Boeing Needs To Repair Its Transparency Problem

Yesterday Boeing’s stock dropped about $25 in price. Over the last few months its stock has dropped from a high of about $444 to about $367 per share. I am looking at a chart which why I am giving general numbers. Investors are not happy with the company’s performance in dealing with the 737 Max fiasco, but they seem to recognize that Boeing will eventually do the right thing.

The May 5th Wall Street Journal reported that Boeing knew about the problem a year before the October 737 crash in Indonesia. Not only did Boeing know about the problem, but it gave “some airlines and pilots partial and inconsistent explanation.” This appears problematic, and it is, resulting in the drop in stock price, but this is part of the mechanism that ensures that big business does the right thing. Management cares about stock value. They will do was is necessary to repair negative events.

I am not worried about collusion between Boeing and the FAA. When I was a manager for the Quality department at Boeing Portland, I worked directly with the FAA. It was a professional relationship, but one needed to ensure we were able demonstrate our ability to do what we had told the FAA we were going to do when manufacturing airplane parts. Let me explain.

When an airplane goes through the design phase and then the build phase there are three certificates that are critical. The FAA is the agency in the United States that awards the three certificates to the airframe manufacturer. The first certificate is the Type Certificate. This certificate is the result of the company submitting an airplane design to the FAA and then the FAA determines that this design is safe to build prototypes for additional testing. This is an extensive process, and the process must be followed to ensure the planes will be airworthy.

The second certificate associated with building airframes is the Production Certificate. This certificate is awarded to a manufacturer when they have demonstrated that its production processes produce consistently high quality product. This means the design submitted to the FAA will be produced correctly. It is also awarded when the production process demonstrates that is meets the Codes of Federal Regulations. These codes require airplane manufacturers to have mechanisms in place to control manufacturing plans, engineering drawings, measurement equipment, and non-conforming material. The manufacturer then provides procedures to the FAA that describes how the manufacturing processes meet the CFR requirements. The FAA then visits various facilities of the manufacturer to determine is what the company really does matches what it said it does. I dealt with the FAA when they came to the Portland plant to audit us for compliance.

The third certificate the manufacturer deals with is the airworthiness certificate. Each airplane delivered to a customer must have an airworthiness certificate. After the plane is manufactured it goes through various tests and is inspected by an FAA representative at a Boeing facility. This could be an actual FAA employee or a Boeing employee certified by the FAA to represent the FAA. If all of the tests are good, all non-conforming material issues dealt with, and documentation complete, the airplane gets the airworthiness certificate and can be flown to its customer.

The process worked well when I worked there, and I am assuming it still does. However, the FAA was struggling a bit, and mind you this was twelve years ago, with understanding new technology. There was talk they did not have the needed expertise. I am sure they took the steps to up their skills, but I can’t say. I also cannot say that Boeing and the FAA was in cahoots to get the Max approved quicker that it should have. I really have a hard time believing that. I don’t believe that anyone at Boeing wants to put unsafe product in the air. I also cannot believe that the FAA would short cut the certification process.

However, here we are, and Boeing needs to repair its relationship with its customers. This will take some time, but its current CEO, it will be interesting to see how long he lasts, Dennis Muilenburg “said the company was focused on safety and the plane maker would look for ways to improve how it develops airplanes.” Knowing what I know about Boeing culture I believe this will happen. However, I think the company needs to work on its communication with its customers.

First, if Boeing did know about the problem with MCAs and different sensors a year before it came to light with the crashes, and told no one, then shame on them. The company needs to be more proactive with the Advanced Directive (AD) process. This will help the company restore some of its reputation. Second, it needs to be completely honest with issues, if there are some, at various locations. Union employees came forward saying there were production issues in the South Carolina. That particular plant mainly builds the 787, the 737 is built in Renton, Washington. However, if there are problems at any facility the company needs to address them quickly. Last, the company needs to spend a lot of time talking to their customers. But, talk is cheap. They need to talk and demonstrate through actions that it can be trusted.

Boeing and Airbus, the competitor, sell the majority of commercial airplanes. China is building a plane similar to the 737, Fokker, a Dutch airplane manufacturer, and Bombardier, a Canadian manufacturer, typically build small planes. With two main players, every order is highly contested. The stakes are extremely high, therefore cultivating strong relationships are critical for Boeing’s success. The company needs to work hard to repair its relationship with its customers. In the old days Boeing could get away with treating its customers badly. It is a new day, and customers have somewhere else to go. It is time for Boeing to do what it needs to do to stay number one. Oh, and make sure I keep getting my pension checks.

And that is my thought for the day.


Hickenlooper’s Plan To Create State Capitalism

When I was younger growing up in California I was what you would call a hippie. I had long hair and round glasses. I wanted to be John Lennon. My parents were Democrats, and my first political awakening was Robert Kennedy, so when I was old enough to vote I registered as a Democrat. Over the years as I engaged politically, I became disillusioned, and have over the last few years reengaged as an Independent. I experimented with Libertarianism, but it really wasn’t me, so I have settled on being a center right Independent. I feel pretty good with this assessment of my political leanings.

