AMMO FOR THE HOLIDAYS!
     As we approach the holiday dinners and relatives staying two days past the "fail-safe-point," I thought I would give you a small smorgasbord of sensible facts and issue updates for you to invoke when Cousin Eddie's arguments clearly commit violence against common sense.
     Go for the jugular early and show them how cutting taxes actually increases the country's tax revenue.  This drives them crazy!  The Congressional Budget Office reports that through the first 7 months of this year, tax revenues rose 2% TO $2.041 trillion even though the corporate tax rate was dropped 14%.
     Of course, Aunt Ridley from Portland will say, "This just helps the rich!"  Calmly pour a little more shiraz and inform the table that the Census Bureau reported that real median household income (amount earned by the very middle) recently hit $65,084 in 2019 dollars.  That's the highest level ever and a gain of $4,144 (6.8%) since the current Administration took office and passed the tax cuts.  For comparison, during the previous Administration's nearly 8 years, the median household income rose just under $1,000.  How can this be possible?
     When Uncle Hunter, or Professor Hunter as he prefers, pulls out his Yale sweater, remind the living room that student-loan debt has now hit $1.5 trillion and college prices keep going up simply because the government guarantees the debt to a third party (the university) without the third party having any incentive to cut costs, increase productivity or show an economic benefit for the expense. [Similar to the states' control of Medicaid enrollment while the Feds actually write the checks].  Explain how this all violates Econ 101, if they still teach that at Yale, but that Secretary Betsy DeVos has recently updated CollegeScorecard.ed.gov.  The site will now provide a little transparency and capitalism to the equation y giving prospective students information on how much their school's graduates are earning in their desired field, and how that equates to monthly pay along with the student loan payments.  Knowledge is power.  A good step by Betsy in the right direction.  And, don't let Elizabeth take our Charter Schools!
     Slide some extra cash to the young crowd to ensure they choose Uber and Lyft over drinking and driving this season.  But, warn them that California has now ruled these capitalist drivers can no longer be independent contractors in charge of their own destiny - along with your DoorDash girlfriend or the Amazon buddy who puts together the delivered furniture.  California wants more employment taxes from these overachievers, along with more workers comp and unemployment insurance payments.  Unions and scumbag plaintiff attorneys are behind this socialist campaign, as 5,730 wage-and-hour law complaints were filed last year in California alone.  These ingenious businesses will be gone overnight if the socialism spreads from the left coast and the National's ballpark.  Get up the courage to ask DoorDash Girl to marry you before you never see her again!
     When the family plans the Memorial Day trip to your brother-in-law's beach house in the Outer Banks of North Carolina, respectfully decline on the principle that others' tax dollars rebuilt this house after the last hurricane.  Have the integrity to not speak out of both sides of your mouth, and provide your family strong leadership-by-example.  Explain the situation with Loyola University Professor Walter Block's advice.  "The best policy is the middle one - laissez faire capitalism.  Treat people as adults - allow them to take whatever flooding risks they choose, but on their own nickel.  They should be free to build wherever they want, and to indemnify themselves against risk by buying insurance on the open market.  But they should not receive a dime of taxpayers' money for rebuilding."  We toast to that.
     Finally, honor Uncle Joe and Cousin Linda's, Korean War and Vietnam veterans respectively, requests to turn off the NFL and NBA games on the flat screen.  Uncle Joe gave up the NFL after the final "taking a knee" scandal, and Cousin Linda canceled her NBA Live subscription after the Houston Rockets-LeBron fiasco of not supporting the courageous Hong Kong citizens.
     But, give them a new idea.  Watch "Field of Dreams," and then make your proposal to let Pete Rose finally enter the Hall of Fame.  Rally their emotions for the game of a simpler time.  Charlie Hustle sprinting to first base even on a walk, playing hurt, knockdowns and spitballs, and sliding into bases hard.  Rose won 3 batting crowns, 3 World Series Championships, and had the most hits ever.  Ever.  As you watch "Shoeless Joe" Jackson hit balls with Kevin Costner, think about what Roger Lowenstein wrote about Rose.  "The sport misses the authenticity of his voice, and the Hall of Fame - barred to him on account of his banishment - can hardly be complete absent such an immense talent.  After 30 years, baseball should think about bringing him home." [Full disclosure, this author kept a poster of Pete Rose over his bed for 18 years in that Dayton, Ohio rancher and always wore number 14 in every little league contest].
     Happy Thanksgiving my friends.  I wish you and your families incredible happiness and prosperity.

