Thursday, January 22, 2015

FanDuel Season Analysis

In life, there are some things that most people don't really want to hear about.  Your diet and your fantasy team are two of those things.  With that in mind, I am going to put most of this (way too long) post under the fold to spare those that don't want to hear how I did this year playing FanDuel (which I wrote about here originally).

Tuesday, January 20, 2015

The Enduring Mystery of Office Depot

There is an Office Depot store near my condo in River North. It is a very large store with a big parking lot. Since I am interested in business and like to ask theoretical questions I recently stopped by to research something that has been bothering me...
How does Office Depot stay in business?
When I was part of a start up business over twenty years ago the first store we went to when it was time to kit out our office was Office Depot. I can still remember practically bounding in and buying up chairs, office supplies, paper, printers, monitors, and everything else we needed.

Today, however, retail is a very difficult business. The high end retail items like Apple laptops aren't sold there; it is a mix of cheap and downscale laptops and inkjet printers. There are tablets, too, although many of them by makers you haven't heard of.

They used to have a giant wall of software. Today, however, software is mostly downloaded and not sold through retailers, and much of it is by subscription. Who goes to the store anymore to buy software? What do you do with the disc? Apple even stopped having a drive on their new Mac Book Air a few years ago and few people missed it. I went "old school" and bought a Mac Book Pro because I thought I might need one and I've used it about 3 times over the last 4 years.

What's left is mostly disposable. Want a phone system for your office? It is $100 for multiple handsets and a base set. Want a calculator? It is a few bucks. Now we are down to furniture and random office supplies. How can a giant store like that survive on margins from office supplies?

Ink for printers was a source of margins for a while and they still have a whole aisle; with modern internet delivery I'd bet that their margins have eroded significantly. If you want to take a chance on jamming your inkjet you can get refilled cartridges for almost nothing.

I'd say that Office "Depot" is an appropriate name for this retailer; it's where you go for low-end equipment and furniture for the parts of your office that aren't worth the Apple and the Herman Miller design touch.

Looking at their financials out on the web, Office Depot and Office Max recently merged and they are starting a plan to reduce their store overlap and gain synergies. Their margins are very low, as expected, and they are investing little in terms of capital into their franchise (which makes sense because they are collectively overbuilt).

Perhaps they have some sort of e-commerce distribution plan up their sleeve; the store is certainly giant and could house a lot of low margin office supplies for your downscale needs. I don't know if I'd put that in River North, however, where the rents are high; would probably be better off in a lower rent section of town.

Monday, January 19, 2015

How To Fix the State of Illinois

In a previous post I discussed the high probability of there being some sort of major fiscal calamity in Illinois in the next two years. Here I propose how to solve the issues in the state. I realize that the chance of any or all of these solutions to be put into place is near zero without unthinkable changes but in fact they are all obvious and will likely be part of the ultimate solution.

Consolidate Governmental Entities - Illinois has over 8400 governmental entities, the highest in the USA. These entities need to be drastically curtailed and likely should number in the hundreds and each should have professional management, strict caps on borrowing capabilities, and an inability to sign up for long term unfunded obligations (pensions, retiree health, etc...) without stringent oversight.

Eliminate Pensions and Defined Benefit Plans and Move to Defined Contribution Plans - Illinois' pension and benefits woes are myriad and well documented and extend through every city and county due to firefighters and policemen and governmental workers. Regardless of the one time pain, strikes, protests, and society-shaking impacts of these moves these unfunded obligations are an impossible burden on the state and they must move to a 401k-like plan (similar to what Nebraska did)

Reduce State and Local Employee Compensation Pay by 25% or More - the government faces a simple choice between paying its employees what they think they deserve (ever more) and the governments' obligation to provide services to their citizens at a price that does not drive excessive taxation. This deal is broken and a large part of the burden will have to rest on governmental employees. If they do not like this solution they will be free to find employment in the private sector where it is unlikely that they will be able to match the same package of benefits and compensation. We will know that the model is in balance when the turnover rate of government is equal to that of the private sector

Outsource 33% or More of Governmental Jobs - there are large opportunities for efficiencies in the governmental sector, through use of the internet, changes in processes, and injection of competition into areas traditionally done by the government. Even within areas that are generally governmental functions (like the police) a significant portion of the functions such as administration could be done by third party or online vendors.