Economically I am a Capitalist. I believe in a Free Market system based the private ownership of the means of production. However, I am a realist, and as a Christian, I recognize how the nature of humankind leads to all kinds of horrible decisions, such as exploitation and greed. Government then has a role to play in the market. I see this role as one of being a referee. I don’t see government as being the owner of the means of production, and I don’t see our economic system as state Capitalism, but I do see an important role for government in ensuring that the playing field is level, and people have the same opportunities. I don’t believe in equal outcomes though. There is value to meritocracy, and I do see incentive as critical, but I don’t think that the elites should have the ability to influence social systems for their benefit.

This preamble sets the stage for my comments on John Hickenlooper’s editorial today in the Wall Street Journal. His, “I’m Running to Save Capitalism,” article caught my attention, and after reading it twice, once again demonstrated to me why I am concerned about all of the Democratic candidates for President.

Hickenlooper starts his article with “American capitalism is at risk.” My first thought as I read this was, who in their right mind would want to change our economic system to one like Venezuela? I don’t think politicians from either party want to do that, but I also am cynical enough to realize that politicians from both sides only care only about power. Give the people free things and they will be elected. But, in all fairness “dramatic income inequality” is an issue. Hickenlooper’s article then describes how he intends to save Capitalism, in my opinion, he intends to change it into a state-owned Capitalist system.

I agree with his comment how neither of the two sides, massive government growth and uncontrolled deregulation, “recognize the realities of our situation,” but I am also concerned about several of his so-called solutions. As a loyal Democrat he needs to attempt to dismiss the current economic growth, and then demonstrate how our government savior can come in and adjust the system to be fair, “just like it has done in the past.” Don’t get me wrong, income inequality and health care are critical issues that need to be addressed, I am just not too sure our current political environment will allow a realistic solution.

His first recommendation for saving Capitalism is to make obtaining the necessary skills to thrive in the economy more affordable. Then he comes back with the common Democratic response, “making community college “free for those who can’t afford it.” He also adds, “expand apprenticeships and skills training programs dramatically.” I totally agree with the second half, but I don’t think government should be the driver on this. I think business should take the lead. I do think government has a role to play, but it is not to be the primary banker. I do think that government could give business tax breaks for educational and apprenticeship activities. This is what incentive is all about.

His next part of the solution is earned-income tax credit and raise the minimum wage to $15. According to the Wall Street Journal $15 an hour represents almost 70% of the median U.S. hourly wage. “A value of 50% or 60% of median pay is in line with the international average among rich economies and with the U.S. historical average during the 1960s and 1970s.” I would agree with raising the minimum wage, but we do need to be careful with raising it too much. The WSJ quoted Arindrajit Dube, a labor economist at the University of Massachusetts Amherst, as stating, “setting a minimum wage at 100% of the median wage would have a big impact on jobs because it would compress the entire bottom half of the labor market at one wage.” As we see in France, Portugal, and others higher minimum wages result in higher youth unemployment. I would agree with the need to raise the minimum raise, but I do think it should be connected to cost of living.

Hickenlooper’s next part of his solution sounds like Warren. Government needs to “protect the heart of capitalism – competition.” This sounds really good, and in principle I agree with it, but what level of increased regulation does this mean? He argues that the Clayton Act needs to be restored to its original focus. This seems reasonable, but once again can we trust government to have our best interests in mind, or will big business lobbying lead to greater cronyism? My lack of trust for both Republicans and Democrats will not help me in this matter, nor with the healthcare discussion.

I do think the healthcare system does need to be reformed. This is the one place I agree with Hickenlooper: “I reject the idea we can improve healthcare by turning it entirely over to the government.” However, I do like my Medicare with my supplement. I think some level of compromise that reduces costs and “establishes potability” would be good. I also agree with the author in principle when he discusses taxing the extreme wealthy. Even Warren Buffet agrees. What worries me though is we have finally reduced business taxes to be on par with the rest of the world, will the Democrats increase taxes not just on the wealthy, but businesses as well. This will stifle our current economic expansion. Hickenlooper claims to want to protect small businesses, but once again my cynicism rears its ugly head.

The Democrats always look for revenue increases to fund wonderful programs that never do what they say they will do. But, I agree with Hickenlooper when he says “Capital-gains reform would also allow Americans to pour their money into what is needed: skills and education.” But, I am not too sure I agree with him that the amount raised through this tax will be the $2.4 Trillion windfall he says it is supposed to be.

His last point is something I agree with whole heartedly. I am amazed at how the Republicans have given up on this last point. “Finally, the U.S. should expand free trade rather than adopt a protectionist crouch.” It does seem that in the past we have given away the farm to benefit other countries and not our country. So, his comment intrigues me, “my policy would extend fair trade that benefits Americans.” He gives a couple of examples regarding green-house emissions and intellectual property, which I think are good.

Hickenlooper ends with, “The 2020 election will decide if capitalism flourishes in America. I am a small-business man, and yes, a capitalist. But today American capitalism is broken. We have to fix it before it is too late.” I agree with this in principle, but I disagree that the Democrats are the only one with a solution. I think I suffer from what Jonathan Haidt and Greg Lukianoff call distorted thinking and vindictive protectiveness. I see the Democrats and Republicans as both proposing singular theses and antitheses. Each are incomplete in themselves, ones that do not represent the total needs of our country. Hickenlooper is trying to portray himself as a compromise ideology that is nothing more than a sanctified Democratic platform of very large government and a deep state. In fact, I think he is proposing a state capitalism.

