Friday, March 06, 2009

The Case Competition

This post may not interest that many people, but I am enjoying this final stretch of my MBA pursuit. The Strategic MBA at the University of Houston – Victoria culminates in a capstone course which includes a case competition. As you might expect, I mean for my team to win that competition.

There are basically three reasons why I want to win the MBA Case Competition. First, the practical point – there is no ‘Dean’s List’ for MBA candidates, we do not graduate cum laude, magna cum laude, or summa cum laude, and while a strong GPA is nice, no employer really cares about it; since the necessary GPA to graduate is 3.0 or better, everyone should have a nice result for their efforts (mine so far is 3.933, if I get A’s in both classes this spring I can finish with a GPA of 3.9412). The only way to stand out in the graduating class of MBAs, is to place in the competition.

The second reason is personal motivation. I think I am one of the smartest and hardest-working students at UHV, so I’d better do my best to show that in my results. Besides, who doesn’t want to finish strong? And third, you never know when you need to look for work, and adding honors to your resume is always a good idea.

The competition, for good and bad, is relatively simple. Each 4-person team will prepare a paper for the target company, in our case PetSmart. We started working last month on the project, so everyone will have three full months to get their project show-ready. Of course, that lets the slackers catch up so our team will just have to be better in depth and in quality of analysis. That’s the second major part; the presentation. A lot of folks won’t rehearse enough, or will assume that their paper is enough to work on. Fact is, however, a good presentation may use the same data, but selling it to judges (or in real life, clients and superiors) means preparing the information to be easy to understand and compellingly persuasive. And of course, we can’t forget the Question and Answer session after the presentation, which can make all the difference between a good team and a winner.

Since it’s such a big deal for me, I will be writing more about the case competition this Spring. Hope it’s worth the read!

Thursday, March 05, 2009

A Fool and His Influence

Barack Obama once again showed why he is not up to the job, when he decided to personally antagonize radio talk show host Rush Limbaugh. This latest decision, consistent with most of Obama’s judgment calls since winning the White House, has once again shown President Obama to be the most paranoid and divisive President since Nixon.

Let’s start with the mechanics of Obama deciding to attack Limbaugh. Yes, Limbaugh mocked Obama’s stimulus plan and said he hoped Obama would fail, since in Limbaugh’s opinion Obama is a socialist who is a threat to the United States. That, however, is Limbaugh’s right as a private citizen, to hold his opinion and speak it freely, even into a microphone on a popular radio talk show. It is not appropriate for government officials to appear to be oppressing free speech, but that is precisely the move Obama chose. On January 23, President Obama demanded that Republicans not even listen to Limbaugh’s show if they wanted any chance of participating in the stimulus bill discussion.

For all the false claims that President Bush was a fascist, this action by Obama comes far closer to actual fascism than anything even imagined in the last decade. President Obama not only painted his administration in the colors of suppressing free speech and attempting to stifle open debate on critical legislation, he inadvertently raised Limbaugh’s influence profile to that of the national government. Rush Limbaugh’s identity went overnight from ‘annoying self-righteous individual’ to ‘legitimate opposition leader’, because in his attack the president chose to treat Limbaugh as someone as worthy of his attention as any head of state or political faction. Obama could have ignored him as a no-account nuisance, the way most presidents ignore the noisy jibes from wanna-be populists, but instead he accomplished the exact opposite of his intent.

The secondary effect of Obama’s latest blunder was a further bullet in his façade of bipartisan leadership. The Telegraph in England, for example, noted that after less than a week in office, Mr Obama's presidency is already encountering the very partisan bickering he had pledged to stamp out during his first 100 days.” The Telegraph further noted the dishonesty of Obama’s pretense by noting that the president responded with a clear signal that he is prepared to ram the bill through without the bipartisan consensus he promised to construct, telling Republican leaders from the House of Representatives: "I won. I'm the president."

Barack Obama somehow fooled himself into imagining that no one would say bad things about him once he was president, that he would face no mockery or ridicule as the highest-profile figurehead in the world. He somehow believed that he could pass himself off as ‘post-partisan’ while simultaneously demanding that everything be done his way. Anyone familiar with American politics, let alone recent events, would have known better, but Obama bought into his own spin too far to accept reality when it did not march in his parade. As a result he diluted the value of his own brand, and tacitly granted equal merit to an unelected entertainer. At this point the best course for the Obama Administration would be to quietly back away and pretend the dustup never happened.

