Marketing Genius II – Transparency and Clarity?
By: R.J. Fee
February 27, 2009
Here are two examples of President Obama’s marketing genius and how to cut through the sales pitch to reach the substance for those unwilling to delve further.
The President says his American Recovery and Reinvestment Act will “save or create 3.5 million jobs”.
This is pure marketing genius. It is impossible to prove (or disprove) a negative. Allow me to demonstrate. If each person in the United States would only send me $100, I will go out into the street and perform an ancient Aztec ceremony that will avert an intergalactic calamity that an ancient scroll forecasts to occur this year. If I was to receive a trillion dollars and no intergalactic event occurred, I could proclaim that I saved mankind. Now since the event did not occur, no one could either prove nor disprove that my actions averted the end of mankind. In this way, President Obama has positioned himself to declare his plan a success without “creating” a single job. In a later blog we will get into the fact that government can not actually “create” jobs unless they are taking money and jobs from the private sector where the jobs already exist.
The President says his plan to save people from foreclosure will focus on “those who have played by the rules”.
This is intended to make you feel good about paying for someone else’s mortgage. My question is: Whose rules are they playing by? The common sense rules for personal finance say:
1) Save until you have at least 3 – 6 months worth of expenses in a cash account for UNEXPECTED EVENTS.
2) Don’t carry debt with the exception of your home mortgage, student loan or a SMALL PORTION of a vehicle purchase
3) If you don’t have substantial equity in a purchase of a home or car, YOU CAN’T AFFORD THAT PURCHASE.
4) Don’t carry credit card debt. Know the difference between needs and wants. If you want more, then work more.
By the way, if you have played by the rules, then you are out of luck under the President’s plan. Those whose have not played by the above rules will be eligible for subsidized refinancing at rates that your tax dollars will allow to be artificially lower than rates in the free market. Although you are paying for it, you will not be eligible to lower your rate.
Some will say that it is necessary to bail these people out, because if we do not then the entire economy will suffer. I say rewarding those who have made poor decisions with additional resources will only lead to even worse decisions in the future that will cause even greater problems. This is true whether we are talking about individuals, companies or our own government. Chrysler is a perfect example of this. They were the first car company to need a bailout. After government loans floated them for approximately 25 years, they are back with the same problem. Only this time they brought their cousins, GM and Ford. The bailout didn’t change Chrysler’s behavior the first time. Why should we believe it will work this time? It won’t. It will only delay the crisis for another generation.
Friday, February 27, 2009
Thursday, February 26, 2009
The Man is a Marketing Genius
The Man is a Marketing Genius
By: R.J. Fee
February 25, 2009
Anyone can raise the price of a good or service from $100 to $200. Only a true marketing genius can then advertise a 20% sale and make the consumer feel as though they are getting a deal. You may think that you would see right through such a ploy. Yet this is almost exactly what President Obama was able to accomplish with a great portion of the American public on Tuesday night in his speech to the U.S. Congress. On the heels of the single largest expansion of government spending, He admonished the very people with whom he authorized this plundering of the U.S. taxpayer by saying that he intends to root out wasteful spending. If we are to take a look at the American Recovery and Reinvestment Act, we can easily find billions in wasteful spending of the taxpayers’ money. President Obama admits that decades of government’s wasteful spending and irresponsibility greatly contributed to this recession, yet his solution is the greatest increase in government spending that this nation has ever seen. Is government spending the source of the problem, or the solution? I don’t have a problem with someone trying to argue the virtues of Keynesian economics. I can absolutely disagree with them and counter with the economic philosophies of Milton Friedman (who I am sure is doing flips in his grave). However, please don’t acknowledge the bureaucratic inefficiencies of government and then tell me that you are going to rectify the outcome by having government control an even greater percentage of our Gross Domestic Product.
Although it is safe to say that I would rarely agree with a man like Dennis Kucinich, I can hold a certain level of respect for his consistency in his beliefs. Mr. Kucinich is admittedly and proudly at the far left of the Democrat Party. This doesn’t make him evil, or malicious. It simply means that his solutions to problems are often found in more government involvement. His rhetoric matches his voting record. My views are often diametrically opposed to those of Mr. Kucinich. This disparity is very healthy, and I believe this is what has historically made our country strong. That is why the founding fathers developed our electoral system and balance of power. The Democrats have gained the White House and obtained a near super majority in the Senate. They should not hide behind rhetoric that belies their actions. Have the courage to stand tall. Say what you mean, and do what you say. If the votes are there, you will get your bill through. The disparity between what politicians’ words and actions only serves to demonstrate a lack of principled commitment and further erode the trust of politicians among those willing to pay attention between elections. However, most elected officials are lawyers rather than economists. This is a fact that has become all too painfully obvious in recent years.
I don’t often listen to, or watch, these major speeches. I prefer to read the transcript of the speech the following morning. This allows me to look past the style and focus on the substance. President Obama is quite Reagan-like in his delivery. As a former actor, President Reagan delivered his speeches as if he was playing a role. As a former lawyer President Obama delivers his speeches as if he if conducting opening and/or closing remarks. The problems arise when actions and words do not correlate. The essence of marketing is making the consumer believe they are getting a great deal in giving you their money. Make no mistake about it. The intent of this newly passed law is to further federalize our nation. This bailout money is the proverbial bait used to entice poorly run private companies and financially irresponsible individuals. With the promise of security and acceptance of public aid comes the same obligation of an indentured servant. Once the banking, mortgage, health care, energy and automobile industries are effectively federalized, we will have completely redefined our economic system. Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries.” There is no more slippery slope. We will have completely jumped the fence to the house of cards that is socialism.