Now the person I am interested in is Howard Shultz. “I wanna see the American people win. I wanna see America win. I don’t care if you’re a Democrat, Independent, Libertarian, or Republican. Bring me your ideas.” Shultz grew up in the projects of Brooklyn and became the first person in his family to graduate from college. He has run a very successful business, Starbucks, and I think he is someone who could find compromise between the extremes. This is a very initiatory viewpoint that I am sure will change as we go along.

As I said earlier, I am a center-right independent. None of the current crop of Democratic candidates float my boat. I am not a Trumpian, I think he is too volatile. He needs to stay off of the Twitter. I don’t want someone telling me that they are a Capitalist and then work to dismantle it. I am all for fighting crony capitalism, but I am not too sure there is a Democrat that can accomplish what needs to be done.

In my opinion this is what needs to be done. Our politicians need to leave business taxes alone. Corporate tax is on par with the rest of the world, don’t hamstring our businesses with high taxation and more regulation. Second, increase taxes on the super wealthy. It appears the wealthy have no problem with that, so let’s do it. Third, create strong apprenticeship programs with tax incentives for business. Millions of jobs are not being filled due to a gap between needed skills and labor force skills. I think this could be a combination of business and government funded programs. Fourth, government should have a competing healthcare option. This option should compete with private market programs. I also think business should receive tax incentives to provide insurance for employees. This could offset the cost to small and midsized companies.

Obviously, I am not an expert, but if our politicians really cared about people and not power, they would find the solutions needed to create a better healthcare and immigration system (I didn’t talk about that because Hickenlooper didn’t). Because I am suffering from vindictive protectionism, I don’t think it will happen.

And that is my thought for the day!

When Liberation Theology And Christian Nationalism Become Another Gospel

Now that I am retired I have found that my body can only handle so much golf. Today was one of those days where my back just got tired. After playing golf five days in a row I have learned a lesson. I need to take a day off in the middle of the week because it will help me play better. Another activity, on the positive side, I have found rewarding is reading. I think I read a fair amount before I retired, but now I seem to be reading a bit more. One of the more negative activities that have been a part of my new routine is Twitter and Facebook. Of course, I only allow myself a certain amount of screen time, which does help with my sanity.

The other day I saw a post mentioning how May 2 was the anniversary of the death of Athanasius of Alexandria. Unless you study Church history, you probably wouldn’t know who he was. He was a theologian, a Coptic Christian, and the protagonist in the drama surrounding Arius. The Arian heresy is similar to what the Jehovah’s Witnesses teach today.

According to the Evangelical Dictionary of Theology Arius was a North African priest who developed some heretical views concerning the nature of Christ. Arius felt, “since God was immutable and unknowable, Christ had to be a created being, made out of nothing by God.” Arius was a competent communicator and had convinced many that his views were correct. However, Athanasius stood his ground and disputed the heretical views of Arius. There is an apocryphal story of how someone stated to Athanasius, “the whole world is against you Athanasius,” he responded, “no, it is Athanasius against the world.”

As I thought about what I knew about Athanasius I pondered the heresies of today and where the champions of the church are? I also contemplated what Paul told the Galatians in chapter one of the epistle of the same name. “I marvel that you are turning away so soon from Him who called you in the grace of Christ, to a different gospel, which is not another, but there are some who trouble you and want to pervert the gospel of Christ. As we said before, so now I say again, if anyone preaches any other gospel to you than what you have received, let him be accursed” (Galatians 1: 6-8).

In this age of tolerance, and how people are saying, “oh I have learned so much from this religion about love and peace,” or how Islam is a religion of peace, and we need to have interfaith activities. I wonder how Paul would have handled this?

The Galatians passage tells me there are different gospels, the Greek means another of a different kind, and if someone is preaching those gospels, Paul says let them be accursed. Barnes notes makes an interesting statement about the meaning of this word. “The object of Paul is to express the greatest possible abhorrence of any other doctrine than that which he had himself preached. So great was his detestation of it, that says Luther, he casteth out very flames of fire, and his zeal is so fervent that he beginneth almost to curse the angels.” Pretty strong words.

I am not too sure we in the Church today understand the seriousness of the gospel and the judgment of God. If Paul is using strong words to express this reality, under the inspiration of the Holy Spirit, then we should pay attention. There is the ability to preach another gospel, in fact, there are many other gospels, and we need to be aware. When I was a very new Christian someone told me that the devil will give you 90% truth and 10% error. I think that is true, and I think there are many in the Church that have embraced this 90% truth and 10%! There are two popular beliefs in the Church today that I want to focus on, and identify them as another gospel. The first is Liberation Theology, and the second is Christian Nationalism.

Liberation Theology is a mix of Marxist ideology and Christianity. Liberation Theology, according to Mark Galli, is “a political theology that interprets the teachings of Jesus Christ in terms of liberation from unjust economic, political, and social conditions.” I know several people who adhere to this particular gospel, and I have always been a little concerned about the Marxist element associated with the theology. As the Evangelical Dictionary of Theology states, “Liberation Theologians contend their continent (Latin America) has been victimized by colonialism, imperialism, and multinational corporations. Economic developmentalism has placed so-called underdeveloped third-world nations in a situation of dependence, resulting in the local economies of Latin America being controlled by decisions made in New York, Houston, or London.”

