BEHAVIORAL ECONOMICS AND NUDGING

     JAM VIEWS regularly attempts to take what politicians and academics claim to be complex and sophisticated economic issues and distill these subjects down to the simplistic, understandable concepts which they truly are.  Or, as my father, Don Martinovich, always professed to me, "Don't bullshit a bullshitter!" (Am I allowed to say that?)
     For our members to run their organizations effectively, to vote intelligently, and to maximize their personal success, we must consistently explain how self-interests and behavioral economics are the entire game.  Nothing else matters.  Save the ridiculous policies that claim everyone will work for the greater good of mankind to the crazies promoting the New Green Deal, or whatever the socialism flavor of the month.  These are the ideas that have failed throughout history.
     Therefore, this week I want to explain behavioral economics a little further, in order that our members have a foundation of these principles to counter cousin Susie's silly opinions on Memorial Day after a few glasses of sangria.
     People will always act in their own self-interests (along with a small, unfortunately small, percentage of time to philanthropic and public causes),  People will not act rationally.  People's filters will generate disparate responses based upon their different lives and experiences.  Behavior economists categorize these issues into Heuristics (making decisions based on "rules of thumb"), Framing (using your filter), and Market Inefficiencies (mis-pricing and irrational trends).
     In 2002, psychologist Daniel Kahneman, whom we have referenced before, was awarded the Nobel Memorial Prize in Economic Sciences for integrating psychology into economic science, and in 2017 economist Richard Thaler was also awarded this honor for "establishing that people are predictably irrational in ways that defy economic theory."  In other words, if we desire to be great business leaders, leaders of humans, we must understand people's feelings and motivations in order to design incentives which point people toward our strategic goals.  Make sense?
     John is only going to spend all weekend on your sales report if he truly understands and believes how it will promote his own career.  The blind-side offensive tackle is only going to train all summer protecting the quarterback if he has deep-down instilled the cause and effects which reward him personally.  Humans, through kinetic energy, will remain on a path until a force acts upon them, and all data prove that positive influences on those self-interests are radically more effective than negative influences (fear and control).
     These positive influences are called "nudges," as formulated in Cybernetics by James Wilk in 1995, and having gained prominence in 2008 in Richard Thaler and Cass Sustein's book, "Nudge: Improving Decisions About Health, Wealth, and Happiness."  These studies refer to influencing behavior without coercion as "libertarian paternalism" and the influencers are named "architects."  A nudge may alter people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives.  To count as a nudge, the intervention must be easy and cheap to avoid.

     Some examples of Nudges are:

1.  Companies which have employees automatically "opted in" to the 401k plan to save for their retirement, as opposed to having to make a phone call.  They may easily make the phone call to "opt out."

2.  Having fruit at eye level and potato chips at the lower level which require the shopper to bend down.

3.  Healthy snacks at the checkout counter instead of candy bars for impulsive purchases.

     Some examples which are not Nudges, but Big Brother decisions (which they believe benefit us):

1.  NYC Mayor Michael Bloomberg banning Big Gulps and trans fats in New York (Krispy Kreme left!).

2.  Philadelphia imposing a large tax on sodas (Eagles fans drove to New Jersey to get Pepsi!).

3.  Health care for all with a single provider (I thought he said we could keep our doctor?!).

     As with all academics, behavioral economists use a thousand terms which over-complicate these theories, but this week we simply want to reiterate that we must design our organizations, and our country, to support free people and free markets.  This is how everyone wins.  Great CEO's incentivize and reward their employees to think like owners, not clock-punchers.  They help their customers truly understand why using their product or service greatly benefits the customer.  Great government leaders, like Ronald Reagan the Great Communicator, help people understand how specific policies benefit their own economic and security interests.  This is all behavioral economics.
     Train yourself to always "put yourself in their shoes."  Don' ask people to stay late, run in the charity 5k, or backup their teammates until you first build a culture and understanding in which they realize how this benefits themselves, and their families.  Don't fall for ridiculous government policies and programs which redistribute people's money or opportunities by force or coercion (IRS).  Support the local business startup which provides fifty new jobs instead of taxing high-income earners to give money to inefficient government programs.
     People are "predictably irrational" and operate on feelings and beliefs, not classic mathematical models of supply and demand.  Great leaders have always understood this.  Economically incentivize everyone, even nudge them if you like, vote for government policies which create economic incentives - not redistributions - and don't worry about cousin Susie's silly opinions.  Nod politely, smile, and refill her sangria.  Have a great week!

On one trip, en route to a conference in Australia, Dr. Elwyn B. Berlekamp was asked by a border-control agent whether he was traveling for work or pleasure.  He replied that he had arranged his life "such that there shall be no distinction between the two."

Many thanks to the WSJ, Forbes, & Fortune 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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HIRE AN ECLECTIC MIX (TRUE DIVERSITY)

     The incessant talk of diversity and identity politics on college campuses, in corporations, and on Sunday news shows always misses the mark.  Diversity, I prefer "eclectic mix," instead of diluting standards and redistributing merit-based slots, can add tremendous value to an organization for all the right reasons.
     But, we must shift our perceptions in business to understand what truly makes people different.  In a free-market capitalistic organization we are not focusing on your feelings, who wronged you in the past, or even how terrible was your childhood.  We are focusing on "what have you done for me lately" and "what can you possibly do for me in the future."
     True free-marketers are the most color-blind, non-discriminating, accepting citizens in our free society.  Check out all of the successful companies, not just the loud activist corporations which get all the headlines.  To paraphrase Edmund Burke, we don't see the thousands of great cattle in the field because we are listening to the half a dozen loud grasshoppers under a fern.
     When I hire my strong, eclectic mixes, I first hire strong individuals, the parts, in order to ensure the whole is greater than the sum of its parts.  I focus on coalescing a group of strong individual overachievers with diversity of ideas, upbringings, experiences, personalities, and educations:

1.  First, I hire "Chips."  Chips come from modest means, they earned scholarships based on merit, they worked for spending money throughout school, they have strong drives to succeed and achieve independence, they have a mature attitude towards work and responsibility, and they understand that hard work will achieve rewards.  They have a "chip" on their shoulder against all the others who had things handed to them.

2.  Next, I sprinkle in a couple "Silver Spoons."  Silver Spoons come from good pedigree, they have experiences and exposure many of us were not fortunate to enjoy, they have expanded though somewhat irrelevant knowledge and skill sets, they come from good schools (hopefully with test scores not inflated by Laurie), and they expect to make high incomes.  Only sprinkle in a couple of Silver Spoons.

3.  Third, I add the "Hairdressers."  The genesis of this term was the hiring of my great executive assistant, Wendy, who was previously the receptionist at Style By Design.  Her great example later prompted me to advise others that "I hire from Harvard and the hairdressers, and the hairdressers are more successful!"  Hairdressers do not arrive with the formal education or curriculum vitaes, but they possess superior drives and acknowledgments of their opportunities.  They are intelligent and learn new skills quickly, they are clean slates open to learn, and they will overachieve in whatever role you select as long as you provide good mentorship.

4.  "Dreamers" and "Realists."  We must always balance our organization with Dreamers and Realists.  I, as the Dreamer CEO, had my incredible COO, Kevin, to reel me back in and to roll up his sleeves to handle the "blocking and tackling."  Dreamers drive the organization forward and achieve success that others thought was not possible, but are bored with the details (Musk).  Realists ensure the numbers work out correctly and operations keep up with sales (Buffet).  Dreamers climb after Big Hairy Audacious Goals (BHAG's), while Realists make sure we also dot our "i's" and cross our "t's."

