An Open Letter to Kaepernick

Dear Mr. Kaepernick,

Let me start by reminding you that you are in the fortunate position of playing a game for a living. You do not work a regular job, you get lots of time off (and even more so with your recent on-field performance), and are paid handsomely for throwing a ball to people who get hit when they catch it. As a quarterback, you are also offered more protection than the rest of your teammates, and likely make more money than they do.  Make no mistake kid, you have a pretty easy job when compared to other members of your team.......

Next, let's talk about your performance.....or more appropriately, lack of it in the past several seasons.  The argument I would expect you to make is that you took your team to the Super Bowl in 2012.  I will remind you that you came in to replace a player who suffered a concussion.....and then you failed in the Super Bowl on the biggest stage of all, against an aging Baltimore defense.  You failed.  So, to be fair, let's examine the following season, in which you were beaten by a superior team from Seattle.  You failed again.  Your only job is to win games, and you seem to lose the big ones.  By definition, this makes you a failure at what you would call a "job."

There are many folks who are not as fortunate as you, and are paid substantially less for legitimate forms of employment.  While I understand the importance of supply and demand in setting wages, you should consider yourself grateful that you are paid as much as you are.....in my opinion, you are substantially overpaid for being a failure.  If you had 4 rings like Tom Brady, then it is a different story.....but you don't, so you are not even in the same conversation.

Finally, let's talk about your most recent nonsense of refusing to stand for the National Anthem of the United States.  I will agree that as an American, you are entitled to your opinions and freedom of expression, the same as I am with my blog and my criticism of you.  However, as a public figure, you are also entitled to the backlash of criticism you will get for your actions.  You have succeeded in insulting all American citizens, let alone those who have served in uniform and those who have paid the ultimate sacrifice for this nation that has given you so much.  If you really feel the National Anthem is supporting a nation of those who "oppress the colored," feel free to leave your game check with the charity of your choosing......If you really want to change things, put your money where your mouth is.  What you are doing right now is the behavior I would expect from a two-year old having a tantrum.

In conclusion, you are an overpaid failure, you have insulted the entire country with your childish behavior, and your moment of time in the spotlight for your tantrum is over.

Obama's Failed Economic Policy Analysis

While driving in to my job (for which I am grateful to have, and I might add this is the best company I have ever worked for), Bill Handel on KFI stated that the unemployment rate under President Obama has dropped, and that we should consider this a success of his Presidency.......In the words of Dr. Ben Carson, Handel demonstrated that he is part of the "useful bunch of idiots" needed for policy to succeed.  I decided to perform an analysis of the numbers from impartial sources (US Bureau of Labor Statistics and the S&P 500) to see if the numbers are true.......No major surprise, the claims of successful economic policy are pretty much bunk.  Here is how this all fits together.

First, we need to take a look at the unemployment rate.  At first glance, the chart below supports the claim that the unemployment rate has decreased.

Everything is puppy-dogs and butterflies, right?  The number definitely shows a decline.  The decline is only one-sided.......unemployment rate is skewed by the labor participation rate (specifically, people who are employed and people who are actively seeking a job).  The below chart shows that there has been a year-over-year decline in the labor participation rate.

With essentially a 4 million headcount decrease in the labor participation rate, it would be reasonable to expect a significant decrease in the the unemployment rate.  There are several factors that may have contributed to this, including retirements (which clearly does not create new jobs) and individuals no longer seeking employment.

Finally, one must examine the change in population to see if there are changes that should be noted. The below listed chart shows the changes over the same period.

So, making sure I understand this......the population is showing an increase, year-to-year, but the labor force is showing a decrease in participation rate?  Long story short, the claims of the Obama administration make absolutely no sense.  It is yet again proof of failed Democratic economic policy, and that jobs are not created by increased government regulation and restrictions.  It should also be noted that underemployment (think of a college graduate working at Starbucks as they cannot find work) is not considered in any of the above analysis....and is yet further strain on the economy.

So, ask yourself this.....are you better off than you were when the Obama administration made a mess of this country?

Increased Minimum Wage Fantasy

OK, the latest buzz in the People's Republic of California is that raising the minimum wage will increase prosperity for those who are at the lowest tier of the economy.  While in theory this sounds great, a simple examination of the supply and demand curve will clearly demonstrate that there will likely be unintended consequences.

