Michael Brown: Beneath the Surface

michael brownPlease let me present a different take on the Michael Brown tragedy, and the resulting demonstrations and property destruction after the Grand Jury failed to indict Officer Darren Wilson. I have waited for a while because I wanted to read the official court transcripts of the testimony of various witnesses before the Grand Jury. You can find the link to this testimony at:

http://www.stltoday.com/news/multimedia/special/the-testimony-the-grand-jury-heard-in-the-michael-brown/html_47d95368-a8f2-5ae1-9173-6653c15d0f0e.html

The Grand Jury witness testimony that was consistent with the forensic and other scientific evidence paints the following picture of the last day of Michael Brown’s life:

Brown (unarmed) robbed a convenience store, stealing a box of cigars and some other items. This is a felony. The security video of the robbery is at: https://www.youtube.com/watch?v=v7WIju-nAoQ

A few minutes later Brown and a friend were walking down the center line of a Ferguson, MO street and were asked by Officer Wilson to use the sidewalk. A struggle ensued in which Brown put his entire torso through the open window of Wilson’s police truck and struck at least two blows to Wilson’s head. This is Brown’s second felony of the day.

Brown left the vehicle and started walking up the street, enabling Wilson to leave his truck. Wilson followed closely behind Brown with his pistol in hard, but at his side. Brown ignored Wilson’s demands to submit to arrest and eventually charged Wilson at close range. Wilson, while backing up, shot 4 or 5 times at Brown. Brown paused briefly but then continued his charge, and Wilson finally ended his life with a shot to the forehead.

Brown was headed down a felonious path prior to his encounter with Wilson. He was primed to be one of the 25% of black males who spend at least some of their lives in prison in the United States. He didn’t have to die. Hopefully some workable procedures will be forthcoming in law enforcement to avoid similar occurrences.

There is the popular argument that Brown was a product of the poverty and hopelessness of his urban environment. However no one wants to admit that big government (no matter how well intentioned) has created these hellish neighborhoods while at the same time causing a massive deterioration of our culture. It is my contention that the billions of dollars that government has spent over the past fifty years on misguided social programs has given us neighborhoods rife with crime, poverty, and immorality. What are the chief culprits of this big government meddling?

  • Failing public schools. Teachers’ unions and misguided bureaucrats run our public schools. Despite huge per-capita expenditures on education, big city schools often graduate only 50% of their students.   The NEA has fought voucher systems, which might have been the last hope for kids stuck in substandard public schools. The NEA knows that politicians couldn’t care less about the education of students as long as they get the millions of votes that the union can provide. Teachers may be materialistic, but they are not stupid; a majority of NEA members that teach in poor urban schools send their own children to private schools.
  • Breakdown of the Family. Children who have a mother and a father at home do much better than kids that do not have a male parent in the home. Welfare programs have incentivized single female families, contributing to poverty and moral decay. No other group has a higher incidence of poverty than female-headed, male-absent households.
  • Lack of respect for property rights. If a man has no regard for his property or the property rights of others his community becomes a ghetto. By entitling welfare recipients to money and benefits the government has broken the link between property and work. Without that work ethic stewardship over one’s community and neighborhood are lost.
  • Fostering of “victimhood” as an excuse for taking responsibility for one’s actions. Once a man believes he is a “victim” he ceases to improve himself or adopt personal responsibility. He blames someone else for his troubles, abandoning hope and not looking for a personal solution to his problems. Most government programs are founded on the principle of “victimhood.” Al Sharpton and Jesse Jackson have made millions by teaching Americans of all races to play the “victim” card.
  • Lack of free market jobs due to excessive government regulation. Child labor laws and minimum wage legislation make it impossible for a small business owner to hire 10-15 year-olds to do just a few hours of work around their store or shop. Instead of learning about commerce and our system of voluntary exchange, children in their early teen years get into trouble. Because they can’t be legally hired they are deprived of that little bit of experience needed to help them understand what a job is all about and how a job leads to wages and income, which are the only permanent path to prosperity.

Michael Brown’s death was a tragedy, yet thousands of young blacks are being killed in our big cities each year. Hardly a weekend goes by in Chicago without at least 2 or 3 young black men losing their lives in gang violence. The guns are not the problem; the people using them are the problem. They are the products of a permissive welfare state that is fuelled by entitlement and which requires absolutely no responsible behavior in return. We’re getting what we’ve incentivized. How sad a legacy.