5.  Finally, all overachieving organizations need "Sporters."  Sporters, obviously, have competitive college or professional sports backgrounds.  They understand the incredible amount of hard work and preparation required to be #1.  The great Hoosiers Basketball Coach Bobby Knight always notes that lots of people have the determination to win, but that a very rare few have the determination day in and day out to put in the preparation necessary to win.  Sporters understand this.  They have also experienced a great deal of failure, been in the arena, so they know how to shake it off and find another path to victory.

     These are the elements necessary for the overachieving, A-Player culture of success.  You need to learn how to spot them, recruit them to your mission, and coalesce their diversity into an unstoppable machine.  Throw away the personality tests, the Myers-Briggs and all the rest, as this is an industry built to sustain itself.  It's an incredible waste of time, and terribly ineffective when compared to the skills of a wise, perceptive leader. (Client surveys are also a wasteful industry unto itself, but we'll cover that another day).
     This is the diversity on which you should focus, not the noise in the media every day.  For a great summation of what all is wrong about this topic, I recommend you read "The Diversity Delusion: How Race and Gender Pandering Corrupt the University and Undermine Our Culture" by Heather Mac Donald, a fellow at the Manhattan Institute.  From this book I wanted to include some notes about the monstrous "diversity bureaucracy" in place at Yale University today, to include the outrageous number of devoted diversity personnel, but it is so bizarre that I thought you'd never believe me.  Please don't let your children go to Yale.
     Today, think about how you can maximize true diversity and start recruiting your Chips, Silver Spoons, Hairdressers, Dreamers, Realists, and Sporters.  Your organizations will be stronger than you had ever imagined.  Have a great week!

"For the strength of the pack is the wolf, and the strength of the wolf is the pack."  -  Rudyard Kipling, The Jungle Book

** This Post contains excerpts from Jeff's upcoming book "Building Special Companies"  Ash Press, 2020 Release.

** 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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CAPITALISM NEEDS STRONG PUBLIC EDUCATION

     JAM Views periodically stresses the paramount importance of strong public education, and specifically economic education, for building and protecting capitalistic-democratic societies.  Without strong education systems, the elites and the entrenched government authoritarians always rule the bourgeoisie.  Throughout history, control of education and the money supply have been the two essential components for ensuring the haves remain the haves and the have nots do not get an opportunity to rise through the caste system.
     In the United States we are fortunate to live in one of the most free societies on Earth, but we still allow entrenched socialistic norms to control our pursuit of education.  Let's address a few recent events:

1.  Jason Riley, who writes the Upward Mobility column, frets that all of the public school's recent progress and reforms have lost much of their steam because "the same progressives who obsess over inequality and statistical disparities also fume at education reforms that have helped narrow learning gaps and thus led to better life outcomes for underprivileged groups in general."  New York City's Mayor, Commissar Bill de Blasio, wants the NYC top-ranked public schools to now replace their merit-based entrance exams with a racial quota system.  Why?  Two simple answers:

   a) Black and Hispanic students from the city's charter schools are admitted to the top high schools at twice the rate as their counterparts from other city public schools, and

   b) Asian-American students are awarded more than 50% of the slots even though they comprise only 16% of the city's public school students.

     Charter schools are wildly successful.  Don't let the legacy self-interests try to convince you otherwise.  Yet, the Commissar rabidly opposes them, because his top political campaign funders, teachers unions, oppose them. (How come all of the JAM Views Posts expose that everything is always, only, about the money?).  It's as simple as that, and it is a crime beyond all crimes.  We allow the country to keep the poor and mass of the middle class virtually uneducated in order to protect the aristocracy, with it all disguised as helping the underprivileged.  There is no greater crime in America.
     I have personally lived closely for nearly six years with men of little to no education.  There is no chance for them to rise and compete with the elites.  All programs, speeches, and billons of dollars in funding mean nothing for them now, because there was no strong education at the beginning.  Instead of stopping charter schools and merit-based testing, we need to multiply these schools and ideologies onto every street corner in America.  Seth Andrew, founder of Democracy Prep, stated it best.  "If the city had more high-performing charter schools, the specialized schools would be dramatically more diverse."  Sadly, just in NYC the charter-school wait list now exceeds 50,000 children.  The consumer always knows the truth.  Econ 101.
   
2.  A JAM Views reader from California commented earlier on our Post about the Asian-American discrimination suit against Harvard University, questioning, "Why do you support the Asian-Americans so much?"  I found that to be quite an interesting observation, as I actually don't know many Asian-Americans.  But, I certainly would like to know more, because I believe our reader simply mislabeled what I am attempting to promote.  What JAM Views "supports so much" is merit-based systems, equality of opportunities instead of outcomes, and outsized rewards for those who give outsized efforts.
     Kay Hymowitz reported in the City Journal that the great majority of these NYC Asian students come from a low-income neighborhood in Brooklyn where Chinese immigrant parents "have crammed themselves into dorm-like quarters, working brutally long hours waiting tables, washing dishes, and cleaning hotel rooms."  Instead of using this life as an excuse, "Asian kids read more books, watch less television, and study longer.  In poorer families, money goes toward test-prep, instead of $200 sneakers."  This is the true American Dream.  The Commissar has it all backwards.

3.  Finally, I want to highlight a significant, positive step forward in balancing the scales of opportunity.  Anne Tergesen has written, "States are now turning to financial-literacy programs to educate teens before they form bad spending and payment habits, hoping to save taxpayers money over the long term by reducing public assistance, including Medicaid.  Nineteen states have now implemented financial literacy requirements before students receive their high school diploma.  They must be JAM Views members!
     Of course, many academics are protesting these requirements for taking away time from other studies.  Don't they understand that this is the most important study?  Without it, most of the rest will be meaningless!  If you have no job, nor home, nor savings, you will not likely be attending Madame Butterfly at the Met.  Owen Cole, a high school senior in Kentucky who also brings home $600 a month from Chick-fil-A, decided after taking the courses to attend a local community college for two years before transferring to a four-year state university in order to avoid a heavy load of student loans.  He said, "After finding out the costs, I knew the extra spending might hurt me later in life."  We should all listen more to Owen.
   
     Education is everything.  Financial education is the most important.  Anyone who doesn't believe this is merely supported directly, or indirectly, by someone who does.

