Wednesday, September 1, 2010

Life Skills – Part 1 of whatever

I recently attended a goddaughter’s wedding. During the reception, I was surprised (in conversation) by the lack of many basic “life skills” exhibited by the assembled younger wedding guests. Since they don’t seem to teach all of this stuff in school, here are a few of the most common:

#1 Your Money!

The 1st RULE OF MONEY – get control of your finances, else it will get control of YOU!

In his book “The Millionaire Next Door”, author Thomas J. Stanley offers the example of two doctors with very similar credentials and professional backgrounds. The first doctor lives comfortably, has amassed assets and investments, and has provided for his children. The second doctor has virtually no saving or investments, spends his entire paycheck, and lives in terror of not being able to provide for his family. See Rule #1 above (and maybe read this book?)

It is astounding how much debt young people have accumulated by the time when they graduate from college and joined the “working world”. It seems like they are trying to run a marathon race, while wearing CEMENT SNEAKERS.

CONSIDER BEST CASH FLOW: If you have a $10,000 student loan @ 6%, and $10,000 of Treasure Bonds paying 4% - congratulations – you’re LOOSING 2%! Doesn’t make more sense to sell the Treasure Bonds and payoff the loan? The answer depends on a number of factors (all of which are beyond the scope of this discussion); however the key point is - Consider the “big picture” batting order:
1. pay off all non-deductible debt (i.e., credit cards, revolving store charges etc.)
2. don’t add NEW DEBTS (stop digging yourself into a hole! Live within your means)
3. have a plan for paying off “useful debts” (home mortgages)
4. build an “Emergency Fund” of savings (i.e., cash which is easily accessed if car needs repairs, etc.) equal to 3-6 months of average expenses.
5. set-up a Special Funds (saving for a new house, major appliance, big vacation, new baby, etc.)
6. any excess cash should be used to build your long term investments (stock, EFT, etc.)
7. If you have access to a 401k (or similar retirement plan) – pay the best match amount (see below).

Should you do these in this order; or a little bit of each? That would depend upon your individual circumstances, and the amount of money which is available. Which action will give you, “the best bang for the buck”?

– Think about your Money Management; and make YOUR MONEY WORK FOR YOU, AS HARD AS YOU WORK!

The 401k is an interesting investment. The real value of a 401k Plan comes from the Employer Matching Contribution (which may actually double your contribution – hey 2 for 1; what a deal) plus tax-free investment income on both contributions. I doubt that a more generous investment is available anywhere. Your Plan Administrator can provide you with the “vesting requirements” of your plan – this is the point at which your employer’s “matching contribution” actually becomes YOUR MONEY! The real trick (if you want to call it a “trick”) is to minimize the expenses of the 401K, so that most of your income is compounded – don’t be fooled by “gross yield”. Consider that 7% Income less 3% Expense is a 4% Net Return on investment, whereas 5% Income less 1/2% Expense is a 4.5% Net Return on investment or ½ % more income per year – over 40 working years would be 20% additional investment value!!! A Final Note: if you leave your employer, the 401k is YOUR MONEY (plus the “vested contributions”). You can legally “roll over” this account into an Individual Retirement Account (IRA) at your bank, broker or Mutual Fund Company. The roll-over option can be a powerful tool to take full control of this investment potential while minimizing the administrative and investment costs, because you will have the full control – SO don’t goof it up!

A Final Note on Money
. Reconcile your Bank Accounts, Credit Statements, and Loan Balances – if a Bank makes a mistake, it will always be in their favor, so check monthly and keep them honest. To this end, you may also wish to employ some kind of Personal Financial Software (such as Quicken).

#2 - Time management – Time is your greatest asset!

You can’t control other people (friends, family or enemies); nor governments; nor financial markets, interest rates or currencies; nor even the weather. The only thing of which you may have a quantum of control over is: your own time – SO DON’T WASTE IT! Do you want to drive around with your buddies, shoot some hoops, play a round of golf, travel or just read a book? In the same way as the “MONEY” section discussed above; how you choose to spend your time is a very personal matter. The Critical Point is – know this truth and act accordingly.

My maternal grandmother lived a very stilted life. When she retired she spent every summer in the beachfront community of Ocean City, NJ; because she enjoyed it. One day, she had the opportunity to fly (her 1st time in an airplane at age 67) to Banff (Lake Louise) Canada. She had a marvelous time, enjoyed air travel, and began to plan a trip (with a lady friend) to San Francisco. However, shortly before Christmas of that year, she sustained a stroke, which paralyzed her to the extent that she could no longer travel – she died 7 years later, sadly having never seen San Francisco. KEY POINT: TRAVEL WHILE YOU ARE ABLE. Take advantage of work related travel opportunities, but don’t lie on your expense account!

#3 - The Law

Common Law Doctrine states that “Loss Follows Title”, this means (in simple language) that if you own it - protect it; and if someone else owns it – respect it. If you violate the first part, you may loss an asset; if you violate the second part, you may incur a liability (i.e., legal judgment, such as a fine). Hang on to your wallet or purse; don’t text and drive!

#4 – CYA: Get it in writing

With respect to dealing with other people, try and document (to the extent possible) their actions and reactions AS WELL AS YOUR OWN. The resulting paper trail makes it easier to defend your actions (if needed). While a written document is preferred (since this is what a Court is accustomed to reading), sometimes, send an e-mail is sufficient, i.e., “Per your discussion this morning – June 15th, I will call Bob and verify that he will….”

I once had a manager who categorically refused to put anything in writing; on the theory that if it worked - he could claim credit (because it was his unit); and if it didn’t work – he could deny any responsibility (I don’t know anything about it, I never agreed to that, I never authorized him to do that, etc.). In the days before e-mail, providing a well written Memo or Action Plan would be sufficient to document your assignment (and if he didn’t agree with your memo – why didn’t he object at the time???).

#5 – Everything, in life, is negotiable.