Reform Purchasing By Use of Modern Techniques and Focus on Outcomes Not Political Concerns - our procurement systems in Illinois are riddled with favoritism, opaque decision methods, and a focus on aiding politically connected firms. In addition, payment of vendors is very slow which rules out many smaller and less capitalized vendors. We need to focus on market based outcomes (quality of service, cost reduction, speed to market) and reward vendors with consistent and timely payments rather than focusing on political connections and long term relationships which favor a few incumbents.

Consolidate Debt and Plan and Execute In a Strategic Manner - at some point our debt of various entities needs to be straightened out and managed in a consistent and optimized way. This can only occur when the various entities are under central control and their power to create their own obligations has been eliminated, and would be tied with various structural reforms or one-time haircuts to get the situation in line with our taxing capabilities.

Streamline Our Tax Systems and Make the Results Transparent - Illinois is heavily reliant on our property taxes although the process is particularly opaque in Chicago because of various TIF incentives that steer development to certain areas and political favorites. We also have punishing cigarette and sin taxes which reduce revenues while encouraging smuggling. Our sales tax is also punitive and among the highest in the nation. One of our few positive elements is the lack of a progressive income tax which is something that many are continuously attempting to overturn.

Stop Capital Projects and Repair Existing Infrastructure - when the financial crisis hits we will need to defer incremental capital projects (which are very costly and require ongoing support) and attempt to shore up some of our existing infrastructure which is in crisis such as these El Tracks in River North and bridges and roads everywhere in the state.

Eliminate Business Barriers and Favoritism to Cronies - A friend of mine who moved here from California was astonished that he had to bring a lawyer to the closing of his house purchase; who could imagine that Speaker of the House Madigan is partner in a legal firm that engages in property tax appeals. Our liquor and beverage empires are also politically connected, as well as our ever continuing subsidies to horse race track owners and similar state subsidized businesses. Our rules and regulations should be transparent and fair and open to competition.

Make Illinois a Right To Work State - our adjacent states have gone right to work and they have seen an uptick in interest in the type of manufacturing work that would be hard pressed to consider Illinois. We need to level the playing field and work to retain our manufacturing base.

Stop Gerrymandering the State - Our state is gerrymandered at the Federal and State level which is tied to a lack of interest and trust in politicians. As part of the housecleaning that a serious likely default on debt obligations (whether it is official or not it would need to be a restructuring) the elected officials would need to increase transparency and trust among voters and an important way would be to create logically organized districts so that officials could be accountable to their constituents.

In general none of these types of items would make sense individually because any one of these efforts would require an incredible effort and be fought tooth and nail by those entities that profit from the status quo. In the end, however, some sort of serious financial crisis would cause the state to look at the roots of our over-spending and our lack of competitiveness (growth is an important part of the equation) as well as the lack of trust in institutions by voters, since you'd have to ask for more in terms of funding to tackle the resulting mess that's accumulated after all these years.

Cross posted at Chicago Boyz

Illinois Government, Broadly Defined, Will Have A Major Crisis by 2017

The fact that the State of Illinois has dire fiscal problems is well documented. If you just type in headlines like "Illinois is broke" into your web browser and you can spend hours reading. One of the best is Illinois which brings together articles from various news sources into a coherent theme. We have a new governor, Bruce Rauner, who is wealthy and thus unlikely to be entangled in corruption, who is pledging to take on this giant mess which is a cause for optimism.