A simple understanding of economics is that labor is a commodity, for which the demand is largely driven by the cost.  As the cost of a given commodity increases, the demand for the same item will decrease.  The black dotted line effectively shows the effect of minimum wage as a means of cost control, setting an artificial minimum price.  As you can see, there is now a rather large delta between the demand of labor and the supply that will be available.  It doesn't take a rocket scientist to deduce the following unintended consequences:

• Demand for labor will decrease, resulting in stagnant or even more likely, increased unemployment.  This will be more evident in smaller businesses, which generally lack the financial resources to absorb a hit to their costs.
• Increased unemployment resulting from this will result in greater strain on public assistance programs, likely pushing the same folks who wanted increased minimum wage to call for higher taxes.  
• The above factors will likely contribute to decreased overall economic activity, lowering consumer confidence, and having an overall drag on the economic indicators.  This will now result in decreased performance to an already shaky stock market.  

The only positive I can see in this horrible scenario is that innovators in small business will likely come up with solutions that will make labor less of a factor (entrepreneurs always manage to do this, which is why they are successful in the first place).  This will result in a long-run decreased demand for labor overall in the economy.......So, when this takes place and the economy starts to show stresses as a result, you can thank the Democratic legislature, organized big labor such as the United Farm Workers (UFW), Service Employees International (SEIU), and anyone else who supported this complete and total nonsense.......

If I have said it once, I have said it a million times......if you wish to make more than the minimum wage, spend the time to increase your marketable skills.  Not everyone has the financial resources to attend college right after high school (I most certainly did not), but everyone who is willing has the opportunity to better their life through education.  I assure you that if you obtain a degree that is in a marketable skill, and then put those skills to work, you will not need the minimum wage increased. 

Economic Proof of Failed Democrat Promises

Everyone likes a free lunch, right?  After all, free is better.....everyone knows this.  Hillary Clinton and Bernie Sanders believe that university education should be free to all who are willing, and have gone as far as made this a promise if they are elected.  It is well documented that those who have graduated from college are compensated higher than those who have not, so this is a good thing, right?  Not so fast......let's bring in sound principles of economics......this one we will call the Law of Supply.

The law of supply is very simple......as the quantity supplied increases, the relative value that a consumer is willing to pay for that item decreases.  The graph to the right demonstrates a very simple example of what is called a "shift" in the supply curve.  As the supply of a given quantity increases, the price a consumer is willing to pay decreases until the price achieves equilibrium point.

The main reason people do not attend college is that they cannot afford the tuition.  Sanders and Clinton propose that if this is made free, there will be economic prosperity for all, and the workers will be better off.  While the claim is noble, it is also foolish to anyone who knows the slightest thing about how an economy works.  The supply of college graduates will increase in their plan, and effectively the wages that these new college graduates can expect will decrease, as the supply of graduates have increased.  The "Free College for All" plan can be counted on for the following to take place:

• Underemployment (a term never mentioned by the Democrats, I might add), with college graduates working at places like Starbucks as there will be fewer jobs available
• Decreased income tax revenue due to decreased wages
• Increases in unemployment of college graduates
• Decreased consumer spending due to decreased wages, resulting in decreased tax revenue (again)

All in all, this plan is foolish, and could devastate the economy.  College is expensive; I know this first-hand.  As I have said many times, the solution is for the University systems to become more competitive, and no longer rely on government subsidization.  This would force universities to become more competitive, and they would either increase the value of their product or reduce their rates to satisfy a market demand.

Now some folks would argue about increasing the minimum wage.....in my next entry, I will point out why this is just as foolish as this free college nonsense.

The Issues in Port Hueneme

According to the Ventura County Star, Juanita Guzman has resigned from her position as city treasurer for the City of Port Hueneme.  Guzman now joins the ever-growing list of individuals who have resigned in the past year.....City Manager Cynthia Haas, Finance Director Robert Bravo.  All of the resignations come following an investigation by the U.S. Department of Housing and Urban Development, and the subsequent findings of improprieties.

While the resignations are a good start, my question would be what is the degree of culpability that the individuals mentioned above have in the financial mess faced by the City......was there some degree of cronyism?  Was there something inappropriate going on?  I am certain as time marches on, the truths in the matter will manifest themselves......if a criminal investigation takes place, it is amazing the powers that a Grand Jury has in fact-finding.

More importantly, how did we get here in the first place?  While I have not researched the pedigree of the individuals involved, it begs the question of their respective background in budget and finance......have they ever had the same degree of accountability that is held to those of us who work in the private sector, or are they career bureaucrats who have the same sense of entitlement to spend our tax dollars as the politicians in Washington?