"War is an ugly thing, but not the ugliest of things.  The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse.  The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself."  -  John Stuart Mill

* Many thanks to the WSJ, Forbes, & Fortune 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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WINTER IS COMING

     Too much debt eventually gets us all: personally, corporately, and nationally.  I have made this mistake many, many times.  For example, in 2010, amidst the regulator backlash following the Financial Crisis, I spent our cash and debt on acquiring financial practices from Merrill Lynch, UBS, and Morgan Stanley.  Taking advantage of the market dislocation, I was able to provide our MICG shareholders a $4 increase in equity value for every $1 spent on acquisitions.
     But, I didn't keep enough "powder dry" for our own Black Swan, which by definition I never saw coming.  If I had saved $10 million in the war chest, I could have written a large "settlement" check to the government regulators and had them move onto the next target.  Instead, I demanded arbitration to defend our people, and a terrible spiral, cyclone, ensued.  I should have saved the money.
     The United States is finally bumping up against the wall of too much debt, and extreme consequences are on the way unless radical changes to entitlement spending are enacted quickly (which isn't going to happen in this environment where everyone has lost their minds).  So, let's first clarify for our JAM Views members the difference between debt and deficit.  The talking heads interchange these terms all day long, and this confuses most observers and obfuscates the dire station we are in.
     The DEFICIT is the yearly amount we are dipping into our credit line (we have no savings) to pay our current bills.  This is your Wells Fargo overdraft for small items, or credit line secured by the house for the big items (the country's credit line is secured by your future life wages and the anticipated taxes on those wages = "the full faith and credit of the United States").  The last balanced budget was under Bill Clinton, so we have been dipping into the line ever since, up to the tune of $900 billion just this year!
     The NATIONAL DEBT is the total mortgage, to which the annual deficits keep increasing the balance, or which is also increased in large chunks by the Federal Reserve printing more money to fund the Iraq Wars, or when the Obama Administration bailed out the banks with trillions of newly printed dollars. (All of this printing eventually, always, creates significant inflation, but we will cover that another day).  The U.S. now owes $22 Trillion in Treasury debt (the country's mortgage), with the majority of principal due to bondholders over the next 8 years, and with $6.5 trillion owned by China, Japan, and Saudi Arabia.  Also, don't forget that the true national debt is over $70 trillion once we include our unfunded liabilities (the commitments we have made without saving the money to cover).
     Now, debt is only a problem in relation to revenue; with our household, our company or our country.  Unfortunately, our national debt has ballooned to 80% of GDP (revenue) and in the next few years will equal 100%.  Very, very soon, with this tenuous balance sheet, America's creditors (buyers of U.S. Government bonds - home and abroad) are going to demand much higher interest rates due to risk of default, "cram down" or other political options. (Don't believe it will never happen, as we have done it multiple times before, and President Trump has mentioned these options more than once).
     The Perfect Storm current possibility, or probability, comes from the fact that after the 2008 Financial Crisis, the Obama Administration decided to use monetary stimulus (lower interest rates and printing money) instead of fiscal stimulus (lower taxes and reduced regulations).  Therefore, instead of reducing the mortgage-bank debt, we greatly increased and redistributed the debt to the U.S. Treasury, corporations, and personal consumers.  We piled on more and more debt to solve a debt crisis; and the world followed us.
     Over the past 10 years, total global debt (sovereign, corporate, household) has risen 75%.  Countries owe $60 trillion, and corporations owe $66 trillion, with McKinsey reporting that 40% of U.S. companies are rated only one notch above "junk bond" rating or lower!  Pause for effect.  The Bank for International Settlements estimates that 10% of long-term companies in the developed world are now "Zombie Companies," meaning earnings before interest and taxes don't even cover the interest expenses.  They are just sucking in more capital to survive. (Lyft IPO?).
     Why do you think everyone in Washington calls for a public execution of the Federal Reserve Chairman whenever he now mentions raising interest rates?  A 1% increase in rates will be disastrous on this huge debt load.  These higher interest payments will crowd out business investments and the nation's growth rate will stall; which in turn will mean less tax revenue, lower household incomes and a higher debt to GDP ratio, and the cycle, or cyclone, will feed upon itself.
     The only two answers, again, are to increase growth (pro business) and to actually reduce entitlement spending (Medicare, Medicaid, & Social Security).  Don't follow the talking head's misdirection about defense and discretionary spending.  Those numbers are down in the noise and at historical lows.  At current defense budgets of only 3.1%, we have already given up the world to the Chinese.
     So, which politician on TV lately has the guts, or the brains, to raise the social security full benefits age to 70, and then index it to increasing life expectancies?  Stopping the growth of entitlements is the only answer, only answer; even strong growth cannot eclipse this tidal wave.  As educated JAM Views members, we would be extremely naive to believe a politician could pull this off in today's environment, so the prudent decision would be to plan for the more likely scenario.
     Remember, in investing, always do opposite what feels good at the time, and always do opposite what everyone else at the cocktail party is doing.

"The race to zero fees and zero advice is the next scheme to gather and control capital, and people, and is the unfortunate result of an industry which forgot that 'price is only a concern when value is in question.'" -  Bob Vukovich, Just One More

* Many thanks to the WSJ, Forbes, & Fortune 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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FREE MARKETS REQUIRE TRANSPARENCY, FROM EVERYONE

     The New York Stock Exchange, the NASDAQ, and the rest of the market exchanges employ Market Makers, humans or computers, which openly list all bids and asks, all offers to buy and sell a particular security.  The law demands "best execution" which requires a trader to accept the highest offer, in other words to ensure the end client gets the best and most fair result available in the market place.  This requires complete transparency.  Otherwise, Goldman Sachs or J.P. Morgan could sell their own positions to the highest bidder while executing their client's trade at a lower price which may also be available (and we all know they would never do that).
     Capitalism requires sunlight.  This is why our country doesn't like the Dark Pools in which Goldman and Morgan secretly swap stocks and bonds, nor are the citizens comfortable with the Dark Web which possibly protects criminal transactions.  But, did you know the U.S. Government demands secrecy when it reaches an economic or even criminal settlement with a U.S. citizen?  They say they don't, but let me explain how this works, and show you how this secrecy operating in the shadows impedes capitalism, free markets, and democracy.
      Two examples today:  (1) For over 50 years, the Securities and Exchange Commission (SEC) has required citizens to sign "gag orders" as part of the final case settlement.  Ninety-eight-percent of cases are concluded with settlements, because of the extreme financial and criminal threats which hang over the citizen's head like a sword of Damocles if they take the case to trial. (Note: The government maintains 98% conviction rates by implementing such extreme penalties for going to trial, up to 10-times, to dissuade citizens from forcing the government to bear the burden of proof, and to stop the defense's "side of the story" from being heard publicly.  If only 1-2% more of defendants actually defended themselves at trial, the justice system would come to a screeching halt due to the incredible volume of arrests and indictments served daily in the United States), and (2) When a U.S. Federal Judge has been found to have egregiously violated the rights of a U.S. citizen, as determined by the judge's own peers and with corrective action taken, the Final Order contains no names or identifying elements, only a long number-code for obfuscation.  A Confidentiality Provision, with the threat of criminal prosecution and imprisonment, hangs over the head of any U.S. citizen who reveals the judge's name, the very judge who is a public servant paid by U.S. tax dollars.
     (1) Recently the Cato Institute has sued the SEC claiming the gag orders violate the First Amendment.  This think tank, whose name is inspired by Cato's Letters in 18th century England, works for individual liberty, limited government, free markets and peace.  This organization is suing to be able to publish a book written by "Mr. X" who "tells the story of how he was the victim of egregious government overreach at the hands of overzealous officials: how he'd personally done nothing wrong, yet the government leveraged the threat of crippling fines and the prospect of years of costly litigation to extract a settlement from him where he ultimately admitted no wrongdoing."
     The Cato press release states, "The result is a system where the press and the public only hear one side of the story: The SEC issues press releases detailing its allegations at the BEGINNING of an enforcement action, and then it enters into settlements in which the accused is forced to promise never to dispute any of those allegations in public."  Cato's Vice President for Criminal Justice, Clark Neily, states, "The SEC's policy of demanding lifetime gag orders as a condition of settlement flouts the First Amendment and prevents publishers like the Cato Institute from educating the public about the true nature and behavior of government."
     (2) The recent misconduct claims against well-known Ninth Circuit Federal Judge Alex Kozinski, which led to his resignation, have re-ignited the calls for court transparency, disclosure and accountability for misconduct claims against federal judges.  U.S. Supreme Court Justice John G. Roberts, Jr. has proposed revamping the disciplinary system in order to promote "independent investigations and greater disclosure to enhance public confidence in the courts."
     "Transparency should be the default," said Gabe Roth, Executive Director of Fix the Court.  "Neither a judge's written response to a complaint nor any disciplinary action should remain private."  Charles Geyh, a legal-ethics professor at Indiana University told a panel of 10 judges that the process in which judges discipline each other is "particularly problematic and gives judges too much discretion to look the other way."  He concluded with, "The system should be about promoting public confidence" rather than "self-protection."
     JAM Views members must understand that pure markets demand transparency, provided by competition, not technocrats.  We must also demand transparency from our government, or what then separates us from Russia, from China?  Tom Hanks said it best in "Bridge of Spies" in response to the CIA agent demanding, "We need to know.  Don't go Boy Scout on me.  We don't have a rule book here."
     Hanks, protecting his client, responded, "I'm Irish, you're German, but what makes us both Americans?  Just one thing, one, the rule book.  We call it the Constitution, and we agree to those rules.  It's what makes us Americans.  It's all that makes us American, so don't tell me there's no rule book...and quit smiling at me you son of a bitch."
     This week may you operate in the sunlight and steer clear of the shadows.

