Merry Christmas
And
Happy New Year

May God richly bless everyone in this season as we celebrate the greatest gift ever given to humanity, Jesus Christ. This year has been a roller coaster ride for everyone financially.

That is why during this next year I will be not only keeping you up to date on current economic affairs but I will also be teaching on how we can manage our finances to lessen the impact of business cycles. Just because the rest of the world has a recession or depression does not mean we have to play along.

Follow this blog after the first of the year so the predicted down cycle for 2009 will not have as much of a negative affect on your finances. Economic downturns are survivable. In fact, many have been able to prosper during these times. So join me for the journey.

Surviving The Storm

The most devastating thing that happens during times of recession is that people lose their jobs. Having been in that situation in my life, I know it can be devastating, discouraging and depressing. We begin to fear we will lose everything. We can begin to lose our self-confidence. Some people even give up completely. In this posting, I want to provide a plan of recovery and encouragement to those who have or fear losing their jobs.

The most important thing to learn is that losing a job is an event not the end of the world. Many people live in areas where natural disasters occur on a regular basis. People living in these areas understand that these disasters are events and that with proper planning they can be survived. Job loss can also be survived if we have a plan for survival.

Here is a list of things we can do to survive job loss.

1. Update your resume – You should always have a resume prepared. The good news is that we can prepare a resume today and save it to our computer. Be sure to always have a backup copy as computer hard drives can crash causing you to lose your resume along with other important documents. Today’s word processing software makes it easy to update the information contained on your resume, so this should only take a few minutes.

2. File for unemployment – this will provide cash flow to take care of necessary living expenses such as eating and shelter. Understand you will not be making as much on unemployment as you were making on your job so the temptation will to say why bother but every penny counts now.

3. Cut out the frills – cash is now a precious commodity. When you lost your job, you may have been fortunate enough to receive a severance package. You also may have had a balance in a 401K. I encourage you to take this money and put it into a savings account. If you have a credit union account this would be an excellent place to put this money since it pays higher interest. However, avoid the temptation to spend this money on any frills. Instead, only use this money to make up for cash shortages needed to pay for necessary living expenses and anything you will need in your job hunting campaign.

4. Seek temporary employment – there are many agencies offering temporary jobs. Prior to becoming unemployed, it is wise to make a list of these agencies in your area. That way you can quickly begin making phone calls and sending them your resume. My current job started as a temporary position that became permanent. You may be fortunate enough to have the same happen to you.

5. Distribute your resume both online and in person – with the internet it has never been easier to get your resume out on the market. Unfortunately, the fact that it is easier to post your resume means that you are out there with thousands of other applicants. That is why I encourage you to also physically taking your resume to employers. Dress in your finest business dress as you only have one chance to make a good first impression. You may even get an interview, something that would not occur by simply posting your resume online.

6. Do not give up - As Winston Churchill said in one of his shortest and most famous speeches “Never give up”. The only way unemployment can change from an event to a disaster is for us to completely give up.

Earlier this year my family and I had the privilege of traveling to Israel. We saw where Jesus was born, grew-up, taught, was crucified, rose from the grave, and ascended back to heaven. One of the sites we had the privilege of visiting was the Sea of Galilee where Jesus did most of his teaching. A miraculous event occurred 200 years ago at this location and I want to share it as a way of encouraging both those who are currently unemployed and those who fear becoming unemployed during these turbulent economic times.

A Biblical record of this event is found in Matthew 14:25-36. Here is a summary of what happened. The disciples were on a boat in the middle of the Sea of Galilee. A storm had arisen and they feared being thrown from the boat. However, the disciples saw Jesus walking on the water. Peter, having a momentary time of faith, steps out of the boat and walks on the water towards Jesus but when he sees the turbulent storm around him he begins to fear and sink into the sea. Jesus then reaches out his hand and Peter and Jesus get into the boat. When Jesus gets into the boat, the storm immediately stops and the disciples arrive safely on the other side of the sea.

In these turbulent economic times many of us are in the boat of our jobs but find ourselves in a turbulent economic storm. We fear being thrown out of the boat. Some of us have already fallen out of the boat and fear drowning in the turbulent sea. Jesus is there with us, walking on the water. The storm does not faze him. If we will invite him into our boat, the storm for us will calm and we will arrive at the other side safely. If we have already fallen into the sea we need to reach out our hand to Jesus and he will take us back to the boat of a new job, get in with us, and the storm for us will also calm and we will be safe.