The second major reason that Obama’s attacks on Limbaugh were unwise, is the effect that action had on the debate surrounding Obama’s plans. Loading a trillion dollars more debt onto the taxpayers for a bill which guaranteed not even one private-sector job, did not save one house already facing foreclosure, and which made no effort at all to save even one private industry company in crisis, is more than controversial on its own merit; the Obama Administration needed to lead the debate on its merits, not allow itself to lose focus and create doubt as to how well it planned its policies. Reacting emotionally to a talk show host sends out the signal that Obama is worried about anyone looking closely at his proposals. Certainly the apparent contradictions are causing people to wonder about the plans, and not just talk show hosts:

In the midst of signing and proposing massive spending bills, the president announces his plans to cut the deficit in half

The president urged the Congress to pass his massive ‘stimulus’ package with admonitions that delay could be catastrophic, yet the bulk of the bill’s effects won’t occur until late 2010 at the earliest

The president has repeatedly promised that 95% of “working families” will see a tax cut, but only 66% of working Americans actually pay any taxes to begin with
The president has announced plans to close the terrorist incarceration facility at Guantanamo, on the basis that the site was inhumane, yet investigators have determined that the Guantanamo site was not inhumane, indeed was superior to many places the inmates would be transferred to. Yet the shut-down is still scheduled to occur, even as the Obama Administration admits that in some cases it considers rendition to be an appropriate option

Given the lack of civil discussion on the issues, a reasonable observer might well conclude that the Obama Administration is not able to defend its policies on a rational basis. The juvenile spat between the president and the radio host only adds support to that belief.

Wednesday, March 04, 2009

Genuine Trumps Gimmick

The failure of Barack Obama to comprehend the financial crisis, let alone deal with it effectively, is crumbling the façade of his competence as President. His minions, as a result, are going through the classic first stage of grief and loss, the stage of denial. That denial is performed through their ludicrous comparisons of Obama to Ronald Reagan, as if the blundering and desperate moves by the present President can be said to be reasonable and prudent, let alone considered the equal of Reagan’s leadership. To understand why the comparison is not valid in any sense, we must consider the nature and causes of the two presidents’ economic environments.

Ronald Reagan and Barack Obama each inherited a recession when they came to office. That’s not unusual, though – Presidents Kennedy, Ford, and Bush also inherited recessions when they arrived at the White House, and in fact Presidents Taft, Cleveland, Buchanan, Van Buren, and Washington were also greeted with recessions upon their arrival (in Cleveland’s case it was upon his return to the White House). Recessions are cyclical, and so far no one has been able to prevent them from happening, although a bad president can make things worse if he bungles the job. The point here, is that recessions are not ‘republican’ or ‘democrat’ in their cause per se, but should be examined in the specific causes of each and their conditions created upon the nation.

The recession which greeted Barack Obama was caused by three forces – the burst of the housing bubble, the credit crunch brought about by bank speculation, and the liquidity crisis in the domestic auto industry. The initial symptoms were an unemployment of 7.2% in December 2008 (7.6% in January 2009) and a 3.85% inflation rate.

When Ronald Reagan took office, the recession he faced was more profound, because of the heretofore unimagined combination of unemployment and inflation rising at the same time. The chief causes of that recession were the rising price of oil and instability in the Middle East. The initial symptoms were an unemployment rate of 7.2% in December 1980 (7.5% in January 1981) and a 15.81% inflation rate.

You cannot change what you cannot control. This is the essence of why Reagan’s economics were so radical. Reagan established four general goals he believed were essential to setting a sound economic course:

1 - Reduce the growth of government spending
2 - Reduce the marginal tax rates on income from both labor and capital
3 - Reduce regulation, and
4 - Reduce inflation by controlling the growth of the money supply.

While not perfect in its results, Reagan accomplished all four goals and established conditions for an unprecedented boom in business and prosperity.

Obama’s plan is far less complete, and in spirit opposes every one of Reagan’s goals, by massively increasing government spending, raising taxes on both individuals and corporations, drastically increasing regulation and driving inflation upward, deliberately so in the case of energy and finance costs. Essentially, President Obama is rolling the dice on some old notions of Keynes, hoping that simply spending massive amounts on his pet projects will renew economic prosperity by simply spending money. Any parent with a teenager knows the flaws in such thinking; spending is not desirable in itself, but only when it creates the necessary results. In the individual case, this means you pay the rent or mortgage and you buy your food, before you ever entertain the idea of buying that SUV or investing in that can’t-miss IPO. When a teenager wastes his money, he is depending on his parents to cover his needs, but the parents have to be responsible themselves for keeping sound priorities and enforcing discipline. In the case of the government, it’s necessary for government to be cautious about spending and to think through its goals and abilities before engaging on a new bout of projects. It’s catastrophic, nothing less, when a government becomes reckless in spending and in committing its resources without consideration of the critical needs. Obama’s “stimulus” package spent almost eight hundred billion dollars – before interest – without creating even one private-sector job, without addressing even one home foreclosure in process, and without even addressing consumer confidence. This is the government version of trying to justify spending mortgage money on a hooker.