As we see a rising tide of change in the forthcoming Presidential election, the wave must also continue to the state and local levels.....the status quo have gotten us into this mess, and it is time for the people to take the reigns of government back into their own hands..... Considering how much tax revenue is taken in by the City, hard choices need to be made by bold individuals who are willing to make sacrifices.

I seriously think I should run for public office here......

The day I met Bella Rose

OK, I know this is supposed to be a business blog, but I've been telling Christa for some time that I needed to write about the day I met my granddaughter Bella Rose......so here goes!

It was a hot August day.....really hot.  Being the smart guy that I am, I chose to drive my old Toyota pickup named Uncle Chuy to the office (why I did this on this day, I am still not certain....considering I knew it was going to be hot and Uncle Chuy had no air conditioning).  I knew it was going to be a hot day when I crested the grade into the San Fernando Valley and felt the wave of heat hit.....I was glad I chose to wear a tie at this point, as I was going to be driving home in an old pickup with no air conditioning.......

Meanwhile, Christa and I had been on edge for a few weeks prior, awaiting the arrival of our granddaughter.  Heather, our daughter, had made some poor choices, and was incarcerated while pregnant with Bella. The decision was obvious that Bella would be coming home to live with us in our small condo (1 bedroom 1 bathroom) until her mother was released and got her life back on track.  We knew it would be cramped, but also a small sacrifice.

So, back to my day at the office.....I was working on a development program with one of my mentors, Deacon Gary, and I had advised him that I may be called to go at a moment's notice to get my granddaughter from the hospital.  While in the middle of a nice debate over something technical on a program, Christa called and told me it was time.......

Going backwards a bit, I had never been involved in raising babies, and had only held one baby in my entire life (my niece Autumn Rose).  I had never fed a baby, changed a diaper on a baby, burped a baby, placed a baby in a car seat, rocked a baby to sleep, or pretty much anything that would be required of me as a parent of a baby.......I kind of felt like a football player who was sitting on the bench, and finally got the call from the coach to get into the game.  Ready or not, get in there and make it happen.  The difference was the stakes were now the highest, as Bella Rose depended on Christa and myself for everything......

Christa picked me up at my office in her Kia....she had the baby seat in her car, and it had a really nice air conditioner (it was 10am, and already around 95 degrees....I was really glad I wore a tie and long sleeves now, I tell you!).  We made the trek down to County USC in Downtown Los Angeles.....Now for those of you who are not familiar with it, the hospital is in an area called Boyle Heights.  Let me just say it is one of the most "interesting" parts of town....I am glad the car had door locks!

We arrived at this massive and beautiful medical center, and the parking was awful as it it is in most metropolitan medical centers......but we got really lucky and found a spot right near the footbridge from the structure to the medical center.  Car parked, we started walking in.......I noticed people were looking at me kind of funny, and at that moment I realized I was wearing a cardinal shirt, and a gold tie......I completely looked the part of a Trojan!  So, back to the massive medical center......a place that big is hard to get around in, namely because it is easy to get lost.....I'm not sure how far Christa and I walked, but it seemed like forever until we finally found the nursery.

We walked in and were greeted by Nurse Cheryl, a charming older black woman who was nearing retirement.  She took us over and introduced us to Bella Rose, who was sleeping at the moment.  We let Bella sleep, and Nurse Cheryl took us down to get the paperwork and all that jazz, so we could take Bella home.  We asked what Nurse Cheryl was planning to do when she retired, and she told us, "Maybe hit a jazz club or two, walk the streets, have some wine."  We feel in love with her instantly!
So we get back to the nursery, and Nurse Cheryl was telling Christa about the formula Bella was eating and all that jazz.....I snuck into the other room where my granddaughter was sleeping still.  I peeked under the cover-thingie just to see her, touch her hand, and so forth.  Christa and Nurse Cheryl came in, and told me it was time to feed Bella.  They scooped her up, gave her a bottle, and she ate.....to say Christa was a proud grandma would be an understatement.

Now, keep in mind, I had only held one baby in my life.....somehow I mustered the courage to ask to hold my granddaughter.  I remember my voice cracked and my throat was dry, and even remembering the well of emotions at that moment now makes me a little emotional.....powerful stuff, man......Christa handed Bella to me, and it was my turn to feed her.  I remember she was very warm, and very tiny......about the size of a football.  She and Nurse Cheryl were gathering up a few things, and then it would be time for us to go....in the meantime, I had some alone time with my granddaughter.

