“Chainsaw Elon” and how to lose weight

In the last thirty years of my business career, I specialized in turning around unprofitable small (under $10 million) businesses. There are two ways to improve profitability: Reduce costs and increase sales. I did both, but mostly the latter. When cutting costs, one must be careful to cut fat without cutting too much meat. Growth requires keeping good people, not merely keeping fewer people. Short term, it’s easy to increase profitability. Merely fire everyone. Long term such a path can destroy a company. Watching cost-cutter Elon Musk and his boss, Donald Trump, I am reminded of the notorious Albert John Dunlap. From Wikipedia:

Albert John Dunlap (July 26, 1937 – January 25, 2019) was an American corporate executive. He was known at the peak of his career as a professional turnaround management specialist and downsizer. The mass layoffs at his companies earned him the nicknames “Chainsaw Al” and “Rambo in Pinstripes”, after he posed for a photo wearing an ammo belt across his chest.

Can Chainsaw Al Really Be A Builder? America’s most ferocious cost cutter says he wants to make Sunbeam bigger. Jan, 1998.

When Sunbeam announces year-end results in January, people will see that sales, not just profits, are rising dramatically. (Dunlap eliminated) 16 of 26 factories, five of six headquarters, and half the 12,000 employees, Dunlap extracted $225 million in annual savings.

Then again from Wikipedia:

It was later discovered that his reputed turnarounds were elaborate frauds, and his career was ended after he engineered a massive accounting scandal at Sunbeam Products, now a division of Newell Brands, that forced the company into bankruptcy. Dunlap is on the lists of “Worst CEOs of All Time” published by several business publications. Read the list and you’ll find that many of the “worst” were massive job cutters, whose overall philosophy was. “We don’t need people. Just pay me more.” Fast Company noted that Dunlap “might score impressively on the Corporate Psychopath measure” and in an interview, Dunlap freely admitted to possessing many of the traits of a psychopath but considered them positive traits such as leadership and decisiveness.

“Mass layoffs, “frauds,” “bankruptcy,” psychopathy” “accounting scandal,” — do those terms remind you of our leaders? Consider these articles:

FRAUD and ACCOUNTING SCANDAL New York judge rules Trump committed fraud and lied about his net worth for years The judge, Arthur Engoron, also denied Trump’s bid to dismiss the New York attorney general’s $250 million lawsuit against him and his company.

According to the ruling, which allows the civil trial to begin next week, Trump lied to banks and insurers by both overvaluing and undervaluing his assets when it was to his benefit while exaggerating his net worth to the tune of billions of dollars.

BANKRUPTCY Why Donald Trump’s Companies Went Bankrupt, Details About the 6 Trump Corporate Bankruptcies The New York Times, which conducted an analysis of regulatory reviews, court records, and security filings, reported in 2016 that Trump “put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses, and other payments.

“The burden of his failures,” according to the newspaper, “fell on investors and others who had bet on his business acumen.”

PSYCHOPATHY How much of a psychopath is Donald Trump? Worse than Hitler, apparently Saddam Hussein tops the list ahead of Henry VIII and Idi Amin

According to the Hare psychopath checklist, psychopaths tend to feel a lack of remorse for destructive acts, but they are unable to feel empathy, impulsive, manipulative and sexually promiscuous.

MASS LAYOFFS Trump officials fired nuclear staff not realizing they oversee the country’s weapons stockpile. by Rene Marsh and Ella Nilsen Trump administration officials fired more than 300 staffers Thursday night at the National Nuclear Security Administration — the agency tasked with managing the nation’s nuclear stockpile — as part of broader Energy Department layoffs, according to four people with knowledge of the matter.

Fired federal workers decry ‘arbitrary,’ ‘haphazard’ terminations

Carly Arata received an email around 9 p.m. on Thursday saying her position in the federal government had been terminated. When she saw the email, Arata told ABC News that she “screamed.”

“I didn’t think it was real at first, so I reread it like three times, then kind of started crying because I was relying on this job,” Arata said. “My husband and I just purchased this house in December, and now we’re not really sure what we’re going to do.”

Arata is one of possibly more than 200,000 workers affected by mass firings of probationary employees.

Arata had been a probationary employee since September with the Department of Agriculture’s Natural Resources Conservation Service but had worked as a contractor in the role for a year before that. Arata, who turns 32 on Sunday, has experience in this area. She obtained her bachelor’s degree in environmental science and her master’s degree in ecological restoration.

“We’re relying on this job and we’re qualified for this job, and yet, we’re losing it just because we’re under a year,” Arata said.

“Chainsaw Al” fired his good, experienced workers, not for efficiency reasons but to demonstrate his frugality. Cutting payroll initially increased profits but losing good people helped destroy his company. Trump/Musk are firing their good, experienced workers, also not for sound efficiency reasons, but to demonstrate frugality. The two are destroying government services, especially services to the middle-classes and the poor. Does the Trump/Musk Joint Presidency claim a good way to lose weight is to cut off your arms and legs? THE CHAOS PRESIDENT The computer people have a slogan, “Move fast and break things.” Musk seems to believe this idea defends his wild and reckless firing and deporting of good people. The saying embodies a Silicon Valley ethos that encourages rapid change, even at the expense of stability or quality. But what may be acceptable for electronic program development is completely wrong for government programs that are supposed to “Improve and Protect People’s Lives.” The destruction of a test rocket, as Musk has often done, doesn’t equate with the mass destruction of people’s jobs, lives, and financial protections. Firing an entire police force will save money, but it opens the door to crime. If you have hoped that the U.S. would completely depart from democracy and adopt a dictatorship, your dreams are being answered.