I highly recommend reading a book by Herb Cohen entitled: “YOU CAN NEGOTIATE ANYTHING” (Bantam Books - 1980). Since life gives us few “gifts”, most of what we have or become, occurs as a direct result of our ability to “make a deal”. In the novel “THE HONORABLE SCHOOLBOY”, the British spy says to the Chinese spy that he wants to make a deal; and the Chinese spy corrects him and says, “… you want a commodity; the deal obtains for you, the commodity …”. This is the key point in any negotiation: What Do You Want? Focus on your goals and objectives (what you want) THEN determine the best cost/benefit/ value way to obtain the objective

#6 - Work Is Not a Job, and a Job is not a career.

Nobody “owes” you anything in this world (I’m very sorry to be the one who tell you this simple fact). In some cases, there are a fixed number of seats at the table, so if you want a seat, you are going to have to push someone away – and (generally) they aren’t going to be happy about it! This means that your gain will occur at the expense (or detriment) to someone else. The best way to succeed, and get a seat at the table is to coop other people, such that your agenda becomes their agenda. Thus they “invite you” to join them at the table – they make room for you.

While it is important to do a “good job”, it is also important to be aware of the “political environment” in which you are working. Everyone with whom you come into contact has an agenda. Understanding how they can help or hurt you, will depend on what you want, and how any arrangement can be “mutually beneficial”.

In dealing with your Boss / Manager / Supervisor, it is very important to understand how they perceive the world and your place within it. Some bosses are mean, some are smart, some are kind & caring and (unfortunately) many are just scared (the most dangerous boss is the one who is VERY SCARED). If you find that you can’t work effectively with your supervisor (for whatever reason) and you’re certain that you have made a “best effort” (tried to “work it out with them”, talked to HR, etc.), then the only solution is to get out and do something else – Life’s Too Short, to waste your time working in pain (or working for a “Jerk Boss”). The alternate plan in this situation would be to stage a coup d'├ętat and overthrow the tyrant.

Your Colleagues / Co-workers / Associates
“Plays well with others” is a box checked on your Kindergarten Report Card. This applies to the folks with whom you will work. Consider their agendas with respect to yours and that of the boss.

Support and Administrative Staff - having Big Friends in Small Places.
Good relations with the support staff, is a valuable (critical?) source of inside information and assistance. If you treat your support staff like dirt (after all, you’re a superior college graduate), they have mysterious and magical ways of getting back at you that you could even imagine (remember Melody Griffith’s character in the film “WORKING GIRL”?) Alternatively, if you are respectful and courteous, you can create lifetime friendships (I still get Christmas Cards from two of my favorite administrative assistants, and they each retired 20 and 15 years ago). KEY POINT: Never forget your manners – it pays huge dividends.

In the days before PCs, most large corporate offices employed a “typing pool” of staff workers. On fine day I was entrusted with a large report whose preparation in previous years, had encountered many logistical problems and delays (I got the assignment because I was the new guy and the senior people dumped this headache on me). Before the new years report was to be assembled, I met with the staff and manager of the Word Processing Dept. (in advance) to determine how the process could be “improved”, and implement many of their suggestions. The end result was that the report was prepared in record time, with fewer corrections and with superior quality. KEY POINT: I later wrote the supervising manager a short note of appreciation, which (being the 1st formal “Thank You Note” the unit had ever received) was immediately posted in their break room. From that day forward – all of my typing seemed to get higher priority. The next year, the senior staffer “fought” over who was going to do the report – but the Boss, having received so many congrats from his management – reassigned it to me.


If you are a slave to your job, then you are a “lamb for the slaughter”. You can gain some sense of empowerment by (on the first day on the job) typing your resignation, putting it in a sealed envelop and storing it in the top drawer of your desk. Whenever the pressures of your position become unbearable – you have already prepared your exit plan. The power to say: “I QUIT”, is among the most empowering statements in the English Language – see Money above, so you have the necessary Reserve Funds to carry you over until you get your next assignment.

The Annual Performance Review Process – Bark twice for the Dog and Pony Show. Sadly, the Annual Performance Review is the most poorly preformed activity in all of Corporate America – a wonderful opportunity to assess (a) your efforts within the organization and (b) how the organization perceives your value is usually missed because managers are usually too lazy (or incompetent) to job correctly. [POINT TO CONSIDER: Since each manage is evaluated in turn; don’t good performance reviews start with the Board of Director’s assessment of the CEO?]

Doing your own review is the worst managerial “cope out” of all time (and a very clear indication of a lazy supervisor). Since anything your say against yourself, will be used against you; I suggest you rate yourself EXCELLENT or 100% at everything; then make them explain why you’re not excellent – remember you get no points for “fairness” in self-assessment. Generally, managers only seem to remember the last 2 months of your efforts – so help them by keeping track of your activities and progress.

Here’s a great tip. (1) Block of some time before your leave on Friday afternoon, to summarize your week (I use 4x5 scrap paper). What did you do well? What did you do poorly, and how are you going to fix it or do differently next time? What’s on your TO-DO List for the next week? (2) On the last Friday of each month – summarize the results of the previous weeks. You may want to send the Boss an email of this summery. (3) When your performance is being evaluated, you will have a summary of your activities and their results. (4) KEY POINT - If you have staff in you direct reporting relationship – do a weekly sheet and summary on each of them; as this will aid you in preparing their performance review as appropriate. Improving the quality of the performance reviews which you give, as good as they can be helps to build loyalty and teamwork.

GOOD LUCK or as we say here in New Jersey, “BONA FORTUNA”


Wednesday, August 18, 2010

On Being Fired

Someday, on one fine day, you will be called into a room, somewhere in your office building, and somebody (you may or may not know) will say, something like this: I’m sorry, but …
(a) Your employment has been terminated or
(b) Your position, with the company, has been eliminated or
(c) This is your last day of employment with this firm or
(d) …some variation of all of the above.

The bottom line is simply this: You don’t have a job with this company anymore. This will feel, at that moment, as if you had just been hit in the head with a baseball bat (I know it did for me). Another problem is that once the announcement is made, everyone you know at work will avoid you as if you had leprosy – Termination is apparently a communicable disease (cut them some slack, they could be next).

