Socialism and Why It Fails

Why does socialism fail?  Socialism is not a new idea.  The idea is thousands of years old, and has never worked.  According to a friend of mine, the only really new political idea in the last couple thousand years was the Republic with three branches of government our founding fathers designed. 

Changing the name of socialism and calling it something else does not change how it works and the end result.  It does not matter if you call it socialism, modern socialism, progressivism, modern progressivism, or communism.  The principals and objectives are the same.

Socialism fails because it takes away all incentive to perform and achieve.  Why should someone work when there are no rewards?  The concept of working to one’s ability and being compensated only according to one’s needs just does not work in the long run. 

Socialism often shows early signs of success, but eventually fails.  Early success is because of wealth redistribution, but over time everyone is reduced to a lower standard of living except for the political elite.  By definition, socialism grows the size and power of government, and ends with tyranny.  The political elite live in luxury and the workers live in near poverty.  This is not just a wild prediction.  Look at history shows every socialist country fails. 

This history lesson is relevant today when we have a self-proclaimed socialist running for President.  In the past political candidates may have advocated socialist ideas, but tried to disguise them under other names. 

We have been moving toward socialism in this country for the last 100 years.  I think it is time we get back to the principles of our Founding Fathers that made this country great. 

Presidential Debates

      I have watched both the Republican and Democratic Presidential debates.  CNN was a little hard on the Republican candidates.  CNN openly said they would concentrate on the candidate’s vulnerabilities and try to pit them against each other.  I was not happy with this agenda, but understood that CNN was going for maximum ratings.  

When CNN hosted the Democratic Presidential debates, they stated they did not want to pit the candidates against each other because these were serious candidates that wanted to discuss the issues.  Was CNN saying the Republican candidates were not serious candidates? 

Let’s take a look at the candidates.  The Republican candidates included seven governors, five senators, two medical doctors, two CEOs, one woman, two Cuban Americans, one Asian American, and one African American.  Most were well known to the politically informed.  The Democratic candidates included one woman, one socialist, and three old white men that most people had even heard of.  This is interesting, considering the Democratic Party tries to present themselves as the party of diversity.  Talk is cheap.

  As with most politicians, the Democratic candidates tried to shout out about all of their accomplishments, both real and imagined.  The exception was Jim Webb, who is actually a war hero and never made a big point of it. 

Because of the self-proclaimed socialist on the stage, all the candidates leaned toward socialism except for Webb.  He obviously was the big loser.  They all promised everything imaginable for free, but never mentioned how to pay for it. 

If the Democratic candidates were serious about the issues, why did the issue of Islamic terrorists never even come up?  The topics included the mythical global warming, but never addressed the serious issues facing this country like, out of control government spending and debt.  I would like to hear a real debate and not a scripted one, but most politicians will say and promise whatever their advisors tell them to say with no intentions of keeping their promises.

For me, one of the scariest things about the Democratic debate was when Anderson Cooper asked the candidates to name their worst enemies.  Hillary Clinton said Republicans were her worst enemy, and also said she was proud of it.  This is at a time when we need a President that will unite and lead this great country.  Clinton’s elitist partisan attitude is the last thing we need at this time.

Speaker of the House

The Speaker of the House is one of the highest ranking positions in our government.  Besides chairing the House of Representatives, the Speaker of the House is third in line for the President, right behind the Vice President. 

John Boehner has been the Speaker of the House since 2011.  He has resigned, but is continuing in the position until a replacement can be named. 

Kevin McCarthy was the House Majority Leader and the obvious successor to Boehner, but he has announced that he is not interested in the position.  McCarthy said he felt a new face was needed that could unite the Republican Party and work across party lines. 

The most common name that now comes up is Paul Ryan, a US Representative from Wisconsin since 1999.  Paul Ryan has been the Chairman of the House Budget Committee since 2011. He came to national recognition when he was Mitt Romney’s running mate for Vice President in 2012.  With Democratic Senator Patty Murray, he negotiated the Bipartisan Budget Act of 2013. This was the first time since 1986 a budget was reached when different parties controlled the House and the Senate.  Ryan is currently the Chairman of the House Committee on Ways and Means.

Paul Ryan probably knows more about Federal government spending and waste than anyone in government.  Partisan politicians that want to continue to grow the size of government consider this a negative, because Ryan will cut the budget and eliminate some of their pet projects. 

I think some of the negative things I have heard about Paul Ryan are interesting.  I heard someone call him a quintessential Midwesterner and not a very good liar.  I heard several comments that he was not a very good politician because he couldn’t lie. 

