Pro Commerce

Laos airport

I spent many years in Third World development.  It is common for Third World societies to strongly resist any change to their traditional norms.  Unfortunately that is not possible in the contemporary world.

Bhutan, Burma and a few other countries try an approach of allowing only limited tourism.  That approach seldom works because tourists are very demanding for their own non-traditional goods and often carry off the population in marriage.

I saw a better approach in Laos where a large international airport in the capitol was surrounded by factories which in turn was surrounded by a very high fence.  Semi-finished goods were flown in, to be finished by Lao workers, and flown out for the world market.

The Lao people were not expose to modern lifestyles,  but they earned good wages to use in their traditional markets.

It seems like a good model of development to me.

Anti-Mercedes

There was a time before I removed the cobwebs and barnacles from my brain that I was hostile to fancy new Mercedes.

That means that a Mercedes trying to squeeze into traffic would get no help from me.  It was a time when I had more tolerance for lefty ideas. The obvious idea that led to my rude civil behavior was that rich people should be punished for their success.  An egalitarian premise. The basic premise for progressive taxation.

What changed my idea and my behavior was the recognition that ostentation was a viable communications mode, just as clothing, language and other parts of appearance are.  

I further came to realize that my egalitarianism was nothing more than childish “make the world the way I want it” sentimentality, rather than honest, intelligent thought about how the world works.

Use the taxiway

Airports are extremely important to the growth of America.  More and more goods are transported by air and there continue to be more business travelers (crowded of course).

Most airports can’t grow and are far out of the city. They are severely restricted in the volume of flights they can handle because of environmental regulations. Most regulations are absurd.  A teeny fraction of the San Francisco Bay cannot be filled in for more runways.  No matter what. It is not rational it is religion.

I see a temporary solution for most airports.  

Because private business jets are becoming a much larger segment of our landings and take-offs,  they are interfering with commercial passenger flights.

Since these much smaller planes, need a fraction of the landing space,  we should dedicate group of taxi strips to their usage.

Taxiways and main runways are handled by different air traffic controllers.  Modest changes need to be made in control rules.

Insurance company error

This is a happy blog.  

My homeowner’s insurance company, CIG, made a mistake and deducted the same monthly fee twice. The company immediately put one charge back in my account.  I never noticed until two weeks later, while reconciling the account.

The company sent a letter of apology offering to pay any expenses that had been incurred by the mistake and enclosed a $10 Starbucks card.

Good recovery from an inadvertent mistake.  I call that recourse in my marketing book. All businesses make mistakes, how they handle them is the measure of competence.

National Geographic & Disney

Do you subscribe to a monthly Disneyland magazine?

If you subscribe to National Geographic, you do.  

National Geographic has a worldview that makes Disneyland sophisticated.

I have three examples.  First was a recent issue on Palestine.

Nothing in the issue told you that those sweet little children were being indoctrinated from preschool through college to kill their Jewish neighbors.  Nothing in the article even suggested the essence of any democracy: elections, nothing suggested the perpetual unwillingness to negotiate peace with their neighbors and the perennial hatred of Palestinians in the rest of the Middle East. 

Second, was an article on the Pacific island Palou, which is a giant urban slum; the National Geographic showed a photograph from an outdoor museum, of a traditional house. No such thing exists on the island and the source was never mentioned.

I was on part of a shoot for National Geographic on big horn sheep in Idaho.  The film that is shot is sent in to NG untouched.  the photographer and writer had a totally different editorial point of view on the subject from the people in headquarters.  The photographer and writer were concerned about the survival for several herds... nothing was mentioned in the final article.

I have other examples but these three should suffice show how National Geographic has a Disneyland worldview.

Zinc and colds?

Three years ago, I told my readers about the connection between zinc and colds.   I found the relevant meta-studies and was shocked that the studies made no distinction between the various types of zinc and the outcomes.

So I went directly to the original studies and looked at the specific forms of zinc.  I found that the three studies that used zinc acetate showed stunning reductions in the length of colds.

Then I proceeded to look for appropriate over-the-counter medicine and was duly disappointed. That is what my earlier blog was about.

