If you get to thinkin' you're a person of some influence, try orderin' somebody else's dog around.

(Most of this post is taken verbatim from Vicki Haddock’s article "Above the Influence", California Magazine, May/June 2009, p. 41-43, based on research from Berkeley psychology Professor Dacher Keltner, Cameron Anderson (Haas Business School), and graduate student Gavin Kilduff.)

Power flows to self-confident people who speak up – even if they don’t know what they are talking about and are often wrong. Power tends to erode empathy, and to cause the one in power to look upon themselves as the center of the universe. When people go on a power trip, they typically are encouraged by fawners and flatterers. Small wonder that the powerful come and go, yet year after year the rest of America looks at the those in Washington and on Wall Street and asks, “What were they thinking?!?”

Power doesn’t corrupt, however, as much as it reveals the true character. Those who already were community-oriented (“I look out for others”) or exchange-oriented (“I give something in the expectation of something equal in return”) tend to become more generous in power, while those who are innately self-centered become more selfish. Abraham Lincoln observed, “Nearly all men can stand adversity. If you want to test a man’s character, give him power.”

My advice to those in power: take out the trash twice a week.

The Vice President should perform Party duties for the President

The President should serve the entire nation from a position above normal party politics; so, he or she should refrain from performing Party duties, such as fund-raising, campaign rallies, and party-only speeches and meetings. The party in power will of course resist this, as the Presidency is too big a pulpit to resist using for partisan advantage. The Vice President, however, could perform these duties as the President’s representative, while keeping the President away from the partisanship inherent in party functions. Of course, this would take tremendous personal integrity from the President to resist party calls for favoritism.

To this American, something does not seem right watching any President raise money for other members of their party.

GM failed because its liabilities were based on negotiation, not productivity. Americans should learn a lesson.

I recently bought a new 2009 Buick Enclave and know that GM makes world-class cars. The bumper-to-bumper 5-year service warranty and On Star remote diagnostics show that they also know how to innovate and run a service business. Nevertheless, today GM filed for bankruptcy, while Ford and Toyota continue as independent car manufacturers.

General Motors was a phenomenal business that produced huge profits and benefits during its Alfred Sloan era. But eventually, the stakeholders (executives, unionized employees, dealers, politicians) placed liabilities on GM that paid out based on the results of negotiations, not productivity or business conditions. Thousands of dealerships built when GM had a 50% market share were unnecessary today, but state laws and inflexible regulations prevented their closure. Lifetime benefits and pensions negotiated when GM was young and growing cannot be sustained when it is older and shrinking.

Over the years, I’m sure that union leaders were congratulated for extracting “guaranteed” wages, executives got big bonuses for making promises that prevented a strike in exchange for liabilities pushed out far past their retirement, and politicians were re-elected for protecting their patrons. But any “guarantee” that is not based on productivity and a sound business model (that includes a reasonable profit and return on capital) is doomed to fail.

Americans should learn a lesson from General Motors. Our politicians make “guarantees” that lead to applause, re-election, and a comfortable consulting retirement. But these liabilities will not be sustained unless they are connected to productivity and a sustainable way of life, one that ensures our great-grandchildren will have the same blessings that we have.

P.S. GM is still a great company, but a horrible business.

Nothing is Too Big To Fail

Bloomberg reports that Nancy Pelosi “says GM is too big to fail”. Americans need to remember that nothing is too big to fail – including the United States of America. The responsibility to prevent failure is ours – to share the blessings of liberty among all instead of everyone accumulating as much as possible for themselves and then getting out before it all falls down.

Failure is not guaranteed when something is "too big" - it happens when the system is too complex or inflexible to adapt to external changes.

Proceeds from the Estate Tax should go toward the Federal Debt

I believe that death should not cause a family farm or small business to be broken into pieces. But above a reasonable size, I wonder if part of the estate a wealthy American accumulated during their lifetime was aided by the deficit spending their government practiced over those years? I propose that the government target all proceeds from a modest estate tax to pay down the existing federal debt, instead of counting the estate tax in general revenue for the annual budget.

For most of the past 100 years, Americans have lived well while our government passes a burden of debt to future Americans. Why not help ease that burden for our children when the money will be of no further use to the man or woman who earned it? The estate tax usually accounts for only 1-2% of annual federal tax revenue, so lawmakers could find a way to replace that revenue through cost savings in the operating budget. A reduction of $25 billion each year would be a symbolic payment toward our long-term debt.

Veteran’s Day Reminds us of Leadership and Sacrifice

On the 11th hour of the 11th day of the 11th month of 1918, the slaughter called “The Great War” (World War I) ended.

“I’m really glad that our young people missed the Depression, and missed the great big war. But I do regret that they missed the leaders that I knew. Leaders who told us when things were tough, and that we’d have to sacrifice, and that these difficulties might last for a while. They didn’t tell us things were hard for us because we were different, or isolated, or special interests. They brought us together, and they gave us a sense of national purpose.” – Ann Richards, Governor Texas (1991-1995)

Now is the time to raise gas taxes

Oil is at $62 per barrel, and gas is below $3 per gallon. If we are serious about breaking the national addiction to imported fossil fuels, then we need to keep the consumers’ cost of oil above $100 per barrel, so that efficiency solutions and renewable energy developments can become established in the marketplace. We should offset this tax on productivity with increased personal income tax deductions, reduced corporate tax rates, and possibly annual stimulus payments.

Americans consumes about 360 million gallons of gas each day. Raising the federal gas tax 12 cents immediately and 3 cents each quarter for the next 8 years (for a total of $1.08 by 2016) would keep the price of gas above $3/gallon, give time for consumers and business to adjust to higher gasoline prices, and would raise $15.8 billion per year now and $142 billion per year in 4 years (assuming consumption remains flat).

We could dedicate a portion of this revenue to increasing the federal highway infrastructure fund and return the rest to taxpayers via either a permanent increase of standard deductions by $3000 per person and $1500 per child, and a reduction in business taxes.

We should tax that which is not sustainable (burning fossil fuels) and remove taxes on that which is sustainable (income, children, and employment).