Perhaps you have never come to know the man Jesus who walked on the water. He did die on the cross but he arose and is still alive today. He loves us as the bible tells us in John 3:16 and is waiting for us to invite him into the boat of our lives. I encourage you to ask him to come into your boat today.

If you are unsure how to ask him in or you want to know more, you can go to the link for “Calvary Community Church” on right toolbar of this website. Go to the tab “How to know God” for more information about getting to know God. We all need something stable to hang onto in these turbulent times. The only stable thing in this world is God. The only way to get to know God is through his son Jesus. I encourage you again to get to know him for having him by our side is the most important thing we can do in these turbulent times. May God bless you.

Uncle Sam, Can I Have Some Money?

Once again this week we were subjected to the CEO’s of the big three automakers appearing before congress requesting money to rescue their failing operations. They all claim that they will be out of money and in default by the end of the year. There is no doubt that if one or all three of the automakers fail, it will have a major affect on the economy. The question we need to ask ourselves is if it is wise for the government to simply give money to the automakers in order to rescue them without addressing the reasons for the shortage of cash being experienced by the companies.

In last weeks posting we explained management of cash flow. The fact that the automakers find themselves going into default leads us to believe they have insufficient operating cash flow to sustain their operations at the present level. To fix this problem the automakers need to discover why they lack sufficient operating cash flow.

Prior to the introduction of foreign competition, the U.S. automakers held a majority of the U.S. auto market. It was during this period that the automakers decided they wanted to share their prosperity with their hard working employees. They did this by entering into labor contracts that provided lucrative fringe benefits. Included in these fringe benefits were healthcare benefits that employees continued to receive even after retirement. As the workforce of the automakers matured, a point was reached where they were paying more to provide benefits to employees who no longer produced for the company than they did for those who were productive employees. In other words operating cash flow is being used to provide benefits for employees who no longer produce operating cash flow, or income, for the company.

In addition, the companies provided a job bank where employees continued to receive pay even after being laid-off. The reasoning here is that these employees would still be paid while they either looked for another automaker job or went back to school to train for a different career. However, many employees abused this benefit and continued to receive pay for many years past their being laid-off. In a sense, the automakers would downsize and lay people off but the automakers received no financial benefit from the layoffs since they still had to pay the laid-off employees thus depleting more of the company’s operating cash flow.

To make matters worse, increased pressure from environmentalists on the government led to increased regulations on the companies. Among these regulations were fuel economy standards implemented to reduce carbon emissions and the use of fossil fuels. These regulations control how automobiles are built. Each time these regulations change, automakers need to retool their assembly lines and redesign their cars and trucks to adhere to the new regulations. These changes can cost the automakers millions of dollars, depleting more of their valuable operating cash flow.

To fix these cash flow problems, automakers will first require concessions by the company’s employees. No one likes to give up benefits from their employer but employees of the automakers must look at the long-term picture. Making concessions at this time helps insure the company continues to operate in the future. Without these concessions, the company may go into default and eventually have to liquidate in order to pay their obligations. If this occurs, all the benefits will cease to exist and thousands will become unemployed. Wouldn’t it make more sense to make some concessions now in order to insure continuance of benefits that remain and employment for those still working for the companies?

Second, instead of the government giving the automakers more of the taxpayers’ money, wouldn’t it make sense for the government to ease some of the costly regulations on the industry? This would make it possible for the automakers to build cars the way they want to which is to build cars people want, and can afford to buy. Perhaps it would be wiser for the government to give the automakers tax breaks, instead of cash, so they can reduce the price of their cars and become more competitive in the marketplace.

A loan to automakers does nothing to increase the company’s operating cash flow. It just increases the company’s cash flow through financing. Before throwing money at the problem, we need to take time to discover the reason for the problem. Otherwise, we will only be prolonging the inevitable default and possible liquidation of these once successful companies.

Managing Cash Flow

Cash flow management is an important component of economic success for both individuals and businesses. During upturns in the economy, cash flows freely and there is a temptation to be lax in the management of cash flow. However, in times of economic downturn or recession, cash flow management takes on a much more important role. In this posting, we will explore how cash flow is generated and how government policy can either increase or decrease cash flow.

Cash flow comes to individuals and businesses in one of three ways. Operations which for individuals is when they work in either their own business or for someone else and earn either an hourly wage, salary, or commission. For businesses, operational cash flow is generated by selling the goods or services the business provides.

Cash flow is also generated through investing. This involves the purchase of capital assets, holding them for a period of time, and selling them, hopefully for a profit. Capital assets are defined as anything owned that is used for personal purposes, pleasure, or investment. This definition includes most anything we own. For businesses it includes anything that appears in the asset section of the business' balance sheet.