It is said that God has 10,000 names; so I’m not surprised that the phrase “You’re Fired” can also be expressed in many ways. Given the general state of the economy (beginning in 2007), termination, unemployment and “transitional management” have become the new Buzz Words in the business lexicon. The 2009 Jason Reitman film “UP IN THE AIR” even provides a fictionalized account of the effects of what is euphemistically known as “Fiscally inspired involuntary unemployment”.

The “Termination Rational”

There are only two kinds of unemployment: voluntary and involuntary. Voluntary unemployment (also known as “$#%^ YOU - I QUIT, YOU DUMB BASTARD!”) occurs when you leave your place of employment by your own action – essentially, you fire your boss. This occurs whenever you submit your “Letter of Resignation”, and give your employer the customary “two weeks” notice, or it may be an immediate resignation due the urgent circumstances (i.e., the night that Jack Parr walked off the TONIGHT SHOW). Involuntary unemployment occurs when your boss fires you. Involuntary unemployment comes in three sub-variations: Performance, Political, and Fiscal.

Fiscally inspired involuntary unemployment occurs when the overall level of business activity of your organization drops to the point that the current staffing levels are excessive. Accordingly, in order to save the remaining available resources, and keep the company operating (until it can increase sales and economic activity) “excess capacity” must be jettisoned (in the same way that a sinking ship throws everything overboard in order to stay afloat). Under these circumstances, in is not uncommon for companies to sell excess inventory, close and consolidate offices, relocate to smaller facilities, and (naturally) terminate staff.

A STORY: My former Chairman, in his annual budget letter, once said,”We are staffed for a higher level of sales activity than we are currently achieving” (how very clever i.e., we’re not over staffed; we just have lower sales. Surprise – The business did not improve and the layoffs began six months later).

Performance inspired involuntary unemployment results from an employee failing to do his or her job by not following the prescribed duties, responsibilities, practices and procedures as defined in the stated “job description”. Other items in this category (which are usually enumerated in the Employee Manual) might be inappropriate behavior, such as: fighting, shooting, rape, theft, fraud, drunkenness, drug abuse, etc. Notably absent from this listing: Stupidity (else many managers would be “unemployed”).

Politically inspired involuntary unemployment occurs when your supervisor (or anyone in their “chain of command”) has determined to remove you from the organization – for reasons known only to themselves (and maybe God). In his treatise THE PRINCE, Machiavelli advises: “Kill the enemy, for men may recover from lessor slights”. I have known of entire units to be fired by an income supervisor, simple because he wanted to pick his own people. KEY POINT: There is no “logic” to this action, and you are only wasting time and your emotional energy in searching for meaning where none exists.


Generally, we like to think that companies act in rational ways, with respect to downsizing - but this is frequently not the case. While it might make sense to keep the most experienced and versatile employees; past performance is no guarantee of future employment. KEY POINT: “termination” is like an avalanche - once the decision is made, somewhere by somebody, to fire you - there really isn’t a lot you can do to stop this action; although you may be able to postpone the actual termination date (see My Story).

Somebody (very famous) once said that, “The Best DEFENSE is a Good OFFENSE”. Accordingly, from the day you accept employment at the firm, you should begin to plan your “EXIT STRATEGY”. WHAT (?), you say; but I’ve only just arrived. Here’s my logic: if you have a plan to deal with your potential “termination”, then YOU, as verse your supervisor (or the “organization”), ARE NOW IN CONTROL OF YOUR CAREER. Take a moment to reflect upon that last sentence – doesn’t it make you feel powerful?

Step #1 – Write out your letter of resignation, and put in an envelope in your desk drawer (ready to sign, date, and deliver). If you have already quit (mentally), you can only keep your job by making the decision to stay. Cold hearted? YES, but what happens when the tables are turned? Remember that the Boy Scout Motto is: BE PREPARED. The “shock value” of Jack Parr’s on air resignation sent a shudder through the television industry, and ultimately, Parr was fully reinstated.

Step #2 – Be aware of the “skill set” that the organization expects, in order to survive and be promoted (i.e., learn to play their game). Also consider those skills which you need in order to obtain a better job within your industry.

A STORY: my college buddy spent 15 years as an Actuary, and determined that Underwriting Experience was his missing skill. He took a sideways transfer and relocated his family so he could run a branch office and its underwriting staff. He’s now had three better jobs and is currently a Senior Vice President of a major international reinsurance firm.

Step #3 – Periodically reassess “other employment options” both within and outside of the organization – the grass just might be greener somewhere else. How can you assess your “value” to the firm, if you do not have a reliable benchmark? The lack of other opportunities may also trigger a reassessment of your personal goals and skills (see #2).

Step #4 – Be aware of the three kinds of involuntary unemployment (Performance, Political, and Fiscal) and develop a corresponding plan of action to deal with each of them. If management thinks that they can control you through “terror”, their hand will be weakened if you have already planned a counter-move (see the game of chess).

> Fiscal Unemployment is the easiest to identify and adjust. Stay abreast of the trends and activities within your industry and the company’s relationship to the wider-world. One guaranteed way to go out of business is to continuously acquire a growing share of a declining market (i.e., would you work for the sole surviving buggy whip manufacturer?). If your company’s business is declining, what long term chance of survival do you really have? Rats usually desert a sinking ship – so join them; first one out gets the best outside job.

On the positive side: if you have ideas for new products, services or operating methodologies – now is your time to shine (i.e., Drew Major continued to work on the Novell LAN Software, even as the company reorganized). BIG WARNING: they may ignore your ideas and the company may die anyway. Consider taking your ideas with you and going to work for the competition. BIGGER WARNING: they may take your ideas and fire you anyway – so be certain of your documentation and identify the “best” person to be briefed (which is not always your boss but maybe much higher up. A STORY: One morning I waited for my CEO to arrive, and then pitched an idea {man was I scared!}. No action was taken, but he always remembered me favorable wherever we next met.)