I am proud of my midwestern farm background.  I don’t like liars and never have.  Why does a large portion of the public accept the notion that a politician needs to be a good liar?  We have some great examples of excellent lies in high positions.  “If you like your health insurance, you can keep your health insurance.”  How is that working out?

I heard someone question Ryan’s ambition and motivation.  They said he went to Washington “to do something and not to be somebody.”  Obviously whoever said that is more comfortable with a narcissist than someone who wants to serve the people.  Personally, I have had enough of unqualified narcissists in government and think someone who wants to serve the people is what our country needs.  Unfortunately, Ryan say’s he is not interested in running for Speaker of the House either. 

Some commentators think the Republican Party is in trouble because there is not a clear heir apparent to the position of Speaker of the House.  I hope it is just the reverse.  Maybe the Republican Party is evolving to put forward qualified candidates to serve the people instead of unqualified party loyalists. 

Real change would be good.

Return On Investment

Return On Investment or ROI is a common accounting term.  It is simply the return or percentage return on an investment.  If someone buys a business for one million dollars and that business generates $100,000 a year in profits, the ROI is 10%. 

I once had a client who was considering buying a small franchise business for $100,000.  The seller was an absentee owner paying a manager a $20,000 annual salary.  The manager was working 60 hours a week.  The business was just breaking even.   I told my client that she would have to increase the profitability of the business, or she was paying $100,000 for a 60-hour per week job that paid $20,000.  She decided the business was not a good option for her. 

If an investment of any kind is made in a business, that investment should generate additional profits.  The increase in profits is the ROI.  A retailer invests $5,000 in a new advertising campaign, and $10,000 in additional sales are generated.  If the retailer has an average profit margin of 20%, the additional gross profits generated by the ad campaign are $2,000.  The additional profits generated did not even cover the cost of the ad campaign.  This was a bad investment if there are no additional residual sales as a result of the campaign. 

See my example of giving cars away at cost in Business Fits.   http://BusinessFits.com

The private sector is very aware of ROI.  Unfortunately, that is rarely the case with the public sector.  The examples of government spending money on things that generate no return on investment are disgusting and all too common. 

There are a few politicians who actually watch the ROI on government spending.  I recently attended a Small Business Summit here in Wisconsin.  I was amazed to see that Governor Walker and his cabinet are aware of the ROI for the way they spent the tax dollar.  Governor Walker actually tries to run the state government like a business.  Amazing! 

The local economic development and tourism groups I am familiar with consider the ROI for any expenditure.  Local government is normally more efficient.

When private corporations, special interest groups, and big money make an investment in a political candidate’s campaign, they expect a return on that investment.  That return may come in the way of loans, grants, subsidies, tax breaks, or special political appointments.  Don’t kid yourself; big money is not making that donation for the good of the country.

Donald Trump admits making large campaign donations to candidates from both parties.  Trump is a very savvy businessman.  He knows how the game is played, and I am sure he received a very good return on investment for those campaign donations.  He could be a game changer.

We are in desperate need of campaign spending reform if we are going to take back our country.  Maybe we should pass legislation making it illegal for any individual, corporation, or special interest group that makes a campaign donation to any candidate from either party to receive federal money in any form. 

Think about this.  Making a campaign donation with this law would eliminate receiving government money or favors. They could not buy politicians, as is now the case.  It would be a real game changer. 

That change might actually help clean up politics and provide the campaign spending reform we desperately need.  Organizations like Planned Parenthood could no longer use federal money to donate to the Democratic Party in order to get more federal money.

I’m probably just dreaming again, but I can hope and pray we can band together and make some real changes to take our country back.

#1 Entrepreneurial Mistake

      I have been watching some comments on a Linkedin forum titled “What’s your best tips for an entrepreneur?”  I find most of the comments very disturbing, because they lead the new entrepreneur down the wrong path.  The comments may be valid, but many are dangerous if blindly followed.  Most seem to be rah-rah, psychological, self-help or motivational in nature.  I think some of the advice is just people trying to psych themselves up to continue their own venture. 

There are both new and old clichés that ignore the basics of business.  This infatuation with current clichés scares me.  It is no wonder so many new entrepreneurs fail.  This obsession with blindly plunging forward and ignoring the basics of business promotes failure.   I have previously blogged about the 7Ps, which are Proper Prior Preparation Prevents Pitifully Poor Performance.  Many current clichés encourage moving forward without proper preparation. 

I understand that no one can be an expert in every area necessary to successfully start and operate a profitable business.  But, the new entrepreneur must be aware of all areas of business so he can obtain the help he needs.  If the new entrepreneur ignores the basics of business, he will fail unless he is extremely lucky.   

