When do you put a bandage on a wound?
After the injury occurs.
In a perfect scenario, you are in a position to stop the damage from occurring in the first place. Prevention beats repairing every time. Given a choice, that’s the way to go. Sigh.
The worst choice is to be the kind of person who breaks something and then makes someone else fix it. Or maybe criticizing someone who is trying to stop the bleeding on a grave wound that someone else inflicted…and being the critic to make people like you and give you the other guy’s job? That might be the worst.
When you are driving on the freeway, does it make you more nervous to have a semi-truck tailgate you, or a VW Beetle? Going at the same speed, the VW will squeal to a halt and possibly nick your fender while a truck will use you as a speed bump to help slow down. The driver will look in his rearview mirror at the roadkill that you (mixed with your car) have become and will remember next time to leave more than one car length for every 10 mph of speed.
The size of the vehicle must be calculated into the equation when you need to figure out how to slow down.
Remember the Exxon Valdez that ran aground in Alaska? With an oil tanker, it takes something like a mile and a half to change course once the order has been given in the wheelhouse.
Forget a full stop. Just changing course takes time when the ship is colossal.
Why do nutrition experts advise people not to shop for groceries when they are hungry? Because it is important to spend our grocery money on food that is healthy instead of on junk food. The packages of stuff that eventually can kill are designed to encourage us to reach for the pretty shiny boxes instead of for broccoli.
It’s like the difference between getting a student loan for an education that will increase the odds of an increased income over a lifetime of earnings, or maxing out credit cards because of a gambling problem. Or taking out a mortgage to pay for property improvements that will increase the utility and value of the property, or taking out a mortgage because you want to buy more shoes. All are debt leveraging, but the quality of what is bought in return for the risk is REALLY important.
Put plainly, our economy got broke by Bush. Obama started working to fix it as soon as he got the job. But because the economy is big, it takes time to put the brakes on and change course. Obama got the debt from Bush, plus Obama has added new debt. Sometimes debt is necessary, sometimes a smart idea, but it all depends on what the money is spent on.
At Bain, Romney put debt on companies to artificially increase the stock value in the short run. The debt was junk food, not investment. Because he and his teams had no new or real economic activities to support the stock values, the only profits that could be made were to cut the businesses up and sell the parts. Like a cow, a company is worth more when it gets its name changed to ‘meat’.
Because his compensation packages were comprised of mostly stock, he made his money from wrecking these companies and cashing in on the short-run increased stock values. Leveraging, but not for property improvements. Basically, Twinkies instead of broccoli. Or innovation. Or infrastructure improvement. Or competitive advantage.
Romney knows one way to make money. Now so do you. Interested?
Quote of the Blog from Ayn Rand: “Upper classes are a nation’s past; the middle class is its future.”
Image of Twinkie the Kid, the Hostess mascot who helped sell untold millions of the iconic junk food that contained so many preservatives that its packaging didn’t include expiration dates.