Now after significant national publicity on the power of zinc acetate to mitigate the common cold.... I still find there is no reliable over-the-counter or online source of zinc acetate.

It is my hope that extensive national publicity will bring an appropriate product to market in the next few months.

Same Democratic party

We now have the same Democratic party that supported slavery 150 years ago.

When the Democratic party supported slavery, the Democrats  could not understand why so many people objected to slavery and the expansion of slavery.

The failure was so great that it created the Republican party.... very much like the current Democratic failure to understand the government out of control has created the Tea Party.

What the Democrats failed to understand, this time, like slavery, is why anybody would object to a government who’s employees are controlled by unions and a government with budgets and taxes that never stop growing.

There is an another parallel that is important; the union pension issue will continue to grow if ignored, just as slavery became more of an issue as new states were formed

This time around we have a bitter nation, with brother against brother but not a Civil War.

NPR

Nothing would make me happier than to see NPR defunded.

To me NPR stands for National Palestinian Radio

I had a national public radio program for nine years. It started in the late 1980s and was broadcast worldwide. My program, Social Thought, was not on many NPR affiliated stations.  It was not one of the NPR generated programs. The reason was simple. Beginning in the early 1980s NPR established its magazine format. Programs fit into daily and weekend time slots. They never changed over the next 25 years.

Have you noticed that the same programs are now more than 25 years old?  NPR is stuck with the audience it first had in the early 1980s.  It will die as members of its audience die.

Defunding NPR would not have much effect, unfortunately. It is almost entirely supported by local stations that buy the national programming.

Should it be called stupid?

I try never to use the word stupid in my blogs.  First it is an ad homonym attack, second it seldom provides useful information about the subject under discussion.

The subject that tempts me in the direction of the word stupid is the perpetual attacks on Google for antitrust reasons.

Google is the Pied Piper walking through your town with a dictionary in his hand and nearly everyone is following him. That seems to infuriate every living lefty.

Google offers nothing but information. Not just information but secondary information that Google has found (hence the use of a dictionary in my metaphor).  Google uses open-source for most products, like Android.

The first source of this Google antagonism seems to be that Google is big. But Google is not big by the standards of anyone who knows business.  

Secondly, there is nothing inherently wrong about a business being big. That is the norm, world wide, in automobiles, oil, natural resources, telecommunications and any other field that requires large amounts of capital.  Think in natural terms.  For every million blades of grass, there is one bush, for every thousand bushes there is one tree and for every thousand trees there is one giant Sequoia.

Lastly and most importantly, Google has no, I repeat,  no natural monopolistic barriers that keep anyone else out of the field. If Google does not offer the services its customers want, another company will provide it. Think Bing.  

Google satisfies its customers and that is the source of its size and success.  In the pro-commerce world that is a service monopoly. It has no relation to economic concepts of monopoly.

Meanest American company

I would like to nominate the meanest company in America.

I know it’s difficult to single out such a company, but possibly doing it on an annual basis will make the selection more reasonable.

The company is Nuance (NUAN).  The company owns Dragon Speak the leading voice to text company.

I nominate Nuance for two reasons.  First and most importantly, you can search their website endlessly and never find a way to get tech help on the phone.  This is particularly disturbing because a major use of Dragon Speak is by blind people and people with physical disabilities...  especially disabled hands.

To sell a product to people who are disabled in many ways and offer no possible way to contact the company for help, strikes me as flat out mean.

Second, to show that these people are high in the category of mean you can also find on their website that they are selling their tech support service as a separate business. Buying tech support from people who don’t provide it must be a farce.

Please feel free to nominate any company you think behaves worse than Nuance.

Justice Douglas

Some of my friends, Lefties, have been reacting to articles that have been attacking Justice Thomas’s wife for some of her political efforts (she wants to be a liaison to the Tea Party).

Bless her and bless Justice Thomas.

The Left is morally corrupt in this issue.

