Tag: Money Management Mishaps

Obama is the Touch of Death for Companies

Sua Eccellenza Barack Obama, Capo del Governo, Duce del Fascismo e Fondatore dell’Impero has some very powerful abilities. He can just mention a company during his State of the Union address causing them to instantly go bankrupt:

Andrew Restuccia of The Hill is reporting that Ener1, a battery company that President Obama referenced in his State of The Union Speech on Tuesday as an example of successful energy investments, has just filed for chapter 11 bankruptcy.

That’s just two days after the speech.

I believe it’s obvious for all to see that Obama’s words are the touch of death for any company. First Solyndra and now Ener1, I wonder what that next company Obama will point to as a successful investment only to see it go into bankruptcy shortly afterwards. Does this power extent to government agencies? If so I have a list of government agencies for Obama to mention.

It Will Cost $320 Million to Upgrade The IRS Website

I run this website on commodity hardware sitting in my apartment. Needless to say my costs are negligible and consiste of the server, electricity, and an Internet connection. A larger entity that has mission critical servers running twenty-four hours a day, like Amazon, is going to sink a much larger chunk of change into their infrastructure (at least I hope so). Of course Amazon will establish exact lists of needed upgrades and expansion before going forth because they have to maintain profits. What happens when the Internal Revenue Service (Revenuers) decided to upgrade their site? They claim to need $320 million but submit no actual plan:

IRS’ current $320 million investment for its website includes new, more secure portals so that taxpayers can access more information. The new website is expected to go online in 2013.

However, the IRS needs to be more strategic about exactly what online customer services it intends to improve, and what it hopes to achieve, the GAO said.

“IRS does not have concrete plans that define what additional online services the new website will ultimately provide and how much the services will cost,” the report said. “To their credit, IRS officials have begun developing a roadmap that identifies some online services they would like to provide, and IRS has periodically added new online services in the past. However, the roadmap omits several fundamental elements.“

I guess it costs a lot of money to upgrade a website that exists only to assist in the act of theft from the entire United States populace. It would be nice if we knew exactly why it costs that much money though but the Revenuers must have decided we don’t need to know that. If government agencies had to run like private businesses they would be putting for very detailed plans consisting of exact costs and explain how those costs will provide long-term benefits that exceed those initial costs. Instead the government has a blank check and never has to justify any expenditure. Needing more money isn’t a problem for them because they can simply steal more form the populace in the form of tax increases.

I have a simple demand: if government officials are going to demand that everybody pay their “fair share” of taxes then the government must put forth detailed spending reports that account for every dollar that goes out along with justification for those costs.

For those who want to read the Government Accountability Office’s (you have to love how the government gets to determine its own accountability using its own office) report it can be found here [PDF].

A Majority of United States Foreign Aid Is Used for Military Purposes

The United States gives a lot of money to foreign countries in the form of aid. Truthfully this aid is usually a cheap way of buying off allies in other countries. If you don’t believe me then you should read this:

A new bill approved by Congress last week would again make the Defense Department the premier funder of security assistance to foreign countries, giving it more than double the comparable budget of the agency popularly associated with America’s foreign aid, the State Department.

The $17 billion Pentagon aid budget for the 2012 fiscal year is the second in a row to exceed the State Department’s by $10 billion, a disparity that has begun to provoke debate among foreign policy experts in Washington. Seven years ago, circumstances were reversed, with the State Department spending triple the amount the Pentagon spent on such aid.

Your country doesn’t have enough money to build buildings? No problem, let us give you some money to blow up some of the buildings you already have!

Give Us Your Money

It’s no secret that the United States is broke off its ass and whenever a government is broke is turns to taxpayers to make up the difference. Personally when I’m unable to pay for something I just don’t buy it but when the state is unable to pay for something they use existing laws and enact new ones to increase the amount of money they steal from the populace. As you read this article the Internal Revenue Service (revenuers) and the Department of Justice (DoJ) are expanding their power to forcefully take more money:

US OFFERS SWISS BANKS A DEAL

The United States authorities have offered to lift the threat of legal action against 11 Swiss banks in exchange for information, a Swiss paper reported on Sunday.