"There's no way to rule innocent men.  The only power any government has is the power to crack down on criminals.  Well, when there aren't enough criminals, one 'makes' them.  One declares so many things to be a crime that it becomes impossible for men to live without breaking laws."  -  Ayn Rand, Atlas Shrugged


* Many thanks to the WSJ, Forbes, & Fortune 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 

* SUBSCRIBE TO JAM VIEWS

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 SCHADENFREUDE

     Schadenfreude: n\ 'sha-d'h-Froi-da.  Enjoyment obtained from the trouble of others.  Interesting.  H.L. Mencken defined Puritanism as the haunting fear that someone, somewhere, may be happy.  Andy Kessler, investor, spins this Puritanism definition to now be "the haunting fear that someone, somewhere, may be successful.  Finally, do you remember the old joke about the Russian who isn't happy that he and his neighbor each have a cow?  He isn't truly happy until his neighbor's cow dies.
     Why can't the socialists let others be successful?  Don't they understand that someone has to be the adult, that someone needs to make the money for them to redistribute?  Apparently they do not read JAM Views, or they would understand that governments have no money; they only take from the producers and give to the looters.
     So, now the socialists want to break up the successful companies, but at the same time they want the government to provide a Universal Income to every citizen.  They are too uneducated to understand that these two objectives are mutually exclusive.
     Columbia law professor Tim Wu recently stated, "We've let Facebook have their ride, they've made their money and they've been very successful" but it's time to "break things up a little bit."  First of all, "he" and his academics haven't "let" Facebook do anything.  Doesn't this ring of the previous Administration's proclamations that a rugged individualist never built anything, only the government can do this?
     The collectivists now want Facebook to divest of Instagram and WhatsApp, Amazon to sell whole Foods, Google to get rid of DoubleClick, and Apple to spin off the App Store.  This is no different than calls years ago to stop IBM and GE.  Collectivists don't understand that innovation and free markets take care of rebalancing the equation, moving towards equilibrium naturally.  Soon, great innovations in a multitude of smaller companies will make most of the above names irrelevant, just as IBM and GE are today.
     But, in the interim stage, Facebook, Google, Amazon, Apple, Microsoft and Samsung are spending $85 billion per year on research and development, which will multiply exponentially into products, services, and thousands of other startups which we cannot even envision today.  Why break that up through foolish government mandates?
     Next, Universal Income, a minimum paycheck to every citizen regardless of their personal production, is also gaining momentum as "a reasonable idea."  Beyond the expected lunatics in the news today, this extra government paycheck has recently been supported by Barack Obama, Bill Gates, Richard Branson, Mark Zuckerberg, and Elon Musk.  I'm sure you've noticed that once your net worth exceeds $1 billion, you must replace your capitalistic drive to succeed with a huge bucket of guilt for how you got there, at least when you are publicly addressing the media.
     They all must have burned their copy of Adam Smith's "Wealth of Nations," and already had dropped out of Stanford before taking the Behavioral Economics 101 course.  In a shocking paradox, the startup incubator, Y-Combinator, is pushing the Basic Income Project which would provide an extra $1,000 per month for everyone, or instead a fixed percentage of the nation's GDP every year.  They don't understand that there would not be any more GDP!
     If you think this will never happen, just look to Italy whose left wing 5-Star Movement's legislators have just instituted reddito di cittadinanza, or citizen's income.  Italian citizens will be required to do eight hours of community service per week and must accept one of their first three job offers (from whom?) to keep getting their checks.  Analysts estimate that nearly 20% of Italy's economy is "off the books," so there should be a huge crowd qualifying for the additional check, about $11,000 extra per year.  And, consistent with these brain-dead economics, any unspent monthly balances are clawed back so savings are impossible, and, of course, if you work more you lose the same amount from your government check.  I swear I don't make this stuff up!  It reminds me of how the Air Force Academy's roads were beautifully re-paved every year, whether they needed it or not, to ensure we did not lose our government allocation next year.
     I urge all JAM Views readers not to scoff at these ideas which destroy innovation, motivation, and dreams realization.  Social media, jealousy and lack of education can combine quickly into a terrible cocktail intoxicating 51% of the vote. These terrible human traits bubble over where you least expect them.  Everyone "wants your stuff!"  Send in a Freedom of Information Act (FOIA) request for your FBI file (trust me, there is one) and review their collection of financial documentation on your mortgages and car leases back further than you can remember, yourself.  Ask yourself why they have all that information on you.  Pay attention.  Seek knowledge.

"Property is the fruit of labor - property is desirable - is a positive good in the world.  That some should be rich, shows that others may become rich, and hence is just encouragement in industry and enterprise.  Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built."  -  Abraham Lincoln

* Many thanks to the WSJ, Forbes, & Fortune, & especially Andy Kessler 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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LET US LEAD LIVES OF SIGNIFICANCE