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The Millennials

millennialsMillennials are people born between 1980 and 2000, or people who are currently in the age group 14-34, which includes my current cohort of 18-22 year old college students. This week one of my students asked me to take a look at the resume he had drafted. The student will graduate with a degree in business administration this coming May of 2015.

Millennials are a different breed with a life outlook that is unlike any previous generation. Intelligence isn’t a problem; millennials are as intelligent as any past generation of Americans. As we would deduce, they are also more tech savvy than previous generations. However, many millennials are a spoiled and entitled bunch who are in for a rude awakening as they attempt to enter and compete in the labor force.

As I looked at the resume of my student, the first line after the name and address information contained the following:

Objective:  “To obtain my first job after college with a company that aligns their values with my own.”

Seriously? Really? I can’t believe what I just read. Apparently this student is very “special,” just like all of his teachers have told him throughout his lifetime. In fact, he is so “special” that this company is going to hire him and immediately take him to the corporate board room on his first day of work where the CEO and Board of Directors will excitedly ask him about his “values”. After taking copious notes about the “values” of their new “guru”, the CEO and the board of Directors will immediately start “re-aligning” the structure of the corporation to match that of their brilliant, first-day hired millennial!

I guess I’m old school. In my day the “Objective” portion of a resume was to tell the company what you are going to do for them, not the other way around.

A 38 year old executive for a Minneapolis company recently told me that she interviewed a 27 year old millennial for an IT position. The young man didn’t mention his qualifications but went on and on about what he expected the company to do for him. The executive tuned him out immediately and let him finish his spiel. Afterwards she said, “I don’t think that we have a good fit here. However, I do have some advice for you as you continue your job search.” Happily he asked her for her advice. She replied, “I think you should look for a firm where it’s all about you.” He didn’t get her point at all replying “Gee thanks, that is really good advice.” And on he went, looking for that ideal firm.

As an entrepreneur who’s started two manufacturing firms I can’t imagine that we will ever be able to afford people who only think about themselves. The costs will be too high. Our economic survival depends on hiring good people who aren’t afraid of an honest day’s work for a day’s pay. What is this world coming to?  Can anyone afford a Millennial?

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OPEC Finally “Over a Barrel”

Large Fracking Rig in North Dakota

Large Fracking Rig in North Dakota

I’ve got some great news for all Americans; perhaps the best economic news that I’ve delivered in my lifetime. It has nothing to do with Republicans winning the mid-term elections or with Harry Reid’s fall from power. This is really good news! It portends incredible vitality for the US economy now and for decades into the future.

In case you haven’t been paying attention the United States of America is now the world’s largest energy producer. According to many energy analysts and those at Bank of America, “The U.S. will remain the world’s biggest oil producer this year after overtaking Saudi Arabia and Russia as extraction of energy from shale rock spurs the nation’s economic recovery.”

On Tuesday, November 4, 2014 Saudi Arabia lowered its price of oil for export to the United States to $75 a barrel, while at the same time raising its prices to Europe and Asia. This action by the Saudis was designed to pressure US oil producers, but it will also strain the Saudi economy.

Due to the productivity of the US energy sector the Saudis have seen their sales to the US slump in recent years. This is true for all OPEC producers who are quickly losing their largest customer. In a press release the United Arab Emirates Oil Minister said his country is “not panicking”. Translation: they’re PANICKING!

What will cheaper oil mean?   First of all, it will put billions of dollars into the pockets of American consumers, just like a permanent tax cut. US Consumers will spend this additional money on goods and services, boosting output and employment in the United States. US producers will adjust to downward oil prices by tapping their huge gas reserves (Saudi has little natural gas). While large US producers may slow down some fracking activity for a time the Arabs, the Ecuadorians, Nigerians and Venezuelans know that we have the capacity to go full steam ahead if needed.   OPEC’S days of holding the United States hostage to oil are OVER!