To the Liberation Theologian “theology is not a system of timeless truths, engaging the theologian in the repetitious process of systematization and apologetic argumentation. Theology is a dynamic, ongoing exercise involving contemporary insights into knowledge (epistemology), man (anthropology), and history (social analysis).” Truth is evolutionary and “comes out of a given historical situation through personal participation in the Latin American class struggle for a new socialist society.” Although these quotes discuss Latin America, there are many in the United States that embrace Liberation Theology.

I think there are several key components that will help us identify this ideology as heresy. Leonardo Boff states, “Jesus secularizes the means of salvation, making the sacrament of the other a determining element for entry into the kingdom of God.” Enrique Dussel said, “The poor are the epiphany of the Kingdom or of the infinite exteriority of God.” And according to the Evangelical Dictionary, “We are forced to understand God from within history mediated through the lives of oppressed human beings. God is not recognized analogically in creations beauty and power, but dialectally in the creatures suffering and despair.”

I am not a big Ron Sider proponent, but he does help us to see the heresy and strength of Liberation Theology. “God is on the side of the poor and oppressed” (Sider). One would be a fool to dismiss this as heretical, because scripture is clear that God cares for the poor. Sider does do a good job of warning us about the concerns of this statement. Sider states that God does not intend for people to give up material wealth and seek poverty. Also, he states that the poor are just as much a sinner as the rich. Just because one is poor does not give them a place in the kingdom of God. Another problematic element is that God cares more about the salvation of the poor than the rich. Sider notes that the poor do not have a special claim on salvation. The last, and probably most critical, is “that knowing God is nothing more than seeking justice for the poor and oppressed.”

Liberation Theology’s emphasis on the poor and oppressed is commendable. However, it becomes another gospel, another of a different kind of gospel, when it deemphasizes the primacy of Jesus Christ replacing it with care for the poor. Many churches today are rightfully focused on the poor and oppressed, attempting to bring relief to people who are in tragic situations. Those actions however, as altruistic as they are, do not relieve the most important aspect of history, who is Jesus Christ and what did He do on the cross. If we do these wonderful things for the poor, thinking that it saves us and them, but not tell them about sin and the need for salvation found in Jesus Christ, then we have not created disciples. I had a colleague tell me one time that our place of employment was not a church. At the time I said ok, I can accept that. But now I can’t, because each of us who are Christians are the Church. And as a result, we have a responsibility to tell people about Jesus. Ok, I’ve hit the left, now I want to go after the right.

Christian Nationalism is another gospel. It is insidious ideology based on an incorrect assumption of American exceptionalism in God’s economy. Contrary to what some people believe God did not replace Israel with America, we are just another kingdom that God has raised up, and if we are not careful will be taken down. To mix salvation with being an American is heretical. As Mark Galli states in this month’s Christianity Today, “To believe that America is a divinely chosen nation, to be privileged at the expense of other nations – that is idolatry.”

Christian Nationalism has been around for a long time, and expressed is many countries, not just the US. The phrase white supremacy was used in the past by Nazi Aryanism and in this country, the KKK. It has been used by adherents of identity politics as representing systemic racism in our culture. Galli defines the phrase identity politics as, “a tendency of people sharing a particular racial, religious, ethnic, social, or cultural identity to form exclusive political alliances, instead of engaging in traditional broad-based party politics, or promote their particular interests without regard for interests of a larger political group.” With the rise of identity politics there is an emergence of tribalism that is impacting the Church in a negative way. Christian Nationalism is an ideology that, in my estimation, has emerged because people in our country are afraid of the changes occurring around the nation.

I agree with Galli when he states that “Christian Nationalism comes in many forms.” I also agree with his statement that “it usually includes a fierce protection of national borders, a deep distrust of those who are not Christian or citizens, a belief in special divine favor for one’s homeland, an excessive dependence on military power, and an attraction to brutal authoritarian leaders.” The “another gospel” aspect of this is the use of the tools of the kingdom of man to propagate the kingdom of God. It has not, and does not work, it is another gospel.

I am of the conservative mindset, but I am also a Christian. I worry about combining my faith with any political ideology. The left part of the Church has connected itself with Liberation Theology and as such has lost its ability to lead people to Christ. Jesus becomes immaterial to the poor and oppressed. All the left has left is a universal salvation that allows for a watered-down sense of sin. The right has done just as poorly by aligning itself with Nimrod and a literal tower of Babel. I am not able to say it better than Galli, so I will close with a lengthy quote from his article. Describing the sin of Christian Nationalism Galli states, “their unrepentant hearts blind them to the desperate who knock on our nations doors to escape persecution, poverty, and drug wars at home! Their blindness prevents them from seeing that, except for angry terrorists, the vast majority of Muslim men and women seek to know the true God, and thus Christian Nationalists fail to see the opportunity to share with them the merciful love of Jesus.”