Justice William O Douglas, (a weirdo Lefty) spent his entire time on the Supreme Court as a political activist in the environmental area. He wanted to save this river, this mountain, this forest in Eastern Washington or wherever else he was hiking. A lifetime of lobbying and not one progressive, not one liberal ever complained about his conflict of interest on the Court. He was even on the board of a foundation connected to the mob.

There is a story I can tell here, which to my knowledge has never been told before.

Douglas’ fourth wife, Cathleen Heffernan, (who was 23 when he married her at age 67) very soon after the wedding went to the President, Nixon, and offered to talk her husband into leaving the bench in return for her appointment to chair of the Atomic Energy Commission.

At the time, Douglas was incontinent and having numerous other medical problems, so the offer probably seemed genuine to Nixon.

Nixon did not take the offer.  I don’t know why. Possibly he didn’t trust the young woman to deliver her end of the deal.  

I got the story from a good friend of mine who observed it all.

How new businesses start

I have watched more than a dozen new businesses being formed and becoming successful. They all have one thing in common.....they evolved from an earlier product.

There was the modern mountain bike and its many urban offspring. It was a variation on an old Schwinn adapted for big brakes for use on fire roads.

There was the Body Shop, a wide range of lotions made with fewer strong scents, more scents from the hippie range of smell, more use of the term organic and simpler packaging and design. They used the same chemical supplier as everyone else.

There was the Apple; first as the Apple II then merged with the designs from the Atari and finally the child oriented programs from Xerox Lab. The Mac was the outcome.

Tofu in America, first arrived as a do-it-your self product. Then reached grocery store shelves in bulk.

The Whole Foods organic grocery store, began as commune delivery of cheeses, then more dairy products, then food from organic farms.  The first organic shops were nothing but tables and bins.

All of these were my clients in their startup phases.  My favorite was the man, in his 50s, who created the modern Japanese perfume business. Japanese do not particularly like or use perfumes. My client, 30 years in the perfume business,  realized that most perfumes were on a continuum from floral scents to musk.   The Japanese had a long tradition of identifying ingredients at parties of incense.  Their favorites included sandalwood. Off the continuum. That is where my client began his perfume business that exploded in Japan.

New businesses are usually evolutionary steps from existing successes.

Hybrid becomes standard

Nearly half a century ago, when I was in a military railroad repair unit, I worked on the forerunner of the modern hybrid.

It was a diesel electric engine that could pull a 90 car train.  The large diesel engine only had six cylinders.  It drove one large generator which was attached to electric motors on four axles.

About 15 years ago I got to look at one of the first modern hybrids, produced by Toyota.  It was a Prius with an electric elevator motor on the driver's side and a four-cylinder gasoline engine on the passenger side. The two were connected by a planetary gear which was attached to the front wheel drive shaft. The car had a very large battery; charged by the small engine and surplus power from braking.

I watched a wide variety of plays on this engineering. Ford, called its car hybrid, which only used a large starting motor and bigger battery.

The whole issue for the railroad engine and the auto is that an electric engine begins at 0 mph with full torque.

What we have in the hybrid, since I believe all cars with gasoline engines will soon be hybrids, is a significant improvement in the gasoline engine. The addition of an electric motor means a much more level torque generating engine system as well as a more efficient energy consumer.

I consider the modern hybrid an example of the real way that new businesses are created. They are almost always evolutionary improvements.

Best blogs February 1 to February 14

The miracle invention to allow small businesses to take credit cards.

 

Leftie good heartedness is driving business from California, Illinois and New York to Texas.

 

Good heartedness first drives out new businesses then old business. It misses very little.

 

The popular theory of advertising has been wrong for 100 years. Now Yahoo is proving it wrong.

 

What is the connection between 1991 and teenage pregnancy?

 

Inflation or deflation?  Inflation for most of the world.

 

How a new business can deal with lawsuits.

Influential

A recent discussion concerned the fact that The New Yorker doesn’t count anymore. When did it stop counting, what does it mean to count and who does count?