Our “ace in the hole” is the Compressed Natural Gas (CNG) capacity that will enable the USA to power trucks and cars for the gasoline equivalent of $1.75 per gallon. Our vast natural gas supply gives our manufacturers a tremendous cost advantage over European and Asian competitors. Ironically the Europeans are importing US coal to fire their power plants because they can’t afford the prices that Putin is charging them for natural gas. The Euros are now in non-compliance with the Kyoto Protocol (limiting greenhouse gas emissions) because they’ve used up nearly all of their natural gas and must now burn coal. Meanwhile, greenhouse gas emissions in the USA are plummeting because of our huge natural gas reserves. We’re getting cleaner and the Euros are getting dirtier.

The United States is heading for a nice economic recovery thanks to the effect of hydraulic fracturing technology on our natural gas and oil supply. We have the lowest energy costs in the world, which will make the United States the world leaders in petrochemical production and other important manufacturing activities. Despite obstacle after obstacle coming from the Obama Administration, energy producers in the United States have “gotten it done” to fuel our economic recovery. God bless their frac-sand pounding little hearts!

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Kwik Trip: The Little “C” Store that Could

Kwik Trip CNG Filling Station in LaCrosse, Wisconsin

Kwik Trip CNG Filling Station in LaCrosse, Wisconsin

Quietly, in a La Crosse, Wisconsin industrial park, a business firm is establishing the energy policy of the United States in ways that will reduce pollution, lower transportation costs and improve national prosperity for years to come.  For those of us in Wisconsin, Minnesota and Iowa, Kwik Trip is an incredibly clean and efficient convenience store (“C” store as they are known in the industry) where we purchase gasoline, bananas, fresh fruit, donuts, pizza and even fresh meat.
kwik-trip-logoDon Zietlow’s company, which will celebrate its 50th birthday in 2015, has a marvelous corporate culture, including the policy of annually distributing 40% of its pre-tax profits to employees.  However Zietlow isn’t just the owner of over 400 convenience stores; he and his coworkers are energy visionaries who are building fueling stations across the upper Midwest for compressed natural gas (CNG), which I predict will fuel half of the big rig semi-trucks operating in the United States by 2019.

Last week I had the pleasure of touring the transportation facilities of Kwik Trip with Chad Hollett, its head of transportation who leads the CNG project.  Compressed natural gas has been fueling vehicles for over 50 years.  The technology of CNG to power internal combustion engines is solid and well established.  CNG is used widely in South America and in India to fuel busses, trucks, and even automobiles.  CNG has three main advantages compared to gasoline or diesel fuel.  First, the United States has the largest supply of natural gas in the world; enough to power vehicles here for the next 100 years.  Second, CNG is environmentally friendly, emitting 30% less pollution than gasoline or diesel fuel.  Because CNG is a gas, it is incapable of leaking into the soil as a result of a ruptured storage tank.  Third, CNG costs roughly half as much as gasoline or diesel fuel.  As of 10/19/2015 regular gasoline in La Crosse was priced at $3.09 per gallon while the equivalent price of CNG was $1.71 a gallon.

While CNG has been used for decades in the United States, it has not been available in a “retail” setting where thousands of cars and trucks can simply fill up at the pump.  Kwik Trip improved compression technology so that vehicles can be fueled with diesel or CNG in about the same time.

CNG Tank on Big Rig

CNG Tank on Big Rig

The company has also invested millions of dollars to set up over 40 fueling stations (soon to be 120) in its three-state area.  Every business day Kwik Trip staffers call on trucking companies, urging them to convert their rigs to CNG.  It’s not a tough sell.  Due to the lower price of CNG the conversion process pays for itself in 6 months!  Trucking companies and truck manufacturers are beating down Kwik Trip’s doors to get in on the action.  Incredibly, while they are saving money they are also saving the environment.  While politicians flap their jaws about energy policy, Kwik Trip is actually creating a cleaner environment while saving businesses (and the US economy) billions of dollars a year.

Filling Up With CNG

Filling Up With CNG

The Kwik Trip story illustrates yet another fact of life.  Government does not create jobs, progress or prosperity.  Free markets are always ahead of the “political” curve.  Economic common sense, as revealed in market prices, eventually rules the day.  Unlike the ethanol lobby, Kwik Trip hasn’t received a penny from the Federal Government or any government agency.  Instead, Kwik Trip has done what entrepreneurial companies do, they took real financial risk in establishing the retail CNG market.  When history is finally written it will show that a few folks in La Crosse, Wisconsin broke ground for a US energy policy that established CNG as the “bridge” between the fossil fuel world and technologies that will finally give us truly clean energy.