> Performance Unemployment is also easy to avoid – JUST DO YOUR JOB, STUPID! Be on time, and on target. Follow your instructions, and wherever possible – document your instructions and resulting actions (CYA). Sometimes, a supervisor will refuse to provide a written instruction; so that they can later deny any responsibility (in case it explodes). Under these circumstances, I recommend (a) prepare an authorizing memo for his / her signature, and if they still won’t sign-off, then (b) send a confirming email (i.e., “per our discussing this AM, I am taking the following actions ...”). KEY POINT: Depending on your company’s Security Policy, you may also want to make a backup copy (or BCC to your home account); as incriminating defensive documentation has a mystery way of disappearing (maybe the security staff will keep a copy for you?).

In this regard, it also helps to have had good, prior annual performance reviews (although this is an entirely separate topic). Beware of posturing and mediocre written reviews, regardless of how much money they pay you (i.e., “… hey look, we are giving you this money so you don’t need to worry about what’s on the stupid form - nobody reads them anyway …”). KEY POINT: whenever push comes to shove; what has been written - with your signed agreement - is what will be used for (or against) you with respect to your continued employment; or in any subsequent legal action you may feel necessary (i.e., why didn’t you object?). If the review is unfair, or unsubstantiated (i.e., hearsay comments) – clearly state your objections on the document; they won’t like it but always CYA.

WARNING: if you have had good or average previous reviews, and suddenly you’re being “downgraded” – WATCH OUT! This is management’s way of “telegraphing their punch” so that they will have grounds for future dismissal (they may not need it, but its in the file just the same).

> Political Unemployment is unavoidable and incomprehensible, so don’t try. The only advice I can offer you under these circumstances is: (a) be prepared, (b) CYA, and (c) keep your eyes and ears open for any potential changes in duties or staffing. A STORY: I once watched a guy be purposely promoted into a job he couldn't do (i.e., set up to fail) and subsequently become terminated for poor performance (he did fail). A STORY: I’ve known of situations where an employee’s job responsibilities were systemically reassigned to other staffers over a period of several months, and then the targeted employee was terminated because (after all) they had no assigned tasks or job activities.

MY STORY: Once upon a time, my department manager ordered my supervisor to fire me (reason = unknown). The Supervisor said I was “late” with a specific work assignment. I was able to show the supervisor the memo he had previously given me, which clearly stated that the assignment in question was due the following month, BANG! While his action was intended to set me up to fail, it not only (1) made me aware of management’s subsequent game plan, but also (2) proved me with time and resources to plan a delaying action (note: I couldn’t stop Political Unemployment, just slowed it down). I was subsequently able to negotiate a severance package, COBRA Benefits and outplacement services, in additional to the traditional unemployment compensation and an acceptable job reference (for future employment).

Assuming you unemployment is not “Performance Related”, it is so incredibly UNFAIR to give your best efforts, fidelity and allegiance to an organization (13+ years in my case), and then to become severed for no apparent reason. During the period of the MY STORE (above) I was in contact with a Corporate Recruiter (a/k/a a Headhunter). When I complained to him about my unfair treatment, he offered the following sage advice,

“Why are you fighting to stay, in an organization which doesn’t want you? Yes, you have been an above average employee. Yes, you have innovated and improved the operations, sales, expense controls, etc. Yes, the company may suffer as a result of loss of your abilities. GUESS WHAT: THEY DON’T CARE (else “they” wouldn’t let you go). Take the severance package, take a week off, then call me when you get back and we’ll start setting up interviews.”

EPITAPH - two years later:
(a). My salary DOUBLED and
(b) my former employer, while still in business today, has been reduced in size by more than 60%!

THE NEXT JOB – “Living well is be Best Revenge”

Being “fired” is heart wrenching and painful personal experience (much like the death of a loved one); but it happens. Never (EVER) lie about your termination on your resume or any employment applications; even if it was the result of something you did (or didn’t do) – i.e., Performance Unemployment. If a prospective employer discovered this “lapse”, it can be grounds for immediate dismissal – so look them right in the eye, and explain what happened and what you’ve learned from the experience.

In closing

Consider the words of the song “They All Laughed” by George Gershwin/Ira Gershwin:

They all laughed at Christopher Columbus
When he said the world was round
They all laughed when Edison recorded sound
They all laughed at Wilbur and his brother
When they said that man could fly
They told Marconi
Wireless was a phony
It's the very same cry.

They laughed at me wanting you
Said I was reaching for the moon
But oh, you came through
Now they'll have to change their tune
They all said we never could be happy
They laughed at us and how!
But ho, ho, ho!
Who's got the last laugh now?


Tuesday, June 1, 2010

2nd Act of American Politics: Senator Jon Corzine

It is an incumbent responsibility of every leader (and every group), to plan for contingencies which may likely have a negative impact upon the group. Common “contingencies” are: Hurricanes, Floods, Forest Fires, Power Blackouts, and Blizzards. Less common might be: Computer Viruses, Disco Music, Denial of Internet Service, Swine Flu, BP's Oil Spill in the Gulf of Mexico and the Red Sox actually winning the World Series (weren't we all surprised about that one).

A common problem, which is not sufficiently addressed, is the unexpected change in the LEADERSHIP itself, in terms of: promotion, job / career change, illness or death. How many small companies have been forced to close, because the founding owner never planned the “end game”. The Boss dies, and the company dies with him (don't we have enough unemployment ???)

Governor Chris Christie may be required to face the very real possibly of appointing someone to fill the unexpired term of our “junior“ US Senator: Mr. Frank Raleigh Lautenberg, currently 84 years of age, who’s term will up for re-election in 2014. While Mr. Lautenberg has serve the citizens of New Jersey with honesty, integrity and distinctions for more than 25 years - and age is not a barrier to effective public service; NEVERTHELESS we must all face the real and distinct possibility that Senator Lautenberg may not be able to complete his present term of office.

Therefore I propose the following “contingency candidate”, in the event that a successor is needed: Former Senator (and Former Governor): Mr. Jon Corzine

OK – you can all stop laughing now.

Here are some of the reasons why Jon Corzine is the best choice to fill Senator Lautenberg’s unexpired term:

1. Prior Experience Part-1: While Cozine was defeated for a second term as Governor (by Christie), he had been a two term US Senator; so New Jersey will be getting an experienced senator.