The issues, however, are much larger. It isn't just the state of Illinois which is in deep crisis - we have an interconnected set of entities which each are on the verge of facing fiscal woes, who in turn can tip other entities off the fiscal cliff. The city of Chicago also has very significant financial problems, mostly from pensions as well, which it has been papering over for many years with debt and by allowing its unfunded pension issue to get ever larger. Cook County, too, which is one of the largest governmental counties and entities of its nature in the USA, is also facing dire challenges.

Once you get beyond the state, the city of Chicago, and Cook County, you encounter myriad minefields from our plethora of governmental units. Illinois has more governmental entities than any other state, 8400, as you can see from this article. Most of them have various taxing powers, debt they've raised, and liabilities like pensions and health care for workers that are not funded. Look near O'Hare, where the (tiny) city of Rosemont has funded huge shopping malls, convention centers, and even a casino by floating debt. In the end this debt is substantially backed by the state whether that guarantee is implicit or explicit; a city of a few thousand residents can't normally fund this sort of largess.

But the challenges are much deeper than this. These entities, much of which are overseen on a local level, invite vast opportunities for institutional corruption. We saw this on Metra, where the scandals caused the prior president to commit suicide (by standing in the way of a train, no less) and cast a light on the squalid pay for play decision making process of a typical entity in our state.

The situation has become so bad that even in a time of record low interest rates, when there are many buyers of debt with any sort of return, that Illinois and the city of Chicago often cannot take advantage of municipally funded debt (which carries a lower interest rate because individuals are not subject to Federal taxes on the interest) because this debt has to be used for capital purposes and can't just be used to pay day-to-day bills. Thus they are forced to issue "taxable" debt, and pay a higher interest rate. Many of the issues are essentially "scoop and toss" where we just take the entire principal and interest of expiring debt, refinance the whole thing, and just throw it out into the future, growing ever more indebted.

The state has been surviving not only by the fact that interest rates have plummeted but by our penchant for not paying our bills. Even with the recent tax increase, the state is far behind in paying off billions of dollars in bills to third parties (note, as employees, they always pay themselves on time).

Atop all these woes are the poor performance that we generally receive from the governmental entities. While there have been improvements (I have friends who send their kids to local city of Chicago schools), the schools in many government units are poor and the public hospitals are targets of frequent criticism. We also have "Chiraq" which is the name given by gang bangers to the City of Chicago which has had more murders than our ongoing wars in Iraq. Our universities are severely underfunded and many of them have turned to foreign students (especially from China) to fill in for the state funding that no longer can pay the bills. The key take-away is that not only are we in a major fiscal hole, but our performance from these governmental units is generally viewed as lacking and subject to extensive corruption.

If there is some sort of shock in one of these entities, say a major municipal strike, a huge corruption investigation, or a big lawsuit that fails, or just a lack of buyers for our ever growing pile of debt, any one of these units is teetering on a cliff. The difficulty is that these entities have many inter-connections. You can't just "let" the city of Chicago go broke, or Cook County. These entities are tied to our web of obligations and debt and will draw in the State once the problems are too large. Note how Michigan helped to corral the bankruptcy of Detroit, for instance, even though they mostly were staying out of the way of supporting their debt.

A significant percentage of these Illinois entities are insolvent right now, meaning that they don't have cash to pay day-to-day bills much less their share of debt obligations (formal) much less their informal or off the books debt (like pension or health care benefits in the future for existing employees). The fact that they need to borrow all the time just to keep functioning makes "triggers" for a mega-event lying all around the 8400 governmental entities listed above, much less the known major ones you see in the paper every day.

There is no way of knowing how long we will be able to keep playing this mega-shell game in the state of constantly piling on debt, unfunded obligations, and commitments to residents and third parties that can never be met. We have been bailed out by record low interest rates which allow us to keep issuing debt at low costs (it is high relative to the other states, but low relative to historical baseline rates) and a lot of liquidity in the market which means we can find buyers for our debt. The state also has been able to do things like let their pension funds fall to the lowest level in the nation and not pay bills for months or years at a time and it appears that this cannot continue in perpetuity.