Finally, cash flow can be generated through financing. We can always put up an asset we own as collateral, and borrow money to generate cash flow. Of course the downside of this type of cash flow generation is that the cash has to be repaid. However, in a crunch, it may be the best method available.

Government economic policy can have either a positive or a negative affect on the cash flow for both individuals and businesses. The Federal Reserve Bank has a vital role in controlling cash flow in the economy. When economic activity is high and cash is flowing freely, they tend to implement policies that restrict cash flow in order to prevent inflation. This is generally done by increasing interest rates. When economic activity begins to slow down, they will implement policies to free up cash flow generally by reducing interest rates.

In the last eight years we have witnessed the Federal Reserve Bank in action managing cash flow. In the days after 9/11, they began to reduce interest rates in order to get the economy moving again. As the economy began to grow and cash was freely flowing, the Federal Reserve became concerned about inflation and raised interest rates. Recently, the Federal Reserve has been lowering interest rates in an effort to keep the country out of a recession brought on by the mortgage crisis. This time, however, the strategy did not work and the market continued to go down. This leads a commonsense economist to deduce that there might be deeper concerns in the market besides high interest rates. So what might these deeper concerns be?

In addition to the Federal Reserve Bank's policies, the Federal Government can also increase or decrease cash flow through its tax and regulation policies. If the government decides to raise taxes, or let previous tax cuts expire raising taxes to their previous levels, cash flow for individuals and businesses will be restricted. Increased regulation of businesses and individuals also affects cash flow. This is because individuals and businesses are required to spend additional money to insure compliance with these new regulations rather than investing this cash in expansion and job creation.

Is it possible that the market continued to go down due to its speculation that the new administration will increase taxes and regulations on businesses and individuals? If this is true, what should the government do to calm these fears? I believe President Elect Obama needs to let the market know that it will place a moratorium on any tax increases and increased regulations until the economy comes out of the recession. In addition, he needs to let the markets know that he will extend the Bush tax cuts for an additional two years. This will calm these fears and return the markets back to where they should be.

This calming of the markets will begin to restore individual retirement accounts and provide increased liquidity for businesses as their stock values increase. Increased liquidity for businesses will mean fewer lay-offs and even the creation of new jobs as businesses invest their excess cash provided through increased operational cash flow.

This will calm individuals’ fears of job loss freeing them up to spend or invest their excess cash. The side benefit for government in this scenario is that revenues to the treasury will actually increase giving the government the tax increase they were initially seeking without the disastrous side effects that would have occurred had they actually increased taxes during a recession.

I am therefore encouraging everyone reading this posting to contact the president-elect and urge him to announce a moratorium on any tax increases, extend the Bush tax cuts that are set to expire on December 31, 2010, and not to place any more regulations on business during this time. I have provided a link to President Elect Obama's webside at the left so you can contact him. If enough of us make our voices heard, they will not be able to ignore us. So I urge you to take a few moments to respond and share the results of your contact with the president elect by posting a comment to this blog. I also encourage you to share your opinions whether positive or negative.

What is Bankruptcy?

Many of us have experienced difficult times in our lives. Due to recent economic events, many people are experiencing tough economic times. For some of the younger people in the population, this is the toughest time they can remember. For those of us who have been around for a while we can remember tougher times. However, when we find ourselves in the middle of economic tough times, we often do not know where to turn. Many of us will turn to our faith at these times and others will seek help from friends, family, or even the government.

Companies also experience hard times not knowing where to turn either. The recent bailout mania in Washington has demonstrated that many of these companies are turning to the government to bail them out. In last weeks posting “Bailout Mania” we determined that simply bailing out failing organizations is not a good idea. This week I want to take a few minutes to explain why bankruptcy is a viable option for organizations finding themselves in difficult times but there is much confusion as to what bankruptcy is. So, let us begin by explaining what bankruptcy is.

The Bankruptcy Act was passed by congress to provide an organized procedure for, under the supervision of a federal court, dealing with insolvent debtors. It provides two methods for dealing with insolvency, chapter 7 and chapter 11. Under bankruptcy protection a means for the creditor to receive some measure of payment of the debt while giving the creditor an opportunity for a fresh start is developed.