"I didn't have no education." - Pete Rose, famous for his double negatives

** Thank you to the WSJ, Forbes and Fortune for the above quotes and statistics.

** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

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NOT ENOUGH INCOME INEQUALITY?
     Income inequality is another falsehood currently being pushed by politicians, and will be a household term for everyone by election day 2020.  Therefore, in our JAM VIEWS mission, let's understand the truth of income distribution today in the United States.
     As you are tired of hearing me chant, we must deal with the facts.  We must understand that all news is tainted, if not clearly false, and the great majority of "experts" truly are not, as this blog continually uncovers.  Once you understand the math, then you are permitted to scream for more redistribution, or to scream to take back more of your own money.  That is the great freedom of being an American.  All JAM VIEWS continually asks of us is to, first, understand the facts so that we may form an educated opinion for ourselves - not from someone else's sound bite.
     And another reminder, it is much more fun to hang around people with views much different than our own.  Vanilla is boring, and lack of growth is boring.  Seek out diversity in your friendships and associates.  Otherwise, you become that guy at the water cooler whom everyone already knows their opinion on everything.  Don't be predictable!
     Former Senator Phil Gramm and former Assistant Commissioner of the Bureau of Labor Statistics, John Early, have released another report detailing the true economic distributions in the U.S., as of the end of 2017.  This week I thought I would attempt to summarize the current state of affairs from their report in order that you may be armed with some simple facts when Uncle Charlie and Aunt Vivian fly in from California for Thanksgiving dinner.
     The first roadblock for Americans attempting to understand income inequality is that the Administrative State's Census Bureau chooses to produce irrelevant household income numbers.  The Census Bureau claims that the top quintile (20% of earning households) has 17 times as much income as the bottom quintile, but they do not distribute the net number that you as a U.S. citizen are left with to spend however you see fit.  The Census Bureau does not calculate in the taxes you have to pay before you get your money, and it does not calculate in the redistribution public transfer payments to American households.
     For example, in the top 20% the numbers do not factor in that one-third of the income is first taken by the government in federal, state and local taxes, as this top 20% pays nearly 70% of all taxes for our country.  Wow, thank you for your service!  Also, the Census Bureau, inexplicably, fails to count the $1.9 trillion a year taken from higher quintiles and given to lower quintiles.  Again, thank you for your service!
     So you know, there are 95 federal programs, such as Medicaid and food stamps, along with dozens of state and local programs with which the Administrative State takes and gives.  40% of federal spending is allocated to these transfers, and this income provides nearly 90% of the bottom 20%'s resources, as well as more than 50% of the next 20%'s resources.  Still with me?
     At the beginning, there is actually a 60-1 disparity as the top 20% earns an average of $295,000, while the bottom 20% earns $4,900.  Then the bottom 20% receives $48,000 in transfer payments and pays out almost $3,000 in mostly sales taxes, ending with approximately $50,000 in net resources.  At the same time, the top 20% pays out an average of $109,000 in taxes leaving approximately $190,000 in net resources to spend as they see fit:  A true Income Inequality Ratio of 3.8 to 1.
     Interestingly, the average middle-income household receives nearly $18,000 in government transfers and pays the same $18,000 in taxes.  Also, the lower second 20% earns 500% more income than the lowest 20%, but nets only 9% more to spend as they see fit.  Not good.
     The concerning issue, if you recall our Behavioral Economics posts, is that Americans operate in a mostly logical fashion when it comes to work and earnings.  For instance, the anti-poverty spending of the last 50 years has raised most households into the middle class, yet has tempted many to stop working.  In 1967, 70% of prime working-age adults in the bottom 20% were employed, and now only 36% keep a job.  They are not being irrational, but logical.  I am even curious as to why the next 20%, and even the next 20%, still work.  It really doesn't make much sense.
     Last week, I wrapped up a six-week course teaching inmates job hunting skills and interview techniques.  As I sat down with each individual to complete their resume, a consistent answer was, "This doesn't matter. I'm just going to get a check."  I told them that I couldn't really argue with them.  "That sounds logical."
     Maybe you think 3.8 to 1 is too much income inequality in our country, or maybe you believe this is too much income equality which is killing economic incentive and mobility, but at least now you have the truth.  Vote as you see fit.  Have a great week!