Another element working against us is "relative" performance. Illinois is adjacent to other states that are emphatically reforming. Michigan, the cradle of our union movement, instituted a "right to work" law just like the deep south and is allowing Detroit to go bankrupt. Indiana long ago reformed most of their institutions and made their state business-friendly. Wisconsin under Walker have worked to tame their unions (although they have not yet implemented "right to work") and are obviously tackling their problems. Only deep blue Illinois (with Rauner a "speck" of red, about to get rolled by our veto-proof legislature) and historically liberal Minnesota are clinging to the old ways of tax, spend and bet on the government and unions to keep the party going. The difficulty is that if you are in the midwest already these other states compete for business and on the margins Illinois, although it has advantages, will start to lose business to these states and it is a self fulfilling prophecy.

The kindling is everywhere. All the governmental units have stretched their kit bag of "tricks" to the maximum. We have allowed our unfunded obligations to deteriorate worse than any other states, and are not paying bills. There are huge implicit links between these entities in which shocks in one will be difficult to contain in the others. There is also little confidence in our institutions due to chronic corruption which is well publicized and is in fact a national punch line. We also cannot put up a wall to keep our citizens here, and by relative performance the adjacent states are moving forward while we continue to slide backwards.

Based on all of this we are looking at some sort of "spark" to set the flames alight across these entities and then we will see what happens next.

Cross posted at Chicago Boyz

Friday, January 16, 2015

My 2015 Range Practice Punch List

If you are a Glockophobe you can turn back now and read no more. Nothing for you here.

The 2015 Shot Show takes place in Las Vegas beginning next Tuesday. This is an annual trade show serving the legal firearm industry playing mainly to manufacturers, distributors and retail buyers. Sure would like to go. It is open to the public, at least parts of it are. From what I have been told the NRA Annual Meeting I attended in Indy last spring has nothing on this expo. One day…maybe.

This is where all the big wholesale deals take place. From what I understand retail distributors and buyers cut their annual large lot purchasing deals with manufacturer reps in back rooms of select hotel locations. They play parlor games like,"if you want to buy X of these for $X you must also buy X of these at $X". Nothing out of the ordinary happens than at any other product trade expo. This is also is when and where manufacturers announce their hot new products.

Last year Glock released their Model 42, a Gen 4 single stack mini holding six shots of .380 and it has been a huge success. We sell every one we can get our hands on. Most customers want to at least handle it even if it is out of their price range. At $419 most hand will hand it back and then ask to take a look at those lovely 9mm Hi Points. 

One ex-mil NRA certified instructor I know owns a G42 and confided in me that to him this is currently the ultimate citizen daily carry and perfect backup for LEO's. Extremely accurate, very light and surprisingly ergonomic (for him and us big handed folks) with trademark Glock dependability. To me I believe I could train with this mini-Glock enough to master using it if needed.

This year the pre-SS expo buzz is Glock will be introducing another 9mm model, one that replicates the size and capacity of the 42. Not if but when I will be buying this is as soon as I can obtain one from my 40% discount source. IF rumor becomes reality. Should be a nice addition since my vault is currently void of representation by any 9mm handgun.

For AR fans here's a little taste of what Magpul plans on offering this year. Magpul makes the finest aftermarket products of their individual type for AR's and are famous for their highly affordable and very dependable hi-cap PMAGs. How about a 60 round drum mag for the AR platform? Yes, that's 60 rounds. Get 'em while they're still legal.

The only downside of a drum mag to me is the profile. It's a lot easier to stuff a number of loaded 30 or 40 round flat mags into pockets on my end of times rifle case than a few round ones. But this thing is so damn cute it's on my gotta have punch list. Ordering!

Back to the Glockers. While I don't own a 9mm G17, Magpul delights Glock owners with a new magazine that retails for less than half of a Glock factory mag. The music on this video alone is worth the watch.

It won't be long before Magpul starts cranking out more Glock mag goodness for the entire product line. To me and many others all aftermarket mags are crap. They may not be bad for cheap range fun but potentially worthless if your life depends on one. Built on their reputation for PMAGs this is more expected excellence from Magpul and great news for us Glockophiles.