It is time for the Church to repent. In the past we were sitting in a tent, and when the camel of Marxism and Nationalism stuck its nose into the tent we did nothing to stop it. Eventually, the camel was in the tent up to its neck. Ultimately, the camel took other the tent and we are in the cold. The Church in the United States is in danger of losing its ability to proclaim the gospel of Jesus Christ because we have allowed other ideologies to overwhelm the true gospel. Paul warned Church leaders in Acts 20, starting in verse 28, “Therefore, take heed to yourselves and to all the flock, among which the Holy Spirit has made you overseers, to shepherd the church of God which He purchased with His own blood. For I know this, that after my departure savage wolves will come in among you, not sparing the flock.”

I have been pondering this for quite a while. What do I think about current events in this country. How do I feel about Trumpism? The current expression of the Democratic party? Racism? Abortion? I am developing my own social theory and will share it as we go along. My biggest concern right now is the alignment of the Church with political ideologies. I think it is destructive and minimizes the ability of the Church to do its work.

And that is my thought for the day!

Democratic-Capitalism: Imperfect But Has Potential

I remember a few years ago, when I was Department Chair of the Business Department, I asked an adjunct professor to teach a marketing class for traditionally aged college students. He taught in our adult program. Our traditional classes were sixteen weeks long, and our adult classes were five weeks long. Both paid the same amount. Some of my younger adjuncts taught at several institutions, so the opportunity to teach on a traditional campus was very attractive. Their willingness to take a risk paid off and several are now teaching full time. However, back to the gentlemen I mentioned earlier, he was a little older and told me he was an unabashed capitalist. He said “Roger, why would I teach a sixteen-week class for the same amount as a five-week class?” Made sense to me. Even a colleague of mine from the humanities discipline told me he can teach three classes in the same time as a sixteen-week class and make three times as much money. Even though he would not claim to be capitalist, he behaved like one.

To get to my point, I am an unabashed Democratic-Capitalist. I like the free market and the potential of it to bring financial benefits to all who work hard, but I also like the Democratic portion, because we-the-people can make sure that all have the same opportunities, and those who are hurt by the system can receive help. In my last blog I referred to the invisible hand of the free market. In this offering I want to warn of what is the equivalent of crony capitalism, or in the words of Phil Gramm and Michael Solon, medieval royal charters.

In the early years of this country we were influenced by both Puritanism and the Enlightenment. “18th-century Enlightenment liberated mind, soul and property, empowering people to think their own thoughts, worship their own gods, and benefit from the fruits of their own labor and thrift” (Gramm and Solon, WSJ, April 16, 2019). The Puritans of the same time, as Max Weber accurately described as the Puritan Work Ethic, believed in industriousness and thrift. As Benjamin Franklin, not a Puritan in any respect, reflects “early to bed and early to rise, makes a man healthy wealthy and wise.” As an old curmudgeon I worry that the younger generation has lost that work ethic. In fact, yesterday, Richard, the guy working on my gutters, asked me if I had observed a change in young people over the two decades that I had been teaching. I told him that I don’t want to generalize. Some seem lazier and entitled and some still work hard.

However, I do think there is an unseen force trying to drive us into more dependence on a centralized government, and one that is attempting to undermine our strong work ethic. An example of this unseen force is found in Elizabeth Warren. As Gramm and Solon rightly point out, “Sen. Elizabeth Warren’s Accountable Capitalism Act would harness large American corporations by imposing new federal charters under which businesses would swear fealty to stakeholders: the general public; the workforce; the community; the environment; and societal factors.” This is just like the devil, give 90% truth and 10% error, but that 10% is a killer. It is one thing for a corporation to choose to give credence to stakeholder theory, but it is a total different thing for government to mandate it. Those that argue for this see it as giving the fruit of labor back to employees, I see it as government intrusion into the free-market.

As a Democratic-Capitalist I agree with Gramm and Solon, “History teaches that if we want to be prosperous and free, within the rule of law, we must let private-enterprise create wealth and reap the rewards. Only after wealth has been created should we debate the costs and benefits of redistributing it to our desired social ends.” You might ask, Roger what does this look like?

Typically, redistribution involves taxes, charitable giving, and education. Let’s start with taxes. I think the current tax rate for corporations is fine. It is in line with the rest of the world, and it does not encourage corporations to redistribute earnings to tax havens. However, I do think the wealthy can pay more taxes than they are. Even Buffet, Gates, and others say they can pay more. It is the middle person that I am worried about. I have a friend in Sedro-Woolley who has his own business and is constantly concerned about increased regulations and taxes. Often our politicians think they are impacting the big company but end up hurting the small and middle size companies. Ultimately, I think we can raise a bit more revenue with higher taxes for the wealthy.

However, I agree with Bobby Jindal when he stated in his WSJ article on April 9th, “Modern liberalism has broken from its roots by focusing on groups rather than individuals, reimagining Western history as irredeemably corrupt, and celebrating victimhood.” Leviathan wants us to become completely controlled by government, instead of being personally responsible for our actions. The United States is the most generous country in the world. As I stated in a previous blog we give over $400 Billion to charity each year. This provides churches and non-profits with the funds needed to help those who have been less fortunate or struggle with various issues in their lives. I do think we should look at those charities that give people the skills needed to thrive in our new economy. Millions of jobs are not being filled due to the lack of needed skills.