     At JAM Views we periodically review the WSJ Obituaries to learn about people who believed in opportunity, took risks, and decided to take the path less traveled.  These tributes are excellent lessons, case studies, which hopefully shake us from our weekly routines and help us remember why we started these journeys in the first place.
     Barbara Gardner Proctor, an African-American woman born to an unwed mother in North Carolina, once stated, "I have never had the luxury, or the hindrance, of having anyone take care of me."  When applying to the Small Business Administration for a loan to start an advertising firm in 1970, she was asked what her collateral was.  She replied, "Me!," and that turned out be solid backing as she grew her Chicago firm to great success representing Kraft Foods and Sears.  Barbara moved onto the next adventure recently at age 86 after an amazing life.
    After a promising start to a Wall Street career, Jason Spindler was at his Tower 7 office during 9/11.  Instead of fleeing the devastation, he joined the first responders to help the injured.  This experience promoted him to join the U.S. Peace Corps, bringing finance and investment opportunities to the developing world.  He became Founder and CEO of i-Dev International with offices in San Francisco, Lima and Nairobi.  His firm funded Twiga Foods connecting fruit and vegetable growers across Kenya to markets, as well as coffee ventures in Madagascar, and an East African fast-food chain.  Tragically, just shy of his 41st birthday he was killed by Islamist extremists who stormed a hotel complex in Nairobi where he was on a late lunch.  What an amazing journey he experienced here, and I am sure the universe simply needed him for another great expedition.
     Caroline Rose Hunt was the daughter of H.L. Hunt who used his poker winnings to acquire oil fields in Texas.  Fortunately, she did not invest her slice of the inheritance with her two brothers, Nelson and William Hunt, who famously went bankrupt attempting to corner the silver market.  "Moozie," as she like her grandchildren to call her, instead built a chain of luxury hotels to include the Bel-Air in Los Angeles and the Carlyle in New York, and spurred development in blighted areas around Dallas.  She wrote a novel and two cookbooks, created Lady Primrose bath oils, soaps and lotions, and led weekly Bible study sessions at her Presbyterian church.  She recently passed at age 95, leaving 19 grandchildren and 23 great-grandchildren with an incredible example and role model for their own journeys.
     Robert Smith was a bored Boston attorney when a client asked him to collect a debt in Turkey.  He flew there and had to create a convoluted transaction, but he was then hooked on buying foreign abandoned debt and then selling it at much higher prices.  Decked out in his toupee and $99 seersucker suit, Mr. Smith traveled the world in search of adventure and profits.  He stayed in hotels with "dead cats floating in the pool," and wanted "to prove to his wife that he wasn't a loser."  In this murky world, he bought Guatemalan bonds from one arm of a British bank and sold them, at a hefty markup, to another unit of the same bank.  He profited on Nigerian Government promissory notes, and he recounted his adventures in his 2009 memoir, "Riches Among the Ruins."  He recently passed at age 78, and his wife said a few days after his funeral, "He wanted something different, and he certainly got it."
     Susan Ellis, with degrees in English and folklore, landed a job at the Philadelphia Family Court managing volunteers helping youths in trouble.  She had "absolutely no qualifications," but discovered neither did most everyone else.  So, she started Energize Inc. in 1977 to teach nonprofits and other organizations how to use volunteers more effectively.  She changed their mindsets from "little old ladies in flowery hats" to computer coders and legal aides.  She preached, "The best volunteering is when the giver and the recipient see each other as equivalent and equal - when they both benefit, and it's a form of exchange."  She wrote and co-wrote 14 books and gave speeches in 26 countries.  Diagnosed with cancer, Susan kept friends updated by email on her "Medical Magical Mystery Tour," with her last update stating, "One day at a time.  Smile as often as possible.  Love to you all!!! XOXO Susan."  She moved on at age 70, likely now organizing all of her new angel volunteers, and left her estate to the new Susan J. Ellis Foundation to continue her amazing work.
     WOW!  This week let's not complain about our boss, whine that our back hurts, or lose patience with our children's stumbles.  Life is an adventure, and the clock is ticking.  We live in the greatest country, and during the most prosperous time ever, in the history of this strange blue rock.  No excuses!  Let's make it happen this week.  Good luck!

""Life should not be a journey to the grave with the intention of arriving safely in the pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming, 'Wow!  What a ride!'"  --  Hunter S. Thompson

* Thank you to the WSJ for sharing these amazing stories.

* 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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DOLLAR STRATEGY:  NOT WEAK, NOT STRONG, BUT STABLE

     Periodically we pick up the newspaper, or a Fortune Magazine, and we read confusing articles proclaiming the need for a weak U.S. dollar, or a strong U.S. dollar, many times interchanging the exact same arguments for either case.  Now, as JAM Views members we know to first pause and remember (1) the pontificator is more than likely incorrect, and (2) their views are driven by their own self-interests (not to mention confirmation bias and recency bias).
     I have to admit that even while running an investment firm for two decades, when it came to exchange rates I would have to regularly pull the finance books off the back shelf and refresh my memory on what helps what and why.  So, I thought this week we could endeavor to present a simple lesson on the strength of the dollar, so that we can more easily debunk Uncle Harry's rant about Trump's trade policies over Schlesinger's Easter Brunch.
     First, know that we are not dealing with absolutes.  The dollar is strong or weak only in relevance to the rest of the world currencies (similar to how stocks are overvalued or undervalued mostly in comparison to current interest rates).  Currently, the U.S. dollar is about 5% "stronger" against the world than its average since 1971 (when we abandoned the gold standard), so pretty "normal."
     The main arguments for a strong dollar promote selling our U.S. Government bonds to the world at higher prices, adding more capital without the Federal Reserve having to buy our bonds, and giving the U.S. strong purchasing power and influence around the world.  "He who owns the gold makes the rules."
     The primary arguments for a weak dollar are for promoting U.S. exports.  If the dollar is weaker compared to the Japanese Yen, the Japanese will find the Harley Davidson's to be much less expensive, and U.S. manufacturing jobs will thrive, at least in the short-term.
     It seems simple enough, but the real world never works the way the elites claim it does (seems to be a recurring JAM Views theme).  For example, the Swiss and the Dutch are at the top of the list for best-performing currencies (strongest) since 1900, but the major parts of their economies are exports.  Also, history is replete with countries devaluing their currency (making it weaker) to boost their export economies, and hurt imports, only to see them quickly ravaged by inflation, devaluing more, and destroying everything.
     The answer for the U.S. dollar now, and always has been, is stability.  The Federal Reserve and U.S. politicians can only do damage to the free markets, and they try their damnedest every day to make it worse.  As we have taught in JAM Views, "money goes where it is treated best."  Artificial inputs only screw up systems which are constantly searching for equilibrium, balance, homeostasis.  The British economist, John Maynard Keynes, has been screwing up economies with artificial steering since 1913 when Britain replaced gold with foreign-exchange reserves.
     Our friend, Steve Forbes, explains it best.  Last year he wrote, "Economists and policymakers regard as holy writ the fantasy that the economy can be steered, as if it were a car...The Federal Reserve, or any central bank, can no more control an economy than long-ago Soviet central planners could...with 7 billion people around the world and countless millions of entities of all kinds engaging in more than 100 billion transactions each day...the only sensible question to ponder is how much damage will our central bank do?"
     The answer is stability.  Remember how CEO's complained during the previous Administration that they couldn't make long-term investments because they didn't know if tax rates and regulatory costs were going to keep going higher?  Note how the stock market always falls when there is "uncertainty."  Listen to Coach "K" say, "I don't care if the refs are calling it loose or tight.  I just need them to be consistent!"
     If the U.S. dollar was allowed to find its own proper value, without misinformed politicians and technocrats attempting to justify their own existence (and government paychecks with your tax dollars), then the system would find the correct interest rates, correct inflation rates (maybe it's 2% as the Fed claims or more likely it's closer to zero), and correct exchange rates.  U.S. companies and workers would maximize efficiency and productivity with the requirement to be as competitive as possible, and the U.S. would efficiently import the correct goods from the correct countries which maximize our own self-interests, just as with Adam Smith's butcher and baker.
     Since the Egyptians and the Romans, monetary stability has been maintained over long periods by a gold standard.  Forbes, again, said it best in one of his never-ending campaigns to return to the gold standard.  "Markets work best with fixed weights and measures.  Everyone knows how chaotic life would be if the number of minutes in an hour or ounces in a pound fluctuated.  The same is true for money, which is supposed to measure value.  Until we blew it all up in the early 1970's, the U.S. had a fixed value for the dollar since Alexander Hamilton established it with a gold standard in 1791.  It's no coincidence that the U.S.' average pace of economic growth since then has fallen sharply."
     During brunch slip Uncle Harry one more mimosa, light on the OJ, and let him know that all the fake news is gobbledygook (economics term), and as he goes for another trip to the buffet, stress "less is more."  Let's continue to do whatever we can to keep governments out of free markets and to allow the citizens of all currencies to thrive.  Now that we understand the basics, pay attention to the mistakes countries make every day in attempting to manipulate their currency.  "First do no harm."