There are three books I recommend every new entrepreneur read.  I do not mean read them when time allows.  They need to be a priority, as there is probably nothing more important to a new entrepreneur’s success.  These books are not some psychological Rah Rah or written by a professor talking theory.  All three of these books are easy to read and offer real life examples of business basics that must not be ignored if the new entrepreneur is to succeed.  These three books are:

1.   Business Fits by Terry Oliver Lee

2.   The E-Myth Revisited by Michael Gerber

3.   Marketing War-Fare by Al Ries & Jack Trout

All three of these books are available on Amazon as an eBook or a paperback.  I would recommend the paperback if you are serious about your business, because you will want to refer back to them later.  

I knew an individual who was very successful in the real estate business.  He told a story about going to a class on how to grow his firm.  There was considerable expense in time and travel to take this course.  When he walked into the class the first day, he was disappointed to see several of his competitors in the class, because he felt the class would not give him a competitive advantage. 

He later said the class did help him because he implemented what he learned.  His competitors went home and continued blindly on doing business as usual without implementing anything the class taught them. 

Unfortunately, I realize that 90% of all entrepreneurs will ignore this advice and move eagerly forward until it is too late.  They will justify this by telling themselves that they al ready know what they want to do and don’t have time to read some book.  This makes me sad.  I wrote Business Fits for the new or aspiring entrepreneur, but it must be read to have any value.   

This naive approach to business reminds me of politics.  Some people do not want to learn the facts.  The facts might not support their political views.  They would rather just blindly push forward with their emotional perceptions. 

http://BusinessFits.com

Traditional Politics

Some of us have an image of big money and the political elite in a cigar-smoke-filled room determining who will be our next President.  Presidential candidates were selected by big money and party politics, and then the public was told what it wanted to hear with all those promises forgotten.  With today’s improved communications, the smoke-filled room no longer exists, but the process is alive and well. 

There was a time when if a Presidential candidate was from the north, his running mate needed to be from the south.  Now politicians are more successful at dividing the country on race, sex, religion and other special interest groups.  A current Presidential candidate might want a running mate from the other race, sex or sexual orientation. Our current President won with no experience or qualifications, but commanded votes from a large majority of blacks, Muslims, union members, and Democrats.  That and a meaningless campaign slogan of “Hope and Change” was enough for him to be elected and reelected.

I hope this process is changing.  Political commentators are totally befuddled by the current political campaign.  They can’t get their head around the fact that the working middle class is fed up with the political establishment.  Political commentators and the media cannot understand a candidate that is not dependant on political donations and the political elite.  The fact that Donald Trump was part of big money, understands how to buy politicians, and has bought politicians in the past, terrifies the political establishment. 

Since Trump is not dependent on the political establishment, he could actually change the system.  What if he initiated relevant campaign spending reforms and term limits?  This would take away, or weaken the power of the Washington insider.  Candidates who actually represent working America would be elected. 

I realize this is very optimistic, but I can dream.  Big business, big money, the Washington insider, and the political elite are not working in the best interests of our country.  We have to do something to take back our country. 

Lawful Compliance

A county clerk from Kentucky was jailed recently for refusing to issue a marriage license to a gay couple.  She was jailed with no opportunity to post bond.  She said she refused because her religious belief was that marriage must only be between a man and a woman. 

There clearly is a conflict between her right to practice her religious beliefs and compliance with the law.  Would an elected county official who refused to comply for religious reasons have been treated the same if they had not been Christian?  We bend over backwards for Muslims and atheists, but Christians continually have their First Amendment rights violated. 

I question the law because I question the Supreme Court legislating instead of just enforcing the Constitution, as they should.  I cannot understand why both Congress and the states allow their laws to be ignored and their power taken away. 

Personally, I think the county clerk should have assigned the duty of issuing marriage licenses to another staff member if it was against her religious beliefs.  This may be a cop out, but it would have complied with the law.  She also could have resigned, but this would not have given her a platform to express her beliefs.

All members of government, both elected and appointed, should comply with the law or be forced out of office.  This needs to be applied at all levels of office and not just the low level of a county clerk.  Why should the political elite be exempt?  Maybe President Nixon was right when he said “It’s not illegal if a President does it.”  President Obama has taken this philosophy to a new level of arrogance.  

High-level officials should be held to a higher standard and not given a pass.  Not one President since Eisenhower has enforced our immigration laws.  A President does not have the right to choose which laws he wants to enforce.  If we held our Presidents to the same standard as that Kentucky county clerk, they would all have been impeached and/or jailed.  Why do we accept and allow this double standard for the political elite? 

Congress makes our laws.  The President enforces those laws.  The Supreme Court’s job is to enforce the Constitution.  Our founding fathers knew what they were doing when they set up these three branches of government.  Why do we allow the political elite to ignore the rules and hold themselves above the law?