2. Prior Experience Part-2: When Cozine was serving in the US Senate, he served on a number of important (and influential) committees; as well as being the former chairman of the Democratic Senate Campaign Committee. The simple "bottom line" is: He has lots of important friends and a boatload of IOUs - all of which could be VERY HELPFUL to New Jersey.

3. NO SENATE Power Shift: Mr. Corzine, like Mr. Lautenberg, is a card carrying, long time, member of the Democratic Party, so this succession will not affect the balance of power in the US Senate; as verse the popular election of Scott Brown in Massachusetts Special Election. In making this appointment, Christie can not be accused of hijacking the Federal Government – although I’m certain he will get a HUGE amount of grief from his GOP Friends and the Party (such is the high price of bipartisanship and cooperation - read on). Corzine was moderately "bi-partisan", and as a multi-millionaire, would be acceptable to the moderate wing of the Republican Senatorial Minority.

4. Bi-Partisanship: The Appointment of Mr. Corzine is a strong and effective way to show Governor Christie’s bipartisanship, which will doubtlessly earn him a few extra points with the Democratic Leadership in the NJ Legislator, a body which is of more pressing concern than the affairs of the Federal Government in Washington, DC (i.e., Look how I am prepared to meet you half way; now what can you do for me?). NOTE: Historians among us will recall that FDR appointed Wendell Willkie, whom he had defeated in the 1940 elections, to be a roving ambassador; so what’s the down side? (see Spoiler)

5. Open Election: Mr. Lautenberg's term is scheduled to expire 2014, and Corzine would be unlikely to seek election in his own right; thus paving the way for his graceful "public retirement". This seat would then be "contestable" (without an incumbent) and provide the citizen’s of New Jersey with the rare opportunity reconsider their political options.

6. PUBLIC SERVICE: How can Jon Corzine say “NO THANKS” when asked to serve the citizens of New Jersey? He is: (a) “retired” from any current governmental responsibilities; (b) he has the time and (c) he has the ability and experience to perform the job – why not take this one last public opportunity? The US Senate is the last bastion of Public Debate – a place where real issues can be openly discussed, and government policy can be fashioned. Bet he gets a Standing Ovation on the floor of the Senate, upon his return, any takers?

If Mr. Corzine declines this offer, Governor Christie still gets to play the "Bi-Partisan Trump Card" in Trenton (hey I made an offer to the guy and he said "No Thanks" - I can lead a horse to water, I can't make him drink; what do you want me to do, eh?). How can Christie be expected to offer the seat to a Democrat (like Congressman Bob Andrews) who would then campaign for re-election; doesn't that deprive the people their right of an open primary?

Such an overture might also provide an opening (and political cover) for an otherwise unelectable "moderate political placeholder", until the next election cycle. "Chris Daggett, Chris Daggett - pick up line 2, Governor Christie calling."

Appointing Senator Jon Corzine is a winning combination for:
(a) the citizen’s of New Jersey,
(b) Governor Chris Christie / NJ Politics,
(c) the US Senate, and (finally)
(d) Jon Corzine, too.


Saturday, May 1, 2010

Bogus Rebates – a Simple NJ Budget Fix

Beth DeFalco (a reporter for the Associated Press) wrote in a 12-Feb-2010 story that an audit conducted by the Treasury Department – Division of Taxation has identified the fact that millions of dollars have been wasted by rebating Property Taxes to senior citizens, disabled citizens, and veterans who did not appropriately qualify for these benefits.

This is unfair to those taxpayers who are paying their fair share of taxes here in New Jersey.

To the average citizen, the simplest solution would be to:

1. Pool together information from State Tax Records, and Registry of Vital Statistics (Birth, death and Marriage records)

2. Create a Database of all New Jersey Taxpayers.

3. Apply an “attribute test” to each taxpayer found within the Database to determine if they were: (a) senior citizens, (b) disabled citizens, or (c) a veteran; as well as residency information and taxable income limitations.

4. Post and indicate a “change” in taxpayers status from the prior year (i.e., increase in income levels above limitation, death of a qualifying spouse, etc.)

5. Grant “secure access” to this Database to all State Agencies and County / Municipal Governments so that they could access this information (in real time) and apply it to their own Property Tax Systems (this is commonly known as Real Time Update). Using a common system will also save money for most local Governments, as they will pay for only the parts of the system they utilize (this is commonly known as Software as a Service or SaaS).

6. Provide an administrative procedure for a speedy appeal and revision of the Database to correct any “mis-coding errors” which has been subsequently identified by: (a) State Government, (b) County / Municipal Governments (or their Agencies), and (c) the effected Taxpayer; together with any notice of corrective action (so applied).

The prompt development and implementation of this Database (or similar mechanism) would provide immediate: (a) budget relief, (b) ongoing resolution to potential future problems, and (c) fairness to all taxpayers.

Criminal prosecution should be considered against: (a) Taxpayers who “willfully” attempt to defraud the Treasury (with the prospect of restitution of inappropriate prior payments) and (b) County / Municipal Governments who fail in their diligence to obtain appropriate and competent documentation, or to make appropriate inquires with respect to any changes to the underlying taxpayer’s status from which to make their refund claim to the State’s Treasury.

We have enough problems, without our neighbors “gaming the system”; however any comprehensive system (as discussed above) needs to be more robust, properly designed and prudently (and fairly) administrated for the great benefit of all New Jersey Taxpayers.

Saturday, April 3, 2010

Government Waste Commission for New Jersey

Shortly after Ronald Reagan was sworn in as Governor of California in 1967, he initiated a commission to identify “waste fraud and abuse” within the operations of the State. Implementation of many of the recommendations of this commission saved California taxpayers millions of dollars.

In 1982, now President Ronald Reagan requested an investigation into waste and inefficiency in the Federal government. He initiated a Private Sector Survey on Cost Control, or PSSCC, generally known as “The Grace Commission” - named for its chairman - businessman J Peter Grace (retired CEO of W.R. Grace and Company, Inc.). Reagan charged the group to:

"Be bold. We want your team to work like tireless bloodhounds.
Don't leave any stone unturned in your search to root out inefficiency”.