I think the New Yorker stopped counting some time around the arrival of Tina Brown in the 1990s. It wasn’t Tina, it was that Tina marked a point in America where the haughty arrogance of the New Yorker, with a snotty overtone of “anyone intelligent is pro-Left” was finally seen as a part of tradition of opposing war against Hitler, tacit support of Stalin, benign approval of Mao, Castro and the mid-century killers. When that assemblage was finally considered irrelevant the New Yorker’s arrogant, Harvard modulated and elitist voice no longer mattered.  Most recently the New Yorker published a false article connecting the rise of the Tea Party to the Koch brothers.

What does it mean to count? You count if you are consistently honest and accurate so other media, and the occasional public figure, respond to your strong, original and relevant articles.

Who counts today in the U.S.? The following count: the Washington Post and the Jerusalem Post; Commentary and the Weekly Standard; Fox News, Slate (online) Politico and the Wall Street Journal.

The Journal didn’t count until the late 1990s when it started doing follow-up on the issues it raised. 

Lawyer to paper over

When I started an Internet business, I was fully aware of the potential problem of lawsuits.

 

It is common for actual competitors and potential competitors to swamp a new startup with massive legal costs and associated lawsuits.

 

The solution I used was to hire a young independent lawyer, who was a longtime friend.  My friend understood what was required.

 

For $1000 per month retainer, he was to swamp any nasty letters, threatening phone calls or actual lawsuits with unbearable amounts of legal paperwork.

 

We called that papering over.  My $1000 per month was designed to cost the predator tens of thousands of dollars in legal fees.  The actual cost for me and my lawyer was nothing but time to write in the name of the predator on the legal notices, the cost of postage and occasionally the cost of legal filing fee.

 

I recommend this type of arrangement for all startups.

Taxes hit old businesses

I have written about perverse good heartedness in an earlier blog.  The subject was how progressive income tax at the state level drives business away. We are now seeing this in the migration of businesses from New York, Illinois and California to Texas.

 

I would like to make one more very important point. Progressive income tax and other antibusiness regulations and obstructions drive away new business.

 

I have watched as an entire new industry, dairy and cheese, moved into California struggled for 15 years with environmental and agricultural regulations and then moved the billion-dollar operation to Texas.

 

I have also watched as dozens of new businesses in the Internet world, such as Google,  have moved every possible part of their business out of California.

 

Old businesses take quite a while and sometimes require significant distortions in order to get out of the state.  Pacific Bell had to sell itself to the Texas Telephone Company to get out of California. The same was true for Bank of America and Wells Fargo and Southern Pacific and other old established companies.

 

It is hard for old companies to migrate, but they do.  It is easy for new companies that are growing to migrate and they sure as hell do.

 

This makes the perversity of graduated income tax and other obstacles to commerce even more onerous.

See the rally to know

If you want a really good laugh and you have some competence in your thinking processes,  read some of the statements about the Tea Party by lefty members of Congress, Democratic Party leaders, the NAACP, and the mainstream media for 18 months before the 2010 election.  Also, the absurdity has continued in some of the mainstream media, like the New Yorker, since the election.

The Tea Party turned out over 10 million voters in the last congressional election. They hear the insults directed at them.

I have been going to public rallies in San Francisco and a few of the surrounding areas for over 55 years. I attended dozens of parades and rallies from the hippies and the antiwar movement in the mid-60s on.  I have continued to go to rallies and parades and marches including of those in the 70s, 80s (Nicaragua,etc) 90s (Iraq) and for the past 10 years.

Until the past year and a half 95% of all demonstrations were lefty.  There were some pro-abortion marches in San Francisco over the past five years.  There have also been pro-police marches in the past five years.  There have also been some pro-Israel and anti-Israel marches.

Beginning in August of 2009 we got the first all-purpose pro-Constitution movement in the form of the Tea Party.

If you have been to as many marches and parades and demonstrations as I, probably hundreds, you could make this positive statement that I am making here.  More than 98% of the hate posters, signs and insignia that are references to Nazis, Jew-hate, or statements about killing political figures... come from the Left.

The only other such references come from the consistently present Lyndon LaRouche supporters.

The pro-Israeli demonstrators and the Tea Party gatherings are made up of mature, peaceful, usually well-dressed and temperate adults.   No hate signs, no belligerence, no antagonism toward people on the other side. Just civil behavior.