Think about that the next time you drop into Kwik Trip to get your next cup of coffee and glazer donut!

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Humble Hero on Chicago’s South Side

Paul Konerko

Paul Konerko

In this column I will write about current events, politics, economics, religion and other topics that most reasonable people won’t touch. My last column was about sports and this one also is about sports, but I assure you, this is not ESPN! I’ll eventually move on to non-sports topics.

On Saturday evening, September 27, 2014 I attended a Chicago White Sox game at US Cellular field on Chicago’s south side. It is a 20 minute subway ride from my north side home, but I seldom watch the sox in Chicago unless the Twins are in town. On those wonderful occasions I wear full Twins regalia and head down to Sox Park to harass the home town folks and pull for my Minnesota Twins!

Retirement Ceremony: US Cellular Field September 27, 2014.

Retirement Ceremony: US Cellular Field September 27, 2014.

Last Saturday was a far different occasion, as the Sox organization bid retirement farewell to their long time captain, Paul Konerko. Traded to the White Sox from the Reds in 1998 Konerko became a Sox hero in 2005 by carrying the south siders to their first World Series Championship since 1917. At that point Konerko’s market value spiked. White Sox owner Jerry Reinsdorf made the best offer ($60 million for 5 years) he could afford. Reinsdorf made his offer sincerely and humbly. This impressed Konerko, who stayed in Chicago and turned down more lucrative offers from the Dodgers and Orioles. Konerko and Reinsdorf have remained good friends.

With the departure of hall of famer Frank Thomas, Konerko became the face of the White Sox. Admired by working-class fans, Konerko took his “lunch bucket” to the park every day and put in a full day’s work. He did one thing consistently during his career…every day he came in he “Did His Best.”

Jason Stark of ESPN might have said it best: “He won a World Series in Chicago, hit a grand slam in a World Series, won an ALCS MVP Award. He isn’t a guy you’d elevate into the pantheon of all-time greats. But he did have one more excellent claim to fame that I haven’t seen enough hoopla about:  He’s one of just 10 players in history, whose primary position was first base, to make it into the 400-homer, 400-double club. Courtesy of Baseball-Reference.com, here are the others: Jimmie Foxx, Lou Gehrig, Albert Pujols, Eddie Murray, Jeff Bagwell, Fred McGriff, Carlos Delgado, Jason Giambi and Rafael Palmeiro.”

More important than his time on the field, Paul Konerko’s friends spoke of his love and devotion to his teammates and especially for Jennifer Wells, the woman he married back in 2004 and for their three children; Nicholas, Owen and Amelia.   This is a decent family man; a loyal man; a workman who need not be ashamed of his daily efforts to honor and respect his fans, whom he calls “Friends.”

As I sat in the crowd with my Twins gear on, a few folks wondered why I had donned Twins clothing when the Sox were playing the Royals. “To say good bye to Paulie” I answered. “I came all the way from Minnesota to say goodbye to Paulie.” They smiled at my response. A couple of big, rough-looking guys teared up and gave me a hug! I’m so happy that I didn’t miss that wonderful, warm Saturday night when the Chicago White Sox, the “little team that could” in the big city of Chicago, celebrated their hero.

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Bigamy and Loyalty in Sports

Tad Salyards and his son Marek at Wrigley Field.

Tad Salyards and his son Marek at Wrigley Field.

The dictionary definition of bigamy is the act of marrying someone when already married to another person. Marital bigamy is a crime in the United States. I’m glad this doesn’t apply to sports because I’ve been a “Sports Bigamist” for nearly ten years. Sports bigamy is when a person is loyal to more than one team in the same sport; for example being a Dodger fan and a Royals fan at the same time.

Most fans give all of their loyalty to one team in each sport, living and dying on the performance of the Vikings, Blackhawks, Celtics, or Manchester United. These fans usually support the team geographically nearest to their residence. I think this is unfortunate. For example, I’ve often asked Vikings fans to give me one good reason to support the “Queens” other than the fact that they’re in Minnesota. I seldom get a good answer; probably because there are none. Don’t get me wrong…I don’t dislike the Vikings…I just think they’ve been badly owned, badly managed, and badly coached since the days of Bud Grant.