"The rating agencies guys wore blue suits from JC Penny, with ties that matched too well, and shirts that were starched just a bit too stiffly.  They appeared to know enough to justify their jobs, and nothing more."  Michael Lewis, The Big Short

* Thank you to the WSJ, Forbes, and Fortune 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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CAPITALISTS SHOULD VOTE FOR NUCLEAR

     The nuclear power industry probably has the worst marketing department in the history of the world, and also can't even figure out how to have their own lobbyists effectively pay off the Washington politicians, as does the rest of the energy industry.
     JAM Views' mission is to not only help us all understand true economic and business principles, but to continuously uncover how the great majority of what "they" tell us simply is not true.  Nuclear power falls into this category.  If we all understood commercial nuclear power generation, and its incredible potential to completely change the technology landscape of our country, every capitalist and every New Green Deal believer would have to support its primary, and possibly only, position powering the United States.
     Quick basics.  Nuclear power today is generated by splitting or joining the nuclei of atoms.  The nucleus is the heart of the atom which is the building block of molecules which form to create everything on the planet.  So, let's first agree that there is pretty much an infinite supply of atoms for our projects.  Fission is the splitting of the nucleus which releases a tremendous amount of energy, and which shows us that the universe has already been designed to hold incredible energy beyond our current understanding.  Fission performed on one pound of uranium releases as much energy as burning six million pounds of coal.  The atomic bomb (WWII) was created by an "uncontrolled" fission chain reaction.  Commercial nuclear power plants are basically "controlled" fission chain reactions.
     Fusion is the uniting of nuclei and is the basis for a thermonuclear explosion, like which fuels the sun, and which is thousands of times greater than the atomic fission.  Unfortunately, currently, fusion needs about 122 million degrees Fahrenheit to ignite, like from a fission bomb, so commercial applications are still in the works.
     In nuclear power plants today, fission creates a tremendous amount of energy which is converted to steam (which directly powers nuclear submarines), and is then converted to electricity to power our cities.
     John Rie, prior owner of CBRS which specialized in bioremediation, and Alan Emery, former president of the Canadian Museum of Nature, are members of Est Actio, an international group of multi-disciplinary scientists "looking for ways to stabilize the climate."  They released a report in the Wall street Journal promoting both the economic and green benefits of nuclear power.  I've included a few highlights:

1. From 1970-1990 Sweden doubled its energy output by deploying nuclear plants. They also reduced carbon emissions by 50%, reduced fossil-fuel use by 40%, and expanded the economy by 50%.

2.  The world will need 38.6 terawatts of power in addition to existing hydropower over the next 50 years (38,600 one-gigawatt power plants).  Only nuclear or fossil fuels can meet this demand.

3.  Wind and solar are three to five time more costly than nuclear.

4.  Nuclear actually creates large profits.  It costs $2.3 billion to build a one-gigawatt plant (Not a thousand jigawatts by Doc and Marty!), which at current electricity rates generates about $419 million net revenue annually, which is $33.5 billion net revenue over the 80-year life of the plant.

5.  Reality on safety.  The 1979 Three-Mile Island incident caused zero deaths or increases in cancer.  The 2011 Fukushima "disaster" caused zero deaths or disease.  The 1986 Chernobyl Plant's bad design and lack of Soviet Union response caused 150 deaths.  The 2012 World Health Organization report estimates the burning of fossil fuels and biomass causes three million deaths world-wide every year.

6.  Reality on waste.  A nuclear power plant generates 20 metric tons of waste annually.  A typical coal plant produces this much toxic waste (mercury, arsenic, etc.) in one hour (I probably shouldn't be writing this in West Virginia!).  Most nuclear waste is hazardous for only a few decades, and newer technology plants are recycling nuclear fuel, actually using up waste.  France is way ahead of us here.  How did we let that happen?

     The fact that nuclear power is not at least the dominant energy source for the United States today is purely a result of lack of education and entrenched corporate interests controlling Congress and the White House;  Bush and oil on one side versus Obama and uneconomical Greens on the other.
     Nuclear power is our limitless future if we can overcome politics, fear, and misinformation.  Nuclear is the universe already given to us.  We have not even touched the tip of the tip of the iceberg, and it is already the best economic-green option.  Nuclear is about abundance instead of scarcity, and it simply needs a better marketing department.  JAM Views members, and capitalists across the planet, should support nuclear, but most importantly, must support the commercial re-launch and not look to ineffective governments to control the future.  Commercial implementations will achieve 100x the progress in 1/100th the timeframe it would take governments to move in the right direction.  Remember the Laws of Thermodynamics; energy is neither created nor destroyed, yet merely transferred.  We already have way more than we will ever need, and the net cost will eventually be zero.  We just have to be smart enough to use it.

"Whenever you find yourself on the side of the majority it's time to pause and reflect."  -  Mark Twain

* Thank you to the WSJ, Forbes and Fortune 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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SOCIALIST BUSINESS ADVISORS

     For most of us, when we think of socialism we think of a political construct, like Communist Soviet Union, or Venezuela under Chavez.  But, our loyal JAM Views readers now understand that all politics are about money, nothing else.  Socialism is about controlling the money and, therefore, controlling the people.  Socialism, and all of its euphemistic cousins, takes money from the producers and gives it to the looters under the guise of creating equality.  It was a scam as a first thought thousands of years ago, and remains today the greatest detriment to the forward progress of mankind.
     We are thankful for the President calling out this ridiculous socialist ideology during his recent State of the Union, as the socialist agenda has once again become trendy among the economically-unaware.  The last person, or organization, you want to be in charge of your money is a government.  Throughout history, these entities have a dismal track record for reducing expenses, increasing revenue, achieving objectives, or successfully allocating capital.  Remember, British Prime Minister Margaret Thatcher famously quoted the problem with socialism is "eventually you run out of other people's money."
     Let's review a few current socialism examples getting press in our county:

1.  California's high-speed rail project, initially conceived to connect San Francisco and Sacramento with Los Angeles and San Diego, was approved by voters in 2008 to be funded with a $10 billion bond offering, $3.5 billion in federal government funds, and incentivised private partners.  Construction began in 2015, and, now, New Governor Gavin Newsom has basically pulled the plug on the government project due to the recent estimate of $77 billion to complete!  What a disaster and embarrassment.