After the PSSCC Report was presented, Grace joined with syndication columnist Jack Anderson to form a 501(c)(3) Non-profit organization called “Citizens Against Government Waste (CAGW)” [], in order to continue the work of the PSSCC. CAGW functions as a: Think Tank, government watchdog, and advocacy group for fiscally conservative causes. According to their web site, "CAGW is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide. CAGW's mission is to eliminate waste, mismanagement, and inefficiency in the federal government."

The “Council for Citizens Against Government Waste (CCAGW)” is the lobbying arm of CAGW, organized as a section 501(c)(4) organization, and is therefore permitted to raise awareness of the group and its objectives.

Given the pass success of these projects, the pressing need to bring the fiscal operations of the State of New Jersey under control, and (most importantly) to create a formal “mechanism” to: (a) perform the necessary operational assessment, (b) identify the issues to be addressed, and (c) present recommendations for corrective action and implantation;

NOW THEREFORE, I NOW FORMALLY URGE Governor Chris Christie to create a formal, permeate working group with the Office of the Governor to:

(a) identify and refer to the Attorney General, incidents of Fraud and/or Malfeasance; as well as
(b) eliminating waste,
(c) mismanagement, and
(d) inefficiency within the government of the State of New Jersey; and
(e) where appropriate to make recommendations and referrals to County, and Municipal governmental units.

This group should also include a “whistle-blower provision" whereby citizens and government employees can report matters to the "NJ waste commission" of which there are aware.

We, the Citizens of the State of New Jersey, pay a lot of money to support the various levels of governmental operations ....



Monday, March 1, 2010

Better Resume = Lower Unemployment

Once upon a time, I was required to hire additional staff. The (incredibility) poor quality of the resumes we received, prompted me to write this "Letter to the Editor" of the newspapers wherein we had placed our Help Wanted Classified advertisement.

I was recently asked to help review job applications – sadly, many of my previous comments and concerns are still relevant. Accordingly, I am reissuing my Letter, in the hope that current job seekers will be assisted in their quest for suitable employment.


DATED: August 1985

FROM: A Potential Employer

TO: All recently graduated High School and College Students, and all others now seeking full time employment.

REF.: Your Resume’

My company was interested in hiring several employees, to fill newly created positions. Accordingly, we placed HELP WANTED NOTICES in several local newspapers. I am very disappointed with the quality of the resume's which we received, and I want to take this opportunity to point out to potential applicants, the common deficiencies, so that all of you may take the appropriate corrective action(s).

1) PLEASE DON'T WASTE MY TIME! Unlike you, I have: a job; a business to run; employees to supervise; suppliers and customers to pacify; and 1001 other tasks which require my immediate and ongoing attention. Reading your Resume' and cover letter (see #3 below) should not become an effort on my part. IF I CAN NOT MATCH YOUR SKILLS TO MY NEEDS, I WILL NOT CONTACT YOU FOR AN INTERVIEW! (Please don't call me) Why do you make it so difficult for me to evaluate your work history? If you are going to make to all of the effort to draft a resume'; PLEASE TAKE THE TIME TO ACTUALLY SAY SOMETHING USEFUL ABOUT YOURSELF. Evaluate your final product by asking yourself this simple question:

"Does my resume' & cover letter make the reader / employer want to call me in for an interview?"

2) THE ACTUAL CONTENT OF THE RESUME'. It is unfortunate that they don't teach "Effective Resume' Presentation 101" in school. Were this class available, among the "minimum points" to be covered would be:

>> General statement of your goals and objectives; i.e., "I am interested in obtaining a position in: financial management, process workflow, secretarial, legal correspondence, medical technology, etc." – This makes it easier for me (the reader / potential employer) to match you to my job description.

>> A chronological list of work experience, from your current job backwards toward your first work experience - EXPLAIN ALL GAPS! (Unexplained gaps leads me think you were in jail). PLEASE summarize relevant activities older than 10 years - while it's nice to know that you sold a large number of Girl Scout Cookies in 1968, IT'S NOT RELEVANT!

>> BE BRIEF: 2 sentence maximum of what you did on each job. If the experience is relevant to my position, please believe me that I will ask you more about it during the interview (do you now see how your resume' has now attracted my interest...).

>> NO MORE THAN 2 PAGES PER RESUME' (see above). If interested, I'm sure I will ask about your lengthy career (or I'll give you the opportunity to explain it to me).

>> PLEASE TYPE (not printed with crayons) NEATLY, PROOF & SPELL CHECK YOUR WORK!!! A messy & careless resume' is surely the sign of a lazy person – someone who will not be working for me - EVER.

>> FINAL SHOT: DON'T EVER LIE ON YOUR RESUME'. You should take every opportunity to present yourself in the best possible light. However, you must assume that I will check your references and verify past employment. I will not hire anyone who is not TRUSTWORTHY! The flip side is also important. If you do not yet have the skills that I currently require, BUT ARE WORKING TO OBTAIN THEM, include this information. If none of the other applicants are acceptable / employable; I may reconsider your resume' (SEE - you won points for being straightforward, and not wasting my time in the first place).

3) COVER LETTER. Your resume' is a listing, which takes time to read; this is time I just don't have. A cover letter is the easiest way for you to point out your strong points so that I can find them easily, and match them to my hiring requirements. An interesting cover letter indicates a Resume' worth reading (see #1). You should indicate a range of the Salary of which you are considering (see #4 below); this is another way to summarize the most relevant candidates ("I am looking for a salary in the range of $50,000" If the job I am offering pays $6.75 / hour, think you have applied for the wrong job?).

4) SALARY HISTORY & REFERENCES. Please put this information on a separate page. If I want it, I'll ask for it during the interview process.

5) SHOW & TELL. Many jobs (i.e., graphic artists) require job candidates to actually provide samples of past work product during the interview (DO NOT SEND THEM WITH THE RESUME'). You should indicate that "Samples of Work are available", but be sure that these "trade samples" are appropriate and relevant to the job under consideration.