Under chapter 7 bankruptcy, also known as liquidation or straight bankruptcy, the debtor individual or organization is required to disclose all assets they own. The individual or organization then is required to surrender these assets to the bankruptcy trustee who sells or liquidates the assets and distributes the proceeds to creditors in accordance with the relative rights of the creditors under the law. When an organization files chapter 7 bankruptcy, the company goes out of business leaving the employees unemployed and customers having to go elsewhere to purchase the products or services they previously received from the now liquidated company.

Under chapter 11 bankruptcy, also known as reorganization bankruptcy, the debtor seeks a business plan where they, under the supervision of a federal court, can solve their financial problems. The organization continues to do business but its operations may be curtailed if so ordered by the court. Under this form of bankruptcy, only those employees affected by any court ordered curtailment of operations loose their jobs. In addition, customers are still serviced by the organization but possibly at a lower level to court ordered business curtailments.

Chapter 7 bankruptcy is generally is not a viable business strategy for turnaround since the company goes away. However, chapter 11 does provide a viable option for companies in financial difficulty and many companies in business today have used this option to turnaround their operations. One example of this is Delta Airlines whose jets are still flying in our skies today.

This week we witnessed the CEO’s of the big 3 automakers flying to Washington in their private jets seeking a bailout from Uncle Sam for their financial difficulties. This prompted the members of congress, who were initially positive to the idea of bailing out the automakers, to take a second look and put any potential bailout on hold until the automakers could return with a plan for turning around their ailing companies. This also prompted President Elect Obama to issue a statement about the possibility of a bankruptcy package to rescue ailing automakers. It is unclear what the specifics of such a bankruptcy package would be, but if it involves a chapter 11 bankruptcy where the automakers, under the supervision of the court, will develop a plan to turnaround their ailing companies. The option should be seriously considered.

If nothing is done, these companies will eventually run out of cash causing them to begin defaulting on their obligations. This could force the companies into a chapter 7 liquidation situation. This would mean that thousands of people working for these companies, and employees of creditors who will be hurt financially, to go on unemployment overnight. This will not only be devastating to the finances of the laid off people but will place a strain on already strained federal and state budgets affecting all taxpayers. Before it is too late, a chapter 11 form of bankruptcy reorganization for automakers needs to be considered so that many jobs are saved. Please feel free to comment on what you think.

Bailout Mania

Bailout mania has struck Washington. We are now beginning to see a procession of industries, companies, and state and local governments going up to Washington with their hands out looking for a bailout. It would appear that they see the election of Barrack Obama as a sign that Washington will be handing out money more freely than they have in the past. As commonsense economists, we must ask ourselves two questions. How are we going to pay for these bailouts and are bailouts, or simply giving money to public and private organizations, the best way to solve the problem.

In answer to the first question we need to look at how governments, such as the US government, raise revenue. Governments do not manufacture anything tangible. Governments do provide services but unlike services provided in the private sector, the individual or organization benefiting from the service, as a rule, is not the one paying for it. Let us use an auto mechanic as an example. Auto mechanics provide a valuable service for those of us who are mentally challenged as to how our cars or trucks work. When we need the service of an auto mechanic, we are willing to pay them for it. However, government services do not work the same way. When someone comes to the government looking for service, they are not expecting to have to pay for it. Instead, they are looking for a hand out, anticipating that the government will tax someone else to pay for it. Therefore, the answer to the first question is taxpayers who, most likely, will receive no benefit from the bailout, will be the ones paying for it.

Now, to answer the second question, are bailouts the best way to solve economic problems? The best approach to solving problems as to apply critical thinking. One of the first steps in the critical thinking process is determining the root cause of the problem. When we go to our mechanic with a complaint that our car or truck is running rough, the mechanic does not bail us out by taking money from someone else and giving it to us to buy a new car. No, he instead determines the cause of the problem and fixes it. He then presents us with a bill. If we are unable to pay the bill, we use our credit card, which is the same as taking out a loan. Instead of bailing out the organizations that have a deficit, we need to take the time to determine what the root cause of their deficit is. We can then come up with a solution to the problem and if necessary loan the organization the money to cover their deficit. Now that we have determined the cause of the organizations deficit, they will be able to run profitably and out of these profits, or surpluses for governmental organizations, pay back the loans.

This is exactly what the government did with Chrysler back in the 70’s. They loaned Chrysler the money it needed to remain in business but as a requirement for the loan required that Chrysler revamp its line of cars and reorganize its management. They did this, became profitable, and fully repaid the loan with interest. The common sense economist in me thinks this is a much better solution that will result in stronger organizations without over burdening taxpayers. Please send me your comments on this issue.

Whats Next?

