
My best to everyone this week!
Thoughts of the Day from Chief Pontiac
Maslow had it right!
Famed Psychologist Abraham Maslow developed his hierarchy of needs in the 1940’s and the 1950’s. The five levels of human needs have been an important part of motivation, leadership and management since it first was published. We need to look no further than this great piece of work to understand what is wrong in America.
The five levels of needs are as follows:
1. Biological and Physiological needs - air, food, drink, shelter, warmth, sex, sleep, etc.
2. Safety needs - protection from elements, security, order, law, limits, stability, etc.
3. Belongingness and Love needs - work group, family, affection, relationships, etc.
4. Esteem needs - self-esteem, achievement, mastery, independence, status, dominance, prestige, managerial responsibility, etc.
5. Self-Actualization needs - realizing personal potential, self-fulfillment, seeking personal growth and peak experiences.
The principle is that humans work and live through each level of needs consecutively. That is, once level one is fulfilled a human will move to level two and so forth until they reach level five. Of particular importance is that when a lower level of needs is no longer fulfilled a person will revert of trying to fulfill that need and not the level he/she had reached.
In a simple example, when someone is having their house repossessed, you cannot expect them to focus on a world currency, health care for all, or even a war to help other nations. Yet, the latter items seem to be what our Government is focused on achieving.
Seemingly the vast majority of the electorate in the country has reverted to levels one and two. The examples of why they would be clinging to these levels are truly so numerous they cannot be all enumerated. A couple of examples: Laws are not enforced (immigration, GM bankruptcy, voter disruption, health care law exemptions, home foreclosures, bank fraud, etc.). Belief in our Government’s ability to properly respond and manage the country (Katrina, BP oil spill, bank bail out, unemployment, lobbyists, healthcare). Unemployment continues unabated and there are no programs in place to create jobs.
Many have said that we are not “on the same page”; the taxpayers and Government. Truly we are not on the same page and the hierarchy of needs explains why and what needs to be done by the Country’s leadership. As in any business or in any management role, the leaders must lead at the level of their constituencies. If your employee is worried about losing his job because his employer might go out of business, you do not encourage him by talking about strategic initiatives of the next five years. No, you spend the time explaining and demonstrating that the Company has a bright short term future and he should not be concerned.
In contrast, what we see daily is a Governmental leadership that has a “don’t worry be happy” attitude. Instead of leading on the level of the hierarchy in which the electorate lives our leaders seem to be focused on their personal self actualization while telling the followers that it will get better soon. President Obama’s proclamation that we should “buck up” only confirms that he is happy at level five and can’t be bothered with the predicament of the masses.
When a collective we, are managed on the level at which we live that means we are all on the same page and we are working together to move everyone to the next level. This is not hard to do, it is more empathy and a willingness to show compassion by acknowledging the level on which the followers live and taking some actions to ensure the followers that the leaders are working to solve the problems.
Imagine if tomorrow you woke up and the Government was working on real American jobs. Suddenly they would be leading at the level on the hierarchy that you can agree with. Imagine if it was announced tomorrow that Pontiac was reinvented and 60,000 jobs would result. On the same page? Of Course. www.savingpontiac.org
The Stimulus Works! Just not in
The New York Times ran an interesting opinion piece today entitled “Return of the Killer Trade Deficit”. The conclusions were both fascinating and, frankly, unfounded.
In this article the American trade deficit was essentially blamed on others; specifically
The trade deficit is not a living thing or even a tool of other countries. The
In the last year, unemployment in
Just like the bailout of AIG to the tune of $165 Billion there is a direct flow-through pipe to foreign countries for our stimulus spending. When we bailed out AIG, within minutes the money was wired to overseas banks that were the so called counter-parties. Similarly, when the stimulus money was put into the hands of the general public in the form of a Keynesian demand stimulus, it did create demand; just not for American goods because we no longer manufactured the goods demanded.
Our Country abandoned managing trade policies and started assuming that the world economy would act rationally with the admission of China to the WTO in 1999 and adoption of NAFTA and similar free trade agreements. We are, however, still individual teams known as countries competing for an economic trophy. The choices of Germany and China were to protect and grow their manufacturing base and thus create a way to manage their economy in the face of world wide recession and they recovered quite nicely (won the trophy).
Blame is pointless for the past. Our leadership now must acknowledge we made bad choices and change our direction. As an old boss used to say: There are three rules of decision making: 1) Never make a decision until it is time; 2) when the time comes make a decision; 3) If the decision is wrong, change it! It is time to change our trade policies and change to support manufacturing again in the
JOBS? Not….
So our Administration is worried about jobs. Or at least they would have us believe that. Let’s look at the reality.
The Obama administration recently said that the car bailout saved 1,000,000 jobs. How many jobs were killed in the process? By demanding that Saturn and Pontiac be ended it is estimated that at least 120,000 jobs were destroyed. As a practical matter, all the 1,000,000 jobs would not have gone away. If the various divisions of General Motors had been sold or spun off let’s estimate that ½ half of the jobs would have survived and ALL of the pension liabilities would have been left behind in a proper bankruptcy process and would have required no bailout money.