If you have friends who would doubt my accuracy, suggest that they get off their lazy asses and go look for themselves.

Wally Ali

That is the name that one of his former lawyers calls Al-Waleed bin Talal.  Wally is a major shareholder in Citicorp and a dozen other American corporations.  He is a Saudi Prince who graduated from Menlo College in the San Francisco Bay Area.

I don’t know how close my lawyer friend was to Wally Ali but they did spend time together on Wally’s yacht and one of Wally’s many private airliners, a 747.

The main thing I learned about Wally Ali, concerns his role as a tribal leader in one of many Saudi tribes.  Wally Ali has many palaces in Saudi Arabia but in the desert he has one giant tent.  

At the entrance to the tent is a traditional Arab tribal room with carpets, highchair for the dignified Al-Waleed bin Talal, and servants to serve tea and biscuits.  The back area of the tent, out of sight, has high tech computers, satellite transmission equipment and power management engines.

Wally Ali comes here several times a month, leaving behind his luxury global life, to sit and adjudicate tribal judicial matters.

This is the extraordinary contrast:  a world renowned investor who has to sit in his Arab robes and adjudicate his tribes’ divorces, property conflicts concerning rugs and who killed Ahmed’s camel.

Arab tribalism in the Western World.

The Packard died

I saw a PBS program on the Packard. It had beautiful photography but was a complete loss on commercial issues.

The Packard died in the mid-1950s, after a failed effort to create a larger corporation out of several smaller automakers.

The PBS experts offered several reasons that Packard died, but being PBS experts they were incompetent and foolish. They focused entirely on design and internal corporate bickering.

What really killed Packard were three elements important in the mid-1950s: One, labor unions were growing stronger and making it impossible for small auto companies to survive.  Two, the international market was beginning to open up as Europe recovered from the War and only a large corporation could take advantage of the new markets.  Three, the big three companies, GM, Ford and Chrysler had a wide range of lines from low price too high price and were able to understand market forces much better with a variety of products.

(Photo: 1941 Woody Packard. My father bought one of these in 1954 and had my three brothers and I restore it.)

Revolutionary equals anti-commerce?

This is not about Egypt or the Middle East. Arabs are not anti-commerce. They are avid traders and love to negotiate about price and credit.

This is about the vast left wing of American and European life.  

Every time I see the word ‘revolutionary’,  as in the phrase revolutionary education, revolution in food distribution,  revolutionary art, revolutionary politics or revolutionary way to live …..  I know we are dealing with a social self hatred.

What is social self-hatred?  It is the leftist view that business and money corrupt individuals and society and lead to some immoral or decadent form of life.

The the term revolutionary as used in this form is an example of social self hatred.  What are they overthrowing?

We are today the byproduct of several thousand years of trade and two hundred years of industry.  Virtually everything in our lives, housing, transportation, education, media and information sources, nearly all the food (certainly the variety) and most importantly for the lefty revolutionaries, our health and dental care are handed to us by the world of commerce.

Few things would give me greater pleasure than to see all the American revolutionaries move to Cuba or North Vietnam where commerce is minimal.  Even in these minimal societies virtually all products and designs are simple copies of the outside commercial world. The old x-ray machines are the product of commerce, money and corporations, not anything lefty Revolutionary.

Let’s put it in the simplest language:  every leftists revolutionary society has required an iron curtain to surround the inhabitants.  The leftist Revolutionary Dream is not what human beings want or are willing to live with, if they can escape.

Origins of random legislature

It was in the mid-1970s that I was driving back to San Francisco with friend Annie.  Annie had heard me explain how San Franciscans had significantly different opinions on prostitution and several issues than the elected officials.  Annie asked how that was possible and how something could be done to correct it.  That is when I came up with the idea of random selection of legislators.

The other night I was walking on Fisherman’s Wharf and noticed at least five homeless in a very short distance.  I stopped to talk to two community employed safety officers and asked them why there were homeless in such a visible tourist location.  They knew how much this disturbs tourists (one third of all tourists mention how distasteful homeless are in San Francisco;  when leaving the city.)