2.  California utility PG&E filed Chapter 11 bankruptcy this month as it expects $30 billion in liabilities from more than a dozen major wildfires in recent years caused by its equipment.  This failure is due to the government overseers prioritizing the state's climate goals over safe and reliable service, in other words running a proper business.  The politicians last year approved a $269 million rate hike to pay for "fast charging" stations for everyone's Teslas purchased with other government credits (my apologies for always picking on Teslas to my Academy roommate, the coolest guy on the planet, who has two in his California driveway!), and another $437 million to pay for employee retention programs while shutting down the nuclear plant which produced over 25% of their total power (Did we say "Soviet Union?").  Then, the legislature voted to mandate 100% of PG&E's energy be generated by solar and wind by 2045.  While PG&E was spending a billion here and a billion there on these mandates, they forgot to invest their capital on insulating equipment, clearing overgrown vegetation, and taking other precautionary measures to reduce wildfire hazards.  Now, California politicians are tweeting about the company's focus on profits over safety, even though the politicians are 100% responsible for the disaster. (I once heard a story of how the government shut down an extremely valuable investment company, the golden goose they called it, over a minor regulatory dispute, and then rallied the shareholders and community against the company, all to their own significant detriment.  Unfortunately, this scenario plays out every day in our country).

3.  Now, Bernie Sanders and 16 other Senators are campaigning diligently to replace ALL private health insurance in the U.S. with a government-run single health care plan (Did we already say "Soviet Union?").

4.  Forty Congress members now propose The Green New Deal which includes "a job guarantee program to assure a living wage job to every person who wants one." (I foresee long bread lines).

5.  Elizabeth Warren is demanding a new federal charter for business which would now make companies answer to not only shareholders (the owners), but also to politicians and government oversight groups. (Such as the Politburo?).

6.  And, of course taxes.  Elizabeth also wants to add a new, extra 2% tax not on income or consumption, but just for having accumulated savings and net worth.  This 2% "wealth tax" is government confiscation which even France recently abolished!  No more storming The Bastille!

     Let's stop there this week, as it's probably all our stomachs can withstand.  This week please do your best to help the economically-unaware begin to realize that the LAST "person" you want to run your business, manage your project, or to efficiently allocate your capital is the government.  Take an aggressive stand today, like the President, and call out these ridiculous talking heads.  See through politics and understand money.  That's all there is.  As Margaret foretold, soon they are going to run out of yours.

"The robbed that smiles steals something from the thief."  -  Shakespeare, Othello

* Thank you to Alejandro Lazo & the WSJ, Forbes, & Fortune 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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DRIVING MYSELF TO PRISON

Due to extenuating circumstances, Jeff was unable to send a blog for this week's JAM VIEWS. 
FOJ chose an oldie but goodie:


I had rejected three Government plea offers, endured a four week trial debacle, and received a twelve year prison sentence. Following the egregious trial, I was assured I would remain free on bond while the Appeals Court reviewed the facts and would certainly reverse the decision. But, I had not yet received confirmation of this reprieve.  
On November 12, 2013, I was meeting with my new consulting team and reviewing the day's rebuilding progress. At 4:15 PM my cell phone buzzed with a call from the attorney's office. "Jeff, you're not going to believe this, but the Appeals Court answered our forty-page Motion with one sentence, 'Bond is Denied.' You have to report to prison in Morgantown, West Virginia by Noon tomorrow, and whatever you do, don't be late." I had been naive about the system. I had always believed that common sense would prevail, things would be resolved, and we would rebuild our organization and restore our shareholders. 
After many tears with my amazing team, I decided to spare my family and friends an uncomfortable road trip to West Virginia. I would drive myself to prison. At 3 AM I texted my son in college that I loved him, I smooched Mom, I punched Morgantown into the iPhone's GPS, and I began my journey West. 
The dramatic fall from grace swirled through my mind as I kept asking myself out loud, "How the hell did we get to this point?!" I decided to use my voice texting function to say goodbye, hopefully only temporarily, to all my friends listed in the phone's contacts. At least I wouldn't wake them up with a 3 AM call and make their day as miserable as mine. "Kevin, I'm driving myself to prison today! You better find another partner for the Member-Guest, but hold my slot for next year!" "Sean, write this down. Don't ever, ever invest in a solar stock!" "Dave, you're probably just getting home from the L.A. bars, and I'm driving myself to prison. Tell me a good story!" And on I drove, reaching deep into my contacts list, going all the way back to military buddies, business partners, and the neighborhood gang. It was a long drive. I imagined friends waking up across time zones saying, "Honey, I'll be damned. Martinovich is going to prison today!" and then, "Oh, don't forget to pick up my dry-cleaning," as they quickly moved on with their own lives and responsibilities. 
As the sun rose in my rearview mirror, I started to receive a few responses - "WTF???," "Dude, I'll send some cookies! Do you like Rice Krispy treats?," and "Turn left! Turn left!" I also received a call from my attorney, James Broccoletti. "Don't worry. Hang in there. We will get the appeal in as quickly as possible. Remember, don't be late!" (He would send me a letter in prison one week later stating that he had withdrawn from my appeal case, and to this day he has refused to return the $25,000 deposit!). 
Then the phone died. The GPS was gone. In the confusion I had forgot to bring the phone charger. I had no paperwork for where I was supposed to go. I contemplated stopping for a morning cocktail since this was West Virginia, and someone had to be serving a beverage which could calm the nerves. But a quick calculation said that I might be cutting it close, I didn't know where I was going, and I remembered Broccoletti saying that the first thing they do is give you a breathalyzer! 
As I got closer, I stopped at two stores for directions, but to no avail. Time was short, and the blood pressure was rising. I asked God to not let today be another disaster on top of a long list of recent disasters. I stopped again at a corner restaurant and engaged the pierced and tattooed hostess, "Hi, I have a meeting this morning at the Morgantown Prison. Can you please give me directions?" I chuckled internally at my embarrassment. She paused, looked me over in my Hugo Boss sport coat and Gucci loafers, and pointed, "Mile and a half down the road." I thanked her, ran to the car, and felt secure in the forty-five minutes I had left for a safe arrival. 
I pulled up to the gate, and the lone guard walked out of his shack. 
I offered, "Hi, I'm Jeff Martinovich, and I'm reporting to prison today." 
He leaned onto my door, looked into the empty car, and inquired with a perfect West Virginia twang, "You drove yourself to prison?" 
I nervously replied, "Well, it's a long story. I didn't think I was making the trip. Everyone fell apart last night. I thought I'd better just drive myself. I'm going to park in that lot over there. My buddy, Mike, owns a car lot, and he'll send a couple guys over to pick it up tomorrow." 
He looked at me like I'd lost my mind, leaned back, spit tobacco juice on my front left tire (true story!) and said, "You're not parking your car here. Your only option is to go back into town, leave your car, and take a taxi back here. And, you have thirty minutes to make it back, or you'll be starting your sentence in the Hole!" 
I wasn't sure what the Hole was, but it certainly did not sound good! I had scary visions of Paul Newman in "Cool Hand Luke." I whipped the car around and headed in the opposite direction. There would be no time to get a taxi, and surely the guard took great enjoyment in knowing this fact. My only hope was my Goth hostess. I pulled into the restaurant's small parking lot and ran in to ask if I could leave my car there overnight. 
"Oh no, Sir. John The Manager would never allow that. There's never enough space as it is." 
I interrupted, "I'm sorry to be short, but I'm in a huge hurry. May I please speak to John?" 
Soon appeared John The Manager displaying double the piercings and tattoos as our hostess, died black hair, and thick black eyeliner. "Cannot do it. No way!" he rolled off his pierced tongue. 
I proceeded to employ every Dale Carnegie technique I could remember to influence this fine, young gentleman to allow me to leave my car, but I was getting nowhere. Then, I went to Plan B and just would not accept "no" for an answer. Finally, in exasperation, he yelled, "Fine! But if it is still here tomorrow, it will be gone!" and he stormed back to the kitchen. 
I turned back to my hostess. "Miss, I didn't exactly tell you the whole story before. If I don't report to prison in fifteen minutes, they are going to throw me in the Hole! Is there anyway I could talk you into driving me to the front gate so I can make it on time? You can even drive my car!" 
I then experienced for the first time the label of a "felon" as she took two dramatic steps backwards and made clear that my request would not be possible. 
I ran to the car. My watch noted I actually had sixteen minutes remaining. I threw the watch, the phone, the wallet, and the keys into the glove compartment. I slammed the car door, looked to the sky, and let out a yell, "Okay God, if this is the way it's got to be, then this is the way it's got to be!" 
I took off in a sprint across the snow covered parking lot. I crossed the street, dodging a few cars, and ran as fast as I could against traffic on the side of the narrow rural road. The snow was deep on the side, and the shoulder was covered in slush and puddles. The road was occupied with Ford F-150's barreling down on this lunatic running for his life against traffic in a black sport coat and loafers! The trucks showered me with spray as they passed too close for comfort. As the mind slows down at these extreme times, so many events which had brought me to this point played like a movie in front of me. 
I was soaked to the bone, the snow was deep, and I knew I wasn't making good time. I screamed to God once more, "After all of this, you have to let me make it!" 
I spotted the prison ahead, and it gave me a final burst of energy. There was a gap in the oncoming traffic, so I moved onto the road and gave it all this forty-seven-year-old body could summon. I sprinted through the gate like Eric Liddell winning the Olympic gold in "Chariots of Fire." 
The guard walked over to me as I clutched my knees, heaving and gasping. He looked me over and shook his head. "Two minutes to spare. I never thought you'd make it." 
I followed him into the Processing Center. There would be no Hole for Prisoner 81091-083 today! 