The one thing I will say about Swiss banks is that they respect your privacy. Instead of spilling the beans about account holders they tell those curious about their customers where to stick it before saying something offensive in German and booting the nosey individual out on their ass. Unfortunately the United States government doesn’t have the same respect and have been trying to get Swiss banks to unveil customer lists for ages. Now the DoJ is making an outright threat; surrender your customer information or we’re taking your asses to court.

Obviously the revenuers don’t want to be outdone at their own game and have stepped up their game as well:

FEDERAL JUDGE GREEN LIGHTS IRS SEARCH FOR CALIFORNIA GIFT TAX CHEATS

A federal district court judge has given the Internal Revenue Service permission to serve a “John Doe” summons on the California State Board of Equalization demanding the names of residents who transferred property to their children or grandchildren for little or no money, from 2005 to 2010.

The IRS has used John Doe summons to seek lists of American taxpayers unreported offshore accounts at Swiss Bank UBS and at HSBC’s bank in India.

I’m going to let the DoJ and revenuers in on a little secret, you’re not going to find enough concealed wealth or missing tax dollars to make up for the massive deficit. What the government is doing now is equivalent to searching couch cushions for spare change. When you’re trying to pay of a $50,000 student loan there isn’t going to be enough change in your couch to even begin touching the interest payment. The only option our government currently has is to reduce their spending, a strategy they are fighting tooth and nail against. I wonder how long it will be before the revenuers start auditing everybody in the United States.

We Missed the Government Shutdown Again

So much for luck, our glorious government “leaders” managed to compromise and avoid a federal government shutdown:

The deal averts the possibility of US federal agencies shutting down because of a lack of guaranteed funding.

The House of Representatives and the Senate are both expected to vote on the controversial $1tn (£643bn) spending bill on Friday.

Why is it those guys can only cooperate when it comes to fucking the American populace over?

Your Tax Dollars Working Hard to Fight Terrorism

One thing that never ceases to amaze me is the absolute lack of fiscal responsibility exercised by government agencies. What our tax money is spent on in the so-called war on terror boggles the mind. For instance I would really like to know how snow cone machines are used to thwart the plans of terrorists:

The West Michigan Shoreline Regional Development Commission (WMSRDC) is a federal- and state-designated agency responsible for managing and administrating the homeland security program in Montcalm County and 12 other counties.

The WMSRDC recently purchased and transferred homeland security equipment to these counties — including 13 snow cone machines at a total cost of $11,700.

The machines were funded by a grant from the Michigan Homeland Security Program. The request for a snow cone machine came from another county, but all 13 counties received them.

The purchase raised some questions at a recent Montcalm County Board of Commissioners meeting. Commissioners wondered about the machine and questioned its purpose.

The Michigan Homeland Security Grant Program’s Allowable Cost Justification document, dated May 9, 2011, says the snow cone machines can make ice to prevent heat-related illnesses during emergencies, treat injuries and provide snow cones as an outreach at promotional events.

Emphasis mine. You can justify anything so long as you’re willing to stretch definitions far enough. I’m curious what heat-related illnesses can be better avoided through the application of snow cones over regular crushed ice. While I’m not a biologist I believe human beings are capable of intaking ice whether it is flavored or not.

I’m also at a loss how consuming ice, flavored or not, will help with heat-related illness. The common complication related to heat is dehydration. Anybody who has studied winter survival techniques understand that the consumption of snow actually further dehydrates a person.

I wish government agencies would just be honest and say, “We want a snow cone machine because snow cones are fucking delicious.” If you’re going to piss away money on frivolous gear at least have the decency to be honest and not attempt to bullshit the public.

Yet The State Won’t Relinquish Its Monopoly

It’s probably not news to anybody that the United States Postal Service (USPS) is in trouble. Their financial situation is growing ever darker and now they’re laying off 28,000 employees and shutting down numerous mail-processing centers:

The US Postal Service is shutting more than half its mail-processing centres in a £3bn (£1.9bn) cost-cutting drive expected to shed 28,000 jobs.

Vice-President David Williams told a news conference that the closures were designed to stave off bankruptcy next year.

Out of 461 mail-processing centres across the US, 252 will be shuttered starting from next April.

So what happened?

Customers were increasingly using the internet for bill payment and other communication, he said.

From nearly 100 million in 2006, first-class mail volume was down to 78 million and expected to half by 2020.