Nothing less than Glockalicious : )

Tuesday, January 13, 2015

Behold. The Limburgermobile.

While disposing of phone cam images I had to share these before tossing.

Some among us have so very few interests in life or respect for their vehicles. This is evidence. While most would be embarrassed to be seen in such a contraption others believe having one sets them apart in terms of style and class, bless their little hearts.

It's bad enough to follow a team with a tacky shade of green combined with a gaudy bright yellow but to top it off with a cute little playscape roof? Yes, those toy figures are Packer and Bear player replicas. Makes me wonder what this poor bastard's home looks like.

While I didn't wait to see who would jump in and drive this thing it was most likely someone like these guys.

Friday, January 09, 2015

White Out Conditions

Drove through a white out yesterday. Lake effect near Michigan City.  Took a photo through the windshield.

Barely made it home.

Monday, January 05, 2015

Here's The Real Poop On San Francisco

It's a crappy story.

San Francisco was a favorite business destination of mine.  It excited me whenever they gave me an assignment to travel there. I often thought how nice a place it was and could be even better if not for the people.

The city has always been a magnet for human debris and now they not only tolerate it their city government welcomes it and makes it comfortable for these substance abusers and assorted other motivationally incapable life forms to flock there and take up permanent residence on the street wherever they choose to flop.

In turn they get free meals, free medicine and carte blanche to panhandle and shoplift. San Francisco has become a taker's paradise.

Now there is a website that tracks (this is not a joke) where in San Francisco the most public human fecal matter has been recently reported. Watch your step.

This fine city was once a gem of history, culture, fine food and architecture. Now it has been reduced to a place famous for human poop on the sidewalks replacing that traditional San Francisco treat, Rice-A-Roni.

As Chicago has neighborhoods S.F. has districts. They have the Mission District, the Sunset District, the Marina District and the Richmond District. Perhaps they could conjure up a new district name. Skid Row may already be taken but how about the Skid Mark District?

With the recent acceptance of more and more panhandlers on the street and ever tolerant clueless politicians taking over the major American cities can Chicago be (pun intended) far behind?

Thursday, January 01, 2015

My Continuing Pursuit Of Happiness 2014

With all the problems in the world, with the media spinning everything in the wrong direction, with a bloated government out of control, with everything negative that comes our way my optimistic nature continues to prevail. The past year was no different. It was the little things in life that made me happiest.

2014 began with me leaving a fun hobby job with the world's foremost outfitter for a nearby small retail sporting goods operation where I am manager of a small hunting, fishing and firearms department. After a long and successful career prevailing in the shark tank of corporate urchins I'm now in full control of my life and love going to work each and every day again.

Never has it been in my DNA to have a career or work in a place or at a job that I did not enjoy 110%. Now I work more for fun and to stay active than to support a family while navigating conference rooms, speaking in corporate rhymes, riddles, metaphorical cliches, consultant buzzwords and traveling. Another reason I took this job is to pay for my healthcare insurance and that saves me at least $500 per month. I would do it for that reason alone if not for one more - the people - and this makes me happy.

My goal at work is to build relationships with customers. We share common interests. I treat them all as friends. We talk hunting and fishing and firearms. I learn a lot from them and others I help with what I know. Most of my customers  turn into repeat business and this greatly pleases they guy who hired me and trusted me with this awesome responsibility. Some of my customers now come in just to visit, jawbone and spend some time. My little department now carries the entire store and generates the most revenue, more than the other departments combined : ) In ten months we sold over 400 firearms to fellow law abiding citizens, hunters and sportsmen. This made me happy.

Very late last year my son and his wife rewarded us with our first grandchild. We don't get to see her a lot and each time we do we marvel at her growth. This past Christmas we got to know her well and it is a miracle that God has blessed us once again after raising two of our own that have gone off and are independent self-driven members of working society. He works for a big bank in Indianapolis and she works as a graphic designer in Chicago. This made me happy.