Had we not bailed out GM, and allowed the bankruptcy process to work as designed, it is likely that 500,000 jobs would have survived out of the 1,000,000 and it is likely that the 120,000 from Pontiac and Saturn would have survived so that is a net loss of 380,000 jobs and no bailout money and no bailout of GMAC and no bailout of the pension plans that will eventually occur. So let’s say that ultimately the total bailout cost $120 Billion. That is about $316,000 per job saved. That is $120 Billion that could have been spent on creating new jobs and encouraging investment in
Then we have the Healthcare legislation that passed recently. In a story in June of 2010 the family owned White Castle Restaurants indicated that the cost of healthcare may put them out of business. This one family owned business represents 10,000 jobs. How many others are just like them?
Following Healthcare there is the problem with the threatened Cap N Trade legislation. In this Hannity piece from Obama’s time as a candidate for President, it is obvious that if he gets his version of the legislation passed it will kill many American jobs (http://www.youtube.com/watch?v=9wzNUZVv0A0&feature=player_embedded ). President Obama admits that the cost of electricity would skyrocket and we would bankrupt coal powered plants.
Next is the effort to thwart Congress in the immigration legislation. This article (http://www.washingtontimes.com/news/2010/jul/29/memo-outlines-backdoor-amnesty-plan-for-obama ) in the Washington Times indicates that there are active efforts to by-pass congress to create an Amnesty program for all who are here illegally. What does this do to trust in our Government and the business atmosphere?
Finally, out of nowhere a moratorium on Gulf Oil Drilling appears from the administration. In this article from the Huffington Post (http://www.huffingtonpost.com/2010/06/21/gulf-oil-spill-job-losses_n_619238.html ) it is estimated that 1,000,000 jobs will be lost over 5 years.
It is unfortunate that the policies of this administration and the underhanded manner in which it conducts business will force unemployment to reach higher levels and there will not be a recovery for many years to come. We at www.savingpontiac.org have relentlessly encouraged the Administration to give
No Plan. Did You Notice?
It can only be assumed that the Administration’s plan is that the original stimulus package would carry the economic recovery. We know that is not working and for all appearances will never work to recreate jobs on the scale necessary for recovery. Are deficits a problem? Sure they are but whether they go up or go down the result will not create jobs.
Our country’s economic makeup has gone through some structural changes over the last 20 years that have been ignored. The lack of management of these changes was conveniently obscured by two bubbles that allowed the appearance of well being but were really nothing but an opportunity for our citizens to incur huge debt balances on imaginary assets. The bubbles obfuscated the inconvenient truth that we were becoming a nation without sustainable jobs and a disappearing middle class.
There are 4 inescapable problems that face our recovery that not one of those talking heads will address. Why? Because they are tough problems that none of the so called leaders want to lead a plan for fixing this economy.
The first two problems and likely the most difficult and at the same time controversial are that we have let a full 1/3 of the manufacturing jobs leave this country since 2000 and that we continue to allow a 25% to 40% currency imbalance with China to exist. 6,000,000 manufacturing jobs have disappeared since
As our country began to evolve into the so called service economy from one based on manufacturing we began the decline in our ability to manage our economy. Much has been written about why the “stimulus” failed. The easy answer to that is that under the Keynesian rules, injection of money into the economy should increase demand and create jobs. What Mr. Keynes did not anticipate is that those injections would only increase imports because the goods were not made within the economy that was stimulated. As
Similarly and in the same context we allow the currency differential to promote foreign manufacturing of the goods consumed in this country. Obviously, manufacturers in the
The third issue is the bleeding ulcer known as Fannie and Freddie. Why is no one talking about these debt bombs in our economy? The taxpayers have paid, already, $145 billion to keep the mortgages and guarantees afloat. It has been estimated that this cost could reach $1 Trillion. That is only a few hundred million less than Obama’s projected deficits for 2010 and 2011 but no one will talk about it. And, oh by the way, these cost are not part of the projected deficit but none the less will become part of our national debt.
As demonstrated with manufacturing, the big cause of ignoring this issue is that
Finally we are continuing to let jobs slip through our fingers. While it was a bit pricey, President Obama underwriting the solar businesses a couple of weeks ago is the right thing to do. Without the Government underwriting, these businesses would likely have gone overseas. As taxpayers we bought GM. Remember that? There are about 120,000 jobs in the remnants of Saturn and Pontiac and those mothballed plants we own. Why would we not recreate these American jobs instead of continuing to send these jobs overseas?
What should we plan? For the first two items, Andy Grove had a wonderful piece recently that detailed the necessity of having a tariff war with
As for Fannie and Freddie, there is a simple plan that could be instituted. Our citizens are struggling with foreclosure and mortgages that are underwater. As so many times we have elected to support others; not our taxpayers. It is apparent that our politicians would prefer to pay out 100% of the unsupportable mortgage guarantees rather than stop foreclosures with a 25% haircut to the bond and mortgage holders. This answer does not add to the deficit. Do we really believe that our credit rating will be diminished? In comparison to whom? Is
Finally, we must plan to underwrite every sustainable job we can find. The previously mentioned Pontiac and Saturn jobs are two that are on my mind. We already own the assets and the minimal Government finding required would result in real jobs not census takers. (see www.savingpontiac.org) .
Summarily, I believe it is scary that we cannot have a discussion about the real problems that face us. Of course wars and deficits are important. We seem however to be stuck on these things rather than those that could create a genuine recovery and could help the taxpayers of the