USPS is sinking because the product they offer isn’t in as high of demand anymore. Basically we can look at this situation by pretending the Internet is the Ford Model T and mail delivery is a horse and buggy. In our example USPS is a buggy whip manufacturer and instead of moving into the business of manufacturing tires for the Model T they continue to stick to their hopeless belief that this whole automobile thing is just a fad and will go away soon.

Even though USPS maintains a complete monopoly on first class mail delivery they have agile competitors in other areas of package delivery. How often do you receive a package from USPS? Most packages I receive are either from UPS or FedEx (although once in a while I’ll get something from a regional deliverer like Speedy). When I wish to ship packages I find UPS and FedEx are almost always cheaper and less hassle. Now it appears as though they’ll also be quicker to get your package from a drop-off point to its destination since USPS is closing down half of their processing centers.

It’s not entirely USPS’s fault in this case. USPS stands in a precarious situation having to please the demands of the federal government while receiving no federal funds. The federal government demands that USPS pay its employees federal wages, pensions, and benefits while keeping the cost of letter delivery very low. Yet the same government making demands about how employees are compensated for their time are also saying USPS has to be self-sustaining. Were UPS or FedEx subjugated to these same conditions they to would face failure.

They only option to fix USPS’s woes is for the federal government to completely cut the cord. That is to say remove any input into the operations of USPS and let the business be run like a business. Either way USPS is on the slow road to complete failure and the only option the federal government will have is relinquishing their monopoly on first class mail delivery less no letters be delivered upon USPS’s complete collapse. USPS also needs to move into another business, which is likely very difficult when the federal government controls everything you do.

On the St. Paul Ford Plant Shutdown

The Ford Ranger is by far my favorite vehicle. I’m on my third Ranger and was hoping to someday be on my fourth but that desire was shutdown with news of the Ford Plant in St. Paul, the last plant manufacturing Rangers, being mothballed. While this is a bit sad it just means my next vehicle will likely be a Ford F-150, which will piss off the enviro-nazis even more than my current gas guzzler so that will certainly be an upside. Still it was interesting reading the Star Tribune’s piece because at one point they pondered if there was anything the government of Minnesota or St. Paul could have done to save the plant. Their speculations were amusing to me:

Dziczek said another factor was the recent stripping of job security language in UAW contracts.

“It used to cost companies an arm and leg to close plants in the automotive diaspora because they had to continue to pay those workers,” she said. “Without those protections, it became easier to close regional outposts.”

You know what else hurt the Ford plant? Union wages. Don’t get me wrong, if a group of workers want to get together and form a union in the hopes of fighting for better wages and working conditions I’m perfectly fine with it. I’m also perfectly fine with the owners of a company firing everybody attempting to create such a union because that’s what voluntary association means, if either party is unhappy with the association they are free to terminate it.

Either way union labor laws in the United States are a tricky beast and they are entirely on the side of the unions. Some would consider this fact a great win for workers but workers aren’t the ones who make union policies, higher ups in the union are. Union leaders will often tell you that their job is to represent the workers and thus they will make outrageous demands including insanely high wages, pensions, and requirements that promotions be based entirely on seniority. Even though such things sound great for workers it ends up biting them in the ass as the companies paying these benefits are unable to continue operations and eventually have to make a decision; close plants with expensive union labor or face bankruptcy. In either case the workers end up losing their job.

Regardless of what union high ups believe those “greedy corporate bastards” don’t have an infinite line of money in which to pay workers. Many factories don’t pay employees more for the simple fact the employees don’t provide more value to the company. Somebody who gets paid $22.00 and hour to put windshield wiper blades on trucks all day isn’t really bringing $22.00 and hour of value to the company and therefore is costing the company money every hour. When paying your employees loses money you’re in a slowly sinking boat.

Minnesota’s distance from auto parts makers in the Michigan-Ohio rust belt further doomed the St. Paul plant, as parts had to be shipped from far away. Despite those factors, some experts insist the St. Paul Ford plant could have been saved if state leaders had more manufacturing expertise and foresight.

“It was a gross piece of stupidity for the state of Minnesota to let this plant die,” said Fred Zimmerman, a retired University of St. Thomas manufacturing professor.

He said state leaders could have come up with a plan to build an integrated metal stamping facility, perhaps in the sandstone caves below the plant, and that might have helped solve the costly problem of shipping in parts.