WORDS TO LIVE BY: Finding a job is like digging an oil well: it is essentially a game of percentages. By focusing your search on the most likely prospects, and helping targeted employers understand you as a potential employee; you can make job hunting both and educational and profitable experience.

FINAL NOTE: Keep your Resume' Current! I recommend that you rewrite it once per year (in the quiet period between Christmas and New Years?). I also recommend that you have a copy of your resume', when you travel, as well as when you attend: seminars, meetings, public events, etc. - you never know when you will stumble upon a potential employer. Consider the impact, if someone you meet is impressed enough to say to you, "Here's my card (note that they are asking you), Why don't you send me your resume'?"; to which you respond by providing them with a copy. WOW!

Best of Luck and Good Hunting to you all.

Monday, February 1, 2010

New Jersey Autobahn

The Turnpike Bonds can fix Pension Under Funding (or Maybe there is a better way to “Monetize the NJ Turnpike Authority”)

1 - A Fairytale Story of Financial Stupidity.

Once upon a time, in a fairytale land which was bounded by a great river and even greater ocean, their lived a group of happy people. The people were happy because they received more benefits from their government, than they were obliged to pay in taxes. Whenever the responsible politicians of this happy land tried to reduce the level of government service or increase the taxes associated thereof, the happy people voted the responsible politicians out of office. So the very smart politicians (who remained in office) continued to keep the taxes low, the level of State provided benefits high, and pushed any “fiscal responsibility” into the future. And the people remained very happy.

Then one day when the government workers, who have been providing the people with all of their benefits and service, decided to retire and discovered – to their collective horror – that although a pension benefit had been promised to each of them, no money had been contributed to fund the Pension Obligation of the Happy Land. The retiring fairytale land workers then sued the Government, and the Court found that because the promise of a pension was a “contract right”, the Government would be REQUIRED TO PAY all of the promised pensions, to all of the retiring workers. And so the workers were very happy, too.

However, in order to pay all of these benefits, taxes were increased many-fold. The people of the fairytale land were no longer happy, because they were now required to pay higher taxes in order to pay for the worker’s retirement benefits. Many of the people soon left the fairytale land so that they didn’t have to pay the new higher taxes; this meant that the taxes on the people who remained became much higher. AN NO ONE LIVED HAPPILY EVER AFTER. THE END

2 - An Alternative Ending to the Story.

Governor Chris Christie could, upon taking office, immediately declare a FISCAL EMERGENCY and accordingly:
  1. Cut government services
  2. Evaluate Governmental Operations in terms of improving their efficiency and effectiveness
  3. Increase tax rates and / or the tax base and / or Fees in order to generate additional revenues.
  4. Or any combination of these three

In my view, monetizing the potential value of NJ Turnpike Authority (hereafter the “NJTA”) would clearly fall under the topic of “improving their efficiency and effectiveness” as well as generating additional revenues. Governor Corzine may be a nice guy, but he was never an effective “communicator” with respect to his plan to restore “fiscal responsibly” to the operations of the State of New Jersey. I feel that since the NJ Turnpike Authority holds a valuable asset, it SHOULD BE monetized for the greater good of all of the citizens of New Jersey. The problem with the Corzine Initiative was: (a) the proposed plan wasn’t very well “focused” and seemed to allow the State to continue with its irresponsible fiscal polities, and (b) the average voter didn’t see any benefit to the proposal (i.e., compare and contrast “my life in New Jersey” now, with the Plan and without the Plan).


Issue Participatory Revenue Bonds from the NJTA to the New Jersey State Pension Trust Fund (hereafter NJSPTF) in order to provide short term “bridge” solution, which would allow the State Government to readjust its priorities and install a longer term solution. Sound crazy, right? Read on and learn more.


The NJ Turnpike has raised tolls ONLY 6 times in 57 years or an average of once every 9.5 years! DO YOU KNOW of any product or service that has raised its rates so infrequently? In 1951, the Wholesale Price Index was 30.4; by 2007 it was 172.6 or an increase of 467% or about 8% / year.

Based of these “back of the envelope” calculations – Do you think the Turnpike is a Bargain or a Subsidy to its drivers? Do you think that the only reason that the NJTA doesn’t seem to have needed to raise tolls more frequently (to keep up with the cost of inflation, additional maintenance and repairs) is the simple fact than more than 50% of the Turnpike traffic is interstate, i.e., non New Jersey drivers help to defray the costs of operation? That is to say – if the NJTA had raised tolls in accordance with inflation, they would have generated enough money to pave over the entire State of New Jersey!



Require that the State Legislature, pass comprehensive Pension Reform with respect to : (a) defining eligibility requirement, (b) benefit rates and vesting levels, and (c) annual funding allocations and PAYMENTS which would require a 2/3rds vote of the New Jersey Legislature to amend or suspend. SPECIAL NOTE: State Worker Union Contracts should also include “enforcement” language in any future labor contracts.

IMPORTANT NOTE: We have to “hold their (the State) feet to the fire”, so the following plan would become contingent and effective ONLY after this enabling legislation was enacted.


A) The New Jersey Turnpike Authority would initiate a toll increase which is designed to reflect the true economic value of the roadways to all drivers (NJ and non-NJ). Based on the anticipated of this additional revenue, the NJTA would then issue a special series of Participatory Revenue Bonds (see * below) to the New Jersey State Pension Trust Fund. This is a requirement so as not to interfere with the guarantee agreements of all of the existing bond issues. Since the Participatory Revenue Bonds are a “restricted issue”, these bonds could be issued in “memorandum form” and as such they which not subject to public trading requirements.

[It this point - most readers would say, “What good are municipal bonds as an investment in a tax-exempt pension entity?” PLEASE READ ON – it gets better, I promise.]

B) The New Jersey State Pension Board (i.e., the Pension Fund Trustees) would then crease a separate asset Trust known as the PARTICIPATORY BOND TRUST, and immediately transfer the Participatory Revenue Bonds into this trust.
[So far so good]

C) The Participatory Bond Trustee would immediately create a Single Member LLC (SMLLC) which would be known as “Participatory Bond Holding LLC”, and immediately transfer the Participatory Revenue Bonds from the trust into this LLC.
[It starts to looks like musical chairs, doesn’t it? Keep reading.]