• ‘Livid’ judge delivers tongue lashing — and threats — in suit against Trump admin
• ‘I intend to defend them’: Senate Republican warns Trump against government purge
• ‘A widespread massacre’: Observers stunned after late-night Trump ‘purge’ of former hires
• Inspector general escorted by security from her office after defying Trump order
• Trump purge a ‘huge disaster’ — and ‘illegal’: ex-federal prosecutors
• Fired inspectors general sue Trump administration: court filing
• Thousands of probationary employees fired as Trump administration directs agencies to carry out widespread layoffs
• Trump Publicly Admits He Thinks He Can Break Any Law He Wants (The self-proclaimed “originalist” Supreme Court gave him that idea.)

Now, the Supreme Court. having given Trump limitless power, must worry that he will use the power to ignore and disobey every Court’s ruling. According to SCOTUS, Trump cannot be punished for any crime, so long as he can claim it was an official act within the scope of his presidential duties. If Trump believes the Democratic Party is a threat to America, he could jail Democrats. He already has claimed that Barack Obama, Hillary Clinton, and Joe Biden, along with all the judges who have ruled against him, are corrupt and should be jailed. The Supreme Court has opened that opportunity. Trump even claims he is king. Recently he said, quoting Napoleon, “He who saves his Country does not violate any Law.” Apparently, SCOTUS doesn’t realize flouting the law is not a Trumpian bug; it’s a feature of the Trump persona and the solid step toward a dictatorship, where courts are puppets of the leader. In short, SCOTUS has voted for its own irrelevance. IN SUMMARY Elon Musk and Donald Trump (MT) are clueless about the differences between business goals [monetarily non-sovereign finances] vs. federal goals [Monetarily Sovereign finances]. In the MT business world the primary goal is to maximize profits, while spending is limited by income and borrowing. When MT began to cut federal expenses, mostly by mass firings, the naive public believed this benefitted the government and taxpayers. But federal cost cutting benefits no one, not the public, not the government, not anyone. Given the infinite power to create dollars, the federal government does not use taxpayers’ money to pay for things. To pay for everything, the federal government creates new dollars, ad hoc. Taxpayer dollars are destroyed upon receipt. They begin as part of the M2 money supply measure, but when they reach the U.S. Treasury they instantly cease to be part of any money supply measure. They effectively are destroyed. The sole purposes of federal taxes are to assure demand for the U.S. dollar by requiring taxes to be paid in dollars, and to control the economy by taxing what Congress wishes to discourage and by giving tax breaks to what Congress wishes to reward–not to provide spending money for the federal government. (State and local taxes do provide spending money to monetarily non-sovereign state and local governments.) By contrast, in the federal world, the goal is to “Improve and Protect the People’s Lives, and the spending is unlimited. Federal deficit spending benefits the public and grows the economy at no cost to taxpayers. By attempting business solutions to federal government problems, the MT pair solves nothing while causing great harm. While other nations (particularly oil nations) are pouring vast amounts of money into artificial intelligence (AI) and massive infrastructure projects, the Make America Great Again bunch tries to make America smaller, weaker, and even more bigoted than ever — much like its current leaders. MT are pushing for a $2 Trillion reduction in federal spending, based on the formula, GDP = Federal Spending + Non-federal Spending – Net Imports, this is what would happen to the economy: Estimated GDP: $29.2T: Federal Spending: $6.5T: Non-Federal Spending: $22.83T: Net Imports: $0.1335T. Superficially, GDP would fall 2T or 7% However, Federal Spending also affects Non-federal Spending and Net Imports. A reduction in federal spending leads to:

1. Fewer government contracts for businesses. This could lead to less spending and less investment by businesses
2. Private sector layoffs, reducing consumer income and spending.
3. Fewer government workers, further reducing consumer income and spending
4. Federal funds often support state programs (infrastructure, education, healthcare). A federal cut may force state governments to reduce their own spending, further shrinking GDP.
5. A spending cut could lower the deficit, leading to lower interests, i.e. less federal interest paid to the private sector by federal T-securities.

If we assume each $1 cut in federal spending reduces non-federal spending by $0.50 (admittedly a guess, based on the certainty there would be some negative effect on Non-federal Spending), then:

• Direct Federal Cut: $-2.0T; Indirect Non-Federal Spending Reduction: $-1.0T; Total GDP Reduction: $-3.0T

So instead of just a $2T drop, GDP could fall by $3T, making the contraction even more significant. A reduction in GDP is defined as a recession or a depression, depending on length. Therefore:

The Musk/Trump (MT) spending reduction promise is, in fact, a promise to cause a recession or a depression.

Fortunately, the MT pair seldom keeps its promises, so they probably will fail, at which time they will blame Hillary Clinton, Barack Obama, Nancy Pelosi, the “fake” media, “crooked judges,” Joe Biden, and the entire Democratic Party. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell; MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/

……………………………………………………………………..

A Government’s Sole Purpose is to Improve and Protect The People’s Lives.

MONETARY SOVEREIGNTY