My take is that blind loyalty to any team is unfortunate. For those of you who are disenchanted with your home town team I’m going to recommend sports bigamy. It’s a lot of fun to root for two or three teams at the same time without guilt or shame. I’m a Twins – Cubs baseball bigamist and a Packers – Bears football bigamist. One of the advantages of sports bigamy is that most days at least one of your teams will win! The only disadvantage is the emotionally conflicting times when your favorite teams play each other.

As an admitted sports bigamist I reserve the right to prefer one of my favorite teams over the others. I have a slight preference for the Cubs over the Twins and for the Packers over the Bears. If the Twins and the Cubs were in the World Series (imagine the infinitesimal odds of this happening) I would root for the Cubs. Likewise I would support the Packers over the Bears in a super bowl game. However, if the Twins are playing any team except the Cubs, or the Bears are playing any team except the Packers, I’ll root for the Twins and the Bears.

While there are no official statistics I’m pretty sure that sports bigamy is on the rise especially with the popularity of fantasy leagues. Fantasy games demand that participants to look beyond their favorite team’s roster and appreciate the talents of other players in the league. This broadens fan knowledge of athletes and their teams which should, other things being equal, increase the number of sports bigamists.

Then there’s the matter of team loyalty, of which I have very little. I’m the ultimate television sports narcissist (loving pleasure and hating pain) but my time always takes precedent over sports. If my team is winning I’ll be watching television intently. If my team starts to get “blown out,” I’ll shut off that darned box and do something else. In my way of thinking professional sports teams are in the entertainment business and they have only one job; to please me by winning! If they’re not winning I’m no masochist; I’ll walk out during the broadcast and do something useful.

No matter our loyalty or bigamy preferences, one thing all fans can agree on is that sporting events are the ultimate reality show! No one knows the outcome and upsets are common. As someone once said, “That’s why they play the games.” I’ll be watching some football this weekend; you can bet on it.

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The Market Always Rules

Don after a complete market "beat down."

Don after a complete market “beat down.”

Since my Chicago neighbor Pete first introduced me to Cubs parking nine years ago, I’ve been hooked! Pete and I worked the intersections in our neighborhood (only two blocks from Wrigley Field) for 5 years until he took his wife and 5 kids to the suburbs. I’ll be forever grateful to him for those wonderful times we spent together determining a daily pricing strategy, deciding the best time to hit the street, conducting daily marketing research (walking around to see how full the competitors’ lots were and what prices they were charging) and otherwise trying to figure out how to maximize our revenue. Pete the financial analyst and me the economist had some pretty sophisticated and lively discussions as the free market dictated to us every day its’ unpredictable and often fickle attributes.

Free markets such as exist in the residential parking business, are purely competitive with many buyers (those who need a parking spot) and many sellers (small time operators who have a spot or two behind their garage). It is a pure supply and demand market that can’t be manipulated by anyone. Some examples will suffice.

Yesterday was a double header. The noon game parked full for us at a price of $20 per car. The night game was brutal; I stood on the street for 90 minutes without a single sale; one of the worst episodes of parking I’ve witnessed in nine years. The photo above was taken by my parking partner Griselle about 5 minutes before I headed in with my tail between my legs.

During the steroid era when Sammy Sosa (corked bat and all) and Mark McGuire were vying for the season home run record Pete got $40 to $50 per car all season long. Today, due to high demand we parked the Gay Pride Parade and got $40 per car. Note the below photo of Griselle and I with our “modified” Cubs signs.

Modified Cubs Signs

Modified Cubs Signs

During the Obama years we have suffered through quite a recession. This depressed Cubs parking prices from $40 to $20 a car. The reason is obvious if you’re on the street for long. Demand hasn’t decreased; people with money still come to the ballpark. Supply, however, has increased markedly. The unemployed lady or man will go out to the street with a shoddy little sign that says $20 and park one car a day; that’s $20 for groceries. Furthermore, there are hundreds of them doing it!  It is the increase in the supply that has pushed prices down. If the job market ever recovers these folks will be working during the day which will reduce supply and drive parking prices up again.

Sometimes I ask myself why I’m still parking cars. It isn’t for the money, although at the end of a home stand I have a wad of cash that makes me feel like a drug dealer. It’s because I’m an economist and I love to see how markets work. Each day is different and the reasons for price changes are as numerous as you can imagine. Win or lose, we as sellers have no real influence on prices; the market always rules.

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