BNWG.US - Small Government. Big People.

Many years ago, my investment mentor told me: If you have to bet your fortune on a politician’s rational decision, don’t. Remember, always short sell the politicians. 

I had my doubts, reasonably. And now, after witnessing the entire fiscal cliff talk and do, I think he was so right. It is naive to believe otherwise.

Remember there was a time, probably in early Nov 2012, after the presidential election, when almost everybody was pledging that we WILL NOT go over the cliff? And now with D-day minus 6, without a fiscal deal agreement, it is almost 90% that we are going over the cliff. 

Right. Always short-sell a politician. Why Naked Short? Because you don’t want to own a politician in the first place. They are bad assets, they are liabilities and they need to be sold instead of bought.

Among the politician groups, there are two types: the group that is pretentious and lame, the group that don’t bother to lie their intentions. Naturally, the  Dems are the former and the GOP are the latter. 

Many Dems, while they are super rich, while a few more taxes does not kill their business since they are either legacies or Hollywood super stars, they ask for everybody to pay more taxes. Right, like everybody making more than 250K a year or 400K a year made their money through some scam or crime, that they deserved to be screwed and support those who never paid a dime to tax revenue but receiving all the benefits through these man years. 

George Cloony or Warren Buffett or Nancy Pelosi, do you know how hard it is for a middle-class (defined someone making around 300-500K in New York or San Francisco, 100 - 300K in other places) to struggle in such economy? I guess you don’t. Prove me wrong. 

All Dems are doing is to cut the road from middle class to rich, both through mentality by demonizing rich or through legislation by screwing rich or the path to rich with taxes and laws. 

GOP on the other hand, don’t bother to lie. They tell you in the face that we are rich and we are capitalists, we want to squeeze profits from you and you can join us too if you work hard enough and lucky enough. They are no Saints. They won’t give their hard-earned money to you for free. But I appreciate that if they can have a business-friendly opportunity (or rather profit-friendly environment) to make sure you have a possibility to be there. Frankly, I like this better, therefore I am leaning right. 

The Cliff is approaching. Buckle your seat belt. Lock in your capital gains, lock your income gains and lock your doors in case there are looters. 

Merry Christmas and Happy New Year, everybody. Buckle your seat belt and cliff diving here we come. 

-Guns kills people, Let’s ban guns; But marijuana is hard to control, let’s legalize it.

-We need freedom on female body; But no our kids don’t have freedom to eat calories higher than xxx

-Let’s tax the rich to make up the gap; But I want to hire a lawyer to save my tax filings

-Big oil companies got 2 billion subsidy a year, But I don’t care that 90 billions spent on alternative energies (that failed mostly)

-Big corporations are blood-sucking vampires; But I need them to fund my presidential inauguration

-I hate the 1%; But I will be a Republican when I am in the 1%

-Condi is a liar; But criticizing Susan is racism.  

List goes on.

And on. 

One common trick mainstream media is doing almost everyday recently is to phrase the title about anything related to fiscal cliff like this “Republicans are willing to let US go over fiscal cliff” or something like “if Republicans insist their opposition, the negotiation will fail”, “Republican is not willing to let the president’s proposal to pass to avoid fiscal cliff”

Right, like the only role Republicans need to do is to obey and budge. Wrong. Dead wrong.

Remember, just because someone opens their mouth to throw the weight to the counterpart, does not give him/her the right to be the “right side”.

Just because I put up a plan and send to you for passing of the plan and you oppose it, does not mean that my plan is a good plan, agree?

Democracy’s biggest strength, is that no one can push through their own agenda over everybody freely. They will always face opposition and challenges. Otherwise you are Mursi.

It is opposition’s responsibility to challenge the incumbent’s proposals and to keep things in check always. And just remember this is a negotiation, on equal ground.

EVERY PARTY HAS ITS ROLE SHOULD THIS THING FAILED.

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There are no shortage of headlines in the past week. Petraeus, John Allen, jealous mistress #1 and stupid mistress #2, or if you don’t like gossips, Fiscal Cliff negotiation, DOW fell more than 5% since Obama was re-elected, or some pure business news?  Twinkies brand owner Hostess is liquidating its business. Yes, 

NOT CHAPTER 11, but TOTAL LIQUIDATION.

Does that remind you some uncomfortable chapters in “Atlas Shrugged” yet?

The reason behind the liquidation is very simple, that even a lay person to business world can get the idea. Back then the company told their employees: Folks , we need to work a little harder in order to survive in this world, so I am asking you to work an hour more each day and taking 9% less in salary. 

Immediately the protest started. This is still understandable. You work for many years at current compensation and doing some work. And suddenly you are asked to work a bit more, not for a promotion but a pay cut? I guess anyone will be upset. But what struck me as inconceivable is this: even when the company told the union that if you guys dont stop the strike and come back to work to keep everything floating, we have to liquidate the business and fire all of you. 

The union did not budge. They want to call the owner bluffing.

Guess what? The owner has a flush, against the Union’s pair of Aces.  

Lesson #1: Always remember who is paying you the money in exchange of your service

Lesson #2: Always evaluate your negotiation position fairly and accurately. 

Now unfortunately, 18,000 workers there will be laid off and the company will stop their business.

Union is a weird thing. In certain historical moments, it made some sense. Back then the individual rights were not well respected and not protected. The evil business owner tried to squeeze every possible value from their workers and little human rights can be mentioned in workplace. That was the background of the birth of Union. i.e. unless you unite yourself together, you can’t fight for your rights. 

Nowadays, Unions need to remember always: there is a fine line between what you think you deserve and what you really deserve, because human’s greed is unlimited and if without a limitation, it will go too far. It applies to both evil bankers and union workers. 

I still remember 3 years ago, in the worst financial crisis, the news flash came across my screen that shocked me to the floor. 

A piano moving worker earned about 400K a year in Carnegie Hall. 

I believe some other works in the union makes at least 200K to 300K a year for doing some simple tasks and enjoy great benefits. 

Question: are their service properly valued? or they are “protected” by the union so they have collective bargain and created a “labor” monopoly situation?

Another piece of news you may find interesting: In schools there are rooms called “rubber room”, which is for teachers who broke the rules and waiting for regulation decision on their tenure in school to sit in. Basically their job is to sit in the rubber room for several years since it is extremely complicated to fire them because of the teacher’s union “protection” and they are paid about 70K - 100K a year for doing nothing. 

Inefficiencies in economy? Yes. Low Productivities as a result? Yes. Will it go away? Not likely. Good news is that in many places, Unions see their funding more and more shrinking because of the unemployment caused by the bad economy and more and more workers are in fact standing up against those “compulsory” unions dues from the already shrinking paycheck. 

Unions are the monsters that were created in the past, and it can’t serve the current time and we need to get rid of it. We only need the government to observe and enforce the labor laws so that the 7/24 workweek will not come back. This is one of the important cause for having a government in the first place : to ensure basic level of human rights and safety net. We don’t need both Government and Unions to do such task. Otherwise we may have wonderful “work-life” balance with little working hours but huge pay check, and heading towards the hell that Greece is currently in.