Generally speaking, I am never at a loss for words (as I suspect you already understood with my blogging skills), but I was not quite sure what to say to Bella.  After all, this was her 3rd day on Earth, and I am sure she has met several people, but being her grandfather, I had to make sure she knew I was going to be with her for the rest of her life.  So, I said to Bella, "Hello little one.  My name is James, and I am your grandfather.  I am married to your grandmother Christa, and you are going to come home and live with us.  I work in aerospace and am a college student at CSU Channel Islands.  I love you Bella Rose."

We loaded up Bella Rose in her car seat (she was so tiny at the time we had to kind of pad her in place with blankets and stuff), and then headed back to Ventura County.....I never drove so carefully in my life.

The Failure of Labor Unions

In 1935, the United States Congress passed the National Labor Relations Act, which secured effectively the right of employees to unionize and subsequently enter into collective bargaining agreements with employers.  The intent of the law was to provide fair labor conditions, and increased wages.  While the spirit of intent of the law was favorable, the inevitable side effect of this was that workers were protected based on payment of dues to their union, rather than the merits of their respective performance.  A worker who metaphorically "mails it in" and puts forth the bare minimum effort is given basically the same compensation as a worker who is a top performer.  Performance is no longer an incentive for most of these workers.  As a result, companies are not able to achieve at top-tier performance, as they are not getting the most out of their respective labor forces.


In addition to labor inefficiencies, the process of collective bargaining brought about substantial pension obligations that companies will have to fund in the future.  Making matters more complicated (and expensive) is an increased life expectancy of Americans overall, and advances in medical technology which also promote longevity (and, consequently, increased expense). 


The environment for business created by unions has made companies which are union-heavy at a decided disadvantage in competing with non-union shops.  Detroit is a glaring example of this, with the automotive manufacturing business virtually dried up, and the highest rate of poverty and unemployment in America.  GM, Chrysler, and Ford all have to account for the costs of union obligations in the price of their respective automobiles.  We, as consumers, pay for this with the purchase of each car we buy made by union shops.  Hostess, the maker of Twinkies, was the most recent large business to fail as a result of union pressures and strikes.  Concurrently, with each purchase of a simple snack cake, the cost of the union labor was included.....all of which is a cost that adds no intrinsic value to the product at the end of the day.  The United States Postal Service is yet another glaring example of union inefficiency....it is my opinion that it is simply a matter of time before the Post Office is insolvent, goes bankrupt, and must be taken over by private enterprise (oh, did I mention my capstone project in grad school was an intensive study on the US Postal Service?).


The worst part of all of this?  When large companies fail and their pension is declared insolvent, the Pension Benefit Guarantee Corporation is forced to pick up the tab, all at taxpayer expense.  Even worse, the workers who were counting on a sound pension when they retire are now being paid pennies on the dollar for their retirement, placing additional economic strain on local welfare programs (and yes, we the taxpayers get to pick this tab up, too).


Bottom line is that business is smart, and when you are hit in the pocketbook, you learn quickly.  The automotive industry, for example, has been moving vehicle manufacturing operations from the north to the south.  Hyundai, Toyota, and Kia have all successfully been building cars that were traditionally imported in Tennessee, Georgia, and Alabama....all in non-union shops.  They are providing good paying jobs to a local economy that welcomed the business, and producing cars that do not have the "tax" created by unions.  The real tale of the tape was in 2008 during the Global Financial Crisis.  Chrysler and GM were forced to accept a government bailout, while Ford chose to implement cost-cutting measures that ensured solvency.  During this same time, the foreign-owned manufacturers were profitable and gained market share.


Most recently, the United Auto Workers attempted to form a union-shop in Tennessee at a Volkswagen factory.  For those not familiar, for a shop to unionize, employees must approve a measure of this nature by vote.  Volkswagen had taken a stance of neutrality on unionization, and publicly indicated they did not care if the shop unionized or not.  When the vote took place, the UAW move was defeated, and the factory will remain non-union.  Naturally, the UAW is pushing an appeal, has threatened litigation, and just about anything else you can think of.  More importantly, there is extreme significance with this vote - workers in the south do not feel they require the influence of unions to earn a living wage.  This is symbolic of unions in the United States overall.....they do more harm than good.  There is a reason why their respective membership is shrinking.  Eventually, unions will go they way of the goonie bird......