Their reply was that the police refused to help them deal with homeless because the police say ‘San Francisco is homeless friendly’.

  That is simply not true.  The citizens have voted six times in 15 years against homeless on public streets.  But the pressure groups that talk to the elected officials make sure they bow to the homeless advocates.

So now you can look at the homeless in San Francisco, understanding the horrific and credible cost in jobs and revenue to the city, and recognize that tragedy as an argument for random selection of legislators.

The first photo on this page is a homeless person in the heart of Fisherman’s Wharf;  the second photo on this page are four young people preparing signs for their days work begging.  We have had street homeless for over 30 years, it is not surprising that some less-than-competent young people see this as an acceptable occupation.

Inflation/deflation

If you are baffled by the deflation in Japan the mixed inflation/deflation in the United States and the inflation in most Third World countries.... you are paying attention.

I am asked by my readers for explanations of commercial issues. Somehow I have more credibility than the economists who pontificate on this... having left economics behind.

First Japan. Japan has faced deflation for 20 years now and a negligible growth rate. How this is possible is a good question. During this time the yen has rapidly appreciated making all imports much less expensive which helps the cost of living decline. This is also partly because of radical movement from the rural areas to big cities and associated drop in everything rural including rents.

Japanese deflation is actually hard to see when you are in Japan.  Low spending and high savings are a partial explanation.

The United States has had a mixed inflation/deflation for 20 years. Overall we haven’t had inflation because of the vast amount of inexpensive imports from China and recently because of the decline in the euro. We have inflation in everything for which there is no overseas competition: education, health care, construction and government services.

We just had inflationary action by the Fed (QE2) with no inflationary U.S. effect.

Third World countries are almost in all cases facing inflation. This is a long-term trend but within the past two years many countries face very rapid inflation. This has led to a rise in food prices in many Arab countries and subsequent rebellion.

Globally there is a rapid rise in prices of commodities; platinum, corn, steel, coal etc.  

Does all of this fit together?

Actually yes. Most Third World countries have little to export and depend entirely on imports with serious protectionist barriers.  Because India, China and the United States are growing at very healthy rates the demand for commodities is driving up prices on the world market.  This is of little significance to India and China because of their economic growth.

This increase in prices globally is having little effect on the United States because (a) the economy is so large that small input cost disruptions are not passed along to the market ( example: the 2007 increase in oil prices had little effect on retail non-gas prices)  and (b) there has been so much productivity gain in the past 15 years that deflation is the order of the day.

Japan is immune to the global price rise. It is a vast exporter like China and India. It has an astounding savings rate which is inherently deflationary. It has a government that has been running an enormous deficit which is sopping up some of the Japanese savings.  Overall, there is little reason for inflationary impact on Japan.

Summary:  the global economy is booming which is creating inflation in Third World countries and having little or no impact on the four main exporting countries ( which includes Germany ) or the planetary elephant ... the United States.

Significant year

Those of you who don’t know the significance of the year 1991 will probably be fascinated.

Nineteen ninety-one was the peak year in American crime. Crime has declined every year for the past 20 years.

The best explanation comes from the paper, "The Impact of Legalized Abortion on Crime," by Stanford University law professor John J. Donohue III and University of Chicago economics professor Steven J. Levitt.  

Like most good research, Donohue and Levitt found their data by accident while researching another subject.  Abortion in the United States began to rise five years before Roe v Wade in many states.  After Roe v Wade it grew rapidly. 16 to 18 years later crime began to drop rapidly.

To put it clearly, this has been confirmed many times, the babies that were aborted turned out to include a high proportion of potential criminals.

The most recent stunning data I have seen, shows that teenage pregnancy began to decline in 1991 also and is today 70% lower than in 1991.

The unwanted fetuses from the 1970’s would have been the source of not only crime but teenage pregnancies.

Yahoo on wrong boat

I have two significant experiences that explain the imminent failure of Yahoo.

First, I was in charge of marketing research and the advertising for a large bank. I had the funds to try many kinds of advertising and to measure the impact.