Once again Leviathan, that daemon in our society that wants to destroy humanity, wants to take away from the poor those things that will help them advance themselves in our society. A free-market holds companies accountable for their actions. But, our education systems in this country do not want to be help accountable. Inner city schools suffer from the lack of funds and unions that want more money and less accountability. Don’t get me wrong teachers work hard and inner-city schools don’t have the teachers or enough resources, but to eliminate those competing opportunities like charter schools is a travesty. I think competition in our educational system is a good thing. I also think that inner-city children should have the same educational choices that wealthy children have. Charter schools are the current tool to provide that opportunity.

Democratic-Capitalism gives us the financial resources and collective will to provide opportunities for all. The only thing that is holding us back is a political climate that does not have the ability to legislate. I hope we-the-people have the will to keep our republic strong, and not give in to Leviathan. There is a story about Benjamin Franklin that I think is appropriate here. He was approached by some folks who wanted to know what kind of government the leaders had just created. He responded, “a republic, if you can keep it.” When I hear words like make America Great, or we are fighting for America’s soul, I worry. I know what we are capable of doing, both good and bad, history is filled with it.

And that is my thought for the day!

Democratic-Capitalism, Boeing, Notre Dame, And HBCs

I have to say, free-market commercialism, Capitalism, is the most efficient and responsive economic system. There is no perfect economic system, but the one we have chosen over the years, coupled with an overseeing government provides necessary protection and opportunity for all. Yes, there is meritocracy, but that encourages incentive, and without incentive we would not have the largest GDP in the world.

Two recent examples of the ability of free market commercialism to direct market resources are Boeing and Notre Dame. Each demonstrates the power of incentive, the invisible hand, and personal choice. I’d like to start with Boeing.

As we all know, the Boeing 737 Max is struggling a bit right now. Boeing is trying to repair the 737 Max computer system associated with two crashes. However, there are disagreements between countries about how much simulator time will be required to prepare pilots. There is also a parallel issue with Boeing involving the separation of CEO responsibilities from the Chairman’s role. Currently, Boeing’s CEO, Dennis Muilenberg, like other before him operate as both CEO and Chairman of the Board. Boeing is not the only company to practice this, and this common action has been debated for years by academics and practitioners alike. Now, with the 737 Max issue, Boeing is being advised by “proxy advisory firms,” to split the roles. As the WSJ reports, “Institutional Shareholder Services Inc. recommended in a note earlier this month that Boeing shareholders vote for a proposal that would split the leadership roles at the Chicago plane makers annual meeting on April 29th.” If you are familiar with agency theory, I think combining the two roles involves a conflict of interest, therefore they should be separated. I will vote my proxy shares for the split.

The fix for the 737 Max is turning out to be a bit complicated, but what is great is how we can see the invisible hand of the market drive Boeing to do what it needs to do. “Before the planes were grounded last month, passengers told airlines they didn’t want to fly on them” (Daniel Michaels and Robert Wall, WSJ, April 17, 2019). Michaels and Wall also reported that pilots criticized Boeing for the lack of training associated with the new software. These actions are driving Boeing to make needed changes. I have argued that Boeing should have taken the initiative and get out in front of this situation, but my argument in this post is the market will make sure the appropriate change occurs. If Boeing does not make changes that placate the market, then Boeing’s profits will take an even more substantive hit. The work of the invisible hand pushes the appropriate corporate action. I love it.

In all fairness Boeing’s CEO has stated, “that Boeing held some blame for the crashes.” And, he stated what I know to be true having been a Boeing employee, “We know every person who steps aboard one of our airplanes places their trust in us. We’ll do everything possible to earn and re-earn that trust and confidence from our airline customers and flying public in the weeks and months ahead.” Thus, the power of the invisible hand.

However, another benefit of free market commercialism is the fact we have profit. In other words, we have something left over to, of our own choice, give to meet the needs of people. In 2017 Americans gave $410.02 Billion to charity, and as reported crossed the $400 Billion for the first time. Compared to other countries the United States shines as a city on a hill. Although, there are no official numbers for global charitable giving reports show that Russia gives the equivalent of about $2 Billion, China about $13.2 Billion, Switzerland about $1.8 Billion, UK about $12 Billion, and Australia about $103 Billion. So, the United States does well.

Although, many people hate the rich, I really can’t say I hate the rich. I know a few rich people, but they are amazingly generous. But, I am sure there are some very greedy people out there. The WSJ today reported that some very wealthy people have donated about 850 million Euros to rebuild the Notre Dame cathedral. Some very nasty people have stated that the Catholic church is worth $35 Billion so why donate to rebuild Notre Dame. The only problem with that statement, the church does not own the building. The nation of France doe, so the anti-religionists lose again. I think it is amazing that people who have been fortunate enough to create wealth for themselves and the people who work for them see the importance of giving to help others. This is how Capitalism is supposed to work.

As a wonderful side note. Because of the level of giving to rebuilding Notre Dame, the GoFundme account for rebuilding the three historically black churches in Louisiana now stands at about $2 Million. Hate crimes will never win, they will only make us stronger.