Last winter was the worst we have ever seen. I removed snow from the driveway more than I mowed lawn the summer before and damn was it cold! To keep myself occupied I found a new hobby to keep me warm and distracted during the dark period - homeloading my own ammunition. Over the past year I have spent time picking up once fired brass whenever I could and now have many thousands of empty cases ready to be given a second life. No longer will I be at the mercy of the market availability and high prices and I'm saving the planet by recycling brass to boot. Today I will spend time punching out primers, cleaning primer pockets and tumbling the spent brass while watching college football out in the garage. This made me happy.

When the water thawed we went back to Canada for our annual remote fishing trip to a foreign land. Fishing wasn't great (no really big fish) this year but it was good enough for catching and eating as many walleye as we wanted in the cabin for dinner and brought our legal limit home to share. We miss having dad along and he misses coming along even more but age does not permit him making long trip. But we have the memories of the past and he is always in the boat with us in spirit. This make me happy.

It seemed as if summer never arrived on 2014. It was wet and mild. My lawn never looked better. I grilled out almost each and every night and developed new methods of grilling for one, not an easy task as it would seem. This made me happy.

In September my sister got married for the first time at age 51 and hell did not freeze over - that already happened last January. It was a splendid event taking place in St.Joe Michigan and held on the waterfront next to the beach. I discovered what a nice place St.Joe Michigan really is. Many attended and I must say it was one of the most enjoyable weddings I have ever been to. That made me happy but probably not as happy as my parents were.

Our two annual blog meets came and went. Getting together with Carl and Dan to watch the Chicago Bears lose another early season stinker to Green Bay was overshadowed by our good time and fellowship at the parking lot pre-game tailgate. This was the only time I would venture west over the Illinois border and into Chicago for the year and it was well worth the trip being with the guys. It's an annual event I look forward to very much. This made me happy.

Gunstock happened one week later. The annual celebration of peace, love and The Second Amendment was met with a chilly windy late fall morning that finally settled down. I counted two dozen attendees having a safe bang up time. Thank God for ear protection. Dan and Carl made the long trip all the way down to our Indiana farm for some quality trigger time and they brought some along friends too. This year I strategically placed some tarps at the firing line to catch all the spent brass. This made me happy.

I got my deer this year. OK, so it wasn't a trophy buck and I only took one but it did fill my freezer with tasty wild game protein. The best part is I shot it with my new crossbow. All went as planned placing one ladder stand in a new location due to some diligent scouting and trail cam data. She hopped out of the woods about 100 yards away into the open alfalfa field and slowly followed my scent drag to within fifty yards before busting me. Confident in my new Parker Bushwacker after weeks of successful practice with my finely tuned scope I took the shot as she slowly turned to head back where she came from. I would have never taken that fifty yard shot with a compound bow, never. That sharp stick hit with a thunk right where it needed to be. A seventy five yard walk later and it was in the bag. That made me happy.

Thanksgiving was a rerun and that's the way we like it. All close family members on both sides are still with us as we enjoyed a fine dinner and friendship. That made me happy.

My Grandbaby's first birthday party was held between Thanksgiving and Christmas. Other family members came over and got to meet her and spend time together. She's walking now and cute as can be. All in all 2014 was the most family oriented year I have spent in a very long time. And that is what made the happiest.

Try not to let the current leftist government and their mass media propaganda machine get you down, this is still the greatest nation in the history of man and I trust it is finally going to get better after six years of Zero's dictatorship. There's a lot of work to do but in the end it will make me happy again.

This guy's approach to life resonates with the way I have lived mine and still do. No apologies, none.

All the best to you and yours in the upcoming year. Keep calm and be happy.