"The real test of man is not when he plays the role he wants for himself, but when he plays the role destiny has for him." 
-- Vaclav Havel 

* 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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YOU DON'T NEED AN EMPLOYER

     I know I keep pestering you to take that step; to start your own business, to teach the rest of the world, and to constantly lead by example.  But, I really think this is your year!  The window is open!  Unemployment is 3.9%, and corporations are more flexible than ever - literally ever.  Technology is ready for you, the regulatory environment is ready, and the tax structure is optimal.  Now is the time for you to be the person you always dreamed you could be.  On our death beds we only regret the things we DID NOT do.
     I have an idea.  Why don't you set July 4, 2019, as the date you will launch your new business?  You can execute a responsible and methodical game plan to hit this target.  If you are now an electrician working for other contractors, on Independence Day you will roll out your own organization.  If you are a software engineer, by the time you are watching fireworks, you will have launched your own consulting enterprise.  If you are in sales, by mid-year you will have negotiated contracts to independently represent only products and services about which you are passionate.
     First, review our previous Post, "What Smart Investors Look for in a Business Plan."  Initially, you are not going to need investors but the plan will help you get out of the gates.  Investors will come later when everyone wants to get in on your success.
     Second, let's take the next few months to get everything you need in place.  You will be surprised at how easy and inexpensive it is.  The Friends of JAM have been kind enough to help us with a Virginia, USA, startup example.  I note "USA" since we are honored to have many JAM Views readers from Germany, Ireland, France, and Ukraine, to highlight a few most-frequent visitors.
     While watching "Seinfeld" reruns this weekend you can access Virginia.gov and open your single-member Limited Liability Company (LLC) online in 15 minutes, to include Articles of Incorporation. Pay the $100 fee and you are off and running.  Do it yourself instead of paying an attorney to waste your time and money.  You don't even need to pay Legal Zoom $400.  All these intermediaries do is charge you tons of money to make you think you need them.  Do it yourself so that you understand everything.  Remember, you are taking back your power!  Make a note to also file a simple Annual Report and $50 to the state in 12 months.
     Spend 10-minutes online with IRS.gov, and get your Employer Identification Number (EIN) for your new company.  That's free.  If you think your name or logo is really awesome, you can trademark these at USPTO.gov.  That's $400, or we can wait on this one until the Chinese begin stealing your Intellectual Property (IP).  Open a corporate account with Ally Bank online, so you don't have to pay all the fees from the big banks.
     Download QuickBooks for the Self-Employed, at $10 per month, so you can easily keep track of all the expenses you will now write off your taxes.  Come tax time, as a single-member LLC in Virginia you will simply translate your revenue and expenses to your Schedule C on your personal return.  Easy.  Later, when you add employees and are printing money, you will do a separate return, K-1's, and all that.
     Next, during "Cheers" reruns you will create your online presence.  At GoDaddy.com you will purchase your website name (URL) for $13, and you will also have them host your website for $7 per month.  Next, you will design your website using one of Go Daddy's easy plug-n-play templates.  Super simple.  Then, you click over to Blogger.com to start your own blog (You mumble to yourself, "I've met Martinovich, and if he can do it, anyone can do it!").  This is free.  You open a new blog, and twice a week you begin posting something short and simple that will help people in your industry.  By next year, they will refer to you as "an expert."
     Now, you are going to gradually dip your toe into this new venture by doing a little work on the side.  Steve Strauss wrote in "USA Today" that nearly 40% of Americans now have a side hustle, and "the average side hustler earns about $8,000 a year."  That pays for a lot of ballet lessons, not to mention braces!  I know a beautiful woman who sells R&F on the side, another for Scentsy, and you would be surprised who drives for Uber and Lyft.
     Steve also highlighted the online product Ascend as one tool that allows us to do just as much in our startup from home as we used to only be able to accomplish at the office.  From the dashboard you can manage contacts, give price quotes, manage workflows, and invoice customers.  Over coffee you can run email and social marketing campaigns, create a video in a few minutes, and create search-engine-optimized (SEO) pages.
     Now is the time.  You will not find a better window during your working lifetime.  Grab the opportunity for freedom, challenge, responsibility, and no excuses.  Maybe it will go nowhere, maybe it will be a failure, but then again, maybe you will succeed.  You don't have to build Berkshire Hathaway, but at the end of this journey you need to be able to hold your head high, your shoulders back, and claim, "I played the game, and I gave it everything I had."
     Download "Defending Your Life" this weekend and watch Meryl Streep during her life review.  Notice how she overcame fear.  That's the point.  That's why we came down here.  I will be cheerleading you all the way to Independence Day and beyond!  And, if you stumble, we will all help you back up to stay in the fight.  You can do this.

"Never doubt that a small group of thoughtful committed citizens can change the world.  Indeed, it is the only thing that ever has."  - Margaret Mead

* Thank you to Friends of JAM (FOJ) for the above research conducted, initially, for the JAM Course "Building Special Companies."

* I, thank God, am not a lawyer or accountant, and nothing above is to be construed as legal or tax advice.  Please consult an expert. (Isn't it ridiculous that the lawyers make us include this, or otherwise they sue us to protect their own cartel?  I promise we will fix this, also).

* 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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