I am a strong believer in the free market. I am also a strong believer in the fact that human nature is flawed. Therefore, I am not naïve when it comes to the goodness of people. There is greed and selfishness that impacts our ability to care for those who are in need. This is why we need government oversight of big business, to some level. Of course, even those in government can be corrupt, but this is the best we can do given our flawed nature.

In his excellent book, Big-Business: A Love Letter To An American Anti-Hero, Tyler Cowen states, “We live in an age when the reputation of business is under siege. Among Democrats, for instance, the world socialism now polls better than does capitalism. But Republicans, while they pay lip service to some business ideals, are not in practice much better. Many of them have quite readily followed President Donald Trump into his attacks on free trade, immigration, outsourcing, and the American Media (which is labeled enemy of the people) – all fundamentally anti-business stances.” Business is being attacked from both sides. Talk about biting the hand that feeds you, literally. Business makes and sells us what we need, and it employs us. This allows us to live our lives comfortably and care for our families. Yes, it could do better, but I’ll tell you, working for a large company like I did, it worked hard to promote on merit only, not race or gender, it worked hard to pay its employee’s the same wage for a job, no matter if you were black, brown, or female. It worked hard at employing the right person for a job nor matter gay or straight. Yes, it was sued, and yes it paid out money for infractions, but that is the power of Democratic- Capitalism.

And that is my thought for the day!

Boeing’s Lesson That Our Government Should Learn From

My current read is a book by Tyler Cowen. Big Business: A Love Letter to an American Anti-Hero. It is described as “An Against-the-grain polemic on American Capitalism.” I am enjoying this book, especially because it reinforces my experience working for a large company. My career at Boeing was fruitful, and my experience with Boeing was positive. Boeing is not by any stretch of the imagination a perfect company, but it was a good one to work for.

Today’s WSJ had a very interesting article about Boeing today. “Boeing to Solicit Overseas Blessing For 737 Mac Fix.” The article goes on to explain that this is not normal for Boeing, but with shareholders now suing the company it is a necessary step to restore its reputation with its customers.

The trust issue that Boeing is having with its customers may not be just because of the Max, it may represent a greater resentment that culture has with those in a position of status. The police throughout the United States are struggling with its relationship in communities. The incident in Chicago is probably an exemplar of this. Our politicians have lost, and continue to lose, our respect. Instead of finding ways to positively lead our country they investigate even though we are tired of the phony charades and narratives created by both sides of the aisle. Even the Evangelical church has taken a hit because of how a part of the church supported Trump. All around our country Trump Derangement Syndrome (TDS) has kicked in creating a negative vibe impacting normally cogent individuals.

Tyler Owen in his book discusses the 2016 Gallop poll about the “relative trust Americans have in a variety of institutions.” Congress was on the bottom, which is no surprise to me. Zero of us trust congress a great deal, while only 6% trust congress quite a lot. I am not too sure what these phrases meant to the researchers, but congress’s abhorrent reputation is even lower than the President’s. Big business is the second lowest, third lowest is the news media, and then we have the criminal justice system. Our society does not trust those in power of status.

Boeing recognizes the problem it has with the trust of its customers and sees this overseas blessing as necessary to restore confidence in its product. Andy Pasztor, Andrew Tangel, and Robert Wall describe this in their article, “The strategy stems from a recognition by Boeing’s management and agency leaders that an impartial, outside group’s endorsement is essential to restore trust in the planes.” Some would see this as extreme, but I think it is a wise move. The leadership of Boeing in the aerospace industry has been damaged, therefore there needs to be some serious work done to repair Boeing’s reputation. Boeings stock is down, and its 737 Max has been grounded for a month, this is a huge hit to their bottom-line. This is why Boeing stockholders are suing the company.

This event, and the disgusting behavior of our politicians, got me thinking about what is needed for those in power and status to restore trust between themselves and the rest of us normal people?

First, I think the powers-that-be need to recognize that it took us years to get to this point, it will take a while to repair the situation. Second, there needs to be some recognition of the mistakes done. Biden did invade personal space, Trump did say some atrocious things, Warren did use her 1/1264th heritage to get ahead, and many others. Third, some may need to step down for the good of the whole. Maybe Trump, AOC and Ilhan need to step down for the good of the whole? Fourth, a sincere apology for bad behavior is critical. I have a fantasy where Pelosi and Trump stand up before the nation in a joint media event and tell everyone how sorry they are about their infantile behavior and all though they don’t agree on everything will work to find compromise that will be the best for all the country.

I do think Boeing is trying to repair its reputation. I know the motivation is part financial, but we live in changing times. More is demanded of companies by the consumer. We want a high-quality product, at a decent price, made in an ethical manner.

I agree with Tyler Cowen’s premise that American business has certain virtues. In fact, Boeing works hard to ensure it has a diverse workforce, paid a competitive wage, with the best benefits available. I know they provide that because they did for me. They paid for all of my education from BS to PhD. I am very pleased with my career at Boeing. Even as I say this, I know the comeback for Boeing will be difficult. As will the comeback of our political leaders.

It will take good management of systems. The productivity of our country is always higher when we have good leadership. When this occurs then trust will increase. We will be able to delegate to our political employees much easier if we trust them. Boeing and American business in general “has never been more productive, more tolerant, and more cooperative” than right now. Boeing has been productive for years and will regain its form. Will our government? I hope so, because we are all paying the price right now for our poor leadership.