The election is over. The American people have elected Barrack Obama as their next president. Let us take a moment to look at what could begin to happen in America economically after inauguration day.

When we look at President elect Obama’s economic proposals during the campaign, it is obvious his economic philosophies are socialistic in nature. This became evident in his comments to Joe the plumber when he mentioned spreading the wealth. This philosophy comes directly from the teachings of Karl Marx.

We can also discover his socialistic philosophies in his tax proposals. During the campaign, he promised to raise taxes but he also promised to give tax cuts to individuals making less than $250,000 per year. At present 40 percent of the population pays no income tax. To give these individuals a tax cut would mean that the government would be giving them a rebate check for taxes they never paid. This is not a tax cut but a stealth redistribution of wealth another policy directly from the teachings of Karl Marx.

In order to reverse this socialist trend in American economic policy we must determine how a majority of the population could be convinced that socialism is best for the country. It is my opinion that the foundation for this trend lies in the failure of our education system to teach basic economics. Those of us who have an understanding of basic economics now have a responsibility to begin teaching those we know about basic economics. Time is short since Mr. Obama plans to implement many of his programs during his first hundred days in office.

In an effort to make this task easier, I will be making postings to this blog between now and inauguration day that you can share with others. These postings will present some basic teachings on economic fundamentals along with links to materials on the web that go into depth on these principles. If you are as concerned as I am about the economic direction of the U.S. I encourage you to send everyone in your address book a link to this blog. The wonderful thing about the web is that information can be distributed quickly.

I am volunteering to do my part by posting these teachings. I encourage everyone to do their part by learning from these teachings and distributing the information. This is a great country and we will get through this. In fact, once the American people have the knowledge they need about economics, they will never be duped into falling for a slick socialist marketing campaign again. Join me in spreading the word.

Get Out and Vote

In many countries of the world, the citizens do not have the privilege of picking their leaders. However, in the United States we do have that privilege and on Tuesday November 4, we have an opportunity to exercise that privilege once again. I want to urge everyone to get out and vote so your voice can be heard. We are not only electing the next president but there are also many other federal, state, and local offices up for election as well as some important propositions.

We currently face an economic downturn. This is not the first time we have went through such a downturn. I am 52 years old and have endured many such downturns. It is never pleasant to be in the middle of the turmoil of the downturn, but it is also important not to panic by just arbitrarily making changes just so we can feel good about doing something. There is no doubt in my mind that some changes will be necessarily but we must take the time to determine what changes will be best. Experience tells us that the US economy is very resilient and will survive while we take the time to determine what changes are necessary.

The theme of Senator Obama’s campaign has consistently been change but when the senator is confronted about being specific about changes he will make, he is not specific and has changed plans regularly throughout the campaign. This has been evident this week as he has changed the income threshold he will use to determine who will get a tax increase. Initially it was $250,000. Later he mentioned that it was $200,000. Joe Biden, Senator Obama’s Vice Presidential selection later reduced it to $150,000. Finally just yesterday, Governor Richardson of New Mexico, an Obama supporter, further reduced it to $120,000 http://elections.foxnews.com/2008/10/31/low-richardson-pegs-middle-class-making. This leads us to question who will have their taxes increased in Obama’s tax plan if he is elected president.

Even if we currently do not make over $120,000 per year, we may someday; we also most likely work for someone who does. In my opinion, it is not wise economic policy to change the tax code of the country so that anyone pays more taxes during rough economic times. Changes to the tax code always have unintended consequences. Before just arbitrarily increasing taxes on any group, we must take time to evaluate these circumstances.

This, among other reasons, is the primary reason I will be casting my vote this election for Senator McCain and Governor Palin. Senator McCain has demonstrated his dedication to his country and his ability to critically think through issues before proposing or making any changes. Governor Palin has also demonstrated her ability to confront opposition, even when it comes from her own party in order to do what is right for her home state of Alaska. This type of solid leadership is what the country needs in these uncertain times.

However, you have the right to vote whatever way you want on Tuesday. The only thing I am urging is that you consider whether we need to make change just for changes sake, or do we need smart change that has been thought through. I am confident that you will make the right decision on Tuesday after you have considered this.

What is Socialism

I have heard much talk in this election year about socialism. Much of it is in the form of accusations made by one candidate to another over economic issues. With the economy heavily weighing on the minds of voters this election, let us take a moment to determine what socialism is.