"Choose a job that you love, and you will never have to work a day in your life."  -  Confucius

** Thank you to WSJ, Forbes and Fortune for the above statistics, and most especially Senator Gramm and Mr. Early for their work.

** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

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ANTITRUST SMOKE SCREEN
     What is a smoke screen? It's a cover to hide what's really going on behind it.  We can likely label every government economic activity a smoke screen, as the true intentions are never what is sold to the taxpayer, and antitrust actions are simply the latest angle, reborn.  So, let's attempt to understand the truth, not the politics, and be able to understand the intentions behind the smoke screen.
     In more recent years, antitrust initiatives attempted to breakup Microsoft in 2000 when a federal judge ordered it split in two.  Bill Gates fought back aggressively, George W. Bush was elected, and the case was reversed on appeal with Microsoft paying a juicy settlement to the government.  Now with market forces, Microsoft's name is never mentioned as a monopolistic threat.
     In the '70's and '80's the government attempted for thirteen years to break up IBM.  IBM is now irrelevant in the big picture and recently spent a third of its market value to acquire Red Hat, praying that cloud services will save its future.  See a trend here?  See how markets take care of themselves if governments stay out?  And, Microsoft would have given us tremendously more innovation if Bill gates hadn't said, "Okay, if that's what you want, screw it.  I'll be over here trying to save the world with Melinda." [One day read about how the Gates Foundation's world impact, however remarkable, is a mere fraction of the poverty-killing, medicine-creating, economic growth his technology produced, and would have produced].
     Antitrust is the current tool used by liberals to work the masses into a froth to overthrow the King and redistribute the wealth.  Vive la France!  And, it's the tool for conservatives to attack Google's news algorithms and Twitter's bans on political speech.  It is simply the tool, one with, again, little economic credibility.
     The theme should be: Don't spend all of this money, energy, and political will rallying the public against successful companies.  Instead, spend all of this power helping the thousands of small businesses become big also.  Focus on abundance, instead of scarcity.
     Economically, antitrust activity has simply caused more harm than good.  Fortunately, since Robert Bork authored "The Antitrust Paradox" in 1978, most Administrations have focused not on the size of the company, but whether its actions harm consumers.  Antitrust scholar Joshua Wright wrote in 2016, "Economic analysis has more often than not trumped ideological politics for the past 35 years.  Let's keep it that way."  Barak Orbach, University of Arizona law professor and member of the American Antitrust Institute, states, "The energy for antitrust reforms is not in science and facts, but in accounts that can move public emotions."
     So, remember that when Elizabeth Warren publishes her 1,700-word blog post titled "Here's How We Can Break Up Big Tech," and Attorney General William Barr opens Department probes of Google and Apple while handing over Facebook and Amazon to Chairman Joe Simons of the Federal trade Commission (FTC), none of this has anything to do with protecting U.S. consumers and taxpayers.