And that is my thought for the day!

Monday Musings!

Monday morning! Now that I am retired I love Mondays, but even better I love Sunday evenings. When I was still working fulltime, Sunday evenings would often be filled with tossing and turning while trying to sleep. I would worry about many different things that never came to pass. Today, Sunday night sleep is usually not too bad. However, as every older male knows, sleep is often interrupted with a trip to the little boy’s room. Other than that, my sleep is usually uneventful.

Today’s blog offering is just a series of short comments on the plethora of editorials I read this morning. All of them reflect on our changing nation. There is no doubt in my mind that our country is changing. I don’t care who you are, it is our country. It is one out of many, and diversity gives us our strength as a nation. There are basic fundamentals that are critical to our continued success, but as a whole we are changing. This is not a quality statement, just a recognition of reality.

I am now a senior citizen who is sitting on his porch watching the world go by. I have enjoyed my life, and as the characteristics of my city and nation changes I mourn the loss of the past. Mick Jagger had heart surgery. Billy Graham is now with Jesus. Louis Palau is aging. Life goes on. I don’t recognize the music the youth seem to enjoy, the skinny jeans don’t fill my boat, and the manbun definitely is a no-go for me. Of course, at my age I am a bit follicle challenged, so the manbun is out. Maybe I am jealous.

The fact is the world turns. New generations rise, and old generations pass away. It is inevitable, and until the end it will continue on. So, what can I do about this? As the song says, “Absolutely nothing, say it again!” But I can scream from my front porch, watch out! This doesn’t seem right! Be careful! Today’s blog will be just that, a scream from my front porch to watch out for the cultural revolution, the true costs of increased minimum wage, and gum balls and immigration.

Anastasia Lin is a very interesting woman. She is a Chinese-Canadian woman who is a human rights activist. In 2015 she won the Miss World China pageant and was supposed to represent Canada in the subsequent competition that was to be held in China. However, China would not allow her to enter the country due to her human rights work highlighting abuses in mainland China. She warns North America of a Cultural Revolution that has emerged in North America.

She warns about online mobs and other mechanisms used by people to silence those with contrarian beliefs than the majority. “The presumption of innocence is a fundamental tenet of Western law. Yet, it is increasingly abandoned in the rush to force orthodoxy and destroy political enemies. The mobs pile on, destroying lives, careers and reputations with gleeful abandon. They claim to act in the name of tolerance, compassion and diversity, but their commitment to these principles is purely abstract. In practice, they are intolerant and cruel, and they demand total conformity.”

As I ponder those words I think of an event I was at several years ago. Our group was deciding whether to recognize someone for a life time of accomplishments. One person in the room said, “but this person doesn’t represent our politics.” That was the moment I knew our world was changing. The other now is being demonized to a point of exclusion. Even this move to eliminate the Electoral College is a move to negate those that don’t agree with what appears to be the majority perspective. Warning Will Robinson, danger, danger!
My next concern involves the fight for a $15 minimum wage, a worthy cause for sure. We all want to help the little person. But, I think we need to remember why the minimum wage was created. It is a short-term protection, so people can adjust their work skills and find better employment. When we start setting wage floors the substitution effect comes into play. Employers with look for other ways, usually involving technology, to provide the same services. Thus, the fecal infested kiosks of McD’s. As the WSJ demonstrated in its editorial this morning, “trying to increase low-skilled pay by political fiat isn’t a free lunch.”

The Bureau of Labor Statistics notes that in 2018 sit-down restaurants in New York City had 167,900 employees. This number has been reduced, as of January 2019 when the minimum wage increased to $15, to 161,700. A reduction of 3.7%, “when overall city employment increased by 2% year over year.” New York restaurant owners warned of this and continue to express their concerns. “The New York Hospitality Alliance surveyed 324 full-service eateries late last year. Nearly half, 47%, planned to eliminate jobs in 2019 to deal with higher labor costs. Three-fourths expected to cut employee hours, and 87% said they would raise menu prices.”

Once again, something that was meant to do good, is hurting the ones that need the help. I am all for increasing the minimum wage to a point connected with some index. However, I don’t want to reinforce people in a situation where they don’t want to improve themselves. Help them get the job skills they need to get a better paying job. Help them to rise out of a low-skilled job. This would have a longer-term effect for them and our nation.

My last scream from the porch deals with a point that Mary Anastasia O’Grady makes in today’s WSJ. The title of her piece is “Why Hondurans Flee For The U.S.” Once again she hits the nail on the head. However, it reminded me of a wonderful presentation I saw on YouTube. Roy Beck gave an amazing presentation on “Immigration, World Poverty and Gumballs.” I have discussed this before in my blog, so I don’t want to go too deep into it. But the fact is, more can be done to help others in their countries. However, Honduras politicians need to take the initiative to want to deal with their issues. They need to help their people, not just line their own pockets.

There you have it. I am screaming from my porch. Warning everyone! There are problems here, and new ones coming. But you know what? When I was young the older generation did the same thing. Watch out young people the road is treacherous. There are many IED’s out there that can devastate your movement forward. I can only hope this younger generation listens, but probably not. Because we didn’t! Warning, warning, warning!

And that is my thought for the day!