Everything has to be paid for. That’s as basic as economics gets, yet somehow it gets ignored when government is putting together a budget. Literally trillions of dollars are being committed with no reasonable explanation of how it will be paid. When anyone, even the President, tells you that “only the rich” will see their taxes go up, do the math. There are simply not enough “rich” people to pay all these costs and bear these new taxes.

The historical record warns that the massive tax hikes envisioned by the Obama Administration will result in less revenue than they intend to collect. This is because what gets rewarded gets repeated, and what gets punished stops. And in practical terms, this means that when people and corporations are punished for succeeding financially under US tax law, they will find alternatives to paying taxes. They will move business off-shore, they will stop spending money on goodwill initiatives, they will hire fewer people and pay less to their employees, because the government is destroying their effective business models. Obama’s heavy-handed plan for tax and spending with government in control of every major initiative, has no successful model in practice in the world.

Comparing Barack Obama to Ronald Reagan is pathetic and arrogant, to say the least. While it must be admitted that Obama is a far better actor than Reagan ever was, he cannot hope to be even half the leader that Reagan was.

Tuesday, March 03, 2009

The Trust Deficit

Perhaps the most immoral choice made by democrats in the last ten years was the decision to attack Republicans solely on the basis of partisan goals. Consequently, the hundreds of democrats in the House and Senate who voted for the Iraq War feigned indignation at the war’s costs, ignoring success and the threat of terrorism in order to gain political leverage. Pleas by Bush to address Social Security and Medicare reform went unheeded, although democrats would later blame the President for their own dishonesty. Democrats nominated a man they knew to be unprepared for the office, simply because their lust for power was far greater than their last few glimmers of love for their country. Nine of every ten democrats has sold his soul for power, and could not care less how many Americans he hurts, so long as he gets re-elected.

Republicans see the rising anger in the eyes and voices of Americans, and many of them think they can turn this to their advantage in 2010 or 2012. But they forget how far they have left the road of moral leadership. The GOP tolerated Larry Craig, they resisted President Bush when he led like a conservative but rode along when he proposed liberal budgets and found no voice to oppose earmarks or corruption in politics. The GOP likes to imagine they are the party of Reagan, but not one of them evokes comparison with the Gipper. True, John McCain would have been a significantly better choice for President than Barack Obama, but that is only because Obama is so horribly incompetent and dishonest; there was no real conservative among the leading candidates, partly because none of the GOP leadership wanted one. America has not yet forgotten how few of its promises the republican party kept during the years it held power. So only a great fool, which is to say a politician, would imagine that incompetency and dishonesty by democrats would mean a return to the pachyderm’s glory days. It’s just not going to play out that way.

Ronald Reagan was probably the greatest President of the twentieth century, not least because he was the only president to rebuild much of the public trust in the office. But since he left office, the brand has quickly eroded. Some of that comes from character assassination, especially by the mainstream media, but it was also spurred by an incredibly clumsy history of bad judgment, personal arrogance, and rejection of common-sense thinking. It’s difficult to imagine a president counting terrorists and despots as moral equals to democratically-elected leaders, or imagining that Moscow would hold a worldview comparable to that of the average American, or promoting laws to essentially cause banks to ignore risk evaluations in mortgages, or to ignore radical terrorist groups which publicly declare their desire to kill Americans, or that massive government programs would result in effective improvements in education and medicine, or that terrorists should enjoy the same civil rights as decent citizens, or that the best way to create new employment would be to punish the people who create and run companies, but all of those things have happened.

To put it plainly, the American people do not trust the politicians. Democrats grabbed power in 2006 and the White House in 2008 largely by lying about the situation and what they promised to do, but they will only be voted out if the public sees a more trustworthy alternative. If republicans truly want to regain the power they had before, they will have to show that they have reformed and are worthy of the responsibility. As for the democrats, they can and will play on fear and prejudice to hold onto their seats, but in the end this will kill their party unless the few democrats with scruples left, the ones who remember what their party once stood for, reform their party as well. It has become difficult to kill off an obsolete party, but the Whigs died because they became completely useless to the nation; the republicans and democrats had better learn from that history. If things continue as they are now, then no matter who hold office, the public will treat the federal government with all the contempt it has richly earned, and eventually no policy or program will have a chance of success, because its source is an illegitimate government, a bastard set of dictators.

Monday, March 02, 2009

Apology for Poor Post Production

I have a cold, an 8-year-old preparing for her first TAKS tests, and I am also working on my presentation for my MBA Case Competition later this semester. As a result, what blog posts I have attempted to produce have generally been below acceptable, and as a result I have been slow in posting this month. I hope to improve production as circumstances improve.