their constituents. None of them want to lose elections and lose power. It seems that being in power is more important to both parties than using that power to do good, but very difficult things for the nation.

The only real solution is for us as a nation to look at ourselves in the mirror and realize that we are our own worst enemy: We can’t have it all. We need to say “No” to ourselves and stop relying on the Federal government to provide a public version of most services in our society. There simply isn’t enough money.

On a very different note (no pun intended), I must admit that I like this song by Pharrell Williams. It’s catchy and I get it out of my head. And his web site is something I’ve not seen before. Take some time to click through it and see how the different people dance and have fun with the song. Pretty creative. J

Thirdly, the EPA report on greenhouse gas emissions shows again this year that cows are just farting too much. Apparently, the methane they emit is 23-times more potent than carbon dioxide as a greenhouse gas. So, the answer is obvious – eat more beef!

The Fifth Amendment ensures that the government can’t just jail us for an accused crime without proving that we have committed a crime. Does this apply to terrorists who are US Citizens? The fact that the Obama administration is divided on this issue – and has been since 2009 when he took office – is troubling. But our rights can be undermined by local police department bizarre notions as well. Consider this man who blew a 0.0 and still was arriested and forced to spend a night in jail.

When it comes to unemployment benefits, North Carolina is a state to look at. They ended their unemployment benefits six months before the Federal government would have done so. What happened was somewhat predictable. A number of people just quit looking for jobs and most others took jobs for which they were over-skilled. Hence, the latter group is under-employed. Overall, what it did was revealing – some were getting benefits when they were probably not working that hard to find new work. Others were looking for work and once the benefits ended, they took whatever work they could. I don’t envy anyone who is working in a job they do not want and are clearly over-qualified for. Still, it is better, overall, to be working. Now, I understand that finding a new job is a full-time job. I get that. Hopefully, those who are underemployed will find work commensurate with their skills.

Bill English, CEO
Mindsharp

 

 

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