I found the advertising budget to be good for one thing: informing  statewide employees of new bank programs.  It also reassured top management that we did advertising like every other bank and good advertising at that.

I have seen advertising be effective in dealing with the ignorance of tourists and children. Otherwise, advertising is useless; an horrific waste of money.

Second, I have advised nearly 2000 small businesses in the US and abroad.  I have never seen one where advertising brought in customers.

This was the basis for a management course I taught in the early 80s and the subsequent book on the subject called Marketing Without Advertising.  The first chapter of the book explains why advertising doesn’t work.  The book makes a distinction between advertising and listing.  Listing is putting information at the point  the customer is looking for it. Google meets that definition.

Yahoo has based its survival on standard advertising. That is why Yahoo is effectively gone.  

The hundred year sham that advertising works has been refuted by the Internet that allows people to get information before they buy.  And ignore the expensive crap that advertisers squeeze in front of and behind everything.

Perverse good heartedness

The good heartedness that I am referring to is progressive taxation. Progressive taxation means that the tax rates increase with income level. (Precisely what Gov. Jerry Brown wants to continue for five years in California.)

There are two distinct perversities with progressive taxation.   The first is that it becomes meaningless as it gets above a gross level of 30% of income.  It is very rare in any circumstances and anyplace in the world to effectively tax citizens at a level that yields more than 30% revenue on real income.

That is a perversity that occurs for several reasons. First, people who were subject to higher effective tax rates simply leave the tax district. Additionally, upper income taxpayers spend money to find ways to avoid higher tax rates. Most importantly upper income taxpayers change their behavior, change their portfolios and change their lifestyle in order to avoid an effective tax rate above 30%.

That makes the taxing government a hypocritical entity, claiming to set progressive income taxes above a 30% rate but not actively collecting the higher rates.

The second perversity is probably the most serious. Those states that have been facing near bankruptcy and cities as well for the past 2 to 3 years are facing this problem because they have progressive income taxes. During a recession or business slow down, upper income taxpayers face the greatest decline in income and their personal decline in income is passed on as a decline in tax revenue.

In California where the top income tax rate is 9 ½%, a very small percentage, under 2% of the population, pays taxes at this rate. More than 70% of the state income taxpayers pay nothing. It is easy to see that economic volatility makes income tax revenue highly volatile when it is dependent on such a tiny portion of the population and ignores the base income generating population below them.

Desire to be goodhearted and to tax wealthier people at higher rates than ordinary people turns out to be a perversity. Such a policy makes state, city and federal revenues more volatile and creates consequent fiscal disruptions that hurt everyone.  This tax volatility consumes vast amount of everyone’s time, and generates significant emotional distress.

Great for small business

I have had nearly 2000 small business clients (and dozens of major international corporations).

What I recently saw, in action, was completely amazing and will be a boon to millions of small business and one person operations.

All businesses can benefit from the use of credit cards. (I would say this even if I weren’t the father of the modern Universal credit card.)

Many businesses find that they are too small to effectively have a credit card reading machine, or find inputting daily customer data online is arduous.

This brilliant little device that you plug into your smart phone ear-piece hole reads and records credit cards on the spot.

It is fantastic. Thank you Squareup.com.

Best blogs Jan. 15 to Jan. 31

There is money to be made in old warehouse space in safe neighborhoods.  You need clean space good parking and you have to be on site.

It is time to appreciate some of the near miracles of modern medicine especially in cancer treatment.

We Americans get to see a wonderful experiment in good government tax policies (Texas, Georgia) and bad government ( California, Illinois, New York). Businesses migrate to the good government.

When the government forces businesses to migrate because of poor tax policies the lives of tens of thousands of people are disrupted painfully.  I see no sympathy or compassion from the lefty politicians.

The extraordinary attention paid to unhappy Jews by journalists is due to their multiple extraordinary qualities. Like 'Who are they?

There is  a group of people who undermine commerce.  When they fail we get a productivity boost.  They are non- government unions.

Academic knives and lies are out to damage our best training resource: technical for-profit schools and universities.