     These are simply narratives to grab votes and extort huge sums of money from Main Street and Wall Street to give to Washington.  Congress and the Administrative State are deeply troubled that the European Union blackmails Google for $5 billion using the antitrust smoke screen of "unfair searches."  Google pays the $5 billion to keep playing the game.  U.S. politicians scream, "You can't do that to America's successful companies - at least until we get our slice/vig/taste/tax!"  The Federal Reserve and U.S. Treasury props up Wall street with $4 trillion printed out of thin air, and then fines Bank America $17 billion for fraudulent mortgages.  It's all nonsense.  All a scam.  And our job is to, if we choose to keep playing the video game, at least not believe the narratives.
     The latest proposals call for Facebook to spinoff its previous Instagram and WhatsApp acquisitions, and Amazon to spinoff Whole Foods and Zappos.  The FTC claims they have the power to review old mergers and have formed an antitrust task force for this purpose.  What happened to ex post facto?  How is this legal?  Does that matter?
     State attorney generals love a great blackmail - tobacco, opioids, vaping, big tech.  Why don't all of these extorted dollars get returned to taxpayers, whose money it is in the first place?  How can government agencies grab "forfeited" assets and fines and keep them for their own operations and kingdom building?  Are they appropriated the constitutional power to tax?
     In the Swamp, did you know that Attorney General Barr was previously General Counsel at Verizon Communications where he clashed with tech companies over net neutrality which prevented Verizon from charging users higher fees?  Barr also played a key role in reconsolidating the telecomm industry after the court-ordered breakup of AT&T, "thus protecting the Bell companies from the competition Congress intended," according to FCC lawyer Chris Wright.  Later Barr testified against the "grossly anticompetitive" tactics of cable companies who were shutting out the telecoms.  Life is really a James Bond 007 movie in which you truly never know who is working for whom - unless, of course, you follow the money.  Senator Elizabeth Warren, House Antitrust Subcommittee Chair David Cicilline, FTC Chair Joe Simons, New York Attorney General Letitia James, and U.S. Attorney General Barr will play whatever role you need, whatever angle fills your emotions, as long as you keep the dollars flowing.  Vive la France!
     Over 50 people in the Justice Department alone are working on tech antitrust cases.  Instead, give that tremendous amount of money to startup incubators and accelerators.  Makan Delrahim, Head of the Justice Department's Antitrust Division, says more than a third of his current 100-plus open criminal investigations involve the government as the victim who gets the extortion money.  Take the budget for 100 investigations, and instead give it to Chambers of Commerces in Nebraska, Arkansas, and Ohio.  Do good, not harm.
     In 2016, 433,000 businesses were born in the U.S., but 400,000 died.  Help them.  In 2017, .26% of female adults created new businesses, .30% of African-Americans, and .50% of Latinos.  Spend the bulging budget not on fighting dragons, but on helping real people like these entrepreneurs.
       As a JAM VIEWS reader, you of course know the educated answer:  Keep your own tax dollars, unleash laissez faire free-market capitalism, and spend your own money for your own self-interests.  Maybe Microsoft and IBM will thrive, or maybe they won't.  Thousands of other innovations and miracles will be created and thrive.  Half the studies show the bulk of innovation is created inside large companies, while the other half always claim most new technology and services come from small companies.  Pure capitalism gives both.  Put on your face mask, and see through the smoke screens [A shout out to our courageous capitalist brothers in Hong Kong!]