Socialism has its roots in the philosophy of Karl Marx. According to the Stanford Encyclopedia of Philosophy, Karl Marx’s philosophy was based on the belief that societies, including economic systems, rise and fall as they further and then impede the development of human power. He viewed capitalists as those who would in the beginning further the development of human power but as the economic system grew he believed these capitalists would begin to impede this development. His view on profit was that it was the extraction by these capitalists of excess value from an exploited proletariat or working class. He believed that societies would progress through various modes of production, culminating in communism.

Full-fledged communism is when the state or government has full control and ownership of economic resources. Socialism is system in which the government allows private ownership of resources but through progressive taxation and regulation attempts to redistribute these resources among the population. This fulfills the underlying philosophy of Karl Marx “To each according to his need. From each according to his ability”.

In order to determine if a candidates accusation of socialism on his or her opponent are true, we need to look at his or her economic positions. If his or her positions favor the following, his or her policies are socialistic in nature.

1. The candidate proposes increasing taxes on the rich who are the greatest producers in the economy.
2. The candidate proposes tax cuts to lower income individuals regardless of whether they even pay taxes.
3. The candidate proposes using the increase taxes received from the producers to offer benefits to lower income individuals such as free healthcare or free education.
4. The candidate opposes any proposed across the board tax cuts or reformation of the tax code to a flat rate income tax or sales tax.

However, I am not saying that the candidate is a socialist, just that his or her economic policies are socialistic in nature.

The only thing left is for you as a voter to determine is if you believe socialism is the most beneficial economic policy for the country to follow. However, consider that most of us probably work for one of these capitalist producers in the economy. If we increase taxes on these producers, how will they pay the additional taxes?

1. They could just fork over the money
2. They could increase prices to their customers
3. They could lay-off employees
4. They could offer lower, or even eliminate pay raises
5. They could offer lower, or even eliminate bonuses such as Christmas bonuses
6. They could lower pay
7. They could lower or eliminate some employee benefits

All of these methods for payment of increased taxes, except the first one, would actually end up punishing the lower and middle class individuals the socialist policies were designed to help. So do socialist economic policies really help the lower or middle class or actually end up hurting them? Something to consider as Election Day approaches.

Joe the Plumber, the Real Issue

Those of us who watched the final presidential debate this week heard Senator McCain’s reference to Joe the plumber. In the following days, Joe became a political football that was kicked, passed, and carried up and down the political field. The politics aside, let us take a few minutes to explore the real economic issue with Joe the plumber.

Joe works for a plumbing company in Ohio. He is interested in buying the business for which he currently works. As anyone of us looking to purchase a business would do, he looked over the books to determine if it would be a good investment or not. During a campaign stop in Ohio, Senator Obama came down Joe's street to talk with the residents. Joe approached him about his proposal to raise taxes on Individuals and businesses making more than $250,000 per year. Joe told him that this proposal would affect the business he was considering buying. Senator Obama’s response tells us much. He told Joe that he did not intend to hinder his success but felt it necessary to spread the wealth.

In a capitalist economy such as the United States, small businesses are a critical component to job creation. Small businesses are created when someone like Joe has a dream to improve his or her financial position, and believes the best way to accomplish this is starting or buying a business. Joe’s boss is apparently interested in selling his business and Joe is interested in buying it. However, if Joe, or any other perspective buyer, is discouraged from buying the business because of increased taxation, Joe’s boss may choose to liquidate his business instead. Should he do this, all of his employees, including Joe, will be unemployed.

The real issue with Joe the plumber is government policy should encourage small business creation and not hinder it. Arbitrarily increasing taxes on individuals or businesses because their income exceeds a certain amount places a cap in economic growth. Is it wise, under our current economic climate to place such a cap on economic growth?

Hello everyone. Please allow me to introduce myself.

My name is Dale Weckbacher and I have worked in the accounting and finance industry since 1976. I have a bachelors degree in accounting along with an MBA. During that time I have witnessed many economic ups and downs but nothing like what we are witnessing now. As I look at the current situation, there seems to be little common sense at all in what is being done in an attempt to correct the situation. As we have seen from the current economic ups and downs, simply throwing more money at the problem, as the government did with the recent bailout bill, has provided little relief and has actually resulted in the market dropping further.

What is necessary is for more common sense in our economic policies. This begins with education. I am currently working on a book entitled commonsensenomics which I plan on having completed in the next 6 months. I currently do not have a publisher, so if anyone has any contacts, please let me know.

In the mean while, I will be posting some information as I come across it in my research so the education process can begin. I plan on posting to this blog on a weekly basis. Please feel free to send everyone you know, regardless of their political affiliation, to the site so they can learn more about how we can restore common sense to our economic system.