If Ford believed construction of such a facility would have been a profitable way to continue I guarantee you that there would be such a facility at that plant. I agree that the state let the plant die but not through inaction. Minnesota isn’t a very business friendly state, the state government loves to bleed corporations for as much money as they can. When a company is faced with ever dwindling income due to state theft you can bet they’re not going to stay in the state for long. California has this exact issue as big players like Electronic Arts and Adobe have been fleeing the state in the hopes of finding greener pastures. Had the state not continue to syphon funds from productive companies we would likely still have flourishing industry as we did in the old days (I’m still surprised how many companies were started in Minnesota). At least Zimmerman had one piece of common sense:

Now, Zimmerman says, leaving out its agriculture sector “Minnesota is, to some extent, a Greece in the making.” Losing high-wage Ford jobs will hurt a state with mounting unfunded public pensions and other budget challenges.

“You have to make things and export them out of the community to pay the bills,” he said. “It’s a great tragedy to lose one of the best places for employment in the entire state.”

An economy that buys but doesn’t sell is one that will be facing failure in quick time. This is a problem in the United States as a whole. The government makes doing business in the United States more difficult with every rule, law, and regulation. Why would a company build a manufacturing plant in the United States when they have to spend millions of dollars on idiotic regulation compliances when they can just contract with a Chinese manufacturer for a fraction of the cost? Who will start a company in the United States when they will be facing huge corporate income taxes where as they’ll face little or none in Hong Kong? You can’t continue to steal from people and expect them to gladly take it. So what’s to be done with the plant? Ford is hoping to sell it to somebody for new development but it seems the mayor of St. Paul wants to hinder that development:

“We still hope to develop this into a little jewel for the metro area, but it’s not going to happen overnight,” said Bill Klein, a business attorney and task force co-chairman who lives two miles away. “It’s going to be a long process.”

Added Coleman: “We’re not just going to take the first operation that comes in and says they’ll take the whole site and create 200 jobs. That’s not acceptable to anyone.” Among his concerns: replacing Ford’s diverse workforce. “I’ve always been impressed by the number of women of color working in that plant,” he said.

They’re not “going to take the first operation that comes in.” No, instead they’ll likely turn down numerous productive ideas in the hope of finding a developer who will build some fancy looking building that ultimately generate nothing of value. Perhaps Toyota will desire the location, only to be turned down because they don’t have a plan to build some fancy looking tourist attraction. The state (in general, not Minnesota) is the single largest hinderance to business.

Either way so long Ford Plant. I’ll always have fond memories of the Ford Ranger and wish it wouldn’t have to end like this but fully understand continued development of such a vehicle in a hostile business environment isn’t a sustainable possibility.

Oracle Submits One of the Dumbest Court Filings Ever Conceived

Oracle is a company I hold no love for. Their products never impressed me (probably because I have no need for a proprietary high-end database system) and I hate what they ended up doing with the products and services they obtained from the Sun Microsystems acquisition. Yet Oracles latest court filing really takes the cake:

Hewlett-Packard has secretly contracted with Intel to keep making Itanium processors so that HP can maintain the appearance that “a dead microprocessor is still alive”, and make money from its locked-in Itanium customer base and take business away from Oracle’s Sun servers, Oracle said in a court filing on Friday.

That’s right, Oracle is throwing a hissy fit because they believe Hewlett-Packard (HP) are secretly floating money to Intel in order to keep the Itanium processo alive. My questions is this: who fucking cares? When one company gives another money in trade for a good or service that is called a transaction. As these transactions are agreements made between two entities neither is obligated to reveal the details to anybody else.

Why is Oracle wasting taxpayer money by bring up the fact HP and Intel do business in court? This isn’t a secret, anybody with an HP computer knows this as it’s advertised by a sticker on the computer that says, “Intel Inside.” If HP is paying Intel money to continue production of the Itanium processor what does it matter? What justification is there for bringing up this fact in court?

Tactics to destroy competition like this is one of the many things wrong with the United States economic system. Were the state controlled courts willing to simply toss this type of stupidity out the door money would be saved but businesses throughout the country and that money could be put to productive use. Instead our economy is so intermingled with government that you can’t make a single move without filling out the correct form in triplicate and getting the expensive rubber stamp of approval. Our court system needs to stop being a mechanism for companies to destroy competition through monetary attrition.