p.s.  A grateful thank you this Veterans Day to our incredible men and women who serve and protect this great republic.  In honor of these heroes, JAM VIEWS asks that we all do everything we can to support our deployed troops and families, fix the Veterans Administration, and stop civilian U.S. attorneys prosecuting soldiers in war zones under constant threat from terrorists - it's a national disgrace.

"He who permits himself to tell a lie once finds it much easier to do it a second and third time, till at length it becomes habitual; he tells a lie without attending to it, and truths without the world believing it."  -  President Thomas Jefferson

** Thank you to the WSJ, Forbes, Fortune and Bloomberg for the above statistics and quotations.


** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

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EXECUTE vs. PLAN (& don't talk to Siri!)
     It's not the thinkers that change the world, but the doers.  You are only aware of the historically-great thinkers who were the ones that also wrote the book, built the organization, and failed at their first 1,000 experiments.  Our companies, schools and playgrounds are filled with brilliant, high-IQ individuals, yet 99.9% never reach their potential because no one ever teaches them how to execute.
     In our investment firm, I often declared, "I can go down the street to William & Mary and hire hundreds of MBA's who can create a financial plan or client service software.  They are a dime-a-dozen.  But, find me the 1% of A-Players who can wake up every morning and go get the money, and we can build an empire!"
     As a CEO, President of Big Brothers Big Sisters, or captain of the sports team, I have always been baffled by the great divergence of output from similarly-situated human beings on our teams.  It is not intelligence.  Is it nature or nurture?  Whatever the answer, we must commit to being the "Just Do It" leader, and we must only recruit these same people for our organizations [see Post, "The Right Type of Diversity: Harvard to Hairdressers"].
     Professor Wyatt Wells wrote what I believe to a be a hilarious article about the strategic planning exercise at Auburn University at Montgomery (AUM).  He recounts the "organizational ritual...took months...at considerable expense."  His observations confirm what all A-Players already know.  The B's and C's spend their weeks creating plans and policy, and telling everyone else what they should do - along with why they, themselves, are constrained from achieving their own ambitious objectives.  Remember, life is too short and precious to be hanging around these people.  Your place is not among them!
     AUM commits to "enhance morale among employees."  Tear that up, enroll your company team in the local Friday night softball league, take them to Harrigan's Pub after, and you will see enhanced morale.
     AUM commits to "enhance a culture of scholars."  Erase that, and become the leader with the most trade licenses and industry accreditations, and be "the smartest one in the room."  Your entire organization will follow and duplicate your achievements without you ever uttering a word of guidance.
     AUM also commits to adopting "national advising best practices standards and diversity learning outcomes."  I must not be bright enough to understand what the hell that one means!  With today's fast pace, 5-year plans are a joke, 3-year plans are a waste of time, and 1-year strategies may be partially accurate [see Post, "Extraordinary Organizations"].  Professor Wells concludes from his experience that "strategic planning, the way it's practiced by most institutions in the U.S., is a fraud...offers incompetent managers a shield...and at its best, it's little more than a public-relations exercise."
     So, how do we not follow the masses, and instead find High-Executioners and build special organizations?:

1.  High-Executioners many times have backgrounds focused on achievement in sports, top academics and development goals, such as Eagle Scout.  The child who committed to practicing fundamentals, who hit the pool before and after school, now as an adult doesn't know any other way than to do whatever it takes to reach their goal.  Remember those kids with wet hair in high school?  Go look them up now.

2.  Massive organization and time management are non-negotiable requirements for High-Executioners, and for anyone they choose to partner with.  They refuse to suffer disorganized underachievers.  They make tomorrow's task list before closing the books on today.  They implement every new technology for efficiency.  If the task list turns red when past due for them, their assistant, or their boss, it drives them crazy!

3.  High-Executioners stand out like a super nova among the masses at work, at the gym, or at the Susan G. Komen Pink Meeting.  Unfortunately, most people that do not produce at the office, don't get involved in their community, and literally just sleepwalk through the day.  All circles of life are interwoven - work, health, relationships, spiritual.  High-Executioners burn it down in all circles.  The work-a-holic excuse is a myth propagated by B's and C's to rationalize their lack of desire to also coach the little league team, or follow a healthy discipline.

     Work everyday to raise your level of execution, and do everything you can to recruit these rare individuals to your mission.  Leave the strategic plans to the B's and C's.  They love that stuff!

p.s.  Section 215 of the Patriotic Act, which authorizes the U.S. intelligence services to access your health records, DNA tests, and conversations on Alexa and Siri, expires or is reauthorized on December 15th.  You likely remember James Clapped, Director of National Intelligence, testifying to Congress that they were NOT collecting the telephone-call metadata, including phone numbers and the time, duration and details of calls and texts of hundreds of millions of Americans - until it was discovered they were.
     According to U.S. Congressman Buck McKeon, "Even after legislation was passed in 2015 to rein in the program, the agencies were ultimately forced to suspend the call-detail-record program last year, when they realized it was collecting far more data than they could handle and was violating even their own expansive view of their authority."  Wow.
     Just giving you the facts.  What you do with them is up to you, High-Executioner.

"Good managers can usually list their goals on a note card and explain how they intend to achieve them on a few sheets of paper."  -  Prof. Wyatt Wells, Auburn University at Montgomery

**  Many thanks to the WSJ, Forbes and Fortune for the above quotes and statistics.

** For more information on Jeff's Books, Blog, and Legal Challenge, please visit www.jeffmartinovich.com.

** To access JAM Views directly please visit jeffreyamartinovich.blogspot.com 

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