By: R.J. Fee
February 25, 2009
Anyone can raise the price of a good or service from $100 to $200. Only a true marketing genius can then advertise a 20% sale and make the consumer feel as though they are getting a deal. You may think that you would see right through such a ploy. Yet this is almost exactly what President Obama was able to accomplish with a great portion of the American public on Tuesday night in his speech to the U.S. Congress. On the heels of the single largest expansion of government spending, He admonished the very people with whom he authorized this plundering of the U.S. taxpayer by saying that he intends to root out wasteful spending. If we are to take a look at the American Recovery and Reinvestment Act, we can easily find billions in wasteful spending of the taxpayers’ money. President Obama admits that decades of government’s wasteful spending and irresponsibility greatly contributed to this recession, yet his solution is the greatest increase in government spending that this nation has ever seen. Is government spending the source of the problem, or the solution? I don’t have a problem with someone trying to argue the virtues of Keynesian economics. I can absolutely disagree with them and counter with the economic philosophies of Milton Friedman (who I am sure is doing flips in his grave). However, please don’t acknowledge the bureaucratic inefficiencies of government and then tell me that you are going to rectify the outcome by having government control an even greater percentage of our Gross Domestic Product.
Although it is safe to say that I would rarely agree with a man like Dennis Kucinich, I can hold a certain level of respect for his consistency in his beliefs. Mr. Kucinich is admittedly and proudly at the far left of the Democrat Party. This doesn’t make him evil, or malicious. It simply means that his solutions to problems are often found in more government involvement. His rhetoric matches his voting record. My views are often diametrically opposed to those of Mr. Kucinich. This disparity is very healthy, and I believe this is what has historically made our country strong. That is why the founding fathers developed our electoral system and balance of power. The Democrats have gained the White House and obtained a near super majority in the Senate. They should not hide behind rhetoric that belies their actions. Have the courage to stand tall. Say what you mean, and do what you say. If the votes are there, you will get your bill through. The disparity between what politicians’ words and actions only serves to demonstrate a lack of principled commitment and further erode the trust of politicians among those willing to pay attention between elections. However, most elected officials are lawyers rather than economists. This is a fact that has become all too painfully obvious in recent years.
I don’t often listen to, or watch, these major speeches. I prefer to read the transcript of the speech the following morning. This allows me to look past the style and focus on the substance. President Obama is quite Reagan-like in his delivery. As a former actor, President Reagan delivered his speeches as if he was playing a role. As a former lawyer President Obama delivers his speeches as if he if conducting opening and/or closing remarks. The problems arise when actions and words do not correlate. The essence of marketing is making the consumer believe they are getting a great deal in giving you their money. Make no mistake about it. The intent of this newly passed law is to further federalize our nation. This bailout money is the proverbial bait used to entice poorly run private companies and financially irresponsible individuals. With the promise of security and acceptance of public aid comes the same obligation of an indentured servant. Once the banking, mortgage, health care, energy and automobile industries are effectively federalized, we will have completely redefined our economic system. Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries.” There is no more slippery slope. We will have completely jumped the fence to the house of cards that is socialism.
Wednesday, February 25, 2009
What a Bipartisan Stimulus Package Really Means
What A Bipartisan Stimulus Package Really Means
by R.J. Fee
January 29,2009
All right. President Obama met with Republican leadership in an attempt to foster "bipartisanship" over his very Keynesian Economic Stimulus (read HUGE NEW GOVERNMENT SPENDING) package. I have a few questions.
1) Didn't his plan already include how much, where and when the spending would take place?
I don't agree with very much of the man's political philosophy, but he is obviously smart enough to create a plan. I know he wouldn't throw together a plan to spend $800 billion in new spending at the eleventh hour. A great deal of research into the effects of implementing this plan had to be studied at great cost of time and money. Which leads me to the next question...
2) With his plan already intact, what is there to meet about?
The spending plan has been formed. Even relatively small alterations to such a plan would have to be studied for their ripple effect throughout the economy. Unless the plan was structured with billions in slush money incorporated into the plan to persuade (read buy votes and support) of opposing party members. Of course that COULD NOT be the case, because change has come to
3) Was the plan intact, or not?
The current administration can not have it both ways. Either you have a plan, and you are recklessly accepting input related to altering the plan that you have put so much time and effort into formulating, or you incorporated a great deal of slush and are using the taxpayers money to buy votes and the appearance of support. The funny thing is that, practically speaking, the opposition's votes are not needed to pass this debacle. But it is politics as usual, and the appearance of bipartisan support looks good. Who cares if it continues to waste taxpayer money? This leads to a question for the Republican leadership...
4) Which of you will be conceptually against such government spending until some of this slush money is directed to your home district?
The Republicans can not have both ways either. Either you are against such a move away from Capitalism toward Socialism, or you are not. Herein lies the problem with career politicians. Perhaps Winston Churchill made the point best in the following famously attributed discourse (or pehaps parable):
Churchill: “Madam, would you sleep with me for five million pounds?”
Socialite: “My goodness, Mr. Churchill… Well, I suppose… we would have to discuss terms, of course…”
Churchill: “Would you sleep with me for five pounds?”
Socialite: “Mr. Churchill, what kind of woman do you think I am?!”
Churchill: “Madam, we’ve already established that. Now we are haggling about the price.”
This leads me to a definition of Bipartisanship.
Bipartisanship - Ideally being able to agree conceptually on a matter. When unable to conceptually come to an agreement, it is the price at which the party in power must haggle to persuade the other to abandon their facade of scruples and values.
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