Talk about screwing up

I get digest emails from the Economist every Thursday, on politics and business. Two things caught my eye in today’s edition.

  1. Chrysler appointed Robert Nardelli as its CEO. This is the same guy that left Home Depot after employee and investor dissatisfaction with his management and personal style, with a severance package worth about $210 million. So the guy pisses off people at Home Depot left and right, is run out of the company, but gets hundreds of millions in bye-bye pay… and then Chrysler hires him? Isn’t Chrysler supposed to be in trouble as a company? What do they see in him?
  2. Trump Entertainment Resorts reported a second quarter loss that was more than double that of last year’s. So they’ve been losing money all along, just like all of the other business ventures run by Trump, and yet their share price surged when they released their earnings report?! Are the investors sane?!

I’m going to rant a bit now, because I’ve wanted to say this for a long time. Donald Trump has to be one of the most overrated businessmen ever. On the whole, his career and life are an exercise in ridicule.

Take business: for years, he’s managed to do poorly in his ventures. He’s had a few successes, but on the whole, he’s run project after project into the ground. The ones that are still standing are so heavily in debt that they should be dead by rights. Yet investors continue to sink money into his ventures in spite of all evidence to the contrary. The guy cannot run a business in the black. He’ll run them all in the red, and he’ll pay himself tens of millions while his companies wither away.

Take life: he managed to get a TV show that was a hit with the general populace — that in itself was incomprehensible. He, the clueless, poorly performing CEO, dared to dole out business advice to others, and to act as a role model for other businessmen. If Trump is a model for American business and leadership, then God help us, because we’re headed for the crapper!

Take style: the man looks like he’s got a dead cat on his head. Over the years, he’s persisted with that cockamamie hairstyle to the chagrin of decent people everywhere.

Trump seems to be rubbing it in our faces: he’s ridiculing us. He may be saying something else, but his actions say, “Look, I’m going to thumb my nose at all of you. I’ve got you all eating out of my hand even though I can’t run a business to save my life.” In spite of this, people clamor to kiss his behind and stand in line to invest in his businesses. I don’t get it.

It seems to me that greedy losers do best in modern business, and Americans on the whole love to celebrate them. The two people I mentioned in this post are just a few of the guilty parties. But then, is that any wonder when almost every CEO has ridiculous compensation packages regardless of their job performance, and when companies (especially those that deal in non-physical assets) are stupidly overvalued? I think we’re headed for the crapper, and Trump and others like him are the icing on the cake that’s going to give us the runs.


The US has a negative bank balance of what?!

Stumbled onto this entry on Vinnie Lauria’s blog, listing the bank balances of various world countries. At the bottom of the list… the US of A. Our bank balance: $ -829,100,000,000. Say what?! Yes, according to the CIA, so it’s got to be true.

How about the US Budget? How’s that? Well, according to this chart, compiled with data from the Congressional Budget Office, our 8 years with GW Bush have been wreaking havoc on the budget.

Not really comforting news, is it? And we want to keep spending how much on the Iraq war, in order to bring “peace and stability”, and oh yes, let’s not forget, “democracy”, to that region? Isn’t it about time someone put a stop to our runaway spending?


The Great Depression: past or future?

In reading the description of the Great Depression posted on the Encarta website, a great number of similarities strike me. As far as I’m concerned, we’re in the same boat. We’ve bought an enormous amount of things on credit, most Americans are in debt because of the prevailing idea of “consumerism”, of disposable goods that must be continually re-bought and renewed, and the stock market has just recently collapsed.

Here’s what’s written there: “Although the 1920s appeared on the surface to be a prosperous time, income was unevenly distributed. The wealthy made large profits, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt… These problems contributed to the crisis that began the Great Depression: the disastrous U.S. stock market crash of 1929, which ruined thousands of investors and destroyed confidence in the economy. Continuing throughout the 1930s, the depression ended in the United States only when massive spending for World War II began.” (1) Does this sound familiar to you?

I think what saved us from going into a full-blown depression now was entering into war with Iraq. The massive spending that took place to finance this money-losing operation (hundreds of billions so far) served to revive the economy to some extent, and the politicians managed to save our ship from sinking. The question is, how long will this temporary effect last?

In the 1940s, we financed our massive war spending through various methods, such as war bonds, loans and other such things. A lot of money was made available through the rationing of goods and the conservation of resources such as electricity and gasoline. After the war was over, there were an enormous number of contracts for American factories to fill overseas. None of that is happening today, though. Today, it’s mostly artificial. President Bush spent loaned money to finance the war in Iraq, and he’s spending more loaned money to finance the contracts for rebuilding Iraq. The contractors (Halliburton and others) are overcharging the government, and who is left as the scapegoat? Us, the regular taxpayers. Isn’t this crazy? We’re only going further into debt instead of coming out of it.

Where in the world do you think Congress gets the war money from? Debt! That’s where the money that government spends on big purchases has come from for years. But America is already deeply in debt. I hope that we’re all aware of how much in debt we are as a country. So tell me, what happens when you prop up an ailing economy by spending money you don’t have? I’ll tell you. You’re digging under yourself! And, what’s making it worse is that foreign investments in our government bonds are holding up our economy. China is fast becoming one of the biggest foreign investors, and when you have a communist country with their hand on your capitalist wallet, things aren’t quite right.

In order to counteract the possibility of an economic collapse, we’d need to get some very fiscally responsible politicians in the White House and in Congress. But does that ever happen? Nowadays, it seems that only fiscally irresponsible people ever get to either run for office, or stay in office. Sure, there are a few good senators, but there are far more overwhelmed people holding office, and their legislative votes only serve to worsen the situation. Regardless of who gets elected on November 2, 2004, the situation will not improve. Kerry is no better than Bush when it comes to dealing with the money situation realistically.

What’s to be done? I can’t predict the future, but unless we get someone in the White House who is willing to address the problem of debt head-on, I think our country is headed for certain disaster. You do the math, but economic collapse can’t be good for anyone.

(1) “Great Depression in the United States,” Microsoft Encarta Online Encyclopedia 2004.