* For the non-accounting readers: Normally, Bonds pay a fixed rate of interest based on their stated Par Value – example $1,000 Par Value XYZ Bond @ 5% will pay $50.00 / year until it matures (redeemed). A Participatory Bond is a special type of hybrid because the Bondholder gets the fixed rate of interest PLUS an additional interest amount (which is called bonus interest) based on certain events and conditions. A Participatory Bond is the simplest way to “soak up” the additional revenue which will be created by the implementation of a more realistic toll structure, while not negatively impacting the Bond Covenants Agreements (like a Mortgage Agreement) of all of the existing NJTA Bond Issues.

Now you might well say, “Why not just issue these Participatory Bonds directly to the general public, and cut out all of this “musical chairs” nonsense?”
[Please keep reading, because, like Hamlet, I do have “…much method in this madness…”]


A) One or more Financial Intermediaries will be required to form a Mutual Fund known as “AAA Bond Trust”, which shall be composed of “AAA Rated” taxable corporate bonds.

KEY POINT #1 - The amount of bonds held or placed into this trust shall have stated coupon income levels equal to the tax equivalent level (see below) of the income expected to be generated from the Participatory Bond Trust.

KEY POINT #2 - A provision of the Mutual Fund Agreement shall require that any security which is identified for a “downgrade” by its rating agency shall be immediately removed from the Trust and a suitable replacement Bond inserted in its place with a like a similar income stream (i.e., “auto re-swap and replace”); thus this Fund shall always contain only high grade securities.

B) The Mutual Fund Trustee would immediately create its own a Single Member LLC (SMLLC) which would be known as “AAA Bond Holding LLC”, and immediately transfer all of the Bonds from the trust into this LLC.

PART 4 – ... and now {Drum roll please} …. The “SWAP”

The Participatory Bonds Trustee and The Mutual Fund Trustee would then enter into a “swap agreement” (under IRS Reg. §1.446-3 etal - and additional Court citations) for a period of no more than 20 years whereby the Participatory Bonds Trustee would become the assigned owner of the AAA Bond Holding LLC and the Mutual Fund would become the assigned owner of the Participatory Bond Holding LLC.

Participatory Bonds Trustee ==> Participatory Bond Holding LLC
Mutual Fund ==> AAA Bond Holding LLC

Participatory Bonds Trustee ==> AAA Bond Holding LLC
Mutual Fund ==> Participatory Bond Holding LLC


1 – The NJTA Exempt Interest is redirected into the Mutual Fund Trust, while the actual increased cash income from the Mutual Fund AAA Bond Trust is applied to the New Jersey State Pension Trust Fund.

2 - The additional pension investment income will be invested and reinvested within the Pension Trust Fund for the benefit of the pension beneficiaries.

3 - Because the AAA Bond Holding LLC is not a “publicly traded” entity, the Participatory Bonds Trustee can legally value their swapped LLC asset based on its projected income stream (Income divided by Fair Market Yield of equivalent assets – see below). Naturally this valuation would be amortized over the available life of the underlying Swap Agreement, and become $0.00 in the final year of the Swap Agreement.

4 – The amortized valuation would the offset by the additional contributions which were part of the legislative agreement (see Part 1 above)

5 – When the Participatory Revenue Bonds mature, the proceeds are returned to the LLC, which is then returned to its original owner, and then liquidated into its trust owner. Each Trust is then dissolved and the net proceeds returned to the underlying Pension Trust and the Mutual Fund owners, respectfully.

6 – This temporarily increases the net asset value of the Pension Fund (for long term value for all pension beneficiaries) and additional income (for the payment of benefits for current retirees). It defers any immediate tax increase to pay unfunded pension liability, and gives the State time to standardize its pension obligates and enter into a payment plan for the unfunded liability.


1) Tax Equivalent Level Computation; effective income yield is based on an after tax rate of income. Consider this simplified example.

Description AAA Bond Holding LLC $ Participatory Bond Holding LLC $
Stated % 8.30% $83.00 4.50% $45.00
Effective Fed + NJ (assumed)combined tax rate =46% (38.00) exempt income is not taxable 0.00
Net After Tax % (which are equal) $45.00 $45.00
PAR Value at Income** $1,844.44 $1,000.00

** Taxable Income $83.00 / 4.5% Tax Exempt Rate = $1,844.44

2) IRS Reg. §1.446-3 actually REQUIRES that the UNDERLYING INCOME PRODUCING ASSET MUST BE “SWAPPED” (or assigned) in order for a “bona fide “ assignment of income to be recognized for tax purposes – this is fancy tax parlance which means that you can’t give away the milk and keep the cow. This requirement is easily fulfilled by placing the assets (Participatory Bonds and AAA Rated Bonds) into the separate LLC entities.


The AUTOBAHN Benefit:

Since Governor Corzine’s Turnpike Monetization Plan didn’t provide any direct benefit to the many NJ commuters, who use the Turnpike and Parkway (other than the elimination of any tax increases which would otherwise be required), I would propose an additional benefit to all NJ Turnpike and Parkway Drivers (as a way of softening the effects of the above proposed Toll Increases):

(1) Painting the inside lanes of the Turnpike and Parkway with orange “tiger” strips – orange is a color which is very reflective after sunset and in bad weather, and

(2) Allow unlimited traffic speed in “The Orange Autobahn Lane”. This is an reference to the attribute which is similar to the famous German Autobahn Roadway (a driving experience of which I was once personally privileged to enjoy, It's Better Than NASCAR – HOO-RAH!).

While all drivers will (obviously) be paying more for the use of the use of these roadways, they will be allowed to travel faster (if they so wish) by moving into the Autobahn Lane. It is strange that accident statistics show that the Autobahn is no more dangerous than other high speed and heavy trafficked roadway. This unusual paradox may result from each driver’s need for constant vigilance in such a high speed environment, and may actually force drivers into performing better.

COMMENTS? Happy Motoring ... und Auf Wiedersehen