Wednesday, December 31, 2014

The Failure of State Sponsored Capitalism

It is my assertion that over the last few decades since the fall of communism a lack of understanding of how markets actually work has become commonplace around the world. When it was capitalism vs. communism (or socialism, or even fascism), you generally knew where you stood. To wit:
  • Capitalism said that the free market would provide the best outcome for society, while communism / socialism felt that capitalism had to be tempered and / or that key assets should be owned by the state 
  • Capitalism said that government should be small, and stick to a few areas of logical focus such as security and foreign affairs, while socialism / communism celebrated government and government jobs as a way to employ the citizenry and achieve social goals
Subtly, the growing attraction of jobs that were primarily in the government sector (environmental jobs, education jobs, health care jobs, and outright government work) and the basic thought that you could build a nice, steady career there with assured benefits and pensions while "doing right for the world" became commonplace. These jobs were often seen as "nicer" and "better" than the ruthless corporate jobs that are continually vilified or parodied on television (such as "The Office" or virtually any thriller set in business).

On a parallel scale, the idea that "State Owned Enterprises" (SOE) could be a significant part of the world economy, and compete effectively with private sector companies, became widespread. Let's leave aside the companies that fell into the US governments' hands during 2008-9 like the banks and car companies; I am focusing on the world wide companies, often country "champions", that are in our midst and whose performance has now been hit with the usual causes of failure of these sorts of entities, including:
  1. Politically motivated investment
  2. Forced government subsidies or protectionist behavior
  3. Corruption
The "poster child" for this negative outcome is Petrobras, the Brazilian oil company, which is 64% owned by the state.  Petrobras was briefly the 4th most valuable company in the world after their 2010 IPO; now it is barely in the top 100.  Petrobras hits all these typical failure points with a vengeance.  The government forced them to purchase goods and services from inefficient Brazilian suppliers, subsidized their citizens with Petrobras funds, pushed them to invest in deep offshore finds which were risky relative to the company's capabilities, and finally just engaged in simple corruption to fund their political party candidates.  All of these actions weakened the company and now a downturn in oil prices and a heavy debt load put the company in a seriously bad state.

In China, the role of the SOE has been declining and the role of private sector companies is on the rise; case in point is Alibaba which listed in the US and has been a smashingly successful IPO.  Russia represents the other end of the spectrum; formerly robust private companies in the Internet sector have been weakened by state controls and the SOE's like Rosneft and Gazprom have lost 60% of their value over the last 5 years.

One of the most important "back to basics" points that we can make about economics and use for talking points and education remains that
Capitalism is the most effective economic solution and raises the wealth and happiness of its citizens more than any other alternative.
Government jobs and careers cannot exist on their own; they need to be supported by a vibrant and effective private sector and as government laws and regulations, designed to meet social objectives, strangle business, the entire society suffers.  For years' the US had a smaller governmental sector than our competitors, but today that isn't the case when we face competition from Asia and elsewhere.  Our European competition is barely relevant; the few world class companies there are predominantly global entities with operations everywhere.

As kids spend their years volunteering and working with non-profit groups and entities either part of the government or a virtual offshoot (education), they begin to ignore and take for granted the critical role of the private sector.  As countries get used to the performance of SEO's and all their usual failures, they forget that the actual cause of most of those failures is the role of the state as an investor in the first place.

We need to take back the narrative on the economy from those that look at just "consumer spending" and "job creation" capabilities of the government; this sort of debt fueled and tax strangling approaches will ultimately kill the power of the private sector.  We should also praise all the innovations that come from the markets; everything from your iPhone to the cheap TV to new drugs to all new capabilities built into every car.  The social networks you follow, the food you eat, and the fact that the prices for most of those things outside the significant influence of government that fall every year.  You can contrast this with the rising costs of education, higher taxes, and general ineptitude that you see when dealing with government or socialistic enterprises.

Cross posted at Chicago Boyz

Monday, December 29, 2014

Live from Cadogan Hall

I just watched my daughter, who you can see above (not really, but it is the thought that counts) play in a New Years concert (even though it isn't New Years yet) with her high skool band from Cadogan Hall in London. Technology is truly amazing.